DISTRICT OF COLUMBIA v. DISTRICT OF COLUMBIA CONTRACT APPEALS BOARD, and PRINCE CONSTRUCTION CO., INC., and W.M. SCHLOSSER CONSTRUCTION CO., INC
145 A.3d 523
| D.C. | 2016Background
- The District contracted with Prince Construction Co. and W.M. Schlosser (joint venture) in 2006 to alter and expand the Fort Totten Solid Waste Transfer Facility; contract price was $13,266,000 and completion was set for July 17, 2007.
- During performance the District directed unanticipated work captured in five change orders that increased the contract price by about $1,028,178 but granted only one day of time extension; project finished April 4, 2008 (261 days late).
- Prince/Schlosser submitted claims for indirect delay costs (extended labor, overhead, lost profits, bond costs) and two direct-cost claims (wiring five truck scales and sulfate‑resistant concrete). Total CAB award: $585,498.98 plus interest.
- The District argued the delay claims were procedurally barred because Prince/Schlosser did not (1) give written notice within 30 days after change orders and (2) submit certified cost‑or‑pricing data; it also disputed liability on the merits for specific items.
- The CAB rejected the procedural defenses, awarded damages for seven claims, and Prince/Schlosser appealed to this court; the court reviews contract interpretation de novo but gives weight to the CAB.
Issues
| Issue | Prince/Schlosser's Argument | District's Argument | Held |
|---|---|---|---|
| 30‑day written notice after change order | Notice requirement should not bar claims because District had actual notice of delay circumstances from monthly schedule updates and other communications | Strict enforcement of 30‑day clause bars late claims; alternatively, late notice prejudiced the District | 30‑day requirement is liberally construed; claims not barred because District knew facts and was not prejudiced |
| Certified cost or pricing data (H.33.E) | Post‑performance claims relied on actual incurred costs (verifiable records), not pre‑negotiation cost/pricing data; H.33.C.2 governs post‑performance payments | Contractor failed to supply certified cost/pricing data required before negotiating price adjustments | Claims not barred: when actual costs are incurred, contractor may submit records of actual costs rather than pre‑negotiation cost/pricing data |
| Storm drainage pipe relocation delay | Relocation was an unforeseen site condition that caused delay and costs; CAB awarded indirect costs | Change Order No. 3 expressly referenced the pipe work and included broad release language discharging the District from claims connected to that change order | Reversed: Change Order No. 3 released the District from delay claims connected to the storm pipe work |
| Fire‑pump installation delay (fire‑suppression system) | District’s drawings omitted pump; implied warranty of accuracy of design specs applies and District must pay delay costs | Fire suppression was a performance specification (not a method/spec detail) so implied‑warranty rule does not apply; contractor assumed risk of method | Reversed: the fire‑suppression requirement was a performance spec; no implied‑warranty recovery for delay costs from pump installation |
| Truck scales wiring (constructive change) | District’s precontract reply suggested others would provide wiring; CAB awarded compensation for unexpected wiring | Addendum answer referenced "two new scales," creating a nonresponsive or ambiguous answer; contractor had duty to inquire about the patent ambiguity | Partially reversed: Addendum created a patent ambiguity; contractor failed to inquire and cannot recover for three scales, but District is liable for wiring of two scales that it ultimately required |
Key Cases Cited
- Tillery v. District of Columbia Contract Appeals Bd., 912 A.2d 1169 (D.C. 2006) (standard of review and deference to CAB interpretations)
- Organization for Environmental Growth, Inc. v. District of Columbia (OFERGO I), 700 A.2d 185 (D.C. 1997) (discussion of CAB expertise and prior treatment of notice provisions)
- White v. Edsall Construction Co., 296 F.3d 1081 (Fed. Cir. 2002) (distinguishing implied warranty for design specifications from performance specifications)
- P.J. Dick Inc. v. Principi, 324 F.3d 1364 (Fed. Cir. 2003) (concurrent delay principles in federal contract law)
- United States v. Cunningham, 125 F.2d 28 (D.C. Cir. 1941) (purpose of delay‑notice clauses: notify government of causes so it can act; prejudice requirement)