LADWP Powerplant Modernization Project
On June 4, 2018, a federal jury in the Central District of California awarded $45 million to the Plaintiff Contractor in a dispute with the Los Angeles Department of Water and Power. The dispute involved liability for the Contractor’s costs to accelerate its work on a $440 million power plant modernization project, which were incurred due to delays in delivery of equipment for which LADWP was responsible under the Contract. LADWP filed a counterclaim seeking over $190 Million and was awarded $1 Million by the jury.
Differing Site Conditions Clause; ASBCA Confirms Government Retains Responsibility for Subsurface Conditions in Design Build Context
In an important win for a Watt Tieder client, Judge Peacock of the ASBCA recently rejected the United States Army Corps of Engineer’s argument that the Differing Site Condition clause is interpreted differently in the recently popular design build context than in the more traditional design bid build. Judge Peacock pointedly dismissed the USACE assertion, awarding Watt Tieder’ s client direct, delay, and impact costs associated with the Differing Site Condition. Judge Peacock’s words should have significant meaning to the thousands of government contractors doing business with the United States Army Corps of Engineers, here in the United States or abroad.
"The government argues that the DSC clause is applied more restrictively in the design-build versus the design-bid-build context, citing CCI, Inc., ASBCA No. 57316, 14-1 BCA , p. 35,546, in support of this argument. But such differentiation has consistently been rejected by us and the Federal Circuit. In Metcalf Construction v. United States, 742 F.3d 984, 995-96 (Fed. Cir. 2014), the Federal Circuit ruled that the design-build nature of the contract did not transfer the risk of inaccurate subsurface data to the contractor. Cf. Haskell Corp., ASBCA No. 54171 et al., 06-2 BCA, p. 33,422 at 165,700. The identical DSC clause is required to be included in fixed-price construction projects, whether the design-bid-build or design-build method of contracting is utilized. FAR 36.502. There is no justification for interpreting the clause differently in the design-build context. As appellant concedes, design risk is transferred to contractors in the design-bid context, but not the risk of DSCs. A design-builder does not forfeit its rights under the DSC clause to rely on solicitation representations of subsurface site conditions. ... For the reasons detailed below, we decide that appellant encountered a Type I DSC. The quantities of rock encountered greatly exceeded the quantity reasonably foreseeable based on a fair reading of contractual indications..."
Sir Adam Beck Additional Diversion Project Niagara Tunnel Facility
The project required the underground excavation in rock of a 10.4 km water diversion tunnel in Niagara Falls, Canada. The tunnel boring machine (“TBM”) used on the project was, at the time, the largest diameter (47.2 ft.) hard rock TBM in the world. The contractor encountered extensive and impactful differing site conditions early in construction and hired Watt Tieder to represent them in preparing and presenting their claim to the Contract’s Disputes Review Board.
The Dispute Resolution Board (DRB) recommended that the Owner, Ontario Power Generation (“OPG”), recognize the existence of the claimed differing site conditions and issue an equitable adjustment to the contractor. Because the project was not yet 50% complete and the differing site conditions were so pervasive, Watt Tieder convinced the parties to abandon their fixed price contract in favor of a newly negotiated “Target Cost and Target Schedule” Contract with incentives and disincentives. The new “Target Cost” was more than twice the amount of the original fixed price contract. The Project was successfully completed within the negotiated targets and received the “Canadian Project of the Year” award for 2013.
Stone & Webster Asia, Inc. (SWAI)
Watt Tieder represented SWAI in arbitration proceedings against the Taiwan Power Company regarding construction of one of the first Greenfield Nuclear Power Plants. The arbitration was before the Republic of China Arbitration Association in Taipei, Taiwan, instead of before an international body, as is the norm. Watt Tieder faced the challenges of arbitration under a foreign civil code legal system and translating extensive testimony from Mandarin to English. Ultimately, SWAI was awarded $23.7 million and $3.1 million in fees and costs.
St. Paul Fire & Marine Insurance Company (St. Paul)
When St. Paul was named in a bad faith and destruction of business case by a subcontractor on a power plant project in Puerto Rico, Watt Tieder stepped in to represent the surety. Despite the subcontractor's suit against St. Paul for damages in excess of $60 million, the subcontractor lost the case on a summary judgment motion and collected nothing on its claim. St. Paul was awarded more than $4 million on its indemnity claim and all of its attorneys' fees.
Dillingham-Ray Wilson Co. JV
On the eve of trial, Watt Tieder was hired as co-counsel to represent Dillingham-Ray Wilson Co. JV, a general contractor, in a breach of contract action against the City of Los Angeles related to expansion of the Hyperion Wastewater Treatment Plant, the largest facility of its kind in Los Angeles. Watt Tieder successfully helped obtain a favorable jury verdict for the client in excess of $35 million.