OPINION
Plаintiff filed this suit on August 28, 2002 alleging that defendant United States wrongfully terminated plaintiffs contract for work in Pittsburgh, Pennsylvania. Complaint (Compl.) UH 5, 7, ll.
I. Background
The United States Army Corps of Engineers (the Corps) soliсited bids on December 1, 1998 for construction and other work in Pittsburgh, Pennsylvania. Affidavit of Paul Chambers in Opposition to Motion for Summary Judgment (Chambers Aff.) 113; Compl. 112.
The contract referenced regulations related to bonding required of the contract awar-dee.
The original completion date was extended several times by contract modifications signed by plaintiff and the Corps. Defendant’s Reply to Plaintiffs Response to Defendant’s Motion for Summary Judgment, with Appendix (Def.’s Reply), Reply Declaration of Michael S. DeStefano (DeStefano Reply Decl.) 116. Modification P00004/Change “AE” extended the contract completion date until August 15, 2001. Id. Amwest became insolvent on June 7, 2001 and nоtified the Corps that its bonding of plaintiff for the contract was cancelled. DeStefano Decl. 115, Ex. E. The work on the contract was not complete. See Chambers Aff. 1110 (“The work was approximately 50% complete ... on August 17, 2001.”). The Corps notified plaintiff that plaintiff no longer had valid bonds for the contract and directed plaintiff to deliver “acceptable performance and payment bonds” to the Corps within ten days or a stop work оrder would issue. DeStefano Decl. Ex. F.
Plaintiffs counsel responded on July 20, 2001 by letter to the Corps stating that plaintiffs reinsurance agreement “clearly contemplates and covers both the performance bond and the payment bond.” DeStefano Deel. Ex. G. The Corps replied with a cure notice on July 31, 2001 stating that, among other conditions, “we have not received an acceptable Payment Bond in accordance with contract clause FAR 52.228-15.” DeStefano Decl. Ex. H. The cure notice stated that if the conditions were not cured “within 10 days after receipt of this notice, the Government may terminate for default under the terms and conditions of contract clause FAR
The government has had to defend against claims from subcontractors of plaintiff who seek payment for what they allege is unpaid work performed under the contract. Def.’s Reply at 2 n. 2. The contract work was finished by Swiss Re, but there has been no showing that the government filed claims against the reinsurance of the performance bond for any excess costs created by the need to complete plaintiffs work. Response to Defendant’s Motion for Summary Judgment (PL’s Resp.) at 2.
II. Discussion
A. Standard of Review
“Summary judgment shall be rendered if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.” Coast Fed. Bank, FSB v. United States,
“Where a movant has supported its motion with affidavits or other evidence which, unopposed, would establish its right to judgment, the non-movant may not rest upon general denials in its pleadings or otherwise, but must proffer countering evidence sufficient to create a genuine factual dispute.” Sweats Fashions, Inc. v. Pannill Knitting Co.,
B. Analysis
As many decisions of boards of contract appeals have held, failure to furnish adequate bonding required by a government procurement contract is a material breach that justifies termination for default. See, e.g., Dieleman Constr. Co., ENG BCA No. 6213, 96-2 B.C.A. (CCH) ¶ 28,430,
Plaintiff acknowledges that after Am-west became insolvent plaintiff “could not provide a replacement payment bond for the Amwest bond.” PL’s Resp. at 6. Plaintiff argues, however, that “it had reinsurance,” id., and that “[t]he Government should be estopped from making any claim that the Reinsurance Agreement by Swiss Reinsurance America Corporation did not provide appropriate payment bond guarantees,” id. at 5.
Plaintiffs reinsurance argument proceeds in four steps. The first step of plaintiffs argument is that both the Amwest performance bond and the Amwest payment bond are marked with a single bond number, “1382830,” and that thus there was only one bond, “a performance-payment bond.” Chambers Aff. 117. The second step in plaintiffs argument is that “[h]ad Amwest not been required to use the Government’s forms, bond number 13828[3]0 would have been printed on a single form called a ‘Performance and Payment Bond,’ and there would have been no debate that the reinsurance agreement covered both aspects of the bond.” Pl.’s Resp. at 5. The third step in plaintiffs argument is that “[i]f the Government wanted to take the position that it needed a separate Reinsurance Agreement for the payment bond, the time to make that argument would have been at the time the Reinsurance agreement was issued and ... accepted by the [government].” Id. The fourth and final step in plaintiffs argument is that the Government is now estopped from arguing that insufficient payment bonding was provided because this would be “totally untimely,” “certainly unfair” and “taking unfair advantage of an undisclosed technicality, particularly when no bond claim has been demonstrated.” Id. at 5-6. Plaintiff cites no legal authority for its reinsurance argument. The court will discuss each step in plaintiffs argument in turn.
The Miller Act, 40 U.S.C.A. §§ 3131-3134 (West Supp.2003), applies to the contract and requires that contractors furnish to the United States two bonds: a payment bond and a performance bond, see 8 John Cosgrove McBride & Thomas J. Touhey, Government Contracts § 49A.20[l][a] (2003). “It should be carefully noted that a payment bond and a performance bond under the Miller Act are distinct and separate undertakings by the surety.” Id. § 49A.60[2], “Th[e] performance bond must designate the United States as the obligee and it is for the exclusive protection of the government.” Id. § 49A.70[1]. “The payment bond furnished under the Act is for the protection of laborers and materialmen, and not the United States.” Id. § 49A.60[4]. The FAR section cited in the contract, FAR § 52.228-15, required a performance bond in the penal amount of $4,646,931.00 and a payment bond in the penal amount of $1,858,772.40. See FAR § 52.228-15(b)(l) (requiring the penal amount of a performance bond to be “100 percent of the original contract price”); id. § 52.228-15(b)(2)(B) (requiring the penal
The second step in plaintiffs argument posits a hypothetical scenario that is not in accord with the undisputed facts of this case. In fact, plaintiff did submit a reinsurance agreement to the government which was accepted. DeStefano Decl. II5. This agreement provided reinsurance for the рerformance bond, not the payment bond. Id. Ex. D (stating under “Instructions” that “[t]his form is to be used in cases where it is desired to cover the excess of a Direct Writing Company’s underwriting limitation by reinsurance instead of coinsurance on Miller Act performance bonds running to the United States”). A different form is used for reinsurance agreements for Miller Act payment bonds, and plaintiff did not furnish a reinsurance agreement for its payment bond to the Corps. See id. 115 (stating that plaintiff submittеd GSA Standard Form 273 but not GSA Standard Form 274 “Reinsurance Agreement for a Miller Act Payment Bond”). There is no evidence that the reinsurance agreement titled “Reinsurance Agreement for a Miller Act Performance Bond” applied to the payment bond, because the terms of the agreement repeatedly mention obligations related to a performance bond, not a payment bond. See id. Ex. D.
The third step in plaintiffs argument concerns an alleged duty that the government had in March or April 1999 to inform plaintiff that its reinsurance agreement would not guarantee its payment bond obligation. Neither party alleges, however, that a reinsur-' anee agreement for the payment bond was required at that time. Compare Plaintiffs Proposed Findings of Uncontroverted Fact (PL’s Facts) 116 (“[NJeither the Defendant nor the Army Corps of Engineers ever sought an additional reinsurance form for a separate bond callеd a ‘Payment Bond.’”) with DeStefano Reply Decl. H 3 (“P.E.C. had satisfied its payment bond obligation regardless of whether Amwest obtained reinsurance and, as a result, there was no reason for the Corps to demand additional reinsurance when the award was made or any time prior to Amwest’s insolvency.”).
Reinsurance may be required when a Miller Act payment bond is issued by a surety and the penal sum of the bond is greater than that surety’s underwriting limit. See FAR § 28.202(a)(l)-(2) at 48 C.F.R. § 28.202(a)(l)-(2) (1998) (stating, in a sectiоn titled “Acceptability of corporate sureties,” that only sureties listed on Department of the Treasury Circular 570 are acceptable and that “[i]f the penal amount exceeds the underwriting limit, the bond will be acceptable only if (i) the amount which exceeds the specified limit is coinsured or reinsured and (ii) the amount of coinsurance or reinsurance does not exceed the underwriting limit of each coinsurer or reinsurer”). Amwest’s undеrwriting limit per bond listed on the Department of the Treasury Circular 570 at the time of the issuance of the payment bond in this contract was $2,510,000. Fiscal Serv., Dep’t of Treasury, Dep’t Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies, 63 Fed. Reg. 36,079, 36,080, 36,084 (July 1, 1998). Because plaintiff furnished the Amwest payment bond for $1,858,772.40, see DeStefano Decl. Ex. C, and because Amwest’s underwriting limit exceeded thаt amount, there was no requirement for reinsurance for the payment bond at the time of contracting, see FAR § 28.202(a)(2). Because plaintiff was not required to provide reinsurance for its payment bond on the contract at the time of contracting, the Corps cannot be held to a duty as of March or April 1999 to notify plaintiff of unforeseeable future difficulties that might ensue from plaintiffs lack of reinsurance for the Amwest payment bond.
The fourth and final step in plaintiffs argument is that the Government insisted on “an undisclosed technicality” to terminate its
Next, plaintiff advances the defense that if there was a problem with its payment bond, plaintiffs failure to maintain adequate payment bonding was excused by governmеnt delay.
As a threshold matter, the court notes that plaintiff has abandoned any monetary claims based on the government’s contract performance. See supra note 1. Indeed, jurisdiction in this court will not normally he for such a claim unless the claim was previously presented to the contract officer. See Mark Smith Constr. Co. v. United States,
Plaintiff has not met this burden. Plaintiff has pointed to no sрecific contract term that has been breached by the government. Plaintiff has not presented any theory of a breach of an implied obligation on the part of the government, or shown how such an obligation may or may not have been limited by explicit terms of the contract. See Cedar Lumber, Inc. v. United States,
III. Conclusion
For the foregoing reasons, the court finds that defendant’s termination for default of the contract was justified due to plaintiffs default in providing an adequate payment bond. Defendant’s Motion for Summary Judgment is GRANTED.
IT IS SO ORDERED.
Notes
. Plaintiff voluntarily dismissed claims relating to “damages as a result of unforeseen site conditions, unavailability of owner-specified materials, compliance with the overall design intent, discrepancies in the design, the Contracting Officer’s direction of unpaid changes, and owner delays regarding Plaintiff’s mobilization." Compl. H 9; see also Order of Feb. 13, 2003 at 2 (granting plaintiff’s oral motion to dismiss all claims based on paragraph nine of the complaint). The only remaining claim is for wrong
. Facts cited to the filings of only one party without an explanatory footnote appear to be undisputed.
. Plaintiff asserts that the original completion date would have been "365 days from the beginning of the contract ... March 24, 2000." Chambers Aff. 1110. The actual date of the notice to proceed is not before the court.
. The specific bonding requirements are discussed below in Part II.B.
. Plaintiff urges the court to view these two bonds as a single bond. This issue is discussed below in Part II.B.
. Plaintiff’s government delay defense contains diverse assertions of fact concerning the government’s contract performance that allegedly caused delays and increased costs to plaintiff. See Chambers Aff. 1110 ("This [various problems allegedly caused by the government] took considerable extra time and money."). For simplicity, these assertions are summarized as plaintiff's government delay defense in this opinion.