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Govt. Should Have Warned Sub It Was Installing Underrated Equipment

Wednesday, February 01, 2012 03:30 am


Contract Change--Equitable Adjustment

Reliable Contracting Group, LLC v. Dept. of Veterans Affairs, 2011 CIVBCA Lexis 288 (Nov. 8, 2011)

The Board of Contract Appeals has no sympathy for the government when it "operates in ... a careless fashion and later attempts to obtain relief from such behavior." Here, the carelessness manifested as sloppy specs and will cost the government more than $1 million.

Reliable Contracting Group, LLC (Reliable) was the prime contractor on a project to design and construct a new utility plant and electrical distribution system at the U.S. Department of Veterans Affairs (VA) Medical Center (VAMC) in Miami, Florida. After the VA directed a change to the electrical equipment for the backup emergency generation system, Reliable filed a pass-through claim on behalf of its electrical subcontractor, Fisk Electric Company (Fisk), seeking an equitable adjustment of $1.3 million. While the parties agreed that the change entitled Reliable to an equitable adjustment, they did not agree as to the amount.

The VA-directed change involved providing equipment with adequate AIC ratings to support running three backup generators simultaneously. The VA deemed the equipment Fisk installed inadequate because the sub had set up the system so that just two generators would provide emergency power simultaneously (with the third generator serving as a backup in the event that one of the first two failed). The VA insisted that all three backup generators run simu [...]

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