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Rustler Construction, Inc. v. District of Columbia

Court of Appeals of The District of Columbia

July 3, 2019

Rustler Construction, Inc., Petitioner,
District of Columbia, Respondent, and District of Columbia, Petitioner,
Rustler Construction, Inc., Respondent.

          Argued April 30, 2019

          On Petitions for Review of an Order of the District of Columbia Contract Appeals Board (CAB D-1385)

          Robert A. Klimek, Jr. for petitioner/cross-respondent.

          James C. McKay, Jr., Senior Assistant Attorney General, with whom Karl A. Racine, Attorney General for the District of Columbia, Loren L. AliKhan, Acting Solicitor General at the time the brief was filed, and Stacy L. Anderson, Senior Assistant Attorney General, were on the brief, for respondent/cross-petitioner.

          Before Fisher, Thompson, and McLeese, Associate Judges.


         Over fifteen years ago, Rustler Construction, Inc. ("Rustler") and the District of Columbia entered into a roadway improvement contract. A series of issues arose which prompted Rustler to seek additional compensation. The parties cross-petition for review of an order of the District of Columbia Contract Appeals Board ("CAB") which granted Rustler $155, 481.70 on its quantum claim. Finding neither petition persuasive, we affirm the CAB's decision.

         I. Background

         In 2002, the District of Columbia and Rustler entered into a $5, 217, 550 contract to reconstruct a section of Bladensburg Road, N.E., in Washington, D.C. The contract was scheduled to be completed in 360 days and required Rustler to rebuild approximately three-quarters of a mile of a high-traffic six-lane highway, all while allowing four lanes of traffic to flow through the work area. Work was broken down into five phases. In Phase I, Rustler would remove the existing median and place temporary asphalt pavement in the area. In Phases II and III, Rustler would replace the two outside lanes on either side of the highway. In Phase IV, Rustler would reconstruct the inside lanes, replace the median, and connect the lanes. In Phase V, which was later incorporated into Phase IV, Rustler would remove barriers and prepare the road for traffic.

         Construction on the roadway began in spring 2003. The first major problem arose prior to the start of Phase II. The parties had agreed to maintain nine-foot, four-inch travel lanes throughout construction. However, due to the District's "miscalculat[ions]," this agreed-upon lane width could not accommodate buses. The District issued a stop-work order, halting the construction for twenty days. A revised traffic plan widened the travel lanes to ten feet for bus-restricted lanes, and to eleven feet for all other lanes. This new plan narrowed Rustler's work area by approximately six feet, eight inches.[1]

         The problems with this issue became apparent towards the end of the contract. Reducing the work area impacted five Phase IV projects: (1) Rustler was unable to use a boom truck to install granite curbs as originally planned and instead needed to use a more laborious method; (2) Rustler was unable to use a concrete paving machine and was required to lay pavement by hand; (3) removing excavated material took longer than expected due to the restricted space in which Rustler was required to load the material onto its trucks; (4) Rustler could not use the equipment it had planned on using to excavate around existing manholes, and instead needed to place ramps over the manholes and to hand-grade the area around the manholes once excavation was completed; (5) Rustler was required to spend extra time cutting joint baskets to the proper length.

         The second issue arose during Phase II. Part of Rustler's duties involved removing existing catch basins (storm drains) and installing new ones in their place. During excavation, Rustler discovered that the catch basins were on top of an active high-pressure gas line. Although Rustler had been aware from the start of the contract that a gas line was in the vicinity, it did not know the exact location. To remediate this problem, Rustler relocated the catch basins into the street and returned at a later time to pour concrete around the basins. According to Rustler, it took the District "a good two months" to instruct Rustler how to respond once the issue was discovered.

         The third issue involved Potomac Electric Power Company ("Pepco") manholes which were located along the strip of roadway reconstructed during Phase III. The contract specifications stated that the forty-one manholes were "abandoned," so Rustler planned to pave over them. However, Rustler later learned that the manholes were "live." In order to keep them functional, Pepco contractors were intermittently on the scene for some time. Rustler then paved around the manholes rather than over them as it had planned.

         The fourth issue arose between Phases III and IV. The contract required Rustler to install a thin strip of asphalt between the new and existing roadbeds in order to allow vehicles to transition smoothly from lane to lane. While creating this roadway "tie-in," the parties discovered a several-inch discrepancy between the height of the existing roadway and the new one. The District instructed Rustler to create a wider tie-in than was originally expected. Rustler had to cut down the old roadway and install a much wider strip of asphalt between the lanes. The District compensated "Rustler for the additional work and materials under existing unit prices for the temporary asphalt," but not for additional field overhead.

         A. Rustler's Equitable Adjustment Claim

         Rustler filed a claim for equitable adjustment on November 19, 2009. After the claim was deemed denied, Rustler appealed to the CAB. Rustler argued that it was entitled to an equitable adjustment of $1, 227, 021.37 to cover the "additional costs in completing the work" as "a result of defective and changed specifications, differing site conditions, and other extra contractual activities."

         1. The Entitlement Order

         After a five-day hearing on the matter, the CAB issued an order determining that Rustler was entitled to an equitable adjustment for all four of its claims. Entitlement for three of Rustler's claims-the Phase IV work area reduction, Pepco manholes, and roadway tie-in-was based on defective specifications, while entitlement for the catch basin claim was due to differing site conditions.

         The CAB determined that Rustler relied on the District's erroneous specifications that: (1) the traffic during Phase IV would be maintained in four nine-foot, four-inch lanes; (2) the Pepco manholes had been "abandoned"; and (3) the temporary asphalt placed during the roadway tie-in would be no more than ten inches wide. The District offered no evidence to suggest that Rustler was aware that the specifications were defective. The CAB found that the location of the high-pressure gas line was a differing site condition and, therefore, Rustler had established entitlement for the catch basin claim.

         Rather than awarding damages, the CAB remanded the "matter to the parties ...

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