Free Reply to Response to Motion - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS GASA, INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) No. 01-642 ) (Judge Sweeney) ) ) )

DEFENDANT'S REPLY TO PLAINTIFF'S OPPOSITION TO DEFENDANT'S RENEWED MOTION FOR SUMMARY JUDGMENT Our renewed motion addressed each of GASA's current claims in conjunction with our previously-filed motion for summary judgment, and established that each of GASA's claims is unavailing for discrete legal reasons. GASA's opposition is ineffective, premised almost entirely upon a mish-mash of tangential factual issues that do not specifically address our legal arguments and, therefore, do not rise to the level of genuine issues of material fact related to our motion. We are entitled to judgment upon all aspects of GASA's third-amended complaint ("complaint") as a matter of law for the reasons set forth in our renewed motion, and as summarized in this reply brief. ARGUMENT We recognize that the substance of GASA's case in chief, essentially that the Government conspired to delay issuance of Notice to Proceed ("NTP") and then to impede GASA's contract performance to prevent GASA from earning funds that were purportedly unavailable in fiscal-year 2000 ­ which resulted in GASA's inability to perform the contract according to its pre-bid plan, is rife with factual disputes that would require a trial to entirely

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resolve in the Government's favor.1 The point of our motion for summary judgment, however, is not to entirely disprove all of GASA's factual allegations, or to prove our own factual defenses, but instead to demonstrate that GASA's many factual allegations are irrelevant given clear contractual language or case law that resolves the individual elements of GASA's case in the Government's favor anyway. For that reason, GASA's opposition to our renewed motion for summary judgment, which is an exercise in selective denial, supposition, and loose conclusions, is ineffective to defeat our motion for summary judgment.2 Here, we resist the implied invitation to respond to GASA's unduly complicated narrative and, instead, stay focused upon the legal grounds by which this case can be resolved, and which are presented, largely, in sequential chronological periods. 1. The Government Is Not Liable For The Claimed Delay Prior To Issuance Of Notice To Proceed On August 14, 2000

GASA's complaint alleges that the Government breached the contract by "failing to issue the Notice to Proceed within a reasonable time." Comp. ¶ 66(a).3 It is undisputed that NTP was

For example, it would require a trial to demonstrate that GASA's own performance problems made GASA's planned performance impossible regardless of availability of funds, that GASA's damage claims, as a whole, are woefully unsupported, and that GASA's conspiracy and bad faith allegations against the Government are unfounded. GASA's additional proposed findings of uncontroverted fact are almost exclusively quotations from depositions upon matters that do not bear upon the issues raised by our renewed motion for summary judgment. Although the quotations are not inaccurate, we respond to GASA's proposed findings as a group: They are irrelevant to the issues before the Court and do not raise a genuine dispute as to material facts related to our motion. GASA's third amended complaint is cited as "Comp. ¶ #." GASA's opposition to our renewed motion for summary judgment is cited as "Opp. #." Our original motion for summary judgment is cited as "Def. Br. #." Our reply to GASA's opposition to our original motion for summary judgment is cited as "Def. Rep. #." Our proposed findings of uncontroverted fact in support of our renewed motion for summary judgment is cited as "DRPFUF #." Our proposed -23 2

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issued on August 14, 2000, and that, even under GASA's most optimistic view, GASA could not possibly receive NTP until it submitted its Propelling Unit Agreement on July 12, 2000. Opp. 16. In actuality, GASA's own construction schedule anticipated issuance of notice to proceed on July 17, 2000. DPFUF 23; PRDPFUF 23. The single legal question, therefore, is simply whether a 28 or 33-calendar day "delay" in issuance of NTP (which occurred because of Government indecision regarding whether the project would move forward given the Government's other funding priorities) creates liability for GASA's alleged "delay" costs. The answer is "no." The contract did not contain a specific date by which the Corps would issue NTP, thus GASA's NTP-delay claim is without contractual basis and, instead, relies only upon case law that indicates that NTP must not be "unreasonably" delayed. Def. Br. 5-17, Def. Rep. 6-12, DPFUF 14, 17, 23, 26-49, and DRPFUF 9-49; De Matteo Const. Co. v. United States, 220 Ct. Cl. 579, 600 F.2d 1384 (1979). GASA's opposition offers little more than creative supposition regarding the Government's "motives" combined with a real-time depiction of portions of the correspondence that was exchanged both before (which is irrelevant) and during that time period ­ without addressing the critical point of contractual liability. GASA's opposition also relies upon selected portions of depositions of Corps employees while utterly failing to cite any law, regulation, or other authority to support the "requirements" upon which GASA's opposition is based.

findings of uncontroverted fact in support of our original motion for summary judgment is cited as "DPFUF #." The appendix to our renewed motion for summary judgment is cited as "RMSJ App. #." -3-

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But GASA misses the point entirely, we acknowledge that the timing of issuance of NTP was dictated by the time it took the Government to determine whether and how the contract would be funded. The question before the Court, however, is simply whether, given the obvious (and compelling) need for the Government to provide for funding for GASA's contract, a delay of 33 days (at most) in issuing NTP while that issue was resolved is "unreasonable." We submit that such a delay cannot be unreasonable given the undisputed fact that obtaining funding for contract performance is essential for issuing NTP and there is no evidence whatsoever that the Government was not actively engaged in resolving that issue (albeit not without some internal confusion) during the "delay" period. Moreover, although GASA's opposition identifies cases where delays to NTP gave rise to Government liability, there is simply no precedent for liability for a relatively trivial period of time during which a fundamental issue (contract funding) was resolved. 2. GASA Cannot Recover For The Government's Alleged Failure To Permit Work To Commence From Notice To Proceed Until September 21, 2000

GASA alleged in its complaint that the Government breached the contract by "failing to permit GASA to begin work on the Project until September 21, 2000 almost one month after the Notice to Proceed was issued on August 14, 2000" Comp. ¶ 66(b). GASA alleges that the Corps (not GASA's own problems) did not permit GASA to begin work until September 21, 2000, and purportedly used GASA's failure to properly submit and complete its submittals as a "pretext." Comp. ¶¶ 41-46. GASA's opposition focuses primarily upon the alleged delay to issuance of NTP and does not discuss, except in a general sense, GASA's allegations regarding the August 14, 2000, to

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September 21, 2000, time period. For this reason, we will briefly reiterate the basis for our motion for summary judgment related to this portion of GASA's case. There can be no legitimate dispute that GASA failed to timely submit and complete submittals that were required by contract to be approved prior to commencement of actual dredging and that GASA, notwithstanding its suggestion to the contrary, did not even submit them in accordance with the contract. DRPPFUF 102-06. For example, it was not until September 21, 2000, that GASA completed the requisite pre-dredge survey that was necessary before any dredging work could begin. As established in our previous filings, and as admitted by plaintiff's president, GASA's failure to timely complete the pre-dredge survey was the fault of GASA, not the Corps. Def. Rep. 12-13. For this reason, regardless of GASA's disagreement with the Corps's disapproval or delayed approval of GASA's other submittals, discussed in GASA's opposition, the fact remains that GASA was not contractually entitled to begin work until September 21, 2000, and GASA's claim for compensation related to the August 14, 2000 to September 21, 2000, must fail as a matter of law. 3. GASA Cannot Recover For The Government's Alleged Hindrance Or Failure To Permit GASA To Continue Work After September 21, 2000

GASA alleged in its complaint that the Government breached the contract by "failing to permit GASA to continue working on the Project after work had commenced without hindrance or interference by the Corps." Comp. ¶ 66(c). As support, GASA alleges that "the Corps utilized hyper-technical reasons to impede progress" and "forced work stoppages pending submittals and re-submittals of certain documents and plans." Comp. ¶¶ 47-48. Other than this bald assertion,

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GASA offered no factual support for its arguments, which prompted our motion for summary judgment upon those allegations.4 Def. Br. 18-22, Def. Rep. 12-17, DRPPFUF 79-85. GASA's opposition similarly fails to address our proof that this portion of its claim is spurious. For that reason, the Government is entitled to summary judgment regarding GASA's post-September 21, 2000, delay claim. 4. GASA Cannot Recover For The Government's Alleged Failure To Permit GASA To Mitigate Delays

GASA alleged in its complaint that the Government breached the contract by failing "to permit GASA to mitigate the delays caused by the Corps." Comp. ¶ 66(d). As support, GASA alleges that it "attempted to mitigate the delays and expedite work on the Project by working in multiple locations where possible" and that "the Corps denied GASA's request to work in multiple locations." Comp. ¶¶ 49-50. We moved for summary judgment because GASA's contract simply did not allow simultaneous dredging. DRPPFUF 58-71, 78. Thus, GASA's "mitigation" was actually an impermissible deviation from the contract. Even though the Corps considered allowing simultaneous dredging if GASA demonstrated success at controlling water from its barges, GASA failed to do so. DRPPFUF 58, 77, 82. Thus, the Corps's refusal to permit simultaneous dredging is not compensable as a matter of law. GASA's opposition does not specifically address this point, and certainly does not refute our legal argument, which defeats this portion of GASA's claim.
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At paragraph nos. 51 - 53, GASA sets forth allegations concerning a proposed modification to the contract that would have allowed in-river placement of material that previously had been considered solid waste. The Corps issued a modification to the contract reflecting this proposal, that was rescinded approximately two weeks later. Comp. ¶¶ 52-53. However, GASA's complaint fails to allege or demonstrate in any way how it actually was harmed by the issuance and prompt rescission of this modification. -6-

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5.

GASA Cannot Recover For The Government's Alleged Failure To Compensate GASA For Disposal Of Solid Waste

GASA alleges that the Government breached the contract by "failing to compensate GASA for disposal of solid waste encountered during the in-river dredging operation." Comp. ¶ 66(e). We moved for summary judgment because the contract clearly and unambiguously provided that all solid waste recovered from dredging operations was to be extracted from the dredged material, set aside, and disposed of at permitted solid waste disposal facility. DPFUF 119, PA 145; DRPPFUF 109-110. Contract specification section 02040, paragraph 3.1, entitled "General Disposal Requirements" provides that: Dredged material generated by this project shall be disposed of as specified herein. The material to be dredged is primarily sand and gravel combined with silt and clay, and includes rubble, logs and timbers, tires and other ruber products, scrap metal items, railroad ties, wires, large chunks of concrete, boulders, and other nonfloatable debris and discarded solid materials. DPFUF 120, PA 311-12. Specification section 02040, paragraph 3.2, entitled "Disposal Of Solid Waste" provides that: Solid waste is rubbish, waste materials, garbage, rubble, logs and timbers, tires and other rubber products, scrap metal items, boulders, and other non-floatable debris and discarded solid materials, including man-made items such as wire, railroad ties, large chunks of concrete, appliances, or other refuse (excluding hazardous waste), larger than 24-inches in size, that are visibly present I [sic] the material dredged from the project site. Visible solid waste materials conforming to the definition herein shall be extracted from the dredged materials and set aside for disposal as solid waste. Solid waste shall be placed in containers (such as open top or roll-off dumpsters) and disposed of in a permitted solid waste disposal facility permitted to receive the particular material. All handling and disposal shall be conducted in such a way as to -7-

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prevent spillage and placement in the river. No separate payment will be made for disposal of solid wastes, and all such work shall be considered incidental to the work. DPFUF 121, PA 312 (emphasis added). GASA's has previously argued that it was entitled to receive additional payment for disposal of solid waste, relying upon a September 26, 2000, letter where GASA wrote: In our preliminary meeting September 21, 2000, you directed me to separate and alternately dispose of rubble, logs & timbers, tires and other rubber products, scrap metal items, railroad ties, wire, large chunks of concrete, boulders, and other non-floatable debris, from the dredged materials removed from the Monongahela River between sta. 906+30 to sta. 922+20. You directed that we take this material to our permitted waste facility at Waste Management Inc. The contract states that materials in this area are to be transported and disposed of as specified in paragraph "IN RIVER REPLACEMENT OF DREDGED MATERIALS" We are proceeding with your directive and separating all materials. However the Management of GASA Inc. believes that all materials dredged from the In River Placement Section of this project should be placed back in the river and designated "Unclassified" DPFUF 116, PA 144. GASA subsequently requested $29,305.70 for alleged direct expenses incurred in disposing of the solid waste. DPFUF 117, PA 147. GASA submitted a claim for this amount as part of its April 12, 2006 claim, which was denied by final decision dated July 7, 2006. DPFUF 118, See Comp. Ex. F. Regardless of GASA's belief that it was "directed" to dispose of rubble found at the project site, there can be no legitimate dispute that the contract required GASA to dispose of the solid waste in conformance with contract requirements. PA 311-12. The contract likewise informed GASA that "[n]o separate payment will be made for disposal of solid wastes, and all such work shall be considered incidental to the work." PA 312. GASA's opposition does not -8-

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specifically address this point, and certainly does not refute our legal argument, which defeats this portion of GASA's claim. 6. GASA Cannot Recover For The Government's Alleged Failure To Compensate GASA For Dredging And Placement Of In-River Fill

GASA alleges that the Government breached the contract by "failing to compensate GASA for dredging and placement of in-river fill." Comp. ¶ 66(f). GASA has previously argued, and argues again in its opposition, that specification section 01270, paragraph 1.3.2.2, entitled "Measurement," governs resolution of this dispute because it "is highly specific as to calculation of measurements for payment of removed materials." Pl. Br. 23; Opp. 25-27. According to GASA, specification section 02482, paragraph 3.2, entitled "Dredging Operations," contains "general dredging guidelines" and, therefore, section 01270 "must prevail" over section 02482. Id. GASA's argument still lacks merit. The Dredging Operations clause is no less specific in its details than the Measurement clause. The Dredging Operations clause provides that "[a]ny material deposited in places other than those specified in Section 02040 DISPOSAL OF MATERIALS, designated on the drawings or otherwise directed by the Contracting Officer, or which escapes from such places, will not be paid for." DPFUF 100. The Measurement clause provides "[t]he total amount of material removed and to be paid under the contract will be measured by the cubic yards of material dredged." RMSJ App. 88. GASA's argument would read out of the contract the specific specification section that cautions contractors they will not be paid for materials placed outside the placement area. Such an interpretation of the contract is unreasonable.

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Relying upon the testimony of GASA's vice president, Mr. Germinaro, GASA argues in its opposition that "GASA always believed that all of the in-river placed materials would be paid for. . . ." Opp. 27. Of course, GASA's unilateral "belief" does not create an ambiguity in the contract language and, in any event, GASA's purported belief is simply not true. Mr. Germinaro testified that "[a]t the time of bid, I didn't go through that whole process and think what if the material was placed outside the line, would we still get paid for it?" Germinaro Tr. 53:1-4, PA 445. Likewise, Mr. Germinaro testified that pursuant to the "contract language" any material placed outside the limits of the placement area would be subtracted from the amount reimbursed for in-river placement payment. Germinaro Tr. 51: 1-5, PA 444; Tr. 53: 10-24, PA 445. 7. GASA Cannot Recover For The Government's Alleged Improper Assessment Of Liquidated Damages

GASA's complaint alleges that the Government breached the contract by "assessing liquidated damages." Comp. ¶ 66(g). We moved for summary judgment because GASA has not submitted a legitimate delay analysis that demonstrates that the Government was the sole and proximate cause of the project delay for which GASA was assessed liquidated damages. Def. Br. 29, Def. Rep. 20, and DPFUF 105-09. In order to demonstrate a delay, a contractor must demonstrate: (1) the extent of the delay with a reasonable degree of accuracy; (2) that the delay proximately was caused solely by the government's actions; and (3) that the delay caused specific, quantifiable injury to the contractor. See Servidone Constr. Corp. v. United States, 931 F.2d at 861; see also William F. Klingensmith, Inc. v. United States, 731 F.2d 805, 809 (Fed. Cir.1984); Blinderman Constr. Co. v. United States, 695 F.2d 552,559 (Fed. Cir. 1982). The burden of establishing these factors falls squarely upon the contractor. William F. Klingensmith,

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Inc. v. United States, 731 F.2d at 809; Avedon Corp. v. United States, 15 Cl.Ct. 648, 653 (1988). Here, GASA's opposition offers nothing more than the bald conclusion that "the Corps and not GASA caused the delay," Opp. 27, which certainly does not meet GASA's burden of proof for a delay claim, or to defeat our motion for summary judgment on this point. CONCLUSION For the foregoing reasons, defendant respectfully requests that the Court grant our motion for summary judgment. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director s/Donald E. Kinner DONALD E. KINNER Assistant Director OF COUNSEL: WILLIAM A. LUBICK Assistant District Counsel Department of the Army Pittsburgh District Corps of Engineers s/Brian S. Smith BRIAN S. SMITH Trial Attorney Commercial Litigation Branch Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 616-0391 Fax: (202) 514-8624 Attorneys for Defendant

June 1, 2007

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CERTIFICATE OF FILING I certify that on June 1, 2007, the foregoing brief was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/Brian S. Smith