E&I Global Energy Services, Inc. v. United States ( 2022 )

In the United States Court of Federal Claims
No. 19-244C
Filed: January 10, 2022
E&I GLOBAL ENERGY SERVICES,
INC.,
Plaintiff,
v.
THE UNITED STATES,
Defendant.
Joseph Whitcomb, Whitcomb, Selinsky, P.C., Denver, CO, for Plaintiff.
Christopher L. Harlow, Trial Attorney, Patricia M. McCarthy, Assistant Director, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., with whom
were Thomas Cardova, and Trevor Upderaff, Western Area Power Association, Denver, CO, Of
Counsel, for Defendant.
POST-TRIAL OPINION AND ORDER
TAPP, Judge.
This contract dispute stems from construction of a high voltage substation in South
Dakota. Plaintiff, E&I Global Energy Services, Inc. (“E&I”), seeks damages for breach of
contract. (Compl. at ¶ 36, ECF No. 1). Many issues in this case were resolved on dispositive
motions. E & I Glob. Energy Servs., Inc. v. United States, 144 Fed. Cl. 508 (2019) (Bruggink, J.,
granting the United States’ Motion to Dismiss Counts 1–3 for failure to state a claim); E&I Glob.
Energy Servs., Inc. v. United States, 153 Fed. Cl. 459 (2021) (granting in part and denying in part
the United States’ Motion for Summary Judgment and granting the United States’ Motion for
Judgment on the Pleadings). Those decisions detail much of the factual and procedural history of
this case.
The remaining issues at trial were simple: whether the United States breached its contract
with E&I by (1) denying E&I’s request for payment on nine contract line item numbers
(“CLINs”) contained in Table 17 of E&I’s certified claim; and (2) denying payment for Invoice
No. 1422. The Court tried these issues in Sioux Falls, South Dakota on October 25, 2021. After
considering the evidence presented, the Court concludes that the United States is entitled to
judgment on both issues.
I. Background and Procedural History
In March 2017, E&I entered a Completion Agreement with its sureties, Liberty Mutual
Insurance Company and The Insurance Company of the State of Pennsylvania, whereby E&I
agreed to complete construction of the VT Hanlon Substation at a firm-fixed price of
$5,428,625.69. (Joint Stipulations of Fact (“JSOF”) ¶ 1, ECF No. 85).
Project Specifications, Amendment 002; Solicitation No. DE-SOL-0007930 (Publicly Available)
After entering the completion agreement, E&I’s sureties tendered E&I to the Western Area
Power Administration (“WAPA”) as the new prime contractor for construction of the substation.
(JSOF ¶ 2). In April 2017, E&I signed a Follow-On Contract with WAPA. (JSOF ¶ 3). Thirteen
months later, on May 18, 2018, WAPA terminated E&I for default. (JSOF ¶ 7). Several months
later, on October 1, 2018, E&I submitted a Contracts Dispute Act (“CDA”) claim seeking
$3,336,932.79. (JSOF ¶ 8). The Contracting Officer denied E&I’s claim on December 17, 2018.
(JSOF ¶ 9). This litigation ensued.
After previous disposition of many of E&I’s claims, two categories of claims remain.
First, E&I’s Complaint, Paragraph 36(1) references a table that seeks payment for CLINs. 2, 30,
31, 32, 40, 41, 46, 47, and 48. (Compl. ¶ 36; Compl. Ex. 17). Through these CLINs, E&I seeks
approximately $284,000 in breach of contract damages. (E&I Pre-trial Memo at 1, ECF No. 75).
Second, E&I seeks reimbursement on Invoice No. 1422 for adding “pull wires” at a cost of
$32,113.37. (Id.). As the Court explained in its decision partially granting summary judgment to
the United States, the first claim turns on whether E&I actually performed the work that would
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entitle it to payment under the nine CLINs, and the second claim turns on whether adding the
pull wires was part of either the original fixed price contract or a change order.
E&I presented evidence on each of those issue during the single-day trial. After the close
of E&I’s case, the United States moved for partial judgment under RCFC 52(c) with respect to
the nine CLINs. The Court took that motion under advisement and permitted the United States to
present its case regarding Invoice No. 1422. The parties have each filed post-trial briefs and this
case is now ripe for decision. (E&I Trial Brief, ECF No. 97; USA Trial Brief, ECF No. 96).
II. Findings of Fact
During trial, the Court heard testimony from only two witnesses. Jeffrey Bruce, an
electrician by trade, was the president of E&I who signed and certified E&I’s CDA claim. 1
(Bruce, TR at 29:17–164:4, 107:5–17). He has 34 years of experience, but the substation project
was his first as a prime contractor for the Federal Government. (Id. at 30:3–32:25).
Jonathan Dittmer is the procurement manager and Contracting Officer for the Upper
Great Plains Region of WAPA. (Dittmer, TR at 165:20–256:3). He has been a contracting officer
since 1992 and oversaw numerous substation projects. (Id. at 166:13–167:5). WAPA assigned
Mr. Dittmer as the Contracting Officer to the substation project. (Id. at 167:9–12). As the
Contracting Officer, Mr. Dittmer first awarded the contract to Isolux Corsan, LLC (“Isolux”) in
2015. (Id. at 167:13–15). After Isolux defaulted in 2016, Mr. Dittmer executed the Tender
Agreement on behalf of WAPA to accept E&I as the new prime contractor. (Id. at 172:23–
173:2).
A. CLINs. 2, 30, 31, 32, 40, 41, 46, 47, and 48
E&I submitted its certified claim seeking approximately $3.3 million. (JSOF ¶ 8). Within
that claim, E&I submitted a table of CLINs with five columns, denoting the CLIN, the work or
material at issue, bid price, the amount E&I invoiced, and the amount WAPA paid. (DX01
(E&I’s certified claim); see also Compl. Ex. 17, ECF No. 1-17). E&I claimed that WAPA failed
to pay $284,110.88 for work E&I invoiced as described in the table. (DX01.003; see also Compl.
¶ 36(1)).
For CLINs 2, 30, 31, 32, 40, 41, 46, 47, and 48 E&I invoiced $0.00 each. (DX01.009–
.010; Bruce, TR at 111:7–113:9, 121:4–14). For the other 39 CLINs, E&I conceded that it had
invoiced and been paid the full amount. (Bruce, TR at 124:6–11).
In the “Totals” row at the bottom, E&I stated it was paid $5,059,114.81, leaving an
unpaid balance of $284,110.88. (DX01.011). However, in reviewing the table from the certified
claim and recalculating on the witness stand, Mr. Bruce was unable to determine how he arrived
at the $284,110.88 figure. (Bruce, TR at 116:24–120:24). Mr. Bruce speculated that the “paid
amount” figures were wrong. (Id. at 120:11–12). Though Mr. Bruce testified that he completed
1
A transcript of the trial is docketed at ECF No 94. The Court will reference the witness’s name
in trial citations to reflect their time on the stand, but quotations may reflect questions or
statements of counsel where appropriate.
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the work with respect to the nine CLINs, E&I offered no documents to support those bald
assertions, but more importantly, those assertions are contradicted by E&I’s contemporaneous
documentation. (See, e.g., Bruce, TR at 78:5–18 (CLIN 40), 84:13–85:5 (CLIN 2), 90:5–92:25
(CLIN 30), 93:8–25 (CLIN 31), 94:15–95:16 (CLIN 32), 95:19–97:15 (CLIN 41), 97:23–99:8
(CLIN 46), 99:9–100:16 (CLIN 47)).
E&I submitted its last invoice to WAPA on May 15, 2018. (Bruce, TR at 122:21–123:9).
That invoice, Pay Application No. 13, contained a table of CLINs 1–48 with several columns,
including two showing “payment this period” and “balance to finish.” (DX03.057). “Balance to
finish” represented the work remaining to complete performance under the listed CLIN. (Bruce,
TR at 124:22–125:4). “Payment this period” represented the amount E&I billed for the listed
CLIN. (Id. at 124:18–21). This invoice listed $0.00 in the “payment this period” column for
CLINs 2, 31, 41, 47, and 48. (DX03.057). The invoice also listed a positive “balance to finish”
for CLINs 2, 31, 40, 41, 46, 47, and 48, indicating work had yet to be completed for those items.
(DX03.057). For CLINs 30 and 32, E&I listed the “balance to finish” as $0.00, indicating that
work was complete. (DX03.057).
Mr. Dittmer testified that for many of these CLINs, E&I had not performed work to
finish, though generally the work was at least 90% complete. (Dittmer, TR at 212:15–213:6
(CLIN 40), 217:24–218:7 (CLIN 2), 220:22–221:3 (CLIN 30), 221:20–222:4 (CLINs 31 & 32),
222:5–223:25 (CLIN 41), 224:6–20 (CLIN 46)). The Court finds Mr. Dittmer’s testimony more
credible because it is consistent with E&I’s own documentary evidence regarding the completion
status of the project. See Lodge Construction, Inc. v. United States, Case No. 13-499, __ Fed. Cl.
__, slip op. at 13–14 (Fed. Cl. January 10, 2022) (discussing the hallmarks of witness
credibility).
For example, on CLIN 2, Mr. Bruce testified that the gravel surfacing was complete; Mr.
Dittmer testified that it was only 95% complete. (Compare Bruce, TR at 85:1–5 with Dittmer,
TR at 218:1–7). Consistent with Mr. Dittmer’s testimony, E&I’s own documents showed that all
work completed for gravel surfacing under CLIN 2 had been compensated, but roughly $8,250
worth of work remained to bring that part of the project to completion. (Bruce, TR at 124:12–
125:4; DX03.057). E&I’s last pay invoice shows that the parties agreed to $165,000 worth of
gravel surfacing under CLIN 2; E&I completed and billed for $156,750 worth of gravel
surfacing—exactly 95%. (DX03.057).
Mr. Dittmer testified that CLIN 30 was 95% complete; Mr. Bruce could not remember
why he was not paid for completing 100% of the work. (Dittmer, TR at 220:22–221:3; Bruce,
TR at 91:5–9). E&I’s last invoice shows that 100% of the work was complete, (DX03.057), but
its certified claim shows E&I did not invoice the United States for any work it asserts was
uncompensated. (DX01.010).
Mr. Bruce did not believe any work remained outstanding on CLIN 31 or 32 (the service
station and voltage transformers). (Bruce, TR at 93:8–25 (CLIN 31), 94:15–95:16 (CLIN 32)).
However, E&I’s documents show that only 85% percent of the work was completed for CLIN
31. (DX03.057). Additionally, E&I did not invoice the United States for any additional
uncompensated work for either CLIN 31 or 32 according to E&I’s certified claim. (DX01.010).
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For CLIN 40, the United States contended that 90% of the work was complete, while
E&I maintained that 97% of the work was complete. (Dittmer, TR at 212:15–216:17). E&I’s last
invoice shows that less than 95% of the work was completed for CLIN 40. (DX03.057). E&I’s
certified claim states that E&I billed the United States $0.00 in the final invoice, indicating that
E&I did not believe that there was a discrepancy between work performed and work
compensated. (DX01.010).
For CLIN 41, E&I conceded that it had not completed the work, but that the United
States’ assertion—that E&I was only 95% complete—overstated the amount of work remaining.
(Bruce, TR at 97:11–15). E&I’s last invoice showed that this work was only 95% complete.
(DX03.057). E&I’s certified claim confirms that E&I did not bill for the work it conceded
remained incomplete. (DX01.010).
Mr. Bruce claimed CLINs 46 and 47 were complete. (Bruce, TR at 97:23–100:16). E&I’s
own records show otherwise with respect to CLIN 47. (DX03.057). In its certified claim, E&I
did not bill the United States for any work it now claims it performed but remains
uncompensated. (DX01.010). Finally, E&I conceded that the United States paid E&I all it was
due for work performed pursuant to CLIN 48. (Bruce, TR at 154:5–8). For the nine CLINs at
issue, E&I has not provided adequate support for its claim that it performed work for which it
remains entitled to compensation.
B. Invoice No. 1422
In addition to the nine CLINs, E&I’s certified claim seeks $32,113.37 in compensation
for Invoice No. 1422. (DX01.003, .016, .255). Through Invoice No. 1422, E&I seeks
compensation for “add[ing] pull wires[.]” (DX01.016, .255). E&I claims that this work
constituted a change order added after E&I signed the Follow-On Contract. (E&I Trial Brief at
1). The United States claims the documents that added the scope of work contained in Invoice
No. 1422 were part of the original contract and thus compensated according to the contract
award. (USA Trial Brief at 2). The ultimate factual question is whether WAPA provided E&I
with the contract specifications that added the scope of work in Invoice No. 1422 prior to
executing the contract with E&I.
Mr. Bruce testified that though he received an email that purported to contain Revision A,
adding work related to the pull wires, he could not open the files attached to the email. (Bruce,
TR at 76:24–77:9). However, Mr. Bruce could not explain how he transmitted the same files in
working order to other E&I employees. (Id. at 132:1–134:22). But even if the Court were to
accept Mr. Bruce’s explanation, the evidence shows that those drawings were also publicly
available prior to E&I’s execution of the contract with WAPA.
In its certified claim, E&I submitted several WAPA drawings that highlighted the pull
wires at issue. (DX01.269–.270). In the bottom right-hand corner of the two relevant drawings—
marked VH T600-1 and VH T600-2—WAPA denoted that it “added 12/C-10 cable for each
breaker[.]” (Id.). 12/C-10 cable refers to the pull wires in Invoice No. 1422. (Dittmer, TR at
244:4–10). That addition was noted as “Revision A,” and was dated June 24, 2015. (Dittmer, TR
at 246:2–25; DX01.269–.270). On July 24, 2015, WAPA issued “Amendment 002” to the
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solicitation and posted that amendment on the FedBizOpps public website. 2 (DX04.001
(Amendment 002 dated June 22, 2015; effective July 24, 2015); Dittmer, TR at 248:2–249:13).
Amendment 002 contained drawings VH T600-1 and VH T600-2 with Revision A. (DX04.003;
DX05; Dittmer, TR at 249:13–250:15). E&I signed the follow-on contract with WAPA nearly
two years later, in April 2017. (JSOF ¶ 3). Therefore, prior to E&I’s contract with WAPA, the
revised drawings adding pull wires to the scope of work were incorporated as part of the contract
and that addition was public knowledge.
III. Conclusions of Law
To prevail on a breach of contract claim, a party must establish: “(1) a valid contract
between the parties, (2) an obligation or duty arising out of the contract, (3) a breach of that duty,
and (4) damages caused by the breach.” San Carlos Irr. & Drainage Dist. v. United States, 877
F.2d 957, 959 (Fed. Cir. 1989). The only question in this case is whether the United States
breached its duty to pay E&I for work performed pursuant to the contract. That question also
turns on whether E&I actually performed the work for which it is seeking compensation.
Therefore, to prevail, E&I must show, by a preponderance of the evidence, that it performed
work for which it was entitled to compensation and the United States failed to pay. See Clack v.
United States, 184 Ct. Cl. 40, 50 (1968). “Preponderance of the evidence . . . means the greater
weight of evidence, evidence which is more convincing than the evidence which is offered in
opposition to it.” Hale v. Dep’t of Transp., 772 F.2d 882, 885 (Fed. Cir. 1985). However, as the
Court explains, E&I failed to show that the United States breached the contract.
A. The United States’ RCFC 52(c) motion is granted with respect to the nine CLINs.
At trial, pursuant to RCFC 52(c), the United States moved for partial judgment with
respect to the nine CLINs—Nos. 2, 30, 31, 32, 40, 41, 46, 47, and 48. (Colloquy, TR at 228:3–
229:24). Under RCFC 52(c), “[i]f a party has been fully heard on an issue during trial and the
court finds against the party on that issue, the court may enter judgment against the party on a
claim or defense that, under the controlling law, can be maintained or defeated only with a
favorable finding on that issue.” In considering an RCFC 52(c) motion, “the judge, as the sole
trier of fact, may weigh the evidence and is not required to resolve all issues of evidence and
credibility in the plaintiff’s favor.” Persyn v. United States, 34 Fed. Cl. 187, 195 (1995), aff’d,
106 F.3d 424 (Fed. Cir. 1996). In ruling on the motion, the Court need only determine “whether
or not the plaintiff has convincingly shown a right to relief.” Howard Indus., Inc. v. United
States, 126 Ct. Cl. 283, 289 (1953).
The United States asserted that E&I failed to carry its burden to support entitlement to
payment for the nine CLINs. (Colloquy, TR at 228:3–12). The United States pointed out that the
$284,110.88 total was unsupported by the figures for each CLIN contained therein. Mr. Bruce
admitted as much. E&I’s documents show the work was never completed, and E&I never
2
“FedBizOpps” is a reference to FBO.gov, which has since been replaced by SAM.gov as the
authoritative location for finding government contract opportunities. U.S. General Services
Administration, FBO.gov is Transitioning to beta.SAM.gov, available at https://perma.cc/DFR9-
UCJM.
6
invoiced WAPA for unpaid balances with respect to the CLINs at issue. Though Mr. Bruce
testified that he believed work was complete for several of the CLINs at issue, E&I offered no
credible supporting evidence showing entitlement to an unpaid balance on those nine CLINs.
Conclusory testimony alone is insufficient to entitle E&I to relief. Edge Systems LLC v.
Aguila, 635 F. App’x 897, 12 (Fed. Cir. 2015) (“Testimony that is merely conclusory is
insufficient.”) (internal quotation omitted). Furthermore, it was clear from his testimony that Mr.
Bruce did not know how his certified claim was calculated and could not reproduce the amount
he was claiming for the nine CLINs. That amount is therefore unsubstantiated and, standing
alone, cannot support E&I’s claim for relief. See Johnson v. Off. of Pers. Mgmt., 664 F. App’x
919, 921 n.1 (Fed. Cir. 2016) (“unsubstantiated assertions do not equal evidence.”).
E&I appears to agree that it did not complete 100% of the work to finish the project,
maintaining only that it completed “more than 95%” of the project. (E&I Pre-Trial Memo at 4).
E&I did argue, however, that it “completed 100% of the” CLINs at issue and “is entitled to
100% payment.” (Id.). In its pre-trial brief, E&I identified evidence it intended to produce at trial
supporting entitlement to full payment for each of the CLINs at issue. However, some of this
promised evidence was irrelevant to the issues for trial. For example, for CLIN 2, E&I promised
evidence that Isolux had depleted the project’s gravel supply prior to Isolux’s termination,
preventing E&I from bringing the site to grade. (Id. at 5–6). Proof on that issue could not change
the fact that E&I cannot establish it completed work for the CLINs at issue. On other CLINs,
E&I only offered the testimony of Mr. Bruce, the representative of E&I, in its attempt to show
that work was performed but uncompensated. During Mr. Bruce’s testimony, E&I’s counsel
walked through each CLIN at issue but offered no documentation or exhibits to support Mr.
Bruce’s assertions. (Bruce, TR at 78:5–100:16). The only other witness, Mr. Dittmer,
contradicted Mr. Bruce’s testimony. Setting aside Mr. Bruce’s testimony, E&I failed to produce
any supporting evidence whatsoever for the assertion that the United States breached its contract
with E&I by failing to provide compensation for the work E&I performed. Additionally, the
documents that were introduced—E&I’s own records—tend to contradict Mr. Bruce’s testimony.
Therefore, the Court concludes that E&I cannot meet its burden to show the United States
breached a contractual duty by declining to pay E&I for CLINs 2, 30, 31, 32, 40, 41, 46, 47, and
48. Consequently, the United States is entitled to judgment with respect to those nine CLINs.
B. The United States is entitled to judgment with respect to Invoice No. 1422.
As a basic exercise of good business judgment, government contractors are expected to
read the entire solicitation for which they submit a bid. Liebherr Crane Corp. v. United States,
810 F.2d 1153, 1157–58 (Fed. Cir. 1987) (holding that reading only part of the solicitation
constituted one of several “serious errors in business judgment”); Giesler v. United States, 232
F.3d 864, 870 (Fed. Cir. 2000) (government contractor committed “gross negligence in failing to
read the specification[.]”). Indeed, as the Court explained at length in its prior opinion, E&I
warranted that it had reviewed the solicitation and all amendments prior to entering the
Completion Agreement with its sureties. E&I Glob. Energy Servs., Inc., 153 Fed. Cl. at 470–71
(citing Completion Agreement § 14) (“According to the terms of the Completion Agreement,
E&I warranted that it had examined ‘all amendments [and] addenda’ and had ‘informed itself
with respect to those items required to complete’ the project.”). The Completion Agreement,
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along with E&I’s warranty, was then incorporated as part of E&I’s Follow-On Contract with
WAPA. Id. at 464.
WAPA issued Amendment 002 prior to the solicitation of bids and prior to E&I’s
execution of the completion contract with WAPA. (Compare DX04 (effective July 24, 2015)
with JSOF ¶ 3 (E&I executed the Follow-On Contract in April 2017)). Amendment 002
expressly incorporated the revised drawings that included the addition of 12/C-10 pull wires—
the subject of Invoice No. 1422. WAPA provided those revised drawings directly to E&I in
addition to posting them publicly on the government’s federal contracts online portal. E&I
readily admits that if it had received the relevant drawings prior to signing the construction
contract, “E&I is not entitled to payment on Invoice [No.] 1422.” (E&I Trial Brief at 5). Though
E&I argues it was unable to access the drawings sent via email, (E&I Trial Brief at 6), an
assertion the Court does not fully accept, 3 in executing the Completion Agreement, E&I
warranted that it had reviewed all amendments. E&I protests that WAPA promised to provide
the updated drawings via compact disks rather than via email. (Id.). While that may well be true,
it is without consequence. E&I was or should have been on alert that the contract included
revised drawings. It had both a legal and a contractual responsibility to read the solicitation and
all amendments prior to executing the Completion Agreement. It represented that it did so. The
Court has no basis to conclude that E&I’s representation was meant to exclude Amendment 002,
which was publicly posted nearly two years prior to E&I’s execution of the Completion
Agreement and Follow-On Contract.
Therefore, the Court concludes that Invoice No. 1422 seeks compensation for items that
were included in the solicitation, not part of a change order. Consequently, the United States is
entitled to judgment with respect to Invoice No. 1422.
IV. Decision and Order of Judgment
E&I shoulders the burden to prove that the United States breached the contract at issue
here. Clack, 184 Ct. Cl. at 50. But at trial, E&I failed to establish that it either performed the
work entitling it to compensation or that the United States failed to pay compensation E&I was
due for the nine CLINs. Likewise, E&I has not established that Invoice No. 1422 was a change
order rather than within the scope of the terms of the Follow-On Contract. Therefore, E&I cannot
establish a breach of contract. Accordingly, the Court orders the following:
(1) The United States motion for judgment under RCFC 52(c) is GRANTED.
(2) The Court FINDS AND CONCLUDES that the United States did not breach its
contract with E&I.
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E&I maintains it was unable to access the drawings it received by email. E&I did not attempt to
corroborate that assertion with testimony from other employees, metadata from the email, or any
other sources of evidence that would suggest the email attachments were inaccessible.
Additionally, Mr. Bruce could not explain how he transmitted the same files in working order to
other E&I employees. (Bruce, TR at 132:1–134:22).
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(3) The Clerk is DIRECTED to enter judgment for the United States. No costs
awarded.
IT IS SO ORDERED.
s/ David A. Tapp
DAVID A. TAPP, Judge
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