Citations
- 400 F. Supp. 2d 145
Full opinion text
MEMORANDUM OPINION
THOMAS F. HOGAN, Chief Judge.
In Herman Melville’s Moby-Dick, the first mate is the ironically named Star-buck, a star-crossed sailor who cannot “buck the stars” and avoid his fatal destiny. Just so this protracted litigation. This star-crossed case has been in the hands of two prior judges in this Court, who both died shortly after rendering opinions in this litigation. Indeed, due to no fault of any court or counsel, this litigation has begun to assume the dimensions of Jarndyce v. Jarndyce, the protracted litigation in Charles Dickens’s Bleak House. Charles Dickens, Bleak House (J.M. Dent & Sons 1972) (1953).
Most recently, this star-crossed judicial journey comes before the Court after a 25-day bench trial to determine whether defendant and counter-plaintiff Washington Metropolitan Area Transit Authority (“WMATA”) justifiably terminated for default the joint venture contractor responsible for construction of the Shaw Street and U Street Stations and connecting tunnels for the Washington, D.C. metropolitan area’s subway system, called the Metrorail System (“Metro”), on May 11, 1990. The joint venture and plaintiffs in the case— two construction companies, Mergentime Corporation (“Mergentime”) and Perini Corporation (“Perini”) (collectively, “M/P” or “the Joint Venture”) — allege wrongful termination and claims for breach of contract under the terminated Shaw Street Station (“Shaw Station”) and U Street Station contracts. WMATA counterclaimed to recover reprocurement costs, liquidated damages, and other credits and damages. Counter-defendant Insurance Company of North America (“INA”) was the surety for the performance bonds on both contracts and also asserts claims against WMATA.
After carefully reviewing all the evidence presented, the representations made at trial, the record in this case, and applicable law, the Court concludes that WMA-TA’s termination for default of the Joint Venture was justified and that the Joint Venture is liable to WMATA for damages as detailed below. The Court also concludes that WMATA is responsible to the Joint Venture for the outstanding claims detailed below.
Historical Overview of the Dispute and Litigation
To determine the disputed issues, including whether WMATA lawfully terminated M/P for default, this Court must decipher a complex factual history that began in 1984 with WMATA’s bid invitation for construction of the Shaw Station. In addition, the litigation history has involved years of discovery, separate proceedings before three trial court judges and the Court of Appeals, and multiple opinions from both this Court and the appellate court. To decide this dispute, the Court conducted a trial; — which included oral testimony from numerous live witnesses and thousands of exhibits — and carefully reviewed the entire record in this case, including the many Opinions issued by the two predecessor judges and the Court of Appeals.
While the procedural history and facts were extensively described by the D.C. Circuit in Mergentime Corp. v. WMATA, 166 F.3d 1257, 1260-61 (D.C.Cir.1999), the Court will detail the most relevant aspects fcir -the sake of context. As Judge Rever-comb succinctly stated, “[t]his case is about how not to. build a subway system” — the Shaw and U Street stops on Metro’s Green Line. Mergentime Corp. v. WMATA No. 89-1055, 1993 WL 328083, at *1 (D.D.C. July 30, 1993) (“Revercomb Op.”). In 1985 and 1986, WMATA awarded two separate contracts totaling $94 million to M/P to build the stops and associated tunnels. During the course of the construction, this Joint' Venture encountered various circumstances that caused delay. For example, M/P was faced with differing site conditions, including unanticipated boulders and the need for grouting. In addition, the District of Columbia Department of Public Works (“DPW”) rejected M/P’s traffic maintenance plan, which resulted in prolonged negotiations and reworking of the plans to handle street closings and traffic during the projects.
Among other things, M/P claimed it was owed reimbursement for additional costs incurred during construction as a result of these delays. Accordingly, M/P filed suit in this case on April 14, 1989 for breach of contract due to WMATA’s alleged failure to process claims submitted by M/P in a timely fashion. Mergentime Corp. v. McElhenny, Civ. No. 89-1055 (D.D.C. Apr. 14, 1989). Negotiations and subsequent agreements aimed at salvaging the projects followed; however, WMATA eventually terminated M/P for default on May 11, 1990. As a result, M/P amended its complaint and the litigation resumed.
M/P now seeks to collect on its reimbursement claims and subsequently added claims for breach of contract and wrongful termination, while WMATA has counterclaimed to recover the costs it paid to other contractors to complete the work, credits owed to it by M/P, and other damages. Following a 45-day bench trial, Judge Revercomb issued a 251-page opinion in July 1993 that found, among other things, that WMATA justifiably terminated M/P for default and was entitled to reprocurement costs, and that M/P established the merit of Shaw Street reimbursements but not an entitlement to the claims. Judge Revercomb was unable to quantify the claims and did not make any conclusions with respect to U Street claims before he passed away two days later. Judge Green, serving as the successor judge pursuant to Federal Rule of Civil Procedure 63, handled the post trial motions.
Upon both parties’ appeals, the Court of Appeals reversed the successor judge’s rulings for failing to comply with Federal Rule of Civil Procedure 63, and remanded the case back to this Court. After additional briefing by parties regarding the remand procedures, this Court ruled that a new trial would be necessary in this case because it could not certify adequate familiarity with the record pursuant to Rule 63. Specifically, the Court determined that this case could not be completed in the absence of a new trial without prejudice to the parties. Thus, the Court conducted a 25-day bench trial, which was followed by closing arguments by counsel.
This opinion provides the Court’s findings of facts and conclusions of law, pursuant to Federal Rule of Civil Procedure 52(a). These findings of fact are based on a thorough evaluation of all the evidence and the parties’ proposed findings, and replies thereto. In making these findings, the Court relies in large part upon its determination of the credibility of those witnesses based on, among other things, its observation of their demeanor and the inherent probability of their testimony in light of the documentary evidence and other known facts.
FINDINGS OF FACT
Mergentime and Perini — the plaintiffs and counter-defendants in this case — are two construction companies that entered into a joint venture agreement to bid on and perform two construction contracts: the Shaw Station and Tunnels contract and, subsequently, the U Street Station contract. These contracts were awarded by defendant and counter-plaintiff WMA-TA, an instrumentality and common agency created by the Interstate Compact by and between Maryland, Virginia, and the District of Columbia that, among other things, oversees and manages the construction and operation of the Metro. Counter-defendant INA was the surety for the performance bonds on both the Shaw and U Street Station contracts. After evaluating the record compiled by the parties in this case — including the testimony of many witnesses and thousands of pages of exhibits — and the arguments made by their counsel, the Court now makes the following findings of fact.
I. The Invitations
A. Shaw Station Invitation
To initiate bidding on the Shaw Station and Tunnels construction project, WMATA issued Invitation for Bid No. IFB-C-663 for Contract 1E0012 (“Shaw Station Invitation”) on December 10, 1984. WMATA described the project as follows:
This is a two-part multi-year funded Contract for Construction of the Greenbelt Route segment from Seventh and Q Streets, N.W. to Vermont Avenue and U Street, N.W., consisting of Section E-l/b and E-l/c, and as follows:
Part I: Cut-and-cover construction of Shaw Station
Part II: Soft ground tunneling as follows:
South of Shaw Station — 445 linear feet
North of Shaw Station — 1450 linear feet
SAF No. 106. The Shaw Station Invitation called for competitive bidding with a public opening of bids on March 27, 1985, and WMATA’s estimate for the contract price was $53,338,512, with $16,798,502 allocated to Part I of the contract and $36,540,010 allocated to Part II. Id.
In response to this bid invitation, Mer-gentime and Perini entered into a Joint Venture Agreement on March 23, 1985. SAF No. 107. Pursuant to this agreement, the two corporations “agreed to enter into a Joint Venture for the purpose of submitting a joint bid” for the Shaw Station construction project. Def. Ex. 12, at 1. In addition, they agreed to “associate themselves as joint venturers for the purpose of performing and completing this work ... in the event [the contract was] awarded to them.” Id. at 2. The agreement designated Mergentime as the “sponsoring joint venturer,” meaning that the construction contract would be carried out under its direction. Id. In addition, the agreement allocated the profits, losses, contribution responsibilities, and other interests between the two parties, assigning Mergentime 60% of the project and Perini 40% of the project. SAF No. 107. Data submitted by the Joint Venture included letters from financial institutions stating that Mergentime had lines of credit totaling $14 million and Perini had lines of credit totaling $18 million. SAF No. 108.
After opening and receiving the bids for the Shaw Station Invitation, WMATA awarded Contract 1E0012 to the Joint Venture for the firm-fixed price of $50,895,000 on August 17, 1985. Specifically, the project was divided into two parts with separate prices and completion dates as indicated in the invitation. SAF No. 110. Part I, which dealt with the station area work, was priced at $19,300,000. Part II involved excavating and constructing the tunnels and finishing the station for $31,595,000. M7P was to complete Part II work within 1280 days after receiving the Notice to Proceed (“NTP”).
B. The U Street Station Invitation
WMATA followed a similar process for the U Street Station by first issuing its Invitation for Bid No. IFB-C-716 for Contract 1E0021 for the construction of Greenbelt Route U Street Station (“U Street Station Invitation”) on January 6, 1986. SAF No. 112. This U Street Station Invitation described the work as follows:
The work of this two-part Contract includes the following:
a. Part I:
(1) Construction of line segment from Vermont Avenue and U Street, N.W. to Fourteenth Street and V Street, N.W.
(2) Cut-and-cover construction of U Street Station.
b. Part II:
(1) Cut-and-cover construction of line section.
(2) Finish work for entire project.
Id. The bid also set forth “Instructions to Bidders” describing the necessary qualifications, which included satisfactory evidence of adequate financial resources and ability to comply with performance schedules. SAF No. 828.
WMATA estimated the cost for this contract at $47,282,000. It also set two periods of performance for the distinct parts of the contract: Part I was slated for 1000 days after receipt of the NTP for the project, while Part II was set for 1190 days after receipt of the NTP for that part of the contract. SAF No. 112. After opening the bidding on February 12, 1986, WMATA received the lowest responsive bid from M/P. SAF No. 113. Thus, on April 1, 1986, WMATA awarded this contract to MyP for the firm-fixed price of $44,298,000.
II. General Contract Provisions
The contracts for both of the projects were largely governed by the WMATA General Provisions and Standard Specifications for Construction Projects of 1973 (“General Provisions”). In addition, both contracts included various special provisions and governing documents as well. Given that the relevant portions of these contracts were set forth at length by Judge Revercomb, Revercomb Op. at *2-23, the Court now will provide the following descriptions of the key provisions. There is no significant dispute about the contractual provisions. SAF Nos. 106-172.
A. M/P’s Responsibilities
Among other things, M7P had the following responsibilities in connection with the construction projects:
• provide its personal superintendence to the work or have a competent foreman or superintendent, satisfactory to the Contracting Officer, on the work at all times during progress, with authority to act for the Joint Venture;
• obtain any necessary licenses and permits, at no additional expense to WMATA;
• comply with all applicable federal and local regulations in connection with the prosecution of the work, at no additional expense to WMATA;
• take proper safety and health precautions to protect the work, the workers, the public, and the property of others;
• erect and maintain signs, fences, barricades and pedestrian bridges and provide watchmen wherever necessary and as indicated in the contracts;
• take positive measures to prevent the entry to the work site and storage areas by children, animals and unauthorized adults;
• keep the construction area, including storage areas, free from accumulations of waste material or rubbish at all times and, prior to the completion of the work, remove any rubbish and all tools, scaffolding, equipment, and materials not belonging to WMATA;
• leave the work and premises in a clean, neat and workmanlike condition satisfactory to the Contracting Officer upon completion of the construction; and
• provide sufficient and adequate equipment to complete the work as specified in the contracts within the deadlines, adequate maintenance of this equipment throughout the project, and improvement or removal of any ineffectual or hazardous equipment.
B. Contract Modifications
There were two mechanisms to deal with changes. M/P could propose changes by issuing a Contractor Proposal Number (“CPN”). WMATA, on the other hand, could issue a Proposed Change Order (“PCO”), in which it would seek to make a change and would be responsible for any increased costs or delays stemming from that change.
The General Provisions allow the “Contracting Officer” (ie., the person executing the contract on behalf of WMATA), to make any change in the work within the general scope of the contract. The contractor could designate such changes as a “change order,” which could involve anything including the projects’ specifications, the method or manner of performance of the work, and the projects’ time schedules. In addition, the Contracting Officer’s written or oral orders causing any such change were to be treated as a “change order” if M/P provided written notice that it regarded the order as such to the Contracting Officer (including any order to accelerate the project performance).
If any changes caused an increase or decrease in the projects’ cost or the time required for the work, whether or not changed by any order, an equitable adjustment was to be made and the contract modified in writing accordingly. If M/P intended to assert a claim for an equitable adjustment, it was required, within 30 days after receipt of a written change order or furnishing a change order written notice, to submit to the Contracting Officer a written statement setting forth the general nature and monetary extent of such claim.
Changes to the projects also could involve differing site conditions. The contracts required M/P, before such conditions were disturbed, to promptly notify the Contracting Officer in writing of (1) sub-surface or latent physical conditions at the site that materially differed from the contracts’ descriptions, or (2) unknown and unusual physical site conditions differing materially from those ordinarily encountered and generally recognized as inherent in such work. After an investigation, the Contracting Officer would determine whether such a material difference caused an increase or decrease in cost or time. If so, an equitable adjustment would be made and the contract modified in writing accordingly.
In connection with any proposal for a contract modification, the contracts mandated that M/P provide an itemized price breakdown as required by the Contracting Officer. This breakdown needed sufficient detail to permit an analysis of all material, labor, equipment, subcontract and overhead costs, and profit. The breakdown also must cover all work involved in the modification, whether such work was deleted, added, or changed. Any amount claimed for subcontracts required support by a similar price breakdown. In addition, if the proposal included a time extension, a justification for such an extension was required. If the modification price was not agreed to before commencement of the work involved in the modification, M/P and any subcontractor were required to maintain separate accounts of all incurred seg-regable direct costs allocable to the change.
C. Conditions Affecting the Projects
The contracts also required M/P to ascertain the nature and location of the work, as well as the general and local conditions that may affect the projects. Any failure to do so would not relieve M/P from successfully performing work without additional expense to WMATA. Indeed, under the contracts, WMATA assumed no responsibility for any understanding or representations concerning conditions made by any of its officers or agents prior to the execution of the contracts, unless expressly stated in the contracts.
D. Sequence, Progress Schedules and Deadlines
M/P’s work was to be performed generally in accordance with the contracts’ construction sequence requirements, the contract drawings, and a detailed plan of the work in a logical sequence developed by M/P and approved by WMATA’s engineer. M/P was required to submit a schedule to the Contracting Officer for approval showing the proposed order of work, the dates on which several major features would be started, and the contemplated dates for completing those features. The schedule was to be in the form of the graphic network diagram or progress chart indicating the work scheduled for accomplishment at any time. Specifically, M/P was required to enter on this schedule the actual progress at monthly intervals, which was to be immediately delivered to the Contracting Officer. A failure to submit or update the progress schedule in a timely manner would allow the Contracting Officer to withhold approval of progress payment estimates.
The contracts also required M/P to prepare and submit a two-part schedule to be used for planning and executing the projects. This schedule would provide details about the construction activities and the attendant “cost loading” of each segment. The Part I schedule would depict M/P’s planned activities for the first 180 days of the contracts. The Part II submittal would be a cost-loaded Critical Path Method (“CPM”) schedule depicting all milestone dates through contract completion. In addition, M/P was required to submit monthly computer updates to the schedule, monthly narratives stating the general progress during that period, a discussion of problems and proposed solutions, and Monthly Progress Status Reports (“Monthly Report”). The two-part network submittal, the Monthly Reports, and revisions to the activity network and analysis were collectively referred to as the Network Analysis System (“NAS”).
The Part I submittal would include a narrative explaining M/P’s general approach for meeting the interim and final completion dates. Also, the cost of all activities expected to be completed before delivery and approval of the Part II sub-mittal would be included, and this data would be used as a basis for payment. No progress payments were allowed until the Part I submittal was approved, and approval could only occur if the submission was complete as specified and represented a realistic approach to the work.
The Part II submittal, which was due 120 days after the Part I NTP, would provide a schedule for the entire contract, including the approved Part I schedule used for the first 180 days of work. This “cost loaded” submittal also would include a narrative on how M/P proposed to perform the balance of the work. Once the Part II schedule was approved, this schedule (unless subsequently changed) was to be the schedule used by M/P for planning, scheduling, managing and executing the work to be accomplished. No progress payments were allowed for work performed after the first 120 days of the contracts until the complete initial Part II schedule was submitted, and no progress payments were allowed for work performed after the first 180 days of the contracts until the initial Part II submittal was approved and the first Monthly Report based on Part II submittal was provided to WMATA.
Monthly Reports were first required 180 calendar days after the NTP and monthly thereafter. M/P was required to participate in monthly meetings with WMATA engineers to allow for joint review and agreement on job progress. Activities that were not included in the initial Part II submittal were to be added to the Monthly Reports for approval in various circumstances, including introduction of change order activities, addition of onsite material delivery activities, or actual or potential delay to contract deadlines. These reports were to be the basis for progress payments, and a failure to provide acceptably updated reports (based on the sole judgment of WMATA engineers) would disallow progress payments.
Original contract milestone dates could not be changed except by contract modification. If M/P’s NAS document submit-tals were not approved, the Contracting Officer was authorized to suspend progress payments. Also, if the Contracting Officer determined that M/P had fallen “significantly behind the approved progress schedule,” M/P would have to take any steps needed to improve the progress. The Contracting Officer could require an increase in shifts, initiate or increase overtime operations, increase days of work, increase the amount of construction plant, and/or require the submission for approval of supplemental progress schedules proposing changes to regain the approved schedule, all without additional cost to WMATA. M/P’s failure to comply with these requirements of the Contracting Officer would be grounds for terminating M/P’s right to proceed with the work, or any separate part thereof, in accordance with the contracts.
E.Disputes
Disputes about a question of fact arising under the contract and not disposed of by agreement were to be decided in writing by the Contracting Officer. The Contracting Officer’s decision would be final and conclusive unless M/P properly lodged a written appeal with the WMATA Board of Directors. In turn, the Board’s decision was to be final and conclusive unless determined by a court to have been fraudulent, capricious, arbitrary, so grossly erroneous as necessarily to imply bad faith, or unsupported by substantial evidence. Pending a final decision about any dispute, M/P was required to proceed diligently with the performance of the contract and in accordance with the Contracting Officer’s decision. In addition, M/P and/or any subcontractor performing the affected work were required to maintain separate accounts of all incurred segregable direct costs.
F.Work Commencement and Completion
M/P was required to commence work within 10 calendar days after receiving the NTP and to prosecute the work diligently to completion. Regarding interim work completion, the contracts required M/P to complete all work in specific areas within the number of calendar days after receiving the NTP if specified in the contracts and release the areas to other contractors. Each contract had Special Provisions pertinent to the particular contract that contained, inter alia, interim completion dates for the two projects requiring that certain aspects of the work be completed within specified periods of time to allow WMA-TA’s system-wide contractors to complete follow-on work. Final completion of the entire project, including the final cleanup and readying for use, was required within not more than the number of calendar days specified in the contracts.
The milestone dates could only be adjusted upon modifications to the contracts. Further, actual slippage of activities could not be the basis for time extensions unless such slipped activities were on the critical path or caused one or more new critical paths, thus resulting in a delay in achieving any milestone date or in achieving the Contract completion date.
If M/P failed to complete the work within the specified time for interim completion dates, the contract required it to pay WMATA liquidated damages of $2500 per each day of unexcused delay for each affected area. For final completion, failure to complete the work on time required M/P to pay WMATA $1500 in liquidated damages for each day of delay. The liquidated damages were not to exceed $5000 per day.
G.Termination for Default
If M/P failed to complete its work (or any separable part) on time, or refused or failed to prosecute such work with the diligence required for completion by the agreed-upon deadlines, WMATA could terminate by written notice M/P’s right to proceed working. Further, WMATA could take over and complete the work, by contract or otherwise. The contracts provided that, regardless of any such termination, M/P and its sureties would be liable for any damage to WMATA resulting from the refusal or failure to complete the work in the specified time.
Termination and any resulting damages claims were disallowed if the delay was caused by unforeseeable causes beyond M/P’s control, fault, or negligence (e.g., natural occurrences, acts of WMATA or its other contractors, fires, floods, strikes, freight embargoes, unusually severe weather, or certain delays by subcontractors or suppliers). Also, M/P could prevent termination by notifying the Contracting Officer in writing of the causes of delay within 10 days from the beginning of any such delay. The Contracting Officer would then ascertain the facts and the extent of the delay and extend the time for completing the work when, in his judgment, the findings of fact justified such an extension. Such findings of fact would be deemed final, subject only to appeal as provided in the General Provisions’ “Disputes” article. The rights and remedies of WMATA under the termination provisions were in addition to any other rights and remedies provided by law or under the contracts.
H. Termination for Convenience
M/P has asserted that the “Termination for Convenience of [WMATA]” provision is relevant. In this provision, WMATA could terminate the contracts whenever the Contracting Officer determined that such action was in WMATA’s best interest. Such termination would be effectuated by delivering a “Notice of Termination” that specified the extent to which performance under the contract was terminated, including the date termination became effective. M/P would be required to stop work as directed, place no further orders and terminate existing orders outside the scope of the' non-terminated work, transfer rights and titles to WMATA as directed, settle all outstanding liabilities, and otherwise complete the non-terminated work. M/P would submit a termination claim to WMATA, and in the event the parties failed to agree on the outstanding payments owed to M/P, the provision set forth the method to calculate the termination amount to be paid to M/P.
III. Shaw Station Project Provisions and Early Performance
“The Shaw project consisted] of a ‘cut- and-cover’ station and service area construction under 7th Street, between Rhode Island Avenue and S Street, N.W., with machine-bored tunnels to the north and south.” With this “cut-and-cover” method, M/P would “cut” a trench into the earth, which would be covered with decking to allow traffic to flow on the surface while work was proceeding underneath. The major elements of work ■ were the South Tunnels, the station south vent structure, the Shaw station (including south and north service rooms), the station north vent structure, the North Tunnels, the 8th Street fan structure, and the crossover. SAF No. 141. The project would interface with the U Street Station project at Vermont Avenue and U Street.
A. Shaw Station Contract Provisions
Various provisions unique to the Shaw Station project also set forth construction sequence and staging requirements, as well as internal and final deadlines. These provisions required M/P to undertake Parts I and II of the Shaw project construction work in a particular order. However, within the parameters set by these provisions, M/P had discretion regarding the order in which to perform particular items of work or particular work stages, so long as this planned sequence was set forth in approved Part I and Part II submittals. SAF No. 150.
1. Sequencing
The contract divided the Shaw Contract work into Part I and Part II, each part separately fended. In the beginning, funds were sufficient for Part I only, in the amount of $27 million, and Part II was contingent on the future availability of additional funding. As such, M/P could not begin Part II work until specifically authorized to do so by the Contracting Officer. WMATA would issue the NTP for Part II 182 days after issuance of the Part I NTP. SAF No. 142.
Part I work involved the construction of the Shaw Station Structure, which would run under 7th Street, between R Street and north of S Street. M/P was required to construct this reinforced concrete Station Structure in the area excavated in 7th Street between R and S Streets. The structure would comprise of three major concrete components: inverts that formed the floor of the cylindrical Station Structure, lower arch-like walls resting on the inverts, and upper arches that made up the roof. In addition, Part I required the relocation of the following utilities running in the area beneath Rhode Island Avenue and R Street:
• water lines running under 7th Street;
• a 60-inch diameter sewer line (the “S-8 line”) running under the south side of Rhode Island Avenue that flowed into a 102-ineh diameter sewer line (the “S-5 line”) under the intersection of 7th and R Streets;
• a main Potomac Electric Power Company (“PEPCO”) electric line (the “E-5”) under the east side of 7th Street;
• a 48-inch diameter water line running below R Street;
• a telephone line running just under R Street; and
• a 102-inch diameter sewer line running below R Street.
Finally, Part I of the project required restoration work around the Shaw Station Structure, including “backfilling” (i.e., placing fill dirt over the Station Structure), restoring utilities, backfilling over those utilities, and finishing the streets and sidewalks. SAF No. 143.
Under the Shaw Contract’s Part II, M/P would construct the South Service Area, a concrete structure by the station’s south end under Rhode Island Avenue. In addition, M/P would construct two other concrete structures: the South Vent Shaft Structure, which adjoined the South Service Areas, and the North Service Area, which was at the station’s north end. Tunnel boring work for both the South and North Tunnels was also included under Part II. Finally, the overall restoration work was to be completed, which consisted of placement or relocation of utilities, backfilling around Part II concrete structures and over replaced utilities, and construction of streets, curbs, gutters, and sidewalks. SAF No. 144.
The construction sequence provisions unique to the Shaw Station contract required WP to follow certain time intervals, divided into four terms. The first term encompassed all of Part I’s work, while the final three terms split up the work required in Part II. Also, for the first three terms, the following work was required throughout: setting up of traffic detours, setting of piles, utilities replacement, construction of slurry walls, decking and utility support installation, excavation system support installation, excavation, sewer and drainage system installation, utilities restoration, and backfilling and restoring the street. SAF No. 145.
The first two terms involved the South Tunnels and station referred to as “E-lb” — indeed, both were titled “E-lb Structural.” The first term was for the construction of the station vault, the north service rooms, and the north entrance and service rooms. In addition, “button-up” work would be done, if required. This term was slated for the first 28 months after M/P received the NTP. The second term was slated for 30 months, specifically the 6th-36th months after receipt of the NTP. This construction work involved the station platform, mezzanine, south vent structure, south service rooms, and station south entrance and service rooms. Id.
The third term involved the North Tunnels referred to as “E-lc,” and was titled “E-lc Structural.” This term, which was slated for 34 months starting with the sixth month after receipt of the NTP, required the construction of the station’s north vent structure, fan structure, and crossover. Id.
The final term, which was titled “E-lb/E-lc Finish,” was to occur for 20 months between the 22th and 42nd months after receipt of the NTP. As the title suggests, M/P was to finish work on the various parts of the project, including work for the South Tunnels; the south vent structure and service rooms; the station itself; the entrances, passageways and related service rooms; the north vent structure and service slabs; the chilled water lines; the pumping station; the fire stand pipes; the light and power elements; the fire protection system; the electrical and mechanical systems; and the architectural system and work. Id.
Thus, the following sequence was required by the contract:
• Term I (Part I work titled “E-lb Structural”) during the 0-28th month period.
• Term II (Part II work titled “E-lb Structural”) during the 6-36th month period.
• Term III (Part II work titled “E-lc Structural”) during the 6-40th month period.
• Term IV (Part II work titled “E-lb/E-lc Finish”) during the 22-42nd month period.
This sequence made clear that the parties intended from the outset for Part II work, if authorized, to overlap with Part I work. In addition, an amendment added an access restriction that prevented work on the South Tunnels during the first 700 days of the project to accommodate work on an adjacent project to the south. SAF No. 146.
2. Deadlines
The construction contract required M/P to complete the project within 1280 days after receiving the NTP. Because M/P received the NTP on Part I of the Shaw Station contract on September 3, 1985, the contract completion deadline was March 6, 1989. SAF No. 148 (quoting Special Provisions of Shaw Station Contract).
In addition to setting this final completion date, the contract also established interim dates for certain identifiable portions of the work. Generally, Part I was to be completed 840 days after the NTP for Part I was received. Aso, the contract specified certain areas where M/P was required to complete all work and release those areas to other contractors within a certain number of calendar days after receiving the NTP for Part I. A portion of the inbound and outbound trackways, including the station limits were to be completed 1150 days after receipt of the NTP. The remaining trackways were to be completed by 1020 days after receipt. The deadline for work on permanent power and all branch circuits, the tiebreaker room, the train control and communications room, the escalator wellways, the elevator hoist-ways, the machine rooms, and the kiosk area was 1200 days after the NTP was received. SAF No. 149.
3. Staging for Traffic Maintenance
The Shaw Station contract also set forth certain guidelines for the staging of construction operations. M/P was directed to pay “particular attention ... to the fact that both vehicular and pedestrian traffic must be maintained on the various existing streets within and adjacent to the project site in accordance with the maintenance of traffic notes.” SAF No. 148.
Given the need for urban excavation, temporary decking was required over open excavations to allow for vehicular and pedestrian traffic to continue. To minimize disruptions to traffic, M/P was required to perform the decking operations, the utility work, and the subsequent paving and restoration operations in stages. The contract drawings set forth a staging method, as well as requirements for the number of traffic lanes provided during rush hours and non-rush hours, the shifting of traffic lanes, the use of working and storage areas, and other traffic maintenance concerns.
M/P would determine the particular order in which the various stages were to be performed, provided that all other traffic maintenance requirements were met. However, stage work within the limits of one stage must have been completed before work in another stage is commenced. M/P was required to prepare and submit to the DPW working drawings including comprehensive staging and decking plans for its approval, and could not start any work without such approval.
B. M/P’s Planned Work
Thus, as Judge Revercomb pointed out, the Court must examine the planned work versus the actual work sequence on the Shaw Contract to understand the parties’ disputes. M/P’s basic planned sequence of work ran from south to north. First, during the first 180 days, M/P planned to relocate major utilities, including the S-3 and S-5 sewer lines and the E-5 electrical line. The early work at the south end was to include the start of support of excavation work, including installation of soldier piles for the south vent structure and slurry walls for the support of station excavation.
M/P then planned to proceed with support of excavation, including installation of deck beams, capbeams, and decking in the open cut area along 7th Street. This work would permit M/P to proceed with its excavation operations under the street using the cut-and-cover method.
After completing the excavation to sub-grade at a certain location north of R Street, M/P intended to mobilize its Tunnel Boring Machine (“TBM”), including trailing gear, track, and grout plant, in the excavated area between Rhode Island Avenue and R Street. The muck bin for the material excavated by the TBM was to be installed in the area of the south station entrance on the north side of R Street. M/P then planned to proceed with the excavation of the South Tunnels using the TBM.
While South Tunnel work was proceeding, M/P planned to continue mass excavation of the station area moving from south to north, followed by station concrete operations. When the excavations of the station and South Tunnel were complete, the TBM would be remobilized to the north end of the station to excavate the inbound and outbound North Tunnels.
During the North Tunnel excavation, M/P planned to complete its station concrete work and work on the concrete in the south service rooms. Concrete work for the station north service rooms and vent structure was to occur after the completion of the North Tunnels. Finally, upon completion of structural work in the station area, M/P planned to backfill above the station to below the utilities, complete work on restoring utilities, backfill to the surface, and perform surface restoration (restoring the streets, curbs, gutters, and sidewalks that had been removed at the beginning of the excavation) along the alignment of the Shaw station and under 7th Street. M/P’s original plan then called for station lower arches, followed by the upper arches, to proceed from north to south.
This planned sequence of work deviated from the contract in several ways. For example, M/P acknowledged that starting the South Tunnels first was a deviation from the contract’s 700-day access restriction. Def. Ex. 32. However, with Perini performing the adjacent contract to the south, M/P was easily able to arrange for excavation of the South Tunnels to be performed before the adjacent project was completed. SAF No. 629.
C. Actual Work Sequence
The sequence of work for the Shaw station largely proceeded as planned. The Court finds that the major deviations from the general sequence of the planned construction were of M/P’s choosing for M/P’s convenience. For example, M/P deviated from its planned sequence of station concrete operations for its own convenience, opting for a “skip-and-fill” method of pouring the inverts in which the inverts are poured alternately instead of sequentially to save concrete forming costs. M/P also decided to pour station arch concrete from the south end to the north, rather than north to south as originally planned. M/P also altered the sequencing for tunnel excavation as well for its own convenience and benefit. See discussion infra (M/P’s resequencing claims).
D. Shaw Project Performance
1. Traffic Pattern Claims (CPN 002)
The initial traffic maintenance plan presented by M/P to WMATA and the DPW, as required by the contract, was rejected, necessitating prolonged negotiations to develop an acceptable traffic plan. As such, M/P contends the associated delays substantially disrupted and delayed its performance on the Shaw Station project by, among other things, restricting work space and altering the sequence of work. Proposed Findings of Fact of Mergentime, Perini, & INA (“P1.FOF”) at 250. The claim was asserted as Contractor Proposal Number 2 (“CPN 002”), one of two substantial claims by M/P that posed problems for the parties during the course of the Shaw Station construction project.
As detailed above, the contract documents reflect that Part I of the Shaw Station construction project involved utility relocation below street level, decking, and excavation, impacting traffic patterns in the area. As such, the contract required plans on how the traffic would be maintained during the construction operations. SAF No. 500. Specifically, M/P was responsible for obtaining all necessary licenses and permits from the District of Columbia related to prosecuting the work, including approval from the DPW of M/P’s traffic maintenance plan. SAF Nos. 501-02.
In its pre-bid contract drawings, WMA-TA’s original suggested traffic plans proposed closing four lanes of traffic on Rhode Island Avenue while maintaining two lanes of westbound traffic and a left turn lane and diverting Rhode Island Avenue’s eastbound traffic to Q Street. The contract also provided that 7th Street would remain partially open for southbound traffic. Def. Exs. 1508, 1754; see also Revercomb Op. at *24. This plan was reflected in WMATA’s contract drawings Elb-G-13 through Elb-G-18. Before their issuance, these traffic plans were approved by the District of Columbia government.
However, on March 21, 1985, six days before the bidding opened for the Shaw Station project, William Leech, WMATA’s Resident Engineer for the Shaw Project, was told by representatives from the DPW that it could not approve the traffic maintenance plan in contract drawings Elb-G-13 through Elb-G-18 because it would divert too much traffic from Rhode Island Avenue to Q Street. Mr. Leech was advised that the DPW would require four lanes of traffic — two west bound lanes and two east bound lanes — on Rhode Island Avenue at all times during the construction of the Shaw Station. Tr. 1/13/1992, at 6-7, 71-72; Pl.Ex. 1528, at 15-16, 21-24; PI. Exs. 22, 23, 24, 24(a).
While WMATA determined that it was too late to advise bidders of this change, purportedly to avoid delaying the bidding process, it appears that WMATA also did not formally advise M/P of its knowledge regarding the DPW position for some time either. Indeed, on September 25, 1985, Mr. Leech reviewed and approved M/P’s Maintenance of Traffic Drawing TC-001 that was substantially the same as depicted in the contract drawings, and allowed M/P to forward these plans to the DPW for permit issuance despite his apparent knowledge (based on his March 21, 1985 meeting with the DPW representatives) that the DPW would not approve the plan given its reliance on a Q Street detour. Tr. 1/13/1992, at 7-9, 72-73, 82-83; Pl.Ex. 32. As such, this Court finds — and agrees with Judge Revercomb — that WMATA “did not advise M/P of [this] fact for nearly six months.” Revercomb Op. at *24. Specifically, it appears from the evidence that the first recorded indication of M/P’s knowledge regarding the DPW’s position comes from WMATA’s minutes from an October 1, 1985 meeting between the DPW, WMATA, and M/P:
Proposed traffic control for Rhode Island Avenue is inacceptable [sic]. Mr. Chardon stated that since Q Street is a small residential street, it can’t handle traffic detoured from Rhode Island Avenue.
Pl.Ex. 34, at 2; see also Tr. 11/6/1991, at 142; Tr. 1/13/1992, at 82-83; Tr. 9/19/2001, at 643-44.
M/P gave formal notice to WMATA that its maintenance of traffic plans for Rhode Island Avenue, using the Q Street detour, had been disproved by the D.C. government on October 21, 1985. SAF No. 508. On the same day, Mr. Leech informed Don Miner, Mergentime’s Vice President and Project Manager for the Shaw Station project, that WMATA would seek a credit for a 7th Street closure if approved against any claim by M/P for time and money arising from the rejection of its traffic plan. SAF No. 509. Several days later, M/P assigned CPN 002 to the Rhode Island Avenue traffic plan changes on October 30,1985. SAF No. 508.
In subsequent correspondence, the DPW indicated that it was instead willing to approve the full closure of 7th Street (between R and S Streets, N.W.) to expedite construction. PI. Exs. 37, 38; Tr. 1/13/1992, at 12-13. Accordingly, in late 1985, M/P submitted a series of revised traffic plans for Rhode Island Avenue eliminating the Q Street detour. On November 8, 1985, Mr. Leech wrote Mr. Miner about the new traffic control requirements, noting that WMATA recognized that the loss of the Q Street detour was a change from the traffic control plan shown in the contract drawings. SAF No. 510. Mr. Leech further instructed M/P as follows:
1. Review and adopt your construction sequencing and maintenance of traffic schemes to suit [the new traffic plan].
2. Provide to this office the maintenance of traffic drawing schemes that [Department of Transportation] will permit.
3. Furnish to [WMATA] a proposal for additional costs, if any, with justification caused by this change.
Upon receipt of items 2) and 3) [WMA-TA] will review and may issue a PCO based on the change.
SAF No. 510.1 (first alteration in original). M/P submitted a revised traffic plan for approval on November 13, 1985, which would keep four lanes of traffic — two eastbound lanes and two westbound lanes — on Rhode Island Avenue during all construction operations under Contract 1E0012. SAF No. 511. The DPW approved this plan on January 9,1986.
M/P informed WMATA that the traffic changes would cause delays and additional direct costs. Specifically, M/P’s Shaw Project Manager Thomas Goedjen sent a letter to Mr. Leech on April 23, 1986 stating that, while it would submit a cost proposal for CPN 002 only when the full impact was documented, at a minimum the affected activities included the E-5 electrical duct, the W-2 16-inch water line, the S-3 sewer, the T-2 two-way duct, soldier piles, caps, decking, and additional traffic protection devices and traffic pattern switches. PI. Ex. 55.
M/P and WMATA did not reach agreement on the valuation of CPN 002 despite continued discussions about traffic plan changes and the value of the 7th Street closure. M/P refused to acknowledge a linkage between the Q Street detour and the 7th Street closure. Pl.Ex. 58. On October 6, 1986, WMATA unilaterally submitted Contract Modification Number 7 (“Mod 7”), which provided for a no-cost/no-time extension adjustment to the contract reflecting the Rhode Island Avenue traffic change offset by the 7th Street closure cost and time savings. SAF No. 602.
M/P did not submit a cost proposal for CPN 002 until November 20, 1986, requesting a contract price adjustment of almost $1.12 million and a 92-day time extension. Def. Ex. 240. In that proposal, M7P claimed $192,246 in inefficiency costs (non-direct), Def. Ex. 62, at 47, which M/P described as “costs which arose from working in the smaller work areas necessary to maintain 4 lanes of traffic in Rhode Island Avenue.” SAF No. 607. These included inefficiencies in installing soldier piles and decking and relocating the S-3 sewer, the W-2 and W-4 watermains, and the E-5, E-4, and E-2 electrical duct-banks. Def. Ex. 62, at 52. M/P also claimed almost $60,153 in direct costs of maintenance of traffic activities associated with additional traffic switches under Rhode Island Avenue. Id. at 48. Notably, M/P did not — as of the claim submission in November 1986 — assert claims for acceleration and administration impacts on work in the station area.
Neither WMATA nor M/P prepared any cost proposals regarding the benefits from the 7th Street closure at any time during 1986 and 1987. Indeed, WMATA did not prepare a detailed cost estimate until after it had terminated M/P as contractor for default. SAF No. 611. Further, WMA-TA’s did not issue a final decision on CPN 002 until May 10, 1990 — the day before termination. M/P claims that these delays in processing the CPN 002 claim breached the contract, and justified its delays in performing the Shaw Station project.
The start of utility work under Rhode Island Avenue was delayed; however, once excavation had proceeded to Level B struts, subsurface operations could proceed entirely from below the surface without hindrance from street-level traffic. By November 6, 1986, subsurface excavation and utility activities under Rhode Island Avenue could proceed regardless of street level traffic activities. Retr. 10/16/2001, at 2683-84; Retr. 9/19/2001, at 680; Retr. 9/21/2001, at 793. Further, based on a second independent review of the entire record, trial testimony, and credibility of the witnesses, the Court agrees with Judge Revercomb’s findings with respect to M/P’s claimed delays regarding the following particular items of early work:
The E-5 Electrical Line: M/P’s original Part I CPM Schedule shows that work on PEPCO’s E-5 electrical line was to commence the week beginning November 6, 1985, with a “late finish” date of November 19 for the section between manholes 5 and 8 in Rhode Island Avenue and an overall late finish date of February 10, 1986. Pl.Ex. 16. M/P planned to begin this work at the south end of the Project in the intersection of Rhode Island Avenue and 7th Street and proceed northward up 7th Street. In fact, the Resident Engineer’s diary discloses that M/P began excavating the E-5 line as early as October 11, 1985, albeit at a different point along 7th Street than originally planned. See RE Diary (Shaw), 10/11/85. This work was performed under the guidelines set forth in a PEPCO permit, which generally limited the work to specific areas and only during off-peak traffic hours. Work on the E-5 line did not commence on Rhode Island Avenue until January 16, 1986, 70 calendar days later than the scheduled start. See Periodic Progress Review Meeting Minutes, 2/19/86, App. B. Completion of the section between manholes 5 and 8 was delayed until June 26, 1986. See Periodic Progress Review Meeting Minutes, 7/22/86, App. B. The delay in completion appears to have been cause in part by the need to complete work first on the S-3 sewer line in the immediate vicinity of the E-5 line.
The S-S Seiver Line: The Part I CPM indicates that M/P was to begin installation of the new 60-inch S-3 sewer line beginning December 17, 1985, with a “late start” date of January 23, 1986. See Pis.’ Ex. 16. According to the claim narrative submitted by M/P in November, 1986, work on the S-3 sewer line commenced on March 17, 1986. See Def.’s Ex. 240, at 15. This statement is at odds with M/P’s own as-built schedule update, which the Court finds a more reliable source, showing that installation of the S-3 line began on February 21, 1986, the S-3 sewer was activated on June 13, 1986, and was completed at the transition chamber on June 26, 1993. See Pis.’ Ex. 17.
Soldier Piles: M/P’s original Phase I plan called for installation of soldier piles in the Rhode Island Avenue area once the early utility work was completed there, as part of the support of excavation system for the South Service Area/Vent Shaft. Nee Pis.’Ex. 16. This work was to begin in the vicinity of the South Vent Shaft on the north side of Rhode Island Avenue on May 13, 1986, on the west side of Sta. 50+25 to Sta. 51 + 00 on June 2, on the east side of Sta. 50 + 25 to Sta. 51 + 00 on June 9, and at the South Bulkhead on June 20. See Pis.’ Ex. 16. M/P’s own as-built schedule (Pis.’ Ex. 17) and its schedule updates attached to Periodic Progress Review Meeting minutes show that M/P actually began work on the soldier piles as early as March 21, 1986, in the vicinity of the South Vent Shaft on the north side of Rhode Island Avenue, well ahead of schedule. The soldier piles for the east side of Sta. 50+25 to Sta. 51 + 00 were started on April 23, 1986, but not completed until June 27. See Pis.’ Ex. 17; Periodic Progress Review Meeting Minutes, 7/22/86, App. F. Although M/P complains that its piling activities were interrupted and non-sequential, see Def.’s Ex. 240, it is evident that the net delay was only 7 calendar days.
Revercomb at *26-27.
As to the administration and valuation of M/P’s CPN 002, the Court finds that M/P’s claim was inadequately documented or unsupported, M/P frequently revised and updated its claims resulting in the need for further audit and review by WMATA, and M/P refused to address offsetting credits and the benefit of the 7th Street closure. Def. FOF ¶¶ 319-25. The Court also finds that WMATA followed its internal procedures and the contract requirements in processing CPN 002, although these internal procedures may have contributed to some delay in processing the claims. Id. ¶¶ 340^43. Thus, the Court rejects M/P’s contentions that the delay in processing the claim was a breach of contract or excused it from delay and nonperformance on the Shaw Station contract.
The Court also finds that, between January and August 1987, M/P and WMATA attempted to negotiate a settlement of CPN 002 and other issues as part of.Memorandum of Agreement Number 1 (“MOA l”). This agreement recognized a bona fide dispute regarding CPN 002, but nonetheless attempted to revise milestone dates and settle many of the claims associated with CPN 002. Ultimately, WMATA did not sign MOA 1, but it did implement all of its provisions except that of the 100-day time extension. By letter dated August 11, 1988, Charles Mergentime gave the WMATA Contracting Officer John McEl-henny an additional 30 days to sign MOA 1 with its 100-day time extension. Pl.Ex. 99.
In addition, successful efforts to mitigate the effects of the delay did occur. Starting with a meeting on November 5, 1985, Mr. Leech and M/P’s management, Mr. Miner and Tom Goedjen, began to develop plans to mitigate the effect of the change in traffic patterns on Rhode Island Avenue. Def. Ex. 1521, at 29-30; Tr. 1/13/1992, at 14-15. Their plan would squeeze four lanes of traffic into what previously had been three lanes, and using the median and parts of the sidewalks to accommodate traffic. In addition, M/P was no longer required to maintain a left turn lane east of Rhode Island Avenue. The Court finds that these measures minimized the effects of requiring M/P to maintain four lanes of traffic during peak hours on Rhode Island Avenue. Tr. 1/13/1992, at 15-16,19-20.
The DPW’s denial of the Q Street detour did constrain the working space available to M/P under Rhode Island Avenue and 7th Street for utility work, and required some additional maintenance of traffic activities in that area. Def. Ex. 1364; SAF Nos. 645-55. The Court finds that WMATA’s failure to inform M/P of its superior knowledge about the DPW’s position for six months, including as M/P prepared its permit request was unjustified. Further, WMATA did contribute to the delays in resolving CPN 002 — indeed, the WMATA Contracting Officer did not issue a final decision on CPN 002 until May 10, 1990, the day before termination.
However, the impact of the change ceased in November 1986, when M/P had excavated to a level that allowed M/P to continue excavation and utility work from under the decking, without regard to street traffic above. Def. Ex. 1135; Tr. 1/17/1992, at 93-94; Retr. 10/16/2001, at 2684. Further, the costs incurred by M/P as a result of the Rhode Island Avenue traffic change were offset in large part by the cost savings achieved as a result of the allowance of full closure of 7th Street during station construction and beyond. The Court finds that this alternate traffic maintenance plan increased the efficiency of several operations along 7th Street, including support of excavation, deck beam installation, maintenance of traffic, excavation, and concrete operations during 1986-89. The full closure of 7th Street during the work week was a change to the contract, from which M/P clearly benefited as its Project Manager Goedjen admitted. Retr. 9/19/2001, at 664-65. The estimated savings, proposed by WMATA (although prepared after termination) and credited by the Court, totaled $912,379. The Court notes that M/P never offered evidence as to the value of those benefits. Def. FOF ¶¶ 33-37, 912-26.
The Court agrees that the Rhode Island Avenue traffic change delayed excavation under Rhode Island Avenue, which in turn contributed to the delays in starting the South Tunnels from October 16, 1986 to January 23, 1987. Def. Ex. 1271. However, a cost-saving change designed and proposed by M/P, Contractor Proposal Number 005 (“CPN 005”), also contributed to the delayed excavation under R Street until a. sewer line was completed and supported in that area. This delay, discussed infra, in turn inhibited the installation of muck cars and trailing gear for the TBM. Thus, M/P’s change proposal also, contributed to the South Tunnels delay. Tr. 1/17/1992, at 88-89; Tr. 1/21/1992, at 148-50; Retr. 10/16/2001, at 2678-82; Def. Exs. 1599,1600; Retr. 9/21/2001, at 812-13.
Regarding its acceleration claims, M/P argues that WMATA’s failure to grant timely extensions of time for CPN 002 and the June 2, 1986 and October 29, 1986 letters from Leech to M/P’s Goedjen, which indicated concern over missed deadlines, constituted acceleration. Def. Exs. 145, 226. The letters show that by October 1986, WMATA had determined that M/P was behind on the Shaw Station project. See Revercomb Op. at *36. At most, the two letters only ask M/P to submit a plan for recovering lost time on the contract. The Court finds no directive to accelerate performance. Rather, the letters inform M/P. that, if an acceptable plan is not .submitted, WMATA may invoke contract provisions to direct extra shifts or added manpower to make up lost time. Def. Ex. 1, at 22; Tr. 11/4/1992, at 60-62. Not surprisingly, despite the contracts’ requirement to notify WMATA if an order was deemed a directive to accelerate, M/P gave no such notice regarding these letters in its response or otherwise. Instead of claiming or even complaining of acceleration, M/P’s response denied that it was 64 days behind schedule. Def. Ex. 151; Retr. 9/21/2001, at 809. Indeed, as Mr. Miner testified, M/P never discussed or prepared a plan for accelerating the work and never presented such a plan to WMATA.
In any event, the Court notes that M/P’s own schedule narratives show that it was behind schedule 64 workdays as of September 15, 1986, behind 77 workdays as of October 15, 1986, and behind 79 workdays as of November 15, 1986. See Def. Ex. 151