Total Eng’g, Inc. v. United States, 2015 U.S. Claims LEXIS 30 (Fed. Cl. Jan. 26, 2015)
The United States Army Corps of Engineers (the “Government”) awarded a contract to Total Engineering, Inc. (“Total”) for preliminary site construction work for the United States Army Medical Research Institute of Chemical Defense Replacement Facility. When failures occurred in a steam line system that Total had installed, the contracting officer issued a cure notice and ultimately terminated Total for default.
Total’s contract required it to construct a steam line system, consisting of steam and condensate lines anchored to parallel concrete piers inside a concrete trench. During a hydrostatic pressure test, the Government noted cracks in the piers, pipe detachment from several concrete piers, and damage to an anchor support. The parties disputed the cause of the failures. Total contended that the Government’s faulty design caused the failures, and the Government alleged that deficiencies in Total’s work were to blame.
The contracting officer issued a final decision which rejected Total’s defense of defective design and demanded that Total pay a deductive credit of $2.3 million, representing the amount required to render the steam line operable. Total appealed the contracting officer’s final decision to the Court of Federal Claims, and the Government filed a motion to dismiss for lack of subject matter jurisdiction.
In its motion to dismiss, the Government argued that the Court of Federal Claims lacked jurisdiction over Total’s appeal because Total’s defense of defective design was effectively a claim asserting that the Government’s specifications impacted Total’s work. Couching Total’s allegation of defective design as a claim seeking adjustment or interpretation of contract terms, the Government further argued that the “claim” must have first been submitted to the contracting officer under the Contract Disputes Act before the Court of Federal Claims could obtain jurisdiction under the Tucker Act.
The Court rejected the Government’s argument because Total’s defense of defective design was in fact a defense and nothing more. Total did not seek relief for damages it incurred as a result of the allegedly defective design, but instead merely argued that the steam line failures were caused by deficiencies in the Government’s design rather than deficiencies in Total’s workmanship. The Court thus distinguished cases cited by the Government in which contractors alleged that an agency’s delay entitled the contractor to a time extension or that an agency’s defective specifications entitled the contractor to additional costs incurred performing the work. Because Total merely asserted that defective specifications, rather than defective work, caused the damages at issue in the Government’s claim, Total simply presented a factual defense to a claim, not an independent claim for its own benefit. The Court therefore had jurisdiction over the case as an appeal from a contracting officer’s final decision.