{"id":901128,"date":"2023-05-03T14:15:41","date_gmt":"2023-05-03T20:15:41","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=901128"},"modified":"2023-05-03T14:15:43","modified_gmt":"2023-05-03T20:15:43","slug":"contract-disputes-act-claim-duty-to-good-faith","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/contract-disputes-act-claim-duty-to-good-faith\/","title":{"rendered":"Breach of Duty of Good Faith and Fair Dealing Packaged with Contract Disputes Act Claim"},"content":{"rendered":"\n<p>David Adelstein | <a href=\"https:\/\/www.floridaconstructionlegalupdates.com\/breach-of-duty-of-good-faith-and-fair-dealing-packaged-with-contract-disputes-act-claim\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Florida Construction Legal Updates<\/a><\/p>\n\n\n\n<p>An interesting opinion on a motion to dismiss came out of the United States Court of Federal Claims dealing with the claim that the government breached its\u00a0<strong>duty of good faith and fair dealing<\/strong>\u00a0in administering the prime contract. \u00a0The contractor\u2019s argument was that the government breached its duty of good faith and fair dealing by denying the contractor\u2019s claim under the\u00a0<a href=\"https:\/\/www.floridaconstructionlegalupdates.com\/does-your-request-for-equitable-adjustment-rea-comply-with-the-contract-disputes-act\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Contract Disputes Act<\/a>\u00a0(CDA). \u00a0This was a creative claim and argument that deserves consideration because it tied in the contracting officer\u2019s denial of the CDA claim for additional money with a breach of the duty of good faith and fair dealing.<\/p>\n\n\n\n<p>In this case,&nbsp;<em>Aries Construction Corp. v. U.S<\/em>., 2023 WL 2146598 (Fed. Cl. 2023), a prime contractor was hired for a water pipeline construction project. The contractor encountered unexpected difficult site conditions that required additional equipment and labor. The contractor informed the contracting officer and alleged it was instructed to proceed with the additional equipment and labor.&nbsp; The contractor submitted a claim under the CDA but the contracting officer denied the claim. &nbsp;The contractor pursued the claim in the United States Court of Federal Claims arguing the government breached the contract and, of interest, breached its duty of good faith and fair dealing.<\/p>\n\n\n\n<p>The government moved to dismiss the breach of good faith and fair dealing claim arguing that besides failing to state a cause of action the Court of Federal Claims had no jurisdiction because the breach of the duty of good faith and fair dealing was not properly presented to the contracting officer under the CDA.&nbsp; The Court of Federal Claims denied the government\u2019s motion.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong><u>Jurisdiction<\/u><\/strong><\/h5>\n\n\n\n<p><strong>For a CDA claim to the contracting officer to be \u2018the same\u2019 as a claim in this Court, the claims must be based on the same basic theory, arise from the same operative facts, and seek the same relief. By the same token, this Court \u2018treat[s] requests as involving separate claims if they \u2026 assert grounds that are materially different from each other factually or legally. [The government] does not appear to dispute that [the contractor] presented the same operative facts to the contracting officer and sought the same relief. The question, rather, is whether [the contractor] presented the same basic legal theory to the contracting officer.<\/strong><\/p>\n\n\n\n<p><em>Aries Construction, supra<\/em>, at *2 (internal citations omitted).<\/p>\n\n\n\n<p>The Court of Federal Claims held that it has jurisdiction if the claim in the Court arises from the same operative facts and claims basically the same relief as the CDA claim submitted to the contracting officer even if different legal theories of recovery are sought by the contractor.&nbsp;&nbsp;<em>Id<\/em>. (quotations omitted). \u201c<strong>If the contracting officer was on notice of the factual and legal substance, the contractor may assert a \u2018slightly different legal theory[y] when he sues<\/strong>.\u201d&nbsp;&nbsp;<em>Id<\/em>.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong><u>Breach of Duty of Good Faith and Fair Dealing<\/u><\/strong><\/h5>\n\n\n\n<p>For purposes of a breach of good faith and fair dealing claim against the government, the contractor must show:<\/p>\n\n\n\n<p><strong>[T]hat \u2018a specific promise\u2019 in the contract was \u2018undermined by the government. The promise must be grounded in the terms of the contract, because \u2018what the duty entails in part on what the contract promises (or disclaims). [The contractor] must also show \u2018subterfuge[]\u2019 or \u2018evasion[],\u2019 such as \u2018evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms, [or] interference with or failure to cooperate in the other party\u2019s performance. Against the government, such claims \u2018typically involve some variation on the old bait-and-switch\u2019 or \u2018government action \u2026 specifically designed to reappropriate the benefits the other party expected to obtain from the transaction[.]\u2019<\/strong><\/p>\n\n\n\n<p><strong>Thus, a claim for breach of good faith and fair dealing must include (1) a specific promise that was undermined, plus some combination of (2) subterfuge, evasion, or dishonesty, and (3) reappropriation of a reasonably expected benefit. If the [contractor] presented such facts to the contracting officer with a claim for money, then the contracting officer had sufficient notice of a good faith and fair dealing claim, even if the current legal packaging is \u2018slightly different.\u201d<\/strong><\/p>\n\n\n\n<p><em>Aries Construction, supra<\/em>, at *3.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong><u>Denying Government\u2019s Motion to Dismiss<\/u><\/strong><\/h5>\n\n\n\n<p>The contractor\u2019s CDA claim was premised on an equitable adjustment due to it being instructed to perform additional work to overcome unexpected site conditions. \u201c<strong>The contracting officer was therefore on notice that if he denied an equitable adjustment to which [the contractor] was entitled, [the contractor] could allege that the government reappropriated the contract\u2019s promised benefits.\u00a0 That, in turn, meant the contracting officer was on notice of the facts and general legal basis that could support a claim for breach of duty of good faith and fair dealing<\/strong>.\u201d\u00a0<em>Aries Construction, supra<\/em>, at *3.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Adelstein | Florida Construction Legal Updates An interesting opinion on a motion to dismiss came out of the United States Court of Federal Claims dealing with the claim that the government breached its\u00a0duty of good faith and fair dealing\u00a0in administering the prime contract. \u00a0The contractor\u2019s argument was that the government breached its duty of&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/contract-disputes-act-claim-duty-to-good-faith\/\">Continue reading <span class=\"screen-reader-text\">Breach of Duty of Good Faith and Fair Dealing Packaged with Contract Disputes Act Claim<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10720,9],"tags":[9895,224,9437,8674],"class_list":["post-901128","post","type-post","status-publish","format-standard","hentry","category-bad-faith-insurance-coverage","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-contract-disputes-act","tag-duty-of-good-faith","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Breach of Duty of Good Faith and Fair Dealing Packaged with Contract Disputes Act Claim - Advise &amp; 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