Government’s motion for summary judgement on a claim for excusable delay and reduction in liquidated damages is granted, where the solicitation language put the contractor on notice of the traffic it would encounter on a waterway where dredging was to occur and of the likelihood of regular work delays to accommodate that traffic, and therefore the plaintiff could not assert a differing site condition. The court also found the agency had not withheld its superior knowledge, as the solicitation discussed the water traffic and delays, and encouraged prospective offerors to visit the work site before bidding.
The court found some facts in dispute regarding the plaintiff’s claim that it was not fully paid for work performed, and denied the government’s motion to dismiss this single claim.
The government moved for summary judgment on North American Landscaping, Construction and Dredge Company Inc.’s claim for excusable delay on its contract with the U.S. Army Corps of Engineers for maintenance dredging of Hoskins Creek, Tappahannock, VA.
The contract provided for a 120 day performance period beginning with the notice to proceed. This notice was provided on June 4, 2015, which established the contract completion date as October 2, 2015. However, NALCO quickly fell behind its proposed dredging schedule, and the dredge did not start operations until August 10 or 11, 2015, and proceeded sporadically.
The agency also expressed concern about several contract tasks and documentation requirements. USACE also found the appellant’s dredging equipment was a hindrance to navigation on the creek, and concluded that NALCO had little knowledge of how to appropriately operate the dredge. On August 20, 2015, the CO sent a letter outlining these deficiencies and reminding NALCO that an assessment of liquidated damages was likely if the project was not completed on time.
On August 25, 2015, NALCO responded to the CO’s letter, and pointed out that barge traffic was slowing down the dredging work, but that the dredge would be out of this zone of barge traffic “in a day or two.” Concluding that successful completion of the project by the contract deadline was unlikely, the agency considered involving NALCO’s surety or terminating the contract for default. The CO sent a formal cure notice on September 22, 2015, to both NALCO and its surety. NALCO responded on September 28, 2015, asserting that barge traffic was causing delays and also was causing the newly-dredged channel to fill back in with material disturbed by the barges. NALCO acknowledged that completion of work by October 2, 2015, was “most likely” not going to occur.
The agency allowed work to continue and by late October, NALCO was meeting the milestones established in a revised schedule. However, the agency was concerned that the dredged channel was not free of material to the required depth. The agency ordered re-dredging of sections that were not deep enough. On November 10, 2015, the agency still had not accepted the work as complete, and began to assess liquidated damages. On November 13, 2015, NALCO was directed to continue re-dredging, over NALCO’s objections that the channel depth problems occurred through no fault of NALCO.
On December 9, 2015, the Corps accepted the project work and assessed $17,700 in liquidated damages for 59 days of performance after October 2, 2015, through November 30, 2015. NALCO filed a certified claim for an equitable adjustment of the contract price in the amount of $288,025.97; the claim also included a request for a time extension of 91.85 days for contract performance. This claim was denied and this litigation followed.
In the largest of plaintiff’s delay claims, NALCO asserts that tug and barge traffic caused an excusable delay of 57.25 days past the contract completion date of October 2, 2015. NALCO argued for entitlement as a differing site condition and superior knowledge. Generally, the plaintiff argued that the solicitation was inaccurate and misleading as to the frequency of barge traffic, and that the agency had the duty to disclose its superior knowledge of this traffic. The plaintiff also asserted the linked concepts of patent ambiguities, latent ambiguities, and the principle of contra proferentem.
First, the court noted that the solicitation required the contractor to conduct the work in a manner that obstructed navigation as little as possible, and to move its equipment should it obstruct the channel to the extent that navigation was difficult. The court found this notice to the contractor was clear. The solicitation also stated that traffic on the creek would include shallow draft fishing vessels, pleasure craft, tugs, grain barges, and various other small crafts, and warned the contractor to expect that traffic would cause periodic delays and interruptions of the work. Thus, NALCO was informed of the type of vessels usually encountered on the creek and was informed of possible delays.
NALCO argued that “periodic delays” meant something different than the condition it encountered on the creek. Alternatively, the plaintiff argued this term is ambiguous. However, the court found neither argument persuasive. The plaintiff argued that the solicitation implied that traffic delays would occur less frequently than the daily interruptions it experienced, but the court found this argument unsupported. The court found that NALCO conflated the frequency of barge traffic with the frequency of delays related to barge traffic, and merged these two concepts when construing the meaning of the contract term “periodic.”
The court agreed with the government that the frequency of barge traffic and the frequency of delays were two separate ideas. The government argued that “periodic” referred to the frequency of delays, not to the passage of vessels. The agency argued it could not guess the extent to which vessel traffic would impede operations, because that would be dependent on the contractor’s chosen means to perform the work.
Further, even if there were a rough equivalence between barge traffic and dredging delays caused by barge traffic, the contract language did not specify the frequency of barge traffic. The court held that the term “periodic” did not mean infrequent, and did not represent that barge traffic would occur less frequently than daily, or near-daily, when the contract work was being performed. Because the contract did not represent the frequency of barge traffic, the plaintiff could not argue a differing site condition based on it. Further, the court found that none of the traffic or delays encountered by NALCO were materially different from those indicated in the contract language, even affording NALCO the most favorable interpretation of the language.
The court also found no ambiguity in the contract language on this point. Rather, NALCO tried to read into the contract a representation to support its claim. The court also held the doctrine of contra proferentem was inapplicable.
Finally, NALCO argued that its reasonable interpretation of the Channel Traffic provision, and its reliance on that interpretation in formulating its work plan and bid, demonstrated the validity of NALCO’s barge traffic delay claim. However, the court found NALCO’s interpretation—that delays would occur approximately once per week—to be subjective. The contract made no representation as to the frequency of barge traffic, or the frequency of delays caused by barge traffic, and was unambiguous in this regard.
Next, the court considered NALCO’s superior knowledge claim. The court noted that the agency likely possessed superior knowledge of the barge traffic, but found that it did not withhold this information from the contractor. The court found the contract language was not misleading, that the Corps did not breach an implied duty to reveal vital information, and that NALCO’s superior knowledge theory of entitlement to 57.25 days of excusable delay was without merit.
Affording NALCO the most favorable inference, the court acknowledged that NALCO appeared to be unaware of the frequency of barge traffic on the creek and that the agency did not appear to have provided this information before contract signing. However, the court found no evidence the agency was aware that NALCO did not have this knowledge. More importantly, the court noted the solicitation noted the barge traffic and likelihood of performance delays. The fact that the contract language did not mislead NALCO or fail to put it on notice, undermined the claim of superior knowledge. Further, NALCO was invited by the solicitation to visit the work site prior to bidding.
Finally, NALCO sought a severe weather-related time extension of 22.6 days. However, the contract provided that weather-related requests be submitted within 10 days of the weather event in order to reduce liquidated damages. NALCO did not submit its claim for the weather delay until March 16, 2016, several months after the completion of performance. Further, the CO concluded that the documentation submitted to support this claim was insufficient, especially when compared to weather records for the time the dredge was operating. The court agreed the claim was time-barred.
Next, NALCO sought a 12 day extension due to the agency’s delay completing its survey of the work. According to NALCO, it remained on standby from the period of November 3 through November 14, 2015, awaiting further direction from the agency. The CO denied this claim, finding no fault on the agency’s part in the timing of the survey. According to the government, NALCO failed to provide the minimum 14 days advance notice between its request for a completion survey and the proposed date for the completion of work and the date for the government’s completion survey. The court agreed that the government had completed the survey within the 14 days provided by the contract, once notice was given.
Finally, NALCO sought $19,173 for the quantity of material removed from the channel before the Corps directed NALCO to re-dredge certain portions of Hoskins Creek. NALCO argued it was not credited with 6391 cubic yards of dredged material that should have been paid at $3 per cubic yard. NALCO argued that depths of the channel that were cleared by the first pass of the dredge were filled in later by the passage of tugs and barges. The court found there was a genuine dispute over the facts of this claim, and denied the government’s motion to dismiss this single claim.
North American Landscaping, Construction and Dredge Company Inc. is represented by Joseph L. Katz. The government is represented by Daniel B. Volk, Trial Attorney, with whom were Joseph H. Hunt, Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Elizabeth M. Hosford, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice; and Mark R. Higgins, United States Army Corps of Engineers.
