Aecom Technical Servs., Inc. v. Prof'l Servs. Indus., Inc.

580 F.Supp.3d 1176

AECOM TECHNICAL SERVICES, INC., Plaintiff,

v.PROFESSIONAL SERVICES INDUSTRIES, INC., Defendant.

Case No. 8:18-cv-2981-KKM-TGW

United States District Court, M.D. Florida, Tampa Division.

Signed December 29, 2021

Seth M. Schimmel, Caroline Catchpole Spradlin, Phelps Dunbar, LLP, Tampa, FL, for Plaintiff.

Haley R. Maple, Katz Siegel & Maple, PL, Clearwater, FL, for Defendant.

ORDER

Kathryn Kimball Mizelle, United States District Judge

In 2017, the Tampa Hillsborough Expressway Authority hired Kiewit Infrastructure South Co. to build an extension to Tampa's Selmon Expressway. Kiewit, in turn, contracted with AECOM to perform the design services for the extension and AECOM then hired Professional Services Industries (PSI) as a subcontractor to perform the geotechnical investigations on the project. This case arises from a dispute between those last two parties over whether PSI was obligated to perform certain services in its geotechnical investigations.

When Tampa sought to extend the Selmon Expressway, it issued a Request for Proposal (RFP) and entertained bids from contractors who wanted to develop the project. One contractor, Kiewit, teamed up with AECOM, the plaintiff in this case, to bid on the project. Kiewit proceeded as the general contractor and AECOM as a subcontractor for design services. AECOM brought on PSI as its pre-award geotechnical subcontractor and, if Kiewit was awarded the contract, PSI agreed to provide AECOM with the geotechnical data needed for AECOM's designs.

Tampa ultimately awarded Kiewit the project, and Kiewit quickly executed an agreement with AECOM to supply design services for the project. Days later, AECOM executed a contract with PSI. Each contract incorporated to some extent the other contracts in the project. Thus, PSI's contract with AECOM incorporated AECOM's contract with Kiewit and AECOM's contract with Kiewit incorporated Kiewit's contract with Tampa and finally, Kiewit's contract with Tampa incorporated provisions of the RFP.

After execution of the contracts and as the team started on the project, a representative from Tampa noted that PSI's scope of services did not conform to the requirements listed in Tampa's RFP. Specifically, it did not account for what Tampa called the Pilot Hole Program (PHP). In response, PSI contended its scope of services was sufficient to satisfy all its contractual obligations to AECOM. When AECOM insisted that PSI must comply with Tampa's interpretation of the RFP, PSI refused absent increased compensation. AECOM then hired a third-party to perform the PHP and brought this action for breach of contract based on the differing interpretations of the contract, breach of contract for suspension of performance, negligence, and negligent misrepresentation. PSI responded with two counterclaims, asserting breach of contract and unjust enrichment.

Both parties now move for partial summary judgment. Each party seeks partial summary judgment ruling that the contract means what they say it means. PSI further moves that AECOM's second breach of contract claim fails because PSI never suspended performance and that all of AECOM's damages are barred under the "first cost" doctrine. PSI also moves for summary judgment against AECOM's negligence and negligent misrepresentation claims and for partial summary judgment that AECOM is liable to PSI for certain invoices included in PSI's counterclaims.

The Court concludes that PSI's contract with AECOM incorporated the RFP and that the RFP required the PHP. The Court therefore grants AECOM's motion for partial summary judgment and denies PSI's motion for partial summary judgment on the same issue. The Court also denies PSI's motion for summary judgment against AECOM's negligent misrepresentation claim, PSI's motion for summary judgment that all of AECOM's damages are barred under the "first cost" doctrine, PSI's motion for summary judgment against AECOM's negligence claim, and PSI's motion for partial summary judgment on its counterclaims. But the Court grants PSI's motion for summary judgment against AECOM's breach of contract claim alleging suspension of performance.

I. BACKGROUND

Tampa issued an RFP in January 2017, seeking a contractor to build an extension to Tampa's Selmon Expressway. (Doc. 84 at 1–2.) The proposed extension was a 2.5 mile "elevated roadway" consisting of "two 15-foot lanes with inside and outside 6-foot to 12-foot shoulders." (Doc. 84-1 at 15 (RFP section I.).) The RFP sought a contractor to conduct "all investigations, design, permitting, coordination, final approved construction documents and the construction activities necessary" to build the Selmon West Extension. (Id. at 13.) Importantly, the elevated roadway would be supported by sixty piers each with a foundation secured by four to six shafts drilled in the ground. (Doc. 86 at 2.) Because each proposed foundation included more than two drilled shafts, the foundations were considered "redundant." (Id. )

Before drilling the shafts, a contractor must investigate the subsurface area due to the volatility of the area's soil. That investigation would then provide the data necessary to design the support for the foundation and drilled shafts. (Doc. 83 at 6.) A contractor accomplishes this investigation by using a variety of borings to investigate the subsurface area. (Id. at 6–7; Doc. 98 at 5.) This dispute centers on how many and what kind of borings the RFP required the contractor to perform in investigating the subsurface terrain.

According to the RFP, the contractor must complete all geotechnical services necessary to construct the expressway extension. These geotechnical services included "[e]valuating geotechnical conditions to determine the drilled shaft diameter and length and construction methods to be used." (Doc. 84-1 at 52–53 (RFP section VI.C).) Specifically, the RFP required that the contractor "[p]erform[ ] the subsurface investigation and drill[ ] pilot holes prior to establishing the drilled shaft tip elevations and socket requirements." (Id. at 53.) The subsurface investigation for redundant drilled shaft foundations required the contractor to "perform at least one test boring in accordance with the Soils and Foundations Handbook at each bent/pier." (Id. ) "For non-redundant drilled shaft foundations," the contractor must "perform at least one SPT boring in accordance with the Soils and Foundation[s] Handbook at each drilled shaft location prior to establishing the drilled shaft tip elevations and socket requirements." (Id. ) The RFP further required, in item (4) of the requirements for Drilled Shaft Foundations for Bridges and Miscellaneous Structures, that the contractor "[p]erform[ ] pilot borings for each shaft location ... and load test shafts and provid[e] the results of the pilot hole borings and the computations of calculated shaft tip elevations to the Authority at least one[ ] week before beginning construction of these shafts." (Id. ) Testimony from various witnesses confirms that test borings are used to obtain data on the general subsurface area surrounding the boring and pilot borings are used to obtain data on the specific shaft location.¹ (See, e.g. , Doc. 85-8 at 8.)

On October 10, 2016, Kiewit teamed with AECOM to bid on the expressway contract with Kiewit operating as the contractor and AECOM as the designer. (Doc. 84-2 at 1.) In January 2017, after AECOM and Kiewit entered into an agreement to prepare a proposal for Tampa, AECOM began negotiations with PSI for it to provide geotechnical services for the project. (Doc. 84 at 2.) PSI reviewed the RFP, provided a geotechnical write-up for AECOM, and became the geotechnical subcontractor on the proposal. (Doc. 84 at 2–3.)

On June 21, 2017, PSI submitted its initial proposal to AECOM describing the scope of services it would provide for the project. (Doc. 84 at 6.) As PSI prepared the scope of services, it relied in part on the Soils and Foundations Handbook referenced in the RFP. (Doc. 84 at 5.) A little over a month later, PSI provided AECOM with a revised scope of services, wherein it promised to "perform up to 60 [Standard Penetration Test (SPT)] borings ... in each shaft boring location[ ]." (Doc. 84-13 at 1.)

Tampa awarded Kiewit the contract on August 7, 2017, and the two executed a fixed-price contract (Prime Contract). (Doc. 84 at 9.) Two days later, Kiewit executed an agreement with AECOM to "cooperate in carrying out the [Selmon West Extension Project] in a relationship of mutual trust," agreeing that AECOM "assumes toward [Kiewit] all of the obligations and responsibilities that [Kiewit] assumes toward [Tampa] ... insofar as applicable to the Design Services to be provided by [AECOM]." (Doc. 84-17 at 1–2.) Two weeks after Kiewit and AECOM executed their contract (Design Contract), AECOM and PSI entered into an agreement for PSI to perform the "geotechnical field exploration and laboratory testing as described in the ... Scope of Services," which PSI provided to AECOM on July 28, 2017. (Doc. 84-18 at 10.) In addition to the Scope of Services, PSI "assume[d] toward AECOM all of the obligations and responsibilities that AECOM assume[d] toward Kiewit." (Id. at 1.) Kiewit then formally entered into its contract with Tampa on September 7, 2017, agreeing "to do all the work and furnish all the materials, equipment, supplies, and labor necessary to carry out this Contract in the manner and to the full extent as set forth in the Request for Proposal, and the Contractor's Proposal, which are incorporated by reference herein." (Doc. 84-16 at 1.)

Around December 22, 2017, after all the contracts had been executed, Tampa's representative commented to Kiewit, AECOM, and PSI that "the project scope requires for pilot holes to be completed for each of the drilled shafts on the project." (Docs. 86 at 8; 84-22 at 3.) As the dispute evolved, the parties referred to this requirement as the Pilot Hole Program (PHP). (Doc. 86 at 9.) One of the PSI employees...