Contractor Couldn't Show Work Suspension Increased Costs By $3 Million

Friday, November 02, 2018 6:28 am
October 2018 - Volume 40 Number 10

Work Suspension --- Delay --- Damages

Appeal of: CDM Constructors, Inc., 2018 ASBCA Lexis 252 (August 20, 2018)

A Contract Appeals Board denied a contractor’s attempt to recoup $3 million in costs it claimed it incurred when a project delay caused its subcontractor to pull out of the project.

On July 31, 2015, the U.S. Army Corps of Engineers (Corps) awarded a $100 million contract to CDM Constructors, Inc. (CDM) for the construction of dissolved oxygen injection systems in the Savannah Harbor. Two weeks later, the Corps suspended the project pending the outcome of a protest that had been filed with the Government Accountability Office. On October 21, 2015, after the protest was denied, the Corps lifted the suspension and issued a notice to proceed.

CDM notified the Corps that the project suspension forced its “contemplated” marine construction subcontractor, Cape Romain, to withdraw---that is, the sub had been “economically forced to pursue other opportunities rather than continue to remain idle during the indefinite suspension imposed by the Corps.” CDM resumed discussions with other subcontractors, including Ballard Marine Construction (Ballard), a sub whose proposal it had considered during the bidding phase but did not include in its bid because of its high price. CDM claimed it “was forced to reprocure” subcontract packages with Ballard and another sub and that the project delay increased its costs by $3 million. In June 2016, CDM submitted a claim for the increased costs, which the contracting officer (CO) denied. This appeal followed.

The government filed a motion for summary judgment, arguing that the project delay was reasonable and, in any event, did not cause CDM’s alleged damages. The Armed Services Board of Contract Appeals agreed, finding no evidence that the approximately 60-day suspension caused Cape Romain’s unavailabi[..]