Free Status Report - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS CADDELL CONSTRUCTION CO., INC., ) ) Plaintiff, ) ) v. ) ) UNITED STATES OF AMERICA, ) ) Defendant. )

No. 04-461C (Judge Diane Gilbert Sypolt)

SUPPLEMENTAL JOINT PRELIMINARY STATUS REPORT Pursuant to Rule 16 and Appendix A, Rules of the United States Court of Federal Claims and this Court's September 16, 2004 Order, the parties submit the following Supplemental Joint Preliminary Status Report in response to questions set forth in paragraph III(4) of Appendix A and this Court's May 12, 2004 Chambers Procedures Order. a. Jurisdiction:

The parties currently perceive no jurisdictional defects in this case. b. The Consolidation: parties do not believe that this case should be

consolidated with any other case. c. Bifurcation:

The parties do not believe that the trial of liability and quantum should be bifurcated.

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d.

Deferral:

The parties know of no reason to defer proceedings in this case pending consideration of any other case presently before the Court. e. Remand/Suspension:

See response to item c, above. f. Joinder:

The parties do not believe any other party will be joined. g. Dispositive Motions:

The parties do not anticipate filing dispositive motions prior to the completion of discovery but may reassess the filing of dispositive motions during the discovery period. h. l. Relevant Issues: Whether the Government's structural steel design drawings

were defective and whether such defective design delayed the detailing, fabrication and erection of structural steel. a. Steel Service originally planned to fabricate steel Steel Service could

for Project from June 1996 to November 1996.

not fabricate steel for the Project until it received shop drawings approved by the VA. Steel Service originally planned to prepare

shop drawings (referred to as "detailing") from May 1996 to October 1996. Steel Service could not prepare shop drawings during the

planned period because the plans and specifications were inadequate

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to detail.

Specifically, although Steel Service and other bidders

had sufficient information to determine steel quantities from the plans to bid and contract, once detailing began Steel Service realized that there was not sufficient information or that there was conflicting information that prevented Steel Service from preparing the shop drawings without more information from the VA. Excerpts from Steel Service's RFI's and the VA's responses are attached at Tab No. 1 as examples. b. plans and Design information which was either missing from the specifications or which conflicted with other

information, could not be provided by Caddell and/or its other subcontractors. Therefore, the VA's the plans and specifications,

which had missing or conflicting design information, were defective and the VA cannot escape liability under the guise of the

contractor's duty to coordinate the work of its subcontractors. c. "M" Line North was the first area of the Project to

be fabricated by Steel Service and is an area which has been analyzed in detail by Steel Service. affected this area. Forty-three (43) RFI's

A list of "RFI's Which Affected "M" Line" is Steel Service's analysis of the "M" Line

attached at Tab No. 2.

North and the VA's responses establishes that virtually no portion of this area remained unaffected and that the nature and extent of the missing and/or conflicting information coupled with the VA's

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delay in responding to Steel Service's RFI's (see Tab No. 2) delayed detailing and fabrication of "M" Line North steel. d. Steel Service has also analyzed the history of the

VA's review process for other drawings to demonstrate the impact of such "review" on Steel Service's ability to fabricate. See Tab No. 3 (RFI review); Tab No. 4 (shop drawings review). 2. Whether the Government unreasonably delayed in responding Steel

to Steel Service's RFI's and in reviewing and approving

Service's shop drawings and whether such delays caused Steel Service to miss its fabrication windows, thereby rendering its performance more expensive. a. Based upon the enclosed lists of RFI submittal and

VA response dates which demonstrate that the VA held responses to some RFI's for more than 200 days (Tab No. 3) and that the VA timely returned only 59 shop drawings out of more than 900 shop drawings submitted (Tab No. 4), the VA unreasonably delayed the detailing and fabrication process (Tab No. 5). b. In an excessive number of cases, the VA's response For instance, when specifically asked

to an RFI was meaningless.

which dimension controlled, the one given on the architectural drawing or the one given on the structural steel drawing, the VA responded that Steel Service was to "coordinate" this dimension with Caddell and/or other subcontractors. However, where, as here,

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the design information could only be obtained from the VA or with the VA's assistance, the contractor cannot "coordinate" and the VA is liable. c. The VA's "clarification" label for its responses to

certain Steel Service's RFI's that supplied missing information not otherwise available or which corrected misleading information in the plans and specifications is a constructive change, entitling Steel Service to compensation regardless of the VA's

"clarification" label. d. The enclosed list of shop drawing submittal and

back-from-approval dates demonstrates that the VA's review of shop drawings took a minimum of 17 days and a maximum of 220 days (Tab No. 4). That unreasonable delay in approval drastically impacted See Tab No. 5 and 6 (as-

Steel Service's ability to fabricate. planned versus as-fabricated schedule). 3.

Whether the VA breached its implied warranty of the

adequacy of its plans and specifications. a. 4. See subparts h.1. and 2. above.

Whether the VA breached its implied duty not to delay,

disrupt or hinder Steel Service's performance. a. In addition to the discussion above at subparts h.1.

and 2., the VA's extra-contractual requirement that shop drawings

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be submitted by sequence was unreasonable and further delayed the detailing and fabrication of steel. b. The VA's shop drawing "review" failed, in many

cases, to answer many of Steel Service's questions, so that "holds" noted on the shop drawings when submitted remained "holds" after the VA's review and approval. c. Or, the VA's review created more confusion by the

VA's circling of dimensions for Steel Service to confirm via the VA's instructions to "coordinate" design information already shown on the drawings. 5. Whether the VA's alleged failure to issue complete and

adequate structural steel design drawings, its alleged failure to promptly provide responses to cure the defects in its drawings and its alleged failure to review and approve shop drawings within a reasonable time constitute constructive changes and/or an

unreasonable suspension of the work, entitling Steel Service to compensation. 6. Whether Steel Service is entitled to recover the

approximate amount of $3,447,100.37, together with interest and costs, as itemized at Tab No. 7. 7. The Government's response to these allegations is that

the purpose of the detailing and shop drawing submittal process is to engage in exactly the type of detailed review and clarification

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of the design drawings that occurred.

Neither Caddell nor Steel

Service could have expected to be able to prepare precise shop drawings without obtaining additional information and/or resolving omissions and discrepancies, and Steel Service has not shown that the substance of the legitimate clarifications that it obtained was particularly unusual, and certainly not that the required

clarifications, in and of themselves, rendered the design drawings "defective." Steel Service's complaint that certain Government

responses were "meaningless" or otherwise insufficient requires a case-by-case analysis which Steel Service's claim did not provide. More importantly, as Steel Service admits, its examination of the design drawings during the bid phase, which was, by definition, detailed enough for Steel Service to quantify its bid, did not reveal any "defects," therefore, absent clear evidence to the contrary, the drawings cannot be deemed to be "defective." As a practical matter, Steel Service was a subcontractor to Caddell and had the obligation to submit RFIs and requests for drawing clarifications to Caddell. Steel Service's claim failed to isolate Government "delays" in review/return of shop drawings and RFIs from those caused by Caddell, or even to segregate those RFI's that were answered directly by Caddell without any Government input whatsoever. A number of Steel Service's RFI's contained questions

that were answerable by reference to the drawings without any need

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for clarification or resolution of a conflict.

Further, Steel

Service/Caddell's practice of submitting a large number of RFIs at one time may well have contributed to any slowness Steel in the

Government's

response

time.

Nevertheless,

Services'

allegation that the Government took between 17 and 220 days to review/return shop drawings is simply untrue. The contract

provided that the VA had 30 days to review and return submittals. The Government's records indicate that virtually all of Steel Services' submittals were reviewed and returned within this time frame. Finally, Steel Services' complaints relate only to the

administrative process of detailing, submittal and review of shop drawings, and the posing and resolution of RFIs. Delays in these

administrative tasks, even if they occur and are the responsibility of the Government, do not necessarily translate into actual delays in construction project. operations, or claim a critical appears to path delay suggest to the the

Steel Service's

that

administrative delays resulted in actual field/project delay, but did not support this notion with a cause/effect or CPM analysis in its claim. drawing In actuality, the Government's response time to shop and RFIs was not out of the ordinary,

submittals

unreasonable, or in violation of any contract provision. Moreover, Steel Services' approved construction schedule showed steel would

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be delivered to the site around July 17, 1997, which in fact took place. This is contrary to Steel Service's claim that the

Government delayed a "scheduled" delivery of steel from April, 1996, to one year later." i. Settlement:

The parties will conduct settlement negotiations, and will discuss the possibility of submitting this case for alternative dispute resolution as discovery proceeds. If the parties agree to

pursue alternative dispute resolution, we will notify the Court promptly. j. Both Trial: parties anticipate proceeding toward trial should

discovery reveal that dispositive motions, ADR, or settlement are inappropriate. The parties recommend that trial should be held in

Jackson, Mississippi. k. The Electronic Case Management: parties are aware of the Court's electronic case

management procedures and will comply with them. parties will cooperate with regard to the

In addition, the of electronic

use

document management techniques where possible. l. Other Information:

There is no other information of which the Court should be made aware at this time.

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Discovery: The parties request a discovery period of eight months, commencing with the approval of this joint preliminary status report. The parties propose that expert reports be due 70 days

before the end of the discovery period, with expert depositions to take place thereafter. The parties also propose that they file a

joint status report proposing further proceedings within 30 days after the close of discovery. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director s/Bryant G. Snee BRYANT G. SNEE Assistant Director s/Brian S. Smith BRIAN S. SMITH Attorney Commercial Litigation Branch Civil Division Department of Justice Washington, D.C. 20530 Telephone: (202) 616-0391 Fax: (202) 353-7988 Attorneys for Defendant

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s/David W. Mockbee MOCKBEE HALL & DRAKE, P.A. Lamar Life Building, 10th Floor 317 East Capitol Street Jackson, Mississippi 39201 601/353-0035 Telephone 601/353-0045 Facsimile Attorney for Plaintiff September 29, 2004

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