ELAINE KAPLAN, Judge.
These consolidated cases arise out of a contract between the plaintiff, Weston/Bean Joint Venture
In addition to its constructive change/differing site condition claim, WBJV also alleges that the government provided defective specifications for the Miami River Project, which resulted in damage to certain properties along the river; that the government breached its implied duty to cooperate; that it unreasonably failed to grant extensions of time to complete work; and that the government improperly retained or assessed liquidated damages. Weston/Bean seeks an equitable adjustment of the contract amount, a time extension of 348 days, and $12,423,937.23 in damages, plus interest, costs, and attorney fees.
After a decision by this Court denying the parties' cross-motions for summary judgment, a nine-day trial was held in Washington, D.C. in June 2014. The Court heard testimony from sixteen witnesses, including several experts. Hundreds of exhibits were admitted and the parties have filed hundreds of pages of post-trial briefs.
For the reasons set forth below, the Court concludes that plaintiff has failed to prove its claims. Accordingly, judgment is entered for the government as to all counts in plaintiff's complaint.
Beginning in the late 1920s, the City of Miami, Florida sought an appropriation from the federal government to deepen and to widen the Miami River. Joint Stip. of Facts ("JS") ¶ 1, ECF No. 88, May 30, 2014. On July 3, 1930, Congress appropriated $800,000 for these purposes and authorized the Secretary of War "to improve the Miami River with a view to securing a channel" 150 feet wide and 15 feet deep for a distance of 3 miles from the mouth of the river, 125 feet wide and 15 feet deep to a point 4.125 miles from the mouth, and 90 feet wide and 15 feet deep to a point 5.5 miles from the mouth, with "each section to have suitable side slopes."
The federal channel of the Miami River was dredged from 1931 to 1933, creating "a navigation channel that extends from the mouth of the Miami River approximately 5.5 miles to a salinity control structure near NW 36th Street." JS ¶ 2; PX 7 at 17 § 1.7.2. Approximately 1,000,000 cubic yards ("CY") of dredged materials were removed from the federal channel. JS ¶ 2. Some sections of the channel, however, were not dredged to the authorized depth of 15 feet mean low water ("-15 feet MLW" or "-15 feet").
The 1934 as-builts show that there remained rock above grade (i.e., rock above -15 feet) in some areas of the channel. Mahar Tr. 658:3-4; Wood Tr. 863:2-4; 874:16-20. Thus, the federal channel that resulted from the 1930s project was "150 feet wide and 14-16 feet deep from the mouth of the Miami River to the south fork" of the river, "125 feet wide and 14-16 feet deep from the south fork to the Tamiami Canal, and 90 feet wide and 10-14 feet deep from the Tamiami Canal to the Seaboard Railroad Bridge near the salinity structure." JS ¶ 2; PX 7 at 17 § 1.7.2.
No dredging of the federal channel was performed between its creation in the mid-1930s and the beginning of the project at issue in this case ("the project"). JS ¶ 2. Private dredging, however, occurred outside of the federal channel along bulkheads, docks, and boat slips.
In 1986, Congress authorized and directed the Secretary of the Army "to remove polluted bottom sediments from the Miami River and Seybold Canal in Miami, Florida, between the mouth of the Miami River and the salinity control structure at 36th Street." JS ¶ 3; Water Resources Development Act of 1986, Pub. L. No. 99-662, § 1162, 100 Stat. 4082 (1986) ("WRDA"); PX 7 at 14. Following the passage of the WRDA, however, the Corps conducted a feasibility study of the Miami River and found that "no quantifiable National Economic Development benefits could be identified for the Miami River sediment removal" and, as a result, it did not recommend dredging the Miami River. PX 7 at 15 (1986 Draft Feasibility Report). After the public and governmental agencies voiced their opinions on the draft report, the Corps produced a final feasibility report titled "Navigation Study for Miami Harbor (Miami River)" in March 1990. PX 4. The final report concluded that although there was no apparent justification for removing sediment from the Miami River for water quality or environmental purposes or for "new navigation work," "there [was] an apparent justification for maintenance dredging of the Miami River to provide the currently authorized dimensions for the Federal navigation project." PX 4 at 29.
In early 1998, the Florida legislature created the Miami River Commission ("MRC") to improve the 5.5-mile Miami River and its surroundings, including the 69-square-mile water basin surrounding the river. Fla. Stat. § 163.06 (establishing the MRC as "the official coordinating clearinghouse for all public policy and projects related to the Miami River"). The legislature charged the MRC with uniting government agencies, businesses, and residents to "speak with one voice" on Miami River issues.
The MRC became the local sponsor of the dredging project and held monthly or quarterly meetings attended by both the Corps and representatives of Weston and Bean, among others.
In September 2002, the Corps issued a report entitled "Final Report: Dredged Material Management Plan and Environmental Impact Statement" ("DMMP"). PX 7. The DMMP was developed to "identif[y] the specific measures necessary to manage the volume of material likely to be dredged over a 20-year period, from both construction and maintenance dredging" of the Miami River.
Attached to the DMMP, among other items, were, "Miami River 1934 `As-Builts,'" which showed, as explained above, that the authorized depth of 15 feet was achieved in parts of the lower portions of the federal channel, but that the upper portions of the channel were not dredged to -15 feet MLW.
On August 29, 2003, the Jacksonville District of the Corps issued solicitation number DACW-02-R-0016. JS ¶ 8. The solicitation requested "performance of the work described in" the solicitation itself and accompanying drawings. JX 1 at 31;
The Description of Work clause stated that the project would "involve maintenance dredging of the Miami River from Cut-48 at the Northwestern end of the Federal Navigation Channel to Cut-1 at Biscayne Bay." JX 1 at 39. It further stated that "[a]pproximately [500,000 to 750,000] cubic yards of contaminated sediment will be removed from the river."
The contract line item numbers ("CLINs") for AS-1 through AS-14 included information for the "federal channel" and "non-federal portion."
Section 02325 of the solicitation, entitled "Dredging," provided specific information on the contractor's responsibilities with regard to dredging. JX 1 at 366-82.
The "required depth" for the project was 15 feet MLW, with a two-foot "allowable overdepth" (i.e., to 17 feet MLW) "[t]o cover the inaccuracies of the dredging process." JX 1 at 1, 3, 13, 377 ¶¶ 3.4.1 (defining "required depth"), 3.4.2 (defining "allowable overdepth"); DX 406 at Drawing 2/11; Taylor Tr. 139:9-19 (testifying that the overdepth is granted to the contractor to allow the contractor to "overdredge a certain elevation . . . in an effort to try to leave that elevation that the Corps . . . is looking for"). The contract drawings, an example of which is reproduced here, showed the "existing bottom" of the channel as well as a "required depth" for the "area to be dredged" of 15 feet MLW with an "allowable overdepth" of 2 feet.
The Final Examination of Work clause provided a mechanism for ensuring that the contractor achieved the required depth of 15 feet. It stated that:
JX 1 at 380-81 ¶ 3.7.1.
The Shoaling clause addressed the possibility of the accumulation of material above the required depth that might occur after a section had already been found acceptable. Pursuant to the shoaling specification, if "shoaling occurs in any section previously accepted, including shoaling in the finished channel because of the natural lowering of the side slopes, redredging at contract price, within the limits of available funds may be done if agreeable to both the contractor and the Contracting Officer." JX 1 at 381 ¶ 3.8.
Finally, the Continuity of Work clause specified that "[n]o payment will be made for work done in any area . . . until the full depth required under the contract is secured in the whole of such area, unless prevented by ledge rock." JX 1 at 381 § 02325 ¶ 3.9. In addition, the contracting officer had the discretion to defer payment "for excavation in any area not adjacent to and in prolongation of areas where full depth has been secured."
The solicitation contained a Character of Materials To Be Dredged clause. JX 1 at 373 ¶ 2.1. That clause provided in full as follows:
This clause was drafted by personnel in the Corps' engineering division including John Bearce, a civil engineer who has worked for the Corps in the area of dredging (including disposal of dredged material) for twenty-four years and who served as design engineer for the project. Bearce Tr. 924:9-925:23, 928:20-929:3, 1089:8-11. The 1934 as-builts were taken into account when drafting the clause.
The specifications provided that "[n]o dredging will be permitted within 10 feet of any structure." JX 1 at 374 ¶ 3.2.3 (Adjacent Property and Structures clause). While the Corps uses a standard "set back" of 25 feet for its dredging projects, in this case, the Corps established a setback of 10 feet at the request of the local sponsors. Perez Tr. 1411:22-1412:7. The drawings defined a "structure" as a "bulkhead, bridge fender, dock, pier or any other structure." DX 406 at Drawing 2/11.
The Side Slopes clause provided as follows:
JX 1 at 377 ¶ 3.4.3. The drawings showed that in some areas of the channel, the 10-foot setback intersected with the toe of the channel,
In addition to the solicitation and the drawings, the Corps provided prospective offerors with three forms of geotechnical information based on its own investigations of the Miami River in 1992 and 2000, prior to the issuance of the solicitation: (1) boring logs; (2) particle size and distribution tests; and (3) wash probe data. JX 1 at 219-20 § 01000 ¶ 1.3.1; PX 26-38.
Core borings require a casing and split-spoon sampler to collect samples of the material in the channel for analysis.
In this case, the Corps used a 140-pound hammer dropped 30 inches to drive the sampler into the soil. Taylor Tr. 91:25-92:5; Bearce Tr. 1004:4-1004:11. The drilling operator logs the sampled material and the number of hammer blows required to advance the sampler six inches at any particular depth; the number of hammer blows needed is referred to as the "blow count." Taylor Tr. 91:16-24. From the number of hammer blows, an N value is derived, which is the number of blows needed to drive the sampler the last one foot, expressed in blows per foot.
A higher blow count indicates material that is stronger or more compact and more resistant to drilling, although it does not reveal the character of the material—rock, sand, silt, debris, etc. For example, a blow count of 50 indicates "material that is hard and it could be the limestone or it could be something else." Rios Tr. 1246:7-11;
Another method used as part of a geotechnical investigation involves a vibracore sampler, which uses a larger sampling tube that has a vibrating motor attached to move the tube down through the material (as opposed to a 140-pound hammer). Taylor Tr. 92:20-23. Vibracore samplers are used primarily to determine the type of material present in a given area by examining the material collected in the tube. Taylor Tr. 93:5-12. The vibracore sampling method does not provide good information about the density of material encountered. Taylor Tr. 93:12, 93:5-12; Mahar Tr. 737:5-8; Rios Tr. 1252:24-1253:9.
Samples taken from the core boring may be used to create size distribution charts and gradation curves by passing each sample through a series of sieves and recording the size and weight of material retained in each sieve. Mahar Tr. 625:20-628:12. These tests provide "both a graphical and numerical representation of the different sizes of material that are within that sample." McWilliams Tr. 476:20-22.
Wash probes are an exploration method that reveals the depth of hard material based on its resistance to penetration by a water jet. Taylor Tr. 104:3-24; McWilliams Tr. 477:5-16. A pipe with an attached water jet to move material out of the pipe's path is lowered into the body of water until it meets resistance. Taylor Tr. 104:7-21. As no sample is collected, a wash probe test does not provide information about the character of material that is in the water nor about the nature of material that is encountered at the point of refusal.
In 1992, the Corps performed core borings in 44 locations, at an average distance of 660 feet "primarily for the purpose of . . . determining [the] difficulty of dredging." Bearce Tr. 1034:21-23. Corps employees recorded the results of the 1992 core borings in boring logs. PX 27.
The Corps employed a split-spoon sampler with a two-inch outside diameter and a 1.375-inch inside diameter. PX 27; Perez Tr. 1389:14-15. Use of a split-spoon sampler with a 1.375-inch inside diameter is a standard geological investigation method. Bearce Tr. 1004:18-20. A split-spoon sampler cannot retrieve materials larger than the inside diameter of the sampler. JS ¶ 5. Dr. Mahar, whom the Court qualified as an expert in engineering geology and geotechnical engineering, Tr. 578:13-17, testified that according to geological standards, boulders are rocks larger than 12 inches; cobbles are 3 to 12 inches; gravel is 3/16 of an inch to 3 inches; sand is 0.003 inches to 3/16 of an inch; and silt and clay are smaller than 0.003 inches. Mahar Tr. 594:5-595:14;
According to Dr. Mahar, because of the limited size of the split-spoon sampler, the operation of the drilling rig may be taken into account to assist in identifying the presence of cobbles or other material larger than the diameter of the split spoon. He testified that, during the drilling, an experienced operator will observe the drill and make notes regarding any "rig chatter" experienced as well as the size and frequency of objects encountered. Mahar Tr. 600:19-603:3. It is standard geotechnical practice, according to Dr. Mahar, that when the drill hits harder material like a cobble or boulder, the operator will log how long it took the drill to go through the harder material, the fragments that rise to the surface in the casing, and the time it takes to resume normal drilling if the drill glances off something. Mahar Tr. 615:17-616:19; Bearce Tr. 1006:20-25. In addition, Dr. Mahar testified, obstructions will cause the drilling fluid to lose circulation, which is something else an experienced operator should note on the drilling log. Mahar Tr. 604:5-7. Thus, Dr. Mahar testified, the information in the core boring logs can reveal the presence of cobbles or boulders in the sediment based on these notations. Mahar Tr. 602:25-603:6.
Dr. Mahar testified that it was "critical" that the drilling operator log information concerning both the sampler and the operation of the drilling rig because the samples "tell only part of the story." Mahar Tr. 618: 4-18. If the logs do not record obstructions based on "rig chatter" or the loss of drilling fluid, he testified, then there can be only two explanations: (1) that the operator did not log the information or (2) that there are no cobbles or boulders in the area sampled. Mahar Tr. 604:23-605:12-13.
The individual who actually performed the core borings for the Corps was "R. Gordon," the drill rig operator or driller. Bearce Tr. 1000:21-1001:3. R. Gordon did not testify at trial. However, Rafael Rios, the Corps' geologist in charge of the project, did testify. He was on the boat or barge when R. Gordon performed the core borings and was responsible for analyzing the material recovered from the sampler and preparing the drilling logs. Mr. Rios stated that in his career he had probably been on a barge when core borings were taken over one hundred times. Rios Tr. 1235:3-6. He also testified that he had seen as many as one or two thousand pages of core boring logs in his career.
Indeed, the logs do not contain any notations regarding rig chatter or the loss of drilling fluid.
Dr. Mahar testified that in light of the absence of notations of rig chatter, in his view, the drilling logs did not reveal any large gravel, cobbles, or boulders in the sediment. Mahar Tr. 622:22-24. He also observed that there was a "sharp" interface between the sediment and the limestone rock and that the boring logs did not reveal any evidence of cobbles or boulders on top of this layer of limestone rock that might have been left over from when the channel was originally constructed. Mahar Tr. 622:8-14, 623:2-10. Dr. Mahar testified that except in one of the 24 logs taken in AS-1 through AS-6, the blow counts recorded in the log indicated that the limestone rock in the dredging prism was "[v]ery soft [and] weathered." Mahar Tr. 623:14-18;
In 2000, the Corps performed another set of subsurface tests of the Miami River. While the goal of the 1992 testing campaign was to assess the difficulty of dredging, the 2000 testing campaign focused on the environmental aspects of the project, and was designed "to determine the content of the sediment," i.e., "is it sand, mud, how deep is the rock, etc [ ] and therefore, how long it will take [the sediments] to dry." PX 7 at 158 (Minutes of the MRC, August 17, 2000 meeting);
The Corps took core borings in six locations using a vibracore tube with a four inch diameter. PX 37-38. The 2000 vibracore samples contained gravel, sand, silt, and limestone. PX 37.
The Corps also performed wash probes in 2000. The 1992 and 2000 wash probes were taken in lines across the federal and non-federal portions of the channel. Data from the wash probes showed the elevation of the top of the sediments and the refusal elevation at various locations along the river. PX 36 at 1; PX 38 at 1. In general, the elevation of wash probe refusal corresponded to the top of the limestone layer on the boring logs. Mahar Tr. 635:22-637:1; PX 1312 (depicting relationship between refusal elevation and top of the limestone layer). The refusal elevation ranged from -1.1 feet MLW (WP-MR 92-13F taken in AS-11) to -28.99 feet MLW (WP-MR00-3B taken in AS-2). PX 36 at 3; PX 38 at 1; DX 406 at Drawing Nos. 2/4 and 2/10.
Samples taken from the boring logs were used to create size distribution charts and gradation curves.
Dr. Mahar testified with reference to AS-1 that the boring logs indicated that the contractor would "encounter rock in the dredging template, bottom line." Mahar Tr. 658:17-21. According to Dr. Mahar, "[a]ll of [the boring logs] [showed] basically the same thing in terms of the rock elevation. And it is consistent with the information that is in the cross-section with regard to the 1934 [as-built] survey." Mahar Tr. 658:20-23. In other words, the geological data indicated that the limestone rock ranged in depths from 6.4 feet MLW to 16.4 feet MLW.
The Physical Conditions clause, located in the general requirements section of the solicitation, contained cautionary language regarding the uses to which prospective offerors should put the Corps' test results. It stated as follows:
JX 1 at 219-20 § 01000, ¶ 1.3.1.
In June and November of 2002, Weston/Bean "undert[ook] extensive testing, sampling, and surveying of the Miami River." PX 42 at 11 § 1.2;
In June 2002, Weston/Bean obtained six samples using a mini clamshell bucket and vibracore sample tubes and conducted grain size distribution tests on five individual samples and one composite of all samples. PX 1286 at 43-44. In November 2002, Weston/Bean obtained 52 sediment samples using a clamshell bucket, piston sampler and/or vibracore sample tubes. PX 1286 at 45.
According to WBJV's expert, Dr. Mahar, "the clamshell bucket was able to reach the top of rock," but "only sediments were sampled and not the rock." PX 1286 at 45 (Dr. Mahar's expert report). The particle size distribution tests that WBJV conducted were consistent with the government's gradation tests showing some gravel with a maximum size of less than 1.5 inches. Mahar Tr. 645:10-13; 646:16-20; PX 1286 at 48. Also consistent with the results of the Corps' tests, "limestone bedrock was encountered above the dredging template . . . at approximate elevation of -14ft (MLW)." PX 1286 at 46.
According to Jeffrey McWilliams, who was then Bean's operations manager, and who led WBJV's pre-bid investigation, McWilliams Tr. 467:23-25; 471:22-472:1, the material sampled "was consistent with maintenance dredging [of] sediments and was consistent with what the Corps had represented on the borings and their wash probes." McWilliams Tr. 472:4-7.
On November 13, 2003, Weston/Bean forwarded to the Corps a document drafted by Mr. McWilliams entitled "Discussion of rock within the dredging template." JX 2. The document stated that "[t]he contract drawings indicate the existence of rock above grade in much of the Miami River, as evidenced by the results of the 1992 and 2000 wash probes given in the contract drawings and specifications." JX 2 at 2 (WBJV's pre-proposal rock estimate); Taylor Tr. 114:4-9, 116:11-13; Bove Tr. 248:22-249:16, 252:9-15;
Using the top of the sediment indicated by the USACE pre-dredge survey, WBJV performed a "quantity check of the dredge template
Weston/Bean then estimated the volume of material that it "expect[ed] to
Weston/Bean "realize[d] that creating a [digital terrain model] from wash probe sections taken 200-700 feet apart, particularly in areas of dredged rock, could lead to an inaccurate final rock volume." JX 2 at 3; McWilliams Tr. 545:1-7. "However, based on the available information," the report observed, "our calculation techniques provide a good indication that substantial rock above grade and overdepth exists on this project." JX 2 at 3.
Weston/Bean further explained that it "bid on the advertised volume given in the specifications," but based its "productions and unit prices on the actual volume that we expect to remove."
On Friday November 14, 2003, Larry Bove of Weston and Ancil Taylor of Bean had a telephone call with Wanda Cruz, the procurement representative of the Corps. Bove Tr. 255:2-5. According to Mr. Bove, during that phone call, he and Ms. Cruz discussed the potential inconsistency between WBJV's calculation of the amount of rock in the template (which WBJV believed it would not be required to remove) and the solicitation's estimate of the quantities of material to be dredged.
In 2003, WBJV drafted its proposal for the project.
According to Mr. McWilliams, in preparing its bid, WBJV considered the geotechnical information, which it concluded provided "very limited data, actually no data to indicate the size of materials greater than an inch or an inch and a half." McWilliams Tr. 256:2-6. He observed that, nonetheless, WBJV "believed that in doing this job, in getting to the bottom of the sediments, knowing what the description was and knowing that we were in an urban setting, so we were going to find bigger things, tires, shopping carts, whatever, that we estimated the amount of debris in our proposal" as 3-5%.
On November 21, 2003, WBJV submitted its proposal. JS ¶ 10. The proposal stated that WBJV had "thoroughly reviewed all of the available documentation for the Miami River dredging project, including the contract plans and specifications, the amendments to the contract," and the DMMP, among other documents. PX 42 at 96 § 2.13.1;
Under a section of the proposal titled "We Understand the Miami River Project," WBJV stated that its geotechnical investigation "has revealed that there is some limestone rock in the pay template." PX 42 at 14 § 1.5. Weston/Bean explained that "[m]uch of the Miami River template includes rock above grade, as per the wash probes included in the contract drawings."
The proposal stated that WBJV would separate and process dredged materials as follows:
On April 9, 2004, the government awarded Contract No. W912EP-04-C-0021 to WBJV for AS-1 federal channel in the amount of $11,800,000. JS ¶ 12. The contracting officer stated that WBJV's proposal and subcontracting plan were "incorporated into the contract." JX 1 at 28.
On April 14, 2004, Weston and Bean executed the Weston/Bean Joint Venture Agreement. JS ¶ 13. Pursuant to that agreement, WBJV is managed by a management committee or "board" consisting of four members, two from each joint venture partner. Taylor Tr. 55:10-14. On the board from Weston were Mr. Bove, Division Manager, and General Kelly, Vice President. On the board from Bean were Mr. Taylor, President, and James Bean, Jr., Vice President of C.F. Bean, Bean's parent company. JS ¶ 14; DX 47 at 2-3 ¶ 4.1; Taylor Tr. 55:17-21. Reporting to the board were Mr. Cole from Weston and Mr. McWilliams from Bean. Mr. Cole served as the joint venture's Project Manager and was "involved in design, preparation of proposal, sales of the job, and then actual management of people on the project." Cole Tr. 398:11-15. Mr. McWilliams was the joint venture's Operations Manager in charge of "overseeing all the operations, production, crew, equipment . . . and reporting back to senior management." McWilliams Tr. 468:1-5, 505:20-25.
On May 6, 2004, Eagle North America ("Eagle") submitted a proposal to WBJV to perform processing of dredged materials for the project. JS ¶ 16; DX 54;
On September 30, 2004, WBJV began dredging operations in the AS-1 federal channel using a clamshell bucket. JS ¶ 20; Taylor Tr. 122:12-123:4; Brennan Tr. 1510:14-16. According to Mr. Taylor, WBJV was immediately surprised at the "very rocky" nature of the material that its operators had dredged and loaded on barges. Taylor Tr. 123:8-12. Mr. Taylor testified that as the dredging progressed, he continued to receive reports about "significant quantities of rock" being placed in the barges.
Mr. Cole, WBJV's project manager, was present at the processing plant on a daily basis during this period. Cole Tr. 414:3-4. He observed what he characterized as "varying amounts of sand and a huge amount of rock."
Pursuant to the contract, WBJV was required to provide daily contractor quality control ("CQC") reports to the Corps. Wood Tr. 854:11-25. The purpose of these reports was to keep official records of the progress of the project on a daily basis, including "if there are any unusual occurrences, what type of material, what's the equipment on site, how many people." McWilliams Tr. 507:7-12;
At trial, WBJV introduced a number of completed CQC reports into evidence. It did not, however, present testimony from any witness describing how WBJV provided the CQC reports introduced into evidence to Mr. Anderson. Both Mr. Wood and Mr. Anderson testified that, notwithstanding the contractual requirement, the Corps did not receive the CQC reports on a timely basis. Wood Tr. 856:3-857:15; Anderson Tr. 1313:4-1315:14 (testifying that reports were "months late"). The Corps memorialized this conclusion in a March 7, 2005 letter from Mr. Wood to WBJV which was intended to "document the late submission of [CQC reports]" and which stated that the Corps did not receive "the initial package of reports from work that began September 11, 2004 until the middle of January 2005." JX 8.
In any event, whether or not the reports were timely supplied to the Corps, they support the testimony of WBJV's witnesses that, as time went on, WBJV was encountering and dredging a significant amount of rock. They also show that—at least initially—WBJV did not believe that the amount of rock it was dredging would serve as the basis for any claim for an equitable adjustment. Thus, the CQC report dated September 30, 2004, and prepared by WBJV's quality control representative ("QC representative"), contained a notation that "[m]aterials consisted of mud, sandy material and rocks of varying sizes." PX 166 at 1; Cole Tr. 433:15-25. In response to the question "DID ANYTHING DEVELOP THAT MAY LEAD TO A CHANGE IN ORDER/CLAIM?" the QC representative stated, "NO." PX 166 at 2. The October 4 and October 7, 2004 CQC reports described the material being removed as "[p]rimarily [s]and with significant quantities of [g]ravel, [c]obbles, [b]oulders and some [s]ilt," noting that "[t]here were no problems encountered in dredging this material." PX 170 at 1; PX 173 at 1;
In mid-October 2004, WBJV removed the clamshell bucket from the jobsite, and, thereafter, WBJV used a conventional "backhoe" bucket, the Barredor del Rio, for dredging. DX 407 at 43; McWilliams Tr. 487:8-488:17 (concluding that a backhoe was clearly preferable to a clamshell bucket for this project); Brennan Tr. 1512:6-14;
Sediment processing and disposal operations began in early November 2004. PX 201 at 1. After Eagle began "tentative processing on November 2, it immediately encountered many operational problems such as blown pipe joints, burned-out starters on pumps, unloading excavator breakdowns, etc." DX 95 at 1 ¶ I(2);
In addition, the processing plant—which Mr. Bove testified had been designed to handle sediments only, with a limited capacity to handle larger material—immediately ran into problems. Bove Tr. 274:24-275:12. The plant's design protocol provided for separating out some oversized material that was up to six inches in diameter before the rest of the material passed through to the screens.
The CQC reports began to reflect the problems that the plant was experiencing as a result of the unexpected quantities of rock that were being dredged. The November 5, 2004 CQC report stated "[s]ubstantial quantities of rock interfering with effective operation of material separation system." PX 201 at 1; DX 407 at 44. That report also raised for the first time the possibility that WBJV might file a claim alleging a differing site condition based on the quantity of rock in the dredging template. PX 201 at 1. It stated that, "[t]he large quantity of rock in the dredged materials is substantially slowing production of the processing plant"; that "[t]he quantity of rock encountered far exceeds that which was anticipated"; and that "[i]f the rock volume remains consistent throughout Acceptance Area 1, it could be considered a Differing Site Condition."
In his weekly narrative reports for the project, dated November 8, 2004, November 15, 2004, and December 6, 2004, Mr. McWilliams advised WBJV's board about the problems that the processing plant was experiencing. DX 95; DX 98; DX 99. For example, his November 8, 2004 report stated that:
DX 95 at 1. In response to these problems, Mr. McWilliams wrote, WBJV planned to "design and install a larger hopper above the grizzly where we will load and slurry the material with a larger volume of jet water; we believe this will clean the rock and debris and slurry the material sufficiently so that production is maintained."
Mr. Anderson acknowledged that during this period of time he had discussions with various WBJV personnel regarding the quantity of gravel and cobbles that were being dredged. Anderson Tr. 1281:5-10; 1341:25-1342:14. He testified, however, that he was advised "repeatedly" by Mr. Cole that WBJV did not intend to pursue the issue as a differing site condition.
On December 6, 2004, several members of the Corps, including Saxby Anderson and John Bearce, conducted a site visit of WBJV's operations.
In a December 14, 2004 email, Mr. Wood advised Mr. Anderson and Mr. Cooper that a memorandum to the Corps' district office needed to be prepared "alerting to a possible differing site condition—and your evaluation of the situation." PX 1273 at 1. At trial, Mr. Wood could not recall what had led him to write this email. Wood Tr. 905:15-19. He testified that "apparently there was [sic] issues that were discussed and I don't know if the contractor at this point in time gave us a formal notification of differing site condition or whether we were trying to be proactive."
In any event, a few days later, during a December 17, 2004 meeting, the WBJV board directed Mr. McWilliams "to hold off on a submission of a change order" regarding "the type and quantity of rock" encountered in AS-1. DX 103 at 4-5 ¶ 3. The board did not discuss the possibility of submitting a differing site condition claim during that meeting because, although the board "believed [WBJV] was experiencing a differing site condition," the board did not know whether it had "met what [it] considered the standard for alerting the Corps that [it] had a different site condition" because "[i]t was very, very early in the job" and the board "wanted to make sure at least [it] truly understood every issue before [it] raised a change order flag." Bove Tr. 272:16-274:15;
The question of whether WBJV intended to file a differing site condition claim came up again during the January 11, 2005 weekly progress meeting between WBJV and Corps personnel. JX 49 at 1; Bearce Tr. 1284:9-24. Thus, the minutes of that meeting reflect that the "USACE indicated that if unexpected quantities of rock are delaying the dewatering, Weston/Bean should submit a letter providing explanation, actions taken to make up schedule, and requesting additional days." JX 49 at 2 ¶ 4;
As discussed above, although WBJV did not experience any difficulties dredging the material in AS-1, the processing of that material was another matter. It was immediately evident when processing began in early November that the Eagle plant did not have the capacity to deal with the quantity of rock that WBJV was loading into the system. Bove Tr. 275:5-12. Because payment to Eagle was based on the number of cubic yards of materials processed, and because as time went on Eagle continued to have difficulty in processing the materials, it was not receiving payment under its subcontract with WBJV.
In late 2004, WBJV approached Eagle in order to determine what it would take to resolve the processing problems and make the contract economically viable.
On February 1, 2005, Bean and Boskalis submitted a proposal for a new material processing plant to WBJV. JS ¶ 25; DX 125. Thereafter, on February 10, 2005, WBJV ceased dredging, and Eagle ceased processing materials and began demobilizing from the site. JS ¶ 26; Bove Tr. 280:6-7. Five days later, in a February 15, 2005 letter, Mr. Bove notified Eagle that its subcontract with WBJV was being terminated for default. JS ¶ 27; DX 137; Bove Tr. 280:9-16.
In the letter Mr. Bove explained that the grounds for termination were Eagle's: (1) "cessation of work and abandonment of the project"; (2) "failure to prosecute the work in accordance with the processing rates set out in the Subcontract"; (3) "failure to meet the performance requirements of the Subcontract, including moisture and cleanliness criteria"; (4) "misrepresentations and/or breach of warranty of its ability to perform the Subcontract work in accordance with the Subcontract requirements"; (5) "refusal to prosecute the work with the diligence that will ensure completion within the time specified in the subcontract"; and (6) "failure to pay subcontractors and suppliers as required by the Subcontract and Federal Acquisition Regulations." DX 137 at 2. Mr. Bove advised that Eagle had left WBJV "with no alternative, particularly given Eagle[]'s abandonment of the project last week."
In a February 15, 2005 letter to Mr. Wood, Mr. Cole notified the Corps that Eagle "has ceased its operations at the project." JX 28 at 1. He further advised that WBJV was terminating Eagle for default. JX 28 at 1. On March 11, 2005, WBJV submitted a proposal to the government to substitute a processing plant supplied by Bean/Boskalis for the Eagle plant. JS ¶ 28; JX 55. The Boskalis plant had additional and more robust front-end equipment to handle the quantities of rock being dredged. Bove Tr. 281:25-283:7; Cole Tr. 423:1-13.
Following Eagle's default on February 10, 2005 till May 19, 2005, no dredging or processing occurred on the project. PX 299-396 (CQC reports showing no dredging or processing activity). On May 19, 2005, the government issued unilateral modification P00007 incorporating the Boskalis plant into the contract. JS ¶ 29; PX 60. The modification provided, in relevant part, that:
PX 60 at 1;
Thereafter, between May 20, 2005, and June 4, 2005, WBJV resumed dredging and dredged the gas pipeline area near the railroad bridge and also performed miscellaneous cleaning passes in AS-1. DX 365 at USACE004538-USACE004605; DX 407 at 24. On June 4, 2005, the Boskalis plant became operational and was able to process limited amounts of dredged material to test the system. DX 365 at USACE004603; DX 407 at 24. On June 7, 2005, WBJV resumed dredging in AS-1 and commenced dredging in AS-2. JS ¶ 30; DX 365 at USACE004618.
On January 17, 2005, Mr. McWilliams sent a letter to Mr. Wood advising him, as required by the contract, that WBJV had encountered what it considered to be massive, monolithic in situ rock. DX 115 at 1. Specifically, he stated that channel obstructions had been encountered along the south toe of AS-1 in the non-federal channel and that the material encountered "was very hard and is believed to be in-situ rock."
The Corps ultimately responded in a March 30, 2005 letter signed by Mr. Wood. In the letter, Mr. Wood stated that the Corps had "confirmed" the existence of rock that "may have prevented your dredge from meeting the required template." JX 9 at 1. "However," Mr. Wood went on, "in addition to these areas, the after-dredge survey results disclosed material above the required contract template in Section 1 (see attached plot of high spots)."
In a June 14, 2005 letter to Mr. Wood, Mr. McWilliams notified the Corps that WBJV had found "an area of hard material and rock directly underneath and adjacent to the railroad bridge in Acceptance Section 1. . . . on the toe of the channel" and that it had been "unable to take the sections to grade." JX 29 at 1. Mr. Wood responded in a July 7, 2005 letter to WBJV, the substance of which was that the government's February 5, 2005 survey of AS-1 (performed in the wake of Mr. Wood's January letter identifying channel obstructions along the south toe of Acceptance Area 1 in the non-federal channel) had identified in situ rock under the railroad bridge but that other high spots still existed. JX 10 at 1. Therefore, the letter advised, the government did not consider Section 1 ready for acceptance.
In a subsequent July 23, 2005 letter to Mr. Wood, Mr. Cole identified four "areas that remain above -15.00 MLW after dredging is complete": (1) "High spots in the channel — Dredgable Material"; (2) "High Spots in the channel — Rock"; (3) "High Spots along the toe of slope — Sloughing and Shoaling"; (4) "High Spots along the toe of slope — Rock." JX 33 at 1. Mr. Cole explained that "it has been the USACE position that all high spots be cleared, unless they are determined to be rock."
In response, the Corps informed WBJV that the sections "would not be accepted until they were cleared to minus 15, to the required grade." McWilliams Tr. 526:16-19;
On August 31, 2005, the government accepted AS-1 as complete. JS ¶ 35. In an August 31, 2005 memorandum for record, Mr. Wood stated that he had:
JX 5.
On October 4, 2005, the government accepted AS-2 as complete. JS ¶ 36. In an October 4, 2005 memorandum for record, Mr. Wood stated that he had:
JX 6.
On November 18, 2005, the government advised WBJV by telephone that AS-3, AS-4, AS-5, and AS-6 were considered complete and confirmed acceptance by letter dated December 22, 2005. JS ¶ 37.
Weston/Bean leased two properties, one located at 3460 NW North River Drive ("Hooper East"), at which it kept its processing equipment, and another at 3464 NW North River Drive ("Hooper West"), which it used for docking and mooring facilities. JS ¶¶ 17, 24; Bove Tr. 267:15-268:1; Brennan Tr. 1565:1-6.
On July 11, 2005, Mr. McWilliams's weekly narrative report noted that the Hooper West seawall had been compromised. DX 156 at 2;
According to Jeffrey Lish, a Bean employee who was ultimately put in charge of performing the repairs on the seawall (
In a July 24, 2005 letter, Mr. Cole reported the damage to the Hooper West seawall to Mr. Wood. He wrote that after WBJV had finished dredging the toe of the slope next to Hooper West, he noticed that 25 cubic yards of soil had moved into the river through a gap between the old and new bulkheads on the property. DX 163 at 1. He further stated that WBJV also noted that stress cracks had developed over the previous week, indicating that the bulkhead might be moving.
At trial, various WBJV witnesses attributed the collapse of the Hooper seawalls to the Corps' requirement that WBJV redredge the toe of the slope adjacent to the seawalls repeatedly in order to achieve the required depth of 15 feet. According to Mr. McWilliams, "[t]hat allowed the material that was kind of holding up the Hooper property over the years to slough back into the channel, exposing the weaknesses."
In the meantime, after AS-1 and AS-2 had both been completed, and a few weeks before the completion of AS-3 to AS-6, WBJV formally notified the Corps that it was filing a differing site condition claim in a letter dated October 20, 2005. DX 185. The subject line of the letter read "Follow-up Status Report — Differing Site Conditions — Rock in the Miami River."
The Corps rejected WBJV's differing site condition claim by letter dated December 6, 2005. PX 904. According to the Corps, at the time WBJV sent its March 11, 2005 letter requesting permission to substitute the Boskalis plant for the Eagle Plant, WBJV's site staff had advised the Corps that WBJV did not intend to pursue a differing site condition claim.
The amount of material WBJV dredged in AS-1 to AS-6 was greater than it had expected to dredge. Based on its assumption that it would not be required to dredge any rock above grade, WBJV had expected to dredge a total of 176,058 CY of material in AS-1 to AS-6. Taylor Tr. 127:1-6;
The amount WBJV actually dredged and for which it received payment ("the pay volume"), however, was 219,913 CY of material.
JX 2 at 2; PX 1482 at 3-4; Taylor Tr. 125:9-126:15.
On December 2, 2005, WBJV advised the Corps that because the government had accepted AS-1 through AS-6 and had not awarded additional sections due to a lack of funding, it considered the project in an "Interim Demobilization" status. JX 37; Bove Tr. 293:14-294:5. WBJV determined that there might be a period of downtime of over six months. Bove Tr. 294:6-13. Therefore, WBJV demobilized its equipment from the Miami River, disassembled the Boskalis plant, shipped it back to Europe, and waited for the Corps to raise the funding needed to complete AS-7 to AS-15.
A little over two years later, on January 18, 2007, the contracting officer notified WBJV that the government anticipated exercising additional options "within the next few weeks." JS ¶ 38. Pursuant to the contract, following the exercise of an option, WBJV would have 60 days to remobilize. JX 1 at 47; Bove Tr. 296:2-297:19. On May 22, 2007, the government issued unilateral modification P00024 exercising its options in AS-7 and AS-8, thereby requiring WBJV to remobilize no later than July 21, 2007. Pl. Br. ¶ 186; JX 1 at 47 n.4; JS ¶ 39; PX 77 at 2; Bove Tr. 296:17-22. The modification included a $196,666 award for interim mobilization and demobilization. PX 77 at 2.
In a June 12, 2007 letter, WBJV requested a 120-day extension to remobilize, i.e., until September 18, 2007, on the ground of "structural problems with portions of the bulkhead and site permitting issues that need to be addressed prior to the recommencement of operations at the site." JX 43 at 1. In letters dated July 6, July 18, and July 25, 2007, WBJV provided a limited amount of documentation and information in support of its extension requests.
On February 16, 2008-210 days after WBJV was required to remobilize pursuant to modification P00024—repairs to the Hooper properties were completed, and WBJV began dredging in AS-7, although the Boskalis plant was not yet remobilized. DX 271 at 1; DX 407 at 70; Brennan Tr. 1573:6-1575:7.
When WBJV returned to finish AS-7 to AS-15, it mobilized different dredging equipment and informed the Corps that "[it] would not under pretty much any circumstances attempt to dredge anything more than they could actually just touch and move out of the way." Wood Tr. 866:23-867:6. The parties then agreed on a new method for determining whether rock WBJV encountered would be considered "massive, monolithic in situ" rock that WBJV would not be required to dredge. Taylor Tr. 152:9-11 ("When we returned to the project to perform work on section 7 and ultimately through 15, the acceptance criteria changed on the job."). Under that method, whenever WBJV identified an area as containing in situ rock, the Corps went out to the location on a survey boat and "sounded the rock with a bar" to verify whether it was or was not in situ rock. Wood Tr. 867:17-23. For AS-1 to AS-6, the procedure had been that "if the backhoe was able to strike the material several times and not move it," WBJV would alert a field representative of the Corps and "confirm that [the material] was in situ material and would not be dredged." Wood Tr. 868:1-5. Although neither party presented any evidence regarding the differences between the two methods, the apparent result of using the new procedure for AS-7 to AS-15 was that the Corps accepted work with material remaining above grade with significantly greater frequency. Taylor Tr. 152:12-17, 154:21-155:5; Wood Tr. 866:19-868:5.
As of November 10, 2008, the government had accepted AS-7 through AS-15 as complete. JS ¶¶ 40-44. Because the Corps permitted WBJV to leave a significant amount of material above -15 feet MLW, the quantities dredged were less than the estimated quantities in the contract. Consequently, effective September 22, 2009, the government issued bilateral modification P00046, which paid WBJV $4,025,987.30 for "fixed costs which were incurred and not recovered in the performance of contract work in Acceptance Sections 7 through 15 due to the extensive presence of monolithic rock within the template of the dredging project." PX 99 at 1 § 16C, 2 § 14A.
On December 21, 2009, WBJV submitted to the contracting officer a certified claim for "unanticipated quantity of large gravel, cobbles and boulders of limestone." PX 1239 at 2; DX 326 at 8. Unlike the notice of differing site condition that WBJV submitted in October of 2005, WBJV no longer premised its claim on the theory that the solicitations and test results had misled it about the "dredgability" of the rock above grade.
Weston/Bean requested an equitable adjustment in the amount of $8,151,092.49 for the costs of the following: disruptions in the original processing plant due to the unanticipated quantities of rock; demobilization of the original processing plant; site improvements and mobilization of a replacement processing plant; permits for the replacement processing plant; labor and expenses for site supervision; land rent and facilities; marine equipment standby; a dive team and a crane barge for boulder removal; and other items. PX 1239 at 24; DX 326 at 31. In addition, WBJV requested an extension of time to complete the contract and the release of contract amounts retained by the government as liquidated damages. PX 1239 at 26; DX 326 at 33.
On July 15, 2010, the contracting officer issued a final decision denying WBJV's 2009 certified claim. JX 52. She concluded that WBJV "has not demonstrated that the conditions differ materially from what was represented in the contract documents."
On September 24, 2010, WBJV submitted to the contracting officer a second certified claim for "additional dredging to achieve acceptance near the toe of the slopes[,] acceptance sections 1 through 6." JX 51 at 1. It submitted a third certified claim on January 18, 2011 for "contract time extension[,] remobilization for acceptance sections 7 and 8." PX 1240 at 1. In its 2010 and 2011 certified claims, WBJV asserted that it could not have remobilized until the seawalls were repaired. JS ¶ 45. The contracting officer denied WBJV's 2010 and 2011 certified claims on February 4, 2011 and March 22, 2011, respectively. JX 53, 54.
As the record in this case reveals, the Eagle plant that WBJV initially employed to process the material it dredged from the Miami River was not up to the task. According to WBJV, this was not the result of poor planning on its part. Instead, it argues that the Corps' insistence that WBJV dredge the river down to a depth of 15 feet, even in spots where rock had been left above grade when the channel was originally built in the 1930s, led to the failure of its processing operation. Thus, the bulk of WBJV's claim for damages in this case is based on the theory that while its contract with the Corps was one for "maintenance" dredging and the disposal of sediments, the Corp directed it to perform "new work" dredging and to remove oversized gravel, as well as cobbles and boulders in order to achieve the required depth.
In addition, WBJV alleges that the Corps provided defective specifications for the project which led to damage to the Hooper properties. Specifically, it contends that the Corps put the toe of the channel so close to the 10-foot buffer from the Hooper seawall that WBJV could not employ a box cut to dredge the adjacent slope. According to WBJV, the seawall collapsed as a consequence of these design elements, coupled with the Corps' requirement that it achieve a depth of 15 feet MLW throughout the federal channel.
Finally, WBJV claims that the government breached its implied duty of good faith and fair dealing when, after an extended period of demobilization, it required WBJV to remobilize within the 60-day period prescribed by the contract notwithstanding that its knowledge that WBJV had not yet completed the repairs to the Hooper properties or retrieved its processing plant from overseas. Weston/Bean also argues that the Corps unreasonably failed to grant it extensions of time to complete performance and that the government improperly retained or assessed liquidated damages.
For the reasons set forth below, the Court concludes that WBJV has misconstrued the contractual requirements and that its claims otherwise lack merit. Therefore, the Court directs the entry of judgment for the government as to each of WBJV's claims.
As noted, WBJV's claims in this case, whether couched as "differing site condition" or "constructive change" arguments, are premised on the notion that the contract required that WBJV dredge only the "sediments" that were present within the dredging prism. Weston/Bean contends that the contract did not require it to dredge other material (such as large gravel, cobbles, boulders, or soft to moderately hard limestone rock) even if the removal of this material was necessary to achieve the contractually "required depth" of 15 feet MLW.
Weston/Bean's interpretation of its obligations is premised almost entirely upon the Corps' use of the phrase "maintenance dredging" to characterize and describe the project, both in the title of the solicitation and in the Description of Work clause. According to WBJV, "maintenance" dredging: (1) means the periodic dredging of a channel for purposes of removing sediments that have blown into and accumulated in the channel since the last time it was dredged; (2) does not typically involve the dredging of significant quantities of rock; and (3) never involves, as did this project, the dredging of "virgin" material (i.e., rock located in areas that were not dredged to their authorized depths when the channel was built in the 1930s). Pl. Br. 20-21 ¶ 51, 62-63. The latter, WBJV argues, is "new work" not "maintenance" dredging.
As described in greater detail below, to prevail in a constructive change case, a plaintiff must demonstrate that, as a result of an informal order or government fault, it has performed work beyond that which is contractually required.
In this case, WBJV candidly admits (and the record shows) that at the time it submitted its offer in response to the solicitation it was aware that there was a significant amount of rock above the grade of -15 feet MLW in some sections of the dredging prism. In fact, as described in greater detail above, at the time it made its offer, WBJV anticipated that some 28.7 percent of the material in the dredging prism was rock. JX 2 at 3. Its argument, therefore, is not that it did not know that there was rock in the dredging template. Pl. Br. 1-2. Rather, its argument is that it understood that it would not be required to dredge that rock.
Given WBJV's framing of the issues and the record in this case, the Court agrees with the government that WBJV's claims fall more naturally under a constructive change rubric than a "differing site condition" theory. Accordingly, the Court turns first to WBJV's constructive change claim.
"A constructive change occurs where a contractor performs work beyond the contract requirements without a formal order, either by an informal order or due to the fault of the Government."
The interpretation of a contract involves the resolution of a legal question.
"Contract interpretation begins with the language of the written agreement."
The title of the solicitation in this case is "Maintenance Dredging, 15-Foot Project, Miami River, Cut 1 through Cut 48." The "Description of Work" section states, in pertinent part, that:
JX 1 at 39.
The Character of Materials To Be Dredged clause contained in the dredging specification section of the solicitation elaborates on the composition of the sediment in the river and also identifies the other materials that could be expected to be found within the dredging prism. It states, in its entirety, as follows:
JX 1 at 373.
The contract does not include a definition of "massive, monolithic in situ rock." According to Mr. Bearce, "`massive' means heavy," "`[i]n situ' means in place, naturally in place," and "`monolithic' means one piece, in other words, not fragmented but one solid piece of material." Bearce Tr. 1009:2-5. Similarly, Mr. Cooper testified that "massive, monolithic in situ rock" was "bedrock" or "rock that's been there forever." Cooper Tr. 1051:12-15.
Dr. Mahar provided a more contract-specific definition of "massive, monolithic in situ rock." He testified that "[t]here are fundamentally two definitions" for the word massive—"a geologic definition and an excavation definition." Mahar Tr. 596:2-5. According to Dr. Mahar, the "geologic" definition is based on the observable appearance of the material and can encompass material ranging in size from four inches to six feet, depending on particular schools of thought within the geotechnical field. Mahar Tr. 596:6-11. In a dredging project, however, where the appearance of the material in the dredging template is not known ahead of time, the contractor relies on the excavation of the material to identify what constitutes "massive, monolithic in situ rock." The question for the contractor is "whether or not basically I can dig this material up and whether or not I can dislodge it and actually remove it from the subaqueous environment." Mahar Tr. 597:9-13. Dr. Mahar testified that when an excavation definition is employed, whether rock is massive, monolithic in situ rock is dependent upon the type of dredging equipment used and the difficulty in excavating the material with that particular type of equipment. Mahar Tr. 596:21-597:5. "Different types of equipment have different digging capabilities, and so massive, monolithic rock for one type of equipment may be different than massive, monolithic rock for another type of [equipment]." Mahar Tr. 596:22-597:1;
According to Dr. Mahar, the Character of Materials To Be Dredged clause is an "interpretation. . . . of the expected conditions based on the boring logs and the gradations." Mahar Tr. 618:19-22. Indeed, the record in this case revealed that the clause accurately identified the material present in the dredging prism. Thus, in addition to sediment, the materials that WBJV encountered included loose cobble and boulders, as well as massive, monolithic in situ rock. The testimony also established that some of the loose rock was in the sediment and that other loose rock was left over on the channel bottom from the initial dredging of the channel in the 1930s. Bove Tr. 247:12-17; Mahar Tr. 588:14-19, 589:8-10.
Further, the record establishes that, consistent with the Character of Materials To Be Dredged clause, the dredging prism also contained layers of soft to moderately hard limestone rock which Dr. Mahar testified was "virgin" or "new work" material—i.e., material that should have been but was not removed when the channel was first dredged in the 1930s, notwithstanding that the material was above the authorized -15 foot level. Mahar Tr. 732:20-734:11. With respect to Acceptance Sections 1 to 6—the Corps required WBJV to dredge such limestone rock except where WBJV identified it as massive, monolithic in situ rock. Wood Tr. 874:21-875:15. In the latter circumstance, if the Corps agreed that the material was massive, monolithic in situ rock it did not require WBJV to dredge it. Taylor Tr. 188:18-189:18, 190:24-191:2 ("I can't recall an instance where [WBJV] or Saxby Anderson had specifically identified a location as massive, monolithic rock and instructed us to dredge it.").
As noted above, WBJV contends that the contract did not require that it dredge any material other than the sediment. It states that its "intention was to dredge only the sediments, leaving virgin material that resisted wash probe penetration because it had not previously been dredged . . . [and] to dredge to the authorized channel dimensions only where all of the material to such depth was sediment." Pl. Br. 30 ¶ 99.
Weston/Bean's contentions and stated expectations, however, are inconsistent with the contractual language and accompanying drawings. First, the "required depth" for the project set forth in the solicitation is 15 feet (with 2 feet of allowable overdepth). Further, several drawings included with the solicitation identified the "area to be dredged" as one that reached a "required depth" of 15 feet, with 2 feet of "allowable overdepth." DX 406 at Drawing No. 2/11; JX 1 at 377.
Further, the total estimated quantities of materials to be removed set forth in the solicitation for pricing purposes included all of the material in the dredging prism, whether sediment, debris, or rock. JX 1 at 40-47. Thus, offerors were to propose their prices based on the expectation that they would be required to remove all material in the dredging prism. Indeed, as shown above, the record reveals that the volume of material that WBJV was ultimately required to dredge (and was paid for dredging) was closer in amount to the government's estimated quantities than it was to WBJV's pre-proposal estimate of the amount of material that it expected to remove (which subtracted out the rock).
Moreover, the Final Examination of Work clause included a mechanism for ensuring that the contractor achieved the required depth of 15 feet. It stated that the government would "thoroughly examine" the contractor's work after completion to ensure that there were no "shoals, lumps, or other lack of contract depth," and provided that if there were, then the contractor would be required to remove them. JX 1 at 380-1. Nothing in this provision suggests that the Corps would accept work that did not meet the contract depth if the material left above grade were something other than sediment. Similarly, the Continuity of Work clause provided that the contractor would not be paid "until the full depth required under the contract is secured" in an acceptance section "unless prevented by ledge rock," which the Court interprets to be the equivalent of "massive, monolithic in situ" rock. JX 1 at 381.
Further, there is absolutely nothing in the language of the contract which refers to the results of the wash probe tests as defining the depth to which the contractor would be required to dredge or as affecting the contractor's obligation to dredge to -15 feet (except, as explained above, where there was massive, monolithic in situ rock above the required depth).
Weston/Bean's argument that the contract only required it to dredge sediment is also inconsistent with the Character of Materials
The Court finds the maxim
Indeed, WBJV's interpretation of the contract, under which it would be required to dredge only sediment, renders superfluous the next to the last sentence in the Character of Materials To Be Dredged clause stating that massive, monolithic rock is not required to be dredged. For if the contract required that only sediment was required to be dredged, then it was unnecessary to state that massive, monolithic in situ rock was not required to be dredged. Moreover, if only sediment was required to be dredged, then it is unclear what purpose is served by having the contractor accurately locate and notify the contracting officer of the location of massive, monolithic in situ rock, as is required by the last sentence in the Character of Materials To Be Dredged clause. The notification requirement makes sense only if it is read in conjunction with the exception to the dredging requirement and other contract provisions as a means of allowing the contracting officer to confirm that the contractor is not required to dredge the particular rock it has identified as massive, monolithic in situ rock.
Notwithstanding the foregoing, WBJV notes that the Description of Work clause states that "approximately one-half to three-fourths of a million cubic yards of contaminated sediment will be removed from the river" but says nothing about the removal of rock. While WBJV's observation is accurate, it is well-established that "[a] contract must . . . be construed as a whole and in a manner that gives meaning to all of its provisions and makes sense."
Weston/Bean's interpretation of the Description of Work clause is contrary to these principles. Thus, interpreting the Description of Work clause to specify that
Further, the Description of Work clause's forecast that "approximately one-half to three-fourths of a million cubic yards of contaminated sediment will be removed from the river" for treatment does not foreclose a requirement that other material in the dredging template must also be removed. The Corps estimated that the total quantity of material in the federal and non-federal portions of the project was 416,305 CY at the required depth of 15 feet and 721,000 CY at the allowable overdepth of 17 feet. DX 406 at 3; PX 42 at 24; JX 1 at 40-47; Taylor Tr. 86:18-87:12. Mr. Taylor testified at trial that "it is typical for the Corps . . . to represent the volume of material that is within the design template, which is the dimensions of the channel that the Corp has been authorized to dredge." Taylor Tr. 76:25-77:7. Thus, although the Corps estimated the amount of total material in the dredging prism, it did not estimate what fraction of the material was sediment, rock, or debris. In fact, a reasonable interpretation of the broad estimated range of "one-half to three-fourths of a million cubic yards" of sediment represents the difference between the material in the template that was expected to be "sediment" and that which might consist of rock.
In any event, in context, the best reading of the Description of Work provision is that—in estimating the amount of "sediment" that would likely be dredged and have to be processed—the focus was on the environmental aspects of the project.
Notwithstanding the language of the Required Depth, Character of Materials To Be Dredged, and other specific clauses described above, WBJV emphasizes that the contract characterizes the project as one involving "maintenance dredging" in the title of the solicitation and in the Description of Work clause. It also argues that the project was so described during the meetings of the Miami River Commission that led to the solicitation. Taylor Tr. 58:21-59:7, 70:13-15; PX 7 at 180 (minutes of MRC October 24, 2001 meeting). Therefore, it argues, "any rock in the dredge template would not be removed because, in the dredging industry, a maintenance project does not include dredging soft to moderately hard limestone rock, or any other type of rock, whether or not it is monolithic or fractured. Dredging limestone rock would be new work, not maintenance." Pl. Br. 20-21.
There is no definition of "maintenance dredging" set forth in the contract. The U.S. Army Corps manual, however, defines "maintenance dredging" as "[t]he cyclic dredging of the same area over a period of time to remove accumulating sediments and to maintain ship and barge traffic."
The definition of "maintenance dredging" in the Army Corps manual does not limit the process to the removal of sediments as it also includes as a separate purpose of such dredging the "maint[enance] of ship and barge traffic." Further, the record in this case reveals that "maintenance dredging" projects can and often do involve the dredging of loose rock, sometimes in significant quantities. Corps witnesses testified that in the first maintenance dredging project following new work dredging, the contractor is commonly required to excavate rocks that were left over after the new work was done. Wood Tr. 845:6-846:12; Bearce Tr. 1014:5-25, 1019:11-1020:6, 1080:4-1082:20, 1086:9-1087:25, 1205:7-1206:8, 1228:14-17; Cooper Tr. 1049:20-1050:22; Anderson Tr. 1279:19-1281:4; Perez Tr. 1391:4-1393:2. This is certainly to be expected in circumstances like those presented in the Miami River, where no maintenance dredging had been performed for the entire 70-year period since the channel was initially built. Bearce Tr. 1018:13-25, 1087:8-9 ("Most projects might have a typical maintenance dredging interval of three to five years. That would be typical.).
In fact, WBJV does not dispute that a maintenance dredging contractor may encounter "material that may have been left over from previous dredging activity." Pl. Br. 19 ¶ 46. And WBJV's expert, Dr. Mahar, testified that maintenance dredging contemplates the removal of loose rock left over from previous dredging operations.
While the Court is satisfied that the weight of the evidence establishes that maintenance dredging can and often does involve the removal of material other than sediment, including loose rock, the record also establishes that at least some of the work that WBJV performed on the project may not fall neatly under the rubric of "maintenance dredging." Dr. Mahar emphasized that in order to reach the 15 feet required depth in this case, WBJV was required to dredge the soft and moderately hard limestone rock that was present beneath the sediment. According to Dr. Mahar, as well as several of WBJV's other witnesses, the dredging of the layer of soft to moderately hard limestone rock was "new work" and not "maintenance dredging" because it involved the excavation of material that should have been (but was not) removed when the channel was first constructed.
Mr. Bearce was less definitive than Dr. Mahar and some of WBJV's other witnesses about the distinction between maintenance and new work dredging. He testified that "there's lots of argument over [the definition of maintenance dredging] in the dredging industry and in the dredging business." Bearce Tr. 1013:15-17. He stated that "new work is the first time you dig a channel, and maintenance dredging is everything else."
The Court concludes that it is unnecessary to determine whether or not the dredging of the layer of limestone rock in some parts of the channel could reasonably be characterized as "new work" as opposed to "maintenance" dredging. Even assuming that some portion of the dredging required to reach -15 feet in AS-1 to AS-6 could be characterized as involving "new work," the Court is mindful of the principle that "evidence of trade practice and custom does not trump other canons of contract interpretation, but rather cooperates with them."
Weston/Bean's deployment of the less than precise phrase "maintenance dredging" to neutralize the specific requirements set forth elsewhere in the contract is inconsistent with these maxims. The Character of Materials To Be Dredged, Required Depth and other clauses described above require that the contractor dredge to -15 feet, except where doing so would require it to dredge massive, monolithic in situ rock. The general language upon which WBJV relies, both in the title and in referring to the project as one that "involves" "maintenance dredging," cannot override the specific language of these clauses, especially where the contract itself did not provide a definition of the phrase "maintenance dredging."
Finally, in arguing that the requirement that it dredge rock represented a constructive change in the contract, WBJV highlights the differences between the post-dredge surveys conducted in Acceptance Sections 1 to 6 and those conducted for sections 7 to 15. Pl. Br. 42-43. The latter surveys show that the Corps permitted WBJV to leave a significant amount of rock above grade in AS-7 to AS-15, whereas the former show a template for sections 1 to 6 that is generally clean down to the required depth. JX 51 at 147 (color version). The reason for this distinction was the Corps' determination that there was an "extensive presence of monolithic rock within the template of the dredging project" in sections 7 to 15. PX 99 at 2. According to WBJV the "simple and logical explanation" is that the same massive, monolithic in situ rock must also have been present in sections 1 to 6, where the Corps nonetheless required that such rock be dredged. Pl. Reply Br. 15.
The Court does not believe that the difference that WBJV has noted provides any support for WBJV's contention that it was required to perform work beyond contract requirements in Acceptance Sections 1 to 6. First, WBJV presented no proof (and in fact has never argued) that the rock above grade in AS-1 to AS-6 that it was required to dredge was massive, monolithic in situ rock.
Moreover, the record suggests that the Corps' decision to allow WBJV to leave rock above grade in sections 7 to 15 was based on a change in the protocols for identifying massive, monolithic in situ rock, to which the Corps agreed after WBJV essentially announced that it was unwilling to dredge the above grade rock in sections 7 to 15. In fact, there is no evidence in the record that compares the above grade rock that was required to be dredged in AS-1 to AS-6 with that allowed to remain in AS-7 to AS-15. In short, the fact that the Corps was willing—for whatever reason—to treat the above grade rock in sections 7 to 15 as massive, monolithic in situ rock is of no assistance to WBJV's constructive change claim in this case, which the Court finds is without merit.
A plaintiff has a Type I differing site condition claim under FAR 52.236-2(a)(1) if the plaintiff encounters "subsurface or latent physical conditions at the site which differ materially from those indicated in the contract." To "establish entitlement to an equitable adjustment by reason of a Type I differing site condition . . . [plaintiff] must prove, by a preponderance of the evidence," that: (1) the conditions indicated in the contract differ materially from those actually encountered during performance; (2) the conditions actually encountered were reasonably unforeseeable based on all information available to the contractor at the time of bidding; (3) the contractor reasonably relied upon its interpretation of the contract and contract-related documents; and (4) the contractor was damaged as a result of the material variation between the expected and encountered conditions.
In this case, Weston/Bean argues that a reasonable contractor reading the contract documents as a whole would interpret them as indicating that it would be required to dredge only incidental amounts of rock greater than 1.5 inches in diameter. Pl. Br. 1-2. Weston/Bean argues that because the conditions indicated in the contract differed materially from those it encountered in performance of the contract, it was required to dredge significant quantities of oversized rock, which overwhelmed the system it selected for processing the dredged materials.
As noted above, the Court rejects WBJV's argument that the only material that WBJV was required to dredge under the contract was sediment.
First, the Character of Materials To Be Dredged clause stated that limestone gravel and cobbles could be expected along "portions of the channel bottom and side slopes." JX 1 at 373. Weston/Bean's contention that the use of the word "portion" indicates that there would be only "incidental" cobbles at the channel bottom is simply not persuasive. The word "portion" means a "part" or a "share." A portion can be large or it can be small.
Second, and equally important, the Character of Materials To Be Dredged clause and boring logs also indicated that there were layers of soft to moderately hard limestone rock in the dredging template. While WBJV states that it was of the belief that the contract did not require it to dredge this rock, the Court has rejected that contention for the reasons stated above.
Further, the geotechnical tests were consistent with the description of the materials in the dredging template. In particular, while there is some debate about whether the geotechnical tests suggested the presence or absence of cobbles and boulders in the sediment itself, there is no dispute that the tests revealed layers of soft to moderately hard limestone rock below the sediment (as was also described in the Character of Materials To Be Dredged clause) and that the test results were also consistent with the presence of a layer of loose rock and cobble at the interface between the sediment and the limestone rock. At trial, plaintiff's expert, Dr. Mahar, testified with reference to AS-1, that the boring logs indicated that the contractor would "encounter rock in the dredging template, bottom line." Mahar Tr. 658:17-21. According to Dr. Mahar, "[a]ll of [the boring logs] [showed] basically the same thing in terms of the rock elevation. And it is consistent with the information that is in the cross-section with regard to the 1934 [as-built] survey." Mahar Tr. 658:17-23. That is, taken together, the Character of Materials To Be Dredged clause and accompanying geological data indicated that there was limestone rock in the dredging template, in depths ranging from 6.4 feet MLW to 16.4 feet MLW.
While Dr. Mahar was of the view that the contract did not require WBJV to dredge the limestone rock (on the grounds that such dredging would involve "new work"), the geotechnical tests clearly revealed its presence, and also revealed, as Dr. Mahar testified, that the limestone rock was dredgeable and would break up into cobbles, boulders, and finer material when disturbed. Mahar Tr. 663:10-13 (large gravel, cobbles and boulders were in the sediment as a result of the dredging process), 623:14-18; 652:15-653:5 (except in one of the 24 logs taken, the blow counts recorded in the log indicated that the limestone rock in the dredging prism was "very soft and weathered"), 650:8-650:18 (limestone rock was soft enough that "[a]ny material that would end up going to the plant . . . would be broken down in place or it would break down in the operations"), 584:13-584:14 ("I'm looking at a job that is fundamentally a soft-ground job.");
Indeed, WBJV has acknowledged that it knew that there was limestone rock in the dredging template based on the geotechnical tests. It estimated that the rock could be about 30% of the material present.
In fact, notwithstanding the testimony of some of WBJV's witnesses, the Court finds itself skeptical of WBJV's claim that the Corps' use of the phrase "maintenance dredging" is what led WBJV to conclude that it would not be required to dredge any rock. Instead, the record suggests that WBJV did not expect to dredge the layers of limestone rock (and accordingly did not plan for the effect of such dredging on its processing plant) because it had concluded—albeit erroneously—that such rock was not "dredgeable" and would therefore fall into the category of "massive, monolithic in situ rock," which was not required to be dredged.
In particular, the Court finds telling WBJV's letter of October 20, 2005, which served as its formal notice of its differing site condition claim. In that letter, WBJV stated that it was notifying the Corps "that rock outcroppings in the Miami River exist and were not clearly identified in the RFP documentation as dredgeable." DX 185 at 1. The substance of the letter asserts that—based on the language of the solicitation and the results of the Corps' geotechnical investigation—WBJV had assumed that all but approximately 3-5% of the rock above grade in the channel was "in situ" and was therefore not required to be dredged.
Nowhere in this letter did WBJV mention the fact that the contract was one for "maintenance dredging" or that it expected to dredge only sediments. Before this Court, however, WBJV has modified its position (or at least adjusted its legal argument). It still claims, as described above, that it did not expect to have to dredge the limestone rock. But it no longer links that expectation to the notion that the language of the solicitation and the geotechnical tests did not reveal that the rock was "dredgeable." Nor could it, given that, as described above, Dr. Mahar testified that the geotechnical testing indicated that the layer of limestone rock was dredgable and would break down into smaller pieces once it was dredged. Rather, WBJV has now constructed an argument that has nothing to do with dredgeability, but instead is grounded on the significance of the phrase "maintenance dredging."
The shift in approach reflects adversely on the credibility of WBJV's claimed reliance upon the use of the phrase "maintenance dredging" as the basis for its conclusion that it would not be required to dredge a significant amount of oversized rock. Thus, it undermines WBJV's ability to establish that it, in fact, reasonably relied upon indications in the contract when concluding that it would not be required to dredge significant quantities of "oversized" rock. But in any event, the shift is unavailing. As noted above, this case is not really about whether WBJV knew that there was a significant amount of "oversized" rock in the dredging template because, in fact, WBJV acknowledges that it did. This case is instead about whether the contract required WBJV to dredge such rock, a question that the Court has determined must be answered in the affirmative. So understood, there is no merit to WBJV's argument that the geotechnical data that the Corps supplied affirmatively indicated that WBJV would not be required to dredge significant quantities of "oversized" rock. For this reason, WBJV's differing site condition claim, like its constructive change claim, must fail.
Weston/Bean seeks an equitable adjustment arising out of costs that it incurred to repair damage to the Hooper properties. According to WBJV, the damage occurred as a result of defective design specifications, which it says required WBJV to repeatedly dredge the toe of the channel, adjacent to the Hooper properties in order to achieve the required depth of 15 feet MLW. For the reasons set forth below, the Court concludes that WBJV's defective design specifications claim lacks merit.
It is well established that "[w]hen the Government provides a contractor with design specifications, such that the contractor is bound by contract to build according to the specifications, the contract carries an implied warranty that the specifications are free from design defects."
To recover an equitable adjustment for costs incurred due to alleged defective design specifications, WBJV must show that the design specifications were defective, that it relied on the defect, and that the defect was latent.
Weston/Bean has identified the following contract requirements as "design specifications" which it alleges were defective in combination: (1) that Weston/Bean dredge to -15 feet MLW, including at the toes of the side slopes and including rock, Pl. Br. 98 (citing Taylor Tr. 142:12-17); (2) that WBJV comply with a 10-foot buffer, or exclusion zone extending 10 feet from any structures adjacent to the river, within which Weston/Bean was not permitted to dredge, Pl. Br. 98-99 (citing JX 1 at 374); and (3) that WBJV choose among only one of three possible dredging methods to create the side slopes: box cutting, step cutting, or dredging along the side slope. Pl. Br. 99 (citing JX 1 at 377).
According to WBJV, these requirements "in theory, were consistent, but in performance, were impossible to satisfy." Pl. Br. 98. Specifically, because the Corps "placed the toe of the dredged template close to or at the 10-foot buffer," Weston/Bean could not use a "normal box cut" (which required dredging into the slope) without violating the 10-foot buffer. Pl. Br. 99. Further, WBJV argues, because it could not use any of the techniques specified in the contract for dredging the side slopes and because the Corps insisted that it dredge to -15 feet, WBJV had to dredge the toe itself to -15 feet multiple times to remove the material that repeatedly sloughed down into the channel from the slopes. Pl. Br. 7, 98. Weston/Bean further contends that "the 10-foot buffer zone was not sufficient to protect the adjacent structures and property from subsidence and related damage" and caused the collapse of the Hooper dock. Pl. Br. 101 (citing Taylor Tr. 149:10-150:8; Bove Tr. 285:2-22);
In this case, Weston/Bean did not establish that the specifications at issue were design, as opposed to performance specifications. WBJV had the discretion to use any means to meet the objective of achieving the required depth of 15 feet MLW, so long as it did not violate the 10-foot buffer. Further, the contract did not require WBJV to dredge the side slopes unless doing so was "necessary to provide the required project channel dimensions (depth and width)." JX 1 at 377. Weston/Bean did not prove that it was necessary to dredge the side slopes themselves to achieve the project dimensions because it did not show that it could not have instead, opted to overdredge the channel bottom in the first instance.
Further, even assuming the specifications identifying three methods for forming the side slopes were design specifications, WBJV has still failed to establish its entitlement to an equitable adjustment. Weston/Bean argues that these specifications were defective because, as a practical matter, it could not have dredged the side slopes to achieve the required dimensions through one of the three methods specified in the contract. Pl. Br. 99. Specifically, it could not use these methods because the toe of channel was too close to the 10-foot buffer zone, and in certain areas the slope was located entirely within the 10-foot buffer zone.
Thus, relying on an illustration in a Corps of Engineering Manual and the testimony of several of its witnesses, WBJV contends that a "normal box cut" is achieved by "cutting into the slope to create a void into which sediment can slough without impinging on the dredge template." Pl. Br. 44 (citing Taylor Tr. 144:4-145:3). As Mr. McWilliams testified, however, if the toe "is within ten feet, you wouldn't even consider" such a "normal box cut" "because you'd be in violation of the specifications, the ten foot rule." McWilliams Tr. 563:7-10. Therefore, he stated, "a box cut when you're within the ten-foot limit, rule, when you have a structure within ten foot [sic] of the toe, can't even be considered." McWilliams Tr. 563:15-17.
Mr. Bearce, on the other hand, disagreed that "box cutting" necessarily involves cutting into the slope itself, as WBJV argues. He testified that "box cutting" also includes the technique of dredging deeper than the required dimensions along the toe of the channel, thereby allowing material along the side slopes to slough into the void left below and resulting in a channel that satisfies the required depth. Bearce Tr. 1181:11-1182:19, 1188:2-16. He drew an example of such a cut as follows:
Another Corps witness, Mr. Rene Perez, appeared to take issue with Mr. Bearce's view that the phrase "box cutting" could encompass the process of digging below the -15 feet elevation in the channel bottom and allowing material to slough into the void left below.
In short, the contract permitted WBJV to employ the method about which Mr. Bearce testified. As WBJV did not use that method until after the Hooper seawall had already been damaged, it cannot recover its costs on a defective specifications claim.
Further, and in any event, even assuming that WBJV was correct that the method Mr. Bearce suggested was not a "box cut," any resulting design defect was a patent one. Thus, WBJV was well aware prior to contract performance (or reasonably should have been) that, in many areas of the channel, the side slopes were located within or directly adjacent to the 10-foot buffer zone. The contract drawings 2/1 through 2/10 showed numerous places in which the toe of the channel and the 10-foot set-back line intersected. DX 406 at 2/1-2/10.
Finally, WBJV has failed to establish that the failure of the Hooper seawall was caused by a design defect in the dredging operation, as opposed to structural problems with the seawall itself. Mr. Lish testified that the seawall was poorly constructed and structurally inadequate. Lish Tr. 957:8-15, 959:2-8, 959:15-961:1, 976:9-17. According to Mr. Lish, "[t]he existing material [used to construct the seawall] was not of a controlled backfill material. It was silty clay, had roots and wood debris mixed in." Lish Tr. 957:8-10. He concluded that the material was "bad" because it "was incapable of being compacted to an acceptable compatibility, engineered value." Lish Tr. 957:11-12, 959:2-4. Other engineering issues included, for example, using railroad tiebacks to hold the material in place, which he testified "[was] not an engineered procedure for tiebacks." Lish Tr. 957:5-15, 959:2-8, 959:15-961:1, 976:9-17.
In fact, after sending a dive team out to look at the seawall, Mr. Cole reported to WBJV that the team "discovered that a portion of [the bulkhead] has been eroded below the bulkhead sheeting" but that "it does not appear this situation is related to the dredging" although it "should be addressed before further dredging occurs in the area." DX 163 at 1; Cole Tr. 449:6-450:24. Mr. McWilliams, on the other hand, testified at trial that the damage occurred because, as a result of dredging, a "big bank of material flowed down into the channel, exposing the bulkhead sheet pile wall, whatever it would be" so that "the material that was kind of holding up the dock was gone." McWilliams Tr. 532:4-15. While Mr. McWilliams has a degree in ocean and civil engineering and has worked as an engineer, McWilliams Tr. 465:18-21, he was not qualified as an expert for purposes of offering an opinion on the cause of the failure of the Hooper seawall and he provided no supporting data or explanation to support his conclusion, which appears to be at odds with that of the diving team.
In short, WBJV has not proven that the design specifications about which it complains were defective ones. Further, even if it had, such defects were patent and hence cannot serve as the basis for an equitable adjustment. And finally, WBJV has failed to establish that the collapse of the seawall was caused by its dredging operations at the toe of the adjacent slope, rather than defects in the construction of the seawall itself. Therefore, its defective specifications claim lacks merit.
As described in greater detail above, after WBJV completed work on AS-6, and with no exercise of any further options by the government, WBJV decided to demobilize in December 2005, which included disassembling the Boskalis processing plant and shipping it back overseas. The Corps subsequently exercised its options on AS-7 and AS-8 on May 23, 2007, advising WBJV that—pursuant to the contract—it was expected to remobilize within 60 days. WBJV requested a 120 day extension to June 12, 2007, predicated on the need to complete repairs to the Hooper seawall and the fact that the Boskalis processing plant was committed to another project and therefore unavailable for remobilization. After requesting additional information to substantiate the extension request, the Corp denied WBJV's request in a letter dated October 15, 2007, based on a determination that WBJV had not been sufficiently diligent in its efforts to repair the seawall. Ultimately the seawall repairs were completed in February of 2008, and WBJV began dredging AS 7, although the Boskalis plant was not yet mobilized.
Weston/Bean argues that the government breached the implied duty of good faith and fair dealing "when it issued unrealistic remobilization orders and steadfastly refused to grant Weston/Bean's request for an extension of time to remobilize." Pl. Br. 107. It further argues that the delay in remobilization was excusable because it "stem[med] directly from the Corps' issuance of a remobilization order that was impossible to comply with, coupled with the Federal government's decision to reallocate funds away from this maintenance dredging project."
Pursuant to each contract it enters, the government has implied duties of good faith and fair dealing.
Weston/Bean's claim of breach of the implied duty to cooperate falters at the outset, however, because the contract expressly required it to remobilize and to resume work within 60 calendar days from the date the government exercised its options pursuant to the contract. Pl. Br. 49 ¶ 184; JX 1 at 47 n.4; Bove Tr. 296:2-16. "The implied duty of good faith and fair dealing cannot expand a party's contractual duties beyond those in the express contract or create duties inconsistent with the contract's provisions."
Nor is there any merit to WBJV's argument that the Corps' assessment of liquidated damages was improper because its delay in remobilizing was excusable. "[A] party asserting that liquidated damages were improperly assessed bears the burden of showing the extent of the excusable delay to which it is entitled."
Weston/Bean has failed to meet its burden of proving that its delayed remobilization was excusable. It is undisputed that, in a January 18, 2007 letter, the contracting officer notified WBJV that the Government anticipated exercising additional options "within the next few weeks." JS ¶ 38. WBJV did not respond to that letter by requesting more time, nor did it make any effort to obtain a substitute processing subcontractor, or to perform material processing without a subcontractor, as set forth in its proposal. PX 42 at 18 § 1.7, 25 § 2.2. Additionally, WBJV presented no evidence that during the two-and-a-half-year period of demobilization it attempted to obtain alternative sites for docking, mooring, and material processing, such as the dockside processing site and "Jai Alai" staging area identified in WBJV's proposal.
In short, WBJV did not show that its remobilizing delay resulted from unforeseeable causes beyond its control and without its fault or negligence, or that it took reasonable action to perform the contract notwithstanding the occurrence of such unforeseeable causes. Thus, the delay in repairing the damage to the seawalls is not excusable and WBJV is not entitled to an equitable adjustment or a return of the liquidated damages the Corps withheld.
On the basis of the foregoing, the government is entitled to judgment on all counts in the complaint. Each party shall bear its own costs. The Clerk of the Court is directed to enter judgment accordingly.
The Court is not persuaded by this argument. In analyzing a claim based on a differing site condition, the results of the government's tests are considered among the contractual indications with respect to subsurface conditions.