HECO Pacific Manufacturing, Inc., 63217

Background

HECO Pacific had a fixed‑price delivery order to supply three cranes at Naval Base Kitsap; work was suspended in March 2019 over paint issues.
HECO submitted REAs in Nov. 2019 and a revised Dec. 2019 REA for delay impacts; both predated or expressly excluded COVID costs.
On Sept. 3, 2020 HECO submitted a new REA (explicitly excluding COVID costs); on Sept. 17, 2020 the government executed Modification No. 07 increasing price and extending performance to April 30, 2021 and containing broad release/accord language settling the identified REAs.
In Dec. 2020 the government issued COVID access/restriction requirements for the project.
HECO submitted a COVID‑related REA/claim in Sept.–Nov. 2021 for additional costs from complying with base COVID rules; the government denied the claim and HECO appealed to the ASBCA.
The government moved for summary judgment arguing (1) release/accord & satisfaction bars the claim, (2) COVID impacts were unforeseeable, and (3) the COVID requirements are sovereign acts; the Board denied the motion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Modification No. 07 (and its release language) bars HECO’s COVID‑related claim	Mod settled only the REAs identified (which excluded COVID costs) and did not release costs arising from COVID requirements imposed after the modification	Mod’s accord and satisfaction/release language settled all costs, impacts and delays arising out of the revised work	Denied: modification’s plain language and incorporated REAs do not show meeting of the minds to surrender post‑modification COVID costs
Whether government is relieved because COVID impacts were unforeseeable when initial delays began	HECO frames claim as recovery for government delays that pushed performance into the COVID period (analogous to weather delay cases) rather than direct liability for sovereign COVID rules	Government says delay liability cannot extend to unforeseeable COVID impacts that occurred after initial delay began	Denied (fact question): the Board rejects a categorical rule that foreseeability must be judged only as of the initial delay date and declines summary judgment on foreseeability grounds
Whether the government’s COVID access requirements are sovereign acts that bar recovery	HECO asserts its claim is for government delay forcing performance into the pandemic period; even if COVID rules are sovereign, delay consequences may be compensable	Government contends the COVID requirements were public, general sovereign acts insulating it from contract liability	Denied: government failed to prove requirements were public/general sovereign acts or that the issuing official had authority to impose sovereign acts; record insufficient for summary judgment
Whether summary judgment is appropriate overall	HECO maintains genuine disputes of material fact remain (scope of release, foreseeability, sovereign character)	Government seeks judgment as a matter of law based on release, foreseeability precedent, and sovereign acts doctrine	Denied: factual disputes and insufficient evidentiary showing by government preclude summary judgment

Key Cases Cited

Bell BCI Co. v. United States, 570 F.3d 1337 (Fed. Cir.) (accord and satisfaction/release principles)
Meridian Eng’g Co. v. United States, 885 F.3d 1351 (Fed. Cir.) (fact‑specific inquiry into meeting of the minds for accord and satisfaction)
Stockton E. Water Dist. v. United States, 583 F.3d 1344 (Fed. Cir.) (sovereign acts doctrine and limits on holding government liable for public acts)
Casitas Mun. Water Dist. v. United States, 543 F.3d 1276 (Fed. Cir.) (sovereign acts may bar liability when acts are public/general and render performance impossible)
Connor Bros. Constr. Co. v. Geren, 550 F.3d 1368 (Fed. Cir.) (sovereign acts as an affirmative defense; scope of acts relevant)
Horowitz v. United States, 267 U.S. 458 (U.S.) (government’s immunity for sovereign acts)
Dairyland Power Coop. v. United States, 16 F.3d 1197 (Fed. Cir.) (summary judgment movant is not entitled to favorable inferences)