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Fast-track Design-build Project Slows To A Halt Thanks To Govt.'s Failure To Communicate

Monday, November 30, 2009 03:15 am


Appeal of: ADT Construction Group, Inc.

Armed Services Board of Contract Appeals

2009 ASBCA LEXIS 38, ASBCA No. 55307 (July 9, 2009)

From a purely objective interpretation of the contract, the following case poses what appears to be an unsolvable problem. The government's contract allowed the contractor to "fast track" its design, but it also required 100-percent design approval before construction could begin. These conflicting terms are not ambiguous; they are wholly inconsistent.

In the end, however, a court burdened the government with most of the responsibly for resulting delays. The U.S. Army Corps of Engineers (the Corps) awarded ADT Construction Group, Inc. (ADT) a $2 million design/build contract for a munitions maintenance facility at Nellis Air Force Base in Nevada. ADT's proposal, which was incorporated into the contract, stated that it planned to use the "fast-track" method to begin construction on some parts of the project while other parts were still being designed.

The project did not proceed on time, and the government held ADT responsible. After sending a show cause letter and assessing liquidated damages, it terminated ADT's contract. The contractor contended that it had pursued the project in a timely manner but had been unable to gain government approval for the early construction stages. As a result, ADT had filed a claim seeking a time extension, relief from the liquidated damages and an $800,000 increase in the contract price. The contracting officer found that the government had caused some delay by taking so long to approve the design but denied the rest of ADT's claim. The Armed Forces Board of Contract Appeals found the government solely responsible for 158 days of delay primarily caused by withholding its approval of the final design for three months.

If it looks like a fast track and sounds like a fast track ...

The government's original plan to use the fast-track approach to perform the project conflicted with project realities. However, it never revised its plan once it learned that the Department of Defense Explosives Safety Board needed to approve the entire design before construction could begin.

And although ADT communicated its desire to follow the fast-track method throughout the project's design process, the government never corrected ADT of its misconception. The Board found that ultimately the government bore the burden to cut the fast-track language out of its solicitation and to tell ADT that it was not possible to pursue the [...]

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