Rda Construction Corp. v. United States ( 2017 )

In the United States Court of Federal Claims
No. 11-555 C
Filed: July 27, 2017
**************************************** Accord and Satisfaction;
* Breach of Contract;
* Cardinal Change;
* Contract Disputes Act (“CDA”),
* 41 U.S.C. §§ 7101–7109;
* False Claims Act (“FCA”),
RDA CONSTRUCTION CORP., * 31 U.S.C. §§ 3729–3733;
* Federal Acquisition Regulations (“FAR”)
* 52.233-1 (Disputes), 52.236-2
* (Differing Cite Conditions), 52.236-3
Plaintiff, * (Site Investigation and Conditions
* Affecting Work), 52.236-13(Accident
v. * Prevention), 252.236-7001(Contract
* Drawings and Specifications), 52.249-
THE UNITED STATES, * 10 (Default on Fixed-Price
* Construction Contract);
* Rule of the United States Court of
* Federal Claims (“RCFC”) 12(b)(1);
Defendant. * Special Plea in Fraud, 28 U.S.C. § 2514;
* Tucker Act Jurisdiction over Contract
* Disputes, 28 U.S.C. § 1491(a)(2);
* United States Court of Federal Claims’
* Jurisdiction to Adjudicate Government
* Set-Offs, 28 U.S.C. §§ 1503, 2508.
*
****************************************
Cornelius J. O’Brien, Eckert Seamans Cherin & Mellott, LLC, Pittsburgh, Pennsylvania, Counsel
for Plaintiff.
Daniel B. Volk, United States Department of Justice, Washington, D.C., Counsel for the
Government.
POST TRIAL MEMORANDUM OPINION AND FINAL ORDER
This post trial liability decision adjudicates a protracted dispute between RDA
Construction Corp. (“RDA”) and the United States Department of the Navy, Naval Facilities
Engineering Command (“the NAVFAC”), arising from an October 13, 2009 Contract, requiring
RDA to demolish, remove, and construct a wharf at the Naval Station in Newport, Rhode Island
(“Newport Naval Station”).
To facilitate review of this Post Trial Liability Memorandum Opinion And Order, the court
has provided the following outline:
I.  RELEVANT FACTUAL BACKGROUND.
A.  The Deteriorating And Dangerous Conditions At The Newport Naval Station Wharf.
B.  On May 18, 2009, The Naval Facilities Command Issued Solicitation No. N40085-
09-B-7002.
C.  On June 4, 2009 and June 11, 2009, The Naval Facilities Command Conducted Two
Site Visits Of The Newport Naval Station Wharf.
D.  On June 30, 2009, RDA Construction Corp. Submitted A Bid.
E.  On October 13, 2009, RDA Construction Corp. Signed Contract No. N40085-09-B-
7002.
F.  On November 18, 2009, The Appledore Report Was Disclosed To RDA Construction
Corp.
G.  On April 21, 2010, RDA Construction Corp. Filed A Certified Claim.
H.  On May 17, 2010, The Naval Facilities Command Approved RDA Construction
Corp.’s Baseline Schedule.
I.  On August 31, 2010, RDA Construction Corp.’s April 21, 2010 Certified Claim Was
Denied.
J.  On September 20, 2010, RDA Construction Corp. Informed The Naval Facilities
Command That Underground Obstructions Were Encountered, So Work Stopped.
K.  On March 10, 2011, The Naval Facilities Command Instructed RDA To Submit A
Cost Proposal To Remove The Obstructions And Continue Work.
L.  In Late March 2011, RDA Construction Corp.’s Quality Control Manager And Site
Safety Health Officer Quit.
M.  On June 7, 2011 And August 19, 2011, The Naval Facilities Command Issued
Contract Modifications 4 and 5 To The October 13, 2009 Contract.
N.  On August 31, 2011, RDA Construction Corp. Filed A Complaint In The United
States Court Of Federal Claims.
O.  On September 14, 2011, RDA Construction Corp. Experienced A Third Accident At
The Project Site.
P.  From March 20, 2012 To November 8, 2012, The Naval Facilities Command Issued
Contract Modifications 6–12.
Q.  On February 21, 2013, The Naval Facility Command Terminated The October 13,
2009 Contract.
2
R.  On July 3, 2013, RDA Construction Corp. Filed A Second Certified Claim.
S.  On April 15, 2015, The Naval Facility Command’s Contracting Officer Determined
That RDA Construction Corp. Was Liable For Liquidated Damages.
II.  PROCEDURAL HISTORY.
III.  DISCUSSION.
A.  Jurisdiction.
1.  Whether The Claims Alleged In The May 7, 2015 Second Amended Complaint
Arise Under The Contract Disputes Act.
2.  Whether The Claims Alleged In The May 7, 2015 Second Amended Complaint
Were Submitted To The Contracting Officer For A Final Decision.
a.  Regarding Counts I–IV.
b.  Regarding Counts V–IX.
c.  Regarding Damages.
B.  Standing.
C.  The Claims Alleged In RDA Construction Corp.’s May 7, 2015 Second Amended
Complaint.
1.  Count I: Whether The Naval Facilities Command Had A Duty To Disclose The
Appledore Report And The Fay, Spofford & Thorndike Report.
a.  Plaintiff’s Argument.
b.  The Government’s Response.
c.  Plaintiff’s Reply.
d.  The Court’s Resolution.
2.  Count II: Whether RDA Construction Corp. Is Entitled To An Equitable
Adjustment Under The October 13, 2009 Contract’s Differing Site Conditions
Clause.
a.  Plaintiff’s Argument.
b.  The Government’s Response.
c.  The Court’s Resolution.
3.  Counts III And IV: Whether The Naval Facilities Command Misrepresented
The Condition Of The Wharf And The Purpose Of The October 13, 2009
Contract.
a.  Plaintiff’s Argument.
b.  The Government’s Response.
3
c.  The Court’s Resolution.
4.  Count V: Whether The Naval Facilities Command’s November 7, 2012
Directive Was A Cardinal Change To The October 13, 2009 Contract.
a.  Plaintiff’s Argument.
b.  The Government’s Response.
c.  The Court’s Resolution.
5.  Counts VI, VII and VIII: Whether The NAVFAC Violated The Duty Of Good
Faith And Fair Dealing.
a.  Plaintiff’s Argument.
b.  The Government’s Response.
c.  The Court’s Resolution.
i.  Regarding Price And Schedule Changes To The October 13, 2009
Contact, Because Of The NAVFAC’s Failure To Disclose The
Appledore Report And FST Report.
ii.  Regarding Rescinding Approval Of RDA Construction Corp.’s
Baseline Schedule.
iii.  Regarding Extraction Of The Broken H-Pile Sections.
iv.  Regarding Obstruction Drilling.
v.  Regarding Work Suspension After The September 14, 2011 Safety
Mishap.
vi.  Regarding Approval Of RDA Construction Corp.’s Quality Control
Manager And Site Safety And Health Officer.
vii.  Regarding The Re-Inspection Of The Manitowoc 4100 Crane.
6.  Count IX: Whether RDA Construction Corp. Was Entitled To An Extension Of
The Contract Completion Date For Excusable Delays.
IV.  DISCUSSION OF THE COUNTERCLAIMS ALLEGED IN THE GOVERNMENT’S
JUNE 12, 2015 ANSWER.
A.  Jurisdiction.
B.  Standing.
C.  Counterclaim I: Whether The Naval Facilities Command Is Entitled To Recover
Liquidated Damages For The Cost Of Completing The October 13, 2009 Contract.
1.  The Government’s Argument.
2.  Plaintiff’s Response.
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3.  The Government’s Reply.
4.  The Court’s Resolution.
a.  Whether RDA Was Entitled To An Extension Of The Contract
Completion Date.
b.  Whether The Naval Facilities Command’s February 21, 2013 Termination
Of The October 13, 2009 Contract For Default Should Be Converted Into
A Termination For Convenience.
i.  Whether The February 21, 2013 Notice Of Termination Was “Fair
And Impartial,” Pursuant To 48 C.F.R. § 1.602-2.
ii.  Whether The Naval Facilities Command Established That RDA
Construction Was In Default As Of The Termination Date.
iii.  Whether The Naval Facilities Command Breached The October 13,
2009 Contract Thereby Relieving RDA Construction Corp. Of Any
Consequences Stemming From The February 21, 2013 Default
Termination.
c.  The Quantum Of Liquidated Damages That The Naval Facilities
Command Is Entitled To Recover.
D.  Counterclaim II: Whether RDA Construction Corp. Is Liable For Damages Under
The Contract Dispute Act’s Anti-Fraud Provision, 41 U.S.C. § 7103(c)(2).
1.  The Government’s Argument.
2.  Plaintiff’s Response.
3.  The Court’s Resolution.
a.  Whether RDA Construction Corp.’s Crane Re-Inspection Claim Was
“Baseless.”
b.  Whether RDA Construction Corp.’s Crane Re-Inspection Claim Was
“Indefensibly Inflated.”
c.  Whether RDA Construction Corp.’s Crane Re-Inspection Claim Was
“Premised On Affirmative Misrepresentations Of Fact.”
E.  Counterclaim III: Whether RDA Construction Corp. Forfeited All Claims Against
The United States Under The Special Plea In Fraud Statute, 28 U.S.C. § 2514.
F.  Counterclaim IV: Whether RDA Construction Corp. Violated The False Claims Act.
1.  The Government’s Argument.
2.  Plaintiff’s Response.
3.  The Court’s Resolution.
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a.  Whether RDA Construction Corp. Falsely Certified That Its Deck
Removal Work Complied With The October 13, 2009 Contract.
b.  Whether RDA Construction Corp. Falsely Certified That Its Rock Fill
Removal Work Complied With The October 13, 2009 Contract.
i.  Regarding Rock Fill Removal.
ii.  Regarding The Hydrographic Survey.
c.  Whether RDA Construction Corp. Falsely Certified That It Made Timely
Payments To Its Subcontractors.
d.  Whether RDA Construction Corp.’s July 3, 2013 Certified Claim For
Costs Incurred To Re-Inspect The Manitowoc 4100 Crane Was Baseless,
Inflated And Premised On Factual Misrepresentations.
V.  CONCLUSION.
* * *
I. RELEVANT FACTUAL BACKGROUND.1
A. The Deteriorating And Dangerous Conditions At The Newport Naval Station
Wharf.
In 1958, the NAVFAC built a steel-reinforced concrete structure, known as the “marginal
wharf” (“wharf”), and a metal-sheet pile bulkhead2 along 850 feet of Narragansett Bay shoreline,
located between Piers 1 and 2 of the Newport Naval Station. PX 12 at 1–2.
1
The facts discussed herein were derived from evidence adduced at a trial held on
November 16–19, 2015 and December 7–10, 2015 in Boston, Massachusetts and in January 4–6,
2016 and July 11, 2016 in Washington, D.C. (TR at 1–2854). The witnesses for each party are
identified in Court Exhibit A. During trial, the parties also introduced 1,463 exhibits into evidence.
(PX 1–262; DX 1–759).
2
A “bulkhead” is “a retaining wall along a waterfront.” Bulkhead, MERRIAM-WEBSTER’S
ONLINE DICTIONARY, https://www.merriam-webster.com/dictionary/bulkhead (last visited March
22, 2017).
6
DX 7 at 7.
As depicted below, the bulkhead is a seawall comprised of metal sheet-piles that were
secured by steel rods anchored into concrete structures beneath the sea floor.
PX 12 at 3.
The wharf is a concrete structure, supported by 248 steel H-piles.3 DX 1 at 82–91. As
illustrated below, each pile was encased in a concrete “jacket” from the top to below the waterline.
3
A “H-pile” is a steel beam with an “H”-shaped cross section and is driven into the earth
by a pile driver. See H-Pile, MERRIAM-WEBSTER’S ONLINE DICTIONARY, https://www.merriam-
webster.com/dictionary/H%E2%80%93pile (last visited March 22, 2017).
7
PX 12 at 4; DX 1 at 82–91.
In April 2005, Appledore Marine Engineering, Inc. issued a report that was commissioned
by the NAVFAC, titled: “Underwater Facilities Inspection And Assessment of the Newport Naval
Station” (“the Appledore Report”). PX 12. The Appledore Report found “approximately ten
percent of the concrete piles [supporting the wharf were] missing their fiberglass shell forms with
failed or partially failed concrete encasement exposing the reinforcing steel and encased steel H-
pile.” PX 12 at 15–16. The Appledore Report advised the NAVFAC that
[b]elow the concrete jackets, the steel H-piles typically [had] advanced
deterioration with significant loss of cross-sectional area. A Level I inspection of
[all] the piles identified piles with buckled flanges,4 knife-edging and surface
pitting.5 Several piles exhibit[ed] complete deterioration of the flanges . . . . Based
on the degree of deterioration found during the Level I inspection, a special in-
depth Level II inspection was conducted on all 248 steel H-piles including the
removal of marine growth and steel thickness measurements.
PX 12 at 16.
The Appledore Report also found that the state of deteriorated H-piles “could only be
observed during [an] underwater inspection” and was widespread i.e., forty-six percent of the H-
piles could not safely carry any vehicular loads. PX 12 at 21, 25. Significantly, “these piles [were]
4
A “flange” is “a rib or rim for strength, for guiding, or for attachment to another object.”
Flange, MERRIAM-WEBSTER’S ONLINE DICTIONARY, https://www.merriam-webster.com/
dictionary/flange (last visited March 22, 2017).
5
“Pitting corrosion is a localized form of corrosion by which cavities or ‘holes’ are
produced in the material. Pitting . . . is more difficult to detect, predict and design against [than
uniform corrosion].” Pitting Corrosion, NATIONAL ASSOCIATION OF CORROSION ENGINEERS
CORROSION BASICS, https://www.nace.org/Pitting-Corrosion/ (last visited March 22, 2017).
8
overstressed beyond their allowable load capacities simply from the weight of the [wharf.]” PX
12 at 24. As a result, “catastrophic collapse [was] possible.” PX 12 at 25.
In addition, the Appledore Report found that the metal-sheet pile bulkhead exhibited
“advanced deterioration and defects.” PX 12 at 12. Where the bulkhead was accessible for
inspection, there were “large corrosion holes . . . allowing backfill to wash through the bulkhead”
and “[i]t [was] likely [that] portions of the bulkhead obscured from view . . . [had] similar advanced
deterioration.” PX 12 at 12. The earth fill retained by the bulkhead between Piers 1 and 2 also
had a large sinkhole up to eight feet wide and seven feet deep, and “sinkholes occur[ed] along the
entire length of the . . . bulkhead.” PX 12 at 14.
On August 29, 2008, Fay, Spofford & Thorndike, LLC (“FST”) conducted a second
evaluation of the wharf for the NAVFAC (“the FST Report”). PX 19. The FST Report was not
an independent evaluation, but primarily was based on information contained in the Appledore
Report. PX 19 at 3. The FST Report found that the “overall condition of the wharf superstructure
[was] good to fair.” PX 19 at 2. But, the FST Report “recommended that the wharf not be used
during construction.” PX 19 at 1.
B. On May 18, 2009, The Naval Facilities Command Issued Solicitation No.
N40085-09-B-7002.
On May 18, 2009, the NAVFAC issued Solicitation No. N40085-09-B-7002 (“the
Solicitation”) to restore the Newport Naval Station by:
 demolishing the wharf and metal-sheet pile bulkhead between Piers 1 and 2 of the
Newport Naval Station;6
 removing underwater rock and sediment along the project site;
 constructing a new metal-sheet bulkhead; and
 constructing a parking area, storm drainage and other infrastructure, required to
support ship berthing.
DX 1 at 9.
6
The Solicitation required complete removal of the existing H-piles supporting the wharf
and bulkhead. DX 1 at 82 (Demolition Note 3: “REMOVE PILES IN THEIR ENTIRETY”); PX
12 at 3 (picture). In addition, bidders were instructed that during demolition, “[d]ebris shall not
be allowed to fall into the water. Debris that does fall into the water shall be removed by the end
of the work day.” DX 1 at 82.
9
The Solicitation included a set of drawings and specifications; bidders were required to
conform contract work to the instructions listed in those documents.7 DX 1 at 35–36. The
Solicitation warned potential bidders that
[o]missions from the drawings or specifications or the misdescription of details of
work that are manifestly necessary to carry out the intent of the drawings and
specifications, or that are customarily performed, shall not relieve the Contractor
from performing such omitted or misdescribed details of the work. The Contractor
shall perform such details as if fully and correctly set forth and described in the
drawings and specifications.
DX 1 at 36 (emphasis added) (quoting 48 C.F.R. 252.236-7001(d)).
The Solicitation also incorporated Federal Acquisition Regulation (“FAR”) 52.236-3(a),8
requiring that potential bidders conduct their own investigations of site conditions. DX 1 at 14.
7
The Solicitation included thirty-eight technical drawings and specifications: (1) Title
Sheet; (2) Locus Plan; (3) Design Loads; (4) Limit of Work Plan; (5) Demolition & Removals; (6)
Existing Site Conditions Notes; (7) Existing Site Conditions; (8) Existing Site Conditions; (9)
Existing Site Conditions; (10) Existing Site Conditions; (11) Existing Site Conditions; (12)
Existing Site Conditions; (13) Hydrographic Survey Plan; (14) Soil Erosion & Sediment Control
Plan; (15) Soil Erosion & Sediment Control Details; (16) Boring Location Plan & Logs;
(17) Demolition Plan & Sections; (18) Rock Fill Removal Plan; (19) Demolition Details; (20) Site
Grading, Paving & Draining Plan; (21) Sanitary Sewer Plan & Details; (22) Water Plan & Details;
(23) Storm Sewer Plan & Details; (24) General Plan, Legend & Notes; (25) Bulkhead Plan; (26)
Sheet Pile Plan & Elevation; (27) Sheet Pile Plan & Elevation; (28) Bulkhead Details; (29)
Bulkhead Details; (30) Bulkhead Details; (31) Concrete Details; (32) Manhole Details; (33) Anode
Location Plan; (34) Electrical Site Plan; (35) Bonding Locations & Details; (36) Reference
Drawing; (37) Reference Drawing; and (38) Reference Drawing. DX 1 at 36.
8
FAR 52.236-3(a) provides that
[t]he Contractor acknowledges that it has taken steps reasonably necessary to
ascertain the nature and location of the work, and that it has investigated and
satisfied itself as to the general and local conditions which can affect the work or
its cost, including but not limited to (1) conditions bearing upon transportation,
disposal, handling, and storage of materials; (2) the availability of labor, water,
electric power, and roads; (3) uncertainties of weather, river stages, tides, or similar
physical conditions at the site; (4) the conformation and conditions of the ground;
and (5) the character of equipment and facilities needed preliminary to and during
work performance. The Contractor also acknowledges that it has satisfied itself as
to the character, quality, and quantity of surface and subsurface materials or
obstacles to be encountered insofar as this information is reasonably ascertainable
from an inspection of the site, including all exploratory work done by the
Government, as well as from the drawings and specifications made a part of this
contract. Any failure of the Contractor to take the actions described and
10
In addition, the Solicitation contained a release of liability for “any conclusions or
interpretations” arising from the information provided by the NAVFAC. DX 14 at 1. This
release included FAR 52.236-3(b) warning potential bidders that
[t]he Government assumes no responsibility for any conclusions or interpretations
made by the Contractor based on the information made available by the
Government. Nor does the Government assume responsibility for any
understanding reached or representation made concerning conditions which can
affect the work by any of its officers or agents before the execution of this contract,
unless that understanding or representation is expressly stated in this contract.
48 C.F.R. 52.236-3(b).
Neither the Appledore Report nor the FST Report nor their findings were provided by the
NAVFAC to potential bidders.
C. On June 4, 2009 and June 11, 2009, The Naval Facilities Command Conducted
Two Site Visits Of The Newport Naval Station Wharf.
On June 4, 2009 and June 11, 2009, the NAVFAC allowed prospective bidders to
investigate site conditions. DX 1 at 517, 520. At the beginning of each visit, Travis J. Germano,
a NAVFAC Construction Manager, provided bidders with a brief safety presentation and then took
them to the site. TR at 2223 (Germano). Prospective bidders were encouraged to walk the entire
length between Piers 1 and 2 and investigate the wharf’s conditions carefully. TR at 2225
(Germano). They also were instructed to submit any questions in writing, so that everyone would
have access to the same information. TR at 2223 (Germano).
At the site, hazardous conditions around the wharf were marked by yellow sawhorses,
orange construction fencing, and/or concrete barriers. TR at 2226 (Germano).
acknowledged in this paragraph will not relieve the Contractor from responsibility
for estimating properly the difficulty and cost of successfully performing the work,
or for proceeding to successfully perform the work without additional expense to
the Government.
48 C.F.R. 52.236-3(a).
11
DX 742.10 (photograph of the wharf taken on May 19, 2008, prior to the June 4 and June 11,
2009 site visits and RDA’s commencement of performance on February 5, 2010).
DX 742.25 (photograph of the wharf taken on December 8, 2009, after the June 4 and June 11,
2009 site visits, but prior to RDA’s commencement of performance on February 5, 2010).
Exposed steel was visible where the wharf’s concrete structure showed deterioration. TR
at 2226 (Germano).
12
DX 742.18 (photograph of deteriorated H-piles taken on November 29, 2009, after the June 4 and
June 11, 2009 site visits, but prior to RDA’s commencement of performance on February 5, 2010).
DX at 742.17 (photograph of deteriorated H-piles taken on November 29, 2009, after the June 4
and June 11, 2009 site visits, but prior to RDA’s commencement of performance on February 5,
2010).
In addition, there were large sinkholes located along seventy-five percent of the bulkhead.
TR at 2224–25 (Germano). Several bidders climbed into these sinkholes to inspect the existing
seawall and conditions underneath the wharf. TR at 2224–25 (Germano).
13
DX 742.7 (photograph of sinkhole taken on May 19, 2008, prior to the June 4 and June 11, 2009
site visits and RDA’s commencement of performance on February 5, 2010).
An Estimator for RDA testified that he inspected the entire project site and paid special
attention to the condition of the concrete deck and H-piles. TR at 79–80, 127–28 (Wood). But,
RDA did not submit any questions to the NAVFAC, because RDA wanted to keep its bidding
strategy secret. TR at 1474 (“We didn’t ask any questions because you are trying to keep your
competitive advantage and your thought process to yourself. You are not trying to let everybody
know what you are thinking.” (Kelley)).
D. On June 30, 2009, RDA Construction Corp. Submitted A Bid.
On June 30, 2009, RDA submitted a bid for $7,162,524. DX 18 at 1. On July 7, 2009, the
NAVFAC informed RDA that it was “the apparent low bidder” and requested that RDA provide:
a. Identification of the Contractor’s personnel and management to be used on this
contract.
b. The Contractor’s technical and management plans for performing required services.
c. Description of Contractor’s facilities and equipment.
d. Summary of the Contractor’s experience in performing work of the type required
by this specification.
14
e. Current financial statements and data, including financial institution, point of
contact, and phone number.
f. Other work presently under contract.
g. Prior contracts for similar work, and the names, addresses and telephone numbers
of individuals with the organization issuing the contract who may be contacted for
information concerning the Contractor’s performance.
DX 22 at 1–2.
On July 9, 2009, the NAVFAC informed RDA that its bid price “was substantially lower
than the Government estimate” and requested that RDA “review [its] bid worksheets for . . .
possible errors or omissions, assure [itself] that [it] fully underst[ood] the scope of work, and that
[it] . . . include[d] . . . reasonable amounts to accomplish [the] work [required by the Solicitation].”
DX 22 at 2. If RDA considered its bid price to be correct, RDA was instructed to provide a written
confirmation of the price and a statement to the NAVFAC “waiv[ing] any and all claims of a bid
mistake after award of the contract.” DX 22 at 2. After reviewing its bid, RDA informed the
NAVFAC that “no clerical mistake was made in our calculations” and “[RDA] will honor the bid
price and will not file any claims because of a bid mistake[.]” DX 22 at 3.
On July 13, 2009, RDA also provided the NAVFAC with Technical And Management
Plans stating that
RDA plans on performing the work both from the land site and the waterside. The
demolition of the deck and beams will be done from the land while the removal of
the piles will be done from the water. For the driving of the sheets and the
installation of the king piles, RDA plans to do this from the land with a barge in
front of the work to assist in the performance. The diving crew will work off of
floats in front of their work. All deliveries of materials will be done from land.
RDA will self perform most of the work, but will hire qualified subcontractors for
the specialty work, i.e. soil anchor, paving, etc. RDA will complete this project
well ahead of 18 months as allowed in the contract.
DX 23 at 20.
E. On October 13, 2009, RDA Construction Corp. Signed Contract No. N40085-
09-B-7002.
On September 30, 2009, the NAVFAC awarded Contract No. N40085-09-C-7002 (“the
Contract”) to RDA. DX 1 at 536–37. On October 13, 2009, RDA signed the Contract. DX 1 at
537. On October 15, 2009, the NAVFAC issued a Notice To Proceed. DX 29 at 1 (“[T]his letter
constitutes your authority to commence work at the job site subject to the terms and conditions of
the contract concerning other submittals required prior to commencing work.”). Pursuant to the
October 13, 2009 Contract, RDA was to “complete [contract performance] within 555 days after
receiving notice to proceed,” i.e., the completion date was set as June 26, 2011. DX 1 at 1.
15
F. On November 18, 2009, The Appledore Report Was Disclosed To RDA
Construction Corp.
On November 12, 2009, RDA met with Mr. Germano, the NAVFAC’s Construction
Manager, at a pre-construction conference. DX 36 at 1; DX 37 at 2. Afterwards, Michael Hartman,
RDA’s Project Manager, and Mr. Germano toured the project site. TR at 188 (Hartman); TR at
2253 (Germano). During the tour, Mr. Hartman informed Mr. Germano that RDA planned to
demolish the wharf, using two excavators that would be placed side-by-side on the wharf and
gradually work backwards from one end to the other, ripping up the concrete structure and
removing piles as they moved along. TR at 188 (Hartman). Mr. Hartman also stated that RDA
would leave a narrow strip on the outboard side of the wharf where the soil anchoring equipment
would be placed while the new bulkhead was installed. TR at 2253 (Germano). At trial, Mr.
Germano testified that he was “shocked” by RDA’s demolition plan, because the “wharf [was]
condemned.” TR 2254 (Germano).
On November 18, 2009, Mr. Germano provided RDA with the Appledore Report and
restated his reservations about RDA’s demolition plan: “[F]rom [a] quick review of the document
and drawings, [he] would significantly question the capacity of the [marginal] wharf” and “[f]rom
a safety perspective, [he did] not believe [RDA would] be allowed to place any equipment or
vehicles on the wharf.” PX 28 at 1.
On November 20, 2009, RDA informed Mr. Germano that it reviewed the Appledore
Report and was concerned that the wharf apparently was not capable of supporting a live load—a
fact not mentioned in the Solicitation. PX 29. RDA explained that
[i]n preparation of [its] bid[,] [RDA] included means and methods to utilize
portions of the existing structure as a work platform for the initial selective
demolition of the wharf structure, rip rap removal, subsequent drilling of the earth
anchors and final demolition of the structure. Each of these work activities included
staging equipment off the existing wharf not marine access from barge mounted
equipment. The instability of the wharf will cause both time and cost impacts.
PX 29.
On December 9, 2009, the NAVFAC became concerned that the conditions described in
the Appledore Report would adversely affect the cost of completing the wharf and requested that
RDA provide the following information:
 Please explain in some detail exactly how you intended to utilize the existing wharf
in performing the contract work. For example, what portions of the wharf did you
intend to demolish at various times, what equipment did you intend to stage on the
remaining portions of the wharf, and how did you intend to use that equipment to
advance the project?
 Please provide a plan view drawing noting the type of equipment, locating their
position & reach capability. Please provide a profile view drawing for both the
16
rock removal work and soil anchor work locating equipment position, available
angle of drilling, and reach capability.
 Please provide your best current estimate of the cost and time impacts you will
incur if you are required to utilize barges and temporary structures to perform the
contract work. Please briefly explain how you arrived at your figures.
DX 54 at 1.
The NAVFAC also warned RDA that the December 9, 2009 letter should not be interpreted
as accepting RDA’s characterization that the Solicitation and/or contract specifications and
drawings were not complete. DX 54 at 2.
On December 20, 2009, RDA responded to the NAVFAC’s December 9, 2009 letter,
explaining that its “As-Bid Plan” was to use the existing wharf as a staging platform for a two-step
demolition process. DX 62 at 3. During the first step, RDA planned to demolish the inboard side
of the wharf. DX 62 at 3. This work would be performed from the wharf, by moving the
demolition equipment backward from one end to the other. DX 62 at 3. Noncritical sections of
the inboard wharf would be left intact to provide access to the outboard side. DX 62 at 3. Then,
RDA would place a drill rig on the outboard portion of the wharf to complete the earth anchor
installations required for the new bulkhead. DX 62 at 3. After installation of the earth anchors,
RDA would demolish the outboard wharf. DX 62 at 3–4. But, in light of the Appledore Report,
the wharf could no longer be used as a platform for demolition or construction staging. DX 62 at
4. Therefore, that work would have to be performed from barge-mounted equipment and/or
platforms supported by temporary piles. DX 62 at 4. And, because these structural problems were
not disclosed in the Solicitation or during the site visit, RDA would need to spend an additional
$1,209,905.62 to complete performance. DX 62 at 4–5; but see PX 35 at 1–2 (subcontractor
estimate advising RDA that if the wharf demolition was performed from barges, it would cost
RDA an additional $797,400).
On December 23, 2009, RDA submitted a Baseline Network Analysis Schedule (“baseline
schedule”) to the NAVFAC, compiled from its as-bid plan. DX 65 at 1; TR at 229–32 (Hartman).
Pursuant to the October 13, 2009 Contract, “[s]ubmittal and acceptance of the [baseline schedule]
and accurate updated schedules accompanying [RDA’s] pay requests [were] both conditions
precedent to [the NAVFAC] processing pay request.” DX 1 at 144.
On February 2, 2010, the NAVFAC informed RDA that the December 23, 2009 baseline
schedule was not acceptable, because “it [did] not accurately represent the actual ‘work process
logic,’ that is, performing the work from barge mounted equipment, in which the project will be
completed.” DX 87 at 1. The NAVFAC also advised RDA that the February 2, 2010 letter would
“serve as confirmation to our several phone conversations that all submitted baseline [schedules]
to date were not approved.” DX 87 at 1. That same day, RDA submitted a revised baseline
schedule. PX 58 at 1.
On February 5, 2010, the NAVFAC repeated that “the multiple baseline schedules
previously submitted . . . [were] not acceptable” (DX 95 at 1), but conditionally approved RDA’s
February 2, 2010 baseline schedule for the limited purpose of allowing work to begin. PX 58 at 1.
17
The NAVFAC advised RDA that “invoicing will not be permitted until [the NAVFAC]
complete[d] a full review of [the] schedule and accept[ed] it.” PX 58 at 1.
On February 8, 2010, the NAVFAC informed RDA that
[t]he [NAVFAC] is in the process of reviewing the information RDA . . . has
provided regarding its planned method of performance of the P-469 Waterfront
Improvement contract when it submitted its bid. The information consists of
[RDA’s December 20, 2009] letter . . . and marked up drawings CD-101 and CD-
501 (which include narrative inserted by RDA discussing your proposed methods).
While we have not completed our review of this information, two of our subject
matter experts have expressed strong reservations regarding whether your proposed
methods were feasible even if the wharf were structurally sound[.]
While the Navy hopes to complete its analysis of this issue in the near future and
determine whether RDA is entitled to any adjustment to the contract price for
adjusting its method of performance, our analysis does not excuse RDA from
starting performance. As you are aware, your contract contains FAR Clause
52.233-1, “Disputes.” 9
DX 98 at 1.
On April 1, 2010, the NAVFAC informed RDA that the July 3, 2010 revised baseline
schedule contained thirty-four deficiencies and returned it to RDA for revisions consistent with
the NAVFAC’s comments. DX 111 at 1.
On April 21, 2010, RDA submitted another revised schedule that the NAVFAC also
rejected, listing eighteen deficiencies that RDA was required to address before the baseline
schedule could be approved. DX 121 at 2.
G. On April 21, 2010, RDA Construction Corp. Filed A Certified Claim.
On April 21, 2010, RDA filed a certified a claim, requesting that the NAVFAC adjust the
contract price by $1,948,053.86 to reflect the additional costs that RDA would incur to perform
demolition of the wharf and construction of a new bulkhead from barge-mounted equipment. DX
118 at 1, 4.
H. On May 17, 2010, The Naval Facilities Command Approved RDA
Construction Corp.’s Baseline Schedule.
On April 28, 2010, RDA submitted another baseline schedule for the NAVFAC’s approval.
DX 130 at 1. On May 13, 2010, the NAVFAC rejected the April 21, 2010 submission, because it
did not include work that the October 13, 2009 Contract required. DX 130 at 1–3. The next day,
9
FAR 52.233-1(i) states that “[t]he Contractor shall proceed diligently with performance
of [the relevant] contract, pending final resolution of any request for relief, claim, appeal, or action
arising under the contract, and comply with any decision of the [CO].” 48 C.F.R. 52.233-1(i).
18
RDA submitted a new revised baseline schedule, addressing the deficiencies listed in the
NAVFAC’s May 13, 2010 rejection. DX 134 at 1. On May 17, 2010, the NAVFAC finally
approved RDA’s baseline schedule. DX 134 at 1.
I. On August 31, 2010, RDA Construction Corp.’s April 21, 2010 Certified Claim
Was Denied.
On June 17, 2010, the NAVFAC advised RDA that the Defense Contract Audit Agency
(“DCAA”) was performing an audit of RDA’s April 21, 2010 Certified Claim and a final decision
would be issued on, or before, August 31, 2010. DX 151. On August 11, 2010, RDA was warned
that the NAVFAC would deny RDA’s certified claim, if RDA continued to fail to provide the
information requested by DCAA to complete the audit. DX 170 at 2. RDA, however, still did not
provide the requested documents. TR at 522 (Hartman).
On August 31, 2010, the NAVFAC CO issued a decision recognizing that the NAVFAC
failed to disclose the Appledore Report during the bidding process, but nevertheless denied RDA’s
certified claim, because a “reasonable contractor” who attended the June 4, 2009 and/or June 11,
2009 site visits should have concluded that the wharf was in such poor condition that it could not
be used as a platform for demolition and construction: “[I]t was also unreasonable for RDA to
assume that the wharf was structurally sound in light of the fact that the entire purpose of the
contract was to demolish the structure and build a new one.” DX 193 at 3.
The NAVFAC CO added that
RDA has not demonstrated its claimed damages with sufficient specificity to justify
any payment. The Government has made several requests that RDA provide
calculations showing that the wharf could have accommodated RDA’s proposed
methods, such as supporting the weight and lateral forces of construction
equipment, if it were in good condition, but RDA has never provided any such
information.
DX 193 at 3–4.
J. On September 20, 2010, RDA Construction Corp. Informed The Naval
Facilities Command That Underground Obstructions Were Encountered, So
Work Stopped.
The October 13, 2009 Contract required RDA to replace the bulkhead between Pier 1 and
Pier 2 of the Newport Naval Station. DX 1 at 9. The bulkhead was composed of king piles (i.e.,
support beams installed intermittently along the structure) and sheet piles (i.e., a wall of
interlocking metal sheets that mount onto the king piles). DX 1 at 100; PX 12 at 3. To replace the
bulkhead at Newport Naval Station, RDA was required to extract the existing king and sheet piles
and install new ones. DX 729 at 6 (Helmes Direct).
RDA began to renovate the bulkhead from the south-end. TR at 298–99 (Hartman). On
August 23, 2010, however, RDA informed the NAVFAC that an underground obstruction
prevented RDA from installing additional sheet piles at the south bulkhead and requested direction
19
on how to proceed. DX 206 at 1. On September 20, 2010, RDA requested an equitable adjustment
stating that the obstruction encountered was a differing site condition.10
The NAVFAC did not immediately respond to RDA’s September 20, 2010 letter. As a
result, RDA stopped working on the southern bulkhead and began to remove the sheet piles in the
center bulkhead. TR at 302 (Hartman). But, it was not long before RDA encountered other
difficulties at that location. On December 14, 2010, RDA notified the NAVFAC that “[t]he sheets
[at the center bulkhead were] in such a deteriorated condition [that] they [could not] withstand the
extraction process and pull[ed] apart.” DX 237 at 2. RDA also reported that it would “track all
associated costs to perform this changed condition, and forward same to [the NAVFAC] for
review.” DX 237 at 2.
On January 7, 2011, RDA complained that the NAVFAC failed to acknowledge its
December 14, 2010 letter and warned that “[a]ll work associated with the Center Bulkhead will be
shutdown until the [NAVFAC] responds in writing as required by the [October 13, 2009
Contract].” DX 244 at 1. Nevertheless, RDA proceeded to work on the north bulkhead. TR at
339 (Hartman). On March 9, 2011, RDA informed the NAVFAC that it hit a second obstruction
while installing sheet pile at the north bulkhead and requested to meet with the NAVFAC to discuss
possible solutions. DX 283 at 2. RDA also advised the NAVFAC that “[w]e are now at a position
where no work can proceed on either the South, Center or North Bulkheads without direction. We
laid off all of the workers on site today and will return once we come to a mutual understanding
on how to proceed.” DX 283 at 2.
10
The October 13, 2009 Contract incorporated a “differing site conditions” clause, that
stated:
(a) The Contractor shall promptly, and before the conditions are disturbed, give a
written notice to the Contracting Officer of—
(1) Subsurface or latent physical conditions at the site which differ materially
from those indicated in this contract; or
(2) Unknown 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.
(b) The Contracting Officer shall investigate the site conditions promptly after
receiving the notice. If the conditions do materially so differ and cause an increase
or decrease in the Contractor’s cost of, or the time required for, performing any part
of the work under this contract, whether or not changed as a result of the conditions,
an equitable adjustment shall be made under this clause and the contract modified
in writing accordingly.
48 C.F.R. § 52.236-2(a)–(b).
20
K. On March 10, 2011, The Naval Facilities Command Instructed RDA To
Submit A Cost Proposal To Remove The Obstructions And Continue Work.
On March 10, 2011, RDA was advised that
[t]he [NAVFAC] received [RDA’s] cost proposal on 17 February 2011 regarding
removal of the obstructions. Additional back-up information was requested from
RDA on 4 March 2011[.] . . . [RDA’s] proposal cannot be analyzed until this
information is received.
RDA is claiming that they are unable to remove the existing sheet piles . . . [.] As
stated on drawing CD-501, Note 1, ‘if sheets cannot be extracted, cut sheet along
knuckle from top of sheet to ground line, then continue to extract using a vibratory
hammer.’ During a site visit on 8 March, the [NAVFAC] observed that while trying
to remove the existing sheets, RDA did not cut to the ground line but rather to the
waterline. For this reason, the [NAVFAC] disagrees that RDA has encountered a
differing site condition.
Please be advised that RDA is currently in default of the contract. If RDA disagrees
with the [NAVFAC’s] response to these issues, RDA’s remedy is to utilize the
[CDA], which is incorporated into the contract via FAR 52.233-1. Pursuant to that
clause, ‘the contractor shall proceed diligently with performance of this contract . .
. and comply with any decision of the [CO],’ even though it is pursuing claims
under the [CDA]. . . . Any future abandonment of the project by RDA will be
considered a material breach[.]
DX 274 at 1–2.
On March 11, 2011, RDA responded that its work force would return to the site on March
14, 2011, but the decision to stop work “should not be construed as Project abandonment[,] but
rather a short period of time to coordinate and plan for the most recent developments experience
on the Project.” DX 276 at 1.
On March 16, 2011, RDA informed the NAVFAC of another obstruction at the north
bulkhead that was encountered, renewed complaints that obstructions at the bulkhead were
differing site conditions, and requested a meeting to discuss “various options and hopefully come
to terms with a solution.” DX 283 at 3.
L. In Late March 2011, RDA Construction Corp.’s Quality Control Manager
And Site Safety Health Officer Quit.
In late March 2011, RDA’s Site Safety Health Officer (“SSHO”) and Quality Control
Manager (“QC”) quit after RDA experienced two accidents on site. DX 174; DX 262; TR at 1180–
81 (Mr. Rachupka), 1368 (Kelley). Thereafter, from March 31–May 5, 2011, RDA sent numerous
letters to the NAVFAC requesting that Ray Morisette, Peter Meomartino, Lynda Amarantes,
Michael Rand, and Richard DiRamio be approved as QCs and SSHOs. DX 307–13, 316, 319–20,
322–26. On May 9, 2011, the NAVFAC approved Mr. Morrissette to serve both as the QC and
21
SSHO, but denied RDA’s other proposed personnel, because their “resumes and certificates” did
not meet contract requirements. DX 327 at 1.
M. On June 7, 2011 And August 19, 2011, The Naval Facilities Command Issued
Contract Modifications 4 and 5 To The October 13, 2009 Contract.
On April 4, 2011, the NAVFAC requested that RDA submit a cost proposal for “a
pneumatic percussive air-track drill rig to penetrate through the reported obstructions [at the south
bulkhead and north bulkhead],” but cautioned that “this is an inquiry only and is not to be construed
as authority to proceed with the work.” DX 293 at 1. On April 12, 2011, RDA provided the
NAVFAC with that proposal. DX 298 at 1. On April 14, 2011, the NAVFAC asked for more
information and “to provide an approximate number of days [RDA] thought it might take to drill
through the obstructions so [the NAVFAC could] put an estimated number of days in the
modification[.]” DX 299 at 1. On April 22, 2011, RDA provided that information. DX 304 at 1.
On June 7, 2011, the NAVFAC executed Modification 411 as an equitable adjustment to
the October 13, 2009 Contract, “to incorporate changes required by obstructions encountered
during installation of sheet piles.” DX 1 at 587. Modification 4 required RDA to drill through the
obstructions at the south and north bulkheads, extended the contract completion date by forty-four
days, i.e., from June 26 to August 9, 2011, and increased the contract price by $290,180. DX 1 at
588. Modification 4 also required that “[a]cceptance of this modification by the Contractor
constitutes an accord and satisfaction and represents payment in full for both time and money and
for any and all costs, impact effect, and for delays and disruptions arising out of, or incidental to,
the work as herein revised.” DX 1 at 588 (emphasis added).12
On June 28, 2011, Ray Morrissette had a heart attack. DX 347 at 1; PX 138 at 1; TR at
659 (Wallis), 1157–58 (Rachupka), 1373 (Kelley). Because the October 13, 2009 Contract
required RDA to “[p]rovide a Site Safety and Health Officer (SSHO) at the work site at all times,”
RDA had to stop work, pending Ray Morrissette’s recovery or the appointment of another SSHO.
DX 1 at 192; DX 347 at 1; DX 350 at 1. On June 29, 2011, RDA re-proposed Lynda Amarantes
11
Modifications 1–3 made administrative changes to the October 13, 2009 Contract. On
November 4, 2009, the NAVFAC executed Modification 1 designating the Facilities Engineering
Acquisition Division team at Newport Naval Station as the Administrative Contracting Officer
and set the liquidated damages amount at $3,531.56 for each calendar day of delay until the work
is completed. DX 1 at 581. On January 27, 2010, the NAVFAC executed Modification 2
providing that payment to RDA would be made by the Defense Finance and Accounting Service.
DX 1 at 583. On April 15, 2010, Modification 3 changed the contract completion date from April
11, 2011 to June 26, 2011, “due to [an] Option exercised at time of award (which allowed for an
additional 65 days for contract completion if exercised).” DX 1 at 586.
12
The effect of the accord and satisfaction clause was to absolve the NAVFAC from any
liability relating to the non-disclosure of the Appledore Report and the FST Report prior to
executing the October 13,2 009 Contract, including RDA’s April 21, 2010 Certified Claim.
22
for the QC and SSHO positions. DX 345 at 1; DX 346 at 1. On June 30, 2011, RDA also re-
proposed Michael Rand for the QC position. DX 348 at 1.
On July 13, 2011, the NAVFAC responded that Lynda Amarantes was not qualified to
serve as a QC or SSHO. DX 356 at 1. On July 27, 2011, RDA advised the NAVFAC that Ray
Morrissette was “cleared by his cardiologist to return to work,” but was required to “attend [a
cardiac rehabilitation program] on Mondays, Wednesdays, [and] Fridays.” DX 366 at 1. RDA
proposed that Michael Rand act as QC and SSHO, when Ray Morrissette was absent. DX 366
at 1.
On August 9, 2011, RDA informed the NAVFAC that it began drilling through the
obstructions on July 17, 2011, but work was still in progress. DX 372 at 1. The August 9, 2011
letter also advised that
[t]o date [RDA has] experienced conditions which were not anticipated in the scope
of additional work. Several iterations of obstruction drilling, attempted driving of
permanent sheets and then more drilling has occurred several times. Unanticipated
additional obstruction drilling at the Center Bulkhead . . . , extraction of existing
sheet pile at the North Bulkhead . . . causing adjacent King Piles to move outboard.
In general RDA has worked out of planned sequence causing our Obstruction Drill
Crew and Pile Driving Crew to experience inefficiencies in production.
DX 372 at 1.
On August 19, 2011, the NAVFAC issued Modification 5 to the October 13, 2009 Contract,
extending the contract end-date from August 9 to August 16, 2011, and increased the contract price
by $41,055. DX 1 at 592. Modification 5 also included an accord and satisfaction clause. DX 1
at 592.
N. On August 31, 2011, RDA Construction Corp. Filed A Complaint In The
United States Court Of Federal Claims.
On August 31, 2011, RDA filed a Complaint in the United States Court of Federal Claims,
alleging that: (1) the Government violated its duty to disclose material information regarding the
nature of the work required by the October 13, 2009 Contract; (2) under the differing site
conditions clause of the October 13, 2009 Contract, RDA is entitled to recover costs attributable
to site conditions that differed materially from the conditions disclosed in the contract documents;
and (3) the NAVFAC affirmatively and intentionally misrepresented the conditions of the wharf.
ECF No. 1, 8/31/11 Compl. at ¶¶ 49–50, 52–53, 55–56 (“8/31/11 Compl.”). On that same day,
RDA Construction Corp. v. United States, No. 11-555, was assigned to the Honorable Francis M.
Allegra. ECF No. 3.
O. On September 14, 2011, RDA Construction Corp. Experienced A Third
Accident At The Project Site.
On September 14, 2011, RDA had an accident at the Newport Naval Station involving a
Manitowoc 4100W crane, but no one was injured. DX 398 at 1. On September 27, 2011, RDA
was informed that its safety record was unacceptable, because “neither the SSHO/QC Manager
23
nor the Superintendent [was] on site when the accident occurred.” DX 413 at 1. The NAVFAC
also warned RDA that
[i]f the Government observes any unsafe conditions at the project site in the future,
or if any future incidents occur, we plan to vigorously enforce the contract’s
remedies for such matters. Specifically, the contract permits the Government to
stop all work on the project until all safety concerns have been remedied. Under
the contract, such a stoppage would not entitle RDA to any type of monetary
adjustment nor any extension of the contract’s completion date. The contract
specifications also permit the Government to demand the removal of your
superintendent and/or SSHO due to their failure to enforce safety requirements and
stop all work until suitable replacements are identified and onsite. And, if such
stoppages result in RDA failing to make sufficient progress on the contract, the
Government will be entitled to terminate the contract for default.
DX 413 at 1–2.
On September 28, 2011, RDA responded that it did not “take the events surrounding the
incident on September 14, 2011 lightly and intend[ed] to address the situation . . . to the
[NAVFAC’s] satisfaction.” DX 415 at 1. To that end, RDA proposed “an internal review of the
contract requirements regarding the SSHO” and promised that “[t]he approved SSHO or his
approved designee will be on site during all work activities,” “[p]rior to a scheduled absence by
the SSHO upcoming safety and QC inspections will be completed,” and “[i]f there are any QC
and/or safety requirements that have to be addressed or if there are multiple work activities being
performed during the SSHO’s absence then RDA’s President, Gene Kelley will provide the
additional oversight.” DX 415 at 2.
On October 11, 2011, RDA proposed that Mark Wallis be approved as the alternate SSHO
so that he could serve as SSHO, when Ray Morrissette was not present at the project site. DX 426
at 1. On October 19, 2011, RDA also submitted Mark Wallis as an alternate QC. DX 436 at 1.
On January 19, 2012, the NAVFAC rejected RDA’s proposal to use Mark Wallis as a QC, because
of
certain prior actions he has taken that have demonstrated a total disregard for
necessary safety and environmental concerns. For example, Wallis recently
ignored Navy guidance by failing to use any preventive measures to prevent or
mitigate a release of fuel during the recovery operation of the sunken push boat [on
January 12, 2012]. Although the need for such measures was explicitly discussed
during the critical lift meeting on [January 11, 2012] and mentioned again prior to
the critical lift on [January 12, 2012], RDA did not exercise necessary steps to
prevent or contain a spill.
As a result of RDA’s failure, a fuel spill occurred during the lift and Naval Station
Newport had to report a second release of fuel from RDA’s boat into Narragansett
Bay to the RI Department of Environmental Management and US Coast Guard.
This recent spill was the second release of fuel into Narragansett Bay by RDA in
the past month (first release occurred on [December 29, 2011] when attempting to
24
recover the sunken push boat). Despite having experienced the prior spill, and
despite the Navy’s guidance to RDA to have spill kits available to respond if
additional fuel was released into the water, RDA did not utilize any preventive
measures prior to lifting the boat from the water. The Navy finds this lack of care
on the part of RDA and Wallis to be completely unacceptable.
DX 485 at 1–2. The NAVFAC also denied RDA’s request to use Mark Wallis as an SSHO. DX
486 at 1.
On January 20, 2012, RDA proposed Peter Brewer to replace Ray Morrissette as the SSHO.
DX 487 at 1. On January 24, 2012, RDA requested that the NAVFAC reconsider Mark Wallis as
RDA’s QC. DX 489 at 1. On January 27, 2012, the NAVFAC approved Peter Brewer as RDA’s
SSHO, but again rejected Mark Wallis, insisting that “a different, qualified individual [] fill the
QC position before [RDA could] resume work on the project.” DX 491 at 1. On the same day,
RDA requested approval of Gerald Smith as QC. DX 493 at 1. On February 13, 2012, the
NAVFAC approved Gerald Smith as RDA’s QC. PX 156 at 2.
P. From March 20, 2012 To November 8, 2012, The Naval Facilities Command
Issued Contract Modifications 6–12.
On March 20, 2012, the NAVFAC executed Modification 6, granting RDA a $34,401
equitable adjustment to remove the H-piles, sheet piles, and creosoted timber that were not shown
on the contract drawings and extended the contract completion date from August 16, 2011 to
August 17, 2011. DX 1 at 594. Modification 6 also contained an accord and satisfaction clause.
DX 1 at 594.
On April 13, 2012, the NAVFAC issued Modification 7, requiring RDA to perform
additional drilling through the obstructions at the south bulkhead with a construction monitor
onsite to observe the drilling operations. DX 1 at 597. The contract completion date also was
extended by seventy-one days, i.e., from August 17, 2011 to October 27, 2011, and the total cost
of the contract was increased by $63,959.23. DX 1 at 597.
On June 6, 2012, the NAVFAC executed Modification 8, extending the contract
completion date to November 13, 2011 and the total cost by $95,314, to add a corrosion protection
system on the tie rods for the deck fitting bases and attach all landside anodes to new sheet piles.
Modification 8 also included an accord and satisfaction clause. DX 1 at 601.
On August 17, 2012, the NAVFAC issued Modification 9, extending the contract
completion date to February 14, 2012 and increasing the contract price by $351,423, for additional
drilling through the obstructions at the south and north bulkheads. DX 1 at 604.
On September 4, 2012, the NAVFAC published Modification 10, granting RDA a $69,280
equitable adjustment for the time, labor, material and equipment costs that RDA incurred to drill
through the obstructions at the south bulkhead. DX 1 at 607–08. Modification 10 also extended
the contract completion date to June 15, 2012 for delays when RDA did not have an approved
SSHO and QC. DX 1 at 608.
25
On September 19, 2012, the NAVFAC executed Modification 11, decreasing the contract
completion date to June 12, 2012 and deducting $2,504 from the contract price, because RDA used
a method to drill through the obstructions at the north bulkhead that was less expensive than
originally anticipated. DX 1 at 611–12.
On November 8, 2012, the NAVFAC executed Modification 12, extending the contract
completion day to October 5, 2012, and increasing the contract price by $299,165, for additional
work required to drill through obstructions at the north bulkhead. DX 1 at 614–15.
Q. On February 21, 2013, The Naval Facility Command Terminated The October
13, 2009 Contract.
On November 7, 2012, the NAVFAC directed RDA to remove several piles from the bay
floor that broke below the mud-line. DX 626 at 1. On January 18, 2013, RDA complained that
the NAVFAC’s repeated failure to adjust the October 13, 2009 Contract for unforeseen conditions
and November 7, 2012 directive constituted a cardinal change. DX 626 at 2. Therefore, RDA
refused to comply with the NAVFAC’s instructions. DX 626 at 2.
On November 28, 2012, J. P. Riley Crane Consultants (“J.P. Riley”), an independent crane
inspector, conducted an annual inspection of the Manitowoc 4100W crane and presented RDA
with a Crane Inspection Certificate, but also issued a Deficiency Report citing five items that
needed repair. DX 677 at 3, 6. RDA was instructed to sign the Deficiency Report and return it to
J.P. Riley, ten days after the repairs were made. DX 677 at 6. On December 13, 2012, an RDA
employee signed the Report. DX 677 at 6.
On January 9, 2013, RDA provided the NAVFAC with the November 28, 2012 Crane
Inspection Certificate and signed Deficiency Report. DX 677 at 17. But, on January 10, 2013, a
NAVFAC official sent an e-mail to RDA stating there was no “mention when the crane was re-
inspected by J[.]P[.] Riley confirming the adequacy of repairs so that it could be placed back into
service.” DX 677 at 18. The email also stated that, according to the United States Army Corps of
Engineer Safety And Health Requirements Manual EM 385-1-1 (2008) (the “EM 385-1-1”): “a
written report is required confirming the adequacy of repairs.” DX 677 at 18. Subsequently, the
NAVFAC and RDA argued about whether the EM 385-1-1 required J.P. Riley to re-inspect the
crane after the repairs were completed, or if an RDA mechanic could perform the re-inspection.
DX 677 at 17–27.
On January 14, 2013, the NAVFAC issued a letter, pursuant to FAR 52.236–13,13
directing RDA “to have the Manitowoc 4100 crane inspected by an independent, third-party that
13
In demolition contracts, FAR 52.236–13 provides that “the Contractor shall comply with
all pertinent provisions of the latest version of U.S. Army Corps of Engineers Safety and Health
Requirements Manual, EM 385–1–1, in effect on the date of the solicitation,” and
[if the] Contracting Officer becomes aware of any noncompliance with these
requirements or any condition which poses a serious or imminent danger to the
health or safety of the public or Government personnel, the Contracting Officer
shall notify the Contractor orally, with written confirmation, and request
26
specializes in performing crane inspection” and stating that “RDA is not permitted to use the
Manitowoc 4100 crane . . . until such an independent inspection has been completed.” DX 677 at
28. The letter also instructed that the NAVFAC personnel were to be present for the re-inspection.
DX 677 at 28.
On January 16, 2013, J.P. Riley re-inspected the crane in the presence of Craig Rachupka,
NAVFAC’s Construction/Project Manager. DX 625 at 1. At the re-inspection, RDA agreed to
make the necessary repairs and submit to a third re-inspection. DX 625 at 2. The NAVFAC also
instructed RDA to keep the crane out of service until that time. DX 677 at 60. Afterward, RDA
sent the NAVFAC additional letters about whether FAR 52.236–13 and the EM 385-1-1 gave the
NAVFAC authority to keep RDA’s Manitowoc 4100 crane out of service. DX 677 at 60, 104,
106, 118–121.
On January 31, 2013, the NAVFAC instructed RDA to show cause why the October 13,
2009 Contract should not be terminated for default, pursuant to FAR 52.249-10,14 because
immediate initiation of corrective action . . . . If the Contractor fails or refuses to
promptly take corrective action, the Contracting Officer may issue an order
stopping all or part of the work until satisfactory corrective action has been taken.
The Contractor shall not be entitled to any equitable adjustment of the contract
price or extension of the performance schedule on any stop work order issued
under this clause.
48 C.F.R. § 52.236–13 (c), (d).
14
FAR 52.249-10 states, in relevant part,
(a) If the Contractor refuses or fails to prosecute the work or any separable part,
with the diligence that will insure its completion within the time specified in this
contract including any extension, or fails to complete the work within this time, the
Government may, by written notice to the Contractor, terminate the right to proceed
with the work (or the separable part of the work) that has been delayed. In this
event, the Government may take over the work and complete it by contract or
otherwise, and may take possession of and use any materials, appliances, and plant
on the work site necessary for completing the work. The Contractor and its sureties
shall be liable for any damage to the Government resulting from the Contractor’s
refusal or failure to complete the work within the specified time, whether or not the
Contractor’s right to proceed with the work is terminated. This liability includes
any increased costs incurred by the Government in completing the work.
(b) The Contractor’s right to proceed shall not be terminated nor the Contractor
charged with damages under this clause, if—
(1) The delay in completing the work arises from unforeseeable causes beyond
the control and without the fault or negligence of the Contractor.
48 C.F.R. 52.249-10.
27
the contract’s [amended] completion date passed almost four months ago, on 5
October 2012. Since that date, the Navy ha[d] refrained from terminating RDA . . .
under the default clause in hopes that RDA would make significant progress
towards completion, thereby mitigating its potential damages.
RDA’s continued failure to make progress towards completion of this project,
however, require[d] the Navy to reconsider its position regarding termination.
RDA . . . made only limited progress on any contract work for over a month and at
least two of its major pieces of equipment . . . [were] currently broken, [creating]
significant concerns regarding RDA’s ability, and desire, to achieve progress in the
future. RDA . . . also . . . repudiated its duty to perform . . . the extraction of H-
piles broken during earlier removal attempts.
DX 636 at 1.
On February 1, 2013, RDA insisted that “progress ha[d] been limited due to obstructions,
and the [G]overnment’s failure to act in good faith and to utilize the partnering agreement to get
this project done.” DX 637 at 1.
On February 21, 2013, a NAVFAC CO terminated the October 13, 2009 Contract for
default, citing RDA’s failure to perform the necessary contract work and complete the project in a
timely manner. DX 650 at 1. In addition, RDA was advised that the NAVFAC intended to issue
a contract modification assessing liquidated damages against RDA. DX 650 at 3. On that date,
the NAVFAC also contacted RDA’s surety, Great American Insurance Company (“GAIC”),
demanding that GAIC complete the October 13, 2009 Contract. DX 653 at 1, 11. Subsequently,
GAIC conducted two underwater surveys of the project site. DX 689; DX 698. Both surveys
showed that RDA left substantial amounts of debris around the footprint of the demolished wharf.
DX 689 at 1; DX 698 at 4.
As a result, on March 18, 2013, RDA filed a Certified Claim stating:
[p]lease find attached our costs associated with your direction to re-inspect the
Manitowoc 4100W crane . . . . As RDA believes that NAVFAC direction to re-
inspect the crane to be unreasonable and exceed contract requirements we are
hereby filing our Notification of Claim.
DX 677 at 114–15.
R. On July 3, 2013, RDA Construction Corp. Filed A Second Certified Claim.
On July 3, 2013, RDA filed a second certified claim alleging that the NAVFAC: delayed
contract performance (DX 691 at 19–29); failed to award RDA time extensions for delays caused
by the NAVFAC (DX 691 at 21); unilaterally modified the October 13, 2009 Contract (DX 691 at
21–25); and wrongfully terminated the October 13, 2009 Contract (DX 691 at 30). This conduct
breached the October 13, 2009 Contract and entitled RDA to recover $1,625,258 in unanticipated
costs and $718,059 in lost profits. DX 691 at 9, 30–31. The July 3, 2013 Certified Claim also
alleged that RDA was not liable for liquidated damages, but entitled to recover $294,705 that the
NAVFAC wrongfully withheld from RDA. DX 691 at 13, 31.
28
On September 26, 2013, the NAVFAC CO determined that RDA’s July 3, 2013 Certified
Claim failed to identify a specific basis for each of the claimed items and was invalid. DX 695 at
2. The CO also determined that, even if the July 3, 2013 Certified Claim was valid, the NAVFAC
was only liable for PCO 46, “Revised Base Access Requirements.” DX 695 at 2. In a separate
letter, also dated September 26, 2013, the NAVFAC CO decided that RDA was entitled to
$11,162.99, because the NAVFAC changed policies regarding base access, causing RDA to incur
the cost of “new access badges for its employees[.]” DX 696 at 1.
On December 20, 2013, the NAVFAC entered into a Tender Agreement with RDA’s
surety, GAIC. DX 700. Under the Agreement, GAIC tendered Haskell Company (“Haskell”) to
complete the October 13, 2009 Contract for $4,707,353. DX 700 at 4. The NAVFAC would pay
Haskell the remaining contract balance of $1,932,415.76 and GAIC would cover the remaining
$2,774,937.24. DX 700 at 4.
On March 4, 2014, Haskell and the NAVFAC executed a contract for completion of the
remaining work under RDA’s October 13, 2009 Contract. DX 702 at 2. Haskell’s March 4, 2014
Contract had a completion date of November 30, 2014. DX 702 at 6.
S. On April 15, 2015, The Naval Facility Command’s Contracting Officer
Determined That RDA Construction Corp. Was Liable For Liquidated
Damages.
On April 15, 2015, the NAVFAC CO also determined that RDA was liable for $2,581,161
in liquidated damages. DX 711 at 1. The CO, however, credited RDA $11,162.99 for PCO 46
and $294,705 for outstanding compensation that the NAVFAC withheld from RDA as partial
payment of the assessed liquidated damages. DX 711 at 1. As a result, the CO determined that
RDA owed the NAVFAC $2,275,293.01 in liquidated damages. DX 711 at 1.
II. PROCEDURAL HISTORY.
After three years of discovery before Judge Allegra, on May 7, 2015, RDA filed a Second
Amended Complaint (“5/7/15 Sec. Am. Compl. at ¶¶ 1–134”), alleging that:
(1) the NAVFAC breached its duty to disclose material information regarding the
extreme deterioration of the Wharf, that was known by the NAVFAC and
unavailable to RDA (“Count I”);
(2) RDA encountered latent site conditions that materially differed from the conditions
described in the Contract (“Count II”);
(3) the NAVFAC knew that the site conditions materially differed from the condition
described in the Contract, but negligently and/or intentionally withheld that
information (“Count III”);
(4) the NAVFAC affirmatively misrepresented the purpose of the Contract and the
actual conditions of the Wharf (“Count IV”);
(5) the NAVFAC breached the Contract (“Count V”);
29
(6) the CO’s administration of contract work was arbitrary and capricious (“Count
VI”);
(7) the NAVFAC acted “willfully, intentionally, and in bad faith,” when it withheld
decisions, created obstructions, failed to timely approve requests for information
and changes, and wrongfully terminated the Contract (“Count VII”);
(8) the NAVFAC breached the Covenant of Good Faith and Fair Dealing (“Count
VIII”); and
(9) the CO’s determination that the NAVFAC was entitled to liquidated damages for
delays caused by RDA and to retain $294,705 in partial payment thereof, was
“improper, unjustifiable, unsupported by the contract documents, and in bad faith”
(“Count IX”).
ECF No. 44, 5/7/15 Sec. Am. Compl. at ¶¶ 95–96, 98–99, 101–04, 106–07, 109–14, 116–18, 120–
22, 124–27, 129–34.
On June 12, 2015, the Government filed an Answer to RDA’s May 7, 2015 Second
Amended Complaint (“6/12/15 Gov’t Answer”) asserting three affirmative defenses: (1) part, or
all, of RDA’s claims are barred by release, waiver, accord and satisfaction, or estoppel; (2) RDA
assumed the risk that its site investigation, as well as its chosen means and methods during
performance, would be inadequate; and (3) to the extent RDA is entitled to any recovery, it must
be offset by amounts that RDA owes the NAVFAC. ECF No. 46, 6/12/15 Gov’t Answer at ¶¶
136–38.
In addition, the June 12, 2015 Answer contained four counterclaims, alleging that the
Government is entitled to:
(1) $2,275,293.01 in liquidated damages, because RDA failed to finish performance of
the October 13, 2009 Contract by the completion date (“Counterclaim I”);
(2) $82,974.70, under the CDA’s anti-fraud provision, 41 U.S.C. § 7103(c)(2), because
RDA misrepresented facts related to items claimed in the July 3, 2013 Certified
Claim (“Counterclaim II”);
(3) forfeiture of RDA’s July 3, 2013 Certified Claim, pursuant to 28 U.S.C. § 2514,
because that claim contained false statements (“Counterclaim III”); and
(4) $231,000, under the False Claims Act, 31 U.S.C. §§ 3729–3733, because RDA
knowingly submitted twenty invoices to the NAVFAC that contained false
representations (Counterclaim IV”).
6/12/15 Gov’t Answer ¶¶ 174–90.
* * *
30
On June 23, 2015, this case was reassigned to the undersigned judge. ECF Nos. 47–48.
On July 14, 2015, the court issued an Order, setting the deadline for RDA’s Answer to the
Government’s June 2, 2015 Counterclaims for July 24, 2015. ECF No. 50. In addition, the court
set a trial date to be held in Boston, Massachusetts commencing on November 16, 2015. ECF
No. 50.
On July 24, 2015, RDA filed an Answer to the counterclaims alleged in the Government’s
June 12, 2015 Answer (“7/24/15 Pl. Answer”), asserting ten affirmative defenses:
(1) The Government’s counterclaims fail to state a claim upon which relief can be
granted (“Affirmative Defense I”);
(2) the Government is estopped from recovering damages from RDA (“Affirmative
Defense II”);
(3) the Government’s counterclaims are barred by the principle of waiver
(“Affirmative Defense III”);
(4) the Government’s counterclaims are barred by the doctrine of unclean hands
(“Affirmative Defense IV”);
(5) the Government’s counterclaims are based on statements or conduct that the
NAVFAC approved or ratified (“Affirmative Defense V”);
(6) to the extent that any of the circumstances alleged by the Government occurred, the
Government is barred from recovery, because these facts were caused by the
NAVFAC (“Affirmative Defense VI”);
(7) the NAVFAC did not rely upon the misrepresentations alleged in the Government’s
counterclaims (“Affirmative Defense VII”);
(8) the Government did not plead any fraud counterclaim with specificity, as required
by law (“Affirmative Defense VIII”);
(9) the Government’s counterclaims are barred, because RDA did not knowingly
submit any false claims to the NAVFAC for payment or approval (“Affirmative
Defense IX”); and
(10) the Government’s counterclaims are barred, because RDA never made an
actionable misrepresentation, nor did it knowingly make any false statement, record
or other representation material to any claim (“Affirmative Defense X”).
ECF No. 51, 7/24/15 Pl. Answer at 6–8.
In addition, RDA “reserve[d] the right to prove such other and further affirmative defenses
as are disclosed in discovery . . . and through evidence offered at the trial of this action.” 7/24/15
Pl. Answer at 8.
31
On September 21, 2015, the parties filed a Joint Status Report requesting a pretrial
schedule. ECF No. 53. On September 29, 2015, the parties filed their respective Preliminary
Witness Lists. ECF Nos. 54–55. On October 7, 2015, the court issued a Scheduling Order, setting
an Initial Pretrial Conference for October 21, 2015. ECF No. 58.
On October 16, 2015, the Government filed a Motion To Dismiss (“Gov’t Mot.”), pursuant
to Rule of the United States Court of Federal Claims (“RCFC”) 12(b)(1), arguing that, under the
Contract Disputes Act, 41 U.S.C. §§ 7101–09, the court does not have jurisdiction to adjudicate
claims alleged in the May 7, 2015 Second Amended Complaint, because it did not identify the
relief sought by RDA. ECF No. 59. Specifically, paragraph ninety-two of the Second Amended
Complaint (ECF No. 59 at 6–7) includes six items that RDA failed to submit to the NAVFAC CO
in a certified claim or that contradicted the RDA’s certified claim. ECF No. 59 at 7–9.
On November 3, 2015, the Government filed a Witness List. ECF No. 60. On November
4, 2015, RDA filed a Witness List. ECF No. 61. That same day, the court issued a Pre-Trial
Scheduling Order, stating that the court would resume trial from November 16, 2015 to November
19, 2015. ECF No. 62. On November 10, 2015, the parties filed their respective Exhibit Lists.
ECF Nos. 63–67. On November 11, 2015, RDA filed a Response to the Government’s October
16, 2015 Motion To Dismiss (“Pl. Resp.”), arguing that the court has jurisdiction to adjudicate all
the claims alleged in the May 7, 2015 Second Amended Complaint, because RDA submitted each
of these claims to the NAVFAC CO prior to filing the May 7, 2015 Second Amended Complaint
in the United States Court of Federal Claims. ECF No. 68, Pl. Resp. at 1. On November 12, 2015,
the court issued an Order denying the October 16, 2015 Motion To Dismiss, pending trial. ECF
No. 69. The same day, the Government filed a Pre-Trial Brief. ECF No. 70. On November 15,
2015, RDA filed a Revised Exhibit List. ECF No. 71.
On November 16–19, 2015, the court presided over trial in Boston, Massachusetts (TR at
1–1141). ECF Nos. 73, 75, 77, 79. On December 4, 2015, RDA filed a Consent Motion For Leave
To File Deposition Transcripts Of Jonathan Peters And Marc Nicolazzo that the court granted.
ECF Nos. 80. On December 5, 2015, RDA filed the deposition testimony of Jonathan Peters and
Marc Nicolazzo. ECF Nos. 81–84. On December 7–10, 2015 the court resumed trial in Boston,
Massachusetts (TR at 1142–2470). ECF Nos. 87, 89, 91, 93. The court also instructed the
Government to produce several documents for which the Government claimed privilege for in
camera review. TR at 1257. On December 17, 2015, the Government filed a Notice Of In Camera
Submission. ECF No. 85. On January 4–6, 2016, the court resumed trial in Washington, D.C.
ECF Nos. 97, 99, 101; TR at 2471–2759.
On March 4, 2016, the parties filed a Joint Status Report. ECF No. 102. Therein, RDA
explained that, during trial, the Government raised concerns that some of RDA’s damages claims
were not supported by financial records. ECF No. 102 at 1. In response, RDA engaged an
accountant to analyze company records and prepare an expert report on RDA’s damages. ECF
No. 102 at 1. RDA requested that the court schedule a hearing to conclude the trial and allow
RDA leave to file a Third Amended Complaint. ECF No. 102 at 2–3. The Government agreed
that the court should schedule a date to conclude the trial, but opposed RDA’s motion. ECF No.
102 at 3–4. On March 16, 2016, the court issued an Order, instructing the parties that trial would
resume on July 11–12, 2016. ECF No. 103. On July 8, 2016, RDA filed a Motion To Bifurcate.
ECF No. 104. On July 11, 2016, trial resumed in Washington D.C. ECF No. 108, (TR at 2760–
32
854). At that time, the court instructed the parties to draft a proposed scheduling order to conclude
the case. TR at 2852. On July 12, 2016, the court denied RDA’s July 8, 2016 Motion To Bifurcate.
On July 18, 2016, the court issued a Scheduling Order, instructing RDA to provide the
Government with an expert report from RDA’s accountant, Michael Brander, by July 30, 2016.
ECF No. 106. In addition, the court instructed the parties to file a Joint Status Report, proposing
a schedule for further proceedings, by August 12, 2016. ECF No. 106.
On August 12, 2016, the parties filed a Joint Status Report, in which they proposed
different schedules. ECF No. 109. RDA proposed that the court re-open discovery on damages;
the Government requested that the court conclude the trial and issue a post-trial briefing schedule.
ECF No. 109 at 1–2, 4.
On August 16, 2016, the court convened a Status Conference, wherein the court stated that,
“in light of the parties’ disputed issues [over damages,] . . . the Court has decided to . . . bifurcate
[this case] and [first] issue a liability decision.” ECF No. 113, 8/16/2016 TR at 11. On August
19, 2016, the parties filed a Joint Status Report, representing that
the parties agree that the most efficient way to proceed at this point will be to
bifurcate plaintiff’s damages case and proceed with briefing as to liability regarding
plaintiff’s claims. This briefing would also include post-trial briefing on
defendant’s counterclaims, for which there is no need for bifurcation, such that
briefing on defendant’s counterclaims would address both liability and quantum.
ECF No. 110. That same day, the court issued a Briefing Schedule, instructing the parties to submit
Post-Trial Briefs by October 5, 2016; any Post-Trial Response Briefs were due by November 4,
2016. ECF No. 111.
On October 18, 2016, RDA filed an Unopposed Motion To Modify The Briefing Schedule.
ECF No. 118. On October 19, 2016, the court granted the October 18, 2016 Motion. ECF No.
119. Pursuant to the modified briefing schedule, on November 8, 2016, the parties filed Post-Trial
Briefs (“Pl. PT Br.” and “Gov’t PT Br.”). ECF Nos. 120–21. On January 23, 2017, the parties
filed Post-Trial Response Briefs (“Pl. PT Resp.” and “Gov’t PT Resp.”). ECF Nos. 129–30.
On April 18, 2017, the court instructed the parties to file a Draft Order, identifying all of
the Exhibits and Demonstratives admitted into evidence in this case. On May 17, 2017, the parties
submitted the Draft Order, attached hereto as Court Exhibit A.
III. DISCUSSION.
A. Jurisdiction.
The Tucker Act authorizes the United States Court of Federal Claims with jurisdiction to
adjudicate any claim that: (1) arises under the Contract Disputes Act (“CDA”), 41 U.S.C. §§ 7101–
7109; and (2) has been submitted to the relevant CO for a final decision. See 28 U.S.C. 1491(a)(2)
(“The [United States] Court of Federal Claims shall have jurisdiction to render judgment upon any
claim by or against, or dispute with, a contractor arising under section 7104(b)(1) of title 41 . . .
on which a decision of the [CO] has been issued[.]”).
33
1. Whether The Claims Alleged In The May 7, 2015 Second Amended
Complaint Arise Under The Contract Disputes Act.
A claim “arises under” the CDA if it is based on
any express or implied contract . . . made by an executive agency for-- (1) the
procurement of services, other than real property in being; (2) the procurement of
services; (3) the procurement of construction, alteration, repair, or maintenance of
real property; or (4) the disposal of personal property.
41 U.S.C. § 7102(a).
The May 7, 2015 Second Amended Complaint alleges nine claims that are based on the
October 13, 2009 Contract between the NAVFAC and RDA to improve a wharf at Newport Naval
Station. Sec. Am. Compl. at ¶¶ 1–134. For this reason, the court has determined that the claims
alleged in the May 7, 2015 Second Amended Complaint arise under the CDA.
2. Whether The Claims Alleged In The May 7, 2015 Second Amended
Complaint Were Submitted To The Contracting Officer For A Final
Decision.
The CDA provides that “[e]ach claim by a contractor against the Federal Government
relating to a contract shall be submitted to the [CO] for a decision.” 41 U.S.C § 7103(a)(1)
(emphasis added). For this reason, the United States Court of Appeals for the Federal Circuit has
held that CDA “jurisdiction . . . requires both a valid claim and a [CO’s] final decision on that
claim.” M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir. 2010).
The CDA, however, does not define the term “claim.” Id at 1327. Therefore, the court
“look[s] to the FAR implementing the CDA for the definition [of that term].” Id. (citing
Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1575 (Fed. Cir. 1995) (en banc)). According to the FAR,
a “claim” is “a [non-routine,] written demand or written assertion by one of the contracting parties
seeking, as a matter of right, the payment of money in a sum certain, the adjustment or
interpretation of contract terms, or other relief arising under or relating to the contract.” 48 C.F.R.
§ 52.233-1.
A claim under the CDA also must contain “a clear and unequivocal statement that gives
the [CO] adequate notice of the basis and amount of the claim.” Contract Cleaning Maint., Inc. v.
United States, 811 F.2d 586, 592 (Fed. Cir. 1997). A claim also must “indicate to the [CO] that
the [plaintiff] is requesting a final decision.” See M. Maropakis Carpentry, 609 F.3d at 1327. In
addition,
[f]or claims of more than $100,000 made by a contractor, the contractor shall certify
that--
(A) the claim is made in good faith;
(B) the supporting data are accurate and complete to the best of the contractor’s
knowledge and belief;
34
(C) the amount requested accurately reflects the contract adjustment for which
the contractor believes the Federal Government is liable; and
(D) the certifier is authorized to certify the claim on behalf of the contractor.
41 U.S.C. § 7103(b)(1).
If a the plaintiff submits a valid CDA claim, the CO has sixty days to issue a decision or
notify the plaintiff of the time within which a decision will be issued. See 41 U.S.C. §§ 7103(f)(1)–
(2). The CO’s failure “to issue a decision on a claim within the required time period is deemed to
be a decision by the [CO] denying the claim and authoriz[ing] an appeal or action on the claim[.]”
41 U.S.C. § 7103(f)(5).
In addition, “[a]n action brought before the [United States] Court of Federal Claims under
the CDA must be ‘based on the same claim previously presented to and denied by the [CO].’”
Scott Timber Co. v. United States, 333 F.3d 1358, 1365 (Fed. Cir. 2003) (quoting Cerberonics,
Inc. v. United States, 13 Cl. Ct. 415, 417 (1987)). “This standard, however, does not require rigid
adherence to the exact language or structure of the original administrative CDA claim [when
different claims] arise from the same operative facts, [and] claim essentially the same relief, and
merely assert differing legal theories for that recovery.” Scott Timber, 333 F.3d at 1365.
a. Regarding Counts I–IV.
On April 21, 2010, prior to filing this lawsuit, RDA submitted a certified claim to the
NAVFAC CO requesting an equitable adjustment for costs that RDA did not anticipate, because
the NAVFAC failed to disclose the Appledore Report and FST Report. DX 118 at 1–3. The April
21, 2010 Certified Claim specified that the equitable adjustment was related to “the 2005 Marginal
Wharf Inspection Report,” i.e., the Appledore Report (DX 118 at 1), and provided a detailed
breakdown of the costs RDA sought to recover (DX 118 at 4–5), providing the NAVFAC CO
“adequate notice of the basis and amount of the claim.” Contract Cleaning, 811 F.2d at 592. On
August 31, 2010, the NAVFAC CO denied RDA’s April 21, 2010 Certified Claim.
Counts I–IV of the May 7, 2015 Second Amended Complaint allege that RDA is entitled
to damages for the NAVFAC’s failure to disclose that the Newport Naval Station wharf could not
support the weight of construction equipment under four different legal theories: (1) the NAVFAC
violated its duty to disclose “superior knowledge” regarding the wharf’s deteriorated condition;
(2) the October 13, 2009 Contract’s differing site conditions clause entitles RDA to an equitable
adjustment; (3) the NAVFAC affirmatively misrepresented the condition of the Newport Naval
Station wharf; and (4) the NAVFAC misrepresented the purpose of the project. 5/7/15 Sec. Am.
Compl. at ¶¶ 94–107.
The April 21, 2010 Certified Claim and Counts I–IV of the May 7, 2015 Second Amended
Complaint “assert differing legal theories for . . . recovery.” Scott Timber, 333 F.3d at 1365. But,
they “arise from the same operative facts, [and] claim essentially the same relief.” Id. Therefore,
Counts I–IV of the May 7, 2015 Second Amended Complaint are “based on the same claim
previously presented to and denied by the [CO].” Id.35
For these reasons, the court has determined that it has jurisdiction to adjudicate Counts I–
IV of the May 7, 2015 Second Amended Complaint.
b. Regarding Counts V–IX.
On July 3, 2013, RDA submitted a second Certified Claim to the NAVFAC CO alleging
that the NAVFAC: delayed contract performance (DX 691 at 19–29); failed to award RDA time
extensions for delays caused by the NAVFAC (DX 691 at 21); unilaterally modified the October
13, 2009 Contract (DX 691 at 21–25); and wrongfully terminated the October 13, 2009 Contract
(DX 691 at 30). This conduct breached the October 13, 2009 Contract and entitled RDA to recover
$1,625,258 in unanticipated costs and $718,059 in lost profits. DX 691 at 9, 30–31. The July 3,
2013 Certified Claim also alleged that RDA was not liable for liquidated damages and owed
$294,705 that the NAVFAC withheld in partial payment of those liquidated damages. DX 691 at
13, 31. The court has determined that the July 3, 2013 Certified Claim properly was submitted to
the CO for a final decision and provided notice of the basis and amount of the claim alleged. See
Contract Cleaning, 811 F.2d at 592. On September 26, 2013, the CO denied the July 3, 2013
Certified Claim. DX 695.
Count V of the May 7, 2015 Second Amended Complaint alleges that the NAVFAC
breached the October 13, 2009 Contract by: causing unnecessary delays, imposing requirements
on RDA beyond the terms of the contract; failing to compensate RDA for the time and cost of
changes to the project; failing to conduct “partnering sessions,” and wrongfully terminating the
October 13, 2009 Contract. 5/7/15 Sec. Am. Compl. at ¶¶ 111–14. Based on the same operative
facts as Count V, Counts VI–IX allege that the NAVFAC’s administration and ultimate
termination of the October 13, 2009 Contract was arbitrary and capricious and violated the
NAVFAC’s duty of good faith and fair dealing. 5/7/15 Sec. Am. Compl. at ¶¶ 115–27.
The July 3, 2013 Certified Claim and Counts V–IX of the May 7, 2015 Second Amended
Complaint arise from the same operative facts and seek essentially the same relief. Therefore,
Counts V–IX are “based on the same claim[s] previously presented to and denied by the [CO].”
Scott Timber, 333 F.3d at 1365.
For these reasons, the court has determined that it has jurisdiction to adjudicate Counts V–
IX of the May 7, 2015 Second Amended Complaint.
c. Regarding Damages.
On October 16, 2015, the Government filed a Motion To Dismiss for lack of subject matter
jurisdiction, pursuant to RCFC 12(b)(1). Gov’t Mot. at 1. Therein, the Government argued that
paragraph ninety-two of the May 7, 2015 Second Amended Complaint contained a table,
identifying the components of RDA’s total damages, but RDA did not properly submit some of
those components to the NAVFAC CO. Gov’t Mot. at 7–9. On November 12, 2015, the court
denied the October 16, 2015 Motion To Dismiss, pending trial in this case. ECF No. 69.
On November 8, 2016, after trial concluded, the Government filed a Post Trial Brief
arguing that “[a]t trial, it remained RDA’s burden to prove that the [c]ourt ha[d] jurisdiction to
grant the relief [RDA] seeks in its [May 7, 2015] second amended complaint.” Gov’t PT Br. at
74; see also Fanning, Phillips, Molnar v. West, 160 F.3d 717, 720 (Fed. Cir. 1998) (“Federal courts
36
are not courts of general jurisdiction[.] We therefore have a special obligation to satisfy ourselves
of our own jurisdiction.” (internal citations omitted)).
The components listed in paragraph ninety-two of the May 7, 2015 Second Amended
Complaint are not separate claims; instead, they specify the amount of damages requested under
Counts I–VIII. Because the court has jurisdiction to adjudicate the subject matter of Counts I–
VIII, the court has determined that it also has jurisdiction to determine any damages arising from
those claims.
B. Standing.
The United States Supreme Court has held that “the question of standing is whether the
litigant is entitled to have the court decide the merits of the dispute or of particular issues.”
Warth v. Seldin, 422 U.S. 490, 498 (1975). Standing must be determined “as of the
commencement of suit[.]” Rothe Dev. Corp. v. Dep’t of Def., 413 F.3d 1327, 1334 (Fed. Cir. 2005)
(quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 570 n.5 (1992)). “The party invoking federal
jurisdiction bears the burden of establishing [standing].” Lujan, 504 U.S. at 560. The United States
Supreme Court held in Friends of the Earth, Inc. v. Laidlaw Envtl. Serv., Inc., 528 U.S. 167 (2000),
that to establish standing
a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and
particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the
injury is fairly traceable to the challenged action of the defendant; and (3) it is
likely, as opposed to merely speculative, that the injury will be redressed by a
favorable decision.
Id. 180–81.
In addition, “[t]o have standing to sue the sovereign on a contract claim, a plaintiff must
be in privity of contract with the United States.” Anderson v. United States, 344 F.3d 1343, 1351
(Fed. Cir. 2003). In other words, the contract in question must be between the plaintiff and the
Government. See Ransom v. United States, 900 F.2d 242, 244 (Fed. Cir. 1990) (“To maintain a
cause of action pursuant to the Tucker Act that is based on a contract, the contract must be between
the plaintiff and the [G]overnment.”).
The May 7, 2015 Second Amended Complaint alleges that RDA suffered monetary injury
that is concrete, particularized, and fairly traceable to the NAVFAC’s actions. And, any financial
injury established by RDA can be redressed by a monetary award. Moreover, it is undisputed that
RDA was a signatory and intended beneficiary of the October 13, 2009 Contract. 5/7/15 Sec. Am.
Compl. at ¶ 5 (“On or about September 14, 2009, RDA entered contract No. N40085-09-C-7002
P469 . . . with the Government[.]”); 6/12/15 Gov’t Answer at ¶ 5 (“Admits the allegations
contained in paragraph 5[.]”). Therefore, RDA is in privity of contract with the Government.
For these reasons, the court has determined that RDA has standing to seek an adjudication
of the claims alleged in the May 7, 2015 Second Amended Complaint.
37
C. The Claims Alleged In RDA Construction Corp.’s May 7, 2015 Second
Amended Complaint.
1. Count I: Whether The Naval Facilities Command Had A Duty To
Disclose The Appledore Report And The Fay, Spofford & Thorndike
Report.
a. Plaintiff’s Argument.
RDA argues that, under the “superior knowledge doctrine,” a contracting agency has an
“implied duty” to advise contractors of “otherwise unavailable information regarding some novel
matter affecting the contract that is vital to its performance.” Pl. PT Br. at 47 (quoting Scott Timber
Co., 692 F.3d at 1373). In this case, the NAVFAC violated the duty to disclose, because:
(1) the Appledore Report concluded that the wharf could not support the weight of
demolition equipment, a fact that would and did affect the cost and duration of
performance (Pl. PT Br. at 48);
(2) the NAVFAC was aware of the wharf’s deterioration and knew that this condition
could only be observed during an underwater inspection (Pl. PT Br. at 48–49);
(3) the Solicitation did not mention that the wharf, supporting H-piles and bulkhead
were in poor condition; instead the specification stated that RDA could locate
demolition equipment throughout the wharf (Pl. PT Br. at 49); and
(4) the NAVFAC did not advise RDA about the existence of the Appledore Report or
the FST Report or conclusions therein until after the parties had signed the October
13, 2009 Contract (Pl. PT Br. at 48).
In sum, the NAVFAC’s violation of the implied duty to disclose the Appledore Report and
FST Report was a material breach of the October 13, 2009 Contract that adversely affected RDA’s
ability to perform. Pl. PT Br. at 50. Therefore, the court should convert the NAVFAC’s February
21, 2013 decision to terminate the October 13, 2009 Contract for default to a termination for
convenience.
b. The Government’s Response.
The Government responds that it had no duty to disclose either the Appledore Report or
FST Report, nor did the Solicitation mislead RDA about the conditions of the Newport Naval
Station wharf and, in any event, RDA was on notice to inquire about those conditions. Gov’t PT
Br. at 76. The Solicitation informed RDA that, since the wharf was constructed in the 1950s RDA
was on notice that the wharf, “was likely not in good condition.” Gov’t PT Br. at 77. In addition,
structural problems were identified in Solicitation documents and apparent during the June 4, 2009
and June 11, 2009 site visits. Gov’t PT Br. at 77 (citing DX 729 at 5 (Helmes Direct) (“Contract
Drawings showing the existing bulkhead identify a number of sinkholes which clearly indicate an
unstable condition[.]”)). Moreover, during the bidding process, RDA did not ask the NAVFAC
any questions about the condition of the wharf. Gov’t PT Br. at 77 (citing TR at 1474 (Kelley)).
38
Nor did RDA perform an independent analysis of the wharf’s load capacity by a professional
engineer that would have revealed
(1) that the wharf deck slab would have been unable to safely accommodate the
loads of even a very lightweight excavator, (2) that the wharf structure would have
collapsed under its own weight once the restraint provided by the connection to the
landside was removed, and (3) that the existing steel sheet pile wall would have
failed as the rip rap was removed, which had to occur before the king piles for the
new bulkhead wall could be installed.
Gov’t PT Br. at 77–78 (citing DX 728 (Cohen Direct)).
More importantly, RDA’s plan to perform parts of the bulkhead construction from the
wharf was inconsistent with the Solicitation’s instruction that the wharf must be completely
demolished before work could commence on the bulkhead. Gov’t PT Br. at 78 (citing DX 1 at 83
(“CONCRETE APRON & PILES TO BE DEMOLISHED PRIOR TO REMOVAL OF ROCK
FILL.”); and DX 1 at 414 (“Any excavation [of rock fill] required within the area where sheet
pilings are to be installed shall be completed prior to placing sheet pilings.”)).
c. Plaintiff’s Reply.
RDA replies that the severe structural deterioration of the wharf and bulkhead were not
apparent during the June 4 and June 11, 2009 site visits. Pl. PT Resp. at 3–4. The wharf showed
some signs of wear-and-tear, but was well-preserved for its age. Pl. PT Resp. at 3.
In addition, RDA’s demolition plan was consistent with the Solicitation. Pl. PT Br. at 8.
Although the Solicitation required RDA to demolish sections of the wharf, before removing the
rip rap beneath, it did not necessarily require RDA to demolish the entire wharf before
commencing any rip rap removal. Pl. PT Resp. at 9. Moreover, the Solicitation did not expressly
prohibit RDA from placing equipment on the wharf. Pl. PT Resp. at 9. Therefore, RDA’s plan to
demolish the inboard portion of the wharf using equipment located on the wharf, did not conflict
with the Solicitation. Pl. PT Resp. at 9.
Furthermore, it is undisputed that the NAVFAC knew about the Appledore Report and FST
Report before issuing the Solicitation and understood their importance to the cost of the project.
Pl. PT Resp. at 8. But, the NAVFAC did not include or refer to either report or their findings in
the Solicitation. Pl. PT Resp. at 8. This was a conscious attempt to mislead prospective bidders.
Pl. PT Resp. at 10.
d. The Court’s Resolution.
It is well established that “the contractor in a fixed-price contract assumes the risk of
unexpected costs.” ITT Arctic Servs., Inc. v. United States, 524 F.2d 680, 691 (Ct. Cl. 1975); see
also Helene Curtis Indus., Inc. v. United States, 312 F.2d 774, 778 (Ct. Cl. 1963) (“Where the
Government . . . has no duty to disclose information, and does not improperly interfere with
performance, the fixed-price contractor of course bears the burden of unanticipated increases in
cost[.]”). Under the superior knowledge doctrine, however, the Government has “an implied duty
to disclose to a contractor otherwise unavailable information regarding some novel matter
39
affecting the contract that is vital to its performance.” Giesler v. United States, 232 F.3d 864, 876
(Fed. Cir. 2000).
A contracting agency violates the implied duty to disclose “superior knowledge” if:
(1) a contractor undertakes to perform [the contract] without vital knowledge of a
fact that affects performance costs or duration, (2) the government was aware the
contractor had no knowledge of and had no reason to obtain such information,
(3) any contract specification supplied misled the contractor or did not put it on
notice to inquire, and (4) the government failed to provide the relevant information.
Hercules Inc. v. United States, 24 F.3d 188, 196 (Fed. Cir. 1994). The plaintiff bears the burden
of establishing each element by “specific evidence.” See GAF Corp. v. United States, 932 F.2d
947, 949 (Fed. Cir. 1991).
Regarding the first and fourth elements, Mr. Hartman, RDA’s Project Manager, and Mr.
Wood, RDA’s Estimator, testified that RDA was unaware of any load restrictions on the wharf
until November 2009, approximately one month after the parties executed the October 13, 2009
Contract. TR at 106–07 (Wood); TR at 188–89 (Hartman). Mr. Germano, the NAVFAC
Construction Manager, confirmed that the NAVFAC did not disclose that the wharf was subject
to severe load restrictions until November 18, 2009. TR at 2256–60 (Germano). Therefore, the
court finds that RDA undertook to perform the October 13, 2009 Contract without “vital
knowledge” of a fact that affected performance costs and duration. See Hercules, 24 F.3d at 196(element one). And, the NAVFAC failed to provide that information before contract formation.
See Hercules, 24 F.3d at 196 (element four).
Regarding the second element, RDA argues that bidders only could have learned of the
wharf’s load restriction from: (1) the Solicitation; or (2) the June 4 and June 11, 2009 site visits.
Pl. PT Resp. at 8. The NAVFAC knew that the Solicitation did not provide a load restriction for
the wharf. Pl. PT Br. at 48. The NAVFAC also knew that the deterioration jeopardizing the
wharf’s structural integrity “could only be observed during [an] underwater investigation.” Pl. PT
Br. at 48 (quoting PX 12 at 21 (Appledore Report)).
RDA’s argument assumes that bidders could only ascertain that the wharf was subject to a
load restriction by directly observing the wharf’s subsurface deterioration. But, this assumption is
rebutted by evidence showing that there were other indicia of the wharf’s limited load capacity
visible during the June 4 and June 11, 2009 site visits. For example, orange sawhorses and concrete
barriers lining the perimeter of the wharf indicated that vehicles could not drive there. In addition,
large sinkholes running along most of the wharf and bulkhead suggested that the land around the
wharf was not stable. DX 729 at 5, 8 (Helmes Direct).
40
DX 742.10 (photograph of the wharf taken on May 19, 2008, prior to the June 4 and June 11, 2009
site visits);
DX 742.15 (photograph of the wharf taken on June 20, 2008, prior to the June 4 and June 11, 2009
site visits);
41
DX 742.14 (photograph of sinkhole taken on May 30, 2008, prior to the June 4 and June 11, 2009
site visits); DX 742.6 (photograph of sinkhole taken on May 19, 2008).
Therefore, although the NAVFAC was aware that RDA had no knowledge of the
Appledore Report or the FST Reports prior to submitting a bid, the court finds that, from the
physical condition of the wharf visible on inspection, a contractor would have “reason to obtain
[additional] information,” such as an independent engineer report or an underwater investigation.
See Hercules, 24 F.3d at 196 (element two). Accordingly, RDA’s superior knowledge claim fails
under the second element.
Regarding the third element, RDA argues that the Solicitation affirmatively misrepresented
that the wharf could support the weight of cranes and excavators by instructing prospective
contractors to “[l]ocate demolition equipment throughout the structure and remove materials so as
to not impose excessive loads to framing.” DX 1 at 291. RDA interprets “demolition equipment”
to include heavy machines like cranes and excavators. Pl. PT Br. at 49. The Solicitation, however,
does not define that term. Instead, the Solicitation incorporates the American Society of Safety
Engineer’s 2006 Safety and Health Program Requirements for Demolition Operations (“ASSE
A10.6”) (DX 1 at 288), which states that the type of demolition equipment that each structure can
withstand should be determined by the contractor (ASSE A10.6 at §§ 4.1, 5.8).
The United States Court of Appeals for the Federal Circuit has held that “various contract
provisions must be read as part of an organic whole, according reasonable meaning to all of the
contract terms. Such interpretation must assure that no contract provision is made inconsistent,
superfluous, or redundant.” See Lockheed Martin IR Imaging Sys., Inc. v. West, 108 F.3d 319, 322
42
(Fed. Cir. 1997) (internal citations omitted). In this case, Section 4.1 of the ASSE A10.6, which
was part of the Solicitation, provides that “[p]rior to starting demolition operations, a written
engineering survey of the structure shall be made by a qualified person to determine the type and
condition of the framing, floors and walls so that action can be taken, if needed, to prevent
premature collapse of any portion of the structure.” ASSE A10.6 at § 4.1 (emphasis added).
Similarly, Section 5.8 of the ASSE A10.6 cautions that “[t]he use of equipment and storage of
materials and debris on any floor shall not exceed the allowable floor loads.” ASSE A10.6 at §
5.8 (emphasis added). Both of these industry standards require that bidders conduct engineering
due diligence to ensure the load capacity of the relevant structure before placing equipment there.
RDA also argues that the Solicitation’s failure to provide load restrictions for the wharf
misled prospective bidders to assume that the wharf was not subject to any significant restrictions
and could support the weight of heavy construction equipment. Pl. PT Br. at 48–49. Mr. Wood
testified that, if the Solicitation does not specify the load capacity of a certain structure, it is safe
to “use [that structure] for its intended purpose.” TR at 106 (Wood). Mr. Wood’s view, however,
was rebutted by the expert testimony of Philip Helmes, P.E., who observed that, when “[t]he
Contract Documents do not indicate or provide any safe load limits for the existing structure, . . .
a responsible contractor would be expected to seek additional information . . . prior to developing
a work method based on imposing significant loads on the wharf.” DX 729 at 6 (Helmes Direct).
Mr. Helmes also testified that without “a pre-bid engineer’s assessment . . ., the alleged assumption
that the bulkhead could support the load from RDA’s intended equipment had no basis and was a
poor assumption.” DX 729 at 6 (Helmes Direct). There is no evidence that any of the contractors
were precluded from having an independent professional engineer present during the site visits or
from conducting an underwater investigation. Therefore, the Solicitation’s instruction to “[l]ocate
demolition equipment throughout the structure” and the Solicitation’s failure to provide an express
load restriction for the wharf did not represent that the wharf could withstand heavy construction
equipment. See Hercules, 24 F.3d at 196 (element three).
But, even if the Solicitation could be construed as misleading bidders about the wharf’s
load capacity, RDA’s superior knowledge claim still fails under the third factor, because the
Solicitation provided bidders with specific notice to inquire about the wharf’s condition. DX 1 at
34 (incorporating 48 C.F.R. § 52.236-3(a)).15 RDA justifies the failure to conduct an independent
inspection, explaining that most of the deterioration affecting the wharf could not be observed
from the deck’s surface. TR at 189–90 (Hartman). FAR 52.236-3(a), however, requires bidders
to verify both the surface and subsurface condition of the wharf, relying on: “an inspection of the
site;” “all exploratory work done by the Government;” and “the drawings and specification made
15
FAR 52.236-3(a) requires that:
The Contractor . . . acknowledges that it has satisfied itself as to the character,
quality, and quantity of surface and subsurface materials . . . insofar as this
information is reasonably ascertainable from an inspection of the site, including all
exploratory work done by the Government, as well as from the drawings and
specifications made a part of this contract.
48 C.F.R. § 52.236-3(a) (emphases added).
43
a part of this contract.” 48 C.F.R. § 52.236-3(a). Therefore, RDA was on notice to inquire about
the subsurface conditions of the wharf that were not visible during its site visit. See Hercules, 24
F.3d at 196 (element three).
For these reasons, the court has determined that the NAVFAC did not have a duty to
disclose the Appledore Report and FST Report prior to accepting RDA’s bid and entering into the
October 13, 2009 Contract. Accordingly, Count I of the May 7, 2015 Second Amended Complaint
is dismissed.
2. Count II: Whether RDA Construction Corp. Is Entitled To An
Equitable Adjustment Under The October 13, 2009 Contract’s
Differing Site Conditions Clause.
a. Plaintiff’s Argument.
RDA argues that the actual deteriorating condition of the wharf and bulkhead was a “type
1” differing site condition,16 for which RDA is entitled to an equitable adjustment. RDA adds that
a reasonable person would interpret the Solicitation to allow a contractor to perform work from
the wharf and the land parallel to the wharf. Pl. PT Br. at 55. RDA’s Estimator testified that, if
there was a restriction on the wharf’s capacity there would be a corresponding note; if there was
no note, the structure was usable for its intended purpose. TR at 106 (Mr. Wood). RDA’s
Construction Manager also testified that, in his experience, load restrictions always are provided
to bidders. TR at 191–92, 209 (Hartman). In this case, the Solicitation expressly allowed bidders
to place demolition equipment on the wharf, but to “[l]ocate demolition equipment throughout the
structure.” DX 1 at 291. In addition, the Solicitation instructed bidders to assume that thirty holes
in the bulkhead would need repair. Pl. PT Br. at 55 (citing DX 1 at 107). But, RDA’s Engineering
Consultant testified that this amount of deterioration ordinarily would not prohibit a contractor
from demolishing the wharf from the landside of the bulkhead or from the wharf deck. TR at 827–
28 (Martel).
RDA adds that the actual condition of the existing bulkhead and wharf were not reasonably
foreseeable, based on the Solicitation and site visits. Pl. PT Br. at 55. RDA’s President, RDA’s
Estimator, and RDA’s Project Manager “testified credibly that the observable condition of the
wharf provided no indication that RDA would be unable to employ conventional means to
demolish and construct this project from the existing structure and from the landside of the
bulkhead.” Pl. PT Br. at 55.
In sum, RDA reasonably relied on the Solicitation’s representation about the wharf’s
condition. Pl. PT Br. at 55 (“RDA’s cost estimate, including its estimate as to the duration of the
work on this Project, were based on its thorough review of the contract documents and its visual
inspection of the facility.”). But, the actual conditions of the wharf and bulkhead differed
16
The October 13, 2009 Contract includes a “differing site conditions” clause. DX 1 at
545 (incorporating 48 C.F.R. § 52.236-2). “Type 1” differing site conditions are “[s]ubsurface or
latent physical conditions at the site which differ materially from those indicated in this
contract[.]” 48 C.F.R. § 52.236-2(a)(1) (emphasis added).
44
materially from the conditions represented in the Solicitation requiring RDA to shift operations to
the water and incur the cost of deploying a barge for the duration of the project. Pl. PT Br. at 56.
b. The Government’s Response.
The Government responds that RDA did not establish each element of its differing site
conditions claim. Gov’t PT Resp. at 17.
c. The Court’s Resolution.
To receive an equitable adjustment for a “type 1” differing site condition, a contractor must
establish that: (1) “a reasonable contractor reading the contract documents as a whole would
interpret them as making a representation about the site conditions;” (2) “the actual site conditions
were not reasonably foreseeable to the contractor, with the information available to the particular
contractor outside the contract documents;” (3) “the particular contractor in fact relied on the
contract representation;” and (4) “the conditions differed materially from those represented, and
the contractor suffered damages as a result.” Int’l Tech. Corp. v. Winter, 523 F.3d 1341, 1348–49
(Fed. Cir. 2008).
As to the first element, the United States Court of Appeals for the Federal Circuit has held
that there cannot be a differing site condition, “unless the contract [affirmatively] indicated what
that condition would be.” Comtrol, Inc. v. United States, 294 F.3d 1357, 1363 (Fed. Cir. 2002).
Whether the contract indicates a particular site condition is a question of contract interpretation,
requiring the court to “place itself into the shoes of a reasonable and prudent contractor and decide
how such a contractor would act in interpreting the contract documents.” H.B. Mac, Inc. v. United
States, 153 F.3d 1338, 1345 (Fed. Cir. 1998).
In this case, the Solicitation instructed the contractor to “[l]ocate demolition equipment
throughout the structure and remove materials so as to not impose excessive loads to framing.”
DX 1 at 291. RDA argues that this clause affirmatively represented that the wharf could support
the weight of heavy demolition equipment, such as cranes and excavators. But, other provisions
of the Solicitation clarified that the contractor was responsible for evaluating each structure to
determine what type of demolition equipment it could safely withstand. DX 1 at 288 (citing ASSE
A10.6 § 4.1 (“Prior to starting demolition operations, a written engineering survey of the structure
shall be made by a qualified person to determine the type and condition of the framing, floors and
walls so that action can be taken, if needed, to prevent premature collapse of any portion of the
structure.”) and ASSE A10.6 § 5.8 (“The use of equipment and storage of materials and debris on
any floor shall not exceed the allowable floor loads.”)). Therefore, the Solicitation did not
represent that the wharf could support the weight of any demolition equipment, only that the weight
needed to be balanced throughout the surface of the relevant structure and the concentration of
heavy equipment on one area of a particular structure could cause it to collapse.
Moreover, RDA argues that the Solicitation’s failure to provide a load restriction for the
wharf would lead a reasonable contractor to conclude that the wharf could bear the weight of heavy
construction equipment. Pl. PT Br. at 54–55. RDA’s Estimator testified that, in his experience,
“if there is a [load] restriction [associated with a structure], there would be a note [in the
Solicitation].” TR at 106 (Wood). The absence of a note led him to conclude that “[RDA] could
45
utilize the [wharf] to work off of.” TR at 107 (Wood). But, Mr. Wood’s testimony was
contradicted by RDA’s Project Manager, who testified that he did not draw any conclusion about
the absence of load restrictions on the wharf, until he read the Appledore Report. TR at 191
(Hartman). The Government also rebutted Mr. Wood with expert testimony that advised: “a
prudent contractor would have requested more information regarding the [wharf’s] Safe Load
Limit” and “[i]t was not reasonable for RDA to assume that the existing structure could support
heavy construction equipment.” DX 729 at 5 (Helmes Direct). DX 742.6 (photograph of sinkhole
taken on May 19, 2008, prior to the June 4 and June 11, 2009 site visits.)
In addition, the Solicitation required prospective bidders to satisfy themselves of “the
character, quality, and quantity of surface and subsurface materials . . . insofar as this information
was reasonably ascertainable from an inspection of the site[.]” DX 1 at 34 (incorporating 48 C.F.R.
§ 52.236-3(a)). Photographs of the wharf taken prior to RDA’s June 4 and June 11, 2009 site visits
show orange sawhorses and concrete barriers, cordoning off the wharf. DX 742.14 (photograph
of wharf taken on May 20, 2008, prior to the June 4 and June 11, 2009 site visits); DX 742.15
(photograph of wharf taken on June 20, 2008, prior to the June 4 and June 11, 2009 site visits). A
reasonable and prudent contractor could see that the wharf could not safely bear the weight of
vehicular traffic, much less heavy construction equipment, regardless of the Solicitation’s silence
about that issue. Therefore, a reasonable contractor would read the Solicitation, including
accompanying drawings, the ASSE A10.6 industry standards and observation of the wharf’s
condition during two site visits, to warrant further investigation into whether the wharf and
bulkhead could safely bear the weight of demolition equipment.
RDA counters that a reasonable contractor would interpret the Solicitation’s disclosure of
thirty holes in the bulkhead as a representation that the bulkhead and wharf had no other significant
deterioration. But, a statement that the bulkhead contained some deterioration did not
affirmatively represent that the bulkhead contained only that amount of deterioration. See, Int’l
Tech. Corp., 523 F.3d at 1350 (“[T]his court [has] held that contract documents stating ‘[h]ard
material . . . may be encountered’ did not represent that only hard material would be encountered.”
(quoting Comtrol, 294 F.3d at 1362)). Moreover, the Government’s construction project
development practices expert testified that the contract drawings “showing the existing bulkhead[,]
identify a number of sinkholes which clearly indicate an unstable condition[.]” DX 729 at 6
(Helmes Direct).
For these reasons, the court has determined that, as a matter of law, RDA is not entitled to
an equitable adjustment under the October 13, 2009 Contract’s differing site conditions clause.
See Comtrol, 294 F.3d at 1363 (“A contractor is not eligible for an equitable adjustment for a Type
I differing site condition unless the contract indicated what that condition would be.”).
In the alternative, RDA raises a “defective specification claim” under Count II. Pl PT Br.
at 56. But, the United States Court of Appeals for the Federal Circuit has held that:
Although differing site conditions and defective specifications claims are distinct
in theory, they collapse into a single claim . . . where the alleged defect in the
specification is the failure to disclose the alleged differing site condition. Where
the differing site conditions claim and the defective specifications claim are so
46
intertwined as to constitute a single claim, that claim will be governed by the
specific differing site conditions clause and the cases under that clause.
Comtrol, 294 F.3d at 1362 (emphases added).
In this case, RDA’s defective specification claim arises from the NAVFAC’s alleged
failure to disclose that the wharf could not support the weight of demolition equipment, i.e., the
same condition that RDA argues entitles it to an equitable adjustment under the October 13, 2009
Contract’s differing site conditions clause. Pl. PT Br. at 56–57. Therefore, RDA’s defective
specification and differing site conditions allegations constitute a single claim governed by the
October 13, 2009 Contract’s differing site conditions clause and precedent regarding the same.
Since the court has determined that RDA is not entitled to relief under the differing site conditions
theory, RDA also is not entitled to relief under a defective speculation theory. Accordingly,
Count II of the May 7, 2015 Second Amended Complaint is dismissed.
3. Counts III And IV: Whether The Naval Facilities Command
Misrepresented The Condition Of The Wharf And The Purpose Of The
October 13, 2009 Contract.
a. Plaintiff’s Argument.
Counts III and IV are a variation of Count II, the gravamen of which is that the Solicitation
affirmatively represented that the contractor could locate demolition equipment on the wharf. Pl.
PT Resp. at 11 (citing DX 1 at 291). In addition, the absence of a load restriction in the Solicitation,
indicated that the relevant structure could be used for its intended purpose. Pl. PT Resp. at 11
(citing TR at 104–07 (Mr. Wood)); TR at 191–92 (Hartman). Accordingly, RDA reasoned that
“[t]hese express representations, together with the NAVFAC’s failure to provide the Appledore
Report and the [FST Report], constitute clear misrepresentations of material fact regarding the
manner in which the work [was] to be performed and the condition of the wharf that RDA
reasonably relied upon in submitting its bid for this project.” Pl. PT Resp. at 11–12.
b. The Government’s Response.
The Government responds that the Solicitation did not misrepresent that the wharf could
bear the weight of demolition equipment. Gov’t PT Br. at 77. Nor has RDA proffered any pre-
award evidence to show that it intended to work from the wharf. Gov’t PT Br. at 76. Therefore,
even if the Solicitation misrepresented that the wharf could support demolition equipment, RDA
failed to demonstrate that it relied on any such misrepresentation. Gov’t PT Br. at 76. In fact, a
reasonable contractor would not have relied on a representation that a seventy year-old wharf, with
obvious signs of deterioration, could support the weight of heavy construction equipment, without
further investigation. Gov’t PT Br. at 77–79.
c. The Court’s Resolution.
The United States Court of Appeals for the Federal Circuit has held that, “for a contractor
to prevail on a claim of misrepresentation, the contractor must show that the Government made an
erroneous representation of a material fact that the contractor honestly and reasonably relied on to
the contractor’s detriment.” T. Brown Constructors, Inc. v. Pena, 132 F.3d 724, 729 (Fed. Cir.
47
1997). This is the same legal standard that applies to type 1 differing site conditions claims. See
Int’l Tech., 523 F.3d at 1348 (“A misstatement as to site conditions in a government contract can
support a claim for breach of contract. The same requirements apply whether the contractor asserts
such a common law breach claim or a Type I claim under the Differing Site Conditions clause[.]”).
Again, whether a Solicitation makes an erroneous representation is a question of contract
interpretation, requiring the court to “place itself into the shoes of a reasonable and prudent
contractor[.]” H.B. Mac, 153 F.3d at 1345.
In this case, RDA argues that the Solicitation misrepresented that the wharf could safely
bear the weight of demolition equipment, because it: (1) failed to disclose the Appledore Report
and FST Report prior to the contract award (Pl. PT Resp. at 11); (2) did not provide a load
restriction for the wharf or bulkhead (Pl. PT Resp. at 11); and (3) instructed contractors to “[l]ocate
demolition equipment throughout the structure” (Pl. PT Resp. at 11 (quoting DX 1 at 291)). As
discussed previously, the court finds that a reasonable and prudent contractor would not interpret
the Solicitation as a whole to affirmatively represent that the conditions of the wharf could support
demolition equipment.
For these reasons, the court has determined that RDA did not satisfy the requisite elements
of misrepresentation. Accordingly, Count III and Count IV of the May 7, 2015 Second Amended
Complaint are dismissed.
4. Count V: Whether The Naval Facilities Command’s November 7, 2012
Directive Was A Cardinal Change To The October 13, 2009 Contract.
a. Plaintiff’s Argument.
Count V alleges that the NAVFAC’s November 7, 2012 “directive” to extract broken H-
piles from beneath the sea floor was a cardinal change, because it substantially altered the
magnitude, cost, and type of work required by the October 13, 2009 Contract. Pl. PT Br. at 40–
41.
At the time of RDA’s bid, without the benefit of the Appledore Report, RDA planned to
use a vibratory hammer to shake and remove the H-piles in one piece from the sea floor. Pl. PT
Br. at 40. Because the H-piles were deteriorated beyond what was expected, all of the piles that
RDA attempted to remove broke. Pl. PT Br. at 41. After trial and error, RDA discovered a method
to extract the broken piles, but it was costlier than RDA originally anticipated for pile-removal.
Pl. PT Br. at 41. In fact, the company that assumed completion of the project estimated that
removing all of the broken H-piles would cost over $5 million. Pl. PT Br. at 41 (citing 11/05/15
Dep. of Jonathan Peters at 321, 323). In addition, the NAVFAC’s November 7, 2012 “directive”
would have extended the October 13, 2009 Contract’s duration by months, as established, since
Haskell worked to remove all of the H-piles “throughout 2014 and [October] 2015.” Pl. PT Br. at
42.
b. The Government’s Response.
The Government responds that the October 13, 2009 Contract required RDA to “remove
piles in their entirety.” DX 1 at 82. Although it became very expensive to remove the H-piles, the
added expense was RDA’s fault, because “RDA intentionally broke the piles off, having proposed
48
and obtained approval for this . . . method in its demolition plan.” Gov’t PT Br. at 65 (citing DX
108 at 5) (emphasis added). Therefore, the NAVFAC’s November 7, 2012 directive did not
significantly change: (1) the magnitude of work to be performed; (2) the nature of the work
contemplated in the October 13, 2009 Contract; or (3) the cost of performance. And, the
November 7, 2012 directive did not constitute a cardinal change. Gov’t PT Br. at 66.
c. The Court’s Resolution.
As a matter of law, the cardinal change doctrine may be invoked where,
the [contracting agency] effects an alteration in the work so drastic that it effectively
requires the contractor to perform duties materially different from those originally
bargained for. By definition, then a cardinal change is so profound that it is not
redressable under the contract, and thus renders the government in breach.
Allied Materials & Equip. Co. v. United States, 569 F.2d 562, 563–64 (Ct. Cl. 1978) (emphasis
added).
As with other breach of contract claims, the cardinal change doctrine has a causation
requirement. See Rolin v. United States, 160 F. Supp. 264, 268 (Ct. Cl. 1958) (“[T]he
Government’s financial obligation to anyone who has furnished materials or services to the
Government under a contract is to be found within the four walls of the contract, unless the
Government has caused its contractor to incur unforeseen expenses in performing the contract.”
(emphasis added)). In other words, a plaintiff cannot prevail on a breach of contract claim, simply
because unforeseen circumstances changed the amount, or difficulty, of the contract work. See
United States v. Spearin, 248 U.S. 132, 135–36 (1918) (“Where one agrees to do, for a fixed sum,
a thing possible to be performed, he will not be excused or become entitled to additional
compensation, because unforeseen difficulties are encountered.” (internal citations omitted)).
Instead, the plaintiff must demonstrate that the Government caused the underlying change.
“[A] cardinal change is principally a question of fact[.]” Allied Materials, 569 F.2d at 565.
“Each case must be analyzed on its own facts and circumstances giving just consideration to the
magnitude and quality of the changes ordered and their cumulative effect upon the project as a
whole.” Gen. Dynamics Corp. v. United States, 585 F.2d 457, 462 (Ct. Cl. 1978). Since a cardinal
change constitutes a breach of contract, the plaintiff bears the burden of proof. See Stockton E.
Water Dist. v. United States, 583 F.3d 1344, 1360 (Fed. Cir. 2009).
The October 13, 2009 Contract expressly required RDA to “remove piles in their entirety.”
DX 1 at 82. The November 7, 2012 instruction did not change this requirement in any way, stating,
“[all] remaining H-piles . . . will have to be removed in their entirety[.]” PX 96 at 1. In other
words, the NAVFAC did not cause any change to the contract requirements. Nevertheless, RDA
insists that the NAVFAC’s November 7, 2012 directive constituted a cardinal change, because
RDA did not expect the piles to break during the extraction process. But, due to latent
deterioration, virtually all of the piles snapped below the sea floor. Pl. PT Br. 40–41. Removal of
the broken pile stubs required RDA to use extraction methods that were far more expensive than
it originally anticipated. Pl. PT Br. 41. Under these circumstances, the NAVFAC’s enforcement
49
of the contractual requirement that all piles must be removed in their entirety was a cardinal
change. Pl. PT Br. at 40–42.
RDA’s cardinal change claim fails, because the record contradicts RDA’s assertion that it
did not expect the piles to break during the extraction process. On March 29, 2010, RDA submitted
a demolition plan to the NAVFAC advising that,
the combination pile cap and support pile will be extracted with the crane. . . . In
most cases under the load of the extraction process the pile will break between the
mud line and existing pile jacket due to advanced pile section loss[.] . . . The
resulting bottom pile section remaining will be extracted with the Manitowoc 4100
crane and a dive assist crew[.]
DX 108 at 4–5 (emphasis added). The March 29, 2010 plan was submitted before RDA began
pile removal. DX 1 at 287, 290 (stating that approval of the demolition plan was required prior to
beginning work). Therefore, the evidence shows that, prior to removing any piles, RDA knew that
its extraction method would cause most piles to break.
For these reasons, the court has determined that RDA did not prove that the NAVFAC
caused any change to the contract work or the circumstances affecting that work, let alone a
cardinal change that required RDA to perform duties materially different from those bargained for
by the parties. See Allied Materials, 569 F.2d at 563–64. Accordingly, Count V of the May 7,
2015 Second Amended Complaint is dismissed.
5. Counts VI, VII and VIII: Whether The NAVFAC Violated The Duty
Of Good Faith And Fair Dealing.
a. Plaintiff’s Argument.
RDA argues that the NAVFAC breached the duty of good faith and fair dealing by: (1) not
promptly and fairly adjusting the contract for changes in price and schedule, resulting from new
information contained in the Appledore Report and FST Report about the wharf’s ability to carry
demolition equipment; (2) rescinding the NAVFAC’s conditional approval of RDA’s baseline
schedule; (3) failing to provide instructions on how to remove the broken H-piles; (4) failing to
authorize drilling that was required to bypass unanticipated obstructions blocking all progress on
the project; (5) directing RDA to commence obstruction drilling before processing a contract
modification for that work, then failing to compensate RDA for the additional drilling work; (6)
directing RDA to remove all broken piles embedded in the sea floor, despite knowing that “such
work was not necessary, was impractical to perform, and would cause RDA to incur prohibitive
expense and further prolonged delay”; (7) shutting down the project in September 2011, based on
“exaggerated safety concerns and maintaining such [a] shutdown for an unreasonable long period
of time”; (8) failing to act on RDA’s SSHO and QC proposals for months and then denying those
proposals on “insubstantial or erroneous grounds”; and (9) demanding re-inspection of RDA’s
crane in January 2013, violating the October 13, 2009 Contract and prior practice. Pl. PT Br. at
58–61.
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b. The Government’s Response.
The Government responds that the NAVFAC properly did not adjust the contract for
changes in price and schedule, due to unanticipated site conditions. Moreover, the NAVFAC was
“overly generous” in granting RDA numerous modifications to the October 13, 2009 Contract and
any delay in granting such modifications is remediable under the Disputes Clause, not as a breach
of contract. Gov’t PT Resp. at 20.
Specifically, the NAVFAC did not breach the duty of good faith and fair dealing by
insisting that RDA’s baseline schedule include all of the contract work and enforcing the
contractual requirement that RDA remove all of the H-piles in their entirety. Gov’t PT Resp. at
2–9, 20.
Nor did the NAVFAC breach the duty of good faith and fair dealing when it allegedly
refused to instruct RDA on how to remove H-piles that broke beneath the mudline and failed to
authorize drilling to bypass obstructions at the south and north bulkheads in a timely manner, since
the October 13, 2009 Contract did not require the NAVFAC to provide instructions other than
those contained in the Solicitation and RDA was free to drill through obstructions, without any
NAVFAC authorization. Gov’t PT Resp. at 35.
Nor did the NAVFAC breach the duty of good faith and fair dealing by enforcing the
October 13, 2009 Contract’s safety requirements, particularly after RDA experienced a third
accident onsite. Gov’t PT Resp. at 21. In fact, the NAVFAC reasonably exercised its discretion
in rejecting several RDA candidates for the QC and SSHO positions who did not have the
necessary qualifications. Gov’t PT Resp. at 20, 25–29, 32–33, 43–44.
In addition, the NAVFAC’s decision to request a crane re-inspection in January 2013 was
consistent with the October 13, 2009 Contract and did not violate the duty of good faith and fair
dealing. Gov’t PT Resp. at 22.
c. The Court’s Resolution.
“Every contract imposes upon each party a duty of good faith and fair dealing in its
performance and enforcement.” Metcalf Const. Co. v. United States, 742 F.3d 984, 990 (Fed. Cir.
2014) (quoting RESTATEMENT (SECOND) OF CONTRACTS § 205 (1981)(“RESTATEMENT”)) (internal
quotation marks omitted). “Failure to fulfill that duty constitutes a breach of contract[.]” Id.
(quoting RESTATEMENT § 235)). But, the duty of good faith and fair dealing does not “expand a
party’s contractual duties beyond those in the express contract or create duties inconsistent with
the contract’s provisions.” Precision Pine & Timber, Inc. v. United States, 596 F.3d 817, 831
(Fed. Cir. 2010). For this reason, “an act will not be found to violate the duty [of good faith and
fair dealing] . . . if such a finding would be at odds with the terms of the original bargain, whether
by altering the contract’s discernible allocation of risks and benefits or by conflicting with a
contract provision.” Metcalf, 742 F.3d at 991.
In essence, the covenant of good faith and fair dealing “imposes obligations on both
contracting parties that include the duty not to interfere with the other party’s performance and not
to act so as to destroy the reasonable expectations of the other party regarding the fruits of the
contract.” Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005). The Government
51
may breach this duty if it acts unreasonably under the circumstances. See C. Sanchez & Son, Inc. v.
United States, 6 F.3d 1539, 1542 (Fed. Cir. 1993) (“The government must avoid actions that
unreasonably cause delay[.]”); see also Commerce Int’l Co. v. United States, 338 F.2d 81, 86 (Ct.
Cl. 1964) (holding that actions that cause a “breach of [the] obligation of reasonable cooperation”
depend upon the “particular contract, its context, and its surrounding circumstances”).
i. Regarding Price And Schedule Changes To The October
13, 2009 Contact, Because Of The NAVFAC’s Failure To
Disclose The Appledore Report And FST Report.
First, RDA argues that the NAVFAC breached the duty of good faith and fair dealing when
it failed to “promptly and fairly adjust the contract for changes in price and schedule necessitated
by the belated disclosure of material information [in the Appledore Report and FST Report]
concerning actual Project conditions.” Pl. PT Br. at 58. But, as discussed in sections of this Post
Trial Memorandum Opinion and Final Order addressing Counts I–V, RDA was not entitled to an
equitable adjustment, because, as a matter of law, the NAVFAC did not have a duty to disclose
the Appledore Report and FST Report, and the Solicitation did not misrepresent the condition of
the wharf.
Therefore, the court has determined that the NAVFAC did not breach the duty of good
faith and fair dealing by refusing to adjust the October 13, 2009 Contract to compensate RDA for
price and schedule changes as a result of not disclosing the Appledore Report and FST Report
during the bidding process.
ii. Regarding Rescinding Approval Of RDA Construction
Corp.’s Baseline Schedule.
Second, RDA argues that the NAVFAC violated the covenant of good faith and fair dealing
by “[a]pproving RDA’s impacted schedule to permit work to begin[,] then rescinding such
schedule approvals upon which depended RDA’s ability to be timely paid for work commenced
in reliance thereon.” Pl. PT Br. at 59. The record shows that, on February 5, 2010, the NAVFAC
conditionally approved RDA’s baseline schedule for the limited purpose of allowing work to
begin. PX 58 at 1. But, there is no evidence that the February 5, 2010 conditional approval was
ever rescinded. In addition, the record evidence contradicts RDA’s assertion that, based on the
February 5, 2010 conditional approval, RDA reasonably expected to invoice the work it
performed. In fact, the February 5, 2010 conditional approval expressly stated that RDA could
begin work, but the NAVFAC would not process RDA’s invoices until the NAVFAC completed
a full review of RDA’s proposed baseline schedule. PX 58 at 1.
52
PX 58 at 1.
It appears that RDA also contends that the NAVFAC breached its duty of good faith and
fair dealing by allowing work to begin on February 5, 2010, but delaying approval of the baseline
schedule necessary for payment until May 17, 2010, forcing RDA to work without payment for
three months. The record, however, shows that RDA was responsible for most of the delay:
 On April 1, 2010, the NAVFAC informed RDA that its proposed baseline schedule
contained thirty-four deficiencies. DX 111 at 2–3.
 On April 21, 2010, RDA submitted a revised baseline schedule. DX 121 at 1.
 On April 22, 2010, the NAVFAC rejected RDA’s revised baseline schedule,
because it contained many of the same deficiencies identified in the April 1, 2010
rejection and a few new deficiencies. DX 121 at 2.
 On April 28, 2017, RDA submitted a second revised baseline schedule. DX 130
at 1.
 On May 13, 2010, the NAVFAC rejected RDA’s second revised schedule, because
RDA still did not correct many of the deficiencies identified in the April 1, 2010
and April 21, 2010 rejections. DX 130 at 2–3.
 On May 14, 2010, RDA finally submitted a baseline schedule that addressed all of
the NAVFAC’s concerns. DX 134 at 1.
 Three days later, the NAVFAC approved the May 13, 2010 baseline schedule. DX
134 at 1.
53
Therefore, the court has determined that the NAVFAC did not violate the duty of good
faith and fair dealing by rescinding the February 5, 2010 conditional approval of RDA’s baseline
schedule, nor did the NAVFAC cause any delay to the final approval of that schedule.
iii. Regarding Extraction Of The Broken H-Pile Sections.
Third, RDA argues that the NAVFAC violated the duty of good faith and fair dealing by
refusing to help RDA develop a plan for extracting the H-piles that broke off beneath the mudline
or, alternatively, waiving RDA’s obligation to remove the piles in their entirety. Pl. PT Br. at 59.
The October 13, 2009 Contract, however, expressly stated that RDA must formulate a plan to
“remove all piles in their entirety.” DX 1 at 82, 290. In other words, the October 13, 2009 Contract
allocated the risks associated with formulating and executing a pile removal plan to RDA. A
finding that the NAVFAC’s failure to help RDA develop a removal plan, or otherwise waive
RDA’s obligation to “remove all piles in their entirety[,]” breached the October 13, 2009 Contract
would force the NAVFAC to incur the costs of carrying out those activities. Accordingly, such a
determination would transfer to the NAVFAC risks that the October 13, 2009 Contract allocated
to RDA.
Therefore, the court has determined that the NAVFAC did not violate the duty of good
faith and fair dealing by refusing to waive the contractual requirement that RDA remove all of the
H-pile sections or to assist RDA in doing so.
iv. Regarding Obstruction Drilling.
Fourth, RDA argues that the NAVFAC violated the duty of good faith and fair dealing by
failing to timely authorize obstruction drilling at the bulkhead, causing the project to come to a
standstill. Pl. PT Br. at 59–60 (citing PX 83 at 2). RDA, however, fails to identify any contract
provision that required the NAVFAC to authorize such work.
Moreover, the record shows that this delay was caused by RDA’s refusal to drill through
the obstructions without first receiving an equitable adjustment. On March 9, 2011, RDA’s Project
Manager advised the NAVFAC that “RDA will not continue to perform work on [the bulkhead]
without . . . a Contract Modification.” DX 273 at 1. Similarly, on August 16, 2012, RDA’s
President informed the NAVFAC, “I believe that [i]t is in RDA’s and the Navy’s best interest to
hold off on the obstruction drilling . . . until we reach an agreement on a unilateral modification.”
DX 570 at 1. In short, RDA voluntarily stopped contract performance, hoping that the NAVFAC
would modify the contract price and schedule to account for obstructions at the bulkhead. RDA
pursued this strategy, despite the October 13, 2009 Contract’s instruction that “[a] Contractor shall
proceed diligently with performance of this contract, pending final resolution of any request for
relief, claim, appeal, or action arising under the contract[.]” DX 1 at 14 (incorporating 48 C.F.R.
§ 52.233-1(i)).
Conversely, RDA argues that the NAVFAC violated the duty of good faith and fair dealing
by “[d]irecting RDA to commence obstruction drilling in February 2012, in advance of processing
a contract modification, then failing to take any steps to compensate RDA for all such extra work
through termination the following February.” Pl. PT Br. at 60. But, RDA did not proffer any
evidence that the NAVFAC ordered RDA to commence obstruction drilling in February 2012. To
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the contrary, RDA appears to recognize that “[i]n February 2012 . . . RDA proceeded with the
second round of obstruction drilling in advance of receiving formal authorization.” Pl. PT Br. at
25 (emphasis added).17
17
During the trial of this case the court questioned Mr. Rachupka, the NAVFAC’s CO,
about a related issue: a May 10, 2012 request for equitable adjustment that remained pending for
ten months. TR at 2134–35 (Rachupka). Mr. Rachupka conceded that the NAVFAC’s delay was
unfair to RDA:
[THE COURT]: Was there an occasion where you had an outstanding change order
for ten months? . . .
[MR. RACHUPKA]: We did have, as I explained earlier this week in testimony,
the change order that is being questioned right now where there were inaccuracies
related to the amount of money being sought by RDA. If you remember our
conversation about the double dipping --
[THE COURT]: Right.
[MR. RACHUPKA]: -- that is specifically what Mr. O’Brien is referring to.
[THE COURT]: What I am saying is you didn’t get it resolved because you didn’t
get the information from RDA?
[MR. RACHUPKA]: As you have seen, there has been a myriad of issues. It’s one
of those things that we never got to sit down and address and work out.
[THE COURT]: In ten months?
[MR. RACHUPKA]: That is correct, Your Honor.
[THE COURT]: And was that because you didn’t try?
[MR. RACHUPKA]: I had, I had done -- I believe I did some evaluation but never
completed it.
[THE COURT]: I’m sorry?
[MR. RACHUPKA]: I probably did some evaluation as to the cost proposals but
never completed it.
[THE COURT]: Do you think that was fair to the contractor?
[MR. RACHUPKA]: I wouldn’t say it is fair but --
55
Therefore, the court has determined that the NAVFAC did not violate the duty of good
faith and fair dealing by failing to award RDA an equitable adjustment prior to commencing
obstruction drilling in February 2012 or withholding payment for that work.
v. Regarding Work Suspension After The September 14,
2011 Safety Mishap.
Fifth, RDA argues that the NAVFAC violated the duty of good faith and fair dealing when
it suspended work, following an accident on September 14, 2011. Pl. PT Br. at 61. The September
14, 2011 accident was RDA’s third safety incident. DX 413 at 1. The first accident occurred on
August 10, 2010 and resulted in the injury of an RDA worker. DX 174 at 1. The second accident
took place on February 22, 2011, when a vibratory hammer hit an employee breaking several of
his ribs. DX 261 at 9. Moreover, RDA’s QC and SSHO (safety officers) were not at the project
site when the September 14, 2011 accident occurred. DX 413 at 1. In light of RDA’s repeated
failure to satisfy its contractual obligation to maintain a safe work site and have safety officers
supervise all work (DX 1 at 192), and the NAVFAC’s authority to stop work pending the
investigation of a safety incident (DX 1 at 193), the court finds that it was reasonable for the
NAVFAC to require a thorough investigation of the September 14, 2011 accident.
Therefore, the court has determined that the NAVFAC did not violate the duty of good
faith and fair dealing by suspending work to investigate why RDA repeatedly experienced
accidents that risked injury to individuals and damage to equipment at the Newport Naval Station.
vi. Regarding Approval Of RDA Construction Corp.’s
Quality Control Manager And Site Safety And Health
Officer.
Sixth, RDA argues that the NAVFAC violated the duty of good faith and fair dealing when
it failed to evaluate RDA’s QC and SSHO candidates in a timely manner and denied several of
those candidates on “insubstantial or erroneous grounds.” Pl. PT Br. at 60–61. These delays
forced RDA to stop work, because the October 13, 2009 Contract required RDA to “[p]rovide a
[SSHO] at the work site at all times.” DX 1 at 192. The record, however, shows that the NAVFAC
evaluated candidates in a reasonable time and promptly approved personnel that satisfied the
October 13, 2009 Contract’s experience and certification requirements. DX 1 at 192–93
(minimum qualifications for SSHO), 217–18 (minimum qualifications for QC). In fact, the
[THE COURT]: I didn’t hear you. Would you please stop doing that[?]
[MR. RACHUPKA]: So I would not say it is fair. No, I wouldn’t say that.
TR at 2134–35 (Rachupka).
RDA, however, did not argue that the NAVFAC’s failure to timely address the May 10,
2012 request violated the duty of good faith and fair dealing in the November 8, 2016 Post Trial
Brief. Therefore, the court does not address this issue. See Novosteel SA v. U.S., Bethlehem Steel
Corp., 284 F.3d 1261, 1274 (Fed. Cir. 2002) (holding that a party waives an argument when it fails
to raise that argument in its principal brief).
56
NAVFAC approved Mr. Morrissette as QC and SSHO within five days (DX 327 at 1), Mr. Brewer
as SSHO in seven days (DX 491 at 1), and Mr. Smith as QC in eighteen days (PX 156 at 2).
To the extent that delays occurred in the approval of RDA’s candidates for the QC and
SSHO roles, the record shows that RDA repeatedly submitted candidates that did not meet the
contractual requirements for those roles. From March 31–May 2, 2011, RDA requested that the
NAVFAC approve Mr. Meomartino, Ms. Amarantes, Mr. Rand, and Mr. DiRamio as QCs and
SSHOs. DX 306–13, 316, 319–20. On May 9, 2011, the NAVFAC rejected all of these candidates,
because they did not have the experience and/or certifications required by the October 13, 2009
Contract. DX 327 at 1–13. After Mr. Morrissette, the QC and SSHO from May 9, 2011 to late
January 2012, had a heart attack on June 28, 2011, it became necessary for RDA to hire an
alternative QC and SSHO on site. Instead of proposing a new candidate, RDA requested that the
NAVFAC reconsider Ms. Amarantes and Mr. Rand. DX 345 at 1; DX 346 at 1; DX 348 at 1.
Because RDA did not indicate that either candidate had acquired the necessary experience and/or
certifications after they were first rejected, the NAVFAC rejected them a second time. DX 356
at 1 (rejecting Ms. Amarantes); DX 357 at 1 (rejecting Mr. Rand).
Moreover, the NAVFAC did not deny RDA’s QC and SSHO candidates on insubstantial
grounds. The October 13, 2009 Contract required QC candidates to have the following
qualifications:
a minimum of 10 years combined experience in the following positions: Project
Superintendent, QC Manager, Project Manager, Project Engineer or Construction
Manager on similar size and type construction contracts which included the major
trades that are part of this Contract. The individual must have at least two years
experience as a QC Manager. The individual must be familiar with the
requirements of, and have experience in the areas of hazard identification, safety
compliance, and sustainability.
In addition to the above experience and education requirements, the QC Manager
must have completed the course entitled “Construction Quality Management
(CQM) for Contractors.”
DX 1 at 217.
The October 13, 2009 Contract also required that SSHO have specific qualifications,
including:
[a] minimum of 10 years safety work of a progressive nature with at least 5 years
of experience on similar projects. 30-hour OSHA construction safety class or
equivalent within the last 5 years. An average of at least 24 hours of formal safety
training each year for the past 5 years with training for competent person status for
at least the following 4 areas of competency: Excavation; Hazardous energy; Health
hazard recognition, evaluation and control of chemical, physical and biological
agents; Personal protective equipment and clothing to include selection, use and
maintenance.
DX 1 at 192.
57
The NAVFAC denied Mr. Meomartino as QC and SSHO, because his resume did not
indicate: (1) ten years of experience on projects of comparable size; (2) familiarization with United
States Army Corp of Engineers safety guidelines; (3) completion of the “Construction Quality
Management (CQM) for Contractors” course; (4) completion of thirty-hour OSHA construction
safety class within the last five years; and (5) twenty-four hours of formal safety training each year
for the past five years. DX 327 at 3–4.
Ms. Amarantes’ background did not satisfy the contract requirements either, because her
resume did not indicate: (1) ten years of combined experience as Project Superintendent, QC,
Project Manager, Project Engineer or Construction Manager on projects of comparable size; (2)
any experience as QC; (3) five years of safety work on similar projects; and (4) training for
excavation, hazardous energy or personal protective equipment. DX 327 at 5–6. In addition, the
NAVFAC noted that Ms. Amarantes did not provide documentation for fourteen hours of the
formal safety training included on her resume. DX 327 at 6.
Similarly, Mr. Rand’s resume did not indicate: (1) ten years of combined experience as
Project Superintendent, QC, Project Manager, Project Engineer or Construction Manager; (2) any
experience as QC; (3) any experience applying the United States Army Corp of Engineers safety
guidelines; (4) completion of the “Construction Quality Management (CQM) for Contractors”
course; (5) ten years of experience in safety work of a progressive nature; and (6) twenty-four
hours of formal safety training each year for the past five years. DX 327 at 7–8.
Mr. DiRamio also was denied as QC and SSHO, because he: (1) did not complete the
“Construction Quality Management (CQM) for Contractors” course; (2) only had seventeen
months of experience in safety work; (3) did not complete the thirty-hour OSHA construction
safety class within the past five years; and (4) did not provide proof of any formal safety training
in the last five years. DX 327 at 10–11.
And, the NAVFAC also denied Mr. Wallis for the SSHO position, because his resume did
not: (1) demonstrate ten years of experience in safety work; (2) provide certificates showing
completion of the thirty-hour OSHA construction safety class; (3) indicate he had taken an average
of twenty-four hours of formal safety training each year for the past five years; and (4) demonstrate
competent person status in hazardous energy, health hazard recognition, or personal protective
equipment. DX 486 at 1. Likewise, Mr. Wallis was denied the QC position, because in his past
performance he failed to follow Navy guidelines during the recovery of a sunken RDA boat,
leading to a fuel spill. DX 485 at 1. The NAVFAC considered this accident in finding that he was
not competent to perform the role of QC. DX 485 at 1.
Therefore, the court has determined that the NAVFAC did not unreasonably delay the
evaluation of RDA’s candidates for the QC and SSHO positions or deny those candidates on
insubstantial grounds.
vii. Regarding The Re-Inspection Of The Manitowoc 4100
Crane.
RDA also argues that the NAVFAC violated the duty of good faith and fair dealing by
“[d]emanding re-inspection of RDA’s crane in January 2013, violating both the applicable contract
58
standards (EM-385) and prior practice, resulting in prolonged, expensive repairs during which time
RDA was unable to use this equipment.” Pl. PT Br. at 61. RDA’s argument is based on a
disagreement with the NAVFAC regarding whether an independent crane inspector was required
to perform a second inspection of the Manitowoc 4100 Crane to ensure that RDA had properly
repaired deficiencies that the crane inspector had identified during a previous inspection. DX 677
at 60, 104, 106.
The October 13, 2009 Contract incorporates the 2003 United States Army Corps of
Engineers’ Safety and Health Requirements, EM 385-1-1 (“EM 385-1-1”). DX 1 at 192. The EM
385-1-1 states that “[a]ll equipment shall be shut down and positive means taken to prevent its
operation while repairs or manual lubrications are being done.” EM 385-1-1 at ¶ 16.A.08b. In
addition, “[l]oad performance tests shall be conducted . . . [b]efore initial use of cranes in which a
load bearing . . . or load controlling part or component, brake, travel component, or clutch have
been altered, replaced, or repaired[.]” EM 385-1-1 at ¶ 16.C.13c(2)(a). “A qualified person shall
conduct [the] performance tests” (EM 385-1-1 at ¶ 16.C.13a (emphasis added)) and “[w]ritten
reports of the performance test, showing test procedures and confirming the adequacy of repairs
or alterations, shall be maintained with the crane” (EM 385-1-1 at ¶ 16.C.13c).
On November 28, 2012, J.P. Riley inspected RDA’s Manitowoc 4100 Crane and found
inter alia that the crane’s brakes must be adjusted and/or repaired. DX 677 at 13. According to
the EM 385-1-1, the deficiencies required RDA to take the crane out of service while the repairs
were being made (EM 385-1-1 at ¶ 16.A.08b) and a qualified person to conduct a load performance
test on the crane before it could be placed back into service (EM 385-1-1 at ¶¶ 16.C.13a,
16.C.13c(2)(a)). After RDA informed the NAVFAC that it had repaired all of the deficiencies
identified by J.P. Riley, including the break adjustments, the NAVFAC instructed that the crane
must remain out of service until J.P. Riley conducted a re-inspection and load performance test on
the crane. DX 625 at 6; DX 677 at 28–29. RDA argues that this request was not in good faith,
because nothing in the October 13, 2009 Contract required RDA to hire J.P. Riley to conduct the
re-inspection and performance test, instead of another qualified person. DX 625 at 3–6.
RDA requested that Steve Watt, one of RDA’s mechanics, conduct the re-inspection and
performance test, but failed to provide any evidence that Mr. Watt was a “qualified person” under
EM 385-1-1. DX 625 at 3–4. In fact, when the NAVFAC asked RDA for Mr. Watt’s resume, Mr.
Kelley responded:
[o]nce again[,] Steve Watt has demonstrated to me . . . that he is qualified to inspect
the recommended repairs to this crane. I do not and will not have you dictate to me
what you believe the standard to be. You are wrong. Neither OSHA nor the em385
require what you are asking. You are overstepping your authority. [Mr. Watt] has
extensive knowledge and experience working on these cranes as my employee for
nearly 20 years, and that makes him qualified. I have been in in the marine and
crane business all my working life I have the extensive knowledge, training and the
experience to make the determination regarding Steve’s qualifications[.] I have
gone thru dozens and dozens of crane inspections and OSHA inspections. RDA is
complying with our contract.
DX 625 at 3.
59
In addition, RDA had a contractual duty to maintain a safe work environment. But, by the
end of 2012, RDA had experienced three safety mishaps, including one crane accident. DX 398
at 1. In light of RDA’s questionable safety record, it was reasonable for the NAVFAC to require
that RDA either: (1) prove that Mr. Watt was qualified to inspect the crane and conduct
performance tests; or (2) hire a third-party crane inspector to conduct the re-inspection and tests.
RDA also argues that the October 13, 2009 Contract did not require the crane to be re-
inspected at all. Pl. PT Br. at 31. But, the EM 385-1-1 expressly requires a “[w]ritten report[] . .
. confirming the adequacy of repairs or alterations.” EM 385-1-1 at ¶ 16.C.13c. In addition, it is
undisputed that a qualified person had to conduct a load performance test on the crane, and that
RDA had not conducted such a test when the NAVFAC requested that the crane be taken out of
service. In fact, RDA’s response to this request stated that,
[t]he referenced sections of EM-385-1-1 require that a written report documenting
the tests be maintained before initial use of the 4100W as the brakes have been
repaired. This documentation will be provided as soon as the Operational Test has
been completed.
DX 625 at 6. In other words, the NAVFAC had a contractual right to take the crane out of service
until a qualified person conducted a re-inspection and performance test on the crane, and did not
act unreasonably when it exercised that right.
Therefore, the court has determined that the NAVFAC did not violate the duty of good
faith and fair dealing by taking RDA’s Manitowoc 4100 crane out of service.
In sum, the court has determined that the NAVFAC did not violate the duty of good faith
and fair dealing in its administration of the October 13, 2009 Contract. Accordingly, Count VI–
VIII of the May 7, 2015 Second Amended Complaint are dismissed.
6. Count IX: Whether RDA Construction Corp. Was Entitled To An
Extension Of The Contract Completion Date For Excusable Delays.
The May 7, 2015 Second Amended Complaint contains a “ninth cause of action.” 5/7/2015
Sec. Am. Compl. at ¶¶ 128–34. The so-called “ninth cause of action,” however, asserts an
affirmative defense. Specifically, it alleges that the NAVFAC is not entitled to recover liquidated
damages for RDA’s failure to complete performance of the October 13, 2009 Contract by the
modified completion date, i.e., October 5, 2012, because the NAVFAC was required to extend the
completion date by 313 days for excusable delays. 5/7/2015 Sec. Am. Compl. at ¶¶ 132–34.
Because the “ninth cause of action” is, in fact, an affirmative defense to the NAVFAC’s
counterclaim for liquidated damages, i.e., Counterclaim I, the court addresses this issue in its
discussion of the NAVFAC’s counterclaims. See M. Maropakis Carpentry, 609 F.3d at 1330(characterizing allegation that plaintiff was entitled to adjustment of the contract completion date
for excusable delays as an affirmative defense).
60
IV. DISCUSSION OF THE COUNTERCLAIMS ALLEGED IN THE
GOVERNMENT’S JUNE 12, 2015 ANSWER.
A. Jurisdiction.
The United States Court of Federal Claims has “jurisdiction to render judgment upon any
set-off or demand by the United States against any plaintiff in such court.” 28 U.S.C. § 1503.
Likewise, the court has jurisdiction to adjudicate “any setoff, counterclaim, claim for damages, or
other demand [that] is set up on the part of the United States against any plaintiff making claim
against the United States[.]” 28 U.S.C. § 2508. The court’s jurisdiction to adjudicate Government
counterclaims, however, is subject to the prerequisite that the court have jurisdiction to adjudicate
an underlying claim against the Government in the same case. See Mulholland v. United States,
361 F.2d 237, 245 (Ct. Cl. 1966). Therefore, if the court dismisses a claim alleged by plaintiff
against the Government for lack of subject-matter jurisdiction, the court must also dismiss the
Government’s counterclaims. Id.Because the court has determined that it has jurisdiction to adjudicate Counts I–VIII of
RDA’s May 7, 2015 Second Amended Complaint, the court also has jurisdiction to adjudicate the
counterclaims alleged in the Government’s June 12, 2015 Answer. See Computer Wholesale
Corp. v. United States, 214 Ct. Cl. 786, 788 (1977) (“If plaintiff had pleaded a proper claim,
defendant would be able to claim a setoff or counterclaim for the liquidated damages under 28
U.S.C. § 1503 or § 2508.”); see also Martin J. Simko Const., Inc. v. United States, 852 F.2d 540,
547 (Fed. Cir. 1988) (“The Claims Court has jurisdiction to hear government counterclaims
asserted under the False Claims Act.”); Daff v. United States, 78 F.3d 1566, 1573 (Fed. Cir. 1996)
(“[T]he court had jurisdiction with respect to . . . the government’s . . . fraud claims.”).
B. Standing.
The June 12, 2015 Answer alleges that the Government is entitled to recover liquidated
damages for RDA’s breach of the October 13, 2009 Contract and penalties, under the CDA and
False Claims Act, for fraudulent claims that RDA submitted to the NAVFAC. 6/12/15 Gov’t
Answer ¶¶ at 174–90. Therefore, the June 12, 2015 Answer alleges that the Government has
suffered economic injury that is concrete, particularized, and fairly traceable to RDA’s actions.
See Friends of the Earth, 528 U.S. at 180 (“[To establish standing,] plaintiff must show . . . it has
suffered an ‘injury in fact’ that is . . . concrete and particularized . . . [and] fairly traceable to the
challenged action[.]”). In addition, any financial injury established by the Government can be
redressed by a monetary award. See id. at 181 (holding that, to establish standing, alleged injury
can “be redressed by a favorable decision”).
For these reasons, the court has determined that the Government has standing to seek an
adjudication of the counterclaims alleged in the June 12, 2015 Answer.
61
C. Counterclaim I: Whether The Naval Facilities Command Is Entitled To
Recover Liquidated Damages For The Cost Of Completing The October 13,
2009 Contract.
1. The Government’s Argument.
The Government’s June 12, 2015 Answer alleges that the NAVFAC is entitled to recover
$3,531.26 in liquidated damages for each calendar day between the contract completion date and
the date the contract work was actually completed. 6/12/15 Gov’t Answer at ¶¶ 174–76. In
addition, the Government argues that such liquidated damages continued to accrue after the
October 13, 2009 Contract was terminated, because, at that time, RDA was in default for:
(1) violating the False Claims Act (“FCA”), 31 U.S.C. §§ 3729–3733 (Gov’t PT Br. at 42–44); (2)
failing to timely complete the project (Gov’t PT Br. at 44–51); (3) not making progress toward
completion (Gov’t PT Br. at 51–56); (4) failing to provide adequate assurances in response to the
NAVFAC’s January 31, 2013 Show Cause Notice (Gov’t PT Br. at 56–59); (5) repudiating a
fundamental contract requirement to remove all the H-piles in their entirety (Gov’t PT Br. at 59–
67); and (6) not complying with a number of contract provisions, including removal of demolition
debris from the bay, completion of rip removal and installation of sheet piles and soil anchors
(Gov’t PT Br. at 67–69).
In total, the Government argues that the NAVFAC is entitled to recover $2,514,072 for
712 days of delay.18 Gov’t PT Br. at 69. After subtracting $294,705 that the NAVFAC retained
in payments owed to RDA and an $11,162.99 equitable adjustment to the October 13, 2009
Contract for unforeseen costs, the NAVFAC is owed $2,208,204.01. Gov’t PT Br. at 69.
2. Plaintiff’s Response.
RDA responds that the Government did not prove by a preponderance of the evidence that
the NAVFAC’s February 21, 2013 default termination of the October 13, 2009 Contract was
justified. Pl. PT Resp. at 12 (citing Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765
(Fed. Cir. 1987)). Under FAR 1.602-2(b), COs must “[e]nsure that contractors receive impartial,
fair, and equitable treatment.” Pl. PT Resp. at 13. This obligation requires that the CO “take
ownership of all determinations included in the final [CO’s] opinion.” Pl. PT Resp. at 14 (quoting
CEMS, Inc. v. United States, 65 Fed. Cl. 473, 479 (2005) (internal quotation marks omitted)). Ms.
Kahler, the NAVFAC’s Acquisition Director/Chief of the Contracting Office, violated this
obligation, because she issued the February 21, 2013 Notice of Termination without knowledge
of, and relying on incorrect information about, the NAVFAC’s administration of the October 13,
2009 Contract. Pl. PT Resp. at 14–15.
18
The Government calculates the amount of delay by adding: (1) the 441 days that elapsed
between RDA’s final contract completion date of October 5, 2012 and the December 20, 2013
execution of the Tender Agreement between the NAVFAC and RDA’s surety; and (2) the 271
days between the execution of the completion contract between the NAVFAC and Haskell and the
Haskell contract’s original completion date of November 30, 2014. Gov’t PT Br. at 69.
62
In addition, RDA argues that the NAVFAC was not justified in terminating the October
13, 2009 Contract for failure to complete work by the contract completion date, because RDA was
entitled to a 313-day extension of time for excusable delays. Pl. PT Resp. at 17. Nor could RDA’s
alleged lack of progress justify the February 21, 2013 default termination, because the NAVFAC
contributed to RDA’s lack of progress by: (1) refusing to approve obstruction drilling for long
periods of time; (2) requiring re-inspection of the Manitowoc 4100 crane in violation of the
October 13, 2009 Contract; and (3) forcing RDA to deplete its resources dealing with conditions
that the NAVFAC knew about from the Appledore Report and FST Report, but did not disclose to
bidders during the procurement process. Pl. PT Resp. at 20–23. “It is simply not reasonable for
NAVFAC to point to conditions which it had a role in creating as justification for default
termination[.]” Pl. PT Resp. at 22.
Moreover, the NAVFAC was not justified in terminating the October 13, 2009 Contract on
the basis that RDA failed to provide adequate assurances in response to the NAVFAC’s January
31, 2013 Show Cause Notice. Pl. PT Resp. at 23. In response to the January 31, 2013 Show Cause
Notice, “RDA explained the major impediments to completing the project, which were all
NAVFAC’s responsibility, and stated unambiguously that ‘RDA will continue to work diligently
to complete the work.’ RDA is unsure what further assurance could be provided.” Pl. PT Resp.
at 23 (internal citations omitted).
RDA also responds that it did not repudiate any obligation under the October 13, 2009
Contract. Pl. PT Resp. at 23. Although the NAVFAC insisted that RDA remove all of the broken
H-piles from below the sea floor, those instructions constituted a cardinal change. Pl. PT Br. at
23. Therefore, RDA was not contractually obligated to perform that work. Pl. PT Br. at 23.
Moreover, the NAVFAC was not justified in terminating the October 13, 2009 Contract on the
basis that RDA did not comply with its contractual obligation to: (1) remove all of the debris that
fell into the bay during wharf demolition; (2) complete rip rap removal; and (3) install sheet piles
and soil anchors. Pl. PT Resp. at 23–29. First, RDA removed virtually all of the debris from the
bay, and planned to remove the negligible amount remaining once the rest of the contract work
was complete. Pl. PT Resp. at 23–25. Second, RDA removed all the rip rap within twenty feet of
the bulkhead, as required by the October 13, 2009 Contract. Pl. PT Resp. at 27. Any additional
rip rap was beyond the October 13, 2009 Contract’s scope. Pl. PT Resp. at 27. Third, RDA’s
failure to complete the installation of sheet piles and soil anchors at the bulkhead was caused by
unforeseen obstructions and the NAVFAC’s delay in approving work to drill through those
obstructions. Pl. PT Resp. at 29.
But, even if the Government did demonstrate that the February 21, 2013 default termination
was justified, “a contractor’s failure to perform will be excused and the termination for default
converted to a termination for convenience if the contractor can establish that the government
materially breached the contract.” Pl. PT Br. at 37 (quoting Fort Howard Senior Hous. Assocs.,
LLC v. United States, 121 Fed. Cl. 636, 649 (2015)). In this case, the NAVFAC breached the
63
October 13, 2009 Contract by: (1) effecting a cardinal change when it instructed RDA to remove
all the H-piles in their entirety (Pl. PT Br. at 38); (2) failing to timely authorize obstruction drilling
at the bulkhead (Pl. PT Br. at 42); (3) failing to disclose the Appledore Report and FST Report
during the procurement process (Pl. PT Br. at 47–56); (4) including a defective specification in the
October 13, 2009 Contract (Pl. PT Br. at 56); and (5) violating the duty of good faith and fair
dealing (Pl. PT Br. at 57–61). Therefore, the court must convert the February 21, 2013 termination
for default into a termination for convenience. Pl. PT Br. at 37–38.
3. The Government’s Reply.
The Government replies that “[n]one of RDA’s arguments rebut [the Government’s]
showing that RDA was in default at the time of the termination.” Gov’t PT Resp. at 2. First, RDA
was not excused from removing the H-piles in their entirety, because that contractual requirement
was included in the original contract and never changed. Gov’t PT Resp. at 2–9. In addition, RDA
did not demonstrate that it was entitled to a 313-day extension of the contract completion date for
work that RDA performed to drill through obstructions at the bulkhead. Although RDA’s
scheduling expert, Mr. Mitchell, testified that the project experienced a total of 821 calendar days
of delay, he did not offer any opinion as to the causes of the delay. Gov’t PT Resp. at 37. And,
RDA failed to provide any evidence that the obstructions forced RDA to halt all contract work.
Gov’t PT Resp. at 35.
The Government adds that the NAVFAC’s failure to disclose the Appledore Report and
FST Report was not a material breach of the October 13, 2009 Contract. Gov’t PT Resp. at 15.
But, even if it was, “a party facing a material breach must choose between continuing to perform
the contract or ceasing performance and asserting a breach[.] . . . Failure to [cease performance]
results in waiver of any right to treat the alleged breach as having terminated the contract.” Gov’t
PT Resp. at 15. In this case, RDA discovered that the NAVFAC withheld the Appledore Report
and FST Report on November 18, 2009, but continued to perform on the October 13, 2009 Contract
until February 14, 2013. “RDA cannot now [] claim that its 2013 default was excused by its
November 2009 receipt of the Appledore [R]eport[.]” Gov’t PT Resp. at 16.
The Government also replies that RDA was not excused from performing on the October
13, 2009 Contract by any alleged constructive change or differing site condition. Gov’t PT Resp.
at 16–17. “[C]ontingencies contemplated by various contract clauses are remediable under those
clauses of the contract, not as a breach of the contract.” Gov’t PT Resp. at 17 (quoting Triax-
Pac. v. Stone, 958 F.2d 351, 354 (Fed. Cir. 1992)). The October 13, 2009 Contract included a
Changes Clause and differing site conditions clause. Gov’t PT Resp. at 17. Therefore, any change
in work or differing site condition that RDA encountered would be remediable as an equitable
adjustment and not as a breach of contract. Gov’t PT Resp. at 17.
Likewise, RDA was not excused from performing work under the October 13, 2009
Contract by alleged defects in the specification, because such defects are remediable as equitable
adjustments. Gov’t PT Resp. at 18. Alternatively, RDA failed to prove any of the elements of a
defective specification claim; RDA did not demonstrate that the specification contained any errors
or that RDA was actually misled by information contained in the specification. Gov’t PT Resp. at
64
18. Finally, the Government replies that the NAVFAC never breached the covenant of good faith
and fair dealing. Gov’t PT Resp. at 19–22.
4. The Court’s Resolution.
The October 13, 2009 Contract includes the following liquidated damages provision:
(a) If the Contractor fails to complete the work within the time specified in the
contract, the Contractor shall pay liquidated damages to the Government in the
amount of [$3,531] for each calendar day of delay until the work is completed or
accepted.
(b) If the Government terminates the Contractor’s right to proceed, liquidated
damages will continue to accrue until the work is completed. These liquidated
damages are in addition to excess costs of repurchase under the [t]ermination
clause.
DX 1 at 17, 586 (incorporating 48 C.F.R. § 52.211-12).
Although FAR 52.211-12(b) does not distinguish between terminations for default and
terminations for the convenience of the Government, the United States Court of Appeals for the
Federal Circuit’s predecessor held that the Government cannot recover prospective liquidated
damages when it terminates a contract for its own convenience. See John A. Johnson Contracting
Corp. v. United States, 132 Ct. Cl. 645, 661 (1955) (“The plaintiff’s . . . work was, in fact,
terminated for the convenience of the Government. The Government had, therefore, no right under
the contract to charge the plaintiff with the excess costs of having [the work] completed[.]”); see
also Timberland Paving & Const. Co. v. United States, 8 Cl. Ct. 653, 662 (1985) (“Where a
termination for default is . . . in the contemplation of the law one for the convenience of the
government, neither liquidated damages for any period following the termination nor common law
damages for a breach may properly be assessed against a government contractor.”). In addition,
the October 13, 2009 Contract provides that “[i]f, after termination, it is determined that the
Contractor was not in default, or that the default was excusable, the rights and obligations of the
parties shall be the same as if the termination had been issued for the convenience of the
Government.” DX 1 at 15 (incorporating 48 C.F.R. § 52.249-10(c)). Therefore, if the Contractor
was not in default, or the default was excusable, the Government cannot recover liquidated
damages under FAR 52.211-12(b).
In this case, the Government has proffered undisputed evidence that RDA did not
substantially complete the October 13, 2009 Contract by the modified completion date, i.e.,
October 5, 2012. RDA, however, argues that it is not liable for any liquidated damages, because
the NAVFAC should have extended the contract completion date by 313 days to account for
excusable delays. In the alternative, RDA argues that it is not liable for liquidated damages that
accrued after the NAVFAC’s February 21, 2013 Notice Of Termination, because RDA did not
default on the October 13, 2009 Contract.
65
a. Whether RDA Was Entitled To An Extension Of The Contract
Completion Date.
“[A] party asserting that liquidated damages were improperly assessed bears the burden of
showing the extent of the excusable delay to which it is entitled.” Sauer Inc. v. Danzig, 224 F.3d
1340, 1347 (Fed. Cir. 2000). Specifically, the party asserting the excusable delay, must show that:
(1) the delay resulted from “unforeseeable causes beyond the control and without the fault or
negligence of the [party]”; and (2) the party “took reasonable action to perform the contract
notwithstanding the occurrence of such excuse.” 48 C.F.R. § 52.249-10(b)(1); see also
International Elecs. Corp. v. United States, 646 F.2d 496, 510 (Ct. Cl. 1981).
Regarding the first element, RDA argues that most of the excusable delay was caused by
“unforeseen obstructions that prevented RDA from installing [sheet piles at the bulkhead].” Pl.
PT Br. at 21. Although these obstructions may have been “unforeseen,” RDA failed to demonstrate
that they were “beyond the control and without [RDA’s] fault or negligence.” 48 C.F.R. § 52.249-
10(b)(1) (emphasis added). The Government proffered the expert opinion of Mr. Helmes, P.E.,
that, “[t]he difficulties RDA encountered installing the sheet pile return walls were largely a result
of RDA’s failure to properly complete its predecessor activities, which involve[d] removal of piles
and all the required rock fill.” DX 729 at 25 (emphasis added) (Helmes Expert Report). RDA,
however, did not present any evidence to rebut Mr. Helmes’ opinion. At trial, RDA proffered two
witnesses with experience in construction scheduling—Mr. Mitchell and Mr. Sivalogan—to testify
that RDA’s progress on the October 13, 2009 Contract was delayed. But, neither witness addressed
what caused the obstructions. See, e.g., TR at 1810 (Mitchell) (“[THE GOVERNMENT’S
COUNSEL]: What about causation? You didn’t determine the cause of each of the delays you
identified, correct? [MR. MITCHELL]: That’s correct.”).
Regarding the second element, RDA failed to demonstrate that it “took reasonable action
to perform the [October 13, 2009 Contract] notwithstanding the [obstructions].” International
Elecs. Corp., 646 F.2d at 510. RDA argues that it is entitled to a 313-day extension of the contract
completion date, because RDA was forced to stop all contract work pending the NAVFAC’s
approval of obstruction drilling. Pl. PT Resp. at 18–19. RDA, however, does not cite a single
piece of evidence that supports its assertion that obstruction drilling could not begin without the
NAVFAC’s authorization. To the contrary, the October 13, 2009 Contract expressly required
RDA to begin drilling pending a formal modification. DX 1 at 14 (incorporating 48 C.F.R. §
52.233-1(i) (“The Contractor shall proceed diligently with performance of this contract, pending
final resolution of any request for relief, claim, appeal, or action arising under the contract, and
comply with any decision of the Contracting Officer.”)). And, RDA’s November 11, 2016 Post
Trial Brief admits that, on at least one occasion, “RDA proceeded with . . . obstruction drilling in
advance of receiving formal authorization.” Pl. PT Br. at 25 (emphasis added).
In addition, the record evidence shows that RDA stopped contract performance voluntarily,
because it hoped to secure a contract modification that fully compensated RDA for the necessary
obstruction drilling before it performed such work. Indeed, RDA’s Project Manager advised the
NAVFAC that “RDA will not continue to perform work on [the bulkhead] without . . . a Contract
Modification.” DX 273 at 1. Similarly, RDA’s President stated: “I believe that [i]t is in RDA’s
and the Navy’s best interest to hold off on the obstruction drilling . . . until we reach an agreement
on a unilateral modification.” DX 570 at 1.
66
For these reasons, the court has determined that RDA was not entitled to an extension of
the October 13, 2009 Contract’s completion date for excusable delays.
b. Whether The Naval Facilities Command’s February 21, 2013
Termination Of The October 13, 2009 Contract For Default
Should Be Converted Into A Termination For Convenience.
i. Whether The February 21, 2013 Notice Of Termination
Was “Fair And Impartial,” Pursuant To 48 C.F.R. §
1.602-2.
As an initial matter, RDA argues that The CO’s February 21, 2013 default-termination
decision should be set aside—regardless of the merits—because the decision was not a fair and
impartial “product of [her] personal and independent judgment.” Pl. PT Resp. at 14 (quoting N.
Star Alaska Hous. Corp. v. United States, 76 Fed. Cl. 158, 209 (2007)).
Under the CDA, “[e]ach claim by the Federal Government against a contractor relating to
a contract shall be the subject of a written decision by the contracting officer.” 41 U.S.C. §
7103(a)(3). In addition, the CO’s decision must be “fair and impartial.” 48 C.F.R. § 1.602-2.19And, although there is no “implied prohibition against [the CO] first obtaining or even agreeing
with the views of others,” Pac. Architects & Eng’rs, Inc. v. United States, 491 F.2d 734, 744 (Ct.
Cl. 1974), a CO’s default termination decision must be the result of her personal and independent
judgment, such that “a decision by someone else is a nullity.” N.Y. Shipbuilding v. United States,
385 F.2d 427, 439 (Ct. Cl. 1967).
On February 21, 2013, the CO issued a written decision providing her reasons for
terminating the contract for default, i.e., RDA failed to complete the project by its contract
completion date, and also affirmatively repudiated the contractual requirement to remove broken
H-piles. DX 650 at 1–4. RDA argues that this decision demonstrates a “clear lack of
independence,” however, because the CO: (1) lacked technical construction knowledge; (2) relied
on the advice of the field staff, including Mr. Germano, the Supervisory General Engineer for
19
FAR 1.602-2 provides, in relevant part, that:
Contracting officers are responsible for ensuring performance of all necessary
actions for effective contracting, ensuring compliance with the terms of the
contract, and safeguarding the interests of the United States in its contractual
relationships. In order to perform these responsibilities, contracting officers should
be allowed wide latitude to exercise business judgment. Contracting officers
shall—
...
(b) Ensure that contractors receive impartial, fair, and equitable treatment; and
(c) Request and consider the advice of specialists in audit, law, engineering,
information security, transportation, and other fields, as appropriate.
48 C.F.R. § 1.602-2.
67
NAVFAC, and Mr. Rachupcka, the Construction Project Manager for NAVFAC; and (3) did not
adopt RDA’s arguments with respect to the removal of the H-piles. Pl. PT Resp. at 14–15.
In fact, that the CO did not have specialized construction knowledge, does not mean that
her decision was not independent. As the FAR makes clear, COs are specialists in contract
administration that “should be allowed wide latitude to exercise business judgment” in their
dealings with contractors. 48 C.F.R. § 1.602-2. The FAR also recognizes that COs are not experts
in other subject matter and states that they should “request and consider the advice of specialists
in audit, law, engineering, information security, transportation, and other fields, as appropriate,”
“[s]ecure assistance from legal and other advisors,” and “coordinate with the contract
administration office or contracting office, as appropriate.” 48 C.F.R. §§ 1.602-2(c), 33.211. It
was for this reason that the CO relied on the advice of Mr. Germano and Mr. Rachupka, who had
specialized construction knowledge and were involved in the day-to-day management of the
October 13, 2009 contract. That she relied on this advice does not render her decision non-
independent, despite RDA’s arguments to the contrary.
RDA cites to several cases where the United States Court of Federal Claims found a CO’s
decision to be lacking independent judgment, but those cases are distinguishable. In Fireman’s
Fund Ins. Co. v. United States, 92 Fed. Cl. 598 (2010), the CO did not review a claim decision,
prepared by counsel, before signing it. Id. at 697–98. Similarly, in CEMS, Inc. v. United States,
65 Fed. Cl. 473 (2005), the CO “releas[ed] authority to subordinates and remain[ed] remarkably
detached from the decision-making process,” and denied claims “in which even government error
or changes were acknowledged.” Id. at 479–80. Likewise in North Star Alaska Housing Corp. v.
United States, 76 Fed. Cl. 158 (2007), the CO gave in to pressure from other Government officials
to abdicate his responsibility to be impartial and agreed to support contract interpretations made
by officials, who were openly contemptuous of the contractor. Id. at 210–11.
In this case, the CO’s testimony shows no abdication of responsibility. Before making the
default-termination decision, the CO reviewed the contract documents, the contract modifications,
and letters sent by RDA, wherein RDA claimed entitlement to increased costs and time to complete
the project. TR at 2498 (Kahler).20 The CO then sent the January 31, 2013 Show Cause Letter,
affording RDA an opportunity to explain why the contract should not be terminated for default.
DX 636 at 1–2. But, the CO was not persuaded by RDA’s February 1, 2013 Response, because
RDA did not address her concerns in sufficient detail nor express urgency in getting the project
done. TR at 2503 (Kahler). In addition, RDA’s February 1, 2013 Response reiterated RDA’s
earlier position, as expressed in RDA’s January 18, 2013 Letter, that RDA would not conduct any
work related to H-pile removal without a change order. TR 2503–04 (Kahler); see also DX 637
at 1–2 (1/18/13 RDA letter). Based upon this record, the court finds that the CO used her
20
RDA also asserts that Ms. Kahler’s termination decision is defective because she did not
review the claim file associated with RDA’s April 21, 2010 Certified Claim. Pl. PT Resp. at 14.
But, Ms. Kahler testified that she did not review that claim file because a final decision on that
Certified Claim was issued by a NAVFAC CO on August 31, 2010. TR at 2606 (Kahler); see also
DX 193 at 1–4 (8/31/10 Certified Claim denial decision).
68
independent judgment in deciding that RDA was in default, and she did not abdicate her decision-
making responsibility.
RDA also asserts that the CO’s default-termination decision was flawed because: she did
not understand that removal of the H-piles would entail considerable cost; she was not aware that
FST recommended that the H-piles be cut; and she mistakenly was informed by the Government’s
counsel that RDA intentionally broke H-piles. Pl. PT Resp. at 15. But, RDA’s argument does not
establish that the CO did not use independent decision-making. And, as previously explained, the
H-pile removal was required by the express terms of the October 13, 2009 contract. DX 1 at 82
(Demolition Note 3: “REMOVE PILES IN THEIR ENTIRETY”); PX 12 at 3 (picture). Moreover,
the record evidences that RDA did in fact intentionally cut the H-piles, pursuant to RDA’s March
29, 2010 removal plan. DX 108 at 3–4.
For these reasons, the court has determined that the February 21, 2013 default-termination
should not be set aside based upon a lack of independence or fairness on the part of the CO.
ii. Whether The Naval Facilities Command Established
That RDA Construction Was In Default As Of The
Termination Date.
The October 13, 2009 Contract includes a default provision that allows the Government to
terminate the Contract for default if “the Contractor refuses or fails to prosecute the work or any
separable part, with the diligence that will insure its completion within the time specified in this
contract including any extension, or fails to complete the work within this time[.]” DX 1 at 15
(incorporating 48 C.F.R. § 52.249-10(a)). In addition, the October 13, 2009 Contract’s default
clause states that the Government retains “any other rights and remedies provided by law[.]” DX
1 at 15 (incorporating 48 C.F.R. § 52.249-10(d)). This includes the right to terminate the October
13, 2009 Contract upon a material breach or repudiation of a contract requirement. See Dow Chem.
Co. v. United States, 226 F.3d 1334, 1346 (Fed. Cir. 2000) (“A material breach, or repudiation,
gives rise to a right to exercise a termination provision in a contract[.]”); see also Cities Serv.
Helex, Inc. v. United States, 543 F.2d 1306, 1313 (Ct. Cl. 1976) (“A material breach . . . gives the
injured party the right to end the agreement[.]”).
The Government bears the burden of proving that a termination for default was justified.
See Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987) (“[W]e conclude
that the government should bear the burden of proof with respect to the issue of whether
termination for default was justified[.]”). The Government satisfies this burden if it can
demonstrate that “there was an existing ground for a default-termination, regardless of whether
that ground was known to the contracting officer at the time of the termination.” Empire Energy
Mgmt. Sys., Inc. v. Roche, 362 F.3d 1343, 1357 (Fed. Cir. 2004); see also Kelso v. Kirk Bros.
Mech. Contractors, Inc., 16 F.3d 1173, 1175 (Fed. Cir. 1994) (“This court sustains a default
termination if justified by the circumstances at the time of termination, regardless of whether the
Government originally removed the contractor for another reason.”).
Here, the Government argues that RDA defaulted on the October 13, 2009 Contract,
because RDA failed to complete performance by the contract completion date, i.e., October 5,
2012. RDA does not dispute that it had not completed performance of the October 13, 2009
69
Contract by October 5, 2012. In fact, Mr. Sivalogan, a construction scheduling consultant
employed by RDA, testified that as of November 8, 2012, one month after the completion date,
RDA required 198 days to complete the October 13, 2009 Contract. TR at 957 (Sivalogan).
Instead, RDA argues that it was not in default, because it was entitled to a 313-day extension of
the completion date for excusable delays. For the reasons provided above, however, RDA has
failed to demonstrate any excusable delays.
Alternatively, the Government argues that RDA repudiated the October 13, 2009
Contract’s requirement to remove all of the H-piles in their entirety. “At common law, anticipatory
repudiation of a contract required an unambiguous and unequivocal statement that the obligor
would not or could not perform the contract.” Danzig v. AEC Corp., 224 F.3d 1333, 1337 (Fed.
Cir. 2000). Under modern Government contract law, however,
anticipatory repudiation includes cases in which reasonable grounds support the
obligee’s belief that the obligor will breach the contract. In that setting, the obligee
‘may demand adequate assurance of due performance’ and if the obligor does not
give such assurances, the obligee may treat the failure to do so as a repudiation of
the contract.
Id. at 1337–38 (emphasis added) (quoting Restatement (Second) of Contracts § 251 (1981)).
On November 7, 2012, the NAVFAC rejected a request from RDA to waive the October
13, 2009 Contract’s requirement to “remove all piles in their entirety.” PX 99 at 1. On January
18, 2013, RDA informed the NAVFAC that RDA would not remove any additional piles, unless
the NAVFAC provided an equitable adjustment of $1,096,858.26 and three months to perform that
work. DX 626 at 2. On January 31, 2013, in response to RDA’s January 18, 2013 letter, the
NAVFAC ordered RDA to show cause why the October 13, 2009 Contract should not be
terminated on the basis that RDA repudiated its contractual obligation to remove all of the H-piles.
DX 636 at 1. On February 1, 2013, RDA responded to the NAVFAC’s Show Cause Letter stating
that its position with regard to the H-piles remained the same, i.e., RDA would not perform the
work, without an equitable adjustment. DX 637 at 2. On February 21, 2013, RDA terminated the
October 13, 2009 Contract for default, citing anticipatory repudiation as one of the grounds. DX
650 at 2–3.
This sequence of events demonstrates that RDA’s conduct leading up to the January 31,
2013 Show Cause Letter provided reasonable grounds for the NAVFAC to believe that RDA
would not remove the H-piles in their entirety and thereby breach the October 13, 2009 Contract.
Accordingly, the NAVFAC had a reasonable basis to “demand adequate assurance” that RDA
would remove the remaining piles. RDA’s February 1, 2013 Response to the January 31, 2013
Show Cause Letter clearly failed to provide such assurances, as it plainly stated that RDA would
not perform the remaining work. DX 637 at 2.
70
For these reasons, the court has determined that the NAVFAC’s February 21, 2013 default
termination of the October 13, 2009 Contract was justified.21
iii. Whether The Naval Facilities Command Breached The
October 13, 2009 Contract Thereby Relieving RDA
Construction Corp. Of Any Consequences Stemming
From The February 21, 2013 Default Termination.
A material breach of contract by the Government, “provides [the contractor] with a legal
right to avoid the contract, discharges [the contractor’s] duty to perform, and relieves [the
contractor] of the default termination and its consequences.” Malone v. United States, 849 F.2d
1441, 1446 (Fed. Cir. 1988). Here, RDA argues that it is relieved of the February 21, 2013 default
termination and its consequences, because the NAVFAC breached the October 13, 2009 Contract
by:
(1) effecting a cardinal change to the October 13, 2009 Contract (Pl. PT Br. at 38);
(2) failing to timely authorize obstruction drilling at the bulkhead (Pl. PT Br. at 42);
(3) failing to disclose the Appledore Report and FST Report during the procurement
process (Pl. PT Br. at 47–56);
(4) including a defective specification in the October 13, 2009 Contract (Pl. PT Br. at
56); and
(5) violating the duty of good faith and fair dealing (Pl. PT Br. at 57–61).
The court has addressed all of RDA’s breach of contract arguments in its discussion of
Counts I–VIII of the May 7, 2015 Second Amended Complaint, and has determined that the
NAVFAC did not breach the October 13, 2009 Contract. Therefore, RDA is not relieved of the
February 21, 2013 default termination and its consequences.
In sum, the court has determined that RDA is liable for liquidated damages.
21
The Government provides six alternative grounds for the court to find that the
NAVFAC’s February 21, 2013 default termination was justified. Gov’t PT Br. at 42. But, to
demonstrate that a default termination was justified, the Government only needs to show that
“there was an existing ground . . . at the time of the termination.” Empire Energy, 362 F.3d at
1357. In other words, the Government only needs to succeed on one of its six alternative
arguments. Here, the court has considered the Government’s two strongest grounds in support of
the February 21, 2013 default termination and has determined that either ground was sufficient to
justify termination. For this reason, the court does not find it necessary to address the
Government’s four other grounds.
71
c. The Quantum Of Liquidated Damages That The Naval
Facilities Command Is Entitled To Recover.
The Government argues that it is entitled to recover liquidated damages for 712 days of
delay. RDA responds that the October 13, 2009 Contract’s completion date should be extended
by 313 days for excusable delays, but otherwise does not dispute the amount claimed by the
Government. The court, however, previously rejected RDA’s excusable-delay argument.
Therefore, the court has determined that the NAVFAC is entitled to liquidated damages for 712
days of delay.
The October 13, 2009 Contract provides that “the Contractor shall pay liquidated damages
to the Government in the amount of [$3,531] for each calendar day of delay[.]” DX 1 at 17, 586.
Applying the $3,531 daily rate, the NAVFAC is entitled to a total of $2,514,072 in liquidated
damages. This amount is offset by the NAVFAC’s retention of $305,867.99 in payments owed to
RDA. DX 711 at 1. Accordingly, RDA owes the NAVFAC $2,208,204.01 in liquidated damages.
D. Counterclaim II: Whether RDA Construction Corp. Is Liable For Damages
Under The Contract Dispute Act’s Anti-Fraud Provision, 41 U.S.C. §
7103(c)(2).
The Government’s June 12, 2015 Answer alleges that RDA is liable for $82,974.70 in
damages for violating the CDA’s anti-fraud provision, 41 U.S.C. § 7103(c)(2).22 6/12/15 Gov’t
Answer ¶¶ 177–182.
1. The Government’s Argument.
On November 28, 2012, J.P. Riley inspected a Manitowoc 4100 crane that RDA was using
and noted several items that needed repair. DX 677 at 3. On January 14, 2013, the NAVFAC
directed RDA to take the crane out of service for a re-inspection. DX 677 at 28. On January 16,
2013, J.P. Riley conducted a second inspection and issued a Deficiency/Recommendation Report,
finding that several problems identified in the November 28, 2012 report were not addressed and
noting that “any Deficiency . . . Shall be repaired or defective parts be replaced before continued
use.” DX 677 at 52.
22
The CDA, in relevant part, provides:
[i]f a contractor is unable to support any part of the contractor’s claim and it is
determined that the inability is attributable to a misrepresentation of fact or fraud
by the contractor, then the contractor is liable to the Federal Government for an
amount equal to the unsupported part of the claim plus all of the Federal
Government’ s costs attributable to reviewing the unsupported part of the claim.
Liability under this paragraph shall be determined within 6 years of the commission
of the misrepresentation of fact or fraud.
41 U.S.C. § 7103(c)(2).
72
On March 18, 2013, RDA sent a letter to the NAVFAC, certifying a claim for $82,974.70
in additional costs and requesting a 112-day contract time extension in order to comply with the
NAVFAC’s January 14, 2013 directive. Gov’t PT Br. at 37–39; see also DX 677 at 114–15
(3/18/13 certified claim).
The Government contends that this claim was without merit, because “[t]here is no basis
to hold [the NAVFAC] liable for RDA’s inability to keep its crane in safe operating condition.”
Gov’t PT Br. at 37. Indeed, RDA’s witnesses had no explanation for claiming an “indefensibly
inflated” $82,974.40 in costs. Gov’t PT Br. at 70–71.
The Government also argues that the March 18, 2013 Certified Claim included two
“blatantly false statements,” i.e., that: (1) RDA’s “mechanics made [the] noted repairs” after the
crane was first inspected on November 28, 2012; and (2) that “[J.P. Riley] did not take the crane
out of service [after the November 28, 2012 inspection] or at any point thereafter.” Gov’t PT Br.
at 37 (citing DX 677 at 114–15). RDA, however, did not make all of the noted repairs and “fully
understood” that the crane inspector took the crane out of service after the January 16, 2013 re-
inspection. Gov’t PT Br. at 37–38.
The March 18, 2013 Certified Claim for crane re-inspection and repair costs subsequently
was incorporated as PCO 47 in the July 3, 2013 Certified Claim (DX 691 at 30), which was in turn
incorporated into the May 7, 2015 Second Amended Complaint (5/7/15 Sec. Am. Compl. at ¶ 92).
As a matter of law, the Government is entitled to an “amount equal to the unsupported part of [a]
claim.” 41 U.S.C. § 7103(c)(2). Since the $82,974.70 claimed in the May 7, 2015 Second
Amended Complaint is attributed solely to RDA’s fraudulent activity, the Government is owed
$82,974.70 in damages. Gov’t PT Br. at 69, 72 (citing 41 U.S.C. § 7103(c)(2)).
2. Plaintiff’s Response.
RDA responds that the Government cannot establish the requisite scienter for liability
under the CDA, because the NAVFAC “injected itself into the crane inspection and re-inspection
process and, hence, had full knowledge at all times of the status of the inspections and whether the
crane had been taken out of service.” Pl. PT Resp. at 47. “Back and forth correspondence”
establishes that the NAVFAC was aware of all issues regarding repairs and re-inspections;
therefore RDA could not have acted with intent to defraud. Pl. PT Resp. at 45–47.
With respect to whether RDA violated the CDA, by submitting an “indefensibly inflated”
claim, RDA responds that its claim was made in good faith. Pl. PT Resp. at 47 (citing Horn &
Assoc., Inc., v. United States, 123 Fed. Cl. 728, 783 (2015) (determining that a certified claim did
not violate the CDA, when the contractor mislabeled costs as “actual costs incurred,” so the
contractor acted in good faith and did not submit certified claim to obtain “leverage” against the
Government)).
3. The Court’s Resolution.
Under the CDA’s anti-fraud provision, a contractor that is “unable to support any part of
the contractor’s claim” as a result of “misrepresentation of fact or fraud” is liable to the
Government for an amount equal “to the unsupported part of the claim plus all of the Federal
Government’s costs attributable to reviewing the unsupported part of the claim.” 41 U.S.C. §
737103(c)(2). A “misrepresentation of fact” is “a false statement of substantive fact, or conduct that
leads to a belief of a substantive fact material to proper understanding of the matter in hand, made
with intent to deceive or mislead.” 41 U.S.C. § 7101(9); see also Commercial Contractors, Inc. v.
United States, 154 F.3d 1357, 1362 (Fed. Cir. 1998) (“To recover under the CDA, the government
is required to establish that the contractor made false or fraudulent statements in its submitted
claim with an intent to deceive or mislead the government.” (emphasis added)); see also Daewoo
Engineering & Const. Co. v. United States, 557 F.3d 1332, 1335 (Fed. Cir. 2009) (“The
[G]overnment must establish this falsity and intent by a preponderance of the evidence.”). In short,
to establish a violation of the CDA, the Government must prove: (1) falsity, (2) materiality, and
(3) intent to defraud. See 41 U.S.C. §§ 7101(9), 7103(c)(2).
In this case, the Government asserts that RDA’s claim for crane re-inspection costs is
fraudulent because it was: (1) “baseless”; (2) “indefensibly inflated”; and (3) “premised on
misrepresentations of fact.” Gov’t PT Br. at 37, 70–71. The court will address each of these
arguments in turn.
a. Whether RDA Construction Corp.’s Crane Re-Inspection
Claim Was “Baseless.”
The Government argues that RDA’s claim for crane re-inspection costs and repair of the
Manitowoc 4100W crane is fraudulent, because RDA lacked any “colorable basis to demand
compensation” from the NAVFAC. Gov’t PT Br. at 71. But, RDA’s March 18, 2013 Certified
Claim, July 3, 2013 Certified Claim and May 7, 2015 Amended Complaint are rooted in a long-
running dispute about whether the NAVFAC acted within its authority, when it ordered the crane
to be taken out of service. DX 677 at 114–115; see also Pl. PT Br. at 31, 61, 64 (arguing that the
NAVFAC did not have any contractual basis for requiring the crane to be re-inspected and RDA
incurred costs as a result).
The fact that RDA and the Government disagree about whether the NAVFAC acted
properly does not render RDA’s claim fraudulent. The Government cites to the United States
Court of Appeals for the Federal Circuit’s holding in Daewoo for the proposition that “[i]t is well
established that a baseless certified claim is a fraudulent claim.” 557 F.3d at 1339; see also id. at
1339–40 (“For instance . . . if a party knows that its claim that it is entitled to funds under a letter
of credit ‘has no plausible or colorable basis,’ then the party’s ‘effort to obtain the money is
fraudulent.’” (quoting Itek Corp. v. First Nat’l Bank of Boston, 730 F.2d 19, 25 (1st Cir. 1984)).
RDA’s claim, however, was not “baseless,” in the manner of the contractor’s claim in Daewoo.
In that case, a contractor submitted an inflated claim as a “negotiating ploy” and did not honestly
believe that the Government owed it the amounts claimed. See Daewoo, 557 F.3d at 1339 (quoting
Daewoo Engineering v. United States, 73 Fed. Cl. 547, 588, 589 (2006)). In this case, the
Government did not proffer any evidence that RDA certified this claim as a “negotiating ploy” or
otherwise did not honestly believe that the NAVFAC acted improperly.
For these reasons, the court has determined that RDA’s re-inspection claim was not
“baseless.”
74
b. Whether RDA Construction Corp.’s Crane Re-Inspection
Claim Was “Indefensibly Inflated.”
Next, the Government argues that RDA’s $82,974.70 claim for crane re-inspection costs
was fraudulent, because “RDA’s witnesses had no explanation for the amount claimed, [that] was
indefensibly inflated.” Gov’t PT Br. at 71. Specifically, the Government cites the following
testimony of RDA’s Project Manager, Mark Wallis:
[THE GOVERNMENT’S COUNSEL]: Can you explain to me how you calculated
[the $82,974.70?] It might be on the same sheet, [DX] 657.14.
[MR. WALLIS]: It is. The bottom, it’s the bottom amount on total cost, Line 14.
[THE GOVERNMENT’S COUNSEL]: Look at rental equipment on Line 5.
$52,823. It’s not rental equipment, right?
[MR. WALLIS]: No, it isn’t.
[THE GOVERNMENT’S COUNSEL]: It’s actually owned equipment?
[MR. WALLIS]: Correct.
[THE GOVERNMENT’S COUNSEL]: Where does that number come from?
[MR. WALLIS]: Worksheet one.
[THE GOVERNMENT’S COUNSEL]: Worksheet one on DX 657.15, can you
explain the calculation for the 4100 crane?
[MR. WALLIS]: 640 at the 82.63.
[THE GOVERNMENT’S COUNSEL]: How did you get 640 hours? Based on a
40–hour workweek?
[MR. WALLIS]: Yes. I believe so, yes.
[THE GOVERNMENT’S COUNSEL]: If you divide 640 by 40, how many weeks
are you talking about? . . .
[MR. WALLIS]: 16.
[THE GOVERNMENT’S COUNSEL]: 16 weeks?
[MR. WALLIS]: Wait a minute. 16.
[THE GOVERNMENT’S COUNSEL]: 16 weeks, roughly four months?
[MR. WALLIS]: Correct.
75
[THE GOVERNMENT’S COUNSEL]: What date are we going to start that four
months on? Would it be December 13, 2012, from DX 657.14?
[MR. WALLIS]: Well according to what it says on the verbiage at the bottom, it
would be starting December 13.
[THE GOVERNMENT’S COUNSEL]: So if you start December 13, 2012, and run
about four months, where do you get to?
[MR. WALLIS]: Beyond that. Middle of April.
[THE GOVERNMENT’S COUNSEL]: Why did you claim 640 for the crane?
[MR. WALLIS]: I can’t answer that because I don’t have — I can’t answer that.
TR at 796–97.
As this testimony demonstrates, the cost data submitted with RDA’s March 18, 2013 claim
was both confusing and incorrect. Specifically, RDA requested a time extension of “80 work days
or 112 calendar days . . . based on the number of shifts that the Manitowoc 4100W was [not in
service] from December 13, 2012[, i.e., the date] when all repairs had been completed[,] until
February 28, 2013 when the re-inspection [was] completed.” PX 148 at 14; DX 657 at 14 (same).
Eighty work days at eight hours equals 640 hours; RDA multiplied this figure by the Manitowoc
4100W crane’s hourly “Standby Rate” of $82.63, to arrive at a total idle equipment cost of
$52,883.20. PX 148 at 14–15; DX 657 at 14–15. This figure was added together with labor costs,
overhead, a bond premium, and $5740.00 in unspecified sub-contractor costs to reach a total of
$82,974.70. PX 148 at 14; DX 657 at 14.
The record supports RDA’s assertion that the repairs were made to the crane on December
13, 2012. DX 677 at 13. But, RDA’s calculations are incorrect, because there were only 77
calendar days between December 13, 2012 and February 28, 2013, and not all were “work days.”
An incorrect and confusing claim, however, is not necessarily fraudulent. In order to demonstrate
that the March 18, 2013 claim was submitted in violation of the CDA, the Government must
establish by preponderant evidence that RDA acted with intent to deceive or mislead. See Daewoo,
557 F.3d at 1335 (“The [G]overnment must establish . . . falsity and intent by a preponderance of
the evidence.”).
At trial, Mr. Kelley, RDA’s President, testified that the 640 hour/80 work day figure was a
“mistake,” and admitted that it was impossible for 112 days to have passed between December 13,
2012, and February 28, 2013. TR at 1691–92 (Kelley). Mr. Kelley also testified that the work
associated with RDA’s broken-down “CAT 375” excavating machine may have been erroneously
charged to the March 18, 2013 claim. TR at 1693 (Kelley) (“No, it’s clearly inaccurate with the
date and there was also some other issues with that once we started to dig into it. . . . . There were
like some issues that were charged to it that shouldn’t have been charged to it . . . [including] some
work on the 375[.]”). But, Mr. Kelley maintained that the claim was submitted in good faith and
he and Mr. Wallis believed that RDA was entitled to those costs, when the certified claims were
submitted to the NAVFAC. TR at 1694 (Kelley) (“I still stand that I in good faith was trying to
76
certify that claim . . . . I relied on the people in good faith that we weren’t defrauding anybody . .
. . We feel strongly that we’re entitled to these numbers.”).
The United States Court of Appeals for the Federal Circuit has held that a contractor may
violate the CDA, if a claim is based on a “baseless calculation.” Daewoo, 577 F.3d at 1339. But,
Mr. Kelley’s and Mr. Wallis’s testimony is substantially different than the evidence in Daewoo.
See id. at 1335. In that case, the contractor’s witnesses gave false testimony and were found to be
not credible. See Daewoo, 73 Fed. Cl. at 569–570. In addition, the testimony about the calculation
of the certified claim in that case “left no doubt that [the claim] was unsupportable and was pursued
by [the contractor] with fraudulent intent.” Id. at 574 n.45 (emphasis added).
In the judgment of the court, Mr. Kelley and Mr. Wallis admitted and credibly explained
that the March 18, 2013 claim was incorrect, but was not submitted with an intent to mislead or
deceive the NAVFAC. The Government has not offered preponderant evidence to the contrary.
For these reasons, the court has determined that RDA did not submit an “indefensibly
inflated” claim.
c. Whether RDA Construction Corp.’s Crane Re-Inspection
Claim Was “Premised On Affirmative Misrepresentations Of
Fact.”
In addition, the Government argues that RDA’s March 18, 2013 Certified Claim was
fraudulent, because it included “affirmative misrepresentations of fact regarding whether the
repairs had been made after the first inspection and whether the crane inspector took the crane out
of service.” Gov’t PT Br. at 71. Specifically, the March 18, 2013 Certified Claim included the
following statements that the Government alleges were false, material, and made with the intent
to defraud:
(1) On November 28, 2012[,] we performed the “Annual Crane Inspection” on our
Manitowoc 4100W. The inspection was performed by J.P. Riley and both an
annual crane inspection sticker and deficiency report were issued by the crane
inspector. RDA’s mechanics made the noted repairs and the deficiency report was
signed and returned to J.P. Riley as required on his inspection report to indicate that
the deficiencies had been addressed.
(2) In completing the annual [crane] inspection on November 28, 2012 J.P. Riley issued
a certification. Furthermore, it is important to acknowledge that as a qualified
inspector J.P. Riley did not take the crane out of service at this point [i.e., November
77
28, 2012] or at any point thereafter. NAVFAC interpreted the relevant documents
and specification and directed RDA not to use the crane until it was re-inspected.
DX 677 at 114–15 (emphasis added).23
The statement that RDA’s mechanics made the repairs identified by J.P. Riley after the
November 28, 2012 inspection, but prior to the NAVFAC taking the crane out of service and J.P.
Riley’s second re-inspection, in fact, was false, because one of the noted “Deficiencies” was not
repaired. The November 28, 2012 Deficiency Report listed the following deficiencies:
(1) “Hydraulic leaks”; (2) “Fire Extinguisher”; (3) “Brake Adjustments”; (4) “Wipers”; and (5)
“Hook Rollers Need Adjustments.” DX 677 at 6. The January 16, 2013
Deficiency/Recommendation Report listed the following deficiencies: (1) “Fire Extinguisher
(2ND time on reinspection)24”; (2) “Paint/Corrosion Control (Boom Heal [sic])”; (3) “Hydraulic
leaks (lower side at Pumps)”; (4) “Travel Locks (Left Side)”; and (5) “Lattice Members (10ft
section near picture window).” DX 677 at 52 (emphasis added). Thus, although the March 18,
2013 letter states that RDA’s mechanics made the noted repairs, there was one repair that was not
made—a fire extinguisher was not installed.25
With respect to the second statement, RDA is correct that J.P. Riley did not take the crane
out of service on November 28, 2012. DX 677 at 3.26 But the latter part of the statement—that
23
The CDA defines a “misrepresentation of fact” as a “a false statement of substantive
fact [that] leads to a belief of a substantive fact material to proper understanding of the matter in
hand, made with intent to deceive or mislead.” 41 U.S.C. § 7101(9).
24
The Re-Inspection Deficiency/Recommendation Report, however, noted that the fire
extinguisher was replaced on the same day that the inspection was conducted. DX 677 at 52.
25
The November 28, 2012 Deficiency Report and January 16, 2013 Deficiency/
Recommendation Reports both noted “hydraulic leaks” in need of repair. DX 677 at 6, 52. The
January 16, 2013 Deficiency/Recommendation Report, however, does not state that the hydraulic
leaks found on January 16, 2013 were the same as the hydraulic leaks found on November 28,
2012. DX 677 at 52. At trial, both Mr. Wallis, Construction Manager for RDA, and Mr. Kelley,
President of RDA, credibly testified that the leaks could have been located at different points on
the crane. TR at 792 (Wallis) (“The oil leaks are inconclusive, whether they were the same oil
leaks on both times. It’s an old machine.”); see also TR at 1708–09 (Kelley) (“I would only think
that the fire extinguisher was the same deficiency . . . . . When we go to the other one [the
Deficiency/Recommendation Report is] more specific, to the right side of the pump.”). Mr.
Rachupka, the NAVFAC’s Construction Manager, was present at the second re-inspection, and
recorded that hydraulic leaks remained a problem. DX 625 at 1. But, at trial, Mr. Rachupka
testified that he “couldn’t say for certain” whether these were the same leaks, because he was not
present at the first inspection, and only assumed that the leaks were the same. TR at 2184
(Rachupka).
26
Although J.P. Riley issued a “Deficiency Report,” that noted five deficiencies, this
Report did not take the crane out of service. DX 677 at 6. The November 28, 2012 Deficiency
Report only instructed RDA that all of the noted deficiencies required repair and that the Report
78
J.P. Riley did not take the Manitowoc 4100W crane out of service “at any point thereafter,” was
false. On January 14, 2013, the NAVFAC took the crane out of service until J.P Riley
“perform[ed] a re-inspection of the crane now that that the repairs have been made.” DX 677 at
17. It was not until January 16, 2013 that J.P. Riley conducted a second inspection and issued a
second Deficiency/Recommendation Report that actually took the crane out of service until certain
repairs were made: “any Deficiency . . . Shall be repaired or defective parts be replaced before
continued use.” DX 677 at 52.27
Although the aforementioned statements were false, they were not of the character or
quality that falsely “leads to a belief of a substantive fact material to proper understanding of the
matter in hand” nor were they made with “intent to deceive.” 41 U.S.C. § 7101(9). RDA’s March
18, 2013 claim letter was submitted to bring the dispute about the Manitowoc crane to a head.
On January 16, 2013, Mr. Rachupka arrived for the re-inspection and saw that the missing
fire extinguisher was not replaced. DX 625 at 1. But, the fire extinguisher was replaced shortly
thereafter. DX 625 at 1. More importantly, Mr. Rachupka’s summary of the re-inspection
demonstrates that the NAVFAC decided to keep the Manitowoc 4100W crane out of service,
because: (1) the EM-385-1-1 required a qualified person to perform a load test after the crane’s
brakes were repaired, but a load test could not be conducted on January 16, 2013, because of
missing equipment; and (2) new defects were found during the re-inspection would require another
re-inspection.28 DX 625 1–2. In other words, while RDA’s statement regarding its repairs was
false, it was immaterial to the NAVFAC’s approach to RDA’s crane. The crane was taken out of
service and remained out of service, because of the NAVFAC’s interpretation of the EM-385-1-1,
and not because of J.P. Riley’s November 28, 2012 inspection and deficiency report. For these
reasons, RDA’s statements, although inaccurate, could not have misled the Government into
forming a false belief about a “substantive fact material to the proper understanding of the matter
in hand.” 41 U.S.C. § 7101(9).
For these reasons, the court has determined that, although the March 18, 2013 claim was
confusing and incorrect, as Mr. Kelley and Mr. Wallis testified, it was not made with the intent to
mislead or deceive the NAVFAC.
should be signed and returned to J.P. Riley, within ten days of the repairs being made. DX 677 at
6
27
In context, however, RDA’s statement can also be read as “J.P. Riley did not take the
crane out of service on November 28, 2012, or at any point thereafter, until the NAVFAC’s January
14, 2013 order taking the crane out of service.”
28
Specifically, Mr. Rachupka found that the crane’s boom lacing had to be replaced, so an
additional load test would have to be conducted. DX 625 at 1. In addition, one of the cranes’
tracks would not “lock” to allow proper turning. DX 625 at 1. RDA’s repair to the track’s locking
mechanism would require an additional performance test. DX 625 at 1.
79
E. Counterclaim III: Whether RDA Construction Corp. Forfeited All Claims
Against The United States Under The Special Plea In Fraud Statute, 28
U.S.C. § 2514.
The Government’s June 12, 2015 Amended Answer alleges that RDA’s July 3, 2013
Certified Claim should be forfeited under the Special Plea in Fraud, 28 U.S.C. § 2514.29 6/12/15
Gov’t Answer ¶¶ 183–84. To establish a violation of the Special Plea in Fraud statute, the
Government must show by “clear and convincing evidence that the contractor knew that its
submitted claims were false, and that it intended to defraud the government by submitting those
claims.” Veridyne Corp. v. United States, 758 F.3d 1371, 1367–77 (Fed Cir. 2014) (quoting
Daewoo, 557 F.3d at 1341). As a matter of law, however, proof of “negligence and ineptitude”
does not evidence intent to defraud under the Special Plea in Fraud statute. See Miller v. United
States, 213 Ct. Cl. 59, 69 (1977) (holding that a contractor’s “confused and incorrect” invoices,
although evident of a “pattern of carelessness and slothfulness,” did not rise to the level of
deliberate fraud.). In other words, the Government must prove three elements: (1) falsity; (2)
knowledge of falsity; and (3) actual intent to defraud.
The Government argues that the July 3, 2013 Certified Claim incorporates RDA’s earlier
March 18, 2013 claim letter, and is fraudulent for the reasons previously addressed, i.e., it was: (1)
“baseless”; (2) “inexplicably inflated”; and (3) “premised on misrepresentations of fact.” Gov’t
PT Br. at 72–73.
For the reasons previously discussed, the court has determined that the Government failed
to establish even by a preponderance of the evidence that the March 18, 2013 Certified Claim was
submitted with an intent to defraud, much less section 2514’s heightened “clear and convincing”
evidentiary standard.
29
The Special Plea in Fraud Statute provides:
A claim against the United States shall be forfeited to the United States by any
person who corruptly practices or attempts to practice any fraud against the United
States in the proof, statement, establishment, or allowance thereof.
In such cases the United States Court of Federal Claims shall specifically find such
fraud or attempt and render judgment of forfeiture.
28 U.S.C. § 2514.
80
F. Counterclaim IV: Whether RDA Construction Corp. Violated The False
Claims Act.
1. The Government’s Argument.
The Government argues that RDA violated the False Claims Act (“FCA”), 31 U.S.C. §§
3729–3733,35 by submitting: (1) invoices that falsely certified that RDA’s concrete deck removal
work complied with the October 13, 2009 Contract specifications (Invoices 2–21); (2) invoices
that falsely certified that RDA’s rock fill removal work complied with the October 13, 2009
Contract specifications (Invoices 5–21); (3) invoices that falsely certified that RDA made timely
payments to its subcontractors and suppliers (Invoices 2 through 21); and (4) a July 3, 2013
Certified Claim for crane re-inspection costs that was baseless, inflated and premised on factual
misrepresentations. Gov’t PT Br. at 27, 29, 36–37.
2. Plaintiff’s Response.
First, RDA responds that it did not defraud the FCA by submitting invoices for concrete
deck removal, because the NAVFAC paid those invoices in full despite knowing that RDA’s work
did not comply with the October 13, 2009 Contract’s specifications. Pl. PT Resp. at 36–39.
Second, RDA responds that it did not violate the FCA by submitting invoices for rock fill
removal, because RDA’s work satisfied the October 13, 2009 Contract’s requirements. Pl. PT
Resp. at 39–40. To the extent that RDA’s rock fill removal did not satisfy all of the contract
requirements, however, that failure does not constitute fraud, because it was premised on a
reasonable interpretation of ambiguous contract terms. Pl. PT Resp. at 39–40. Moreover, the
NAVFAC knew of the deficiencies in rock fill removal at the time that RDA submitted the
challenged invoices, but nevertheless compensated RDA for that work. Therefore, the NAVFAC
was not defrauded by the submission of those invoices. Pl. PT Resp. at 41, 43.
35
The False Claims Act, in relevant part, provides:
(a) Liability for certain acts.--
(1) In general. . . . [A]ny person who--
(A) knowingly presents, or causes to be presented, a false or fraudulent
claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false record or
statement material to a false or fraudulent claim[,] . . .
is liable to the United States Government for a civil penalty of not less than
$5,000 and not more than [$11,000], plus 3 times the amount of damages
which the Government sustains because of the act of that person.
31 U.S.C. § 3729(a).
81
RDA also responds that it did not violate the FCA by falsely certifying that it made timely
payments to its subcontractors and suppliers, because RDA’s misrepresentation was not material
to the NAVFAC’s decision to pay the challenged invoices. Pl. PT Resp. at 44.
Finally, RDA responds that the July 3, 2013 Certified Claim for crane re-inspection costs
did not amount to fraud, because the NAVFAC had full knowledge of the facts underlying this
dispute. Pl. PT Resp. at 45–46. Moreover, the July 3, 2013 Certified Claim was not inflated. Pl.
PT Resp. at 46. At most, RDA made a good faith mistake in calculating damages. Pl. PT Resp.
at 46.
3. The Court’s Resolution.
To establish a violation of the FCA, the Government must demonstrate that:
(1) the contractor presented or caused to be presented to an agent of the United
States a claim for payment;
(2) the claim was false or fraudulent; [and]
(3) the contractor knew the claim was false or fraudulent[.]
Young-Montenay, Inc. v. United States, 15 F.3d 1040, 1043 (Fed. Cir. 1994).
The FCA defines “know” or “knowing” as “actual knowledge of the information,”
“deliberate ignorance of the truth or falsity of the information,” or “reckless disregard of the truth
or falsity of the information.” 31 U.S.C. § 3729(b)(1)(A). Under the FCA, knowledge does not
require “specific intent to defraud[.]” 31 U.S.C. § 3729(b)(1)(B).
In addition, the United States Supreme Court has held that an alleged “misrepresentation
about compliance with a statutory, regulatory, or contractual requirement must be material to the
Government’s payment decision in order to be actionable under the [FCA].” Universal Health
Services, Inc. v. United States, 136 S. Ct. 1989, 2002 (2016). When evaluating materiality under
the FCA,
the Government’s decision to expressly identify a provision as a condition of
payment is relevant, but not automatically dispositive. Likewise, proof of
materiality can include, but is not necessarily limited to, evidence that the defendant
knows that the Government consistently refuses to pay claims in the mine run of
cases based on noncompliance with the particular statutory, regulatory, or
contractual requirement. Conversely, if the Government pays a particular claim in
full despite its actual knowledge that certain requirements were violated, that is
very strong evidence that those requirements are not material. Or, if the
Government regularly pays a particular type of claim in full despite actual
knowledge that certain requirements were violated, and has signaled no change in
position, that is strong evidence that the requirements are not material.
Id. at 2003–04 (emphasis added).
82
“In any action brought under [the FCA], the United States shall be required to prove all
essential elements of the cause of action, including damages, by a preponderance of the evidence.”
31 U.S.C. § 3731(d).
a. Whether RDA Construction Corp. Falsely Certified That Its
Deck Removal Work Complied With The October 13, 2009
Contract.
The Government argues that on May 18, 2010 RDA submitted an invoice for deck
demolition that violated the FCA by falsely certifying that RDA’s demolition work complied with
the October 13, 2009 Contract’s specifications. Gov’t PT Br. at 29–32 (citing DX 80 at 26).
Specifically, the Government argues that RDA did not comply with the contractual requirement
that “DEMOLITION DEBRIS SHALL NOT BE ALLOWED TO FALL INTO THE WATER,”
and that any “DEBRIS THAT FALLS INTO THE WATER SHALL BE REMOVED BEFORE
THE END OF THE WORK DAY.” DX 1 at 82. The Government adds that, because RDA never
removed the debris, the nineteen invoices RDA submitted after May 18, 2010 also violated the
FCA. Gov’t PT Br. at 31–32.
The parties agree that RDA: (1) presented Invoices 2–21 to the NAVFAC; (2) failed to
remove all of the debris as required by the October 13, 2009 Contract; and (3) knew that it had not
complied with all of the requirements of the October 13, 2009 Contract. RDA, however, argues
that its misrepresentation did not violate the FCA, because it was not “material . . . to the
Government’s payment decision[.]” Universal Health Services, 136 S. Ct. at 2002. The court
agrees.
The United States Supreme Court has stated that “if the Government pays a particular claim
in full despite its actual knowledge that certain requirements were violated, that is very strong
evidence that those requirements are not material.” Id. at 2003. In this case, the NAVFAC did
just that. On May 18, 2010, RDA submitted its first invoice for deck demolition work. DX 80 at
1. The NAVFAC received that invoice two days later. DX 80 at 1. On May 25, 2010, the
NAVFAC wrote to RDA stating that “RDA has been performing demolition since mid March 2010
and only as of last week did you start removing the debris. Everyone has observed that RDA
allowed the significant accumulation of construction demolition debris on your site without
disposing of it as you went along[.]” DX 140 at 1 (emphasis added). The May 25, 2010 letter
demonstrates that the NAVFAC had contemporary knowledge of RDA’s failure to remove the
demolition debris that fell into the Narragansett Bay. The NAVFAC, however, nevertheless
compensated RDA for the deck removal work included in the May 18, 2010 Invoice and all
subsequent invoices. Gov’t PT Br. at 30 (“RDA invoiced for and received the full $100,000
allotted for disposal of the concrete from the demolition of the wharf.”), 50 (“RDA had the
opportunity to invoice, and was paid, for all work satisfactorily performed through the
termination[.]”).
For these reasons, the court has determined that RDA’s misrepresentation regarding the
debris that fell into the Narragansett Bay was not material to the Government’s payment decision.
83
b. Whether RDA Construction Corp. Falsely Certified That Its
Rock Fill Removal Work Complied With The October 13,
2009 Contract.
Next, the Government argues that RDA’s September 28, 2010 Invoice (Invoice 5) violated
the FCA by falsely certifying that RDA: (1) completed all of the rock fill removal work required
by the October 13, 2009 Contract; and (2) submitted a hydrographic survey of the project site
within seven days of completing rock fill removal. Gov’t PT Br. at 32–33.
i. Regarding Rock Fill Removal.
The Government has satisfied the first two elements of FCA liability. First, the
Government has demonstrated that, on September 28, 2010, RDA submitted an invoice claiming
payment for all of the rock fill removal work required by the October 13, 2009 Contract. DX 210
at 3.
Second, the Government established that the September 28, 2010 Invoice misrepresented
that RDA completed the rock fill removal. During trial, Lawrence Ahearn, the superintendent of
the completion contract awarded to Haskell after RDA was terminated, testified that RDA failed
to remove rock fill throughout the project site:
[THE GOVERNMENT’S COUNSEL]: Now, [Haskell] also removed significant
quantities of rockfill and riprap?
[MR. AHEARN]: Correct. . . .
[THE GOVERNMENT’S COUNSEL]: Would it be fair to say you removed several
truckloads of rockfill and riprap?
[MR. AHEARN]: Yeah. Rock, probably 30 truckloads.
[THE GOVERNMENT’S COUNSEL]: And did you encounter the rockfill across
the entire length of the project?
[MR. AHEARN]: Yes. It was heavier in some areas than others.
TR at 1122–23 (emphases added) (Ahearn).
RDA does not dispute that it failed to remove all of the rock fill from the project site.
Instead, RDA asserts that it was impossible to excavate all of the rock fill without some material
falling back into the Narragansett Bay. Pl. PT Br. at 41. The material that fell back into the water
frequently rolled outside of the “limits of excavation.” Pl. PT Br. at 41. According to RDA,
“[c]hasing those rocks . . . was not part of [the October 13, 2009] Contract.” Pl. PT Br. at 41. But,
RDA does not cite, and the court is unable to identify, any provision of the October 13, 2009
Contract that supports this argument. Therefore, the court has determined that the Government
satisfied the second element of its FCA claim. See Young-Montenay, 15 F.3d at 1043.
84
The Government, however, failed to establish the third element of FCA liability. Here, the
Government argues that RDA had “actual knowledge” of the September 28, 2010 Invoice’s
misrepresentations. Gov’t PT Br. at 33. Specifically, the Government argues that RDA knew its
rock fill removal work was incomplete when it submitted the September 28, 2010 Invoice, because
RDA composed a draft schedule narrative the following month that stated, “the last pieces of the
rip-rap . . . were removed by October 22, 2010.” DX 220 at 1 (emphasis added). The draft
narrative also contained a comment from Mr. Sivalogan, RDA’s scheduling consultant, advising:
“check this [date]. This is the date included in the schedule. If this date is incorrect, then [I]
suggest we . . . do not mention dates here.” DX 220 at 1. The final schedule narrative does not
contain the October 22, 2010 date. DX 219 at 4.
The Government asserts that RDA’s removal of the October 22, 2010 date from the final
schedule narrative is an admission that the rock fill work remained incomplete on October 22,
2010, i.e., one month after RDA submitted the September 28, 2010 Invoice. But, the logic of this
conclusion is flawed. Based on Mr. Sivalogan’s comment, RDA’s exclusion of the October 22,
2010 date only suggests that RDA believed that the October 22, 2010 completion date was
incorrect; it does not, however, provide any insight into whether RDA believed the work was
completed before or after that date. In other words, the absence of a completion date in the final
schedule narrative equally supports two conclusions: (1) RDA believed that it completed the work
some time before October 22, 2010 and possibly before it submitted the September 28, 2010
Invoice; or (2) RDA believed the work remained unfinished as of October 22, 2010. Therefore,
the Government did not prove by a preponderance of the evidence, i.e., that it is more likely than
not, that RDA knew its rock fill work was incomplete when it submitted the September 28, 2010
Invoice.
For these reasons, the court has determined that RDA is not liable under the FCA for falsely
certifying that it completed rock fill removal on, or before, September 28, 2010.
ii. Regarding The Hydrographic Survey.
The Government also argues that the September 28, 2010 Invoice falsely certified
compliance with all of the October 13, 2009 Contract’s requirements related to rock fill removal,
because RDA did not submit a hydrographic survey of the project site within seven days of
completing that work. Here, the parties do not dispute that the first three elements of FCA liability
are satisfied. RDA, however, argues that the Government’s FCA claim is not actionable, because
the relevant misrepresentation was immaterial to the Government’s payment decision. Pl. PT
Resp. at 43. The court agrees.
“[I]f the Government pays a particular claim in full despite its actual knowledge that certain
requirements were violated, that is very strong evidence that those requirements are not material.”
Universal Health Services, 136 S. Ct. at 2003. In this case, the September 28, 2010 Invoice
represented that RDA completed rock fill removal on July 21, 2010. DX 210 at 3. The NAVFAC
did not receive a hydrographic report by July 28, 2010. And, it was well known that RDA did not
plan on submitting a hydrographic report until the project was complete. In fact, Mr. Kelley,
RDA’s President, testified that “[it] was common knowledge among[] [everyone], the Navy
included, that we were going to go back at the end of the project, [to] do a final hydrographic
survey.” TR at 1543 (Kelley). Nonetheless, the NAVFAC paid RDA the full amount of the
85
September 28, 2010 Invoice minus a ten percent penalty for falling 125 days behind schedule. DX
210 at 1. Therefore, the court finds that RDA’s misrepresentation regarding the hydrographic
survey was not material to the Government’s payment decision.
For these reasons, the court has determined that RDA is not liable under the FCA for falsely
certifying that it submitted a hydrographic survey of the project site within seven days of
completing rock fill removal.
c. Whether RDA Construction Corp. Falsely Certified That It
Made Timely Payments To Its Subcontractors.
The Government also argues that RDA falsely certified compliance with the Prompt
Payment Act, 31 U.S.C. § 3905,36 in its May 18, 2010 Invoice (Invoice 2), because RDA failed to
pay several of its subcontractors within seven days of receiving payment from the NAVFAC.
Gov’t PT Br. at 34–35.
Here, the Government has demonstrated that RDA presented a May 18, 2010 Invoice to
the NAVFAC. DX 80 at 1. The Government has also established that the May 18, 2010 Invoice
misrepresented that RDA paid its subcontractors on time, pursuant to the Prompt Payment Act. In
fact, RDA’s President testified that, two years after the October 13, 2009 Contract was terminated,
RDA still owed money to several subcontractors:
[THE GOVERNMENT’S COUNSEL]: And RDA owes [] money to Hub [a
subcontractor] regardless of whether it prevails in this case or not, right?
[MR. KELLEY]: Yes.
[THE GOVERNMENT’S COUNSEL]: There are other subcontractors or suppliers
for the P-469 project that RDA also owes money to, right?
[MR. KELLEY]: There was a few.
36
The Prompt Payment Act, in relevant part, provides:
(b) Each construction contract awarded by an agency shall include a clause that
requires the prime contractor to include in each subcontract for property or services
entered into by the prime contractor and a subcontractor (including a material
supplier) for the purpose of performing such construction contract—
(1) a payment clause which obligates the prime contractor to pay the
subcontractor for satisfactory performance under its subcontract within 7 days
out of such amounts as are paid to the prime contractor by the agency under
such contract[.]
31 U.S.C.A. § 3905(b)(1).
86
TR at 1535 (Kelley). Mr. Kelley’s testimony also demonstrates that RDA had actual knowledge
that its Prompt Payment Act certifications were false. TR at 1535.
Nevertheless, the Government has not established FCA liability, because it failed to prove
by a preponderance of the evidence that RDA’s false certification of compliance with the Prompt
Payment Act was material to the NAVFAC’s decision to pay the May 18, 2010 Invoice. The
Government must “prove all essential elements of [an FCA] cause of action . . . by a preponderance
of the evidence.” 31 U.S.C. § 3731(d). One such element is whether the relevant
misrepresentation was material to the Government’s payment decision. See Universal Health
Servs., 136 S. Ct. at 2002 (“[A] a misrepresentation about compliance with a statutory, regulatory,
or contractual requirement must be material to the Government’s payment decision in order to be
actionable under the False Claims Act.”). In this case, however, the Government failed to present
any evidence to prove that compliance with the Prompt Payment Act was material to the
NAVFAC’s decision to pay the May 18, 2010 Invoice. In fact, the Government’s post-trial briefs
do not mention materiality at all. Therefore, the Government failed to satisfy its burden of proof
with regard to an essential element of its FCA claim. See, e.g., Cox v. Merit Sys. Prot. Bd., 817
F.2d 100, 101 (Fed. Cir. 1987) (“Because [the plaintiff] . . . offered no evidence in support of his
assertion . . ., he failed to carry his burden of proof[.]”).
For these reasons, the court has determined that RDA is not liable under the FCA for falsely
certifying compliance with the Prompt Payment Act.
d. Whether RDA Construction Corp.’s July 3, 2013 Certified
Claim For Costs Incurred To Re-Inspect The Manitowoc 4100
Crane Was Baseless, Inflated And Premised On Factual
Misrepresentations.
The Government also argues that RDA violated the FCA by submitting a July 3, 2013
Certified Claim for crane inspection costs that was “baseless,” “inexplicably inflated,” and
“premised on misrepresentations of fact.” Gov’t PT Br. at 37. Specifically, the Government
argues that RDA claimed an equitable adjustment for delays incurred when the NAVFAC took its
crane out of service pending repair of five deficiencies identified in a November 28, 2012
inspection. Gov’t PT BR. at 37. In an attempt to recover some of its losses, RDA misrepresented
the underlying facts, falsely stating that the inspector never took the crane out of service. Gov’t
PT Br. at 37–38. And, claimed an equitable adjustment that exceeded the total amount of working
hours between the inspection and RDA’s default termination. Gov’t PT Br. 38–39.
Here, the Government has satisfied the first three elements of its FCA counterclaim. First,
the Government has demonstrated that RDA submitted an equitable adjustment claim to recover
costs incurred while its crane was out service. The July 3, 2013 Certified Claim incorporates a
March 18, 2013 Certified Claim where RDA requested “compensation for . . . the time associated
with the crane being out of service as directed by NAVFAC.” DX 691 at 1 (incorporating DX 663
at 7). The March 18, 2013 Certified Claim justified its request, in part, by arguing that “[the crane]
inspector . . . did not take the crane out of service at this point or any point thereafter.” DX 663 at
7.
87
Second, the Government has demonstrated that RDA’s assertion that the inspector did not
take the crane out of service was false. At trial, Mr. Wallis, RDA’s project manager at the time of
the crane inspection, testified as follows:
[THE GOVERNMENT’S COUNSEL]: [The March 18, 2013 Certified Claim
includes] a sentence that says, ‘Furthermore, it is important to acknowledge that as
a qualified inspector J.P. Riley did not take the crane out of service at this point or
at any point thereafter.’
[THE COURT]: Is that a true statement or not? You signed the letter.
[Mr. Wallis]: Based on the information that I see now, no. Based on the information
I have been pointed out to, I would say . . . it was taken out of service.
[THE COURT]: So you were misinformed when you wrote the letter?
[THE WITNESS]: Yes.
TR at 790 (Wallis).
Third, the Government has demonstrated that RDA knew that it misrepresented the
inspector’s decision to take the crane out of service. Indeed, on January 18, 2013, the crane
inspector submitted a Deficiency Report that identified five deficiencies on the crane and
instructed RDA that “any [d]eficiencies [must] be repaired . . . before continued use.” DX 677 at
59. On January 23, 2013, RDA acknowledged receipt of the Deficiency Report and responded,
“[w]e do not believe that the equipment should be taken out of service until the deficiencies . . .
have been corrected.” DX 677 at 56. The January 23, 2013 letter shows that RDA had actual
knowledge that the inspector took its crane out of service before RDA submitted the March 18,
2013 Certified Claim or July 3, 2013 Certified Claim.
The Government, however, has failed to establish that RDA’s misrepresentation of the
underlying facts was material to the NAVFAC’s payment decision. Although RDA’s statement
that “[the crane] inspector . . . did not take the crane out of service” (DX 663 at 7) may have
affected the NAVFAC’s decision to equitably adjust the October 13, 2009 Contract, the
Government did not address the issue of materiality during trial or in its post-trial briefs.
Therefore, the court has determined that the Government failed to carry its burden of proof with
regard to this element of FCA liability. See, e.g., Cox, 817 F.2d at 101 (“Because [the plaintiff] .
. . offered no evidence in support of his assertion . . ., he failed to carry his burden of proof[.]”).
Similarly, the Government did not address whether the NAVFAC’s decision to pay the
July 3, 2013 Certified Claim was affected by miscalculations in the requested damages. Therefore,
the Government also failed to prove that the “inexplicably inflated” damages contained in the July
3, 2013 Certified Claim were material.
For these reasons, the court has determined that RDA’s July 13, 2013 Certified Claim did
not violate the FCA.
88
V. CONCLUSION.
For these reasons, the court has determined that the NAVFAC did not breach the October
13, 2009 Contract, as alleged in Counts I, III–VIII of the May 7, 2015 Second Amended
Complaint. The court has also determined that RDA is not entitled to an equitable adjustment of
the October 13, 2009 Contract, as alleged in Count II, or remission of withheld payments, as
alleged in Count IX.
Regarding the Government’s counterclaims, the court has determined that the NAVFAC is
entitled to recover $2,208,204.01 in liquidated damages, as alleged in Counterclaim I of the
Government’s June 12, 2015 Answer. But, RDA did not defraud the NAVFAC, as alleged in
Counterclaims II–IV.
The Clerk of Court is directed to enter judgment in accordance with this disposition.
IT IS SO ORDERED.
s/ Susan G. Braden
SUSAN G. BRADEN
Chief Judge.
89
Court Exhibit A
Court Exhibit A identifies the transcripts, trial exhibits, demonstrative exhibits, and
witnesses whose testimony comprises the record of trial held in this matter between November 16,
2015 and July 11, 2016.
I. TRANSCRIPTS.
The trial record includes the following transcripts:
Description Date Docket Reference
Trial Transcript Vol. 1 Nov. 16, 2015 ECF No. 73
Trial Transcript Vol. 2 Nov. 17, 2015 ECF No. 75
Trial Transcript Vol. 3 Nov. 18, 2015 ECF No. 77
Trial Transcript Vol. 4 Nov. 19, 2015 ECF No. 79
Trial Transcript Vol. 5 Dec. 7, 2015 ECF No. 87
Trial Transcript Vol. 6 Dec. 8, 2015 ECF No. 89
Trial Transcript Vol. 7 Dec. 9, 2015 ECF No. 91
Trial Transcript Vol. 8 Dec. 10, 2015 ECF No. 93
Trial Transcript Vol. 9 Jan. 4, 2016 ECF No. 97
Trial Transcript Vol. 10 Jan. 5, 2016 ECF No. 99
Trial Transcript Vol. 11 Jan. 6, 2016 ECF No. 101
Trial Transcript Vol. 12 July 11, 2016 ECF No. 108
Peters Deposition Transcript Vol. 1 Oct. 23, 2015 ECF No. 81-1
Peters Deposition Transcript Vol. 2 Oct. 23, 2015 ECF No. 82
Peters Deposition Transcript Vol. 3 Nov. 5, 2015 ECF No. 83
Nicolazzo Deposition Transcript Oct. 28, 2015 ECF No. 84
II. TRIAL EXHIBITS.
The following exhibits were admitted unless otherwise noted.
A. Exhibits Offered By Plaintiff.
PX 001 Solicitation, Offer, and Award (Construction, Alteration, or Repair)
PX 002 NAVFAC Mid Atlantic Solicitation, Offer, and Award
PX 003 Cost Detail Estimate
PX 004 Abstract of Offers – Construction
PX 005 Amendment of Solicitation/ Modification of Contract executed 6/30/2009 re
potential bidders
PX 006 Amendment of Solicitation / Modification of Contract executed 7/7/2011 re
Obstructions Encountered During Installation of Sheet Piles
PX 007 Drawing Set for P-469 Waterfront Improvements, Naval Station Newport, RI
PX 008 Contract Modifications Issued to RDA Construction
PX 009 NAVFAC Specifications for Work Order No. 794165, Waterfront Improvements at
Naval Station, Newport, R.I.
1
PX 010 E-mail dated 8/17/2015 with attachment re P469 Waterfront Project Waterside Work
Estimate Summary Sheet
PX 012 NAVFAC Underwater Facilities Inspection & Assessments by Appledore Marine
Engineering, Inc. dated April, 2005
PX 013 Unified Facilities Guide Specifications, UFGS-02 41 00, October 2006
PX 014 United Facilities Guide Specifications July 2013
PX 015 Kickoff Meeting Minutes dated 5/15/2008
PX 016 Order for Supplies or Services executed 5/27/2008
PX 017 Report dated 7/22/2008 from FST Engineers to NAVFAC re Charrette Inbrief
PX 018 E-mail dated 8/27/2008 from David Anderson to Cynthia De Jong re Record of
Telephone Call August 27, 2008
PX 019 Existing Wharf Evaluation dated 8/29/2008 by FST, LLC
PX 020 Letter dated 2/2/2009 from Travis Germano to Michael Hartman re Submission of
Baseline Schedule - Letter of Concern
PX 021 Letter dated 2/8/2009 [sic] from Karen Sampson to Michael Hartman re Review of
Letter RDA-002
PX 022 Pre-bid photographs of Wharf
PX 023 Letter dated 6/26/2009 from NASDI to Gene Kelley re: Pier Demolition Proposal
PX 024 Memorandum dated 6/30/2009 from Hub Foundation Co., Inc. to American Bridge
Company, Attn: Estimating re Proposal
PX 025 Letter dated 7/30/2009 from William Reagan to Bruce Wood re Waterfront
Improvements at Naval Station Newport RI
PX 026 E-mail dated 10/2/2009 with attachment from Drew Floyd to Mike Hartman re Drill
rig - platform schematic
PX 027 E-mail from Sivalogan to Hartman dated 11/11/2009
PX 028 E-mail dated 11/18/2009 from Germano dated 11/18/2009 enclosing Appledore
Report
PX 029 Letter RDA - 001 from Michael Hartman to Travis Germano re E-mail
Correspondence from Travis Germano Dated 11/18/09
PX 030 Letter RDA - 002 dated 11/20/2009 from Michael Hartman to Nancy Van Gelder re
NAVFAC Response Letter Dated December 9, 2009
PX 031 E-mail chain dated 11/24/2009 from Travis Germano to Frank Stich, David
Anderson and Boris Shilman re P-469 2005 Waterfront Marginal Wharf Inspection
Report
PX 032 E-mail chain dated 11/24/2009 from Frank Stich to Boris Shilman re Change
Notification Deficient Wharf Letter
PX 033 E-mail chain dated 12/2/2009 from Boris Shilman to Frank Stich re Change
Notification Deficient Wharf
PX 034 Letter dated 12/9/2009 from Karen Sampson to Michael Hartman re RDA Letter of
20 Nov 2009
PX 035 Draft Letter dated 12/16/2009 from NASDI to Michael Hartman re Demolition from
Barges Estimated Cost and Time Impacts
PX 036 Letter dated 12/18/2009 from NASDI to Michael Hartman re: Newport Pier Deck
Demolition Proposal
2
PX 037 E-mail chain dated 12/28/2008 with attachment from Mike Hartman to Nancy Van
Gelder re: Response to NAVFAC letter dated 12/9/09
PX 038 Demo Plan Calculations dated 2/22/2010 by Martel Engineering, Inc.
PX 039 Letter RDA - 008 dated 2/25/2010 with attachment from Michael Hartman to Karen
Sampson re Letter dated February 8, 2010
PX 040 E-mail dated 4/21/2010 with attachment from Mike Hartman to Karen Sampson re
Claim Certification Request
PX 041 Letter from Rachupka to Hartman dated 5/17/2010
PX 042 Letter RDA - 018 dated 5/24/2010 from Michael Hartman to Karen Sampson re
Demolition Claim due to 2005 Marginal Wharf Inspection Report
PX 043 E-mail dated 5/24/2010 from Mike Hartman to Karen Sampson re Update on
Demolition Issues
PX 044 Letter RDA - 018 dated 5/24/2010 from Michael Hartman to Karen Sampson re
Demolition claim due to 2005 Marginal Wharf Inspection Report
PX 045 Letter dated 5/25/2010 from Karen Sampson to Michael Hartman re Response to
5/24/2010 claim letter
PX 046 Letter RDA - 022 with attachments dated 7/8/2010 from Michael Hartman to Karen
Sampson
PX 047 Letter RDA - 021A dated 7/12/2010 from Michael Hartman to Karen Sampson re
Additional Known Impacts due to 2005 Marginal Wharf Inspection Report
PX 048 Letter dated 8/31/2010 from Department of The Navy re Review of Certified Claim
4/19/2010
PX 049 Letter RDA - 043 dated 11/19/2010 from Michael Hartman to Craig Rachupka re
Cost Impacts Drilling King Piles from Barge
PX 050 Letter dated 6/14/2011 from Eugene Kelley to The Hon. Stephen F. Lynch re RDA
Contract Dispute with U.S. Navy
PX 051 Memorandum dated 2/22/2012 from Marc Nicolazzo to File re P-469 - Con Phase
Site Visit
PX 052 E-mail dated 3/5/2012 from Travis Germano to Ansley Marr re P-469 Field Memo
for Feb 22
PX 053 E-mail chain dated 8/6/2012 from Erick Cooper to Craig Rachupka re P-469
Waterfront Improvements
PX 054 Summary of Monetary Claim for Work Impacted by the Appledore Report
PX 055 P-469 Waterfront Improvement Turnover Sheet
PX 056 E-mail Sivalogan to Hartman dated 1/19/2010
PX 057 E-mail from Germano to Hartman dated 1/27/2010
PX 058 Transmittal #016b dated 2/2/2010 from RDA to Germano conditionally approving
construction schedule
PX 059 Rachupka Letter dated 5/13/2010
PX 060 Invoice 6A with certification dated 11/29/2010
PX 061 Letter dated 11/19/2010 from Michael Hartman to Craig Rachupka re Obstructions
Preventing Completion of S. Bulkhead Sheet Pile
PX 062 Letter RDA-045 with attachment dated 12/14/2010 from Michael Hartman to Craig
Rachupka re Deteriorated Condition of Existing Sheet Pile
3
PX 063 E-mail chain dated 3/9/2011 from David Anderson re Continual Problems
w/Obstructions & Deteriorated Existing Sheets
PX 064 Letter dated 3/10/2011 from Karen Sampson to Michael Hartman re Response to
Letter RDA-053
PX 065 Letter dated 3/10/2011 from Karen Sampson to Gene Kelley re Response to RDA-
053
PX 066 Letter RDA - 055 from Michael Hartman to Karen Sampson re Additional Response
to Government Letter Ser FEAD/L6211 dated 3/10/2011
PX 067 E-mail chain dated 5/11/2011 from Craig Rachupka to Erick Cooper re P-469 Funds
Request for 2 Critical Path Mods
PX 068 Amendment of Solicitation/ Modification of Contract executed 7/7/2011 re
obstructions encountered during installation of sheet piles
PX 069 Amendment of Solicitation/ Modification of Contract executed 8/19/2011 re
differing site conditions
PX 070 Letter dated 1/27/2012 from Karen Sampson to Eugene Kelley
PX 071 Amendment of Solicitation/ Modification of Contract executed 4/13/2012 re revised
drill pattern and additional time and materials
PX 072 E-mail chain dated 8/14/2012 from Gene Kelley to Karen Sampson re Additional
Construction Drilling
PX 073 Amendment of Solicitation/ Modification of Contract executed 8/17/2012 re drill
obstruction at north and south bulkheads
PX 074 E-mail chain dated 8/17/2012 from Boris Shilman to Travis Germano re P-469,
Obstruction Drilling (Mod 9)
PX 075 E-mail chain dated 8/20/2012 from Karen Sampson to Jeffrey Welch re
modifications
PX 076 Amendment of Solicitation/ Modification of Contract
PX 077 E-mail chain dated 11/13/2012 from Gerard Montani re Completion Date for the
Marginal Wharf
PX 078 E-mail dated 11/27/2012 from Mark Wallis to Travis Germano dated 11/27/2012 re
Additional Drilling
PX 079 E-mail dated 1/10/2013 from Erin Sanders to Ryan Tibbets re P-469 Status
PX 080 E-mail chain dated 1/23/2013 from Erick Cooper re P-469 North Bulkhead - Work
Point 7A & Return Wall
PX 081 E-mail chain dated 1/29/2013 from Craig Rachupka to Travis Germano re Financial
Status
PX 082 Letter RDA-173 from Mark Wallis to Craig Rachupka re Letter RDA-135 dated
5/10/2012, Contract Modification P00009
PX 083 Letter RDA-184 with attachments dated 4/1/2013 re Additional Cost of Delayed
Issue of Contract Modifications
PX 084 E-mail chain from Karen Sampson re Notice of Claim PCO-50 Delayed Issue of
Contract Modifications
PX 085 Time Line #2 - Obstruction Drilling
PX 086 Pre-Negotiation Memo re Extension of Bulkhead at WP 5 and WP 7
PX 087 Monthly Schedule Narrative Update 21
PX 089 Letter RDA-025 dated 7/26/2010 from Michael Hartman to Karen Sampson
4
PX 090 E-mail chain dated 8/4/2010 from Don Harvie to Craig Rachupka re Letter on Pile
Pulling - Follow up
PX 091 Letter RDA-058 dated 4/4/2011 from Eugene Kelley to Craig Rachupka
PX 092 Draft Letter RDA-146 dated 6/14/2012 revised 8/10/2012 re Outstanding Contract
Issues
PX 093 Opinion of Cost for Deductions with attachment dated 8/24/2012
PX 094 Letter RDA-155 with attachment dated 9/17/2012 from Mark Wallis to Craig
Rachupka re Outstanding Contract Issues
PX 095 E-mail chain dated 11/6/2012 with attachment from Craig Rachupka to Karen
Sampson re H Pile Extraction Letter 10-12-12
PX 096 Letter dated 11/7/2012 with attachment from Karen Sampson to Gene Kelley re
Letter RDA-098
PX 097 Letter RDA-168 with attachment dated 1/18/2013 from Mark Wallis to Karen
Sampson re Pile Extraction Variance
PX 098 E-mail dated 1/23/2013 from Craig Rachupka to Erick Cooper re Atty Client Priv P-
469 H-Pile Issue
PX 099 E-mail dated 1/23/2013 from Travis Germano re Meeting Announcement and
Agenda
PX 100 E-mail from Louis Vinciguerra to Jonathan Peters dated 1/28/2013 re: potential
impact of delays
PX 101 E-mail dated 1/29/2013 from Travis Germano re P- 469 Financial Position?
PX 102 Remaining Scope P469 dated 1/30/2013
PX 103 FST remaining scope dated 2/11/2013
PX 104 Memo of Meeting on 3/7/2013
PX 105 Remaining Scope 3/13/13 w/ notes
PX 106 E-mail with attachment from Peters to Ahearn dated 3/25/2013 re Project
Preliminary Scope Narrative
PX 107 Completion Drawings 3/28/2013 with notes
PX 108 Cost Estimate Summary 3/29/2013
PX 109 E-mail dated 4/2/2013 with attached drawing set from Craig Rachupka to Jonathan
Peters
PX 110 E-mail from Anderson to U.S. Navy dated 4/2/2013
PX 111 Time Line #1 dated 5/8/2013 re Pile Variance Request
PX 112 E-mail dated 6/16/2014 from Craig Rachupka re RFI-022 existing Water-Side Steel
Piles Cutoff Request
PX 113 Haskell RFI 22
PX 114 E-mail dated 6/26/2014 from Craig Rachupka to Jonathan Peters with attachment re
Responses to RFI’s 21 & 22
PX 115 E-mail chain dated 1/16/2015 from Jonathan Peters to Travis Germano re Meeting
Today
PX 116 E-mail from Jonathan Peters to Craig Rachupka and others dates 1/19/2015 re
Meeting Requests
PX 117 E-mail from Jonathan Peters to Charles Bateh dated 1/21/2015 re 469 Work this
week
PX 118 E-mail chain dated 1/23/2015 from Robert Wadsworth re: P-469 H Pile Removal
5
PX 119 E-mail from Jonathan Peters to Garrett Sigler dated 5/13/2015 re P469 Water-side
work
PX 120 E-mail from Jonathan Peters to Craig Rachupka and others dated 6/16/2015 re P469
Waterfront Improvements: Pile Extraction
PX 121 E-mail from Jonathan Peters to Craig Rachupka dated 7/8/2015 re Waterside Work
PX 122 Memorandum dated 7/10/2015 from Larry Ahearn to Jonathan Peters
PX 123 Letter with attachments from Jonathan Peters to Leslie Brazil dated 7/16/2015
PX 124 E-mail with attached photographs from Jonathan Peters to Craig Rachupka and
others dated 7/17/2015 re GAIC’s approval of Contractor’s June, 2015 payment
request for Water-Side Work
PX 125 E-mail with attachment dated 8/10/2015 from Reagan Construction Corp. to
Jonathan Peters re P-469 Pile Extraction Log 8-11-15
PX 126 Haskell spreadsheet re estimate to complete extraction dated 8/14/2015
PX 127 Letter dated 8/17/2015 from Shannon Reagan to Jonathan Peters re quote
PX 128 E-mail change from Jonathan Peters to David Nimmich, Esq. dated 8/27/2015
PX 129 Mutual Release Agreement between Great American Insurance Company, Haskell
Co. and the United States of America
PX 130 Color Photo of rusted pile
PX 131 Color Photo of rusted pile
PX 132 Color Photograph of rusty piece of pile
PX 133 Color Photograph of cut pile with angles attached
PX 134 Color Photograph of drilled and anchored rock
PX 135 Color Photograph of crane hoist
PX 136 RDA Construction Pile Installation Log
PX 137 Letter RDA-066A with attachments dated 5/5/2011 from Eugene Kelley to Craig
Rachupka re Approval for Alternate Safety Supervisor SSHO
PX 138 Letter RDA-077 from Eugene Kelley to Kimberly Choplin dated 7/7/2011 re
Approval of Lynda Amarantes as SSHO/QC Manager
PX 139 Letter RDA-094 from Eugene Kelley to Craig Rachupka re Alternate Quality
Control Manager
PX 140 E-mail dated 1/4/2012 from Mark Wallis to Craig Rachupka re Recovery of Proud
Mary
PX 141 Letter RDA-106 dated 1/6/2012 from Mark Wallis to Craig Rachupka re Notice of
Delay - Recovery of Push Boat
PX 142 Letter dated 1/19/2012 from Kimberly Choplin to Gene Kelley re Mark Wallis as
QC Manager
PX 143 Letter dated 1/23/2012 with attachment from Kim Choplin to Gene Kelley re letter
of 1/6/2012, sunken push boat
PX 144 Letter RDA-119 dated 2/2/2012 from Mark Wallis to Craig Rachupka re Notice of
Delay - Delayed Response to Rejection of Mark Wallis as QC Manager
PX 145 Letter dated 6/7/2012 from Mark Wallis to Craig Rachupka with attached Additional
Overhead Due to Delayed Response to QCM Approval
PX 146 E-mail dated 8/3/2012 from Craig Rachupka to Stephen Ericson re: Photos of
Existing Bulkhead at Rip Rap Areas
6
PX 147 Letter dated 1/31/2013 from Karen Sampson to Eugene Kelley re Letter RDA-169
PX 148 Letter RDA-178 with attachments dated 3/18/2013 from Mark Wallis to Karen
Sampson re Notice of Claim PCO-047, Additional Cost for Manitowoc 4100W Re-
Inspection [Depex. 181]
PX 149 Letter RDA-176 with attachments dated 3/20/2013 from Mark Wallis to Karen
Sampson re Notice of Claim PCO-045
PX 150 Letter RDA-179 with attachments dated 3/20/2013 from Eugene Kelley to Karen
Sampson re Additional Cost for Delayed Response to RFI-26
PX 151 Letter RDA-181 dated 3/22/2013 from Eugene Kelley to Karen Sampson re Revised
Notice of Claim Letters
PX 152 Time Line #3 dated 5/15/2013 re Annual Crane Inspection
PX 153 Time Line #4 re Delayed Rejection of SSHO
PX 154 Time Line #5 dated 5/19/2013 re Delayed Response to RFI-26
PX 155 Time Line #6 dated 5/19/2013 re Revised Base Access - RapidGate
PX 156 Time Line #7 dated 5/22/2013 re Delayed Approval of QCM
PX 157 Time Line #8 dated 5/23/2013 re Delayed Recovery of Proud Mary
PX 158 Letter dated 5/24/2013 from Kimberly Kahler to Eugene Kelley re Certified Claims
PX 159 Time Line #9 dated 5/24/2013 re Interference Batter Piles vs. Soil Anchors
PX 160 Time Line #10 dated 5/28/2013 re Revised Closure Details at Workpoints
PX 161 Time Line #11 re Delayed Approval of SSHO / QCM
PX 162 Letter RDA-191 with attachments dated 7/3/2013 from Eugene Kelley to Kimberly
Kahler
PX 163 Letter dated 9/26/2013 from Kimberly Kahler to Eugene Kelley re 7/3/2013 Claim
PX 164 Plaintiff RDA Construction Corporation’s Answers and Objections to Defendant’s
Third Set of Interrogatories
PX 165 Equipment Rental Rates, November 2009
PX 166 Letter re RDA-089
PX 167 Letter dated 6/20/2012 signed by Karen Sampson to Gene Kelley re Receipt of
Updated Construction Schedule
PX 168 Letter dated 1/31/2013 from Kimberly Kahler to Eugene Kelley re Show Cause
Letter
PX 169 Letter dated 2/1/2013 from Eugene Kelley to Kimberly Kahler re Show Cause Letter
PX 170 Draft Letter dated 7/31/2012 from Karen Sampson to Gene Kelley re updated
construction schedule
PX 171 E-mail dated 10/11/2012 from Craig Rachupka to Travis Germano re Forbearance
Letter for Updated Schedule 9/17/12
PX 172 E-mail from Craig Rachupka to Robert Wadsworth dated 12/5/2012 re Forbearance
Letter for Updated Schedule 9/17/12
PX 173 E-mail chain dated 12/5/2012 from Craig Rachupka to Robert Wadsworth re
Forbearance Letter for Updated Schedule 7/26/12
PX 174 E-mail dated 1/17/2013 from Craig Rachupka to Robert Wadsworth re Forbearance
Letter for Updated Schedule
PX 175 E-mail dated 1/9/2013 from Karen Sampson to Craig Rachupka re Negotiation
Meeting on Tuesday, 15 Jan 13 at 1300 hrs.
7
PX 176 Letter with attachments dated 2/21/2013 from Kimberly Kahler to Eugene Kelley re
Notice of Termination
PX 177 E-mail chain dated 5/23/2012 from Craig Rachupka to Travis Germano re P-469
Waterfront Improvements Project
PX 178 E-mail chain from Daniel Sullivan re Newport Marginal Wharf - Descoping Items
PX 179 E-mail chain dated 7/2/2012 from Gerard Montani re Pier 2 Load Capacity Study
PX 180 E-mail dated 8/3/2012 with attached photographs from Travis Germano to Gerard
Montani re Photos of Existing Bulkhead at Rip Rap Areas for P-469
PX 181 Letter dated 8/28/2012 from Karen Sampson to Gene Kelly re Cost Proposal
PX 182 Letter RDA-184 dated 8/31/2012 with attachments from Mark Wallis to Karen
Sampson re RFP-010 Letter
PX 183 E-mail dated 8/21/2012 from Erick Cooper re Deletion of Scope
PX 184 E-mail chain dated 8/24/2012 from David Anderson re Deletion of Work Estimates
PX 185 Tender Agreement executed 12/20/2013
PX 186 Memorandum dated 7/30/2014 from Jeff Welch to Jonathan Peters re P-469
Completion Contract
PX 187 E-mail chain with attachments dated 4/2/2013 from Craig Rachupka to Leonard
Topp re Scope of Work to Complete P-469 4/2/13
PX 188 E-mail with attachment dated 4/2/2013 from Craig Rachupka to Jonathan Peters re
P-469 Scope of Work to Complete Remaining Work & Deficiencies
PX 189 Letter dated 7/29/2014 from Jonathan Peters to Kimberly Kahler and Garrett Sigler
re delays
PX 190 E-mail chain from David Nimmich, Esq. with attachment dated 3/14/2013 re Scope
of Work to Complete Project & Haskell Contact Info
PX 191 E-mail dated 2/14/2013 from Craig Rachupka to John Lambalot re P-469 RDA
Resuming Obstruction Drilling Ops at WP7 [Depex. 256]
PX 192 E-mail chain from Craig Rachupka to Travis Germano re Forbearance Letter for
Updated Schedule 9/17/2012
PX 193 E-mail chain dated 12/5/2012 from Craig Rachupka to Robert Wadsworth re
Forbearance Letter for Updated Schedule 9-17-12
PX 194 E-mail chain dated 12/5/2012 from Craig Rachupka to Robert Wadsworth re
Forbearance Letter for Updated Schedule 7-26-12
PX 195 E-mail dated 1/17/2013 from Craig Rachupka to Robert Wadsworth re Forbearance
Letter for Updated Schedule
PX 196 E-mail chain dated 1/29/2013 from David Greenfield to Keith Barbish re P-469
USCG Contact Info
PX 197 E-mail chain with attachment dated 2/7/2013 from L Tanya Simms re Final Minutes
of Coordination Meeting
PX 198 Letter dated 2/21/2013 from Kimberly Kahler to Jeff Woodward re Notice of
Termination
PX 199 Letter dated 5/24/2013 from Kimberly Kahler to Garrett Sigler re Tender Agreement
PX 200 Solicitation, Offer and Award executed 3/4/2014
PX 201 E-mail chain dated 6/6/2013 from David Nimmich, Esq. to Garrett Sigler and
Kimberly Kahler re Updated Tender Agreement
8
PX 202 E-mail chain dated 9/26/2013 from Craig Rachupka re Underwater Survey
Performed by Semper Diving
PX 203 Letter with attachment dated 5/14/2014 from Hindshaw & Culbertson, LLP to
Daniel B. Volk, Esq. re Tender Agreement
PX 204 E-mail chain dated 7/10/2014 from David Nimmich, Esq. re P-469 Schedule
PX 205 E-mail dated 7/18/2014 from David L. Nimmich, Esq. to Garrett Sigler re Water-
side Work
PX 206 E-mail dated 7/31/2014 with attachment from Jonathan Peters re P-469 Waterfront
Improvements: Notice Letter and Alternative Debris Removal Discussion Letter
PX 207 Demolition debris photograph dated 4/16/20104
PX 208 Demolition debris photograph dated 5/10/2010
PX 209 E-mail from Garrett Sigler to Jonathan Peters dated 8/1/2013 attaching RDA
Demolition Photos
PX 210 E-mail from Garrett Sigler to Jonathan Peters dated 8/1/2013 attaching RDA Sawcut
and debris photos
PX 211 Waterside Agreement dated 12/20/2013
PX 212 E-mail dated 6/27/2014 from Jonathan Peters to Craig Rachupka with attachment re
Waterside Work Agreement
PX 213 Letter dated 7/28/2014 from Larry Ahearn to Jonathan Peters re discussion of
removal methods for P469 project
PX 214 E-mail with attached drawing from Jonathan Peters to Craig Rachupka dated
8/14/2014 re P469 Rock and Sediment removal plan
PX 215 Letter from Jonathan Burwood, Esq. to David Nimmich, Esq., Esq. dated 11/3/2014
PX 216 E-mail dated 1/20/2015 from Jonathan Peters to David Nimmich, Esq. re Water-Side
Agreement Billing Summary and Backup through 12/30/2014
PX 217 E-mail from Peters to Rachupka dated 2/13/2015 enclosing photographs of Pile 30B
PX 218 E-mail dated 8/18/2015 from Gregory Koger, Esq. to Jonathan Burwood, Esq.
PX 219 Letter with attachments dated 8/24/2015 from Jonathan Burwood, Esq. to David
Nimmich, Esq.
PX 220 Letter dated 8/28/2015 from Reagan Construction Corp to The Haskell
Company
PX 221 E-mail chain including 8/27/2015 communication from Jonathan Peters to David
Nimmich, Esq.
PX 222 Letter dated 9/4/2015 from The Reagan Company to The Haskell
Company
PX 223 Letter dated 9/8/2015 from Jonathan Peters to David Nimmich, Esq. and Jonathan
Burwood, Esq.
PX 224 E-mail dated 9/9/2015 from David Nimmich, Esq. to Gregory Koger, Esq.
PX 225 E-mail dated 9/14/2015 from Jonathan Peters to The Reagan Company
PX 226 Letter dated 9/18/2015 from Reagan Construction Corp to The Haskell Company
PX 227 Letter dated 9/22/2015 from Reagan Construction Corp to The Haskell Company
PX 228 Subcontract modification dated 10/6/15
PX 229 Haskell Debris Log
PX 230 Haskell’s log of soil piles A & D
9
PX 231 Soil Export Log, Catlano Construction, Inc., Spreadsheet
PX 232 Rachupka to D. Anderson dated 5/31/2012
PX 233 Scope of Work Cost Estimate dated 3/29/2013
PX 234 Time Line #12 dated 5/30/2013 re Termination Cost and Demobilization
PX 235 RDA’s Claim Related to NAFAC’s Wrongful Termination and Breach of Contract
Narrative dated 7/3/2013 with attached Appendices, Summaries and Support
Documents
PX 236 Letter dated 7/16/2015 from Jonathan Peters of Haskell to Leslie Brazil
PX 238 SureTrack Project Manager Scheduling Report RB21 dated 2/5/2013
PX 239 RDA Construction Cost Report Summary
PX 240 RDA Construction Cost Report
PX 241 RDA Construction Daily Production Reports
PX 242 Original Baseline Schedule
PX 243 Adjusted Baseline Schedule
PX 244 Impact Baseline Schedule
PX 247 RDA Construction RFI’s
PX 248 RFI Log
PX 249 P469 Waterfront Improvement Project Submittal Register
PX 253a RDA Construction Photographs
PX 255 Letter dated 8/24/2015 from Jonathan Burwood, Esq. to David Nimmich, Esq. and
Gregory Koger, Esq. re Settlement Communication
PX 256 Judgment in the matter of Great American Insurance Company v RDA Construction
filed 9/3/2015
PX 2571 E-mail dated 9/21/2010 from Craig Rachupka to Frank Stich re: P-469 M-1 Mod
Work Costs with attached spreadsheet
PX 2582 Spreadsheet titled: Costs Associated with P-469 Wharf Work at M-1
PX 2593 E-mail from Craig Rachupka to Frank Stich dated 9/21/2010 at 5:05 p.m. re: P-469
M-1 Mod Work Costs
PX 261* Expert Report of Thomas E. Mitchell, P.E. including attached Curriculum Vitae and
Exhibits
PX 261* Franklin M. Grynkewicz, P.E. Curriculum Vitae
PX 262 Franklin M. Grynkewicz, P.E., Export Report
ECF-81 Deposition of Jonathan Peters (Vol. I) and exhibits 377 through 404 filed 12/5/2015
1 PX 257, 258, and 259 were not admitted during trial. These three exhibits were offered
by plaintiff for impeachment. Trial Tr. 1294:4-5. Defendant objected to their admission as
substantive evidence. Trial Tr. 1294:11-14. The court deferred its ruling pending further
discussion in post-trial briefing. Trial Tr. 1294:17-20. Neither the objection nor these exhibits
were addressed in post-trial briefing.
2 See note regarding PX 257.
3 See note regarding PX 257.
10
ECF-82 Deposition of Jonathan Peters (Vol. II) and exhibits 405 through 432 filed 12/5/2015
ECF-83 Deposition of Jonathan Peters (Vol. III) and exhibits 700 through 715 filed
12/5/2015
*Expert Report of Thomas E. Mitchell, P.E. and Curriculum Vitae of Franklin M. Grynkewicz,
P.E. were inadvertently both filed on record as PX 261.
B. Exhibits Offered By Defendant
DX 001 Contract No. N40085-09-C-7002
DX 002 Contractor Production Reports
DX 003 Haley & Aldrich Reports - King Pile Installation
DX 004 Haley & Aldrich Reports - Obstruction Drilling
DX 005 Haley & Aldrich Reports - Soil Anchors
DX 006 Haley & Aldrich Reports - Soil Anchors & Obstruction Drilling
DX 007 FST Engineers/NAVFAC Charrette Inbrief Report
DX 008 Base Access Master List
DX 009 Base Access Master List
DX 010 Sign In Sheet for First Site Visit
DX 011 Sign In Sheet for Second Site Visit
DX 012 NASDI Proposal
DX 013 Moretrench Proposal
DX 014 Testa Proposal
DX 015 RDA Bid Calculations
DX 016 RDA Subcontractor Quotes Comparison
DX 017 HUB Foundations Proposal
DX 018 Abstract of Offers
DX 019 Bid Opening Sign In Sheet
DX 020 Bid Opening Statement
DX 021 Government Estimate
DX 022 Navy Letter to RDA
DX 023 RDA Letter with Pre-Award Survey Information
DX 024 RDA Construction Equipment Detail
DX 025 Bid Extension
DX 026 Navy Letter to RDA
DX 027 Moretrench Email to RDA
DX 028 Moretrench Email to RDA
DX 029 Notice to Proceed
DX 030 Email Attaching Cost Breakdown
DX 031 Navy Email Requesting Site Plan
DX 032 Email re Pre-Construction Meeting
DX 033 Construction Site Plan
11
DX 034 Email re Schedule Narrative
DX 035 Email re Draft Schedule
DX 036 Pre-Construction Meeting Sign-In Sheet
DX 037 Pre-Construction Agenda & Meeting Minutes
DX 038 Email re Draft Schedule
DX 039 Pre-Construction Meeting Agenda and Minutes
DX 040 Work in Process Draft Schedule
DX 041 Navy email re Structural Report of Existing Wharf
DX 042 Emails re 2005 marginal wharf inspection report
DX 043 Letter No. RDA-001
DX 044 Email re Schedule
DX 045 Stich Exhibit 168
DX 046 FST Letter to Navy
DX 047 Approval of Scheduler
DX 048 Navy to RDA re Approval of Scheduler
DX 049 Navy to RDA re Scheduler Qualifications
DX 050 RDA Draft Baseline Schedule
DX 051 RDA Schedule RN00 Draft
DX 052 RDA Schedule Narrative
DX 053 RDA to Navy re List of Contractors & Subcontractors
DX 054 Navy Letter to RDA
DX 055 Email re Baseline Schedule Challenges
DX 056 RDA Cost Estimate
DX 057 RDA & Navy email re Marginal Wharf Issue
DX 058 NASDI Letter to RDA
DX 059 RDA Cost Detail
DX 060 NASDI Letter to RDA
DX 061 Email re Schedule
DX 062 Letter No. RDA-002
DX 063 Invoice No.1
DX 064 RDA Schedule Narrative
DX 065 RDA Schedule RN00
DX 066 RDA Schedule RN00 Tabular Print
DX 067 Email re SureTrak
DX 068 RDA Original Mod Pricing Calculations
DX 069 Email re CPM Cost Loading
DX 070 Letter No. RDA-003
DX 071 Email Attaching Schedule with SOV
DX 072 Email re Final Touches CPM
DX 073 RDA email re final touches RN00
DX 074 RDA Schedule Activity ID Report
12
DX 075 Letter No. RDA-004
DX 076 Letter No. RDA-005
DX 077 HUB Foundation Subcontract Agreement
DX 078 Moretrench Subcontract Agreement
DX 079 Email re Updated Schedule
DX 080 Invoice No. 2
DX 081 Email re RDA Schedule
DX 082 Email re Revised CPM
DX 083 Email re Baseline Schedule
DX 084 Email re Baseline Schedule
DX 085 Email re Baseline Schedule
DX 086 Email re Submittal Review Time
DX 087 Navy Letter to RDA
DX 088 Draft Navy Letter (Not Sent)
DX 089 RDA Schedule Narrative
DX 090 RDA Schedule Activity ID Report
DX 091 Email re CPM
DX 092 Letter No. RDA-006
DX 093 Letter No. RDA-009
DX 094 Navy Letter to RDA
DX 095 Navy Letter to RDA re Baseline Schedule
DX 096 NAVFAC email re NAS under review
DX 097 Conditional Schedule Approval
DX 098 Navy Letter to RDA on Waterfront Improvement
DX 099 Letter No. RDA-007
DX 100 RDA Email to Martel
DX 101 Demolition Plan Submittal
DX 102 Martel Calculations
DX 103 Revised Martel Calculations
DX 104 Letter No. RDA-008
DX 105 Purchase Order
DX 106 Demolition Plan Submission
DX 107 Navy Letter to RDA
DX 108 Demolition Plan Submission
DX 109 Request for Proposal
DX 110 Letter No. RDA-010
DX 111 Navy Letter to RDA Returning Schedule For Revision
DX 112 Navy Letter to RDA re Asbestos Abatement Plan
DX 113 Email re Schedule
DX 114 Email re Schedule
DX 115 Email re Cost Loading CPM
13
DX 116 Email re Invoicing Procedures
DX 117 Letter No. RDA-011
DX 118 Letter No. RDA-012A
DX 119 Navy Letter to RDA re Wales
DX 120 Navy Letter to RDA re King Pile Connectors
DX 121 Navy Letter to RDA re Schedule Submission
DX 122 Email re Schedule
DX 123 Letter No. RDA-013
DX 124 Letter No. RDA-014
DX 125 Letter No. RDA-015
DX 126 Email re Cost Loading Mix Up
DX 127 Navy Letter to RDA re King Pile Connectors
DX 128 Navy Letter to RDA re Wales
DX 129 Letter No. RDA-017
DX 130 Navy Letter to RDA Returning Schedule For Revision
DX 131 Baseline Schedule Transmittal 016F RA0A
DX 132 Baseline Schedule Transmittal 016F RA0A Classic Layout
DX 133 Baseline Schedule Transmittal 016F RA0A Pred Succ Rpt
DX 134 Navy Letter to RDA Accepting Baseline Schedule
DX 135 Transmittal 16g Schedule Update
DX 136 Navy Letter to RDA re Interlock Connectors
DX 137 Letter No. RDA-018
DX 138 Letter No. RDA-019
DX 139 Navy Letter to RDA re Recent Submittals
DX 140 Navy Letter to RDA re Demolition
DX 141 Letter No. RDA-016
DX 142 Navy Letter to RDA re Interlock Connectors
DX 143 Navy Letter to RDA re PZ 90 degree Corners
DX 144 RDA Email to Navy re Job Progress Update
DX 145 Navy Letter to RDA re Job Progress Update
DX 146 Letter No. RDA-020
DX 147 Navy Letter to RDA re Updated Construction Schedule
DX 148 Navy Letter to RDA re Log Report & Schedule Narrative
DX 149 Navy Letter to RDA re FST Drawings & Elevated Wale
DX 150 Navy Letter to RDA re Updated Construction Schedule
DX 151 Navy Letter to RDA re Receipt of Claim
DX 152 Letter No. RDA-021
DX 153 Letter No. RDA-024 & RDA-023
DX 154 Invoice No. 3
DX 155 Letter No. RDA-022
DX 156 Email Attaching Kelley Certs & SCUBA AHA
14
DX 157 Letter No. RDA-021A
DX 158 Navy Letter to RDA re Updated Schedule
DX 159 Navy Letter to RDA re Dig Safe Permit
DX 160 FST Memo re Site Visit
DX 161 Letter No. RDA-025
DX 162 FST Memo re Letter No. RDA-022
DX 163 Email re King Pile & Soil Anchor Activity Schedule
DX 164 Letter No. RDA-026
DX 165 Letter No. RDA-027
DX 166 Invoice No. 4
DX 167 Letter No. RDA-028
DX 168 QC/Production Meeting #1
DX 169 CorrTech Letter to RDA re Anodes
DX 170 DCAA Letter to RDA re Access to Records
DX 171 FST Letter to Navy re Anodes
DX 172 Email re King Pile Installation Schedule
DX 173 PWD Newport FEAD Safety Assist Visit Outbrief
DX 174 Navy Letter to RDA re Safety Mishap
DX 175 Navy Letter to RDA re Underwater QC Team at SBH
DX 176 RFI 12
DX 177 Email re Obstructions
DX 178 Letter No. RDA-029
DX 179 Letter No. RDA-030
DX 180 Non-Compliance Notice No. 1
DX 181 Email re Obstructions at SBH
DX 182 QC/Production Meeting #2
DX 183 Email re Obstructions
DX 184 Email re Obstructions
DX 185 Email re Obstructions
DX 186 Navy Letter to RDA re Safety Mishap
DX 187 Navy Letter to RDA re Safety Inspection
DX 188 Navy Letter to RDA re Underwater QC Team
DX 189 Navy Letter to RDA re Letter No. RDA-027
DX 190 Email re FST Field Consultation Days
DX 191 Letter No. RDA-031
DX 192 QC/Production Meeting #3
DX 193 Contracting Officer’s Final Decision
DX 194 Navy Letter to RDA re Updated Schedule
DX 195 RDA Letters re Personnel
DX 196 QC/Production Meeting #4
DX 197 Cost Breakdown
15
DX 198 Cost Breakdown
DX 199 Navy Letter to RDA re Personnel
DX 200 QC/Production Meeting #5
DX 201 Letter No. RDA-032
DX 202 RDA email re Addl Piles Pulled SBH
DX 203 Navy Letter to RDA re Safety Mishap
DX 204 Letter No. RDA-033
DX 205 Letter No. RDA-034
DX 206 Letter No. RDA-035
DX 207 QC/Production Meeting #6
DX 208 Email re Job Cost System
DX 209 QC/Production Meeting #7
DX 210 Invoice No. 5A
DX 211 Letter No. RDA-036
DX 212 QC/Production Meeting #10
DX 213 QC/Production Meeting #9
DX 214 Email re Schedule for Field Observation
DX 215 FST Consultation Response re SBH and RFI 12
DX 216 FST Letter re Obstructions
DX 217 Navy Letter to RDA Acknowledging Updated Schedule
DX 218 QC/Production Meeting #11
DX 219 Invoice No. 6A
DX 220 Draft Monthly Schedule Narrative Update#5
DX 221 QC/Production Meeting #12
DX 222 Letter No. RDA-037
DX 223 Navy Letter to RDA Acknowledging Receipt of Schedule
DX 224 Letter No. RDA-038
DX 225 Letter No. RDA-039
DX 226 Letter No. RDA-040
DX 227 QC/Production Meeting #16
DX 228 Letter No. RDA-041
DX 229 Letter No. RDA-042
DX 230 Letter No. RDA-043
DX 231 Letter No. RDA-044
DX 232 Email with Bond Information Request
DX 233 FST to Navy re Soil Anchors 50 & 52
DX 234 FST Letter re RFI 18A
DX 235 FST Letter re RFI 22
DX 236 Invoice No. 7
DX 237 Letter No. RDA-045
DX 238 Moretrench Soil Anchor Submittal
16
DX 239 Email with Photos of Ripped Sheets at WP5
DX 240 Underwater QC Inspection Report
DX 241 Email re Letter No. RDA-045
DX 242 QC/Production Meeting #19
DX 243 Letter No. RDA-046
DX 244 Email re Letter No. RDA-045
DX 245 QC/Production Meeting #20
DX 246 QC/Production Meeting #21
DX 247 RI Tax Notices
DX 248 Email re PCO-015
DX 249 Email re Conference Call re SBH Sheets
DX 250 QC/Production Meeting #22
DX 251 Disapproved Tieback Submittal
DX 252 Navy Letter to RDA re Soil Disposal
DX 253 QC/Production Meeting #23
DX 254 QC/Production Meeting #24
DX 255 Hub Work Chronology
DX 256 QC/Production Meeting #25
DX 257 Navy Letter to RDA re Underwater QC Inspections
DX 258 Navy Letter to RDA re Two Week Look Ahead
DX 259 Letter No. RDA-048
DX 260 RFI 24
DX 261 Analysis on Mishap Presentation
DX 262 Navy Letter to RDA re Safety Mishap
DX 263 Invoice No. 8B
DX 264 Letter No. RDA-049
DX 265 Letter No. RDA-050
DX 266 Non-Compliance Notice No. 2
DX 267 Letter No. RDA-051
DX 268 Letter No. RDA-052
DX 269 RDA Safety Meeting
DX 270 FST Letter re RFI 24
DX 271 Email re RDA-053
DX 272 RDA Email re Obstructions and Deteriorated Sheets
DX 273 Letter No. RDA-053
DX 274 Navy Letter to RDA re Letter No. RDA-053
DX 275 RDA Email re Government letter
DX 276 Letter No. RDA-054
DX 277 QC/Production Meeting #28
DX 278 QC/Production Meeting #28
DX 279 Navy Letter to RDA re Safety Action Plan
17
DX 280 Navy Letter to RDA re Revised Organization Chart
DX 281 Navy Letter to RDA re Request for Backup Information
DX 282 Letter No. RDA-055
DX 283 Letter No. RDA-056
DX 284 QC/Production Meeting #29
DX 285 QC/Production Meeting #29
DX 286 Non-Compliance Notice No. 3
DX 287 QC/Production Meeting #30
DX 288 QC/Production Meeting #30
DX 289 Non-Compliance Notice No. 4
DX 290 Letter No. RDA-057
DX 291 Email re Obstructions
DX 292 Email Requesting Cost Proposal
DX 293 Navy Letter to RDA Requesting Cost Proposal
DX 294 Letter No. RDA-058
DX 295 QC/Production Meeting #31
DX 296 QC/Production Meeting #31
DX 297 QC/Production Meeting #31
DX 298 Letter No. RDA-059
DX 299 Email re Cost Proposal
DX 300 QC/Production Meeting #31
DX 301 Navy Letter to RDA re Obstructions
DX 302 Navy Letter to RDA Requesting Cost Proposal
DX 303 Email re RFP Letters
DX 304 Letter No. RDA-059A
DX 305 Documents re PCO-025
DX 306 Letter No. RDA-065
DX 307 Letter No. RDA-052A
DX 308 Letter No. RDA-057A
DX 309 Letter No. RDA-060
DX 310 Letter No. RDA-061
DX 311 Letter No. RDA-062
DX 312 Letter No. RDA-063
DX 313 Letter No. RDA-064
DX 314 QC/Production Meeting #32
DX 315 QC/Production Meeting #32
DX 316 Letter No. RDA-066
DX 317 Invoice No. 9
DX 318 FST Letter to Navy re Cutoff Wall Variance
DX 319 Letter No. RDA-067
DX 320 Letter No. RDA-067A
18
DX 321 QC/Production Meeting #33
DX 322 Letter No. RDA-068
DX 323 Letter No. RDA-069
DX 324 Letter No. RDA-066A
DX 325 Letter No. RDA-068A
DX 326 Letter No. RDA-069A
DX 327 Navy Letter to RDA re Proposed Personnel
DX 328 RDA-071
DX 329 QC/Production Meeting #34
DX 330 QC/Production Meeting #35
DX 331 QC/Production Meeting #35
DX 332 Cost Worksheet re Obstruction Drilling
DX 333 QC/Production Meeting #35
DX 334 QC/Production Meeting #36
DX 335 QC/Production Meeting #36
DX 336 QC/Production Meeting #37
DX 337 QC/Production Meeting #37
DX 338 Mod P00004 Drawings
DX 339 Letter No. RDA-072
DX 340 QC/Production Meeting #38
DX 341 QC/Production Meeting #38
DX 342 Letter No. RDA-070
DX 343 QC/Production Meeting #39
DX 344 QC/Production Meeting #40
DX 345 Letter No. RDA-073
DX 346 Letter No. RDA-074
DX 347 Email re Obstruction Drilling Schedule
DX 348 Letter No. RDA-075
DX 349 QC/Production Meeting #39
DX 350 Letter No. RDA-076
DX 351 Letter No. RDA-077
DX 352 HUB Foundation Work Chronology
DX 353 QC/Production Meeting #43
DX 354 QC/Production Meeting #43
DX 355 QC/Production Meeting #44
DX 356 Navy Letter to RDA re Personnel
DX 357 Letter No. RDA-061A
DX 358 Email re Tentative RDA Construction Schedule
DX 359 QC/Production Meeting #44
DX 360 QC/Production Meeting #45
DX 361 Letter No. RDA-078
19
DX 362 FST Letter re Landside Anodes
DX 363 QC/Production Meeting #45
DX 364 QC/Production Meeting #46
DX 365 Email re Three Week Schedule
DX 366 RDA Letter to Navy
DX 367 FST Site Sketch for CBH WP5a
DX 368 QC/Production Meeting #46
DX 369 QC/Production Meeting #46
DX 370 QC/Production Meeting #47
DX 371 Navy Letter to RDA re Tie Rods
DX 372 Letter No. RDA-079
DX 373 QC/Production Meeting #47
DX 374 QC/Production Meeting #47
DX 375 QC/Production Meeting #48
DX 376 Letter No. RDA-080
DX 377 Time Impact Analysis Narrative
DX 378 Email re Current Issues
DX 379 Obstruction Drilling Change Order Work History
DX 380 RDA Monthly Schedule Narrative Update #9
DX 381 Invoice No. 10
DX 382 FST Letter re Sheet Pile 100B
DX 383 QC/Production Meeting #48
DX 384 QC/Production Meeting #49
DX 385 QC/Production Meeting #49
DX 386 Narrative re Obstructions at WP7a
DX 387 QC/Production Meeting #49
DX 388 QC/Production Meeting #49
DX 389 QC/Production Meeting #50
DX 390 Letter No. RDA-081
DX 391 Email re Rev Drill Mount
DX 392 QC/Production Meeting #50
DX 393 QC/Production Meeting #51
DX 394 QC/Production Meeting #50
DX 395 Email re WP 7a Obstructions
DX 396 Email re Crane Accident and SBH Obstructions
DX 397 Email re Initial Lessons Learned
DX 398 Safety Lesson Learned: Accident Abstract
DX 399 Email re Crane Capacity
DX 400 Email re Navy Site Visit
DX 401 Email re Crane Accident Report
DX 402 Details of Accident
20
DX 403 Crane Accident Report
DX 404 FST Letter to Navy with Estimate of FST Consultation Time
DX 405 Non-Compliance Notice Nos. 5-8
DX 406 QC/Production Meeting #52
DX 407 Letter No. RDA-082
DX 408 Letter No. RDA-083
DX 409 Negotiation Memorandum
DX 410 Letter No. RDA-084
DX 411 QC/Production Meeting #52
DX 412 QC/Production Meeting #53
DX 413 Navy Letter to RDA re Safety Incident
DX 414 Email re Crane Inspection
DX 415 Letter No. RDA-085
DX 416 Letter No. RDA-047 Revised
DX 417 Letter No. RDA-086
DX 418 QC/Production Meeting #53
DX 419 QC/Production Meeting #54
DX 420 QC/Production Meeting #54
DX 421 Letter No. RDA-087
DX 422 Letter No. RDA-088
DX 423 Navy Letter to RDA re Base Access System
DX 424 QC/Production Meeting #55
DX 425 QC/Production Meeting #54
DX 426 Letter No. RDA-089
DX 427 Letter No. RDA-090
DX 428 Letter No. RDA-091
DX 429 Letter No. RDA-092
DX 430 Navy Letter to RDA re Crane Repair
DX 431 Non-Compliance Notice No. 9
DX 432 QC/Production Meeting #56
DX 433 QC/Production Meeting #55
DX 434 Letter No. RDA-093
DX 435 Letter No. RDA-097
DX 436 Letter No. RDA-094
DX 437 Letter No. RDA-095
DX 438 Letter No. RDA-096
DX 439 Letter No. RDA-099
DX 440 QC/Production Meeting #56
DX 441 QC/Production Meeting #56
DX 442 QC/Production Meeting #57
DX 443 Navy Letter to RDA re Personnel
21
DX 444 Email re Crane Inspection
DX 445 Martel to RDA re Removal of Modification to Crane
DX 446 Email re Tie Back Drilling Schedule
DX 447 QC/Production Meeting #57
DX 448 QC/Production Meeting #58
DX 449 Email attaching Soil Anchor Activity Plan
DX 450 Email re Revisions to Soil Anchor Schedule
DX 451 QC/Production Meeting #58
DX 452 QC/Production Meeting #58
DX 453 Letter No. RDA-098
DX 454 Letter No. RDA-100
DX 455 QC/Production Meeting #59
DX 456 QC/Production Meeting #59
DX 457 QC/Production Meeting #59
DX 458 Invoice No. 11
DX 459 Letter No. RDA-101
DX 460 Letter No. RDA-102
DX 461 Terralogic Proposal
DX 462 Navy Letter to RDA re Letter No. RDA-100
DX 463 Navy Letter to RDA re Letter No. RDA-102
DX 464 Email re RevDrill
DX 465 FST Memo re Soil Anchors
DX 466 Revised Terralogic Proposal
DX 467 QC/Production Meeting #60
DX 468 QC/Production Meeting #61
DX 469 Email re Change From RevDrill to Casagrande
DX 470 Letter No. RDA-103
DX 471 Letter No. RDA-104
DX 472 Coast Guard Notice re Oil Pollution Incident
DX 473 Non-Compliance Notice No. 10
DX 474 Email re Recovery of Proud Mary
DX 475 Letter No. RDA-106
DX 476 Letter No. RDA-107
DX 477 QC/Production Meeting #60
DX 478 QC/Production Meeting #61
DX 479 Letter No. RDA-108
DX 480 Non-Compliance Notice No. 11
DX 481 Non-Compliance Notice No. 13
DX 482 QC/Production Meeting #62
DX 483 QC/Production Meeting #63
DX 484 QC/Production Meeting #62
22
DX 485 Navy Letter to RDA re Personnel
DX 486 Navy Letter to RDA re Personnel
DX 487 Letter No. RDA-110
DX 488 Navy Letter to RDA re Boat Recovery
DX 489 Letter No. RDA-109
DX 490 Non-Compliance Notice No. 12
DX 491 Navy Letter to RDA
DX 492 Letter No. RDA-112
DX 493 Letter No. RDA-114
DX 494 Letter No. RDA-115
DX 495 Letter No. RDA-116
DX 496 Letter No. RDA-117
DX 497 Letter No. RDA-118
DX 498 Letter No. RDA-119
DX 499 Letter No. RDA-111
DX 500 Letter No. RDA-113
DX 501 Letter No. RDA-122
DX 502 Letter No. RDA-123
DX 503 Letter No. RDA-123 REV
DX 504 MA Dept. of Revenue Letter and Attachments
DX 505 Letter No. RDA-124
DX 506 QC/Production Meeting #64
DX 507 Letter No. RDA-125
DX 508 Letter No. RDA-126
DX 509 Letter No. RDA-128
DX 510 Letter No. RDA-129
DX 511 Letter No. RDA-130
DX 512 Letter No. RDA-132
DX 513 Letter No. RDA-134
DX 514 QC/Production Meeting #65
DX 515 QC/Production Meeting #65
DX 516 Invoice No. 12
DX 517 QC/Production Meeting #65
DX 518 QC/Production Meeting #65
DX 519 Letter No. RDA-131
DX 520 Email re RFI 31
DX 521 Invoice No. 13
DX 522 QC/Production Meeting #65
DX 523 Letter No. RDA-132REV
DX 524 QC/Production Meeting #65
DX 525 QC/Production Meeting #71
23
DX 526 Invoice No. 014
DX 527 QC/Production Meeting #73
DX 528 Letter No. RDA-135
DX 529 Letter No. RDA-136
DX 530 Letter No. RDA-137
DX 531 Letter No. RDA-138
DX 532 Letter No. RDA-139
DX 533 Letter No. RDA-140
DX 534 Letter No. RDA-141
DX 535 Email re RDA PCOs
DX 536 Letter No. RDA-142
DX 537 QC/Production Meeting #73
DX 538 Non-Compliance Notice No. 14
DX 539 Non-Compliance Notice No. 15
DX 540 Contractor’s Invoice No. 015
DX 541 Letter No. RDA-143
DX 542 Letter No. RDA-144
DX 543 Letter No. RDA-145
DX 544 Letter No. RDA-146
DX 545 Letter No. RDA-147
DX 546 QC/Production Meeting #73
DX 547 Letter No. RDA-148
DX 548 Navy Letter to RDA Acknowledging Receipt of Schedule
DX 549 QC/Production Meeting #74
DX 550 Letter No. RDA-149
DX 551 Request for Proposal
DX 552 QC/Production Meeting #75
DX 553 QC/Production Meeting #76
DX 554 QC/Production Meeting #77
DX 555 Letter No. RDA-150
DX 556 Letter No. RDA-151
DX 557 Invoice No. 16
DX 558 Email re Obstruction Drilling
DX 559 Email re Drill Patterns Recommended by FST
DX 560 Email re Drilling Through Obstructions For A Third Time
DX 561 QC/Production Meeting #79
DX 562 QC/Production Meeting #79
DX 563 Email re Drilling Rates
DX 564 QC/Production Meeting #82
DX 565 QC/Production Meeting #82
DX 566 QC/Production Meeting #79
24
DX 567 Email re Obstruction Drilling
DX 568 Letter No. RDA-152
DX 569 Letter No. RDA-156
DX 570 Email re Obstruction Drilling
DX 571 Email re PCO-027
DX 572 Email re Obstruction Drilling
DX 573 QC/Production Meeting #83
DX 574 QC/Production Meeting #83
DX 575 Request for Proposal
DX 576 Letter No. RDA-154
DX 577 QC/Production Meeting #84
DX 578 QC/Production Meeting #84
DX 579 Invoice No. 17
DX 580 QC/Production Meeting #85
DX 581 QC/Production Meeting #85
DX 582 QC/Production Meeting #85
DX 583 Negotiation Memorandum
DX 584 Email re Modification
DX 585 Letter No. RDA-155
DX 586 QC/Production Meeting #86
DX 587 QC/Production Meeting #86
DX 588 QC/Production Meeting #88
DX 589 Letter No. RDA-157
DX 590 Email re Dredging
DX 591 QC/Production Meeting #88
DX 592 QC/Production Meeting #88
DX 593 QC/Production Meeting #88
DX 594 Invoice No. 18
DX 595 Email re Jim Souza
DX 596 QC/Production Meeting #89
DX 597 Letter No. RDA-158
DX 598 QC/Production Meeting #90
DX 599 QC/Production Meeting #90
DX 600 Letter No. RDA-159
DX 601 QC/Production Meeting #91
DX 602 Letter No. RDA-160
DX 603 QC/Production Meeting #93
DX 604 Letter No. RDA-161
DX 605 SMC Existing Site Survey
DX 606 QC/Production Meeting #94
DX 607 Contractor’s Invoice No. 019
25
DX 608 QC/Production Meeting #95
DX 609 QC/Production Meeting #95
DX 610 Letter No. RDA-164
DX 611 Letter No. RDA-161A
DX 612 QC/Production Meeting #96
DX 613 QC/Production Meeting #96
DX 614 Letter No. RDA-163
DX 615 QC/Production Meeting #97
DX 616 Non-Compliance Notice No. 16
DX 617 QC/Production Meeting #98
DX 618 QC/Production Meeting #98
DX 619 Letter No. RDA-165
DX 620 Invoice No. 020
DX 621 QC/Production Meeting #99
DX 622 QC/Production Meeting #99
DX 623 Letter No. RDA-167
DX 624 Letter No. RDA-168
DX 625 Email re Crane Re-Inspection
DX 626 Letter No. RDA-166
DX 627 Letter No. RDA-169
DX 628 Email re Return Wall
DX 629 Navy Letter to RDA Acknowledging Receipt of Schedule
DX 630 Letter No. RDA-170
DX 631 Email re Crane inspection issue
DX 632 QC/Production Meeting #100
DX 633 QC/Production Meeting #100
DX 634 QC/Production Meeting #100
DX 635 QC/Production Meeting #100
DX 636 Show Cause Notice
DX 637 Response to Show Cause Notice
DX 638 Email re CAT375 Status
DX 639 QC/Production Meeting #101
DX 640 QC/Production Meeting #101
DX 641 Email re Soil Anchor Records
DX 642 QC/Production Meeting #102
DX 643 QC/Production Meeting #102
DX 644 Contractor’s Invoice No. 021
DX 645 Letter No. RDA-171
DX 646 Letter No. RDA-172
DX 647 Email re Status of Equipment
DX 648 Letter No. RDA-173
26
DX 649 Email re Equipment Status
DX 650 Notice of Termination
DX 651 Letter No. RDA-175
DX 652 Performance Evaluation
DX 653 Email w/ attachments re Termination for Default
DX 654 Letter No. RDA-174
DX 655 FST Meeting Memo
DX 656 Email re Demobilization
DX 657 Letter No. RDA-178
DX 658 Letter No. RDA-182
DX 659 Email re Demobilization
DX 660 Email re Inspection
DX 661 Letter No. RDA-177
DX 662 Letter No. RDA-179
DX 663 Letter No. RDA-181
DX 664 Email re Invoices
DX 665 Letter No. RDA 180
DX 666 Email re Correction re Invoice Amounts Paid
DX 667 RDA Notes
DX 668 Letter No. RDA-184
DX 669 Letter No. RDA-185
DX 670 Letter No. RDA-186
DX 671 Letter No. RDA-187
DX 672 Letter No. RDA-188
DX 673 Letter No. RDA-189
DX 674 Letter No. RDA-190
DX 675 RDA Memo #1: Time Line Pile Variance Request
DX 676 RDA Memo #2: Time Line Obstruction Drilling
DX 677 RDA Memo #3: Time Line Annual Crane Inspection
DX 678 RDA Memo #4: Time Line Delayed Rejection of SSHO
DX 679 RDA Memo #5: Time Line Delayed Response to RFI-26
DX 680 RDA Memo #6: Time Line RapidGate
DX 681 RDA Memo #7: Time Line Delayed Approval of QCM
DX 682 RDA Memo #8: Time Line Delayed Recovery of Proud Mary
DX 683 RDA Memo #9: Time Line Interference Batter Piles
DX 684 Email Attaching Navy Letter re Claim Submission
DX 685 RDA Memo #10: Time Line Revised Closure Details
DX 686 RDA Memo #11: Time Line Delayed Approval of SSHO/QCM
DX 687 RDA Memo #12: Time Line Termination Cost & Demobilization
DX 688 IRS Notice of Levy
DX 689 Email re Dive Results
27
DX 6904 Coastal Diving Report
DX 691 Letter No. RDA-191
DX 692 Email re Hydrographic Surveys
DX 693 Email re Completion Proposal
DX 694 Email re debris negotiation with GAIC
DX 695 Navy Letter to RDA
DX 696 Navy Letter to RDA
DX 697 Email re Semper Diving Initial Survey
DX 698 Semper Dive Report
DX 699 Email re Bond
DX 700 Tender Agreement
DX 701 Email re Receipt of Surety Check
DX 702 Completion Contract Award to Haskell
DX 703 Job Cost Report - Detailed
DX 704 Email re Latent Defect
DX 705 Email re Schedule of Prices
DX 706 Email re Proposed H-Pile Extraction Plan
DX 707 Email re Proposed H-Pile Extraction Plan
DX 708 Depth Survey
DX 709 Job Cost Report - Summary
DX 710 Multi-Beam Side-Scan Survey
DX 711 Contracting Officer’s Final Decision
DX 7135 Email & attachments re Pile Extraction Log
DX 714 RI Exempt Purchase Certificate
DX 715 RDA Sketch
DX 716 RDA Sketch
DX 717 Calculations From Interrogatory Responses
DX 718 Navy Modification File P00004
DX 719 Navy Modification File P00005
DX 720 Navy Modification File P00006
DX 721 Navy Modification File P00007
DX 722 Navy Modification File P00008
DX 723 Navy Modification File P00009
DX 724 Navy Modification File P00010
DX 725 Navy Modification File P00011
4 During trial, RDA asserted hearsay objections regarding DX 690, 697, and 698, and those
objections are preserved as reflected in the transcript. Trial Tr. 2024:2 to 2032:12. The court
overruled the objections under the residual hearsay exception. Trial Tr. 2031:22 to 2032:12.
5 DX 712 was withdrawn. Trial Tr. 1664:12-13.
28
DX 726 Navy Modification File P00012
DX 727 Expert Report of Nancy Byrne
DX 728 Expert Report of James Cohen
DX 729 Expert Report of Philip Helmes
DX 730 Expert Report of John McGrath
DX 731 Expert Report of Scott Richter
DX 732 Komatsu PC800 Spec Sheet
DX 733 Manitowoc 4100W Spec Sheet
DX 734 Kelley Journal Notes
DX 735 GAIC Payment Bond Claims File
DX 736 RDA Job Cost Report Used By LMHS
DX 737 Calculations Accompanying Responses to Defendant’s Third Set of Interrogatories
DX 738 USACE EP 1110-1-8, Vol. 1
DX 739 EM 385-1-1 Safety Manual (2003)
DX 740 EM 385-1-1 Safety Manual (2008)
DX 741 Certified Payrolls
DX 742 Project Photographs
DX 743 Haskell Trucking Records
DX 744 Haskell Trucking Records
DX 745 RDA Schedule Files
DX 746 Assorted PCO Documents and Notes
DX 747 RDA Equipment Rate Calculations
DX 748 Email Attaching Notice to Proceed
DX 749 GAIC Underwriting Memorandum and Associated Documents
DX 750 Grynkewicz Deposition Exhibit No. 1 (Resume)
DX 751 Grynkewicz Deposition Exhibit No. 2 (Report)
DX 752 Grynkewicz Deposition Exhibit No. 3 (Unified Facilities Criteria)
DX 753 Grynkewicz Deposition Exhibit No. 4 (Manual for Bridge Evaluation)
DX 754 Grynkewicz Deposition Exhibit No. 5 (Annotated Drawing CD-101)
DX 755 ASCE7-10
DX 756 ASCE 37-02
DX 757 AASHTO Construction Handbook for Bridge Temporary Works
DX 758 AASHTO - Guide Design Specifications for Bridge Temporary Works
DX 759 ACI 318
29
III. DEMONSTRATIVE EXHIBITS.
Although not offered or received as substantive evidence, Trial Tr. 1823:5, the following
demonstrative exhibits were presented during trial:
A. Demonstrative Exhibits Presented By Plaintiff.
Plaintiff’s Demonstrative Exhibit No. 1: Timeline of drilling modifications
Plaintiff’s Demonstrative Exhibit No. 2: Hartman Drawing
Plaintiff’s Demonstrative Exhibit No. 3: Sketch of P-469 Site
B. Demonstrative Exhibits Presented By Defendant.
Defendant’s Demonstrative Exhibit No. 1: Opening Statement Visual Aid
Defendant’s Demonstrative Exhibit No. 2: Location Graphic
Defendant’s Demonstrative Exhibit No. 3: Summary Chronology
Defendant’s Demonstrative Exhibit No. 4: Visual Aid for Expert Testimony of John McGrath
IV. WITNESSES.
Trial witnesses are listed below in order of their first appearance, along with the title of the
position held during the time period covered by their testimony. The two witnesses whose
deposition testimony was admitted in lieu of live testimony, by consent of the parties and with
leave of the court, appear at the end of the list. The witnesses listed below were not proffered as
expert witnesses unless specifically noted:
1. Bruce Wood
Estimator
RDA Construction Corp.
2. Michael Hartman
Project Manager
RDA Construction Corp.
3. Mark Wallis
Project Manager
RDA Construction Corp.
4. Michael Martel, P.E.
Engineering Consultant to RDA Construction Corp.
Martel Engineering, Inc.
30
5. David P. Anderson, P.E.
Project Manager
Fay, Spofford & Thorndike, LLC
6. Sivalingam Sivalogan
Construction Scheduling
exPertcon, Inc.
7. Lawrence A. Ahearn
Vice President
Reagan Construction Corporation
8. Craig J. Rachupka
Civil Engineer
Facilities Engineering and Acquisition Division, Naval Station Newport
9. Eugene Kelley
President
RDA Construction Corp.
10. Thomas Mitchell, P.E. (expert witness)
Urban Engineers, Inc.
Mr. Mitchell was proffered as an expert in construction scheduling. 6 TR at
1822.
11. James Michael Souza
Pile Driver Foreman
RDA Construction Corp.
12. Travis Germano, P.E.
Supervisory General Engineer
Facilities Engineering and Acquisition Division, Naval Station Newport
13. Nancy Byrne (expert witness)
Hydrographer
Hydro Data, Inc.
6 RDA proffered Thomas Mitchell, P.E., as an expert in construction scheduling. TR at
1822. Mr. Mitchell is the General Manager and Vice President of Urban Engineers. TR at 1782.
Mr. Mitchell received a Master’s degree in civil engineering from Villanova. TR at 1783–84.
And, has approximately thirty years of experience in scheduling analysis, including thirteen years
with the United States Army Corps of Engineers. TR at 1784–85. The Government did not object
to Mr. Mitchell’s qualifications. TR at 1804. Accordingly, the court has determined that Mr.
Mitchell is an expert in his respective field and qualified to testify as such. See Fed. R. Ev. 702.
31
Ms. Byrne was proffered as an expert in hydrographic and geotechnical surveying. 7
TR at 2446.
14. Lieutenant Commander Robert Wadsworth, P.E.
Director
Facilities Engineering and Acquisition Division, Naval Station Newport
15. Kimberly R. Kahler
Chief of the Contracting Office
Naval Facilities Engineering Command, Mid-Atlantic
16. John McGrath (expert witness)
Managing Director
Beacon Group, LLC
Mr. McGrath was proffered as an expert in critical path method scheduling and
delay analysis.8 TR at 2532.
17. Philip Helmes, P.E. (expert witness)
President
Helmes&Co
7 The Government proffered Nancy Byrne as an expert in hydrographic and geotechnica l
surveying. TR at 2446. Ms. Byrne is the owner of Hydro Data, a company that performs
hydrographic surveys, geophysical surveys, and oceanographic investigations. TR at 2442. Ms.
Byrne has a Bachelors in Music from the University of Hartford, and a Bachelors in Earth Science
and Geology from the University of Connecticut. TR at 2444. The American Congress of
Surveying and Mapping has recognized Ms. Byrne as a Certified Hydrographer. TR at 2445. RDA
did not object to Ms. Byrne’s qualifications. TR at 2459. Accordingly, the court has determined
that Ms. Byrne is an expert in her respective field and qualified to testify as such. See Fed. R. Ev.
702.
8 The Government proffered John McGrath as an expert in critical path method scheduling
and delay analysis. TR at 2532. Mr. McGrath received a Bachelor of Science in Aerospace
Engineering and Masters in Business Administration from the University of Colorado at Boulder.
TR at 2525–26. He has twenty-three years of experience in construction scheduling. TR at 2531.
And, has been qualified as an expert in six cases before the United States Court of Federal Claims.
TR at 2531–32. RDA did not object to Mr. McGrath’s qualifications. Accordingly, the court has
determined that Mr. McGrath is an expert in his respective field and qualified to testify as such.
See Fed. R. Ev. 702.
32
Mr. Helmes was proffered as an expert in construction project development
practices, estimating, and management. 9 TR at 2582.
18. James Cohen, P.E. (expert witness)
Associate Principal
Weidlinger Associates, Inc.
Mr. Cohen was proffered as an expert in structural collapse and forensic
engineering.10 TR. 2703–04.
19. Scott M. Richter, CPA (expert witness)
Director, Financial Investigations and Dispute Advisory
RSM US LLP
Mr. Richter was proffered as an expert in accounting and forensic accounting.11 TR
at 2757.
9 RDA proffered Philip Helmes, P.E., as an expert in construction project development
practices, estimating, and management. TR at 2582. Mr. Helmes received a Bachelor of Science
in Structural Civil Engineering from Syracuse University in 1976, and a Masters in Business
Administration from the University of Connecticut in 1981. TR at 2573–74. Mr. Helmes has
thirty-five years of experience as a Professional Engineer, with licenses in ten states. TR at 2574.
He is also the President of Helmes & Co., a consulting practice that specializes in strusctural
engineering and geotechnical foundation work. TR at 2572–75. The Government did not object
to Mr. Helmes’s qualifications. TR at 2601. Accordingly, the court has determined that Mr.
Helmes is an expert in his respective field and qualified to testify as such. See Fed. R. Ev. 702.
10 The Government proffered James Cohen, P.E., as an expert in structural collapse and
forensic engineering. TR at 2703–04. Mr. Cohen has a Bachelor of Science from the College of
Civil Engineering at Cornell University, and a Masters in Concrete Structures from the Imperial
College of Science and Technology in London. TR at 2695. He became a Professional Engineer
in 1985. TR at 2694. And, currently serves as the Senior Vice President for Thornton Tomasetti.
TR at 2698. RDA did not object to Mr. Cohen’s qualifications. TR at 2704. Therefore, the court
has determined that Mr. Cohen is an expert in his respective field and qualified to testify as such.
See Fed. R. Ev. 702.
11 The Government proffered Scott M. Richter, CPA as an expert in accounting and
forensic accounting. Trial Tr. 2757. Mr. Richter is a litigation support consultant with RSM US.
TR at 2756. In 1989, Mr. Richter received his undergraduate degree in Business Administra tio n
from Northeastern University in Boston. In 1991, he became a Certified Public Accountant. TR
at 2756. Mr. Richter is also a Certified Fraud Examiner. TR at 2757. RDA did not object to Mr.
Richter’s qualifications. TR at 2757. Accordingly, the court has determined that Mr. Richter is
an expert in his respective field and qualified to testify as such. See Fed. R. Ev. 702.
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20. Franklin M. Grynkewicz (expert witness)
FCC Consulting
Mr. Grynkewicz was proffered as an expert in civil engineering and safe
demolition practices.12 TR at 2771.
21. Jonathan Peters
Project Manager
The Haskell Company
22. Marc Nicolazzo
Senior Engineer
Fay Spofford Thorndike
12 RDA proffered Franklin M. Grynkewicz as an expert in civil engineering and safe
demolition practices. TR at 2771. Mr. Grynkewicz received his first degree in geophysics from
the University of East Anglia in the in 1976, and his Masters in Civil Engineering from
Northeastern University in 1984. TR at 276667. He has been working as a
geotechnical/geostructural engineer since 1979. TR at 2767. The Government did not object to
Mr. Grynkewicz’s qualifications. TR at 2771. Therefore, the court has determined that Mr.
Grynkewicz is an expert in his respective field and qualified to testify as such. See Fed. R. Ev.
702.
34