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Contractor's 'Unreasonable' Interpretation Of Fill Specs Cost It $4.5m

Tuesday, February 05, 2019 01:45 pm


Delay --- Differing Site Conditions

CKY Inc. v. United States, 2018 U.S. Claims Lexis 1316 (October 12, 2018)

A government contractor will shoulder more than $4.5 million in additional costs---and pay $400K in delay damages---because it unreasonably read a geotechnical report to guarantee the contract compliance of fill material. 

In June 2012, the U.S. International Boundary and Water Commission (the Commission) awarded a small business set-aside construction contract to CKY, Inc. (CKY) in the amount of $6,399,900 to widen a levee in Presidio, Texas. The contract required CKY to "'excavate into the existing levee to create a series of keys and benches as shown in the plans,' then fill the benches with new embankment material." This embankment material had to meet certain contract requirements before CKY could deposit it on the levee. The contractor experienced difficulty getting the material to pass subgrade moisture and density tests, which resulted in delays and requests for extended work hours. 

In August 2016, CKY filed a complaint seeking $4,528,676 in damages, claiming differing site conditions, defective specifications, constructive change, and breach of an oral and implied-in-fact contract. It had no luck. The U.S. Court of Federal Claims instead granted the Commission's motion for summary judgment and its counterclaim for liquidated damages for delayed work in the amount of $424,125.

Improper reliance on contract silence re: specs [...]

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