A recent Armed Services Board of Contract Appeals (ASBCA) decision, DTC Engineers & Constructors, LLC, ASBCA No. 57614, 12-1 BCA ¶ 34,967, illustrates the necessary predicate for recovery of both time and money for weather delays following a government caused delay.

One Sentence Takeaway

While the general rule of recovery for adverse weather in government contracting is “time but no money,” a contractor may receive both time and money if the weather delay affected the contractor as a consequence of prior compensable government caused delays.

Background

DTC Engineers & Constructors, LLC (“DTC”) contracted with the Corps of Engineers (“Corps”) for the design and construction of an Armed Forces Reserve Center. The contract was a fixed-price construction contract for approximately $12.5 million with a completion period of 510 days from the notice to proceed. The contract included the mandatory FAR and DFARS clauses, including the Suspension of Work, Default (Fixed-Price Construction), and Time Extensions for Unusually Severe Weather clauses. Under the Time Extensions for Unusually Severe Weather clause, DTC was entitled to additional time, but not money, for delays caused by the severe weather.

As the contract required DTC to both design and build the Reserve Center, the Corps required design submissions and approval before construction could begin. The Corps initially issued the notice to proceed in February of 2009 with design work. It was not until August of 2009 that the Corps authorized DTC to proceed with on-site construction, subject to six conditions, including that all submittals be submitted and approved prior to work beginning. Due to the government’s delay in approving the submittals, DTC was unable to begin site work until October of 2009.

The project was plagued by unusually severe weather, and the completion of the project was substantially delayed. DTC submitted numerous requests for equitable adjustments based both on rain delays and mud days – days where work was impossible to perform due to site conditions. The Corps granted portions of these requested equitable adjustments under the Default clause, awarding time but no money. Additionally, the parties signed three modifications covering the rain delays under the Default clause, extending the project’s completion date at no cost to the government.

In the meantime, DTC submitted a separate request for time and money based on the Corps’ delay in issuing the notice to proceed. By delaying the notice to proceed, the Corps pushed the project into unforeseen winter conditions, causing unanticipated adverse weather that both delayed the project and caused DTC to incur additional costs. DTC requested both additional time and money as compensation for the Corps’ delays. The Corps denied the claim in its entirety, stating that DTC’s sole remedy was time, not money.

The ASBCA’s Decision

On appeal, the Corps moved for partial summary judgment, arguing that DTC’s claim was based on severe weather delays, for which the proper remedy was time but not money. The ASBCA denied the Corps’ request for partial summary judgment, finding that DTC’s claim was based on seasonal differences in the weather that resulted from government caused delays in the design review and submittal process. These delays unexpectedly pushed the work into the winter months, where DTC was hampered by severe weather conditions. Accordingly, the ASBCA found that DTC could potentially recover both time and money if the unanticipated and wrongful government delays pushed DTC’s performance into periods of adverse weather.

In reaching this decision, the ASBCA found that the Corps’ delay in approving the design submittals constituted a constructive suspension of work under the Suspension of Work clause, not the Time Extensions for Unusually Severe Weather provision. And, as the Suspension of Work clause permits the recovery of both time and money, the Corps’ motion for partial summary judgment was denied. Thus, in certain situations, a contractor may recover both time and money for weather delays.

The Corps also asserted that the broad form release language in the time extension modifications was an accord and satisfaction that barred any further claims for money. The ASBCA rejected that argument on the factual grounds that the contractor had provided notice of its intent to reserve its rights to compensation prior to executing the time extension modifications and the government had acknowledged that reservation by continuing to negotiate with the contractor following the execution of the time extension modifications.

Practical Implications

  • Time and Money - Even though time, and not money, is the normal remedy for adverse weather delays, a contractor may recover both where the adverse weather delays were the consequence of government’s actual or constructive suspension of work. Simply put, a constructive suspension allows for recovery of time and money; use it.
  • Read, Don’t Assume - When submitting a claim for weather delays and before signing modifications for time extensions, consider contractual provisions (including both the FAR and DFAR) other than the Default clause and any adverse weather provision. These other provisions may allow for the recovery of both time and money. In addition, act to reserve rights for additional compensation by providing notice of an intention to reserve that type of claim notwithstanding the release language in a modification granting time for adverse weather.
  • Track both Time and Money Costs – It is not enough that the ASBCA allows recovery of both time and monetary compensation. The contractor must still show, with reasonable certainty, the damages it suffered. Detailed records showing both the time costs and monetary costs are required for recovery.
  • Be Mindful of False Claims – While contractors should not shy from about submitting and certifying valid claims for time and money for adverse weather, claims that are overly creative or lack the requisite basic risk violating the False Claims Act.

Conclusion

DTC Engineers & Contractors provides government contractors with the opportunity to recovery both time and money for weather related delays. Contractors delayed by the government who later suffer adverse weather as a result of the government’s delay are missing monetary compensation if they rely solely on excusable delay provisions.