Industrial Consultants, Inc. DBA W. Fortune & Company
ASBCA No. 59622, 60491
| A.S.B.C.A. | Mar 10, 2017Background
- ICI (Industrial Consultants, DBA W. Fortune & Company) won a fixed-price contract to upgrade HVAC at a Child Development Center in Hanover, NH for $144,680; work period extended to 15 Sept 2014 with restricted weekend access after July 15, 2014.
- The solicitation encouraged attendance at a pre-bid site visit and included FAR clauses for differing site conditions and required pre-approval of product and safety submittals; ICI did not attend the site visit and submitted many required submittals late or not at all.
- ICI repeatedly disputed the government design (louvers, return fan, kitchen exhaust, AHU sizing and coils) and sought redesign or permission to propose alternatives rather than proceed "as designed." Corps repeatedly directed ICI to install per contract and asked for complete submittals (including AHU details, VFD, return fan, accident prevention plan).
- Corps rejected multiple submittals (AHU/coil, VAV boxes, accident prevention plan) for nonconformance and lack of required detail; ICI did not resolve all deficiencies or submit certain items (notably the VFD and return fan submittals) and performed no on-site installation work.
- Contracting officer issued cure notices; after continued nonperformance and failure to obtain required approvals, the Corps terminated the contract for default on 17 Sept 2014. ICI appealed the termination and separately sought conversion to convenience termination and monetary recovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether termination for default was improper | ICI: government provided defective specifications, unreasonably delayed/failed to cooperate on submittals, breach of implied design warranty and codes, making performance impossible | Corps: ICI failed to submit timely/conforming submittals, refused to proceed unless government redesigned, and failed to obtain approved safety plan required before work | Held: Default termination upheld — government made prima facie case; ICI failed to prove excusable nonperformance or government-caused delay |
| Whether contract specifications were defective (louvers/return fan/kitchen) | ICI: design perpetuated defects; louvers spacing violated codes; return fan unnecessary | Corps: drawings/specs required louvers of same opening size, return fan shown/required on drawings and contract documents; no code violation shown | Held: ICI failed to prove defective specs or code violations; Corps reasonably enforced contract as written |
| Whether Corps unreasonably rejected AHU/coil and other product submittals | ICI: submitted acceptable equipment (AHU near required size; larger coil acceptable); Corps delayed approvals | Corps: submittals were late, confusing, or lacked necessary details (VFD compatibility, coil/boiler compatibility); Corps asked reasonable questions; Corps willing to work through issues | Held: Corps' rejections were reasonable; ICI's late, incomplete, and confrontational approach prevented resolution |
| Whether failure to obtain approved accident prevention plan justified government delay | ICI: ACO improperly rejected plan (e.g., hot work/electrical permit issues); plan showed responsible person | Corps: plan omitted required elements per Corps Safety Manual (site safety officer qualifications, hot work permit/fire watch, training, inspections) and contract forbade on-site work before approval | Held: ACO's rejections were supported; ICI's failure to obtain approved plan independently prevented performance and justified termination |
Key Cases Cited
- Metcalf Constr. Co. v. United States, 742 F.3d 984 (Fed. Cir. 2014) (good-faith cooperation obligation during contract performance and disputes)
- DCX, Inc. v. Perry, 79 F.3d 132 (Fed. Cir. 1996) (government bears burden to show contractor did not perform timely and failed to obtain submittal approvals)
- JL. Malone & Assocs., Inc. v. United States, 879 F.2d 841 (Fed. Cir. 1989) (contractor must perform contract as specified; government need not accept post-award major design changes)
- Interwest Constr. v. Brown, 29 F.3d 611 (Fed. Cir. 1994) (government may require performance above or below trade norms by specification)
- Preuss v. United States, 412 F.2d 1293 (Ct. Cl. 1969) (failure to proceed during a dispute can support default termination)
- Farwell Co. v. United States, 148 F. Supp. 947 (Ct. Cl. 1957) (contractor may not substitute its own materials/approach when specs require different items)