Hard Hat Case Notes

AuthorBy Christopher M. Burke and Lauren P. McLaughlin
Published in The Construction Lawyer, Volume 40, Number 3 Summer2020. © 2020 American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
By Christopher M. Burke and Lauren P. McLaughlin
Christopher M. Burke is a partner with Varela, Lee, Metz
& Guarino, LLP in Tysons Corner, Virginia. Lauren P.
McLaughlin is a partner with Smith, Currie & Hancock
LLP in Tysons Corner, Virginia.
Federal Contractor’s Pandemic Delays Ruled Not
Unquestionably, a new body of case law will emerge from
COVID-19-related construction disputes. In what may
be a preview of pandemic jurisprudence, the Board of
Contract Appeals recently issued a decision evaluating
a contractor’s $1.2 million request for equitable adjust-
ment relating to the 2014 Ebola outbreak in Sierra Leone.
In 2013, the Department of State (DOS) awarded a
rm-xed-price contract for $10 million to Pernix Serka
Joint Venture (PSJV) to build a rainwater capture and
storage system in Freetown, Sierra Leone. The contract
permitted PSJV to obtain additional compensation for
value-added taxes, not to exceed $1.6 million. The con-
tract included an “Excusable Delays” clause that followed
the Federal Acquisition Regulations (FAR). This clause
provided for “force majeure” type scenarios that would
entitle the contractor to time extensions (but no compen-
sation) for delays such as acts of God, governmental acts,
res, oods, epidemics, quarantine restrictions, strikes,
freight embargoes, or unusually severe weather.
For any of the “force majeure” instances, the failure
of the contractor to perform work related to any of those
delays must have been without the fault or negligence of
the contractor, and the failure to perform must have also
been tied to one of three prerequisites for a time exten-
sion: (1) the delay must have been one that the contractor
could not have reasonably anticipated, (2) the delay could
not have been overcome by reasonable efforts to resched-
ule the work, and (3) the delay must not have directly and
materially affected the nal date of completion.
The State Department issued a notice to proceed on
December 17, 2013, and the contract required project
completion eleven months later, by November 17, 2014.
By August 2014, PSJV had completed approximately 65
percent of the project. At that time, however, an out-
break of the Ebola virus had spread from New Guinea
to Freetown, Sierra Leone. Concerned about the virus’s
impact on the project and safety of the personnel, PSJV
contacted the contracting ofcer seeking instructions or a
joint consensus on how to best proceed. The contracting
ofcer responded via email providing little to no guid-
ance, only saying, “I can’t at this time tell you to leave
the Post due to current conditions. I do understand that
the situation there is [going] downhill fast. ... It is up to
you to make a decision as to if your people should stay
or leave at this time ... but the decision for your people
to stay or leave for life safety reasons rests solely on your
On August 7, 2014, PSJV then sent a notice of delay
to the DOS related to the Ebola crisis. The next day, the
World Health Organization (WHO) declared the outbreak
an “international public health emergency” and airlines
suspended ights. Some contractor and subcontractor
personnel asked to leave Sierra Leone because of the
Ebola threat and the increased risk of not being able to
leave the country. Given the worsening conditions, PSJV
decided to shut down the project worksite as a tempo
rary measure. In response to the temporary shutdown,
the DOS sent a letter stating, “[s]ince you are taking this
action unilaterally based on circumstances beyond the
control of either contracting party, we perceive no basis
upon which you could properly claim an equitable adjust-
ment from the Government....”
PSJV submitted an order of magnitude cost proposal
for the additional life safety measures needed to complete
the project. The DOS rejected the proposal, citing the
potential for a time extension only and not costs. PSJV
ultimately returned to the project in March 2015. The
DOS granted a time extension for the 195 additional days
requested by PSJV resulting from the Ebola outbreak. In
2017, PSJV submitted a certied claim for $1,255,759,
seeking $608,891 in additional life safety measures to
maintain a safe work site and $646,868 in disruption and
demobilization costs.
The DOS denied the claim and PSJV appealed the
denial to the Civilian Board of Contract Appeals (Board).
The DOS moved for a quick resolution before the Board,
arguing on summary judgment that because the contract
at issue was a rm-xed-price contract, PSJV assumed
the risk of any unexpected costs not attributable to the
government. The Board began its analysis by agreeing
with the government that xed-price contracts are simply
Christopher M. Burke Lauren P. McLaughlin

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