Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 1 of 12
IN THE UNITED STATES COURT OF FEDERAL CLAIMS TETRA TECH EC, INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )
No. 06-146C (Judge Wheeler)
DEFENDANT'S PRETRIAL MEMORANDUM Defendant, the United States, pursuant to the Court's orders dated July 27, 2007, and December 10, 2007, respectfully submits this pretrial memorandum. CONTESTED ISSUES OF FACT 1. Whether the Government issued a warranty concerning the number of unexploded
ordinance ("UXO") and UXO-like items that Tetra Tech would be required to excavate. The Government expects to prove that it did not issue a warranty. 2. Whether there was a breach of any warranty concerning the number of UXOs and
UXO-like items that Tetra Tech would be required to excavate. The Government expects to prove that, if the Court were to find that the Government issued a warranty concerning the number of UXOs and UXO-like items, then there was no breach of such a warranty. 3. Whether Tetra Tech suffered any damages as a result of any breach of warranty by
the Government. The Government expects to prove that Tetra Tech's cost overruns were caused by Tetra Tech's own conduct. 4. Whether the Government possessed superior knowledge of the numbers of UXO
and UXO-like items that Tetra Tech would be required to excavate. The Government expects to prove that it did not have superior knowledge.
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 2 of 12
5.
Whether the Government misrepresented the number of UXO and UXO-like
items that Tetra Tech would be required to excavate. The Government expects to prove it did not misrepresent the number of UXO and UXO-like items that Tetra Tech would be required to excavate. 6. Whether the Government breached its duty to cooperate with Tetra Tech. The
Government expects to prove that it did not breach its duty to cooperate with Tetra Tech. 7. Whether the contracting officer required Tetra Tech to perform work beyond the
contract requirements. The Government expects to prove that it did not require Tetra Tech to perform work beyond the contract requirements. 8. Whether the Government engaged in affirmative misconduct. The Government
expects to prove that it did not engage in affirmative misconduct. 9. Whether the parties were mistaken in their beliefs concerning any material fact.
The Government expects to prove either that there was no mutual mistake. 10. Whether the contract, which was fixed-price, allocated to Tetra Tech the risk of
mistake concerning the cost of performance. The Government expects to prove that the contract allocated to Tetra Tech the risk of mistake. 11. Whether Tetra Tech was aware, at the time it entered into the contract, that it had
only limited knowledge with respect to the number of UXOs and UXO-like items that it would be required to excavate, but treated its limited knowledge as sufficient. The Government expects to prove that Tetra Tech was aware that its knowledge was limited, and that Tetra Tech treated its limited knowledge as sufficient.
-2-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 3 of 12
12.
Whether Tetra Tech applied all three applicable criteria (size, mass and
composition) to anomalies before requiring excavation. The Government expects to prove that Tetra Tech did not apply all three criteria. 13. Whether Tetra Tech continually compared its predicted excavation results with
actual excavation results. The Government expects to prove that Tetra Tech did not continually compare its predicted results with actual results. APPLICABLE CONTRACT CLAUSES 1. The contract incorporated by reference the following changes clause, set forth in
48 C.F.R. 52.243-1, Alternate II: CHANGES--FIXED-PRICE (AUG 1987) (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following: (1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications. (2) Method of shipment or packing. (3) Place of delivery. (b) If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract. (c) The Contractor must assert its right to an adjustment under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract. -3-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 4 of 12
(d) If the Contractor's proposal includes the cost of property made obsolete or excess by the change, the Contracting Officer shall have the right to prescribe the manner of the disposition of the property. (e) Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed. Alternate II (APR 1984). If the requirement is for services, other than architect-engineer or other professional services, and no supplies are to be furnished, substitute the following paragraph (a) for paragraph (a) of the basic clause: (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following: (1) Description of services to be performed. (2) Time of performance (i.e., hours of the day, days of the week, etc.). (3) Place of performance of the services. 2. From the Scope of Work: "3.4 (Task 4) Geophysical Survey & Anomaly
Reacquisition. . . . The Contractor shall identify all geophysical anomalies that may be consistent with all UXO or UXO-like items which may be expected to be found in that particular area. . . ." 3. From the Scope of Work: 3.4.2 Evaluation. During the geophysical mapping, the Contractor shall utilize a qualified geophysicist to check and evaluate the geophysical data collected. . . . The geophysicist shall make a professional determination regarding the identification of anomalies at the site. Based upon this determination, the Contractor shall provide a "dig sheet" in Excel (x, y, z) showing predicted location and character of all suspected anomalies to the CEHNC Project Manager and OE support staff. In addition, the Contractor shall continually compare predicted results with actual
-4-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 5 of 12
results so that the Contractor's geophysical methodology is constantly refined over the life of the project. 4. From the Scope of Work: "3.4.3 Anomaly Selection. All geophysical anomalies
meeting the criteria to be considered a potential UXO will be dug. . . ." 5. From the Scope of Work: 3.4.4 Data Format and Deliverables. . . . The Contractor shall analyze the geophysical data, identify anomalies that may represent buried UXO, and provide "anomaly identification-sheets" containing the following information: · unique target identification number · easting, in State Grid Plane Coordinates, US feet; · northing, in State Grid Plane Coordinates US feet; · instrumental readings (filtered & total response); · estimated target size or mass and/or approximate depth; · Identity of source (fence, tin can, automobile, suspected ordnance etc.) 6. From the Scope of Work: "3.4.5 Quality Control. . . . The most critical
component in this project is the geophysical data. The Contractor shall perform continuous tracking, checks, representations, adjustments and visualization of the field data daily for quality control and to establish efficient field procedures." 7. From the Scope of Work: "3.7 (Task 7) Perform UXO Clearance. The Contractor
shall provide the necessary personnel and equipment to safely locate, identify, and make final disposition of all UXO and suspected UXO from the site. A planned, systematic, effective approach shall be used. . . ." 8. From the Scope of Work: "3.7.1 Anomalies shall be investigated to the depths as
specified in Table 1. The Contractor shall refer to DID OE-005-05, paragraph 10.4 for further information regarding detection equipment and depths."
-5-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 6 of 12
9.
From the Scope of Work: "3.7.6 Grid Failure Criteria. Failure criteria shall be
based upon the requirements of the DID. A grid shall be failed if, while performing Contractor QC/Government Quality Assurance, the Contractor's QC/Corps' on-site Safety representative uncovers any item at or less than the depths indicated in DID OE-005-05 or Table 1 of the SOW, whichever is less. This will include inert rounds, practice rounds, scrap metal or other metallic objects of similar size, mass and composition to those UXO items expected to be found in that project area." PROPOSED CONCLUSIONS OF LAW 1. To recover for a breach of warranty, a plaintiff must prove: (1) that a valid
warranty existed; (2) the warranty was breached, and (3) damages were caused by the breach. Hercules, Inc. v. United States, 24 F.3d 188, 197 (Fed. Cir. 1994). 2. The doctrine of superior knowledge is applied to situations where: (1) a contractor
undertook to perform without vital knowledge of a fact that affects performance costs or duration; (2) the Government was aware the contractor had no knowledge of and had no reason to obtain such information; (3) any contract specification supplied misled the contractor or did not put it on notice to inquire; and (4) the Government failed to provide the relevant information. Giesler v. United States, 232 F.3d 864, 876 (Fed. Cir. 2000); Hercules Inc. v. United States, 24 F.3d 188, 196 (Fed. Cir. 1994). 3. A constructive change occurs where a contract contains the standard changes
provision and the contracting officer, without issuing a formal change order, requires the contractor to perform work beyond the contract requirements. Ets-Hopkins Corp. v. United
-6-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 7 of 12
States, 420 F.2d 716, 720 (Ct. Cl. 1970); Flink/Vulcan v. United States, 63 Fed. Cl. 292, 303 (Fed. Cl. 2004). 4. This Court does not possess jurisdiction to entertain claims based upon contracts
implied in law. Hercules, Inc. v. United States, 516 U.S. 417, 423 (1996); City of Cincinnati v. United States, 153 F.3d 1375, 1377 (Fed. Cir. 1998). 5. An implied-in-fact contract cannot exist if an express contract already covers the
same subject matter. Trauma Serv. Group v. United States, 104 F.3d 1321, 1326 (Fed. Cir. 1997); Short Bros., PLC v. United States, 65 Fed. Cl. 695, 800 (2005). 6. Equitable estoppel may not be asserted against the Government. See American
Nat'l Bank & Trust Co. of Chicago v. United States, 23 Cl.Ct. 542, 529 n.9 (1991) ("Significant doubt exists that estoppel may ever be asserted against the Government."). See also Richmond v. Office of Personnel Management, 496 U.S. 414, 423 (1990) (discussing, but not deciding, whether estoppel may ever lay against the Government). 7. If equitable estoppel may be asserted at all against the Government, the asserting
party must show affirmative misconduct upon the part of the Government in addition to the traditional elements of estoppel. Zacharin v. United States, 213 F.3d 1366, 1371 (Fed. Cir. 2000) (citing Henry v. United States, 870 F.2d 634, 637 (Fed. Cir. 1989); Hanson v. Office of Personnel Management, 833 F.2d 1568, 1569 (Fed. Cir.1987); and Tefel v. Reno, 180 F.3d 1286, 1303 (11th Cir.1999)). 8. Reformation of a written agreement upon the ground of mutual mistake is an
extraordinary remedy, and is available only upon proof of four elements: (1) the parties to the contract were mistaken in their belief regarding a fact; (2) that mistaken belief constituted a basic -7-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 8 of 12
assumption underlying the contract; (3) the mistake had a material effect on the bargain; and (4) the contract did not put the risk of the mistake on the party seeking reformation. National Australia Bank v. United States, 452 F.3d 1321, 1329 (Fed. Cir. 2006) (citing Atlas Corp. v. United States, 895 F.2d 745, 750 (Fed. Cir.1990)). 9. A claim for reformation based upon mutual mistake must be proved by clear and
convincing evidence. National Australia Bank v. United States, 452 F.3d 1321, 1329 (Fed. Cir. 2006) (citing Philipine Sugar Estates Dev. Co. v. Gov't of Philipine Islands, 247 U.S. 385, 391 (1918) and Restatement (Second) of Contracts § 155 Comment C (1981)). 10. A party bears the risk of the mistake when: (1) the risk is allocated to that party by
agreement; (2) the party is aware, at the time the contract is made, that it has only limited knowledge with respect to the facts to which the mistake relates but treats its limited knowledge as sufficient; or (3) the risk is allocated to him by the court upon the ground that it is reasonable in the circumstances to do so. Burnside-Ott Aviation Training Center, Inc. v. United States, 985 F.2d 1574, 1581 (1993); Restatement (Second) of Contracts § 154 (1981). EXHIBIT LIST On December 17, 2007, counsel met to review and discuss a list of exhibits prepared by plaintiff's counsel. In accordance with the Court's instruction to avoid duplication of exhibits, defendant states that it may use as it own exhibits any of the exhibits on plaintiff's exhibit list, (including exhibits to the depositions that appear on plaintiff's exhibit list). In addition, defendant may introduce the following exhibits: Defendant's Exhibit 1: Defendant's Exhibit 2: Deposition transcript of Timothy Deignan, dated June 13, 2007. Deposition transcript of Jack McIlraith, dated June 13, 2007. -8-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 9 of 12
Defendant's Exhibit 3:
Deposition transcript of David Lieblich, dated July 3, 2007. WITNESS LIST
The Government expects to call Lydia Tadesse. Ms. Tadesse is the contracting officer and will testify about contract formation, contract administration, Tetra Tech's request for an equitable adjustment, and her final decision. We estimate that she would testify for three hours upon direct examination. The Government expects to call Robert Selfridge. Mr. Selfridge is the chief geophysicist for the U.S. Army Engineering & Support Center, Huntsville, Alabama. Mr. Selfridge will testify about Tetra Tech's use of geophysical data and discrimination criteria, and Tetra Tech's quality control. We estimate that he would testify for three hours upon direct examination. The Government expects to call Dr. John Potter. Dr. Potter was a director of the Chief Design Center, Ordnance Explosives at the time the contract was performed, and played a supervisory role in the Corps of Engineers team that administered the contract. He will testify about aspects of contract administration, Tetra Tech's request for an equitable adjustment, and the Government's general contracting practices for UXO removal. We estimate that he would testify for two hours upon direct examination. The Government expects to call Michael Slovak. Mr. Slovak is a safety and occupational health specialist for the Corps of Engineers. He will testify about the Government's evaluation of Tetra Tech's data for the number of UXO and UXO-like items that were excavated. We estimate that he would testify for two hours upon direct examination. The Government expects to call Timothy Deignan. Mr. Deignan was Tetra Tech's Rule 30(b)(6) witness for the subjects of: (1) Tetra Tech's anticipated false alarm/false positive ratio; -9-
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 10 of 12
and (2) Tetra Tech's process for comparing predicted results for actual results. We estimate that he would testify for one hour upon direct examination. The Government expects to call Jack McIlraith. Mr. McIlraith was Tetra Tech's Rule 30(b)(6) witness for the topic of Tetra Tech's response to the clarification to the preproposal questions and answers issued by the Corps of Engineers on August 23, 2001. We estimate that he would testify for one half hour upon direct examination. The Government may call Brendan Slater. Mr. Slater is a civil engineer who became the Corps of Engineers' project manager for the contract in 2005. If called, he would testify about work he performed in connection with Modification 3, including estimates of the number of expected UXO and UXO-like items. We estimate that he would testify for two hours upon direct examination. The Government may call Jason Adams. Mr. Adams works for the Corps of Engineers as a cost engineer. If called, he would testify about the Government's estimates of how much it should have cost Tetra Tech to perform the contract. We estimate that he would testify for two hours upon direct examination. Respectfully submitted, JEFFREY S. BUCHOLTZ Acting Assistant Attorney General JEANNE E. DAVIDSON Director s/ Steven J. Gillingham STEVEN J. GILLINGHAM Assistant Director
- 10 -
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 11 of 12
s/ Roger A. Hipp ROGER A. HIPP Trial Attorney Commercial Litigation Branch Civil Division U.S. Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 307-0277 Fax: (202) 307-0972 December 18, 2007 Attorneys for Defendant
- 11 -
Case 1:06-cv-00146-TCW
Document 49
Filed 12/18/2007
Page 12 of 12
CERTIFICATE OF SERVICE I hereby certify that on this 18th day of December, 2007, a copy of the foregoing "DEFENDANT'S PRETRIAL MEMORANDUM" was filed electronically. I understand that notice of this filing will be sent to all parties of record by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.
s/ Roger A. Hipp
- 12 -