Gsc Construction, Inc. v. Secretary of the Army
21-1803
| Fed. Cir. | May 2, 2022Background
- GSC Construction contracted with the U.S. Army Corps of Engineers in 2011 to build two warehouses with a contract start of Sept. 26, 2012 and completion date of Feb. 3, 2014.
- Two primary delays: (1) a dispute over responsibility for removing/overexcavating wet soil for a waffle‑mat foundation (GSC claimed Harper Construction was responsible; the Army directed GSC to perform the work; Harper later provided specialized equipment and performed the work), and (2) design/shop‑drawing delays after GSC used the 2012 Unified Facilities Criteria (UFC) instead of the required 2007 UFC; both parties missed the incorrect‑version error for weeks.
- The Army issued notices of delinquency in Jan. and Apr. 2014 and terminated the contract for default on June 18, 2014.
- GSC appealed to the Armed Services Board of Contract Appeals (ASBCA), claiming entitlement to a 321‑day extension, damages, and conversion of the termination to one for convenience; the ASBCA denied relief.
- GSC appealed the ASBCA denial to the Federal Circuit, which reviewed legal issues de novo and factual findings for substantial evidence.
Issues
| Issue | Plaintiff's Argument (GSC) | Defendant's Argument (Army) | Held |
|---|---|---|---|
| Whether the Army materially breached by assigning soil removal to Harper | Appendix RR and Harper specs show Harper must provide the pad "complete" so Harper was responsible for overexcavation | Multiple contract provisions (GSC proposal, §§6.3.1.1(e), 6.3.1.2) make GSC responsible for site prep and select fill | Held for Army: contract language and context place soil‑removal responsibility on GSC; attachment of Harper specs was "for information only" |
| Whether GSC was entitled to a time extension because the Army reviewed drawings under the wrong UFC version | Army's negligent review of drawings under 2012 UFC (not 2007) caused delay and warrants extension | GSC had contract obligations to coordinate and ensure correct design standards; FAR clause and §1.7 assign design‑coordination responsibility to GSC | Held for Army: GSC used wrong UFC; contract and FAR provisions make GSC responsible for errors and coordination, so no extension |
| Whether the Army forfeited the original Feb. 3, 2014 completion date by allowing work to continue past that date | Because Army let GSC work past Feb. 3, it forfeited right to enforce that completion date | Army repeatedly reserved its rights and expressly stated it did not waive or condone delinquency | Held for Army: repeated explicit reservations of rights prevented forfeiture |
Key Cases Cited
- Kellogg Brown & Root Servs., Inc. v. Sec’y of the Army, 973 F.3d 1366 (Fed. Cir. 2020) (standard of review and limits on setting aside ASBCA factual findings)
- McDonnell Douglas Corp. v. United States, 323 F.3d 1006 (Fed. Cir. 2003) (standard for terminating a contract for default requires reasonable belief contractor unlikely to finish on time)
- Lisbon Contractors, Inc. v. United States, 828 F.2d 759 (Fed. Cir. 1987) (same default‑termination principle cited)
- Elec. Boat Corp. v. Sec’y of the Navy, 958 F.3d 1372 (Fed. Cir. 2020) (de novo review of legal contract interpretation, but Board’s expertise given careful consideration)
- LAI Servs., Inc. v. Gates, 573 F.3d 1306 (Fed. Cir. 2009) (contracts must be construed to give reasonable meaning to all parts)
- Securiforce Int’l Am., LLC v. United States, 879 F.3d 1354 (Fed. Cir. 2018) (government prior material breach can excuse contractor nonperformance)
- Sauer Inc. v. Danzig, 224 F.3d 1340 (Fed. Cir. 2000) (excusable delays standard under FAR)