CBCA 7618

DENIED: July 30, 2024 CBCA 7618 UNITED FACILITY SERVICES CORPORATION, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. William Weisberg of Law Offices of William Weisberg PLLC, McLean, VA, counsel for Appellant. Justin S. Hawkins, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges LESTER, RUSSELL, and GOODMAN. LESTER, Board Judge. Respondent, the General Services Administration (GSA), is seeking to recover money from appellant, United Facility Services Corporation (UFS), for damages caused by a burst frozen water pipe in a federal courthouse building in Memphis, Tennessee, for which UFS, by contract, was providing operations and maintenance (O&M) services. UFS filed this appeal to challenge the Government’s claim. This decision is being issued following the parties’ presentation of witness testimony at a hearing on April 17, 2024. Previously, by decision dated February 27, 2024, the Board granted summary judgment to GSA on its argument that UFS had breached its contractual obligation to respond within no more than thirty minutes to an emergency call about the burst pipe, CBCA 7618 2 entitling GSA to damages. United Facility Services Corp. v. General Services Administration, CBCA 7618, 24-1 BCA ¶ 38,535, at 187,319. GSA’s recoverable damages for UFS’s four-hour delay, to be established at the hearing, would be the difference between the damage that would necessarily have resulted within that thirty-minute response-time grace period and the full damage that actually occurred. There was a second potential breach of contract, however, that was not addressed in the February 27 summary judgment decision. Under its contract, UFS was required to make reasonable attempts to protect the building from damage caused by reasonably foreseeable freezing temperatures. GSA’s summary judgment motion did not address that issue, and it remained open for development at the hearing. During the hearing, UFS’s president volunteered that he had long known that piping in the area of the burst pipe was too close to an uninsulated exterior wall of the building and that, as he had previously told GSA on several occasions, the pipe was going to freeze and burst when it got too cold outside. After learning of the impending freezing temperatures in February 2021 (which was predicted days in advance of the weather event), UFS did nothing to attempt to limit damage or protect the uninsulated pipes from freezing, instead believing that GSA was at fault for not providing better insulation. In fact, UFS let all of its building engineers stay home during the weather event and then let its project manager leave the building for more than four hours, even though, as UFS’s president acknowledged, UFS knew that pipes were likely to freeze and burst. Although UFS is not strictly liable under its contract for the fact that a pipe burst, it is liable under the terms of its contract for damages from a burst that, as here, it could reasonably have foreseen and made no effort to prevent. Further, having accepted this contract knowing of the conditions in the building, it cannot validly complain that GSA should have given it a better building to maintain.1 1 UFS suggests in its post-hearing briefing that the Board, in its summary judgment decision, held that UFS was not liable for failing to attempt to protect the building from freezing temperatures. The Board made no such ruling. GSA’s motion for summary judgment focused solely on UFS’s failure to have an employee on-site when the pipe burst. During briefing, neither party sought a ruling on the adequacy of UFS’s preparations for freezing temperatures or knowledge of the likelihood of a pipe burst. Further, in a scheduling order issued a few hours after its summary judgment decision, the Board notified the parties that the April 17 hearing would “address all unresolved issues in this appeal (including quantum issues).” Order (Feb. 27, 2024) at 2. And, at the beginning of the April 17 hearing, the Board indicated that its “summary judgment decision did not find that [UFS] was strictly liable for the mere fact that a pipe burst, but [that] if GSA wants to pursue such an argument, it can do so here,” since “[t]he summary judgment motion just didn’t address that.” Hearing Transcript at 8.