An entitlement ruling was secured for a dredging contractor in a $5.7 million claim against the U.S. Army Corps of Engineers. The Armed Services Board of Contract Appeals (ASBCA) ruled that the government withheld superior knowledge and issued defective specifications concerning a 2022 dredging project located in Newburyport Harbor, Massachusetts.
In this case, the government awarded a client a contract to dredge a harbor channel. Following contract award, the contractor attempted to self-perform dredging using a cutterhead dredge, but soon found that the channel sea conditions were more severe than stated in the solicitation. The contractor was unable to self-perform and was eventually forced to subcontract dredging to a larger, ocean-going dredge, at added cost.
It was subsequently discovered that an earlier government solicitation specifically warned bidders about the channel’s rough sea conditions and required the use of a dredge insured for use in ocean conditions. It was also discovered that the government had withheld reports and data demonstrating that the channel experienced large swells and had become more dangerous in recent years.
Based on the government’s failure to disclose these warnings and information, the contractor submitted a claim alleging that the government possessed superior knowledge and issued defective specifications. The government, however, denied the claim and argued that the contractor should have discovered the channel’s sea conditions from publicly available sources, among other arguments.
On appeal, the ASBCA rejected the government’s position. The ASBCA found that the warnings and information contained in the earlier solicitation and government reports constituted vital information that should have been disclosed to bidders. The ASBCA also found that the contractor had reasonably assessed the 2022 solicitation and available information, including because the government’s pre-award independent estimate had estimated channel conditions similar to those anticipated by the contractor. The contractor and the government will now seek to resolve the amount to be paid to the contractor on its $5.7 million claim.
A copy of the ruling may be found here.
