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American West Construction, LLC
ASBCA No. 61094
| A.S.B.C.A. | Dec 19, 2017
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Background

  • Contract: MATOC Task Order D02 (design-build bridges), awarded to American West Construction on Sept 27, 2010; included FAR Changes clause and a contract requirement to install temporary bridges for site access.
  • American West sought and obtained a private easement from El Paso County Water Improvement District (the Water District) to use a levee for access, paying $13,200; subcontractor J.D. Abrams incurred ~$20,000 contingency costs for temporary bridges.
  • American West notified the Corps in multiple submissions and meetings in Fall 2015 that it planned to use the levee; the Corps reviewed plans, observed no temporary bridges were built, and approved progress payments that included the temporary-bridges line item.
  • Corps personnel raised the idea of a government credit for not building the bridges in early 2016, but there was no contemporaneous, explicit condition placed on the contractor’s use of the levee; daily reports and correspondence reflect awareness and later negotiations about a credit.
  • After project completion, the Corps issued a final decision demanding a $40,239.89 credit under the Changes clause for work not performed; American West appealed to the ASBCA.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Was the Corps contractually entitled to require installation of temporary bridges and to claim a deductive change if they were not built? Corps was entitled; contract required the bridges, so a credit under the Changes clause is proper. Same: Corps asserts contractual right to strict compliance and to deductive change if contractor deviates. Held for Corps on entitlement: contract required bridges and Changes clause could permit a credit absent waiver.
Did the Corps waive its right to require the bridges (and thus waive the right to a credit)? American West argued Corps waived the requirement by repeatedly acquiescing, approving payments, and failing to timely object. Corps argued any tolerance was conditional and it could later seek a credit (Norcoast-Beck Aleutian reliance). Held for American West: Corps waived the requirement through conduct and acquiescence, so it surrendered the right to a deductive change.
Was any alleged waiver conditional such that the Corps could later invoke the Changes clause? American West: no clear contemporaneous condition was communicated; contractor reasonably relied on waiver. Corps: any allowance was conditional on payment/credit; later demand for credit permitted. Held for American West: the conditional nature (if any) only arose after the requirement was effectively eliminated, so the Changes clause was inapplicable.

Key Cases Cited

  • Rixon Electronics, Inc. v. United States, 536 F.2d 1345 (Ct. Cl. 1976) (government entitled to strict compliance with clear contract terms)
  • Gresham & Co. v. United States, 470 F.2d 542 (Ct. Cl. 1972) (contractual rights become "dead" where a party knowingly fails to exact performance over an extended period)
  • Miller Elevator Co. v. United States, 30 Fed. Cl. 662 (Fed. Cl. 1994) (discussing waiver and estoppel of government contract requirements)
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Case Details

Case Name: American West Construction, LLC
Court Name: Armed Services Board of Contract Appeals
Date Published: Dec 19, 2017
Docket Number: ASBCA No. 61094
Court Abbreviation: A.S.B.C.A.