107 Fed. Cl. 571
Fed. Cl.2012Background
- K-Con contract with Coast Guard for St. Petersburg warehouse; base item awarded, options not funded; completion date July 26, 2004.
- Liquidated damages rate set at $564 per day using Coast Guard personnel cost methodology; no formal written impact analysis documented.
- Coast Guard used COMDTINST 7310.1F rates to compute administrative costs and fixed personnel costs for delay damages; no consistent policy guidance existed.
- Plaintiff alleges delays caused by Coast Guard and contract changes; seeks remission of liquidated damages and, later, a monetary increase for additional work.
- Coast Guard reduced contract price by liquidated damages and actions culminated in battlefield of approvals, extensions, and multiple contract modifications; jurisdiction under the CDA governs claims and remission requests.
- Court previously ruled on Elizabeth City and Port Huron suits; this case addresses CDA notice, penalty issue, and remission for St. Petersburg delays.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the liquidated damages rate a penalty? | K-Con argues $564/day bears no reasonable relation to probable damages. | Coast Guard contends rate is a reasonable forecast; enforceable if reasonable. | Enforceable; rate not a penalty. |
| Whether remission of 67 days is appropriate | K-Con seeks remission for kickoff delay, foundation redesign, and hurricanes. | Remission foreclosed by releases and lack of CDA-notice for some delays. | Remission denied for some delays due to lack of proper CDA notice; remaining gaps viable. |
| Did July 28, 2005 claim letter adequately notify CDA basis? | K-Con argues letter provided adequate notice of some grounds for remission. | Broussard adequately understood basis for some grounds; letter not perfect. | Letter provided adequate notice for at least some CDA grounds; valid claim for remission on those grounds. |
| Was the December 15, 2006 claim letter a valid CDA claim for an eighty-eight-day extension? | Seeks additional time based on Coast Guard delays. | Second claim arises from same facts; magistrate denied as divested by litigation. | Not viable as to the eighty-eight-day extension; new monetary claim relates to different relief and is valid. |
| Can the Hurricanes-related remission be pursued given contract releases? | Seeks additional remission for Charley, Frances, Ivan, Jeanne delays. | Releases in contract modifications bar further relief for those hurricanes. | Remission barred for Charley, Frances, Ivan, and Jeanne due to releases. |
Key Cases Cited
- Priebe & Sons, Inc. v. United States, 332 U.S. 407 (U.S. 1948) (liquidated damages judged at contract formation; reasonable forecast required)
- Bethlehem Steel Co. v. United States, 205 U.S. 105 (U.S. 1907) (liquidated damages enforceable if not a penalty; consider at time of contract)
- Jennie-O Foods, Inc. v. United States, 580 F.2d 400 (Ct. Cl. 1978) (administrative expenses may be considered in calculating liquidated damages)
- DJ Mfg. Corp. v. United States, 86 F.3d 1130 (Fed. Cir. 1996) (reasonableness of rate not questioned; COF not required to show exact method)
- Placeway Construction Corp. v. United States, 920 F.2d 903 (Fed. Cir. 1990) (contracting officer’s final decision; treatment of claims and set-off)
- Sun Eagle Corp. v. United States, 23 Cl.Ct. 465 (Cl. Ct. 1991) (government claim; contractor may assert a CDA claim for remission)
- Case, Inc. v. United States, 88 F.3d 1004 (Fed. Cir. 1996) (separate claims arising from same facts may be treated differently under CDA)
- Sharman Co. v. United States, 2 F.3d 1564 (Fed. Cir. 1993) (doj control over litigation; when new, different claims may proceed)