In Amec Foster Wheeler Environment & Infrastructure, Inc. v. Department of the Interior, CBCA 5168 et al. (Feb. 27, 2019), the Civilian Board of Contract Appeals (“CBCA” or “Board”) recently reiterated that a contractor need not assert every conceivable legal theory of relief as soon as it encounters an unforeseen condition on a construction project. Rather, a contractor may later be able timely to assert additional claims under distinct theories based on operative facts learned during discovery. Apropos of recently celebrated St. Patrick’s Day, this case indicates that discovery may be the rainbow that leads a contractor to a bigger pot of gold, i.e., operative facts that permit assertion of more valuable claims based on alternative legal theories.

The Case

In 2011, the National Park Service awarded Amec a contract to repair parts of the Alcatraz Cellhouse in the historic prison on Alcatraz Island. In January 2016, Amec appealed a contracting officer’s decision denying an equitable adjustment and schedule extension under theories of constructive change and breach of the duty of good faith and fair dealing. The Board docketed that appeal as CBCA 5168. During discovery, Amec decided to allege alternative grounds for relief. Indeed, in August 2018, Amec submitted a new claim for more money than it sought in the already docketed appeal — based on different operative facts and under the distinct theories of superior knowledge and negligent estimates. Amec appealed the denial of that second claim to the Board, which was docketed as CBCA 6298 and consolidated with CBCA 5168.

The Government then moved to dismiss Amec’s new superior knowledge and negligent estimate claim as barred by the statute of limitations. Specifically, the Government argued that Amec could have asserted that claim as early as January 2012, when Amec arrived on the job. In response, Amec contended that its new claim was timely because it “only recently” learned enough operative facts through engineering documents obtained during discovery in CBCA 5186 to assert the theories upon which the claim was based.

In ruling on the motion, the Board recognized that Amec’s claim based on superior knowledge and negligent estimates accrued when Amec should have known that it had been damaged by the Government’s alleged actions in breach of the contract. The Board then agreed with Amec, holding that the allegations in its complaint, taken as true while adjudicating the motion, made it plausible that Amec did not know enough to assert its new claim in 2012. The Board indicated that, if proven at the hearing, the fact that Amec only learned of the extent of the agency’s preaward knowledge of relevant Alcatraz conditions in discovery in CBCA 5186 could make the new claim timely.

At base, the Board recognized that a “contractor cannot in good faith assert a claim based on withholding of superior knowledge or similarly misleading conduct unless the contractor has a solid evidentiary basis to allege such conduct.” Accordingly, the Board refused to endorse the notion that a contractor should assert “every conceivable legal theory of relief as soon as it encounters an unforeseen condition.”

Key Takeaway

An indispensable part of any worthwhile discovery plan is a clear delineation of what facts are needed to support each element of each theory of relief that has been asserted in the matter. This case illustrates the value of taking that elements analysis a step further. Indeed, delineating in a discovery plan the facts needed to support the elements of related, but not yet asserted theories of relief and then propounding associated discovery requests may bear fruit. Coming full circle, if Amec had not sought information in discovery about the Government’s preaward knowledge of relevant Alcatraz conditions, then it may not have obtained the engineering documents that were integral to pleading its later asserted, higher value superior knowledge and negligent estimate claim.