The claimants sought costs caused by the COVID-19 pandemic. They alleged the government hadn’t cooperated during the pandemic and behaved as if the pandemic were not happening. The government moved to dismiss. But ASBCA found the claimants had asserted viable claims that were not barred by the Sovereign Acts Doctrine.
Appeals of McCarthy HITT – Next NGA West JV, ASBCA Nos. 63571, 63572, 63573
- Claims – The contract was awarded right before the COVID-19 pandemic. The agency, however, refused to recognize the pandemic. The agency did not grant extensions and directed the contractor to proceed through the pandemic. But the pandemic disrupted performance and resulted in increased costs for materials. Three subcontractors filed pass-through claims, alleging constructive change and constructive suspension. The agency denied the claims. The claimants appealed to ASBCA.
- Constructive Change – The agency moved to dismiss. The agency argued the claimants had not stated a change claim because they had not shown the agency ever ordered extra work. But in ruling on a motion to dismiss, the board assumes the truth of the facts asserted in the complaint. Here, the claimants had alleged the agency ordered additional work. This was enough for the change claim to survive.
- Suspension – The government argued the claimants had not sufficiently pleaded constructive change. The board disagreed. The complaint alleged the agency’s actions and inactions in administering the contract during the pandemic unreasonably disrupted performance.
- Implied Duty – The claimaints contended the government breached the implied duty of good faith and fair dealing by failing to cooperate during the pandemic. The board found the claimants had asserted a viable breach by alleging the agency acted as if nothing was happening during the pandemic.
- Sovereign Act Doctrine – The government asserted the claims were barred by the Soveriegn Acts Doctrine. The government reasoned the board had applied the doctrine in denying other pandemic-related claims. But the board said that those appeals had been decided on the full record. Here, the case was still in the pleadings stage. Moreover, the Sovereign Acts Doctrine only applies to public, governmental acts. The allegations in the complaint indicated some of the government’s liability arose from contract-specific actions.
The claimants are represented by Martin R. Salzman, Jason A. Kamp, and John T. Gallagher of Hendrick, Phillips Salzman & Flatt, P.C. as well as by Eric L. Nelson of Smith, Currie, and Hancock LLP. The government is represented by Michael P. Goodman, Virginia Murray, and Kristine R. Hoffman of the Army Corps of Engineers.
–Case summary by Craig LaChance, Senior Editor
