Oman-Fischbach International (JV) v. Pirie

No. 01-1075 (276 F.3d 1380) (UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT January 18, 2002)

ELR Digest

The court affirms an Armed Services Board of Contract Appeals decision denying a construction company's application for an equitable adjustment for additional costs incurred hauling waste from its construction activities at a U.S. Navy project at the Lajes Air Base on Terceira Island in the Azores. The company and the Navy entered a fixed price contract, under which the company would construct fuel tank facilities at the base. The contract specified four sites for the disposal of waste from construction. After the company filled two of the disposal sites, it sought to dispose of its waste at the third site, but that site became inaccessible when the Portuguese Army locked an access gate. The Navy's contracting officer directed the company to dispose of the waste at the fourth site via a route around the Lajes Base. In so doing, the company incurred increased waste transport costs and, subsequently, sought an equitable adjustment of the contract. The court first holds that the company could not prove that during contract bidding the Navy implicitly or explicitly warranted the availability of access to a waste disposal route through the base. The language of the contract does not explicitly provide such a warrant. In fact, the contract places the burden of determining the availability of roads on the company, and it also disclaims any representations made by Navy officers or agents before execution of the contract. Moreover, the solicitation for bids for the contract informed potential bidders that it would be the bidders' responsibility to determine what roads would be available to haul waste. After such a calculation, the company could have submitted a correct bid that did not require adjustment. The court also holds that the Navy did not breach the implied warranty of access to the third disposal site when the Portuguese Army denied access to the site. The contract did not specify that the Navy assumed the risk of increased costs of actions by the Portuguese Army. Therefore, because the Portuguese Army is not a party to the contract, the government is not liable for its actions.

The full text of this decision is available from ELR (9 pp., ELR Order No. L-429).

Counsel for Appellant
Jeffrey M. Young
Moore & Van Allen
100 N. Taylor St., 47th Fl., Charlotte NC 28202
(704) 331-1000

Counsel for Appellee
Harold D. Lester Jr.
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]