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Design-Build Contract Supported Government's Actions

Claims alleging the government breached a contract and the implied duty of good faith and fair dealing were denied by the Court of Federal Claims because the government's actions were supported by the contract terms. The dispute arose from a contract to design and construct military housing that required 32 modifications extending the initial completion date by nearly 600 days. The contract was completed two years after the initial completion date.

Lack of Appreciation

In rejecting most of the claims, the court observed the contractor did not appreciate the government "would require strict adherence to contractual requirements, instead of deferring to [the contractor's] private sector expertise." For example, the contractor contended "contract requirements" did not include "design construction" and "specifications and drawings." Therefore, according to the contractor, the requirement to submit design changes for prior approval breached the contract and the government's duty of good faith and fair dealing, and the government's denial of variance requests for minor design changes was unreasonable.

Within Contractual Rights

However, under numerous contract provisions, once the government approved the contract's plans and specifications, the contractor was obligated to construct the project without any deviation unless the government approved variances in writing. The government's insistence the contractor adhere to contractual requirements, which the contractor "deemed to interfere with the superior judgment of an experienced design-build contractor, was within the [government's] contractual rights." The contractor also failed to establish the required elements of successful differing site condition claims for expansive soil and elevated levels of chlordane, but it was entitled to extensions for the government's untimely response to notice of a DSC and a modification that effectively deferred the contract's effective date. ( Metcalf Construction Co. v. U.S., FedCl, 56 CCF 79,703)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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