The government required a 14-day quarantine period before anyone could enter a military base. The contractor sought the costs of quarantining some of its employees in a hotel, alleging that the quarantine restriction was a constructive change. The board, however, found that the government had a defense under the sovereign acts doctrine. The quarantine restriction was an act of the sovereign aimed at the general public, not the contractor. The point of the restriction was to limit the spread of COVID-19 and had not been specifically intended to impact the contractor’s contractual rights.
Appeal of JE Dunn Construction Co., ASBCA No. 62936
Background
The Army Corps of Engineers awarded JE Dunn Construction a task order for replacement of an HVAC system at Ft. Drum in New York. In 2020, at the outset of the COVID-19 pandemic, the Corps informed JE Dunn that anyone arriving at Ft. Drum from outside a 350-mile radius would have to quarantine for 14 days before they could enter the base.
As a result of this directive, four JE Dunn employees had to quarantine in a hotel for 14 days. JE Dunn submitted a claim for the costs of quarantining its employees. JE Dunn alleged the quarantine restriction was a constructive change to the contract. The Corps denied the claim. JE Dunn appealed to the ASBCA.
Legal Analysis
The board found that the sovereign acts doctrine was a defense to JE Dunn’s claim. Under the sovereign acts doctrine, a contractor is barred from monetary recovery for damages resulting from the government acting in its sovereign capacity. The doctrine applies when (1) the government’s act is public and general, and (2) the act renders performance of the contract impossible. An act is public and general if it doesn’t just apply to the contractor but applies to other parties not in a contractual relationship with the government.
Here, the quarantine restrictions at Ft. Drum applied to all the visitors to the base, not just to JE Dunn. The restrictions were intended to to seve a broader government objective of controlling the spread of COVID-19 and were not specifically direct at JE Dunn’s contract rights.
JE Dunn is represented by Reginald M. Jones, David Timm, and Nicholas T. Solosy of Fox Rothschild. The government is represented by Michael P. Goodman, Michael T. Geiselhart, and Liz K. Harris of the Army Corps of Engineers.
