Better Roads

July 2014

Better Roads Digital Magazine

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Better Roads July 2014 19 I n a recent case involving dewatering for the Army Corps of Engineers – Hanover Insurance Co. v. U.S. (U. S. Court of Federal Claims, May 27, 2014) – a federal court denied a contractor and surety's claims for $24 million relating to a termination for default and the Contract Disputes Act. The Contract Disputes Act of 1978 (CDA) was enacted to ensure standardized procedures for litigating contract disputes against the federal govern- ment. Under the CDA, the process starts by submitting a claim to the Contracting Officer (CO), who issues a "fi- nal decision." The final decision is a decision on the merits. To chal- lenge a final decision, a contractor can appeal to the Board of Contract Appeals or the United States Court of Federal Claims. However, before bringing an appeal, a contractor must first obtain a final decision. In Hanover, on Aug. 24, 2010, Lodge entered into a con- tract with the Corps to design and implement a dewater- ing plan, as part of a Florida Everglades upgrade project. Hanover Insurance provided payment and performance bonds to Lodge. Lodge's dewatering plan included relocat- ing surface water from the construction area to onsite re- tention areas, where it was supposed to dissipate through percolation or evaporation. In addition, Lodge planned on constructing a temporary cofferdam using metal sheet piling. In developing its dewatering plan, Lodge relied on geotechnical information included in the solicitation from the Corps. On Nov. 29, 2010, Lodge submitted its dewatering plan and the Corps approved it. Several months later, Lodge submitted its design for the sheet pile cofferdam. On July 1, 2011, the Corps approved the design. In July 2011, Lodge began implementing its plan. However, it soon be- came apparent that water was not dissipating fast enough to allow Lodge's work to be completed within the contract time of 720 days. On June 26, 2012, Lodge submitted a certified claim to the CO seek- ing $3,282,123.02 for additional dewatering and a time extension of 91 days. In the meantime and during construction of the cof- ferdam, breaches occurred in two areas. Two weeks later, on March 29, 2012, the Corps retroactively disapproved Final Decision Contractor's dewatering claim for $24 million was dismissed based on failure to follow contract disputes act. InCourt by Brian Morrow, P.E., Esq. Attorney Brian Morrow is a partner in Newmeyer & Dillion LLP and a licensed civil engineer specializing in construction law, including road and heavy construction.

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