The claimant stepped in to perform after another’s default. But the agency found the claimant defaulted, too. The claimant argued its default was excused because it had to deal with the previous contractor’s irate subcontractors. The court said this was no excuse. The claimant should’ve expected angry subcontractors when it decided to complete a defaulted contract.
E&I Global Energy Services, Inc. v. United States, COFC No. 19-224C
- Termination of Original Contract – The agency terminated a contract for default. The contractor’s sureties entered a completion agreement with a new contractor and tendered that contractor to the agency. The claimant was a subcontractor for the completion agreement. But due to a dispute between the new contractor and the claimant, the agency ended up entering a follow-on contract with the claimant.
- Termination of Follow-On Contract – The claimant, however, ran into delays performing the follow-on contract. So, the agency terminated the follow-on contract with the claimant. The claimant filed suit with the COFC challenging the termination.
- Upset Subcontractors - The claimant argued the delays were excusable. It said the delays were the result of the previous contractor’s unhappy subcontractors. It claimed it had to pay those angry subcontractors before it performed. But the court did not find this excuse compelling. The court reasoned the claimant, who had been subcontractor itself on the previous contract, should’ve known the subcontractors would be angry. As the court noted, “pavement is still hot after the sun goes down.” The contractors may have been angry, but this was foreseeable before the contractor entered the contract with the agency.
- Sureties' Failure to Pay – The contractor argued its delay was excused by the sureties’ failure to pay the subcontractors. But this excuse would only be viable if the claimant had been a party to the completion agreement with the sureties. The claimant was never a party to the completion agreement and had no contractual right to expect the sureties to pay the subcontractors.
- Severe Weather – The claimant asserted its delay should be excused by unusually severe weather that resulted in muddy conditions. The court noted the claimant had certified that it had inspected the site. It should have noticed any muddy conditions during that inspection. The mud was not an excuse.
The contractor is represented by Joseph Whitcomb of Whitcomb Selinsky, P.C. The government is represented by Christopher L. Harlow, Deborah A. Bynum, Patricia M. McCarthy, and Brian Boynton of the Department of Justice as well as Thomas Cordova and Trevor Upderaff of the Western Area Power Associatoin.
--Case summary by Craig LaChance, Senior Editor