Summary
This Armed Services Board of Contract Appeals decision resolves a dispute over a government contractor's claims for costs resulting from a year-long closure of the AUTEC facility in the Bahamas during the COVID-19 pandemic. The Board granted the Navy's motion for summary judgment in part, ruling that the base closure was a valid sovereign act barring recovery for onsite performance and subsequent replanning expenses. Conversely, the Board denied summary judgment concerning offsite preconstruction activities and logistical bottleneck costs due to an insufficiently developed factual record.
Topics
Practice areas
Questions Presented
- Whether the Navy's closure of AUTEC and related access restrictions were sovereign acts that barred Haskell's recovery of costs associated with onsite performance and project replanning.
- Whether the sovereign acts doctrine barred costs incurred to comply with post-reopening public-health and base-access protocols.
- Whether summary judgment was appropriate on Haskell's claims for offsite preconstruction and personnel inefficiency costs.
- Whether summary judgment was appropriate on Haskell's alleged logistical bottleneck costs following AUTEC's reopening.
- Whether the Board could second-guess the duration of the AUTEC closure or the reasonableness of the Navy's pandemic protocols.
- Whether the implied duty of good faith and fair dealing required NAVFAC to intervene with the installation commander to secure access for Haskell.
Holdings
- The closure of AUTEC to non-essential personnel in response to the COVID-19 pandemic was a public and general sovereign act, and it rendered onsite contract performance impossible. The sovereign acts doctrine therefore barred Haskell's recovery of costs associated with onsite work.
- The sovereign acts doctrine barred recovery for costs incurred to replan construction after the year-long closure and for costs of complying with revised base-access and public-health protocols, including bubble-to-bubble plans, quarantines, and restriction-of-movement requirements.
- Summary judgment was denied as to costs allegedly caused by logistical bottlenecks and coordination conflicts after AUTEC reopened because the briefing and factual record were insufficiently developed.
- Summary judgment was denied as to costs associated with offsite preconstruction activities and alleged personnel inefficiency because the Navy did not establish that all such work was rendered impossible by the AUTEC closure.
- The Board would not second-guess the installation commander's discretionary judgment concerning the duration of the AUTEC closure or the selection of pandemic protocols absent a substantiated showing that the government acted to nullify contractual rights or obtain an economic advantage.
- The implied duty of good faith and fair dealing did not require NAVFAC to intervene with the installation commander or override sovereign decisions concerning AUTEC access because no contractual provision imposed such an obligation.
Key quotations
“We grant the Navy’s motion in part and deny it in part.” (9)
“To prevail, the government bears the burden of showing that: (1) the governmental action was public and general; and (2) the act rendered performance of the contract impossible or impracticable.” (10)
“The Navy has not met its burden to establish that all offsite work was rendered impossible by the base closure.” (18)
Factual background
The Navy awarded Haskell a fixed-price task order to construct austere housing at AUTEC, a remote Navy facility in the Bahamas. In March 2020, AUTEC closed to non-essential personnel in response to the COVID-19 pandemic, and Haskell was excluded from the base for more than a year. Haskell continued some offsite design and preconstruction activities but claimed additional costs arising from the closure, delayed authorization to proceed, replanning, public-health access protocols, logistical bottlenecks, and personnel inefficiency. The contracting officer granted a time extension but denied Haskell's monetary claim.
Procedural history
The Navy awarded Haskell a fixed-price design-build task order for construction at AUTEC. After the Navy closed AUTEC to non-essential personnel during the COVID-19 pandemic and later denied Haskell's monetary claim, Haskell appealed to the Board. The Board granted the Navy's motion for summary judgment in part and denied it in part.
Remand instructions
The Board did not issue a general remand instruction. Claims for offsite preconstruction and personnel inefficiency costs, logistical bottleneck costs, and any unaddressed scope-change or design-modification claims require further factual and evidentiary development.