ASBCA 62723

DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below is subject to an ASBCA Protective Order. This version has been approved for public release. ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of - ) ) HDR Engineering, Inc. ) ASBCA No. 62723 ) Under Contract No. W912EP-10-D-0017 ) APPEARANCES FOR THE APPELLANT: Douglas L. Patin, Esq. Lee-Ann C. Brown, Esq. Bradley Arant Boult Cummings LLP Washington, DC APPEARANCES FOR THE GOVERNMENT: Michael P. Goodman, Esq. Engineer Chief Trial Attorney John F. Bazán, Esq. Patrick Sean Murphy, Esq. Engineer Trial Attorneys U.S. Army Engineer District, Los Angeles OPINION BY ADMINISTRATIVE JUDGE O’CONNELL Appellant, HDR Engineering, Inc. (HDR), appeals a final decision in which the United States Army Corps of Engineers (USACE) asserted a government claim for professional negligence related to the design of a dam. The Board conducted a hearing from May 13-20, 2024. Both entitlement and quantum are before us. The Board sustains the appeal. FINDINGS OF FACT This appeal arises from a project with a lengthy history. We will start with a brief description of the overall project, then summarize the three construction contracts, and finally describe HDR’s design contract and task orders. The Project 1. The project is known as the C-44 Reservoir/Stormwater Treatment Area, which is part of a Comprehensive Everglades Restoration Plan (R4, tab 12 at 5 1). “C-44” is the name of a canal. The water in the C-44 Canal comes from the C-44 Basin, a 202-square-mile area in Martin County, Florida. (R4, tab 12 at 5-6) The purpose of the project is to improve water quality and slow down the flow of freshwater during rain events from the canal into the St. Lucie Estuary. The project 1 Citations are to the .pdf page number in the electronic file.  NOT FOR PUBLIC DISTRIBUTION This document contains protected material and is subject to the terms of an ASBCA Protective Order. pumps water from the C-44 Canal into an elevated reservoir that is surrounded by a 30-foot-high embankment dam. Water from the reservoir then flows by gravity through a discharge canal to stormwater treatment cells in which aquatic plants remove nitrogen and phosphorous. Water from the cells is then discharged into collection canals and then back into the C-44 Canal. (Id. at 5-6, 29; app. supp. R4, tab 2482; tr. 5/17-19) It takes about two weeks for water to pass through this system (tr. 5/18). 2. In the 2000s, the project was managed by the South Florida Water Management District (SFWMD), a water district in the state of Florida. Fla. Stat. § 373.069(1)(e). SFWMD planned on building the project through a single construction contract (R4, tab 14 at 8). SFWMD retained HDR as the designer sometime prior to August 1, 2005 (see app. supp. R4, tab 2154). Between 2005 and 2008 HDR produced extensive documentation for SFWMD (app. supp. R4, tabs 2038-2043, 2154, 2155), including a Basis of Design Report dated April 14, 2006 (app. supp. R4, tab 2040), and drawings marked “Issued for Bid” dated April 18, 2008 (app. supp. R4, tab 2043). 3. At some point between 2008 and 2010, USACE became involved with the project. USACE and SFWMD decided to divide the construction contract into three contracts, with USACE responsible for the first two contracts, and SFWMD responsible for the third (tr. 3/161-62). 4. Contract One was for an intake canal and a project access road. Contract Two, the contract relevant to this appeal, included the reservoir, an intake pump station and outlet works, and the embankment dam. The reservoir was designed to have a storage volume of 50,600 acre-feet 2 of water and had an exterior perimeter of 9.3 miles. Contract Three included the stormwater treatment areas. (R4, tab 12 at 7, 29; tab 14 at 8; tr. 6/69) The project site covers approximately 12,000 acres (18.75 square miles) (app. supp. R4, tab 2062 at 6). 5. On July 23, 2010, USACE entered into a contract with HDR.