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FEDERAL CASES: Govt. Properly Doubted Contractor's Ability To Achieve Project Completion

Monday, May 01, 2017 06:46 am

 

Contact Termination

Appeals of: Truckla Services, Inc., 2017 ASBCA Nos. 57564, 577752 Lexis 29 (Jan. 26, 2017)

A contractor that began a project with nonconforming performance didn't have much clout with which to argue that subsequent delays were both excusable and surmountable.

General contractor Truckla Services, Inc. (Truckla) failed to meet the completion deadline on a project to construct stone dikes on and near the Mississippi River. As a result, the Army Corps of Engineers terminated for default the parties' $2-million contract. But Truckla blamed the delay on three external causes: the Corps' arbitrary desire to boot the contractor off the job, an oil spill in the river that impacted equipment availability, and the Corps' failure to provide proper specifications for the stones' location. None of these excusable delay assertions convinced the Armed Services Board of Contract Appeals.

The dispute rested on two issues. First, the contract provided that Truckla was to be paid "for stone satisfactorily placed." Yet the record showed that Truckla had terrific difficulty placing the "hardpoints"---or short, rock dikes extending from the riverbank into the water. Because Truckla didn't correctly position the two barges it used to place the stone, the hardpoints were installed in a zigzag rather than straight line and shaped to incorrect dimensions. The end result, according to the government, which complained to Truckla before the completion date, was that there were significant voids, gaps, and inconsistencies in elevation among the stones. Therefore, the hardpoints did not meet contract requirements.

The Corps was willing to accept the stone's mislocation if Truckla corrected other deficiencies and completed its work on the hardpoints by "tying" them into the bank. But, then, a second issue arose. The Corps instructed Truckla to resume work after a long project standstill (due in part to high river conditions and sturgeon spawning season), and Truckla did not. Following an oil platform explosion and spill in the Gulf of Mexico, the contractor found it was unable to line up the necessary equipment or subcontractors to continue its work. Although it did eventually find a "willing subcontractor"---Patton-Tully Marine LLC (PTM)---the newly extended completion date came and went without Truckla returning to the job. Thus, the Corps terminated the contract and demanded that the contractor's surety take over and complete the project, which it did.

Lack of faith in misplacement contractor was not misplaced

Truckla appealed the termination based on an assertion that the Corps' abused its discretion. The contractor alleged that the government both unreasonably required a "guarantee" of Truckla's ability to complete the remaining work and used the delays as a pretext to get rid of the contractor.

Truckla asserted that, despite misplacement, the hardpoints se[...]

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