Agency’s Failure to Notice that Contractor Was Not Installing Proper Conduit Did Not Waive Conduit Requirement; Appeal of Watts Constructors, LLC, ASBCA No. 61493


Claim to recover the costs of installing electrical conduit is denied. The contract required installation of a rigid conduit. The contractor, however, installed a flexible metal cable. The board found that the metal cable was not conduit. Additionally, contrary to the contractor’s contentions, the board found that the contract did not permit the installation of metal cable. Although the agency initially acquiesced to the installation of the cable, the board found that this did not waive the conduit requirement. The inspectors that had initially accepted the cable did not know that it did not comply with the contract and thus did not knowingly waive the conduit requirement.

Watts Constructors had a contract with the Army Corps of Engineers to build a satellite communications facility. The contract’s electrical wiring requirement stated that the contractor has to install “rigid” conduit.

Instead of installing a “rigid” conduct, Watts’ electrical subcontractor installed a cheaper integrated metal clad cable. Corps personnel on site did not prevent installation of the metal clad cable. Indeed, on many occasions, they inspected the inside of walls before they were closed.

But after the subcontractor had installed quite a bit of metal clad cable, the Corps’ quality assurance electrical engineer inspected the work and discovered the cable. The Corps ordered Watts rip out the walls and replace the cable with rigid conduit. Watts replaced the cable and then submitted a claim seeking over $400,000 for the replacement costs. The Corps denied the claim. Watts appealed to the ASBCA.

Watts first argued that the metal cable it installed qualified as a type of conduit and thus was permitted by the contract. The board was not persuaded. The conduit described in the solicitation was referred to as rigid. The metal cable Watts used was flexible. What’s more, the only testimony Watts offered in support of its position was from its subcontractor’s project manager. Even that project manager would not go so far as to say that others in the electrical trade considered metal cable a conduit.

Even if metal cable was not conduit, Watts argued that it was permitted to use cable because language in the solicitation referred to metal cable. The board, however, found that this language was boilerplate, describing different types of cable that were not used. The language in the solicitation the mentioned the metal cable never stated that it should be used. Indeed, nothing in the solicitation required the use of metal cable. Rather, the only wiring requirements in the solicitation mandated the use of rigid conduit.

Finally, the board found that the Corps’ initial acquiescence to use of the metal cable did not waive the conduit requirement. To be sure, the government can waive a requirement if it fails to exact performance. But the board noted that waiver requires a knowing failure to exact performance. In this case, there was no evidence that any government personnel knowingly waived the conduit requirement. Instead, the lower level people that initially accepted the metal cable did not know the metal cable was not conduit.

Watts is represented by Jason R. Thornton, Jeffrey B. Baird, and Daniel P. Scholz of Finch, Thorton & Baird, LLP. The government is represented by Michael P. Goodman, A.L Faustino, and Robert W. Scharf of the Army Corps of Engineers.

ASBCA - Watts Constructors LLC