Contractor Argued Agency Gave It Additional Time So Government Had Forfeited Right to Enforce Completion Date. Did the Federal Circuit Buy that Argument?

The contractor appealed a termination for default all the way to the Federal Circuit. The contractor alleged the termination was improper because the government created delay by requiring the contractor to remove soil and by messing up design approval. The court held that the contractor, not the government, was responsible for the soil and design issues. The contractor further argued the government had waived the completion date by allowing the contractor to continue working on the project past the deadline. The court, however, opined that while the government had allowed work to continue past the completion date, the government expressly reserved the right to enforce that date.

GSC Construction, Inc. v. Secretary of the Army, Fed. Cir. 2021-1803

Background

GSC Construction had a contract with the Army ‘Corps of Engineers to build two warehouses. During performance, GSC got into a dispute with the Army about removal of existing soil The Corps believed GSC was responsible for the soil removal. GSS thought that another contractor working on another nearby project was responsible for the soil.

GSC also got into dispute with the Corps over its design of metal framing for exterior walls. The Army informed GSC it should design the walls in accordance with the 2007 Unified FAcilities Criteria. GSC based its design on more stringent 2012 criteria. The Army rejected GSC drawings under the 2012 criteria. But if the Corps had reviewed the drawing under the 2007 criteria, they would have been approved.

The problems with the soil and the drawings resulted in delay. GSC missed the contract deadline. The Corps terminated for default. GCS appealed the termination to the ASBCA. The board denied the appeal, so GSC appealed to the Federal Circuit.

Holding

• Corps Properly Required GSC to Remove Soil – GSC alleged it was entitled to an extension because the government improperly required GSC to remove soil from the site. GSC believed the soll was the responsibility of another contractor working on the site. The court rejected GSC’s argument. The contract stated that GSC was responsible for site preparation. Indeed, GSC’s proposal had stated the company would remove unsuitable fill. The other contractor working on the site was working on a separate contract for a separate building and was not responsible for soil at GSC’s site.
• GSC Was Responsible for Design Problems – GSC further alleged it was entitled to an extension because the Army created delay by failing to evaluate GSC’s design under the proper 2007 criteria. But the court held that while the Army’s oversight was unfortunate, under the contract, GSC was responsible for coordinating design work.
• Corps Didn’t Forfeit Completion Date – GSC contended that because the Corps had provided additional time to complete the project, it had waived the original contract deadline. The court was not persuaded. While the Corps allowed GSC to work on the project past the completion date, it reserved its rights to enforce the deadline by expressly stating it was not forfeiting any of its rights under the contract.

GCS is represented by Patrick Bernard Kernan of Kernan and Associates Law Group. The government is represented by Ashley Akers, Brian M. Boynton, William James Grimaldi, Martin F. Hockey, Jr., and Patricia M. McCarthy of the Department of Justice as well as Lauren M. of the Army Corps of Engineers.