70 A.3d 1164
D.C.2013Background
- TRG Construction was contracted by D.C. Water to renovate bathrooms at the Central Operations Facility, with a completion deadline of June 13, 2004, later extended to July 31, 2005.
- TRG requested another extension; D.C. Water demanded a Time Impact Analysis, which TRG delivered late, leading to denial of the extension.
- D.C. Water issued a Cure Notice alleging numerous deficiencies; TRG refused to fix, asserting work was not substandard and the warranty period had expired.
- D.C. Water terminated TRG’s contract for convenience under 21 DCMR § 5350.1.1, triggering claims for termination-for-convenience damages and related losses by TRG.
- TRG asserted various damages: last-invoice payments, bond premium costs, materials left with D.C. Water, and anticipatory profits; D.C. Water sought to deduct its own claims against TRG.
- The Superior Court granted summary judgment to D.C. Water on several counts; the appellate court remanded for further analysis on termination-for-convenience damages, waiver of timeliness defenses, and delay damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of termination-for-convenience damages | TRG contends it is entitled to costs for work performed plus a fair profit, net of any valid deductions by D.C. Water. | D.C. Water may deduct its own claims against TRG and withhold payments if pre-termination deficiencies/curative issues exist. | Remanded for detailed evaluation of damages and potential deductions; summary judgment reversed as to Count IV. |
| Whether D.C. Water waived timeliness for TRG's delay damages | TRG argues D.C. Water waived the 30-day claims deadline by addressing the merits of the claim without raising untimeliness. | D.C. Water contends the time limitation is a strict bar unless timely raised. | Waiver possible; remanded to determine if D.C. Water's conduct constitutes waiver of § 5346.3 and allows delay-damages recovery. |
| Recovery for bond retention damages | TRG seeks damages for losses due to bond retention and decreased bonding capacity. | Damages are speculative and not sufficiently evidenced, with only one unpursued job outside the bond period. | Affirmed summary judgment for D.C. Water on Counts I and V; remanded for other issues. |
Key Cases Cited
- Lisbon Contractors, Inc. v. United States, 828 F.2d 759 (Fed.Cir.1987) (government cannot always recover reprocurement costs; constraints on unallowable reductions)
- Best Foam Fabricators, Inc. v. United States, 38 Fed. Cl. 627 (Fed.Cl. 1997) (termination-for-convenience permits recovery of termination-inventory costs absent gross contractor fault)
- United Partition Sys., Inc. v. United States, 90 Fed.Cl. 74 (Fed.Cl. 2009) (reprocurement costs and government deductions considerations in termination for convenience)
- Linan-Faye Const. Co., Inc. v. Housing Auth. of City of Camden, 49 F.3d 915 (3d Cir.1995) (claims and damages framework in termination scenarios; caution against unreasonable recoveries)
- Copco Steel & Eng’g Co. v. United States, 341 F.2d 590 (Ct.Cl.1965) (considerations on government deductions related to defective work)
- Hoel-Steffen Const. Co. v. United States, 456 F.2d 760 (Ct.Cl.1972) (notice and adjustment principles in contract claims and waiver implications)