Goodloe Marine, Inc.

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of - )
)
Goodloe Marine, Inc. ) ASBCA Nos. 62106, 62446
)
Under Contract No. W9126G-18-C-0071 )
APPEARANCES FOR THE APPELLANT: Michael H. Payne, Esq.
Cohen Seglias Pallas Greenhall & Furman PC
Philadelphia, PA
Casey J. McKinnon, Esq.
Cohen Seglias Pallas Greenhall & Furman PC
Washington, DC
APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq.
Engineer Chief Trial Attorney
Clark Bartee, Esq.
Engineer Trial Attorney
U.S. Army Engineer District, Galveston
OPINION BY ADMINISTRATIVE JUDGE MELNICK GRANTING
THE GOVERNMENT’S MOTION FOR SUMMARY JUDGMENT
Appellant, Goodloe Marine, Inc., of Wimauma, Florida (Goodloe), was awarded
a contract to perform pipeline dredging by the United States Army Corps of Engineers
(Corps or government). The government eventually terminated Goodloe for default for
failing to dredge at the required production rate. Goodloe appeals from the default, as
well as from a denial by the government of its claim for additional time it alleges
should be recognized due to weather delays. The government has moved for summary
judgment, which we grant.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
I. Undisputed Facts
The following facts have not been shown to be in genuine dispute.
1. On September 29, 2018, the government awarded the firm fixed-price
contract identified above to Goodloe. The contract was for pipeline dredging of the
Gulf Intracoastal Waterway around Galveston, Texas. The contract estimated that
630,000 cubic yards of material would be removed. (R4, tab 1 at 4-10, tab 2) Among
the standard Federal Acquisition Regulation (FAR) clauses incorporated by reference
was FAR 52.249-10, DEFAULT (FIXED-PRICE CONSTRUCTION) (APR 1984)
(R4, tab 1 at 16). In addition to that provision, the contract contained section 3.1.3,
entitled “Default Terms.” It provided that:
Failure of the Contractor to comply with the requirements
of the Contract will be grounds for a determination, by the
Contracting Officer, that the Contractor is not prosecuting
the work with sufficient diligence to ensure completion
within the time specified in this Contract. Upon making
this determination, the Contracting Officer may terminate
the Contractor’s right to proceed with the work, or
separable parts of it, in accordance with the default terms
of the Contract.
(R4, tab 1 at 173)
2. The contract required Goodloe to begin performing 10 calendar days after
receiving a notice to proceed and complete performance 130 calendar days later. The
government issued the notice to proceed on October 17, 2018, establishing February 24,
2019, as the contract completion date. (R4, tab 1 at 8, tab 3)
3. The contract imposed strict capacity requirements upon Goodloe.
Section 1.15.2 mandated that “[t]he effective production rate of the dredge plant shall
not be less than 360,000 cubic yards per month” and “[n]o reduction in the capacity of
the dredge equipment and attendant plant employed to execute the work is to be made
except by written direction of the Contracting Officer.” The capacity would be
measured from actual performance. (R4, tab 1 at 133) Dredging 360,000 cubic yards
per month (30 days) requires an average of 12,000 cubic yards per day.
4. To achieve the contract’s requirements, Goodloe informed the government
during a pre-award survey that it intended to use two dredges. One was Bettie G and
the other was Perseverance. (Gov’t statement of undisputed material facts ¶ 2; app.
resp. ¶ 2) Goodloe said that Bettie G’s average production rate ranged between 6,000
and 8,000 cubic yards per day. Goodloe stated that Perseverance could achieve
between 8,000 and 10,000 cubic yards per day. Goodloe also noted that it had a third
dredge, Reliable, available to assist if necessary to complete performance on time.
Goodloe represented that all three dredges were sitting idle at its yard and could be
moved within days to the project site once it received a notice to proceed. Goodloe
confirmed that it understood that the minimum amount of material that had to be
dredged in a month was 360,000 cubic yards. It represented that Bettie G would start
dredging about 21 days after the notice to proceed and Perseverance would arrive about
2
two to three weeks later and dredge concurrently with Bettie G at a rate that would
achieve the minimum production. (R4, tab 349 at 1409, 1411, tab 350 at 1420)
5. The record contains a series of forms purporting to be Goodloe’s Contractor
Quality Control (QCR) Reports. However, no author is identified and their certification
lines are blank. Beginning with the form dated November 6, 2018, a series of them
indicate that Goodloe encountered weather delays on a total of 30 different days between
October 18 and December 29, 2018. Many of the forms attached calendars for October,
November, and December 2018 that also supposedly show the reported adverse weather.
The calendars appear to be from an internet weather application (“app”), but Goodloe
does not identify the source. There is also no indication of the geographical location they
purport to describe, except the December calendar is marked Bay City, Texas. We
judicially notice that location is over 70 miles on a straight line from Galveston. 1 (R4,
tabs 196, 198, 200, 202, 204, 212, 214, 227, 237, 239, 241, 243, 257, 275, 277, 281, 283,
293, 295, 297, 301, 303, 305, 307)
6. Goodloe began dredging on December 17, 2018, with Bettie G. (R4,
tab 220; gov’t statement of undisputed material facts ¶ 15; app. resp. ¶ 15; app. supp.
R4, tab 30 (Native) at 1391 (production rate tab)).
7. On January 10, 2019, the government sent a letter of concern to Goodloe’s
president in Florida regarding its ability to timely complete the contract. The
government indicated that Goodloe’s average dredging rate of 2,011 cubic yards per
day had placed it three weeks behind schedule and was unacceptable. The government
directed Goodloe to submit an updated schedule by January 15, 2019. (R4, tab 170)
8. Goodloe’s president, Ms. Bettie Goodloe, responded to the government on
January 15, 2019. She indicated that Goodloe had experienced “weather days” and
“vendor delays” that delayed the arrival of Bettie G and Perseverance to the site. She
stated that Goodloe had provided documentation of the weather, and expressed the
belief that the conditions Goodloe encountered justified a later completion date. She
also represented that Perseverance would arrive on or about January 22, 2019. (R4,
tab 161)
9. On February 11, 2019, the contracting officer issued a show cause notice to
Goodloe notifying it that the government was considering terminating the contract for
default. The government observed that Bettie G did not start dredging until
December 17, 2018, 65 days after the notice to proceed. Perseverance did not arrive
until January 23 and experienced operational problems. Goodloe’s invoice for
December 15, 2018 through January 23, 2019, showed less than 35,000 cubic yards
removed, well below the contractual requirement. (R4, tab 101)
1
See FED. R. EVID. 201.
3
10. Goodloe responded to the show cause letter on February 15, 2019. Goodloe
stated that it had been delayed by weather since the notice to proceed. It characterized
the amount of rainfall during the previous several months as unusual, saying anyone who
lives or works in the area knows that. It explained that the conditions had hampered its
assembly and placement of pipelines, emphasizing its delays commenced before dredging
began. Goodloe also represented that other Corps projects in the area had been delayed
by weather and that the government’s survey party had declined to work on Goodloe’s
project due to weather on two occasions. It also stated that it had recently been delayed
for two days by fog. Goodloe did not deny the rate of production indicated by the
contracting officer. (R4, tab 94)
11. Goodloe attached to its show cause response more weather app calendars for
October 2018 through January 2019. This second set appears to be from The Weather
Company and describes the weather differently for many of the days than the calendars
Goodloe submitted previously with the purported QCR reports (R4, tabs 94, 237). As
before, Goodloe did not identify the geographical location the calendars are meant to
describe, other than to vaguely declare they are “for the area closest to our work.”
Goodloe claimed it was delayed by weather for 40 days and by an additional lock delay
caused by the Corps of one and a half days. (R4, tab 94 at 653-56)
12. Goodloe also provided three purported news articles with its show cause
response describing another project. The first two look to have come from a website
called Dredgewire and are dated prior to the award of this contract. One stated that the
Corps expected to dredge the San Jacinto River’s West Fork the week of September 17,
2018, weather permitting. The article implied that weather had previously delayed
commencement of the project. (R4, tab 94 at 658) Another reported that the project
actually began September 21, repeating the reference to prior weather delays (id. at 660).
The third “article,” dated November 5, 2018, is just text with no indication that it was
published anywhere. It repeated that the San Jacinto river project began on September 21
after experiencing the weather delays. (Id. at 662)
13. Goodloe’s show cause response also admitted that Perseverance was
delayed arriving on site because of continuing dry dock repairs that Goodloe started
after the dredge was sunk by Hurricane Harvey. We judicially notice that storm struck
Texas and Louisiana in August 2017, over a year before this contract was awarded.
Goodloe blamed its insurance company and a hydraulic expert for overlooking damage
requiring significant time to repair. (R4, tab 94)
14. Goodloe continued to dredge after the February 24, 2019 period of
performance expired. Perseverance began dredging on either March 6 or 7, 2019.
(R4, tab 52; app. supp. R4, tab 30 (Native) at 1391 (production rate tab))
4
15. In late March 2019, Goodloe issued a payment invoice to the government
for work performed between February 21 and March 19, 2019. According to the
government payment estimate (Pay Estimate No. 5) associated with that invoice,
Goodloe had earned $1,494,873.50 of the $3,782,500 contract price, or 39.5%. (App.
supp. R4, tab 8)
16. On March 28, 2019, the contracting officer terminated the contract for default
on the ground that Goodloe had failed to perform in accordance with the contract
schedule at a production rate of 360,000 cubic yards per month. He stated that work was
39.5% complete. (R4, tab 23) In determining whether to terminate, the contracting
officer considered the factors contained in FAR 49.402-3(f) and documented that review
in a Termination for Default checklist signed March 28, 2019 (R4, tab 25). The
checklist noted the work was essential, that Goodloe was given every opportunity to
complete it, but that it had not maintained the required production rate. The checklist
observed that Goodloe dredged less than 35,000 cubic yards between December 15,
2018 and January 23, 2019. Regarding the urgency of the services and the time required
to obtain them from another source, the checklist stated that the channel to be dredged is
shallow and requires timely dredging for navigation. The services would be sought in an
upcoming project to ensure completion during the 2019 fiscal year. An earlier draft of
the checklist from March 22, 2019, indicated that no market research had been
performed. (Id.; app. supp. R4, tab 7 at 47)
17. Goodloe has appealed the termination, which has been docketed as ASBCA
No. 62106.
18. After terminating the contract, the government performed a survey that
showed Goodloe had dredged a total of 268,996 cubic yards of material, which is 43%
of the 630,000 cubic yards the contract estimated would be removed (R4, tab 1 at 10;
app. supp. R4, tab 29 at 1385). The survey indicated that between March 20 and
March 28, 2019, the date of termination, Goodloe dredged 45,000 cubic yards (app.
supp. R4, tab 29 at 1385). Thus, at the time of termination Goodloe was still not
achieving a rate equal to 360,000 cubic yards per month. 2 An April 2019 government
engineer spreadsheet states that Bettie G’s production was 20,388 cubic yards in
December 2018; 61,462 cubic yards in January 2019; 49,012 in February; and
94,184 in March. Perseverance only dredged in March 2019, producing 60,233 cubic
yards. 3 Goodloe’s average monthly production with combined dredges was 128,452
cubic yards, and its highest monthly production was 154,417. The report presented
three possible scenarios had performance continued. The most reasonable scenario
2
Dividing 8 days into 45,000 cubic yards equals 5,625 cubic yards. As already noted,
360,000 cubic yards per month requires an average of 12,000 cubic yards per
day.
3
These numbers add up to 285,279 cubic yards.
5
was based upon Goodloe’s average production using two dredges, with Goodloe
dredging 297,146 cubic yards over 71 additional days. In the best case scenario for
Goodloe, it would maintain its highest reported production rates on both dredges and
require 60 more days to dredge the same amount. Under the least reasonable scenario,
Goodloe would only dredge 181,457 cubic yards in 44 days. This last scenario was
not considered very reasonable because of high shoaling rates and the likely
requirement that Goodloe would have to re-sweep the area. (App. supp. R4, tab 30
(Native) at 1391 (survey tab))
19. The parties engaged in some communications following the termination. An
April 10, 2019 letter from Goodloe’s surety to the contracting officer claimed that at the
time of termination the project was approximately 30 days from completion (app. supp.
R4, tab 12). A June 5, 2019 letter to the contracting officer from the surety’s counsel
sought Goodloe’s reinstatement. It indicated Goodloe might be able to retain help from
another contractor and together dredge an average of 6,378.2 cubic yards per day, or
191,346 per month. This is only slightly more than half of the 360,000 cubic yards the
contract required. Retreating from the surety’s April prediction that the job could be
completed in 30 days, the letter said that at this rate the project would finish in 48 days,
implying that approximately 306,000 cubic yards remained to be dredged. The surety
provided no details about the capabilities of the second contractor’s dredge and
conditioned its participation upon scheduling. (App. supp. R4, tab 22 at 180) The
letter’s next paragraph continued that even if the second contractor did not participate,
Goodloe could proceed using only Perseverance and achieve an average rate of 3,400
cubic yards per day, or 102,000 per month. This is obviously far below Goodloe’s prior
representation that Perseverance could achieve between 8,000 and 10,000 cubic yards
per day, and is less than a third of the contract’s 360,000 cubic yard monthly requirement.
Anyway, where the prior paragraph had implied that 306,000 cubic yards remained to be
dredged, here that number abruptly changed to 198,000 cubic yards. The letter claimed
that the job could be completed in 74 days, including mobilization and demobilization. 4
(Id.)
20. The government concluded that the surety’s proposal was not in the
government’s best interest. It noted the uncertainty of the surety’s projected completion
times ranging between 30, 48, and 74 days. (App. supp. R4, tab 33 at 1401)
21. On December 5, 2019, the contracting officer received a claim from
Goodloe asserting that it had experienced weather delays performing the contract,
entitling it to a time extension of 41.5 days (R4, tabs 6, 12).
4
According to the letter, 240,000 remaining cubic yards “was discussed” by someone.
It says survey information supplied to the surety by Goodloe “suggests that the
number is approximately 198,000.”
6
22. A February 2020 government engineer report notes that there were several
days when weather delayed government acceptance of surveys, which then delayed
Goodloe’s advancement to the next dredging section (app. supp. R4, tab 24 at 768).
23. On March 19, 2020, the contracting officer denied Goodloe’s claim for a
time extension (R4, tab 6). Goodloe has appealed that decision which was docketed as
ASBCA No. 62446 and consolidated with ASBCA No. 62106.
24. On September 28, 2020, the government awarded a replacement contract to
complete the remaining work on the project. The new contractor mobilized to the site
in November 2020, with completion required by July 13, 2021. (App. supp. R4, tab 33
at 1398-99)
II. Status of the Proceedings
Goodloe’s amended complaint in ASBCA No. 62106 alleges that it was
wrongfully terminated because it experienced delays caused by unforeseeable weather.
It also maintains that the project was near completion at the time of termination, that
the government did not properly consider the factors contained in FAR 49.402-3(f),
and that it failed to consider alternatives to termination. Alternatively, Goodloe
essentially contends that for the same reasons the government breached the implied
covenant of good faith and fair dealing. Goodloe’s complaint in ASBCA No. 62446seeks a time extension of 41.5 days to account for the weather delays.
The government moves for summary judgement, claiming that the undisputed
facts show that its termination for default was justified and Goodloe’s delay was not
excusable. In its effort to defeat summary judgment, Goodloe provided Ms. Goodloe’s
declaration. Ms. Goodloe testifies that she was involved with and aware of Goodloe’s
work. She states that Goodloe “was inhibited by weather-related delays, which delayed
the arrival of certain Goodloe equipment and prevented Goodloe from proceeding with
the work as planned.” She does not identify the equipment but elaborates that Goodloe
encountered “rain, high winds, fog and extremely low tides resulting from high winds.”
Ms. Goodloe also says that the delays were discussed with the government project
engineer and Goodloe “documented the weather delays in daily reports with supporting
documentation from weather station data for the relevant dates.” She adds that
Goodloe’s quality control reports provided notice to the government of the weather
delays. Ms. Goodloe explains that dredging projects are susceptible to delays from
weather-related issues, including, but not limited to, rain, wind, fog and high and low
tides. (App. resp., ex.)
7
DECISION
I. Summary Judgments Standards
Summary judgment before the Board is guided by Federal Rule of Civil
Procedure 56. Board Rule 7(c)(2). Under Rule 56, summary judgment should be
granted when there are no genuine issues of material fact and the moving party is
entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986). A non-movant seeking to defeat the suggestion that there are no genuine
issues of material fact may not rest upon its pleadings, but “must set forth specific facts
showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986) (quoting First Nat. Bank of Ariz. v. Cities Serv. Co., 391 U.S.
253, 288 (1968)).
When ruling upon a summary judgment motion, we must construe the evidence
in the light most favorable to the non-movant and draw all reasonable inferences in its
favor. Dairyland Power Co-op. v. United States, 16 F.3d 1197, 1202 (Fed. Cir. 1994).
However, summary judgment should be entered “against a party who fails to make a
showing sufficient to establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at trial” because “a
complete failure of proof concerning an essential element of the nonmoving party’s
case necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 322-23.
Thus, the moving party need not offer evidence showing the absence of a genuine
issue of material fact regarding an issue on which the non-moving party bears the
burden of proof. It must only point out to the Board that there is an absence of such
evidence to shift the burden to the non-movant to offer evidence establishing a genuine
issue for trial. Id. at 325; DJ Mfg. Corp. v. United States, 86 F.3d 1130, 1135 (Fed.
Cir. 1996); Dairyland Power Co-op., 16 F.3d at 1202; Homeland Housewares, LLC v.
Sorensen Research and Dev. Trust, 581 F. App’x 869, 874 (Fed. Cir. 2014).
II. Goodloe’s Unexcused Default
The government premises its motion for summary judgment upon the fact that
Goodloe did not meet the requirement that it dredge 360,000 cubic yards per month. It
also relies upon Goodloe’s failure to complete the project by the contract’s February 24,
2019, deadline. It contends that either of these grounds support sustaining the
termination.
The contract’s default clause permitted termination if Goodloe did not complete the
work on time. FAR 52.249-10(a); see Watts Constructors, LLC, ASBCA Nos. 61518,
61961, 19-1 BCA ¶ 37,382 at 181,724; see also Truckla Servs., Inc., ASBCA Nos. 57564,
57752, 17-1 BCA ¶ 36,638 at 178,445 (“Failure to complete the contract work is a prima
facie basis for a default termination”), aff’d, 730 F. App’x 926 (Fed. Cir. 2018). Having
8
shown that Goodloe failed to finish by the contract’s February 24, 2019 deadline, the
government has established that as a basis for termination (SOF ¶¶ 14, 18). 5
Regarding the government’s reliance upon Goodloe’s failure to dredge 360,000
cubic yards per month, section 3.1.3 of the contract permitted the government to terminate
for default if Goodloe’s performance did not comply with the contract’s requirements
(SOF ¶ 1). The contract expressly stated that the effective production rate of the dredge
plant was to be no less than 360,000 cubic yards per month and no reduction to the
capacity of the dredge equipment and attendant plant employed was to be made except by
written direction of the contracting officer (SOF ¶ 3). Goodloe commenced dredging on
December 17, 2018, but only with Bettie G (SOF ¶ 6). Perseverance did not arrive on site
until January 23, 2019, and it was not operational until early March (SOF ¶¶ 9, 14, 18).
Bettie G was incapable of dredging 360,000 cubic yards per month and did not do so for
the more than two months that it was the only operational dredge on site (SOF ¶¶ 4, 7, 9,
16, 18). Accordingly, the government has carried its burden to establish that Goodloe did
not meet the contract’s requirement for an effective dredge plant production rate of
360,000 cubic yards per month. 6
Goodloe’s failure to comply with the contract’s requirements does not entirely
end our inquiry because Goodloe’s right to proceed could not be terminated if it was
delayed due to unforeseeable causes beyond its control and without its fault or
negligence. FAR 52.249-10(b)(1). One of the express examples of excusable delay
contained in the default clause is unusually severe weather. FAR 52.249-10(b)(1)(x).
Goodloe says that during performance it encountered rain, high wind, fog and
extremely low tides that delayed its work. Goodloe bears the burden to show that its
nonperformance due to unusually severe weather was excusable. Bell Constr. Co.,
ASBCA No. 23376, 79-2 BCA ¶ 13,908 at 68,272. To establish a time extension for
unusually severe weather, Goodloe must: (1) identify work controlling overall
completion; (2) show this controlling work was delayed by the weather, and (3) prove
the weather was unusually severe. Skip Kirchdorfer, Inc., ASBCA Nos. 40515, 43619,
00-1 BCA ¶ 30,622 at 151,168; Bell Constr. Co., 79-2 BCA ¶ 13,908 at 68,272-73.
It was not the weather that prevented Goodloe from having a dredge plant
production capacity of not less than 360,000 cubic yards per month. The record shows
5
It does not matter that the termination notice did not specifically refer to late
completion as its reason. The Board sustains a default if justified by the
circumstances at the time of termination regardless of whether the government
removed the contractor for another reason. Empire Energy Mgmt. Sys., Inc. v.
Roche, 362 F.3d 1343, 1357 (Fed. Cir. 2004) (quoting Kelso v. Kirk Bros.
Mech. Contractors, Inc., 16 F.3d 1173, 1175 (Fed. Cir. 1994)).
6
Indeed, even when both dredges were operating at the time of termination, Goodloe
was still failing to meet the required production rate (SOF ¶ 18).
9
that Perseverance failed to dredge prior to March of 2019 because it was undergoing
continuing repairs necessitated by Hurricane Harvey, followed by operational problems
on site (SOF ¶¶ 9, 13-14, 18). Perseverance’s delay due to damage caused by a
hurricane occurring over a year before award is not an excusable weather event. When
Goodloe assured the government during the pre-award survey that it would meet the
360,000 cubic yard requirement using Perseverance, which it also said could travel to the
project site within days of the notice to proceed, it was in fact proposing a damaged,
inoperable dredge. (SOF ¶¶ 4, 13) Perseverance’s inability to perform was anything but
unforeseeable. Furthermore, contractors generally assume the risk of providing the
necessary equipment to perform and equipment breakdowns do not excuse performance
failure. 7 E.g., Commercial Contractors Equip., Inc., ASBCA No. 52930 et al.,
03-2 BCA ¶ 32,381 at 160,262-63; Naughton Energy, Inc., ASBCA No. 33044,
88-2 BCA ¶ 20,800 at 105,073. Regardless of the weather on site between December of
2018 and March of 2019, only Bettie G was capable of dredging and it lacked the
capacity to remove 360,000 cubic yards per month, as required by the contract. Goodloe
has not shown a nexus between the weather and its default. See TRU & Assocs., Inc.,
ASBCA No. 45263, 96-2 BCA ¶ 28,389 at 141,785-86 (finding the default upon a coal
supply contract not excused for unusually severe weather when the contractor failed to
show that absent the inclement weather it would have been able to perform); Fox-Sadler
Co., ASBCA No. 8421, 1963 BCA ¶ 3768 at 18,795 (disregarding evidence of unusually
severe weather when it was not the cause of late performance).
Even if we were to disregard Perseverance’s failure to provide the necessary
dredge capacity, the government has pointed to an absence of evidence supporting
Goodloe’s allegation that the project was excusably delayed for 41.5 days due to
unusually severe weather. Because Goodloe would bear the burden of proving that
excuse at trial, to defeat summary judgment Goodloe must make a showing
establishing a genuine issue for trial.
“Unusually severe weather must be construed to mean adverse weather which
at the time of year in which it occurred is unusual for the place in which it occurred.”
Broome Constr., Inc. v. United States, 492 F.2d 829, 835 (Ct. Cl. 1974). No matter
how severe or destructive the weather may have been, if it was not unusual for the
time and place no relief is justified. Bigelow, Inc., ASBCA No. 24376, 81-2 BCA
¶ 15,300 at 75,737; see also Cape Ann Granite Co. v. United States, 100 Ct. Cl. 53,
72 (1943) (no relief when work was exposed to severe storms but they were not more
severe than ordinarily encountered); Aulson Roofing, Inc., ASBCA No. 37677,
91-2 BCA ¶ 23,720 at 118,730 (“Excusable delay will be found only where the
weather experienced was unusually severe as compared to the past weather at the same
7
It is also worth observing that Goodloe represented to the government that Reliable
was available to assist if necessary (SOF ¶ 4). Goodloe offers no explanation as
to why it was not employed in the absence of Perseverance.
10
location for the same time of year”). Weather records establish what is normal and
foreseeable weather. Skip Kirchdorfer, 00-1 BCA ¶ 30,622 at 151,168. Excusable
delays are then determined by comparing the weather experienced to the historic
weather. DayDanyon Corp., ASBCA No. 57681, 15-1 BCA ¶ 36,073 at 176,151,
aff’d, 673 F. App’x 997 (Fed. Cir. 2017). Merely offering evidence of a number of
rainy, windy, foggy, or low tide days proves nothing if it is not shown to exceed a
historical norm. Assuming Goodloe has made a sufficient showing that it was delayed
because of severe weather, it has not presented any evidence that it was more severe
than the norm. 8 It has not provided any evidence of the historic weather for the time
and place of the project for comparison to what occurred. 9 Accordingly, Goodloe has
not made a sufficient showing to defeat the government’s motion for summary
judgment upon its claim that its default is excused (or that it is entitled to extra time)
due to unusually severe weather.
8
It is questionable whether Goodloe has made a showing that it was delayed for over
40 days due to weather. Ms. Goodloe’s declaration does not expressly state that
she has first-hand knowledge of the weather Goodloe encountered or witnessed
herself how it impaired Goodloe’s work on any particular day (app. resp., ex.).
See FED. R. CIV. P. 56(c)(4) (requiring that an affidavit or declaration used to
support or oppose a motion for summary judgment must be made on personal
knowledge, set out facts that would be admissible in evidence, and show that the
affiant is competent to testify on the matters stated); Raytheon Co., ASBCA
No. 61859, 20-1 BCA ¶ 37,630 at 182,688. The QCR reports are unsigned and
Goodloe has failed to otherwise identify an author possessing personal knowledge
of the information they purport to convey. The first set of Goodloe’s graphical
weather calendars do not identify their source, and with the exception of the
December calendar’s mention of a city over 70 miles from the project area, fail to
identify the place they are describing. (SOF ¶ 5) The second set of calendars
also fail to identify the relevant location (SOF ¶ 11). Goodloe’s purported
newspaper articles about a Corps dredging project in the San Jacinto River before
the award of this contract are irrelevant (SOF ¶ 12). However, Goodloe has
presented a 2020 government engineer report observing that weather delayed its
advancement to new dredging sections for some unspecified number of days
(SOF ¶ 22).
9
Goodloe’s assertion in response to the government’s show cause order that anyone who
lives in the area knows the weather had been unusual is unsupported and conclusory
and is therefore inadequate to overcome summary judgment (SOF ¶ 10). Moore
U.S.A., Inc. v. Standard Register Co., 229 F.3d 1091, 1112 (Fed. Cir. 2000); see
also Raytheon Co., 20-1 BCA ¶ 37,630 at 182,688.
11
III. The Record Does Not Support Goodloe’s Contention That the
Termination Was Arbitrary, Capricious, or an Abuse of Discretion
Goodloe next argues that even if it was in default, the government’s motion should
be denied because it has presented evidence the contracting officer was arbitrary and
capricious terminating it. It suggests the government was materially in error believing the
project was only 39.5 percent complete and relying upon Goodloe’s less than 35,000 cubic
yards of production between December 15, 2018 and January 23, 2019 (SOF ¶¶ 9, 16).
It stresses that Goodloe dredged 154,417 cubic yards in March and a total of 268,996
at the time of termination, implying that should have been enough (SOF ¶ 18). It also
contends the government was wrong to conclude that Goodloe would need 74 more days
to complete the project. 10 Goodloe says the default was an abuse of discretion because
only a small amount of work remained, the government failed to conduct market research
into its alternatives if it terminated, and the government’s statements about the urgency of
the work are contradicted by its actions. Goodloe argues Darwin Construction Co. v.
United States, 811 F.2d 593 (Fed. Cir. 1987), supports the conclusion that the totality of
these facts show bad faith and abuse of discretion by the government.
A default termination can be set aside if the government abuses its broad
discretion to terminate. McDonnell Douglas Corp. v. United States, 182 F.3d 1319,
1326 (Fed. Cir. 1999). More specifically, default may not be invoked by the
government as a pretext for reasons unrelated to performance. Id. at 1329. To find
that a default termination reflects an abuse of discretion because it was based upon
materially erroneous information normally requires bad faith. This in turn requires a
showing with convincing clarity of a high probability of personal animus by the
contracting officer with a specific intent to injure. Watts Constructors, 19-1 BCA
¶ 37,382 at 181,728. Regardless of whether Goodloe’s progress was 39.5, 43, or some
other percentage, or that it dredged varying amounts of materials in different months,
it failed to maintain a dredging capacity of 360,000 cubic yards per month and failed
to complete performance by the contract completion date. There is nothing erroneous
about these facts, much less anything about them to indicate animus by the
government with a specific intent to injure Goodloe.
Goodloe suggests the default was still unsustainable because, had it been
allowed to continue, it would have consistently dredged 10,000 cubic yards per day
and finished in 18 days. Goodloe has not supported that contention and has not shown
10
The evidence cited by Goodloe does not support its contention that the government
concluded it would take Goodloe 74 more days to complete the project. It shows
that the government rejected Goodloe’s proposal (made through its surety’s
counsel) for reinstatement as not being in its best interest because Goodloe’s
estimated completion time ranged between 30, 48, and 74 days (app. supp. R4,
tab 33 at 1400-01).
12
that it ever demonstrated that possibility to the contracting officer.11 In fact, through
counsel, Goodloe’s surety made very different representations on Goodloe’s behalf
while seeking its reinstatement. After abandoning an initial prediction that Goodloe
could complete the job in 30 days, it informed the contracting officer the work could
not be finished in less than either 48 or 74 days. The 48 days were dependent upon the
uncertain employment of another dredge. Neither scenario had Goodloe dredging the
contractually required 360,000 cubic yards per month. (SOF ¶ 19) Similarly, the
government’s post-termination analysis ranged between 44 days under the least
reasonable scenario and 71 under the most reasonable one (SOF ¶ 18). The
contracting officer rejected the surety’s request to reinstate Goodloe, noting the
uncertainty of its projections (SOF ¶ 20). Again we see no indication of error by the
contracting officer regarding the evidence before him and certainly no animus by him
with a specific intent to injure Goodloe.
Goodloe also objects to the answers the contracting officer recorded for two of
the factors he was to consider under FAR 49.402-3(f) when deciding whether to
terminate for default. Specifically, in response to FAR 49.402-3(f)(3)-(4)’s inquiry
into the availability of the contract’s services from others, their urgency, and the
period of time necessary to obtain them, he said the requirement would be included in
a future project for completion in the 2019 fiscal year. Goodloe complains that the
government did not perform any market research that would support these statements
and it did not compare the time an alternative contractor might take to the time
Goodloe would need to finish performance.
The nature of the government’s compliance with FAR 49.402-3(f) may aid our
inquiry into whether the government has abused its discretion terminating the contract,
but it confers no rights upon Goodloe and the contracting officer’s failure to consider
one or more of its factors does not dictate disturbing a default termination. DCX, Inc.
v. Perry, 79 F.3d 132, 135 (Fed. Cir. 1996). Goodloe cites no authority stating that the
contracting officer must perform a market research study to address the relevant
provisions of FAR 49.402-3(f). Though the answers given by the contracting officer
to these questions about the government’s options lacked specifics, that does not show
the termination was a mere pretext.
Finally, Goodloe contends that Darwin Construction dictates that the totality of
the evidence presented proves bad faith. In Darwin, the Board found that the
11
The best we can discern is that Goodloe is relying upon a government report
showing that on March 16, 2019, which was one out of the 23 days that its two
dredges worked, their combined production exceeded 10,000 cubic yards (app.
supp. R4, tab 30 (Native) at 1391 (production rate tab). This one day does not
evidence that it would have achieved that rate every day into the future, or that
it would have completed the dredging in 18 days if it had.
13
contractor was not terminated because it failed to timely complete the project, but
simply to enable the government to be rid of dealing with it. That was held to be
arbitrary and capricious. The court of appeals affirmed, stressing its conclusion was
based upon the Board’s finding that the government had used the default as a pretext
to terminate. Darwin, 811 F.2d at 596. The court of appeals has since elaborated that
the lesson of Darwin and related decisions is that a termination for default unrelated to
contract performance is arbitrary and capricious and therefore an abuse of discretion.
McDonnell Douglas Corp., 182 F.3d at 1326. However, there is no abuse of discretion
when there is no evidence of bad faith by the contracting officer; there is a reasonable,
contract-related basis for his decision; he has not exceeded his discretion; and he has
not violated any applicable statutes or regulations. Id.; see also Third Coast Fresh
Distribution, L.L.C., ASBCA No. 59696, 16-1 BCA ¶ 36,340 at 177,194.
We have already confirmed the contract-related basis for Goodloe’s default
termination. There is no reason to conclude that it contravenes any statutory or
regulatory restrictions. Goodloe’s complaints about weather delays, the time
remaining to finish, and the absence of market research have been rejected and do not
establish bad faith or abuse of discretion. Still, Goodloe suggests it is the victim of the
contracting officer’s bad faith because it was terminated and replaced by a contractor
whose services could not be obtained until after Goodloe might have finished the job
had it been retained. The undisputed facts belie that contention. Goodloe represented
to the government that it would use a dredge that it knew was unavailable to perform
its contractual obligations, then failed to perform as required without an excuse,
blaming its deficiencies upon unusual weather without evidence. Against this
backdrop, Goodloe’s suggestion that it was an abuse of discretion not to allow it to
dredge to completion anyway, after the contract completion date expired, and at a rate
of its own choosing below the contract’s 360,000 cubic yard per month mandate, is
unfounded.
IV. The Record Does Not Support a Breach of the Covenant of Good Faith
and Fair Dealing
Goodloe’s alternative theory suggesting the facts amount to a breach of the
covenant of good faith and fair dealing does not save it. 12 The duty of good faith and
fair dealing prohibits “interference with or failure to cooperate in the other party’s
performance.” LaBatte v. United States, 899 F.3d 1373, 1379 (Fed. Cir. 2018) (quoting
RESTATEMENT (SECOND) OF CONTRACTS § 205 cmt. d (1981)). The duty binds each
party not to act to destroy the reasonable expectations of the other party regarding the
fruits of the contract. However, the duty does not expand a party’s obligations beyond
12
Goodloe contends that the government’s motion for summary judgment is only a
partial motion that does not encompass its good faith and fair dealing claim.
Nothing in the motion restricted its scope.
14
the contract’s express terms or establish responsibilities inconsistent with the contract’s
provisions. Thus, a party must undermine a specific promise to breach the duty.
Dobyns v. United States, 915 F.3d 733, 739 (Fed. Cir. 2019), cert. denied, 140 S. Ct.
1106 (2020). As already explained, the government was contractually entitled to
terminate Goodloe when it defaulted upon its obligations. Because none of Goodloe’s
arguments purporting to excuse its default have merit, or otherwise undercut the
termination’s validity, there is no basis for concluding the government breached its
implied obligations by exercising its contractual right to terminate for default.
CONCLUSION
The government’s motion for summary judgment is granted. The appeals are
denied.
Dated: January 27, 2022
MARK A. MELNICK
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD J. REID PROUTY
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
15
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA Nos. 62106, 62446, Appeals of
Goodloe Marine, Inc., rendered in conformance with the Board’s Charter.
Dated: January 27, 2022
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
16