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Marshall case - LEXSEE 2002 IBCA Lexis 1 APPEALS OF...

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LEXSEE 2002 IBCA Lexis 1 APPEALS OF MARSHALL ASSOCIATED CONTRACTORS, INC., And COLUMBIA EXCAVATING, INC. (J.V.) IBCA Nos. 1901, 3433, 3434, 3435 Interior Board of Contract Appeals 2002 IBCA LEXIS 1; 2002-1 B.C.A. (CCH) P31,797 March 22, 2002 CONTRACT: [*1] Contract No. 2-07-40-C0809 JUDGES: Bernard V. Parrette, Administrative Judge. Candida S. Steel, Administrative Judge, concur. COUNSEL: APPEARANCE FOR APPELLANT: Richard A. Franzke, Esq., Richard S. Gleason, Esq., Stoel Rives, LLP, Portland, Oregon. APPEARANCE FOR GOVERNMENT: Elaine England, Esq., Department Counsel, Salt Lake City, Utah. OPINIONBY: PARRETTE OPINION: As Amended March 27, 2002. OPINION BY ACTING CHIEF ADMINISTRATIVE JUDGE BERNARD V. PARRETTE On January 12, 2001, the Board issued a detailed entitlement decision on the merits of these appeals, which found in favor of the Appellant and then remanded the case to the parties for quantum resolution in accordance with the decision. See 01-1 BCA 31,248. After various efforts at negotiation and mediation proved less than successful, a quantum hearing was held in Salt Lake City on August 1-3, 2001. This decision is based primarily on the results of that hearing. In order to put the matter into context, however, we will review some of the principal findings in our entitlement decision. Entitlement Decision Background
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Appellant ("Marshall"), a small but experienced construction contractor in business since 1965, was the low bidder on a July 1982 Bureau of Reclamation [*2] (BOR) project to supply, for a price of $ 6,602,693, about 1,061,400 cubic yards (cy) of sand and course aggregate for the construction of the Upper Stillwater Dam, located about 40 miles, from Duchesne, Utah, as part of the Central Utah Project. The construction of the dam was to begin in 1983. BOR intended to allow enough lead time in Marshall's contract to accomplish the production and transport of sand from the borrow site to the mixing and batching plants at the dam site before the dam's construction began. Marshall was required to take materials for aggregate production from a specific borrow area, which BOR represented as containing readily crushable sandstone. But in fact BOR's own boring tests, which were not made available to Marshall, showed that the borrow site primarily contained extremely hard and abrasive materials, principally quartzite, that were clearly incapable of meeting the contract specifications as written. BOR did not permit Marshall to conduct its own tests of the site prior to bidding, and BOR's contracting officer (CO) was unaware of these adverse test results at the time the contract was let. The contract also said that BOR would "direct the contractor's [*3] operations," a promise that went unfulfilled. Marshall, initially not realizing the impractical and uneconomic nature of the borrow site, strove mightily to meet the requirements of the contract, but the results were a financial and equipment disaster that ultimately resulted both in BOR's termination of Marshall for default and in Marshall's business demise.
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