# Mw Builders, Inc. v. United States

> United States Court of Federal Claims · October 18, 2017 · 134 Fed. Cl. 469

URL: https://www.frixlaw.com/law-library/cases/4212776

## Case

- **Full name:** MW BUILDERS, INC. F/N/A MW Builders of Texas, Inc., Plaintiff, v. the UNITED STATES, Defendant
- **Court:** United States Court of Federal Claims
- **Decided:** October 18, 2017
- **Citations:** 134 Fed. Cl. 469
- **Precedential status:** Published
- **Opinion:** Opinion by Braden
- **Judges:** Susan G. Braden
- **Cited by:** 7 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4212776

## Opinion text

In the United States Court of Federal Claims
No. 13-1023 C
Filed: October 18, 2017

**************************************** Anti-Deficiency Act, 31 U.S.C. § 1350;
* Breach of Contract;
* Contract Disputes Act,
MW BUILDERS, INC. f/n/a * 41 U.S.C. §§ 7101–7109;
MW BUILDERS OF TEXAS, INC., * Counterclaims, 28 U.S.C. § 2508;
* False Claims Act, 31 U.S.C. §§ 3729–
Plaintiff, * 3733;
* Federal Acquisition Regulation,
v. * 48 C.F.R. §§ 52.211-12 (Liquidated
* Damages), 52.242-14 (Suspension of
* Work), 52.249-10 (Contract Default);
THE UNITED STATES, * Good Faith and Fair Dealing;
* Special Plea In Fraud, 28 U.S.C. § 2514;
Defendant. * Tucker Act Jurisdiction, 28 U.S.C. § 1491;
* Unreasonable Delay;
* Waiver.
****************************************

Paul Harvey Sanderford, Sanderford and Carroll, P.C., Temple, Texas, Counsel for Plaintiff.

Alexander Orlando Canizares, United States Department of Justice, Washington, D.C., Counsel
for the Government.

POST-TRIAL MEMORANDUM OPINION AND FINAL ORDER 1

This case concerns the United States Army Corps of Engineers (“Army Corps”) attempt to
shift its contractual responsibility to make arrangements for permanent electrical utility services
that MW Builders, Inc. (“MW Builders”) needed to build an Army Reserve Center in Sloan,
Nevada. This imposed unnecessary construction delay and costs on MW Builders that the
Contracting Officer (“CO”) refused to pay. When MW Builders filed a Complaint in the United
States Court of Federal Claims, the Government alleged that the contractor’s claim was fraudulent.

As discussed herein, the court has determined that the Army Corps breached a
September 10, 2010 Contract with MW Builders and violated the duty of good faith and fair
dealing for which $418,961.90 is awarded, as compensable delay damages, together with statutory

1
On September 29, 2017, the court forwarded a sealed copy of this Post-Trial Memorandum
Opinion And Final Order to the parties to provide them the opportunity to correct any
typographical or similar errors. The parties had until October 16, 2017 to submit suggested
corrections. On October 18, 2017, the court issued a final Post-Trial Memorandum Opinion And
Final Order that incorporated all appropriate corrections.
interest. The Government’s counterclaims for fraud are dismissed, but the Government’s
affirmative defense of waiver concerning one of MW Builders’ subcontractors’ alleged pass-
through claim is granted.

To facilitate review of this Post-Trial Memorandum Opinion And Final Order, the court
has provided the following outline.

I. RELEVANT FACTUAL BACKGROUND.

A. In 2008, The United States Army Corps Of Engineers Began Designing An Army
Reserve Center To Be Built In Sloan, Nevada.
B. On June 11, 2010, The United States Army Corps Of Engineers Issued Solicitation No.
W912QR-09-R-0104 Requesting Proposals For A Firm, Fixed-Price Contract To Build
The Army Reserve Center In Sloan, Nevada.
C. On September 10, 2010, The United States Army Corps Of Engineers Awarded Contract
No. W912QR-10-C-0078 To MW Builders, Inc.
D. On December 6, 2010, MW Builders, Inc. Entered Into A Subcontract With Bergelectric
Corporation To Provide An Electrical System.
E. In 2011, MW Builders, Inc. Executed A Third Party Authorization Form And Design
Approval Agreement With NV Energy.
F. In March 2012, MW Builders, Inc. And The United States Army Corps Of Engineers
Had A Dispute Over The Execution Of A Line Extension Agreement With NV Energy.
G. On April 6, 2012, MW Builders, Inc. Notified The United States Army Corps Of
Engineers That The Construction Schedule Would Be Delayed, Because The Line
Extension Agreement With NV Energy Was Not Executed.
H. On April 19, 2012, The United States Army Corps Of Engineers Began To Negotiate A
Line Extension Agreement With NV Energy.
I. On July 12, 2012, The United States Army Corps Of Engineers Signed A Line
Extension Agreement With NV Energy.
J. On December 27, 2012, MW Builders, Inc. Submitted A Certified Claim To The
Contracting Officer For Costs Incurred As A Result Of The United States Army Corps
Of Engineers’ Failure To Timely Execute A Line Extension Agreement With NV
Energy.
K. On June 10, 2013, The Contracting Officer Issued A Final Decision Denying MW
Builders, Inc.’s Monetary Claim, But Granting A Non-Compensable Time Extension Of
146 Days For MW Builders, Inc. To Complete Construction Of The Army Reserve
Center In Sloan, Nevada.
L. On December 13, 2013, The Completed Army Reserve Center in Sloan, Nevada Was
Accepted By The United States Army Corps Of Engineers.

II. PROCEDURAL HISTORY.

2
III. DISCUSSION.

A. Subject Matter Jurisdiction.
B. Standing.
C. Plaintiff’s Claims Against The Government.
1. The September 10, 2010 Contract Required The United States Army Corps Of
Engineers To Sign The Line Extension Agreement With NV Energy.
a. Plaintiff’s Argument.
b. The Government’s Response.
c. The Court’s Resolution.
i. The September 10, 2010 Contract Contains A Latent Ambiguity Regarding
Which Party Was Responsible For Signing The Line Extension Agreement
With NV Energy.
ii. Extrinsic Evidence Of Intent Demonstrates That The United States Army Corps
Of Engineers Was Responsible For Signing The Line Extension Agreement
With NV Energy.
2. The United States Army Corps Of Engineers Violated The Duty Of Good Faith And
Fair Dealing Causing An Unreasonable Delay To The Project.
a. Plaintiff’s Argument.
b. The Government’s Response.
c. Plaintiff’s Reply.
d. The Government’s Sur-Reply.
e. The Court’s Resolution.
i. The United States Army Corps Of Engineers Violated The Duty Of Good Faith
And Fair Dealing.
ii. The United States Army Corps Of Engineers’ Conduct Caused An
Unreasonable Delay.
D. The Government’s Affirmative Defense And Counterclaims.
1. The Government’s Affirmative Defense Of Waiver.
a. The Government’s Argument.
b. Plaintiff's Response.
c. The Court’s Resolution.
2. The Government’s Counterclaims.
a. Subject Matter Jurisdiction.
b. Standing.
c. The Government’s Argument.
d. Plaintiff’s Response.
e. The Government’s Reply.
f. The Court’s Resolution.
i. Regarding The Anti-Fraud Provision Of The Contract Disputes Act.

3
ii. Regarding The Special Plea In Fraud.
iii. Regarding The False Claims Act.

IV. CALCULATION OF DELAY CAUSED BY THE UNITED STATES ARMY CORPS OF
ENGINEERS’ BREACH AND DAMAGES.

A. The Parties’ Scheduling Experts.
1. Plaintiff’s Scheduling Experts.
a. Mr. Neil W. Miltonberger.
b. Mr. Denny Lee.
2. The Government’s Scheduling Expert, Mr. Stephen Weathers.
3. The Scheduling Experts’ Critiques.
B. Plaintiff’s Damages Claim.
1. Plaintiff’s Claimed Amount.
2. The Government’s Response.
3. The Court’s Determination.
a. Regarding The Amount Of Delay.
b. Regarding The Daily Jobsite Overhead Rate.
c. Regarding The Materials And Equipment Costs.
d. Regarding Home Office Overhead.
e. Regarding Profit.
f. Regarding The Bond Fee.
g. Calculation Of Damages.

V. CONCLUSION.
* * *

I. RELEVANT FACTUAL BACKGROUND. 2

A. In 2008, The United States Army Corps Of Engineers Began Designing An
Army Reserve Center To Be Built In Sloan, Nevada.

In 2008, the United States Army Corps of Engineers (the “Army Corps”) began designing
an Army Reserve Center in Sloan, Nevada (the “Project”) for use by the Army Reserve 63rd

2
The facts discussed herein were derived from evidence adduced at the trial held on May
4–6, 9 and 10, 2016 in Austin, Texas (TR at 1–1329), together with the parties’ Joint Stipulations
Of Fact (Jt. Stip. ¶¶ 1–32). The witnesses for each party are identified in Court Attachment A. At
trial, Plaintiff’s Exhibits (PX 4–684) were admitted into evidence. TR at 6–7. The Government’s
Exhibits (DX 1–273), together with 95 Joint Exhibits (JX 1–95) also were admitted into evidence.
TR at 9–10. The Government also moved into evidence two Rule of the United States Court of
Federal Claims (“RCFC”) 30(b)(6) depositions: i.e., the April 12, 2016 Deposition of David
Cimpl, Chief Financial Officer for MMC Corporation (4/12/16 Cimpl Dep.); and the March 10,
2016 Deposition of Daniel “Sparky” Campbell, MW Builders’ Operations Manager (3/10/16
4
Regional Support Command (“63rd RSC”). TR at 16–17 (Probst); TR at 971 (Miller). During the
“Design Phase,” the Army Corps retained Mason & Hanger, an architecture and engineering firm,
to design and prepare construction specifications. Jt. Stip. ¶ 8. Mr. Jonathan Miller also served as
Mason & Hanger’s Project Manager. TR at 970–71 (Miller). Several Army Corps employees also
were involved:

• Hans Probst, the Branch Chief of the Instruction Division of the Army Reserve
Program Louisville District, served as the Project Manager, TR 15 (Probst);
• Robert Caskie, an employee from the Army Corps’ Los Angeles District Office, served
as the Geographical Administrative Contracting Officer, TR 370 (Caskie);
• Johnny Ringstaff, an employee from the Army Corps’ Louisville District Office, served
as an Administrative Contracting Officer, TR at 1118 (Ringstaff); and
• Tara O’Leary, an Army Corps Design Project Engineer, managed the Army Corps’
design contract with Mason & Hanger, TR at 1144–45 (O’Leary).

The Sloan, Nevada site selected by the Army Corps did not have any existing electric
utilities. Jt. Stip. ¶ 5. Therefore, the local electrical utility, Nevada Power Company, doing
business as NV Energy (“NV Energy”), was required to design a new utility line that would
connect the Project with existing power lines. PX 4 at 2; see also JX 2 (4/28/09 Meeting Minutes
reporting that “[u]tility coordination is critical”).

Mason & Hanger was responsible for contacting NV Energy about utility design and, on
May 6, 2009, NV Energy provided Mason & Hanger with a draft “Design Initiation Agreement,”
together with a memorandum that listed all the steps necessary for NV Energy to provide electrical
power to the Project. DX 6 at 4. NV Energy’s May 6, 2009 draft Design Initiation Agreement
provided that, “[p]rior to going to construction, [the applicant must] sign one or more of the
following agreements: Line Extension Agreement (LEA); Large Profit Service Agreement (LPS
Agreement); Contribution In Aid of Construction Agreement (CIAC Agreement); Non-
Refundable Construction Agreement (NRCA).” DX 6 at 5.

On May 14, 2009, a Mason & Hanger employee forwarded the Design Initiation
Agreement and attached memorandum to Mark Cutler, an employee of the 63rd RSC. DX 6 at 2.
On May 15, 2009, Mr. Cutler forwarded the agreement to Ms. O’Leary, the Army Corps Design
Project Engineer for the Project, and stated that the Design Initiation Agreement should “be signed
by the [Army] Corps,” because it “has a look on it that whoever signs it should really have a
warrant or be a contracting officer.” DX 6 at 1. But, Ms. O’Leary declined to authorize a
representative of the Army Corps to sign the Design Initiation Agreement. DX 6 at 1.
Consequently, neither the 63rd RSC, Mason & Hanger, nor the Army Corps signed the Design
Initiation Agreement that NV Energy required before it would commence utility work on the
Project. JX 4. Instead, Ms. O’Leary suggested that the Army Corps “place that requirement on
the construction contractor.” DX 6 at 1.

Campbell Dep.). TR at 12–13. The court also admitted two Court Exhibits (CX 1–2) into
evidence. TR at 773, 969.

5
On July 15, 2009, the 63rd RSC, the Army Corps, and Mason & Hanger decided that the
solicitation should include a requirement that the winning bidder must sign the Design Initiation
Agreement with NV Energy. DX 8 at 1; see also TR at 978 (Miller). The Army Corps and Mason
& Hanger, however, did not include any express requirement about the “Line Extension
Agreement” in the solicitation.

B. On June 11, 2010, The United States Army Corps Of Engineers Issued
Solicitation No. W912QR-09-R-0104 Requesting Proposals For A Firm, Fixed-
Price Contract To Build The Army Reserve Center In Sloan, Nevada.

On June 11, 2010, the Army Corps issued Solicitation No. W912QR-09-R-0104 for a firm,
fixed-price contract to build a new 800-person Army Reserve Center in Sloan, Nevada for use of
the 63rd RSC. Jt. Stip. ¶¶ 1, 14.

C. On September 10, 2010, The United States Army Corps Of Engineers
Awarded Contract No. W912QR-10-C-0078 To MW Builders, Inc.

On September 10, 2010, the Army Corps awarded a contract to construct the Project to
MW Builders, based on a $23,661,000.00 bid (the “Contract”). Jt. Stip. ¶ 3. Under the terms of
the Contract, the completed Army Reserve Center would consist of: a training center (the “Training
Building”); an organizational maintenance shop building; a unit storage building; and a pump
house and tank. Jt. Stip. ¶ 2. In addition, the Contract required MW Builders to follow the Contract
specifications and design prepared by Mason & Hanger. Jt. Stip. ¶ 8.

Because the Project’s location in Sloan, Nevada did not have electric utilities, the Contract
required MW Builders to provide both “temporary power” 3 and “permanent power.” 4 DX 14; TR
at 426–27 (Matson). Contract Drawing ES-002, however, addressed the “Division of
Responsibility (Power):”

NV Energy is the electric utility serving this project. The contractor is responsible
for providing all electric infrastructure, equipment, and wiring for the project unless
specifically noted as provided by NV Energy in the Division of Responsibility.
Contractor shall contact NV Energy prior to bidding to verify that NV Energy will
provide everything noted [in the contract drawing table]. Contractor is responsible
for providing a complete and working electrical system, and shall include all costs
in this bid.

* * *

3
The term “temporary power” describes the electricity required to operate construction
tools and equipment during construction, and can be supplied by generators that construction
contractors bring onsite. TR at 426 (Matson).
4
The term “permanent power” refers to electrical facilities that remain a permanent part of
the building once construction is complete. TR at 427 (Matson).

6
The contractor will be required to sign a Design Initiation Agreement with NV
Energy and pay fees as shown in the bid schedule. The contractor shall contact NV
Energy and determine the scope and costs of this work prior to submitting a
proposal. The contractor’s proposal shall include all work and all costs associated
with providing electrical power for the project. Contractor is responsible for all
guidelines and requirements within [NV Energy’s] Electric Service Requirements,
which can be found on their website listed below.

The construction contractor shall obtain written documentation of all transactions
with NV Energy and provide them to the [Army Corps.]

DX 14.

The Contract also included Line Item 0006, “Nevada Energy Service Fee,” in the amount
of $590,160.00, that “includes the fee required by [NV Energy] to bring electric service to the
site.” Jt. Stip. ¶ 9.

In addition, the Contract required MW Builders to develop and update project schedules
using a “Critical Path Method” (“CPM”), 5 of an “appropriate level of detail,” and provide monthly
schedule updates to the Army Corps. Jt. Stip. ¶ 17. During the course of the Project, the Army
Corps hired a third-party scheduling consultant, Management Solutions, LLC (“Management
Solutions”), to review MW Builders’ CPM schedule updates and either approve them or make
suggestions. TR at 512–13 (Stone).

On November 9, 2010, the Army Corps issued a Notice To Proceed. DX 20. MW
Builders’ work was to be completed in 660 days, i.e., by August 30, 2012. Jt. Stip. ¶ 7.

D. On December 6, 2010, MW Builders, Inc. Entered Into A Subcontract With
Bergelectric Corporation To Provide An Electrical System.

On December 6, 2010, MW Builders entered into a $4,579,943.00 subcontract with
Bergelectric Corporation (“Bergelectric”) to “provide a complete Electrical System in accordance
with [the Contract] plans and specifications.” JX 9 at 2, 14. Bergelectric also was required to
provide temporary power for the site, prior to the installation of permanent power. JX 9 at 14.
Attached to the December 6, 2010 subcontract was a “Partial Waiver And Release,” under which
Bergelectric waived “any and all mechanic’s liens or other liens or any other claims on any bonds
or any other claims whatsoever in connection with this Contract and with the Realty . . . reserving,
however, all lien rights for materials and labor furnished or performed after said period[.]” JX 9
at 49. During performance, Bergelectric also was required to sign periodic partial waivers and
5
The Critical Path Method is a scheduling approach wherein the “logic” of a construction
schedule describes the interdependency of each construction activity. Miltonberger Direct at 6.
The term “critical path” refers to the continuous chain of activities that establishes the minimum
overall project duration. Miltonberger Direct at 6. Thus, a delay in any critical path activity will
extend the final completion date. Miltonberger Direct at 6–7. The term “float” refers to the amount
of time an activity may be delayed before affecting the critical path of the project. Miltonberger
Direct at 7.

7
submit them to MW Builders, together with applications for payment. DX 124 (4/15/12 waiver);
see also TR 672 (Campbell).

E. In 2011, MW Builders, Inc. Executed A Third Party Authorization Form
And Design Approval Agreement With NV Energy.

On March 15, 2011, NV Energy informed MW Builders that “the [Project] Owner shall
complete a NV Energy Consultant/Third Party [Contact] Authorization Form before any activity
will be provided to deliver electric service to the [P]roject site.” DX 37 at 30. On that date, an
Army Corps representative signed a Third Party Authorization Form, indicating that MW Builders
was the “sole contact” between NV Energy and the Army Corps, but MW Builders did not have
authority to negotiate contract changes on behalf of the Army Corps. 6 PX 15. The Third Party
Authorization Form designated the Army Corps as the “Customer/Legal Owner” of the Project. 7
PX 15.

On March 29, 2011, NV Energy also was provided with a “Project Information Sheet,”
wherein MW Builders provided a description of the Project to assist NV Energy’s utility design
and listed the Army Corps as the “Customer/Legal Owner.” PX 567 at 4.

On April 15, 2011, NV Energy sent MW Builders a draft “Design Initiation Agreement.”
DX 37 at 3. This document authorized NV Energy to design a utility system to bring permanent
power to the Project. TR at 1027–28 (Creveling). The draft Design Initiation Agreement listed
the “US Army Corps of Engineers” as the “Applicant” for permanent power. DX 37 at 14. A
timeline titled, “Milestones And NPC Durations For Typical New Business Projects,” also was
included stating that, generally it took NV Energy 20 weeks before it could begin providing
permanent power, but it could take as long as 88 weeks, i.e., 616 days, depending on how long it
took to secure the necessary approvals and perform other preliminary design steps, such as site
inspection. DX 37 at 19.

On April 27, 2011, Michael Marti, then MW Builders’ Project Manager, 8 signed the Design
Initiation Agreement and returned it to NV Energy, as required by Contract Drawing ES-002. JX
19 at 10. On or about April 28, 2011, MW Builders hired Richard Rial of STF, Inc., as a consultant
to help coordinate with NV Energy. Jt. Stip. ¶ 12.

6
The unsigned version of the Third Party Authorization Form initially provided that MW
Builders would have the authority to “communicate and authorize all change requests.” JX 14 at
11. In the signed version “and authorize” was crossed out. PX 15.
7
The Project’s eventual owner and end-user was to be the 63rd RSC. But, the 63rd RSC
deferred to the Army Corps with respect to the Third Party Authorization Form, because the Army
Corps was “the construction agent/property holder until construction completion/beneficial
occupancy.” DX 37 at 30.
8
Mr. Marti managed the Project for MW Builders from December 2010 until November
2011. TR at 219–20 (Marti).

8
On July 25, 2011, Mr. Marti also executed the “Design Approval Agreement,” by which
MW Builders approved NV Energy’s preliminary design for the Project’s permanent power.
TR at 213 (Marti). The Design Approval Agreement stated that the “Applicant” for permanent
power was the “US Army Corps of Engineers.” JX 21 at 1.

After executing the Design Approval Agreement, MW Builders began the work necessary
to connect the Project site to the electric grid. TR at 213 (Marti). 9 The closest hookup to the grid
was an NV Energy-owned utility pole located outside of the Project site at the intersection of
Arville Street and Ray Way (the “Arville Hub”). PX 471. To connect to the Arville Hub, MW
Builders was required to build an underground “offsite ductbank” across privately owned land, but
Contract Drawing CD-100 showed an easement running from the Project site to the Arville Hub
across this property. PX 471; see also PX 267 (“The contract drawings identify a corridor down
the Arville alignment for the construction contractor to install underground ductbanks for both
comm[unications] and power.”). Once the ductbank work was completed, NV Energy was
required to “pull” a utility line from the Arville Hub to the Project site. PX 267. Subsequently,
however, the parties discovered that there were no easements that allowed MW Builders to
construct ductbanks and manholes along the route to the Arville Hub. PX 267. Thereafter, NV
Energy and the telephone company informed the Army Corps that they would not install their lines
without an easement in the underground ductbanks. PX 267.

On or about August 9, 2011, MW Builders informed the Army Corps that their part of the
electrical work could not continue without the required easements. PX 477 at GOV_00012196.
On September 14, 2011, MW Builders sent a letter informing the Army Corps that their failure to
secure the easements, which was their responsibility under the Contract, and was delaying MW
Builders’ work. JX 26. On September 22, 2011, Mr. Caskie, the Army Corps’ Geographical
Administrative Contracting Officer, sent an email to Mr. Probst, the Army Corps’ Project
Manager, to inform him that Army Corps made a “big goof” in not securing the easements, because
it was “prohibited from awarding a contract wherein [its] real estate interests [were] not covered”
and “the design should never have required work on lands that the Government does not have the
right to access.” PX 267. On October 29, 2011, MW Builders sent the Army Corps a Request for
Information (“RFI”) concerning the offsite ductbank easement. PX 481.

On December 5, 2011, MW Builders also sent another letter to the Army Corps,
complaining that “delays in the delivery of permanent power” could affect completion of the
Project. JX 31 at 1. MW Builders attributed these delays to the Army Corps’ failure to secure
utility easements, prior to the start of the construction. JX 31 at 1. Specifically, NV Energy
required an offsite easement to continue the underground electrical work and an “Access To
Equipment Agreement,” signed by the Project owner, to allow NV Energy employees to monitor
the equipment on site. JX 31 at 1. MW Builders warned that, unless permanent power was in
place by May 21, 2012, it could not complete the Project by August 30, 2012. JX 31 at 1.

9
In the interim, temporary power was supplied by onsite generators. TR at 687–88
(Campbell).

9
On February 9, 2012, an NV Energy representative sent an email to the Army Corps
requesting that a senior Army official sign the Access To Equipment Agreement. PX 18.

It took until February 28, 2012, for an Army Corps representative to respond to MW
Builders’ July 9, 2011 email and September 2011 follow up requesting that a senior Army official
sign the Access To Equipment Agreement. PX 18. On March 16, 2012, an Army Reserve Major
General signed a letter authorizing NV Energy to enter the Project site. JX 49.

F. In March 2012, MW Builders, Inc. And The United States Army Corps Of
Engineers Had A Dispute Over The Execution Of A Line Extension
Agreement With NV Energy.

To provide permanent power, NV Energy also required a signed “Line Extension
Agreement” (also called a “Rule 9 Agreement”). PX 4 at GOV_0010874 (“Prior to going to
construction, [the applicant must] sign one or more of the following agreements: Line Extension
Agreement (LEA)[.]”); DX 221 at 7 (providing that NV Energy “shall deliver the Rule 9
Agreement and final cost estimate to Applicant”); see also TR at 38–39 (Probst). 10 The Line
Extension Agreement governed the terms of payment. TR at 473 (Rial) (“A Line Extension
Agreement is the contract between the utility and the owner on how the money is to be collected,
the breakdown on the money, and then, also, how the moneys will be refunded[.]”). Typically, a
Line Extension Agreement had a term of five years and was executed by the utility and the owner
of the project, not the construction contractor. TR at 469–70 (Rial), 584 (Risse); see also TR at
1077–78 (Finley) (same). But, NV Energy’s Utility Electric Service Rule No. 9, governing Line
Extension Agreements between NV Energy and commercial customers, did not expressly require
that the owner of the property sign the Line Extension Agreement. DX 270; see also TR at 631
(Risse) (“I don’t think [Rule No. 9] required the ultimate end user to have to sign [the Line
Extension Agreement.”).

At trial, Katherine Creveling, NV Energy’s Senior Project Coordinator, testified that she
remembered preparing an initial draft of a Line Extension Agreement with the understanding that
MW Builders would sign the agreement, not a government agency. TR at 1001, 1004–05
(Creveling). Although Ms. Creveling was unable to locate a copy of the draft Line Extension
Agreement in this case, she remembered that an initial draft Line Extension Agreement was
rejected by MW Builders, because MW Builders was not the “applicant” for permanent power.
TR at 1005–06 (Creveling).

On March 13, 2012, Mr. Probst, the Army Corps Project Manager assigned to the Project,
hosted a conference call that included representatives of: the 63rd RSC; MW Builders; NV Energy;
and Mason & Hanger. JX 44 at 1 (3/13/12 email summary of conference call). During the
conference call, it was agreed that, by March 16, 2012, NV Energy “will have sent draft contract
for review to 63[rd] RSC (Jeffrey Reed[s])[11] and [the] contract will be executed between NV

10
The December 5, 2011 letter sent by MW Builders about permanent power delays did
not discuss the Line Extension Agreement. JX 31.
11
Mr. Jeffrey Reeds was an attorney that represented the 63rd RSC. TR at 71 (Probst).

10
Energy and 63[rd] RSC such that staging of equipment can start on or about 19 March 2012.” JX
44 at 1. At trial, NV Energy’s in-house attorney, Ms. Rebeca Risse, testified that the “draft
contract” identified in this email was the draft Line Extension Agreement to be signed by the 63rd
RSC. TR at 583 (Risse). During the March 13, 2012 telephone conference, the participants also
agreed that permanent power would be available at the Project site by April 9, 2012. JX 44 at 1.

On March 13, 2012, Mr. Rial also sent an email to Mr. Probst, wherein he explained that

NVE is in the process of preparing [the] Line Extension Contract for service to the
site. On today’s phone call some of the contact information changed. I made a
note that you wanted the contract in the name of “United States Army Reserve, 63d
Regional Support Command.” It was originally submitted to NV Energy as the
Army [Corps] of Engineers.

JX 45 at 2.

On March 14, 2012, Ms. Creveling sent an email to the 63rd RSC with a “Government
Line Extension Agreement.” JX 47 at 1. The Line Extension Agreement provided:

• the Agreement term was five years (PX 449(r) ¶ 14.1);
• the 63rd RSC would make a partially-refundable advance payment of $143,495.00
(PX 449(r) ¶ 1.3);
• the refundable portion (“the Allowance”) of the 63rd RSC’s advance payment
would be reduced via an “Allowance True-Up,” if the 63rd RSC’s demand for
electricity decreased within the 18 months after the Agreement was signed (PX
449(r) ¶ 3.5); and
• the Agreement would be governed by and construed, in accordance with the Nevada
law, and all actions beyond the scope of the Nevada Utility Commission’s
jurisdiction were to be filed, in either Nevada state court or in federal district court.
(PX 449(r) ¶ 13.4).

On that same date, “uncertainty” arose as to whether or not a representative of the 63rd RSC would
sign the Line Extension Agreement. TR at 81–82 (Probst). Mr. Probst opined via email to other
Army Corps officials that: “I anticipate [the Army Corps] will become involved in the review and
possibly signature on the contract with NV Energy depending [on] what the nature of the document
is.” JX 46 at 1–2.

11
Later in the day, Ronald L. Musgrave, an Army Corps Contracting Officer’s
Representative, 12 responded that

I really don’t know why MW cannot sign the contract as they a[re] paying the fee 13
and the cost for service until it is acceptable, but I don’t want to introduce another
issue in this process by asking [NV Energy] if that is acceptable. We did issue a
document naming MW as our proxy. Maybe Rich Rial can go through the backdoor
and get an answer.

PX 501 at GOV_00005390.

That evening, however, Mr. Musgrave reported that

MW’s agent, Rich Rial, has spoken with [NV Energy] and they stated MW cannot
sign the contract on behalf of the [Army] Corp[s] or [the Army] Reserve[s’ 63rd
RSC]. They say it is a 5 year contract and the end user needs to be a signatory. As
of now the contract being prepared by NV [Energy] is on hold until they get a
commitment as to whom will sign and the name to be shown on the contract.

JX 46 at 1.

On March 19, 2012, Mr. Probst hosted a second conference call with the Army Corps and
NV Energy. PX 60A. MW Builders, however, was not invited to participate. TR at 84–85
(Probst). During this conference, the participants “determined that each party will tentatively
consider an arrangement whereby the [Army Corps’] Construction Contractor–MW Builders may
enter the agreement with NV Energy since this supports the typical means [the Army Corps]
obtains electric serv[ice] for new projects and has provisions in the [Army Corps]-MW Builders
Construction Contract.” PX 60A. On that same date, MW Builders provided NV Energy with a
renewed “Project Information Sheet.” DX 88A. Unlike the earlier March 19, 2012 Project
Information Sheet, the March 20, 2012 version stated that the “Customer/Legal
Owner/Responsible Party on Contracts” was MW Builders, not the Army Corps. DX 88A.

On March 20, 2012, Mr. Musgrave learned that NV Energy “ha[d] issues with the
contract,” particularly with respect to the Line Extension Agreement’s five year term and
indemnification provision. PX 60B.

On March 21, 2012, MW Builders informed the Army Corps that it would not sign the Line
Extension Agreement, because it “flatly” exceeded the scope of the September 10, 2010 Contract,
unless the Contracting Officer (the “CO”) ordered it to do so. PX 528. On that same date, Mr.
Probst also hosted another telephone conference with NV Energy, but again excluded MW

12
Although Mr. Musgrave was located in Las Vegas, Nevada during the Project, his
primary responsibility was to “keep the [C]ontracting [O]fficer informed of what was going on”
and answer any of MW Builders’ requests for information. TR at 1038 (Musgrave).
13
The September 10, 2010 Contract required MW Builders to pay NV Energy a
$590,160.00 Service Fee. Jt. Stip. ¶ 9.

12
Builders. PX 60C. During that conference, the participants agreed to procure a letter from a
“competent contracting authority of US Army Corps of Engineers . . . confirm[ing] that the [Army
Corps] construction contract with . . . MW Builders requires MW Builders to provide a complete
and working electric system to serve the Army Reserve Center at Sloan Road.” PX 60C.

On March 22, 2012, Mr. Musgrave informed Mr. Probst that MW Builders still “will not
move forward without [a] directive from the [Army] Corps,” and suggested that the Army Corps
not engage in a “letter writing campaign regarding interpretation” with MW Builders, but instead
recommended that the Army Corps should “[m]ake them do it and let the chips fall where they
may.” PX 27.

On March 26, 2012, Mr. Probst hosted a third telephone conference that included MW
Builders, wherein the participants discussed obtaining a letter from the CO to NV Energy, to
explain MW Builders’ responsibilities regarding electrical power. DX 109 at 2. The issue of who
would sign the Line Extension Agreement was not resolved, but the permanent power delivery
date remained as April 9, 2012. TR at 185 (Probst); DX 109 at 2.

On March 28, 2012, Ms. Creveling, the NV Energy Senior Project Coordinator, sent an
email to the Army Corps stating that “I have not received the letter that states MW Builders can
sign the LEA [i.e., the Line Extension Agreement] contract yet.” PX 504. Johnny Ringstaff, an
Army Corps Administrative Contracting Officer, responded that “I am holding the letter since we
are not in a position to sign the agreement. Our contractor has taken exception to some of the
agreement. Once that it is resolved we will send the letter.” PX 504.

On March 29, 2012, MW Builders’ Operations Manager Greg Herriott, sent an email to
Mr. Ringstaff, reiterating that MW Builders remained opposed to signing the Line Extension
Agreement, because “[i]t appears that this Agreement is intended to be signed by the end user, as
it obligates the Applicant to a 5 year term of service . . . with the Utility and puts the Applicant at
risk of additional costs after the 18 month ‘Allowance true-up[.]’” DX 102 at 1. Mr. Herriott also
stated that the Line Extension Agreement permitted multiple signatories and suggested that MW
Builders could potentially sign the Line Extension Agreement along with either the Army Corps
or the 63rd RSC, provided that “certain language could be modified to limit MW’s responsibilities
after project completion and acceptance by the Government.” DX 102 at 1.

On April 2, 2012, Mr. Ringstaff provided Ms. Creveling with a letter, signed by the CO,
stating that MW Builders was: responsible for providing a “complete and working electric
system;” required to follow NV Energy’s guidelines; and responsible for paying the “fee required
by [NV] Energy to bring electric service to the site.” PX 502 at GOV_00005419. The April 2,
2012 CO letter, however, did not state that MW Builders was obligated to sign the Line Extension
Agreement or that MW Builders was authorized to sign it. PX 502 at GOV_00005419. On that
same date, Ms. Creveling responded that she had received the letter, but was “under the impression
from our meeting . . . that some things still need to be ironed out between MW Builders and the
Army before I can start my contract.” DX 109 at 1.

13
G. On April 6, 2012, MW Builders, Inc. Notified The United States Army Corps
Of Engineers That The Construction Schedule Would Be Delayed, Because
The Line Extension Agreement With NV Energy Was Not Executed.

On April 6, 2012, MW Builders sent a “Notice Of Potential Delay” to inform the Army
Corps of a “delay to the project schedule due to a lack of permanent power at the projected site
referenced above.” JX 58. Although MW Builders completed the “primary duct bank and installed
electrical switchgear in accordance with the Contract Documents and Nevada Energy
requirements,” there was still no permanent power at the site, because “the Line Extension
Agreement between the Government and Nevada Energy [was] not yet in place, subsequently
delaying permanent power installation and startup.” JX 58. Once the site had permanent power,
however, MW Builders still needed “additional time and compensation” to make up the time it
was unable to work, because of the delay caused by the Army Corps’ failure to sign the Line
Extension Agreement. JX 58.

H. On April 19, 2012, The United States Army Corps Of Engineers Began To
Negotiate A Line Extension Agreement With NV Energy.

On April 19, 2012, the Army Corps’ counsel, Mr. Kevin M. Finley, sent an email to Ms.
Creveling questioning the terms of the Line Extension Agreement. JX 60. Mr. Finley also shared
his concerns with NV Energy’s in-house counsel, Ms. Rebecca Risse. TR at 1066, 1073 (Finley).
On April 26, 2012, Mr. Finley also sent an email to Ms. Risse, to begin contract negotiations about
the Line Extension Agreement and summarized the issues, as follows:

The current Agreement is drafted for the end user to sign (the [Army] Reserve[‘s
63rd RSC]), however, it involves issues related to both construction, for which the
[Army] Corps is responsible, and operation, for which the [63rd RSC is]
responsible.

Our construction contract was set up for the contractor to handle this by including
a line item with MW Builders that provides an allowance in sufficient amount to
cover the ‘Nevada Energy Service Fee.’ It was done that way to try to avoid this
very situation of meeting both utility requirements and Government requirements.

The Corps did execute a third party authorization form to allow our contractor to
coordinate and exchange of information related to the design and I think that has
worked and Nevada Energy is satisfied with the design.

We also furnished a letter to Ms. Creveling dated 27 March 2012 explaining the
Contractor’s requirements under his contract with the Government. I believe
[b]ased on this [NV Energy] is willing to accept the Contractor’s signature on the
Agreement. However, the Contractor is having problem[s] with par. 14.1 (5 year
term of service and par. 3.5 (18 month allowance true up).

This has become a critical path item on our construction contract and we are looking
for a path forward.

14
The first request would be to modify the agreement in such a way that either the
contractor or the Corps can sign it[.]

JX 61 at 1–2. In the alternative, Mr. Finley requested that the Army Corps sign an agreement that
governed construction and the 63rd RSC sign an agreement that governed operations, after
construction was completed. JX 61 at 2.

At trial, Ms. Risse testified that she did not read Mr. Finley’s April 26, 2012 email, until
the following week and “didn’t really understand why [Mr. Finley] was making these various
requests,” because she thought “we were having the contractor [i.e., MW Builders] sign” the Line
Extension Agreement, based on the March 21, 2012 conference call. TR at 607–09 (Risse). In
her opinion, the email also was “strange,” because it appeared that Mr. Finley was attempting to
negotiate a contract on behalf of MW Builders, which was not his client. TR at 608–09 (Risse).
On April 30, 2012, Mr. Finley sent a follow-up email, because Ms. Risse did not respond to his
first one. JX 61 at 1.

On May 2, 2012, MW Builders again reiterated that it would not sign the Line Extension
Agreement. PX 31. On May 15, 2012, Mr. Probst arranged a telephone call between Ms. Risse
and Mr. Finley. DX 127. Thereafter, Ms. Risse and Mr. Finley began renegotiating the terms of
the Line Extension Agreement via email. JX 68 (email chain running from 5/17/12 to 6/8/12).

On May 23, 2012, MW Builders sent another letter to the Army Corps, entitled “Permanent
Power Delay,” emphasizing that the “lack of permanent power to the jobsite continues to have
significant cost and schedule impacts,” i.e., MW Builders was required to “build the entire project
with temporary power;” MW Builders was unable to start up and test equipment; and MW Builders
was unable to “install building finishes which require conditioned air in the buildings.” PX 44.
MW Builders attributed the permanent power delay to “the Government’s failure to timely acquire
the onsite and offsite easements and execute the necessary agreements with the electric utility
provider (Nevada Energy)[.]” PX 44. MW Builders also stated that it “fulfilled its contractual
obligations as relates to the power,” but NV Energy still would not “give[] a final price or begin
work until the Government execute[d] the Line Extension Agreement.” PX 44. MW Builders
advised the Army Corps that it had no alternative but to request the additional costs incurred as a
result of the delay. PX 44.

On May 25, 2012, Mr. Finley resumed email negotiations with Ms. Risse, requesting that
the Line Extension Agreement be modified, so that its terms were enforceable and consistent with
federal law. JX 68 at 4–5. Negotiations continued over the next four weeks. PX 500. On May
29, 2012, Mr. Finley told Ms. Risse: “I would just like to get there sooner than later because we
are looking at having to bring in generators so that construction can continue. That is a costly
proposition that we would like to avoid.” JX 68 at 4. Mr. Finley also explained that “I think the
main issue is indemnity (limitations of damages)” and asked Ms. Risse to provide him with a
“sample” agreement that NV Energy previously entered into with a military customer. JX 68 at 4.
On June 4, 2012, Mr. Finley sent another email to Ms. Risse, wherein he stated that “I haven’t
received any reply to my [emails] of May 25 or May 29[.]” JX 68 at 3. On June 7, 2012, Ms.
Risse responded, opposing Mr. Finley’s proposed change to the enforceability provision. JX 68
at 3.

15
On June 15, 2012, Ms. Risse sent another email to Mr. Finley, describing his proposed
changes, but complained: “NV Energy has already compromised by agreeing that the
government’s contractor can be the applicant instead of the [g]overnment.” DX 143 at 2. Ms.
Risse also questioned why Mr. Finley wanted to change the Line Extension Agreement’s choice
of law provision, “given that NV Energy’s counterparty isn’t the federal government but rather the
government’s contractor.” DX 143 at 2.

On June 18, 2012, Mr. Finley responded:

Now, I am confused. I was under the impression that NV Energy would not accept
the contractor and was even balking at accepting the Corps of Engineers versus the
Reserves (the end user). What I have been trying to draft is an agreement between
the [Army] Corps and NV Energy. We seem to be working toward different goals.

DX 143 at 1. On that same date, Ms. Risse replied that she too was confused, because her
understanding was that the Line Extension Agreement was to be between NV Energy and MW
Builders. PX 500 at GOV_00005315. So, on June 20, 2012, Ms. Risse sent an email to MW
Builders’ in-house counsel, Harold Mitts, stating that, “[i]t was NV Energy’s understanding that
MW Builders was going to sign” the Line Extension Agreement. JX 72 at 1.

On June 21, 2012, Mr. Finley and Ms. Risse arranged for a telephone conference call with
Mr. Mitts. JX 75 at 1. At trial, Ms. Risse testified that it was only after this call that she actually
understood that MW Builders was not signing the Line Extension Agreement. TR at 597–98
(Risse). Thereafter, Ms. Risse resumed negotiations with Mr. Finley. JX 75 at 1 (6/21/12 email
from Ms. Risse to Mr. Finley with proposed changes to Line Extension Agreement); see also TR
at 598–99 (Risse). Negotiations continued from June 21, 2012 until July 7, 2012, during which
“drafts were exchanged quickly,” because the parties were no longer confused as to who was
actually signing the agreement. TR at 598–600, 626 (Risse). 14 While Mr. Finley and Ms. Risse
were negotiating the Line Extension Agreement, Mr. Probst initiated discussion with other Army
Corps officials about the pragmatic impact of the delay:

Requirement is for an electric utility line extension with Nevada Energy for
permanent primary power to the project site. Project is experiencing delay and
additional cost, a condition that is frustrating [the Army Corps’] customer [the 63rd
RSC. The Army Corps’] contract requires the contractor to provide a complete and
working electrical system. The contractor has refused to sign the NV Energy Line
Extension Agreement (LEA) claiming the conditions contained therein are meant
for the owner, [i.e., the Government.] NV Energy advises that the . . . approved
LEA is required and if not signed, NV energy will not provide the line extension.
NV energy has advised contractor can act on behalf of the owner ([the Army
Corps]) and have accepted [a CO] letter to that effect. The contractor continues to
object to signing the LEA and after investigation into the [Army Corps/MW
Builders] construction contract, [the CO] is unwilling to direct the contractor to

14
Ms. Risse testified that “once we understood that it was going to be the Government who
signed it, I thought it went pretty quickly—extremely quickly.” TR at 633 (Risse).

16
sign the NV Energy LEA as the [CO] feels the terms are not enforceable and would
expose the Government to a potential Request for Equitable Adjustment (REA) and
a contract ratification if an REA was upheld.

PX 294 (emphasis added).

On July 7, 2012, Ms. Risse sent a draft Line Extension Agreement to Mr. Finley. JX 83 at
1. At trial, Ms. Risse testified that the parties “[came] to an agreement on all of the terms” by that
date. TR at 600 (Risse).

I. On July 12, 2012, The United States Army Corps Of Engineers Signed A
Line Extension Agreement With NV Energy.

On July 12, 2012, the Army Corps signed the Line Extension Agreement. Jt. Stip. ¶ 25.
On July 17, 2012, MW Builders paid NV Energy’s service fee. Jt. Stip. ¶ 26. On July 23, 2012,
NV Energy signed the Line Extension Agreement. Jt. Stip. ¶ 25.

On September 19, 2012, the Army Corps was notified that MW Builders was preparing to
submit a claim for costs 15 incurred by the Army Corps’ failure to sign the Line Extension
Agreement. DX 181 at 1.

By September 26, 2012, NV Energy was supplying permanent power to all buildings at the
Project, except the pump house. Jt. Stip. ¶ 27. On October 12, 2012, MW Builders informed its
subcontractors that the Project had permanent power and directed them to “return to the project
and complete all remaining work immediately.” JX 85.

In early October 2012, MW Builders began to install climate sensitive materials, including
Acoustic Ceiling Tiles (“ACT”) and Vinyl Composition Tiles (“VCT”), inside the Training
Building. PX 343 at 3. This work could not have been performed without permanent power,
required for the Training Building’s heating, ventilation, and air conditioning (“HVAC”) system
to function. PX 343 at 3. 16

15
During the Project, MW Builders’ Accounting Department used a cost accounting
computer system known as “COMET.” 4/12/16 Cimpl Dep. at 17–18. COMET created “job cost
summaries” and prepared monthly financial statements submitted to MW Builders’ parent
corporation, MMC Corporation (“MMC”). 4/12/16 Cimpl. Dep. at 10–16, 18, 82–83. Job cost
summaries were used to track costs and compare them to budget estimates. TR at 1167–68
(Campbell). On April 12, 2016, the Government deposed David Cimpl, the Chief Financial
Officer of MMC Corporation, about MMC’s and MW Builders’ accounting methods. 4/12/16
Cimpl Dep. at 10. On May 4, 2016, the court admitted this deposition into evidence. ECF No. 97.
16
But, the pump house did not have permanent power on October 12, 2012, requiring MW
Builders to install “a temporary generator to supply power to the Pump House pumping system”
to continue work. JX 85. NV Energy did not provide power to the pump house until January 7,
2013. DX 218 at 3.

17
J. On December 27, 2012, MW Builders, Inc. Submitted A Certified Claim To
The Contracting Officer For Costs Incurred As A Result Of The United States
Army Corps Of Engineers’ Failure To Timely Execute A Line Extension
Agreement With NV Energy.

On December 27, 2012, MW Builders submitted a certified claim to the CO requesting a
169-day time extension and $2,139,215.00 for “costs incurred” by MW Builders as a result of
delay caused by “the Government’s failure to execute the required ‘Line Extension Agreement’
with Nevada Energy . . . by the date required to allow [NV Energy] to bring power to the jobsite
as scheduled.” JX 88 at 1–2. MW Builders again stated that it was not responsible for signing the
Line Extension Agreement. JX 88 at 1. MW Builders’ claim included ten subcontractor claims
in the amount of $985,874.00, including Bergelectric’s claim for $296,300.00. JX 88 at 3. MW
Builders’ claim itemized: (1) $181,678.00 for “Material & Equipment” costs; (2) $14,716.00 for
tax reimbursement; (3) $19,639.00 for overhead; (4) $17,283.00 for general contractor’s profit; (5)
$687,999.00 for “Jobsite Overhead Costs;” 17 (6) $192,998.00 for “Home Office Overhead;” (7)
$16,381.00 for insurance reimbursement; and (8) a $22,647.00 bond fee. JX 88 at 3. In submitting
the certified claim, MW Builders’ President, Jason Evelyn, represented that

this claim is made in good faith; that the supporting data are accurate and complete
to the best of my knowledge and belief; that the amount requested accurately
reflects the contract adjustment for which the Contractor believes the Government
is liable; and that I am duly authorized to certify the claim on behalf of the
Contractor.

JX 88 at 1; see also 41 U.S.C. § 7103(b). 18

17
The jobsite overhead costs were derived by multiplying a “daily cost rate” of $4,071.00
by 169 days. JX 88 at 3 (Claims Worksheet); TR at 1178–80 (Campbell). The “daily cost rate”
was ascertained, based upon a five-page work sheet (the “General Conditions Worksheet”) that
MW Builders submitted together with the certified claim; no other underlying documentation was
submitted to support the daily cost rate for jobsite overhead. JX 88 at 6–10 (Claims Worksheet);
see also TR at 1175, 1178–80 (Campbell).
18
Section 7103(b) of the Contract Disputes Act (“CDA”) provides that:

(1) Requirement generally.–For claims of more than $100,000 made by a
contractor, the contractor shall certify that–

(A) the claim is made in good faith;

(B) the supporting data are accurate and complete to the best of the
contractor's knowledge and belief;

18
The General Conditions Worksheet was prepared by MW Builders’ Operations Manager
Mr. Daniel “Sparky” Campbell in November 2012; the December 27, 2012 claim letter was
prepared by Mr. Greg Herriott, an MW Builders employee and Operations Manager. TR at 1171–
72, 1174 (Campbell).

On January 3, 2013, MW Builders submitted a request to the Army Corps for
reimbursement of the fee MW Builders paid to NV Energy. DX 200 at 2.

On May 15, 2013, MW Builders submitted a revised certified claim (“Amended Certified
Claim”) to the CO, wherein MW Builders again stated that it was not required to sign the Line
Extension Agreement, because certain provisions about the conveyance of property rights could
only be provided by the Project site owner. JX 89 at 1–2. MW Builders added that the “[t]he
failure of the Government to timely execute the Line Extension [A]greement implicated the
Government[’]s general duty to cooperate and to do nothing that unreasonably hinders the
contractor’s performance.” JX 89 at 2. MW Builders also revised and increased the claim amount
to $2,562,049.00, but did not change any of the estimated costs. JX 89 at 2.

(C) the amount requested accurately reflects the contract adjustment for
which the contractor believes the Federal Government is liable; and

(D) the certifier is authorized to certify the claim on behalf of the
contractor.

(2) Who may execute certification.–The certification required by paragraph (1)
may be executed by an individual authorized to bind the contractor with respect to
the claim.

(3) Failure to certify or defective certification.–A contracting officer is not
obligated to render a final decision on a claim of more than $100,000 that is not
certified in accordance with paragraph (1) if, within 60 days after receipt of the
claim, the contracting officer notifies the contractor in writing of the reasons why
any attempted certification was found to be defective. A defect in the certification
of a claim does not deprive a court or an agency board of jurisdiction over the
claim. Prior to the entry of a final judgment by a court or a decision by an agency
board, the court or agency board shall require a defective certification to be
corrected.

41 U.S.C. § 7103(b).

19
K. On June 10, 2013, The Contracting Officer Issued A Final Decision Denying
MW Builders, Inc.’s Monetary Claim, But Granting A Non-Compensable
Time Extension Of 146 Days For MW Builders, Inc. To Complete
Construction Of The Army Reserve Center In Sloan, Nevada.

On June 10, 2013, the Army Corps CO issued a final decision denying MW Builders’ claim
for both the company and its subcontractors, but granted a non-compensable time extension of 146
days. DX 218 at 4. Therein, the CO also found that, although significant delay incurred as a result
of difficulties surrounding the execution of the Line Extension Agreement, it “was beyond the
control of the Contractor or the Government,” and therefore was “excusable, but not
compensable,” pursuant to the Federal Acquisition Regulation (“FAR”). DX 218 at 1–3;
52.249-10.

With respect to the apportionment of responsibility, although Contract Drawing ES-002
“places much of the responsibility of arranging for power to the site on the Contractor,” it “does
not specifically place responsibility of the Line Extension Agreement on the Contractor.” DX 218
at 4. As such, NV Energy’s delay in providing electrical power to the Project “was beyond the
Contractor’s control.” 19 DX 218 at 4. Therefore, the Army Corps was not entitled to assess
liquidated damages 20 against MW Builders for the 146 days of delay that occurred between March
14, 2012, when NV Energy first sent the Government a proposed Line Extension Agreement, and
July 12, 2012, when the Army Corps signed the agreement. DX 218 at 3. And, MW Builders was
not entitled to recover costs incurred in connection with the delay by the Army Corps, because the
entirety of the delay was attributable to NV Energy, a “third party over whom the Government had
no control.” DX 218 at 4.

L. On December 13, 2013, The Completed Army Reserve Center in Sloan,
Nevada Was Accepted By The United States Army Corps Of Engineers.

On December 13, 2013, the Army Reserve accepted the completed Project from MW
Builders. DX 225. The Project’s original completion date was August 30, 2012. Jt. Stip. ¶ 7.
During the course of the Project, however, the parties made 85 contract changes and extended the
completion date by 413 days, extending the contract completion date to October 17, 2013.
DX 241.

19
The FAR provision governing contractor default for fixed-price construction contracts
provides: “[t]he Contractor’s right to proceed shall not be terminated nor the Contractor charged
with damages under this clause, if . . . [t]he delay in completing the work arises from unforeseeable
causes beyond the control and without the fault or negligence of the Contractor.” 48 C.F.R.
§ 52.249-10(b)(1).
20
The FAR provision governing liquidated damages in construction contracts provides:
“[i]f the Contractor fails to complete the work within the time specified in the contract, the
Contractor shall pay liquidated damages to the Government[.]” 48 C.F.R. § 52.211-12.

20
II. PROCEDURAL HISTORY.

On December 27, 2013, MW Builders filed a Complaint (“Compl.”) in the United States
Court of Federal Claims: Count One alleged that the Army Corps breached its duty to cooperate;
Count Two alleged that the Army Corps caused an unreasonable delay; and Count Three alleged
that the Contracting Officer improperly classified the delay as “non-compensable.” ECF No. 1.
As a result, MW Builders alleged that it was owed “a compensable time extension of at least 169
days,” as well as $2,562,094.00 in damages. ECF No. 1.
On May 13, 2014, the Government filed an Answer. ECF No. 8.
On July 7, 2014, the parties filed a Joint Preliminary Status Report. ECF No. 9. On July
17, 2014, the court issued a Scheduling Order allowing fact discovery to proceed from July 16,
2014 until July 15, 2015. ECF No. 10. On July 24, 2014, the Government filed an Unopposed
Motion For Entry Of A Discovery Order Concerning Materials As To Which Privileges May Be
Asserted, that the court granted the same day. ECF Nos. 11–12.
On January 12, 2015, the Government filed a Motion To Compel Production Of
Documents. ECF No. 13. That motion requested the court to order MW Builders to respond to
the Government’s First Set Of Document Requests. ECF No. 13 at 1. The court convened
telephone status conferences on January 26, 2015 and March 23, 2015. During the March 23, 2015
Status Conference, the Government voluntarily withdrew the January 12, 2015 Motion To Compel.
See ECF No. 14.
On July 14, 2015, the parties filed a Joint Status Report And Joint Motion To Enlarge The
Discovery Period until October 30, 2015. ECF No. 15. That same date, the court granted the
parties’ July 14, 2015 Motion. ECF No. 16.
On September 2, 2015, the parties filed a Status Report And Second Joint Motion To
Enlarge The Discovery Period until January 13, 2016. ECF No. 17. On September 9, 2015, the
parties filed a Joint Motion For Scheduling Order, including with a proposed schedule. ECF No.
18. On September 10, 2015, the court issued an Order adopting the parties’ proposed schedule.
ECF No. 20.
On December 30, 2015, the Government filed a Status Report And Consent Request For
Status Conference Regarding Productions Of Documents And Trial Issues. ECF No. 23.
On January 6, 2016, the court convened a telephone status conference. On January 8, 2016,
the parties filed a Joint Motion For Scheduling Order. ECF No. 24. The same date, the court
entered that Order. ECF No. 25. On January 29, 2016, the Government filed a Motion In Limine
To Exclude Testimony Of Witnesses Not Properly Disclosed. 21 ECF No. 26.
On February 17, 2016, the Government filed a Motion For Leave To Amend Its Answer
To Assert Counterclaims And Affirmative Defenses, together with a proposed Amended Answer

21
The Government moved to exclude the expert testimony of: Eric Stone, of MW Builders,
Inc.; Justin Knippel, of Bergelectric Corporation; and Larry Campbell, of Desert Fire Protection,
L.P., as they were listed on MW Builders, Inc.’s Designation Of Experts as “non-retained experts.”

21
(“Gov’t Amend. Answer”). ECF No. 27. The February 17, 2016 Amended Answer asserted
counterclaims, based on: the Special Plea In Fraud, 28 U.S.C. § 2514; the anti-fraud provision of
the Contract Disputes Act, 41 U.S.C. § 7103(c)(2); and the False Claims Act, 31 U.S.C. §§ 3729–
3733. ECF No. 27 at 1. The Amended Answer also asserted the affirmative defenses of accord
and satisfaction, and waiver. ECF No. 27 at 1.
On February 22, 2016, MW Builders filed a Response To Defendant’s Motion In Limine.
ECF No. 29. On February 23, 2016, the court convened a telephone status conference. That same
date, the Government filed a Status Report that detailed ongoing discussions with MW Builders to
resolve the Government’s January 29, 2016 Motion In Limine and requested that the court order
MW Builders to produce any remaining waivers or releases. ECF No. 30 at 5. The Government
also requested the court’s leave to take a deposition of one of MW Builders’ non-retained expert
witnesses, pursuant to Rule of the United States Court of Federal Claims (“RCFC”) 30(b)(6). ECF
No. 30 at 5. On February 23, 2016, MW Builders filed a Status Report Noting The Parties’
Agreement Pertaining To The Matters Subject To The Status Conference Scheduled For February
23, 2016. ECF No. 31.
On March 2, 2016, the Government filed a Status Report Regarding Plaintiff’s Expert
Disclosure. ECF No. 32. That same date, MW Builders filed a Status Report Regarding Plaintiff’s
Expert Disclosure. ECF No. 33. On March 4, 2016, the Government filed a Status Report,
indicating that the parties reached an agreement and the Government was withdrawing the January
29, 2016 Motion In Limine. ECF No. 34.
On March 7, 2016, MW Builders filed a Response To Defendant’s February 17, 2016
Motion To Amend. ECF No. 35. On March 15, 2016, the Government filed a Reply. ECF No.
36. That same date, MW Builders filed a Sur-Response To Defendant’s Motion (ECF No. 37),
and the Government filed a Response To Plaintiff’s Sur-Response (ECF No. 38). On that date, the
court issued an order granting the Government’s February 17, 2016 Motion To Amend. ECF No.
39.
On March 24, 2016, MW Builders filed: a Motion To Dismiss Defendant’s Counterclaims,
Pursuant To Rule 12(b)(6), And Alternative Answer To Defendant’s Counterclaims (ECF No. 42);
a Motion For Leave To Supplement Its Expert Report, Initial Exhibit List, And Initial Witness List
To Respond To The Government’s Late-Filed Fraud Counterclaim (ECF No. 43); and a Motion
For Authorization Of Service Of Subpoenas More Than 100 Miles From The Place Of Trial (ECF
No. 44); and a Request For A Status Conference (ECF No. 45).
On March 25, 2016, the Government filed Responses To MW Builders’ March 24, 2016
Motion For Authorization Of Service Of Subpoenas and March 24, 2016 Motion To Supplement.
ECF Nos. 46–47. The Government also included a Cross-Motion In Limine To Deny Introduction
Of Late Produced Documents At Trial. ECF No. 47. That same date, MW Builders filed a Reply.
ECF No. 48.
On March 28, 2016, MW Builders filed a Reply to the Government’s March 25, 2016
Response And Cross-Motion In Limine. ECF No. 49. On March 29, 2016, the Government filed
a Reply In Support Of The Cross-Motion In Limine. ECF No. 50.

22
On March 29, 2016, the Government filed a Motion For Extension Of Time To Serve
Responses To Plaintiff’s Interrogatories And Document Requests And For Leave To Take
Deposition. ECF No. 51. That same date, the court issued an Order granting MW Builders’ March
24, 2016 Motion For Leave To Supplement and denying the Government’s March 25, 2016 Cross-
Motion In Limine. ECF No. 52.
On March 31, 2016, the Government filed a Status Report Regarding Motion For Extension
Of Time And For Leave To Take Deposition, explaining it was withdrawing the March 29, 2016
request for an extension of time to respond to MW Builders’ interrogatories, but still was seeking
leave to take a RCFC 30(b)(6) deposition of an unnamed fact witness. ECF No. 54. On April 5,
2016, the court issued a Scheduling Order that provided additional deadlines for discovery
production. ECF No. 59. On April 8, 2016, MW Builders filed a Pre-Trial Submission that
detailed MW Builders’ proposed findings of fact, proposed conclusions of law, witness list, exhibit
list, and preliminary objections. ECF No. 62. On April 12, 2016, MW Builders filed a
Supplemental Disclosure Regarding Its Pre-Trial Filings that included an exhibit MW Builders
inadvertently omitted from the April 8, 2016 Pre-Trial Submission. ECF No. 63.
On April 14, 2016, the Government filed a Status Report And Request For Status
Conference to resolve a dispute regarding the trial schedule. ECF No. 64. On April 15, 2016,
MW Builders filed a Response to the Government’s April 14, 2016 Status Report. ECF No. 65.
On April 18, 2016, MW Builders filed the written direct testimony of Mr. Neil W.
Miltonberger (“Miltonberger Direct”) and attachments (“Miltonberger Direct Atts. 1–6.5”),
together with the written direct testimony of Mr. Denny Lee (“Lee Direct”) and a Second
Supplemental Designation of Experts. ECF No. 68. On April 19, 2016, the Government filed
Proposed Findings Of Fact And Conclusions Of Law. ECF No. 76.
On April 22, 2016, the Government filed a Motion In Limine To Preclude Privileged Trial
Testimony Of Attorney Witnesses (ECF No. 78) and a Motion In Limine To Admit Into Evidence
Plaintiff’s Binding Admissions (ECF No. 79). On that same date, MW Builders filed a Motion In
Limine (ECF No. 80) to exclude the expert testimony of Mr. Stephen Weathers and a Motion In
Limine Regarding Any Evidence That Supports The Government’s Fraud Allegations (ECF No.
81).
On April 25, 2016, the Government filed a Motion Regarding Procedural Matters At Trial,
requesting that the court enter a proposed order governing witness disclosure. ECF No. 82. The
Government also filed a Response to MW Builders’ April 22, 2016 Motion To Exclude Expert
Testimony. ECF No. 83. On that same date, MW Builders filed a Response to the Government’s
April 22, 2016 Motion To Exclude Privileged Testimony (ECF No. 84), as well as a Response to
the Government’s April 22, 2017 Motion To Admit Plaintiff’s Binding Admissions (ECF No. 85).
On April 26, 2016, the parties filed a Joint Stipulations Of Trial And Pre-Trial Procedure.
ECF No. 86. MW Builders also filed a Response to the Government’s April 25, 2016 Motion
Regarding Procedural Matters. ECF No. 87. On that same date, the Government filed a Response
to MW Builders’ April 22, 2016 Motion To Exclude Evidence Related To Fraud Claims. ECF
No. 88. On that date, the Government also filed the Written Direct Testimony of Mr. Stephen
Weathers, together with seven tabs (“Weathers Direct Tabs A–G”). ECF No. 89.

23
On April 27, 2016, the court issued an Order denying both of the Government’s April 22,
2016 Motions In Limine, and both of MW Builders’ April 22, 2016 Motions In Limine. ECF No.
90. The court also denied the Government’s April 25, 2016 Motion Regarding Procedural Matters,
as moot. On the same date, the Government filed a Revised Exhibit List. ECF No. 91. On April
28, 2016, MW Builders filed a Third Supplemental Exhibit List. ECF No. 92. On the same date,
the parties filed a Joint Stipulations Of Fact. ECF No. 93.
On May 2, 2016, MW Builders filed a Fourth Amended Exhibit List. ECF No. 94. On the
same date, the Government filed a Response to MW Builders’ April 28, 2016 Third Supplemental
Exhibit List and May 2, 2016 Fourth Amended Exhibit List. ECF No. 95.
A trial took place from May 4, 2016 to May 10, 2016 in Austin, Texas. TR at 1–1329. On
May 9, 2016, and at the request of the court, the Government filed the Updated Written Direct
Testimony of Mr. Stephen Weathers (“Weathers Rev. Direct”). ECF No. 96. At the close of trial,
the court left the record open to allow both parties’ experts to file supplemental damages testimony,
if they wished to do so. TR at 1314.
On May 27, 2016, the Government filed an Unopposed Motion To Admit Into Evidence
Deposition Exhibits, i.e., the depositions of Mr. David Cimpl and Mr. Daniel Campbell. ECF No.
97.
On June 14, 2016, the court granted the Government’s May 27, 2016 Motion and issued a
Scheduling Order setting a deadline of August 1, 2016 for MW Builders to file a Post-Trial
Proposed Findings of Fact And Memorandum Of Law. ECF No. 108 at 1. The Order also set a
deadline of September 1, 2016 for the Government to file the same. ECF No. 108 at 1.
On July 13, 2016, MW Builders filed an Unopposed Motion For Leave To Extend Post-
Trial Briefing Deadlines to August 15, 2016 and for the Government’s extension to September 15,
2016. ECF No. 110. On July 14, 2016, the court granted MW Builders’ July 13, 2016 Motion.
On August 4, 2016, the Government filed a Response to MW Builders’ March 24, 2016
Motion To Dismiss Counterclaims. ECF No. 111. On August 17, 2016, MW Builders filed a
Motion To Enter Additional Evidence, i.e., Mr. Neil Miltonberger’s Supplemental Expert Report.
ECF No. 114. On August 18, 2016, the parties filed a Joint Motion For Entry Of Order On Trial
Exhibits. ECF No. 115. On August 19, 2016, MW Builders filed its Post-Trial Proposed Findings
Of Fact And Memorandum Of Law (“Pl. Post Tr. Br.”). ECF No. 116.
On August 26, 2016, MW Builders filed a Motion To Enter PX 679, PX 680, and PX 681
into evidence. ECF No. 118. The August 26, 2016 Motion asserted that the Government waived
any objections to these exhibits at trial and failed to show how it would be prejudiced by their
admission. ECF No. 118 at 2–6.
On September 2, 2016, the Government filed Responses To MW Builders’ August 26,
2016 Motion (ECF No. 120) and MW Builders’ August 17, 2016 Motion To Enter Additional
Evidence (ECF No. 121). On September 9, 2016, MW Builders filed a Reply In Support Of The
August 17, 2016 Motion To Enter Additional Evidence. ECF No. 122.
On December 8, 2016, after receiving 80 days of extensions, the Government filed its
Proposed Findings Of Fact And Conclusions Of Law (“Gov’t Post Tr. Br.”). ECF No. 127.

24
On December 19, 2016, MW Builders filed a Motion For Leave To File Additional Post-
Trial Briefing in response to the Government’s December 8, 2016 Post-Trial Brief. ECF No. 128.
On December 21, 2016, the Government also filed a Response To MW Builders’ December 19,
2016 Motion. ECF No. 129. On the same date, the court granted MW Builders’ December 19,
2016 Motion. ECF No. 130. On January 30, 2017, MW Builders filed a Reply To The
Government’s December 8, 2016 Proposed Findings Of Fact And Conclusions Of Law (“Pl. Post
Tr. Reply Br.”). ECF No. 131.
On February 28, 2017, the Government filed a Motion For Leave To File A Reply Brief.
ECF No. 132. On March 21, 2017, the court issued an Order granting the Government’s February
28, 2017 Motion. ECF No. 133. On March 31, 2017, the Government filed a Reply To Plaintiff’s
January 30, 2017 Brief (“Gov’t Post Tr. Reply Br.”). ECF No. 134.
On June 9, 2017, the court issued an Order granting MW Builders’ August 17, 2016 Motion
To Enter Additional Evidence and MW Builders’ August 26, 2016 Motion For Leave To File
Plaintiff’s Exhibits PX 679–81. ECF No. 135. The June 9, 2017 Order also permitted the
Government to file a Rebuttal Report prepared by the Government’s expert, Mr. Stephen Weathers
(“Weathers Rebuttal”). ECF No. 135.

III. DISCUSSION.

A. Subject Matter Jurisdiction.

The United States Court of Federal Claims has jurisdiction, under the Tucker Act, to
adjudicate any claim arising under the Contract Disputes Act (“CDA”), 41 U.S.C. §§ 7101–7109,
and that has been submitted to a CO for a final decision. See 28 U.S.C. § 1491(a)(2) ( “The Court
of Federal Claims shall have jurisdiction to render judgment upon any claim by or against, or
dispute with, a contractor arising under section 7104(b)(1) of title 41 . . . on which a decision of
the contracting officer has been issued[.]”); see also 41 U.S.C. § 7104(b)(1) (“[I]n lieu of appealing
the decision of a [CO] . . . to an agency board, a contractor may bring an action directly on the
claim in the United States Court of Federal Claims.”).

The term “claim” is defined “as a written demand or written assertion by one of the
contracting parties seeking, as a matter of right, the payment of money in a sum certain, the
adjustment or interpretation of contract terms, or other relief arising under or relating to this
contract.” 48 C.F.R. § 52.233–1. Although a CDA claim need not be submitted in any particular
form or use any particular wording, it must contain “a clear and unequivocal statement that gives
the contracting officer adequate notice of the basis and amount of the claim.” Contract Cleaning
Maint., Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). The CDA also requires that the
claim indicate to the CO that the contractor is requesting a “final” decision. James M. Ellett
Constr. Co. v. United States, 93 F.3d 1537, 1543 (Fed. Cir. 1996).

25
A claim “arises under” the CDA if it is based on,

any express or implied contract . . . made by an executive agency for—(1) the
procurement of property, other than real property in being; (2) the procurement of
services; (3) the procurement of construction, alteration, repair, or maintenance of
real property; or (4) the disposal of personal property.

41 U.S.C. § 7102(a).

In this case, the December 27, 2013 Complaint includes three CDA claims: Count One
alleges that the Government breached the duties to cooperate and not hinder; Count Two alleges
that the Government caused unreasonable delay; and Count Three alleges that the CO improperly
classified the delay as non-compensable delay. Compl. ¶¶ 22–36. MW Builders requested the
same relief for all three Counts; i.e., $2,562,049.00 in damages and a 169-day extension of time.
Compl. ¶¶ a–d.

MW Builders’ August 19, 2016 Post-Trial Proposed Findings Of Fact And Memorandum
Of Law characterizes Count One as “primarily rest[ing] on the implied duty of good faith and fair
dealing.” Pl. Post Tr. Br. at 6. The Government responds that the court does not have jurisdiction
over any claim arising from a breach of the implied duty of good faith and fair dealing, because
“[t]here is no mention of good faith” in MW Builders’ May 15, 2013 Amended Certified Claim.
Gov’t Post Tr. Br. at 105 (citing England v. The Swanson Grp., Inc., 353 F.3d 1375, 1379 (Fed.
Cir. 2004) (“[J]urisdiction over an appeal of a contracting officer's decision is lacking unless the
contractor's claim is first presented to the contracting officer and that officer renders a final
decision on the claim.”). MW Builders replies that the duty not to hinder and the duty to cooperate
are both aspects of the implied duty of good faith and fair dealing and MW Builders’ May 15,
2013 Amended Certified Claim put the Government on notice that MW Builders alleged a
violation of that duty. Gov’t Post Tr. Br. at 32 n. 145. In addition, the May 15, 2013 Amended
Certified Claim stated that “[t]he failure of the Government to timely execute the Line Extension
[A]greement implicated the Government[’]s general duty to cooperate and to do nothing that
unreasonably hinders the contractor’s performance.” JX 89 at 2. Therefore, the court construes
Count One to allege a breach of the September 10, 2010 Contract and a violation of the duty of
good faith and fair dealing. Regarding the latter, the United States Court of Appeals for the Federal
Circuit has held that “[b]oth the duty not to hinder and the duty to cooperate are aspects of the
implied duty of good faith and fair dealing.” Metcalf Constr. Co. v. United States, 742 F.3d 984,
991 (Fed. Cir. 2014) (emphasis added) (quoting Precision Pine & Timber, Inc. v. United States,
596 F.3d 817, 820 n.1 (Fed. Cir. 2010)). It also has held that the United States Court of Federal
Claims may adjudicate a claim, if it arises from the “same operative facts” and requests “essentially
the same relief,” as a claim presented to the CO, even if the complaint at issue alleges a “slightly
different legal theory.” Scott Timber Co. v. United States, 333 F.3d 1358, 1365 (Fed. Cir. 2003).
In addition, “[t]his standard . . . does not require rigid adherence to the exact language or structure
of the original administrative CDA Claim.” Id. Therefore, the fact that MW Builders’ certified
claim did not use the words “good faith” does not divest the court of jurisdiction to adjudicate this
claim. See Transamerica Ins. v. United States, 973 F.2d 1572, 1578 (Fed. Cir. 1992) (“[C]ertain
magic words need not be used and . . . the intent of the claim governs.”).

26
For these reasons, the court has determined that it has jurisdiction to adjudicate the claims
alleged in Count One of the December 27, 2013 Complaint.

Count Two of the December 27, 2013 Complaint alleges that the Army Corps’ improper
actions caused an “unreasonable delay.” Compl. ¶ 28–32. The May 15, 2013 Amended Certified
Claim alleges that the Government “unreasonably hinder[ed] the contractor’s performance” and
that, “for reasons not totally known to MW Builders, the Line Extension Agreement went unsigned
for 6 months after MW Builders presented it to the Government for execution[.]” JX 89 at 2. As
such, Count Two of the Complaint arises from the “same operative facts” as those presented in the
May 15, 2013 Amended Certified Claim. See Scott Timber Co., 333 F.3d at 1365.

For these reasons, the court has also determined that it has jurisdiction to adjudicate the
claims alleged in Count Two of the December 27, 2013 Complaint.

Count Three alleges the CO’s decision improperly classified the cause of the delay. The
court considers this Count to be redundant. Therefore, the discussion of MW Builders’ claims will
concern only the legal injuries alleged in Counts One and Two.

B. Standing.

The United States Supreme Court has held that “the question of standing is whether the
litigant is entitled to have the court decide the merits of the dispute or of particular issues.”
Warth v. Seldin, 422 U.S. 490, 498 (1975). Standing must be determined “as of the commencement
of suit[.]” Rothe Dev. Corp. v. Dep’t of Def., 413 F.3d 1327, 1334 (Fed. Cir. 2005) (quoting
Lujan v. Defs. of Wildlife, 504 U.S. 555, 570 n.5, (1992)). “The party invoking federal jurisdiction
bears the burden of establishing [standing].” Lujan, 504 U.S. at 561. The United States Supreme
Court held in Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167 (2000) that, to
establish standing,

a plaintiff must show (1) it has suffered an “injury in fact” that is (a) concrete and
particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the
injury is fairly traceable to the challenged action of the defendant; and (3) it is
likely, as opposed to merely speculative, that the injury will be redressed by a
favorable decision.

Id. at 180–81.

In addition, “[t]o have standing to sue the sovereign on a contract claim, a plaintiff must
be in privity of contract with the United States.” Anderson v. United States, 344 F.3d 1343, 1351
(Fed. Cir. 2003). In other words, the contract in issue must be between the plaintiff and the
Government. See Ransom v. United States, 900 F.2d 242, 244 (Fed. Cir. 1990) (“To maintain a
cause of action pursuant to the Tucker Act that is based on a contract, the contract must be between
the plaintiff and the [G]overnment.”).

It is undisputed that MW Builders was in privity of contract with the Government. Compl.
¶ 4 (“MW Builders and the Government, acting by and through [the Army Corps], are parties to a
firm, fixed price Contract No. W912 QR-10-C-0078 . . . for the construction of a new Army
Reserve Center in Las Vegas, Nevada[.]”). The December 27, 2013 Complaint also alleges that

27
MW Builders incurred financial injury that is concrete, particularized, and fairly traceable to the
Army Corps’ actions. And, any financial injury established by MW Builders can be addressed by
a monetary award.

For these reasons, the court has determined that MW Builders has standing to seek an
adjudication of the claims alleged in Count One and Count Two of the December 27, 2013
Complaint.

C. Plaintiff’s Claims Against The Government.

Count One of the December 27, 2013 Complaint alleges that the Army Corps violated the
duty of good faith and fair dealing and Count Two alleges that the Government caused an
unreasonable delay. Compl. ¶¶ 22–31. The gravamen of the December 27, 2013 Complaint is:
(1) the September 10, 2010 Contract required the Army Corps to sign the Line Extension
Agreement with NV Energy; (2) the Army Corps failed to secure easements, as required by the
September 10, 2010 Contract, and did not sign the Line Extension Agreement in a timely manner,
thereby breaching the September 10, 2010 Contract; and (3) the Army Corps eventually changed
its position, but nevertheless violated the duty of good faith and fair dealing in its discussions with
NV Energy that substantially delayed MW Builders’ work on the Project.

1. The September 10, 2010 Contract Required The United States Army
Corps Of Engineers To Sign The Line Extension Agreement With NV
Energy.

a. Plaintiff’s Argument.

The parties agree that the September 10, 2010 Contract was ambiguous as to which party
was required to sign the Line Extension Agreement with NV Energy. Pl. Post Tr. Br. at 7; see also
TR at 104 (Government’s counsel conceding that the September 10, 2010 Contract was ambiguous
as to the Line Extension Agreement). Therefore, the court must look to extrinsic evidence of the
parties’ intent as to which party was responsible for signing the Line Extension Agreement. Pl.
Post Tr. Br. at 7–8 (citing D’Andrea Bros. LLC v. United States, 96 Fed. Cl. 205, 219 (Fed. Cl.
2010)).

Prior to issuing the Solicitation, the Army Corps, Mason & Hanger, and the 63rd RSC,
began to work on the “Design Phase” of the Project. TR at 16, 27, 159 (Probst). During the Design
Phase, each of these entities refused to sign NV Energy’s Design Initiation Agreement. PX 45 at
GOV_17874–75. As a result, Mason & Hanger, sua sponte, amended Contract Drawing ES-002
to require the construction contractor to sign the Design Initiation Agreement. Pl. Post Tr. Br. at
31–32. Thereafter, in a May 6, 2009 memorandum, NV Energy, the utility, advised all concerned
that a signed Line Extension Agreement was required before permanent power would be provided
and nothing in Contract Drawing ES-002 changed that obligation. PX 4; see also DX 6 at 4 (5/6/09
Memorandum).

At trial, the witnesses agreed that Line Extension Agreements and similar types of contracts
typically are formed between utilities and the owners/end users of new construction, not between
utilities and the contractor. Pl. Post Tr. Br. at 8–12. For example, Robert Caskie, an Army Corps

28
employee, openly hostile to MW Builders’ claim, 22 confirmed this was a standard industry
practice. TR at 403–05 (Caskie). In addition, Mr. Kevin Finley, the Army Corps attorney who
negotiated the final Line Extension Agreement between the Army Corps and NV Energy, testified
that NV Energy’s “typical way of doing business” was for the end-user to sign the Line Extension
Agreement. TR 1077–78 (Finley). MW Builders’ conduct throughout the performance of the
contract also evidences its understanding, consistent with industry practice, that the September 10,
2010 Contract assigned responsibility for signing the Line Extension Agreement to the Army
Corps or Army Reserve. Pl. Post. Tr. Br. at 12–16. The Contract only required MW Builders to
“coordinate” with NV Energy, provide specific information about power needs, and sign the
Design Initiation Agreement. TR at 335–36 (Herriott). As such, when MW Builders received the
Line Extension Agreement, it “immediately” recognized that Agreement was the responsibility of
the end-user. TR at 355 (Herriott), 451 (Matson). For this reason, beginning in March 2012, MW
Builders first advised and then actively and continually complained that the Army Corps’ failure
to execute this Agreement interfered with and delayed progress on the Project. PX 528.

All of this evidence demonstrates that the parties did not intend the Contract to require MW
Builders to negotiate, sign, or be responsible for the Line Extension Agreement. Pl. Post Tr. Br.
at 37. MW Builders adds that the plain language of the Contract requires only that MW Builders:
(1) build the Project in such a way as to meet NV Energy’s Technical Requirements; and (2) sign
the Design Initiation Agreement. Pl. Post Tr. Br. at 40 (citing PX 422 at 3). There is no express
requirement that MW Builders sign a Line Extension Agreement. Pl. Post Tr. Br. at 40 (citing PX
422 at 3). Nor can the Contract reasonably be read as requiring MW Builders to sign the Line
Extension Agreement, because the term was for five years, i.e., 1,826 days; the term of the
construction Contract was only 660 days. Compare PX 449 ¶ 14.1 (“This [Line Extension]
Agreement . . . will continue for a term of five (5) years[.]”), with PX 52 at GOV_12823 (“The
Contract shall . . . complete [performance] within 660 calendar days[.]”).

In addition, the canon of expressio unius est exclusio alterius, i.e., “the expression of one
thing is the exclusion of the other,” is relevant, because the September 10, 2010 Contract required
that MW Builders sign a Design Initiation Agreement, but does not mention the Line Extension
Agreement. Pl. Post Tr. Br. at 46–47; see also Design & Prod., Inc. v. United States, 18 Cl. Ct.
168, 198–99 (Fed. Cl. 1989) (determining that a theater construction contract that expressly
required installation of seats implicitly did not require construction of interior walls, under the
doctrine of expressio unius est exclusio alterius). Likewise, it is well established that government
contracts that contain latent ambiguities are construed against the Government. See SIPCO Servs.
& Marine, Inc. v. United States, 41 Fed. Cl. 196, 215–16 (Fed. Cl. 1998) (determining that
contractor’s reasonable interpretation of latently ambiguous contract should be construed against
the Government). Therefore, MW Builders reasonably interpreted the latent ambiguity in the

22
Mr. Caskie explained that, when he worked as a CO, he regularly saw contractors file
“frivolous claims.” TR at 410–11 (Caskie). According to Mr. Caskie, MW Builders also had
multiple issues on the site, but chose to use the issues related to permanent power “to their
advantage to support their attempt to get back moneys” they lost on the project. TR at 418–19
(Caskie).

29
September 10, 2010 Contract concerning the Line Extension Agreement, not to require assumption
of that responsibility. Pl. Post Tr. Br. at 49.

Finally, the Government’s argument about the Line Extension Agreement is “riddled with
myopic inconsistency.” Pl. Post Tr. Br. at 16. Initially, the Army Corps decided the 63rd RSC
was required to sign the Agreement; after the 63rd RSC refused, the Army Corps attempted to
convince MW Builders to sign the document. Pl. Post Tr. Br. at 16. After MW Builders refused,
the Army Corps considered having multiple signers, before stepping up to the plate and signing
the Agreement. Pl Post Tr. Br. at 16. The fact that the Army Corps’ position shifted so many
times evidences that the Army Corps was well aware that MW Builders was not required to sign
the Line Extension Agreement. Pl. Post Tr. Br. at 19, 28–29. As MW Builders argued, “how a
party applies a contract during the performance period of a contract is evidence of how a party
interprets the contract,” and “how a party interprets a contract is good evidence of what that party
intended that contract to mean.” Pl. Post Tr. Br. at 28–29.

b. The Government’s Response.

The Government responds that MW Builders offered “no evidence” at trial that the
September 10, 2010 Contract required the Army Corps to sign the Line Extension Agreement.
Gov’t Post Tr. Br. at 108. The plain language did not impose any permanent power-related
obligations on the Government. Gov’t Post Tr. Br. at 108. In fact, Contract Drawing ES-002
expressly required MW Builders to provide a “complete and working electrical system” at the
Project, i.e., MW Builders needed to ensure that NV Energy would extend a line to the Project.
Gov’t Post Tr. Br. at 110.

The Government agrees that the September 10, 2010 Contract is ambiguous, but the
extrinsic evidence shows that the parties intended MW Builders to be responsible for the Line
Extension Agreement. Gov’t Post Tr. Br. at 110–11. This is so, because MW Builders was
required to provide a complete and working electrical system and doing so required the execution
of a Line Extension Agreement. Gov’t Post Tr. Br. at 111. And, multiple witnesses testified that
they had no knowledge about the Line Extension Agreement during the Design Phase. Gov’t Post
Tr. Br. at 111–12.

In addition, the course of performance supports a finding that MW Builders was required
to execute the Line Extension Agreement, because Contract Drawing ES-002 required MW
Builders to coordinate with NV Energy and, pursuant to that obligation, MW Builders signed the
Design Initiation and Design Approval Agreements with NV Energy. Gov’t Post Tr. Br. at 113.
For this reason, the Army Corps executed an “NV Energy Consultant/Third Party Contact
Authorization Form,” authorizing MW Builders to be NV Energy’s “sole contact” with respect to
the Project work. Gov’t Post Tr. Br. at 113; see also DX 30 (3/29/11 Contact Authorization Form).
Although MW Builders argues that Line Extension Agreements typically are signed by owners,
and not by construction contractors, that does not mean all such agreements need to be signed by
property owners. Gov’t Post Tr. Br. at 114.

Moreover, interpreting the Contract to require that the Government was responsible for
entering the Line Extension Agreement would render the September 10, 2010 Contract invalid
under the Anti-Deficiency Act, 31 U.S.C. § 1350. Gov’t Post Tr. Br. at 116. Under that Act, the

30
Government cannot lawfully enter into obligations for which there is no appropriation from
Congress. Since the Line Extension Agreement includes open-ended provisions regarding future
events, the Government could not sign the agreement without violating that Act. Gov’t Post Tr.
Br. at 116–17.

c. The Court’s Resolution.

i. The September 10, 2010 Contract Contains A Latent
Ambiguity Regarding Which Party Was Responsible For
Signing The Line Extension Agreement With NV
Energy.

Contract interpretation is a question of law. See NVT Techs., Inc. v. United States, 370
F.3d 1153, 1159 (Fed. Cir. 2004). In interpreting a contract, the court begins with the language of
the agreement. Id. (“Contract interpretation begins with the language of the agreement.”); see
also C. Sanchez & Son, Inc. v. United States, 6 F.3d 1539, 1543 (Fed. Cir. 1993) (“A contract is
read in accordance with its express terms and the plain meaning thereof.”). “When the contract’s
language is unambiguous it must be given its ‘plain and ordinary’ meaning and the court may not
look to extrinsic evidence to interpret its provision.” TEG-Paradigm Envtl. Inc. v. United States,
465 F.3d 1329, 1338 (Fed. Cir. 2006) (quoting Coast Fed. Bank, FSB v. United States, 323 F.3d
1035, 1040 (Fed. Cir. 2003)). If a contractual provision is susceptible to more than one reasonable
interpretation and is ambiguous, the court should consult extrinsic evidence to determine the
parties’ intent. See Edward R. Marden Corp. v. United States, 803 F.2d 701, 705 (Fed. Cir. 1986)
(“It is a generally accepted rule . . . that if a contract is reasonably susceptible of more than one
interpretation, it is ambiguous.”); see also Metro. Area Transit, Inc. v. Nicholson, 463 F.3d 1256,
1260 (Fed. Cir. 2006) (“Having found the contract ambiguous, we may appropriately look to
extrinsic evidence to aid in our interpretation of the contract.”).

When contract language is ambiguous, the court must determine whether “that ambiguity
was patent so as to impose a duty to seek clarification, or only latent.” Interwest Constr. v. Brown,
29 F.3d 611, 614 (Fed. Cir. 1994); see also Newsom v. United States, 676 F.2d 647, 649 (Ct. Cl.
1982) (“If a patent ambiguity is found in a contract, the contractor has a duty to inquire of the
contracting officer the true meaning of the contract before submitting a bid.”). Whether an
ambiguity is patent or latent is a question of law. See Grumman Data Sys. Corp. v. Dalton, 88
F.3d 990, 997 (Fed. Cir. 1996). When the ambiguity is patent, United States Court of Appeals for
the Federal Circuit precedent requires a departure from the ordinary rule of contra proferentem,
under which ambiguities in government contracts are construed against the drafter, i.e., the
Government. See Metric Constructors, Inc. v. NASA, 169 F.3d 747, 751 (Fed. Cir. 1999) (“The
doctrine of patent ambiguity is an exception to the general rule of contra proferentem which
construes an ambiguity against the drafter[.]”).

A patent ambiguity has been defined as “an obvious omission, inconsistency, or
discrepancy of significance.” Beacon Constr. Co. v. United States, 314 F.2d 501, 504 (Ct. Cl.

31
1963). 23 In contrast, a latent ambiguity is “neither glaring nor substantial nor patently obvious”
on the face of the contract document. See Grumman Data Sys. Corp., 88 F.3d at 997 (quoting
Cmty. Heating & Plumbing Co. v. Kelso, 987 F.2d 1575, 1579 (Fed. Cir. 1993) (explaining that
latent ambiguities arise in the “grey area between the point . . . at which a document requires more
exacting language and that at which additional detail will add nothing but worthless
surplusage[]”)). Therefore, a latent ambiguity usually is not apparent unless there is a dispute. See
Latent Ambiguity, BLACK’S LAW DICTIONARY (10th ed. 2014) (“An ambiguity that does not readily
appear in the language of a document, but instead arises from a collateral matter once the
document's terms are applied or executed”).

The reason that the September 10, 2010 Contract is ambiguous as to which party was
required to sign the Line Extension Agreement, is because the language of Contract Drawing ES-
002 is subject to more than one reasonable interpretation. As MW Builders argues, it is reasonable
to read Contract Drawing ES-002 as not requiring MW Builders to sign the Line Extension
Agreement, because there is no express instruction requiring MW Builders to sign it. TR at 104;
see also Gov’t Post Tr. Br. at 110 (“Contract Drawing ES-002 does not expressly say which party
was to execute the Line Extension Agreement; the drawing itself does not refer to a ‘Line
Extension Agreement.’ In that respect, it is ambiguous.”)

Contract Drawing ES-002 begins by stating that the “Contractor is responsible for
providing all electric infrastructure, equipment, and wiring for the Project unless specifically noted
as provided by NV Energy in the division of responsibility.” DX 14. But, this requirement speaks
only to physical construction requirements. The “Division of Responsibility (Power)” table that
accompanies the text lists a number of physical items to be constructed, e.g., a “transformer,” a
“transformer pad,” a “primary duct bank,” and a “secondary duct bank;” it does not discuss the
execution of documents. DX 14. Next, Contract Drawing ES-002 states that the “Contractor shall
contact NV Energy prior to bidding to verify that NV Energy will provide everything noted in the
table below.” DX 14. This clause also unambiguously concerns only the physical construction
requirements, reflected in the Division of Responsibility table. The sentence immediately
following, however, provides that “Contractor is responsible for providing a complete and working
electrical system, and shall include all costs in this bid.” DX 14. It is here that ambiguity arises,
because “complete and working electrical system” can be read as requiring more than just building
the physical items listed in the Division of Responsibility table. But, this ambiguity is “latent,”
because nothing “obviously [is] omitted” from the surrounding language and it is not inconsistent
with the surrounding sentences. “All costs,” reasonably could be interpreted as relating to all costs
incurred by MW Builders’ to facilitate the installation of electrical power, e.g., building the ducts
and paying the fee associated with the Design Initiation Agreement. In any event, the issue of
responsibility for signing the Line Extension Agreement did not arise until March 19, 2012, when
the Army Corps changed its view that the responsibility was the 63rd RSC’s and instead insisted
that MW Builders was responsible for signing this document. Compare JX 44 at 1 (3/13/12
conference call summary, wherein parties agreed that the Line Extension Agreement “will be
executed between NV Energy and 63D RSC such that staging of equipment can start on or about
19 March 2012”), with PX 60A (3/19/12 conference call summary, wherein Army Corps

23
The United States Court of Appeals for the Federal Circuit has held that United States
Court of Claims decisions issued prior to September 30, 1982, are binding precedent.
See S. Corp. v. United States, 690 F.2d 1368, 1369 (Fed. Cir. 1982).
32
announced intention to “consider an arrangement whereby . . . MW Builders may enter the
agreement with NV Energy”).

Contract Drawing ES-002 also provides that “The electrical distribution system shown on
the plans is the preliminary layout discussed with NV Energy during the project design and may
not match the final design required by NV Energy. Electrical manholes are not shown, but shall
be provided per NV Energy requirements. The electrical design must be coordinated with the
communications design provided[.]” DX 14 at 1. This language also does not require MW
Builders to enter into any contracts with NV Energy. Although the Government placed
considerable emphasis on the term “coordinate,” as the court observed during trial: “[c]oordinate
doesn’t mean to enter into a contract.” TR at 414. The term “coordinate,” in this context, means
that the electrical work had to be coordinated with the telecommunications work performed, in
accordance with the communications design. DX 14 at 1. 24

The next sentence appears to require MW Builders to enter into a contract with NV Energy:
“The contractor will be required to sign a Design Initiation Agreement with NV Energy and pay
fees as shown in the bid schedule.” DX 14 at 1. This language, however, refers to the fact that
MW Builders was responsible to sign that specific contract. The fact that there was no mention
of the Line Extension Agreement was not necessarily an “obvious omission.” See Beacon Constr.,
314 F.2d at 504. Instead, “when parties list specific items, without any more general or inclusive
term, they intend to exclude similar items, even though they are similar to those listed.” 2 E.
ALLEN FARNSWORTH, FARNSWORTH ON CONTRACTS § 7.11 at 293–94 (3d ed. 2004) (emphasis
added). In this case, Contract Drawing ES-002 required MW Builders only to sign one specific
type of agreement with NV Energy, but did not require MW Builders to enter into “contracts” with
NV Energy. Therefore, a reasonable construction contractor could read Contract Drawing ES-002
as requiring MW Builders only to sign the Design Initiation Agreement. To require MW Builders
to sign more than just the Design Initiation Agreement, the Army Corps could have required MW
Builders to “enter into any agreements necessary for the provision of permanent power” or
otherwise be required to “contract with” NV Energy to provide such power. Instead, Contract
Drawing ES-002 requires that “[t]he contractor shall contact NV Energy and determine the scope
and costs of this work prior to submitting a proposal. The contractor’s proposal shall include all
work and all costs associated with providing electrical power for the project.” DX 14 at 1
(emphasis added). This, however, was not a directive to MW Builders to sign the Line Extension
Agreement.

Contract Drawing ES-002 expressly requires MW Builders to provide “all electric
infrastructure, equipment, and wiring for the Project.” DX 14 at 2. Contract Drawing ES-002 also
requires MW Builders to provide “a complete and working electrical system.” DX 14 at 2. In
addition, Contract Drawing ES-002 requires the contractor to “contact” NV Energy and “obtain
written documentation of all transactions with NV Energy and provide them to the [Army Corps].”
DX 14 at 2. But, this contractual provision could be interpreted to require MW Builders to serve
as a middleman between the Army Corps and NV Energy. Contract Drawing ES-002 further

24
Contract Drawing ES-002 also included a “Division of Responsibility (Embarq),” that
governed the telecommunications aspect of the Project; telecommunications were to be provided
by Embarq, a utility company. DX 14 at 1.

33
provides that “The contractor is responsible for all guidelines and requirements within Nevada
Power Company’s [i.e., NV Energy’s] Electric Service Requirements, which can be found on their
website below.” DX 14 at 2. But, this sentence requires MW Builders to abide by the “Electrical
Service Requirements,” found at the website: a 432 page document consisting of technical
requirements related to construction, including, “how deep power lines need to be buried.” TR at
459 (Matson); see also PX 680. The term “Line Extension Agreement” does not appear anywhere
in this document. PX 680.

For these reasons, the court has determined that the September 10, 2010 Contract is
ambiguous as to which party was responsible for signing the Line Extension Agreement, but that
ambiguity was latent.

ii. Extrinsic Evidence Of Intent Demonstrates That The
United States Army Corps Of Engineers Was
Responsible For Signing The Line Extension Agreement
With NV Energy.

Because there was a latent ambiguity in the September 10, 2010 Contract as to which party
was required to sign the Line Extension Agreement, the rule of contra proferentem applies,
meaning that any ambiguity may be construed against the Army Corps. That rule, however, is one
“of last resort” and should be applied only if the ambiguity cannot be reconciled after “looking to
the circumstances attending the transaction and the circumstances under which [the parties]
executed the contract.” See Gardiner, Kamya & Assocs., P.C. v. Jackson, 467 F.3d 1348, 1352
(Fed. Cir. 2006) (quoting Chris Berg, Inc. v. United States, 455 F.2d 1037, 1044 (Ct. Cl. 1972)).
Therefore, “before resorting to the doctrine of contra proferentem, [the court] ‘may appropriately
look to extrinsic evidence’” to aid in the interpretation of the contract. See Gardiner, 467 F.3d at
1352 (quoting Metro. Area Transit, Inc., 463 F.3d at 1260).

As a threshold matter, the Government argues that there is “no evidence” that the Army
Corps was “specifically aware of the Line Extension Agreement prior to Contract award.” Gov’t
Post Tr. Br. at 110. The trial testimony about the pre-award “Design Phase” of the contract
supports this assertion: Army Corps and Mason & Hanger witnesses testified that, during the
Design Phase, they were concerned with the Design Initiation Agreement and not with the Line
Extension Agreement. TR at 16–17 (Probst); TR at 975–78 (Miller). In addition, although the
May 9, 2009 letter attached to the draft Design Initiation Agreement mentioned a “Line Extension
Agreement,” it was in the context of requiring the applicant for permanent power to “sign one or
more of the following agreements: Line Extension Agreement (LEA); Large Project Service
Agreement (LPS Agreement); Contribution in Aid of Construction Agreement (CIAC
Agreement); Non-Refundable Construction Agreement (NRCA).” DX 6 at 5. Consequently, it
appears that the Army Corps was not aware of the significance of the Line Extension Agreement
before awarding the September 10, 2010 Contract to MW Builders. But, any assertion that the
Army Corps was not aware of the Line Extension Agreement, and nevertheless intentionally
bargained for MW Builders to sign that Line Extension Agreement, is logically inconsistent. In
other words, the Army Corps cannot insist on a requirement, if it was not aware the requirement
existed. Recognizing the flaw in its reasoning, the Government next argues that since the
September 10, 2010 Contract did not expressly require the Army Corps to sign the Line Extension
Agreement, that obligation fell on MW Builders. Gov’t Post Tr. Br. at 108–09. This argument is

34
not supported by any evidence and ignores the fact that the Army Corps was aware of industry
practice. See, e.g., Jowett, Inc. v. United States, 234 F.3d 1365, 1369 (Fed. Cir. 2000) (explaining
that the court may look to industry practice where a “term with an accepted industry meaning [was]
omitted from the contract”). In this case, both NV Energy and Army Corps witnesses testified that
it was industry practice for building owners of new construction (“end users”) to execute Line
Extension Agreements. Ms. Risse, the NV Energy in-house attorney responsible for negotiating
Line Extension Agreements, 25 testified that NV Energy typically required “the ultimate end user
to be the counterparty,” because “there are ongoing obligation[s] that survive the termination of
the contract, and it’s a five year contract.” TR at 584 (Risse). Likewise, Mr. Finley, the Army
Corps attorney responsible for negotiating the Line Extension Agreement, testified that NV
Energy’s “typical way of doing business” was for the “end user” to enter into the Agreement, and
it was for that reason that NV Energy originally drafted the Line Extension Agreement for the 63rd
RSC to sign. TR at 1078 (Finley).

It is true that Ms. Creveling, another NV Energy employee, testified that NV Energy once
entered into a Line Extension Agreement with a contractor, instead of the Government end-user,
but this occurred on a “much smaller” project. 26 TR at 1013–14 (Creveling). And, the testimony
of other witnesses confirmed that situation was an exception, not the rule. TR at 343 (Herriott).
Moreover, Mr. Rial, a twenty-three-year veteran of NV Energy who now provides consulting
services for companies contracting with NV Energy, testified that he could not remember a
situation where a contractor signed the Line Extension Agreement. TR at 462, 469–70 (Rial).
This makes sense, because the Line Extension Agreement governs utility payments for at least a
five-year term—long after the construction contractor’s work is over. TR at 473 (Rial) (“A Line
Extension Agreement is the contract between the utility and the owner on how the money is to be
collected, the breakdown on the money, and then, also, how the moneys will be refunded[.]”).

The bottom line is the Army Corps could have contracted to depart from ordinary industry
practice by expressly placing the obligation to enter into a utility contract on the contractor. 27 But,
the Army Corps did not do so and apparently was not aware of the fact that NV Energy would
require a signed Line Extension Agreement from the Project’s end-user. Under these
circumstances, the court declines to supply an omitted term that departs from ordinary industry
practice, without evidence of pre-contract intent to include such a term. Instead, the court has
determined that the parties agreed to follow the typical industry practice with respect to the Line

25
Ms. Risse was responsible for “tak[ing] the lead” on contract negotiations during the ten
years she was employed by NV Energy. TR at 578–80. Ms. Risse negotiated the July 12, 2012
Line Extension Agreement executed between the Army Corps and NV Energy in this case. TR at
599–600 (Risse).
26
Ms. Creveling was unable to find any past projects of similar scope to this Project where
the Line Extension Agreement was executed by the contractor, instead of the end user. TR at 1014
(Creveling).
27
In fact, the Army Corps did seek to contract out of industry practice in a subsequent
solicitation, by including a provision that “[t]he Contractor must also sign the Line Extension
Agreement provided by Nevada Energy.” PX 274 at GOV_00049373.

35
Extension Agreement, placing that contractual obligation on the Army Corps in its capacity as
Project Manager and agent for the 63rd RSC by virtue of its signature on the September 10, 2010
Contract. 28

The parties’ performance also evidences that there was no agreement that MW Builders
was required to sign the Line Extension Agreement. Prior to any controversy regarding the Line
Extension Agreement, the Army Corps restricted MW Builders’ ability to negotiate contract
changes on behalf of the Army Corps, by modifying the terms of NV Energy’s Third Party
Authorization Form. Compare JX 14 at 11 (Unsigned and undated Third Party Authorization
Form draft, providing that MW Builders would have authority to “communicate and authorize all
change requests”), with PX 15 (3/29/11 Third Party Authorization Form, including Government
modifications, deleting “and authorize”). Other paperwork filled out by MW Builders identified
the Army Corps as the “Customer/Legal Owner” of the Project. PX 15 (3/29/11 Third Party
Authorization Form); PX 567 (3/29/11 Project Information Sheet). Similarly, on the April 27,
2011 Design Initiation Agreement, the Army Corps was identified as the “Applicant” for
permanent power. JX 19 at 10.

In addition, when NV Energy sent the Line Extension Agreement to MW Builders and the
Army Corps, all parties held a March 13, 2012 conference call together with the 63rd RSC and
concluded that the Agreement should be signed by the 63rd RSC. JX 44 at 1 (“The contract will
be executed between NV Energy and 63D RSC such that staging of equipment can start on or
about 19 March 2012.”). The fact that the Army Corps first took the Line Extension Agreement
to the 63rd RSC is inconsistent with the Army Corps’ later claim that MW Builders was
responsible for entering into the Line Extension Agreement. TR at 1077 (Finley). It was only
after the 63rd RSC refused to sign the Line Extension Agreement that the Army Corps took the
position that it was MW Builders’ responsibility. PX 501 at GOV_00005389 (Mr. Musgrave’s
email that: “I really don’t know why MW cannot sign the contract as they a[re] paying the fee and
the cost for service until it is acceptable.”). 29

In any event, the Army Corps changed its position as to which party was obligated to sign
the Line Extension Agreement and the CO never issued a directive ordering MW Builders to sign
it. PX 528; TR at 1132 (Ringstaff) (“[i]f the contractor feels that something is out of the scope
and [the Army Corps] feel[s] like it is in scope, we can direct them to do the work.”). And, as Mr.
Probst explained in his June 29, 2012 email, the CO refused to take this step, because doing so
“would expose the Government to a potential Request for Equitable Adjustment (REA) and a
contract ratification if an REA was upheld.” PX 294. In short, the Army Corps refused to order
MW Builders to sign the Line Extension Agreement, because it was cognizant that doing so would
entitle MW Builders to a Request for Equitable Adjustment. Therefore, the extrinsic evidence

28
The Army Corps was the owner of the property while the Project was under construction,
and was designated as “the construction agent/property holder until construction completion/
beneficial occupancy.” DX 37 at 30.
29
Mr. Musgrave subsequently advised that the Army Corps should “[m]ake them [i.e., MW
Builders] do it and let the chips fall where they may.” PX 27.

36
demonstrates that the parties did not intend for MW Builders to sign the Line Extension Agreement
with NV Energy, but instead agreed to follow the industry practice of having the end user sign.

Finally, the Government argues that the September 10, 2010 Contract could not have
placed responsibility for the Line Extension Agreement on the federal government, because it
would be unenforceable under the Anti-Deficiency Act. Gov’t Post Tr. Br. at 116 (citing 31 U.S.C.
§ 1350 (imposing criminal sanctions for knowingly spending funds in excess of those appropriated
by Congress)). It is true that certain sections of the Line Extension Agreement obligated payments
that were not in sum certain for future years and the Anti-Deficiency Act only allows spending
that is authorized by Congress. JX 72 at 5 (Draft Line Extension Agreement providing that
applicant’s refund could be reduced via an “Allowance True-Up”). The Army Corps, however,
removed those provisions prior to finally executing the July 23, 2012 Line Extension Agreement
with NV Energy. Compare JX 72 at 5 (6/20/12 draft Line Extension Agreement providing for a
potential reduction of an Applicant’s refund via an “Allowance True-Up”), with JX 94 at 125
(7/23/12 executed Line Extension Agreement intentionally omitting “Allowance True-Up”
provisions). Therefore, the fact that the draft Line Extension Agreement included language to
which Army Corps could not have agreed, is irrelevant since the September 10, 2010 Contract did
not include any terms contrary to the Anti-Deficiency Act.

For these reasons, the court has determined that the Army Corps was obligated to sign the
Line Extension Agreement and breached the September 10, 2010 Contract by failing to do so in a
timely manner.

2. The United States Army Corps Of Engineers Violated The Duty Of
Good Faith And Fair Dealing Causing An Unreasonable Delay To The
Project.

a. Plaintiff’s Argument.

MW Builders argues that the duties to cooperate and not to hinder are two “sub-duties” of
the broader duty of good faith and fair dealing. Pl. Post. Tr. Br. at 107. In this case, MW Builders
had a reasonable expectation that the Army Corps would not hinder or interfere with MW Builders’
Project Schedule. Pl. Post. Tr. Br. at 108.

The Army Corps first unreasonably failed to secure necessary easements, despite
representing in the September 10, 2010 Contract that offsite property rights would be available to
MW Builders so permanent power could be connected to the Project site. Pl. Post Tr. Br. at 111.
In addition, the Contract Drawings provided by the Army Corps indicated that MW Builders would
be able to build offsite ductbanks at the intersection of Arville Street and Ray Way (the “Arville
Hub”), and then work with NV Energy to “pull” a utility wire to the Project site. Pl. Post Tr. Br.
at 61 (citing PX 267). Although the Contract Drawings suggested that MW Builders would be
able to perform construction work in this area, MW Builders subsequently learned that the Army
Corps failed to secure the necessary easements for MW Builders to construct the necessary offsite
ductbanks. Pl. Post Tr. Br. at 62 (citing JX 26). MW Builders raised this issue with the Army
Corps in July 2011, but the Army Corps did not resolve the issue until March 2012. Pl. Post Tr.
Br. at 67. In fact, the Army Corps recognized that failure to secure the easements was a “big goof”
and, under ordinary circumstances, the Army Corps would work to secure the necessary easements

37
before opening up a project to bidding. Pl. Post Tr. Br. at 63 (citing PX 239); see also TR at 378–
79 (Caskie) (“I wouldn’t have let the bids be open if I knew there [were] real estate issues[.]”).
Therefore, the Army Corps acted unreasonably when it took months to resolve the easements issue,
despite knowing of its critical importance. Pl. Post Tr. Br. at 111.

NV Energy also needed to inspect MW Builders’ ductbank work before pulling a wire to
connect the Project site to the utility grid. Pl. Post Tr. Br. at 65 (citing PX 453, JX 26). This
required permission from the Army Corps so NV Energy provided both with an “Access To
Equipment Agreement” in September 2011. Pl. Post Tr. Br. at 67 (citing PX 18). But, the Army
Corps decided that it could not agree to several provisions in the Access To Equipment Agreement.
PX 18 (2/28/12 email regarding Access To Equipment Agreement). The Army Corps, however,
did not inform MW Builders and NV Energy of its disagreement with those provisions until
February 28, 2012, i.e., several months after first receiving that Agreement. PX 18. Although
none of this delay directly affected MW Builders’ critical path, the Army Corps’ failure to secure
the necessary easements and extended negotiations about NV Energy’s Access To Equipment
Agreement narrowed the window within which a Line Extension Agreement could be executed,
without pushing tasks onto the critical path that would delay the Project. Pl. Post Tr. Br. at 70.
Consequently, when the Army Corps later failed to sign the Line Extension Agreement in a timely
manner, the resulting delay had a considerably greater impact on the Project’s completion date
than it otherwise would have had. Pl. Post Tr. Br. at 70.

Most importantly, during the March 13, 2012 conference call, when the Line Extension
Agreement was first discussed with NV Energy and MW Builders present, the Army Corps stated
that the 63rd RSC would sign the Line Extension Agreement. Pl. Post Tr. Br. at 74 (citing JX 44).
But, the Army Corps changed its position and later insisted that MW Builders was responsible for
signing the Line Extension Agreement. Pl. Post Tr. Br. at 76–77 (citing PX 501, at GOV_5390).
The Army Corps’ bad faith is also evidenced by the fact that on March 19, 2012, the Army Corps
purposely excluded MW Builders from a second conference call with NV Energy, when it
explained the Army Corps intended to make MW Builders sign the Line Extension Agreement.
Pl. Post Tr. Br. at 77 (citing TR at 85 (Probst)).

MW Builders, however, was completely candid as it informed the Army Corps on
numerous occasions that it would not sign the Line Extension Agreement. Pl. Post Tr. Br. at 78–
84 (citing TR at 182 (Musgrave), 198 (Probst); PX 528; JX 58). Nevertheless, on April 26, 2012,
the Army Corps made misleading and confusing statements to NV Energy, to make it appear that
MW Builders would be the counterparty to the Line Extension Agreement. Pl. Post Tr. Br. at 85
(citing JX 61). And so, negotiations dragged on. Pl. Post Tr. Br. at 85–86. It was not until June
21, 2012, that Ms. Risse, NV Energy’s Representative, was clearly informed that the Army Corps,
instead of MW Builders, would sign the Line Extension Agreement. Pl. Post Tr. Br. at 89 (citing
TR at 597 (Risse)).

The “contemporaneous project schedules [also] establish the duration and causation” of the
“critical path” delay caused by the Army Corps’ violation of the duty of good faith and fair dealing.
Pl. Post Tr. Br. at 93. MW Builders began work by creating an initial “baseline schedule.” TR at
509–10 (Stone). As the Project progressed, MW Builders’ schedule was updated on a monthly
basis and was reviewed by Management Solutions, the third party scheduling consultant retained
by the Army Corps. TR at 512 (Stone). The February 2012 updated critical path schedule showed

38
that the Project would be completed 27 days ahead of schedule. PX 336. By the March 2012
Update, however, the lack of permanent power caused a delay and the updated schedule showed a
completion date that was ten days late. TR at 517–18 (Stone). Nevertheless, the Army Corps
continued to decline to sign the Line Extension Agreement and MW Builders’ Schedule Updates
continued to show delay. Pl. Post Tr. Br. at 96–97. By the April 2012 Update, the anticipated
delay reached 52 days and, by May 2012, the delay increased to 86 days. Compare PX 338 at 1
(April 2012 Update), with PX 339 at 2 (May 2012 Update). Management Solutions’ review of the
April 2012 Schedule Update identified several changes and the Army Corps was asked whether it
agreed “with the changes such as the change in original duration of Nevada energy-
wire/transformer/es, added activities, and logic changes?” 30 PX 348 at 3. By the June 2012
Update, the delay was 121 days, because various work activities required permanent power,
including air conditioning. PX 340 at 1 (June 2012 Update). Subsequently, the Army Corps
approved those changes to the underlying logic. PX 348; TR at 1063–64. Although the
Government’s damages expert, Mr. Weathers, did not agree with that decision (CX 2), the fact is
that the Army Corps approved them. Pl. Post Tr. Br. at 99. By the July 2012 Update, the delay
increased to 140 days, because there was “little available work left within [the Training Building]
due to lack of permanent power and as a result many subcontractors have demobilized.” PX 341
at 1–2 (July 2012 Update). By the October 2012 Update, the delay increased to 170 calendar days.
PX 344 at 1 (October 2012 Update).

MW Builders’ scheduling expert, Mr. Miltonberger, also estimated that the Project was
delayed a total of 413 days that could be divided into three “windows” or time periods.
Miltonberger Direct at 3–5. “Window 2” concerns 170 days of delay and is the subject of this
case. 31 Of that amount, Mr. Miltonberger opines that 140 days resulted from the Army Corps’
delay in signing the Line Extension Agreement. Miltonberger Direct at 4.

b. The Government’s Response.

The Government responds that MW Builders did not meet the “heightened burden” to
establish a breach of the implied covenant of good faith and fair dealing by evidencing “specific
intent to injure.” Gov’t Post Tr. Br. at 100, 105 (citing Austin v. United States, 118 Fed. Cl. 776,
790 (Fed. Cl. 2014)). Government officials are presumed to act in good faith. Gov’t Post Tr. Br.
at 100–01 (citing Schism v. United States, 316 F.3d 1259, 1302 (Fed. Cir. 2002)). Specifically,
there is no evidence that the Army Corps acted with animus towards MW Builders or otherwise
intentionally targeted MW Builders and Mr. Probst and Mr. Finley acted in good faith. Gov’t Post

30
Management Solutions regularly approved of

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4212776. Public record. Not legal advice.