Lake Charles Xxv, LLC v. United States
118 Fed. Cl. 717
Fed. Cl.2014Background
- GSA awarded contract GS-07B-16093 to Carotex to design, build, and lease a SSA office in Lake Charles, LA.
- Lake Charles LLC substituted as lessee via SLA No. 1 and notice to proceed issued before completion of construction drawings.
- DIDs were issued but not incorporated into the contract through an SLA; SLA No. 2 (Nov. 8, 2007) set a new completion schedule to Feb. 28, 2008.
- GSA issued cure notices following delays; construction progress remained minimal; satellite schedule and site inspections were pursued.
- GSA terminated for default on June 5, 2008; Lake Charles claimed delay, permitting, and weather issues; government pursued reprocurement costs and liquidated damages.
- CO denied Lake Charles’ certified claim in 2011; suit filed in 2009; court granted partial summary judgment to government and denied plaintiff’s cross-motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| No-waiver clause effect on original terms | Lake Charles argues no-waiver preserves rights to original DID and review provisions. | SLA No. 2 superseded original terms; no-waiver clause cannot preserve pre-SLA rights. | No; SLA No. 2 superseded, no-waiver clause did not preserve pre-SLA rights. |
| Whether delays were excusable | Delays were excusable under 48 C.F.R. 552.270-18 and the contract's terms. | Delays were not timely noticed and SLA No. 2 superseded prior conditions; delays not excused. | Not excused; no timely notice and SLA No. 2 superseded original duties. |
| Whether plaintiff showed bad faith | GSA acted with bad faith to terminate to relocate SSA; evidence shows intent to injure. | No clear intent to injure; actions within contract rights and ordinary contract administration. | No bad faith; government actions consistent with contract rights. |
| Whether termination for default was proper | Termination was improper because government delays and SLA issues nullified performance obligations. | Termination proper due to plaintiff’s material breach and failure to meet SLA No. 2 schedule. | Proper termination for default; no material factual dispute on the core issues. |
Key Cases Cited
- Long Island Savings Bank, FSB v. United States, 503 F.3d 1234 (Fed. Cir. 2007) (no-waiver clause not categorically unwaivable; facts matter)
- Westfeld Holdings, Inc. v. United States, 407 F.3d 1352 (Fed. Cir. 2005) (no-waiver clause enforcement varies by case)
- Public Service Co. v. United States, 91 Fed. Cl. 363 (Fed. Cl. 2010) (court noted potential waiver considerations but required strong evidence)