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04/05/90 EDWARD M. CROUGH v. DEPARTMENT GENERAL

April 5, 1990

EDWARD M. CROUGH, INC., PETITIONER
v.
DEPARTMENT OF GENERAL SERVICES OF THE DISTRICT OF COLUMBIA, RESPONDENT



On Petition for Review of a Decision of the District of Columbia Contract and Appeals Board

Before Newman, Ferren, and Steadman, Associate Judges.

The opinion of the court was delivered by: Newman

NEWMAN, Associate Judge: Edward M. Crough, Inc. ("Crough"), a general contractor, appeals from a decision by the Contract Appeals Board (the "Board") of the Department of General Services of the District of Columbia, charging that the Board erred, inter alia, in denying Crough's claim that the District breached its warranty of commercial availability of certain products. We affirm the decision of the Board.

I

In 1973, Crough was awarded a contract to build an elementary school at Fort Lincoln New Town, N.E. for $6,207,000. The contract called for the roof areas covering the swimming pool and gymnasium to be constructed so that they could serve as play areas. These roof areas were to be built of five layers of material atop a concrete slab. The layers were to be as follows: (1) rigid, one-inch thick insulation boards; (2) bituminous concrete fill, sloping in thickness from a depth of four-inches by one-inch; (3) a waterproof membrane consisting of four-ply cotton with binder; (4) a one quarter-inch thick mastic leveling course; and (5) a wearing surface of pigmented asphalt.

The contract contained three requirements concerning the roof play areas having significance in this appeal. First, the contract required that the three top layers--water-proof membrane, mastic leveling course, and pigmented asphalt wearing surface--be made of specified materials; these specified materials were available only from one local source, Teniseal, Inc. ("Teniseal"). Second, the contract required that the manufacturer of the top three layers provide a five year replacement guarantee for any defective work that developed. Third, the contract required that the waterproof membrane be installed immediately after the installation of the bituminous concrete fill. *fn1

Teniseal provided the only bid for the roof play areas, and Crough awarded the work to Teniseal under a subcontract priced at $15,600. The District's pre-bid estimate for the work covered by this subcontract was $117,975.00.

When it came time for Teniseal to perform, Teniseal refused to provide the five-year guarantee required by the contract, because, in its view, the base upon Which its product would sit was too soft. The District was notified and a meeting was held between the District, Crough, and Fry & Welch Associates ("Fry & Welch"), the project's architect-engineer, on April 11 and 12, 1974, to resolve the problem. On April 15, Fry & Welch recommended changes in the roofing materials to strengthen the base. The District adopted these recommendations and directed Fry & Welch to proceed with drawings and new specifications. These changes were issued in Basic Change Document ("BCD") No. 19 on August 14, 1974, which directed Crough to (1) eliminate the one-inch thick rigid insulation; (2) increase by one inch the layer of bituminous concrete fill; and (3) increase the one-quarter inch mastic leveling course to one inch. Teniseal responded to the new specification in BCD 19 by agreeing to issue the five-year guarantee required by the contract.

One of Crough's subcontractors installed the thicker layer of bituminous concrete fill in October 1974. As noted above, contract specifications called for the immediate installation of the four-ply cotton waterproof membrane over the fill. However, Crough did not install the waterproof membrane, and the bituminous fill was left exposed to the elements for one year. The bituminous fill deteriorated, and, as a result, there Was leakage and water damage to previously installed electrical and mechanical components in the interior of the building.

The reason for Crough's failure to install the waterproof membrane is disputed. When the District first complained about this failure, in a March 13, 1975 letter, Crough asserted that the work had been delayed due to cold weather, i.e., temperatures below 35 degrees Farenheit. When the District again complained about the delay, in a July 22, 1975 letter that noted the fact that temperatures had been above 35 degrees for several months, Crough did not respond. Then, in an August 19, 1975 letter, Crough informed the District that Teniseal was demanding a cost adjustment (of $156,345.17 over the original contract price of $15,600) before it Would perform the work as described in BCD 19. *fn2 Finally, at a hearing before the Board, Crough's president testified that it was necessary to install the membrane, mastic leveling coat, and deck drains in one continuous process. Thus, Crough asserted, it was unable to install the waterproof membrane until Teniseal was ready to install the other layers. *fn3

The District opines that the real cause of the delay throughout the Summer of 1975 was that Teniseal came to realize that it had bid too low and consequently refused to perform the work for the original contract price. The District suspected that Crough and Teniseal were using BCD 19 as a means of compensating for the low bid on the original work.

In any case, the District rejected Teniseal's cost adjustment proposal on grounds that Teniseal's documentation failed to provide a breakdown of the projected cost increase, i.e., the proposal did not identify specific cost increases to BCD 19 or identify credits from the previous design. The District directed Crough to "re-submit your complete proposal [for a cost adjustment] in an acceptable form as soon as possible." Apparently, Crough did not re-submit; nor did it install the waterproof membrane.

On September 5, 1975, the District directed Crough to get 'prices and information on several brands of deck surface material other than those sold by Teniseal. Crough replied that the specified brands either were sold only by Teniseal or unsuitable for the project. A District official suggested that Crough consider using a surfacing material called Dex-O-Tex, and Crough promised to investigate its availability and suitability for the job.

Conway Roofing Co. ("Conway"), one of Crough's subcontractors, advised the District that a waterproof membrane of four-ply asphalt saturated felt could be installed as an interim measure, with the upper surfacing layers to be added later. On September 16, 1975, the District, acting on this advice, directed Crough to install a water-proof membrane of asphalt saturated felt, as opposed to the more expensive cotton membrane called for in the original contract, as an interim measure.

Conway installed the felt waterproof membrane in November 1975; however, neither Crough nor Teniseal installed the mastic leveling course or wear surface over it. On October 27, 1976, the District issued BCD 19 Amendment 4, which deleted from Crough's contract responsibility for installing the mastic leveling course and wearing surface layers. These layers were installed by other contractors using materials other than those sold by Teniseal, including Dex-O-Tex.

Administrative proceedings.

Completion of the school was greatly delayed, with some Of the delay attributable to problems with the roof. *fn4 Concerning these roof-related delays, the District asked the Contracting Officer for, and was awarded, liquidated damages. Crough appealed this decision to the Board.

The Board's decision included matters and claims not at issue here. However, concerning the delays associated with the roof, the Board agreed with Crough that the contract specifications relating to the top three layers of the roof play areas called for a sole-source supplier. However, the Board found that Crough's "own dereliction" in failing to proceed with the installation of the roof after the bituminous concrete fill had been installed caused "the need for repair to the roof" and the attendant delays. The Board also found that Crough's dereliction was not excused by defects in the District's specifications, as asserted by Crough in its defense, because Crough had failed to carry its burden of showing, through "reasonable and diligent attempts to comply with the challenged specifications," that such specifications were impossible of performance.

This appeal followed. *fn5 Crough charges, inter alia, that the Board erred by (1) failing to find that the District breached its warranty of commercial availability by implicitly specifying a sole source supplier who could not provide the materials called for under the contract with the required five-year guarantee; (2) finding that Crough was responsible for delays occurring after August 19, 1975; and (3) failing to find that the District breached its duty to mitigate damages.

I ...


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