Court Opinion

ID: 9900155
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:01:25.902623+00
Date Added: 2024-06-11T09:21:01.196001
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS
    Appeal of -                                 )
                                                )
    Goodloe Marine, Inc.                        )    ASBCA No. 61960
                                                )
    Under Contract No. W912EP-11-D-0020         )

    APPEARANCES FOR THE APPELLANT:                   Michael H. Payne, Esq.
                                                      Cohen Seglias Pallas Greenhall & Furman PC
                                                      Philadelphia, PA

                                                     Casey J. McKinnon, Esq.
                                                      Cohen Seglias Pallas Greenhall & Furman PC
                                                      Washington, DC

    APPEARANCES FOR THE GOVERNMENT:                  Michael P. Goodman, Esq.
                                                      Engineer Chief Trial Attorney
                                                     Susan E. Symanski, Esq.
                                                     Bruce E. Groover, Esq.
                                                      Engineer Trial Attorneys
                                                      U.S. Army Engineer District, Jacksonville

OPINION BY ADMINISTRATIVE JUDGE PROUTY ON THE GOVERNMENT’S
              MOTION FOR SUMMARY JUDGEMENT 1

       This is a case in which the government suspended work on the above-captioned
dredging contract (the contract) for a little less than three months and the contractor,
Goodloe Marine, Inc. (Goodloe) did not submit a claim seeking compensation for the
added costs it incurred due to that suspension until more than five years and
nine months after that suspension was lifted. Respondent, the United States Army
Corps of Engineers (the Corps or the government), moves for summary judgment,
contending that the Federal Acquisition Regulation (FAR) 52.242-14, Suspension of
Work, requirement that a claim be “asserted in writing as soon as practicable after the
termination of the suspension” is a specialized statute of limitations that trumps the
general six-year Contract Disputes Act statute of limitations. Were we writing this
opinion on a blank slate, we might join the government in saying to Goodloe, “too bad,
so sad.” Nevertheless, for reasons explained below, prior law interpreting this and
similar FAR provisions leads us to deny the government’s motion for summary
judgment because the government has not established that it was prejudiced by
Goodloe’s delay in asserting its claim in writing.

1
    This appeal was recently assigned to the undersigned.
         STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION

       The undisputed material facts are straightforward and, for the most part, agreed
upon by both parties. The contract involved in this appeal was a Multiple Award
Task Order Contract for dredging near Tampa, Florida (see R4, tab 10; SUMF ¶ 1). 2
The contract included the standard FAR 52.242-14, Suspension of Work (APR 1984),
clause (see R4, tab 1 at 59; 178) and a standard liquidated damages clause,
FAR 52.211-12, Liquidated Damages – Construction (SEP 2000), tailored to set the
amount at $1,026 per day late (R4, tab 11 at 697). By Delivery Order 002, dated
January 6, 2012 (see R4, tab 13 at 989), the Corps directed Goodloe to perform a
number of services, including dredging at “Cut-A,” “Cut-C,” and the Alafia River
Channel (id. at 991-92). Delivery Order 002 had a delivery date for the
aforementioned services of June 20, 2012 (R4, tab 13 at 1001). The Corps later
extended that delivery date (R4, tab 20 at 1029).

       One June 15, 2012, the Corps issued a “Suspension of Work” to Goodloe for
the Cut-A, Cut-C and Alafia River Channel work on the basis of Goodloe’s alleged
“failure to prevent impacts to migratory birds and their nests in accordance with”
relevant contractual specifications. This suspension was to last until the end of the
migratory bird season on August 31, 2012. (R4, tab 33 at 1855) Goodloe proposed a
change to its procedures to allow it to resume its operations earlier (see R4, tab 35),
but the Corps rejected it (see R4, tab 36). The suspension was ultimately lifted on
September 4, 2012 (SUMF ¶ 10).

       By early October 2012, the Corps was withholding liquidated damages in the
amount of $53,352 for Goodloe being 52 days late (at that time) in completing the
contract (app. supp. R4, tab 1 at 1-2). In a subsequent letter from Goodloe to the
Corps dated October 10, 2012, Goodloe complained of the assessment of liquidated
damages, writing:

               Therefore, due to the fact that Goodloe Marine is of the
               opinion that the Corp improperly shut the project down for
               more than 80 days and has assessed [liquidated damages]
               for that period without any discussion gives us no recourse
               than to reserve our right to file a claim.

2
    “SUMF” refers to a paragraph of the “Statement of Undisputed Material Facts”
        within the government’s motion for summary judgment. Unless otherwise
        noted, every such paragraph cited has been conceded by Goodloe in its
        “Statement of Genuine Issues of Material Fact” (SGMF) contained within its
        opposition to the government’s motion for summary judgment.
                                            2
(App. supp. R4, tab 1 at 6). The same letter rejected the Corps’ purported oral offer to
waive liquidated damages in return for Goodloe’s executing a release (id.).

       In a letter dated October 30, 2012, Goodloe reiterated that it would not execute
a modification that it saw as “requiring Goodloe Marine to give up the right to turn in
a claim” (app. opp’n, ex. 1 at 1). 3

      On August 14, 2013, Ms. Victoria Read from the Corps emailed the final
progress payment paperwork to Goodloe (app. supp. R4, tab 3 at 16-17). Goodloe
responded the same day:

                As you should already know Goodloe Marine will be
                submitting several claims on the above referenced contract.
                We are working on variation and estimated quantities
                claims as well as other claims. We do not anticipate
                having these claims finalized for the next several months
                and therefore will not be signing a release of claims at this
                time.

(Id. at 16).

        The claims were not, apparently, finalized in the next several months. Rather,
the claim at issue today was submitted by Goodloe to the Corps on June 14, 2018.
This claim sought $1,879,000 for additional costs incurred during the government-
ordered suspension. It alleged that Goodloe was entitled to this relief both under the
Suspension of Work clause and because the Corps violated the implied duty to
cooperate. (R4, tab 38 at 1863) The contracting officer (CO) denied the claim on
November 5, 2018 on the bases that it was submitted both after final payment and not
as soon as practicable after termination of the suspension (R4, tab 39).

         Goodloe brought a timely appeal to the Board.

3
    Exhibit 1 to Goodloe’s opposition to the government’s motion for summary
         judgment is this letter. In general, we prefer to consider citations to the Rule 4
         file as supplemented, but we also recognize that a response to a motion for
         summary judgment must sometimes be submitted prior to supplementation of
         the Rule 4 file.
                                              3
                                       DECISION

 I.    The Standard of Review

        The standards for summary judgment are well established and need little
elaboration here. Summary judgment should be granted if it has been shown that there
are no genuine issues of material fact and the moving party is entitled to judgment as a
matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A non-movant
seeking to defeat summary judgment by suggesting conflicting facts “must set forth
specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986) (quoting First National Bank of Arizona v.
Cities Service Co., 391 U.S. 253, 288-89 (1968)). Nevertheless, “[t]he moving party
bears the burden of establishing the absence of any genuine issue of material fact and
all significant doubt over factual issues must be resolved in favor of the party opposing
summary judgment.” Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390
(Fed. Cir. 1987) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

 II.   At First Blush, The Suspension Clause Appears to Foreclose Goodloe’s Very
          Tardy Claim

          A. The Plain Text of the Suspension Clause Requires A Claim To Be
             Asserted As Soon As Is Practicable

       For good reason, the Corps directs us to the text of the Suspension of Work
clause which, in relevant part, provides:

              (c) A claim under this clause shall not be allowed (1) for
              any costs incurred more than 20 days before the Contractor
              shall have notified the Contracting Officer in writing of the
              act or failure to act involved (but this requirement shall not
              apply as to a claim resulting from the suspension order),
              and (2) unless the claim, in an amount stated, is asserted in
              writing as soon as practicable after the termination of the
              suspension, delay, or interruption, but not later than the
              date of final payment under the contract.

FAR 52.242-14, Suspension of Work (APR 1984).

        The first part of this clause is inapplicable to the government’s motion because
the claim, of course, resulted from a suspension order. The government advances no
argument otherwise.

                                            4
        The second part of the clause appears fatal to Goodloe’s ability to maintain this
appeal: in requiring a claim in a specified amount to be submitted in writing “as soon
as practicable after termination of the suspension,” it imposes a requirement upon
Goodloe that it plainly did not meet. Although the government brief references a case
providing a definition of “practicable,” see gov’t mot. at 5-6 (citing Food Mkt. Merch.
v. Scottsdale Indem. Co., 196 F. Supp. 3d 1004 (D. Minn. 2016)), we need not split
any fine legal hairs to conclude that a claim submitted more than 5 years and 9 months
after the lifting of the suspension of work 4 is presumptively not “as soon as is
practicable” – especially when Goodloe has presented no evidence or even argument
that bringing the claim earlier would have been impracticable. Indeed, Goodloe’s
writing in August 2014 that it anticipated bringing the claim in a few months indicates
just the opposite.

        Goodloe makes a somewhat half-baked argument that, since there has been no
final payment, the claim is not late 5 (see app. opp’n at 7). This argument is
unpersuasive. Under the text of the Suspension of Work clause, “but not later than the
date of final payment under the contract” does not mean that the claim may be
submitted as soon as practicable after the suspension is lifted – or not later than the
final payment; rather, it means that final payment is an absolute deadline in addition to
the practicability phrase. This is consistent with the longstanding practice in
government contracting that final payment typically includes waivers of future claims,
see FAR 52.232-5(h), Payments Under Fixed Price Construction Contracts, which
would naturally preclude payment of any subsequent claims. If, as Goodloe seems to
argue, it is enough to submit the claim prior to final payment, there would be no point
in the “as soon as practicable” language, and the inclusion of inoperative language, of
course, is a disfavored contractual interpretation. See, e.g., Hercules, Inc. v. United
States, 292 F.3d 1378, 1381 (Fed. Cir. 2002) (“contract must be construed to effectuate
its spirit and purpose giving reasonable meaning to all parts of the contract”); Hunkin
Conkey Constr. Co. v. United States, 461 F.2d 1270 (Ct. Cl. 1972) (rejecting contract
interpretation that would render a clause in the contract meaningless). Goodloe’s “or”
interpretation would also lead to the result that a suspension of work claim could be

4
  It has not escaped our notice that, in addition to being more than five years and nine
        months after lifting of the suspension, the claim was also submitted one day shy
        of six years after the suspension was imposed by the Corps. Six years, of
        course, is the Contract Disputes Act’s (CDA) general statute of limitations for
        the submission of a claim to the CO. See 41 U.S.C. § 7103(a)(4)(A).
5
  The argument is somewhat disjointed: it appears to argue that the Corps is wrong in
        alleging that Goodloe had accepted final payment before submitting its claim as
        the Corps apparently did in its answer and in the CO’s final decision (see app.
        opp’n at 7), but the government’s motion plainly retreated from that position
        and based its request for relief solely on the “as soon as practicable” language
        (see gov’t mot. at 5).
                                            5
submitted after final payment, which is contrary to the notion, discussed above, that
final payment typically forecloses the submission of additional claims.

         B. Goodloe’s Assertion About the CDA’s Statute of Limitations is
            Undeveloped

        Another undeveloped argument advanced by Goodloe is that the CDA’s statute
of limitations, with which it (by the skin of its teeth) complied, is dispositive (app.
opp’n at 6). There might be something to this argument, even if it was buried in a
single sentence of Goodloe’s brief, because the statutory text references the CDA’s
6- year statute of limitations as “general,” see 41 U.S.C. § 7103(a)(4)(A), while stating
that the “exception” was for those claims involving fraud against the government. 6
See 41 U.S.C. § 7103(a)(4)(B). Does the statutory statute of limitations preclude the
existence of a shorter (or longer) statute of limitations in the contract? This is a
subject made somewhat more complicated by the fact that the limitation contained in
the Suspension of Work clause, in its current form, dates from 1984, and, in fact, was
essentially unchanged from its predecessor that was given effect in 1960, before the
CDA was even a gleam in eye of the procurement community. See Hoel-Steffen
Const. Co. v. United States, 456 F.2d 760, 763 n.2 (Ct. Cl. 1972) (providing text of
1960 version of Suspension of Work clause).

       The CDA, as originally enacted in 1978, had no statute of limitations, but that
was redressed with the passage of the Federal Acquisition Streamlining Act (FASA) in
1994. See, e.g., Lockheed Martin Aeronautics Co., ASBCA No. 62209, 21-1 BCA
¶ 37,891 at 184,025. If the CDA’s statute of limitations was intended to preclude the
imposition of other limitations in the contract, why has the Suspension of Work clause
remained unchanged in the almost 30 years since the passage of FASA? Alternatively,
perhaps it can be argued that the reach of the time limits in the Suspension of Work
clause are such that there was no need to change them whilst being consistent with the
CDA’s 6-year statute of limitations.

        In the end, as will be discussed below, we need not decide, based upon the
paltry argument before us, the issue of the effect of the FASA-passed statute of
limitations upon the contractually set limitations period. And since the matter is
undeveloped here, will leave it for another day.

         C. Goodloe’s Good Faith and Fair Dealing Claim is not Independent of the
            Suspension of Work Clause

       Goodloe also argues that its good faith and fair dealing claim is somehow
separate from the requirements of the Suspension of Work clause and is therefore not

6
    Fraud is the only exception referenced in the CDA.
                                            6
subject to its timely filing requirements (app. opp’n at 11). That is not the case. The
doctrine of good faith and fair dealing, though certainly extensive, does not change the
parties’ obligations on matters already plainly addressed by the contract. See Relyant,
LLC, ASBCA No. 59809, 18-1 BCA ¶ 37,085 at 180,539; see also Dobyns v. United
States, 915 F.3d 733, 739 (Fed. Cir. 2019). The Suspension of Work clause provides a
remedy for instances when performance is suspended “for an unreasonable period of
time.” FAR 52.242-14(b). Since the gravamen of Goodloe’s failure to cooperate
assertion is that the Corps’ failure to act reasonably led to an extended suspension – in
other words, its actions led to a suspension for an unreasonable period of time – that
claim is squarely within the ambit of the Suspension of Work clause 7 and Goodloe
cannot evade that clause’s associated limitations upon when it may bring its claims by
alleging a violation of the duty of good faith and fair dealing.

    III. But, Following Prior Law, we Will not Preclude Goodloe’s Pursuit of This
            Appeal

        As grim as things might appear for Goodloe, the law is forgiving of contractors
who bring claims within the CDA’s statute of limitations, but outside the time limits
set forth in the FAR, so long as the government is not prejudiced. That is the
circumstance we are presented with here.

         A. Goodloe’s Claim Cannot be Rejected Unless Goodloe’s Failure to Submit it
            as Soon as Practicable After the Lifting the Suspension was Prejudicial to
            the Government

        Neither party cites any cases directly on point in which a case was dismissed as
a result of a failure to comply with the timeliness requirements of the Suspension of
Work clause, or in which the Board or a court declined to do so. 8 The closest case we
have is Hoel-Steffen, which supports a forgiving reading of the Suspension of Work
clause. In that case, the Interior Board of Contract Appeals had found that the
predecessor to today’s Suspension of Work clause (which did not differ materially
from the clause before us here) had barred some of the contractor’s claims because the
contractor had not notified the CO, within 20 days, of the government’s actions which
led to a suspension of work. See 456 F.2d at 765-66. Finding that the government was
on notice of the suspension within that 20-day period, even if it had not formally been

7
  Though it appears plain that the good faith and fair dealing contentions are redundant
       to, and thus effectively precluded by, the Suspension of Work clause, there is
       no pending motion to dismiss this count of the complaint pending before us and
       we will not act sua sponte on this matter.
8
  Although absence of evidence is not evidence of absence, this does marginally
       support an inference that the government has declined to advance this defense
       over the years. Marginally.
                                            7
placed on notice by the contractor, the Court of Claims rejected the Interior Board’s
dismissal of the contractor’s appeal, stating:

              To adopt the Board’s severe and narrow application of the
              notice requirements . . . would be out of tune with the
              language and purpose of the notice provisions, as well as
              with this court’s wholesome concern that notice provisions
              in contract-adjustment clauses not be applied too
              technically and illiberally where the Government is quite
              aware of the operative facts.

456 F.2d at 767-68 (citing Copco Steel & Engineering Co. v. United States, 341 F.2d
590, 598 (Ct. Cl. 1965)). In Copco, cited by Hoel-Steffen, the Court of Claims noted
that:
              Lack of strict compliance with many kinds of contract
              requirements concerning writings and notifications have
              frequently been held to be of no consequence where the
              conduct of the parties have made it clear that formal
              adherence would serve no useful purpose or that the parties
              have in fact waived it.

341 F.2d at 598 (citing multiple cases).

       The Hoel-Steffen and Copco courts’ proscriptions against “severe and narrow”
readings of notice provisions, see Hoel-Steffen, 456 F.2d at 767-68, have been applied
widely. To look at one well-known example: the FAR’s differing site conditions
clause, FAR 52.236-2, Differing Site Conditions (APR 1984), requires the contractor to
“promptly, and before conditions are disturbed, give written notice to the Contracting
Officer” of differing site conditions that it encounters, see FAR 52.236-2(a), and further
provides that “[n]o request by the Contractor for an equitable adjustment to the contract
under this clause shall be allowed, unless the Contractor has given the written notice
required. . . .” See FAR 52.236-2(c). On its face, this would appear to give the
government a perfect defense to a differing site conditions claim when the notice, in
writing, had not been provided. Nevertheless, it has long been held that this clause does
not preclude contractor claims advanced without the required notice so long as the
government was not prejudiced by the lack of such notice. See, e.g., R.B. Hazard, Inc.,
ASBCA No. 34289, 90-3 BCA ¶ 22,959 at 115,308 (citing, inter alia, Copco); Dawco
Const., Inc. v. United States, 18 Cl. Ct. 682, 694 (1989), rev’d on other grounds,
930 F.2d 872 (Fed. Cir. 1991).

       We further note that similar results have followed in the past from the
application of notice requirements stemming from the Changes clause, which required
written notice of the contractor’s claim within 30 days of receipt of a written change

                                           8
order. G.M. Shupe, Inc., v. United States. 5 Cl. Ct. 662, 727, n.33 (1984). In Shupe,
the Claims Court held that this contractual provision did not prevent a later claim when
the government was aware of the operative facts at the time they occurred. 5 Cl. Ct.
at 727. Shupe is not binding upon us 9, but it is persuasive and is also evidence of the
consensus view broadly applying Copco.

       With this background in mind, we hold today that a claim to the CO is not
foreclosed by operation of the Suspension of Work clause on the basis of its not being
brought “as soon as practicable” after the end of the suspension of work, so long as the
lateness of the submission does not prejudice the government. 10

        In seeking to avoid this result, the government makes the fair point that the
language in the part of the Suspension of Work clause that it relies on is different than
the language addressed by the court in Hoel-Steffen (gov’t reply at 6). To be sure, the
language the government relies upon is different than the portion of the Suspension of
Work clause addressed in that case and it is also somewhat different than the language
in the Differing Site Conditions clause. Nevertheless, the Court of Claims’s
statements in Hoel-Steffen and Copco are broad and not limited by the precise
language of the contract clauses being discussed, just as the language of the Changes
clause in Shupe was, in fact, very much like the language the government relies upon
in the Suspension of Work clause. Thus, the government’s distinctions, though real,
make no difference.

       B. Though Hardly Ideal, Goodloe’s Failure to Submit a Written Claim to the
          Contracting Officer as Soon as Practicable After the Removal of the
          Suspension did not Prejudice the Government

        Goodloe’s claim, rather than being brought as soon as practicable, was brought
as late as possible whilst still being within the CDA’s statute of limitations.
Nevertheless, we still find no prejudice 11 to the government and thus allow this suit to
go forward.

9
  It is a case from the United States Claims Court, the predecessor to the Court of
         Federal Claims, and successor to the trial division of the Court of Claims. It
         should not be confused with the Court of Claims, which is a predecessor to the
         Court of Appeals for the Federal Circuit, and whose appellate decisions are
         binding upon us.
10
   Lest there be any ambiguity, this rule of law says nothing about the operation of the
         CDA’s statute of limitations, which remains unaffected.
11
   Obviously, needing to defend itself in this matter at all is prejudicial to the
         government. The prejudice to which we are referring is prejudice stemming
         from Goodloe’s submitting the claim when it did, rather than as soon as
         practicable after the removal of the suspension of work.
                                            9
       First, we note that the burden of proof is on the government to prove prejudice
in these circumstances. See Dawco, 18 Cl. Ct. at 693 (citing Shupe, 5 Cl. Ct. at 727).
This is even more so in today’s context in which the government is advancing a
motion for summary judgement and the burden is upon it to prove the material facts
that would entitle it to judgment. See Mingus, 812 F.2d at 1390.

       We further note that the government has provided no evidence of its being
prejudiced by the late filing of the claim. To the contrary, the undisputed evidence
before us is that, within months of the lifting of the suspension, Goodloe made the
government aware that claims were coming. To the extent that the government might
argue that it needed to be put on notice to preserve evidence, that was accomplished.
Moreover, Goodloe’s refusal to accept final payment provided further notice to the
government that it could not “close the books” on this contract. Based upon the
evidence before us, which we interpret in favor of the non-movant, Goodloe, we
conclude that the government suffered no prejudice by virtue of Goodloe’s failure to
submit its claim as soon as practicable after the lifting of the suspension of work.

                                    CONCLUSION

       Though Goodloe plainly failed to submit its claim to the CO as soon as was
practicable after the lifting of the suspension in this matter, this failure did not
prejudice the government. Thus, in accordance with applicable law, the text of the
Suspension of Work clause does not require dismissal of this appeal. The
government’s motion for summary judgment is accordingly denied.

       Dated: July 12, 2023

                                                 J. REID PROUTY
                                                 Administrative Judge
                                                 Vice Chairman
                                                 Armed Services Board
                                                 of Contract Appeals
(Signatures continued)

                                           10
 I concur                                         I concur

 RICHARD SHACKLEFORD                              DAVID D’ALESSANDRIS
 Administrative Judge                             Administrative Judge
 Acting Chairman                                  Armed Services Board
 Armed Services Board                             of Contract Appeals
 of Contract Appeals

      I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 61960, Appeal of Goodloe
Marine, Inc., rendered in conformance with the Board’s Charter.

      Dated: July 12, 2023

                                              PAULLA K. GATES-LEWIS
                                              Recorder, Armed Services
                                              Board of Contract Appeals

                                         11