Zafer Taahhut Insaat Ve Ticaret A.S. v. United States
2016 U.S. App. LEXIS 15077
| Fed. Cir. | 2016Background
- Zafer, a Turkish construction contractor, entered a firm-fixed-price contract with USACE in May 2011 to deliver materials and build a facility at Bagram; contractor bore delivery risk and contract incorporated FAR Changes and Default clauses.
- USACE postponed site availability and issued a bilateral modification extending completion to Oct. 2013.
- In Nov. 2011 Pakistan closed the Karachi–Afghanistan land route after a U.S./NATO incident; the route was closed ~219 days (reopened July 2012), and many of Zafer’s shipments were held in Karachi.
- Zafer repeatedly notified USACE (Mar., July, Oct. 2012) of delays and sought direction, additional time, and compensation for increased shipping/storage costs; USACE told Zafer to deliver materials “by whatever means necessary,” suggested Zafer request a non‑compensable time extension, and requested documentary proof.
- Zafer submitted an equitable adjustment and a certified claim; contracting officer denied it, finding no constructive change and concluding Zafer had made a business decision to ship through Karachi. Zafer sued in the Court of Federal Claims; that court granted summary judgment for USACE and denied Zafer’s motion to supplement the record with news/social‑media items.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Constructive acceleration (constructive change) | Zafer says USACE’s “by whatever means necessary” and insistence on performance despite excusable delay amounted to constructive acceleration requiring equitable adjustment | USACE says contract never mandated Karachi route; it only enforced express contract obligations and did not deny a time‑extension request | Court held Zafer failed to prove an essential Fraser element—USACE did not deny a timely, sufficient extension request; summary judgment for USACE affirmed |
| Government fault theory for delay (sovereign acts exception) | Zafer argues U.S./NATO action caused closure and U.S. negotiation with Pakistan prolonged closure, making the U.S. at fault | USACE argues Pakistan (a foreign sovereign) closed the route and U.S. acts were not aimed at nullifying contract rights; sovereign‑acts defense applies | Court held no evidence U.S. acted to nullify contract rights; sovereign‑acts defense bars Zafer’s claim |
| Sufficiency of Zafer’s requests for relief (procedural sufficiency) | Zafer contends its notices and certified claim sufficed to preserve rights to time and cost relief | USACE contends Zafer never requested a specific extension or provided required documentation | Court found Zafer failed to request a specific time extension or supply required documentation; correspondence showed an ongoing dialogue, not a denial |
| Admissibility of news and social‑media articles proffered by Zafer | Zafer sought to supplement the record with news/social media to show route was contemplated and U.S. negotiating culpability | USACE argued the materials were hearsay and barred by parol evidence rule | Court of Federal Claims did not abuse discretion in excluding them as hearsay and barred by parol evidence rule; decision affirmed |
Key Cases Cited
- Fraser Constr. Co. v. United States, 384 F.3d 1354 (2004) (sets five‑element test for constructive acceleration claim)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment proper when nonmoving party lacks proof of an essential element)
- Conner Bros. Constr. Co. v. Geren, 550 F.3d 1368 (2008) (explains sovereign‑acts defense and exception for acts directed to nullifying contract rights)