United States v. FEDCON Joint Venture

UNITED STATES OF AMERICA for the use and benefit

of GLF CONSTRUCTION CORPORATION, a Florida profit corporation, Plaintiff, v. FEDCON JOINT VENTURE, a Florida joint venture, DAVID BOLAND, INC., a Florida profit corporation,JT CONSTRUCTION ENTERPRISE CORPORATION, and WESTERN SURETY COMPANY, Defendants.

FEDCON JOINT VENTURE, Counter-Plaintiff, v. GLF CONSTRUCTION CORPORATIONand FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Counter-Defendants.

Case No: 8:17-cv-01932-T-36AAS

C/w: Case No. 8:17-cv-02650-T-36TGW

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

January 28, 2021

OPINION AND ORDER

I. INTRODUCTION

This cause came before the Court during a thirteen-day bench trial held in October and December of 2019. Following the trial, the parties attended a mediation conference on January 22, 2020 (Doc. 230) and submitted proposed findings of fact and conclusions of law on May 1, 2020. Docs. 249, 251.

Upon due consideration of the testimony, exhibits received into evidence, argument of counsel, and the applicable law, and being fully advised in the premises, the following, issued pursuant to Federal Rule of Civil Procedure 52(a), constitutes the Court's findings of fact and conclusions of law.¹

II. FINDINGS OF FACT²

A. Overview of the Parties

1. GLF Construction Corporation ("GLF") is a corporation organized and existing under the laws of Florida, and at all times material hereto was engaged in the business of providing heavy civil contracting services.³ GLF's principal office and place of business is in Miami, Florida. Id. In addition to being registered in the state of Florida, GLF is also registered to do business in Louisiana.⁴

2. FEDCON Joint Venture ("FEDCON") is a Florida-based joint venture comprised of David Boland, Inc. and JT Construction Enterprise Corporation ("JTConstruction"), with its principal office and place of business located in Titusville, Florida.⁵ Subsequent to its formation, FEDCON registered to do business in Louisiana and began providing general contracting services.⁶ David Boland, Inc. is a corporation organized and existing under the laws of Florida, with its principal office and place of business located in Titusville, Florida.⁷ In addition to being registered in Florida, David Boland, Inc. is also registered to do business in Louisiana and provides general contracting services as a joint venturer of FEDCON.⁸ JT Construction is a corporation organized and existing under the laws of Florida, with its principal office and place of business located in Orange City, Florida.⁹ In addition to being registered in Florida, JT Construction is also registered to do business in Louisiana.¹⁰

3. Western Surety Company ("Western") is a corporation organized and existing under the laws of South Dakota, with its principal office and place of business located in Sioux Falls, South Dakota.¹¹ At all times material hereto, Western was duly authorized to engage in the business of executing surety bonds in Florida and Louisiana.¹² Fidelity and Deposit Company of Maryland ("F&D") is a corporation organized and existing under the laws of Illinois.¹³ At all times material hereto, F&D was duly authorized to engage in the business of executing surety bonds in Maryland and is authorized to do business in Florida.¹⁴

B. Overview of the Projects

i. The Prime Contracts and the Subcontract Agreements

4. On October 18, 2013, FEDCON entered into a written contract No. W912P8-14-C-0002 with the United States Army Corps of Engineers (the "Corps" or "USACE") known as Resilient Features, WBV, HSDRRS, Mississippi River Levee, Oak Point to Augusta, WBV-MRL 2.2, Plaquemines Parish, Louisiana (the "2.2 Project").¹⁵ The 2.2 Project called for FEDCON to repair and raise substandard levees along a section of the Mississippi River between the cities of Oak Point, Louisiana and Augusta, Louisiana.¹⁶

5. Pursuant to the prime contract with the Corps for the 2.2 Project (the "2.2 Project Prime Contract"), and in accordance with the Miller Act, 40 U.S.C. § 3131, FEDCON, as principal, and Western, as surety, executed and delivered a payment bond to the Corps for the 2.2 Project.¹⁷

6. On January 22, 2014, FEDCON entered into a written subcontract agreement with GLF for work on the 2.2 Project (the "2.2 Project Subcontract Agreement").¹⁸ Pursuant to the terms of the 2.2 Project Subcontract Agreement, GLF, as principal, and F&D, as surety, executed and delivered to FEDCON a payment and performance bond.¹⁹

7. Similarly, on December 5, 2013, FEDCON entered into a written contract No. W912P8-14- C-0011 with the Corps known as Resilient Features, WBV, HSDRRS, Mississippi River Levee, Augusta to Oakville (A), WBV-MRL 1.2a, Plaquemines Parish, Louisiana (the "1.2a Project").²⁰ The 1.2a Project called for FEDCON to repair and raise substandard levees along a section of the Mississippi River between the cities of Augusta, Louisiana and Oakville,Louisiana.²¹

8. Like the 2.2 Project, FEDCON, as principal, and Western, as surety, executed and delivered to the Corps a payment bond for the 1.2a Project, pursuant to the terms of the prime contract with the Corps for the 1.2a Project (the "1.2a Project Prime Contract"), and in accordance with the Miller Act, 40 U.S.C. § 3131.²²

9. Also like the 2.2 Project, FEDCON entered into a written subcontract agreement with GLF for work on the 1.2a Project (the "1.2a Project Subcontract Agreement") on April 3, 2014.²³ Pursuant to the terms of the 1.2a Project Subcontract Agreement, GLF Construction, as principal, and F&D, as surety, executed and delivered to FEDCON a payment and performance bond.²⁴

10. GLF was involved in FEDCON's bid for the projects, as FEDCON teamed up with GLF to develop a joint approach for how the projects could be performed and executed.²⁵ FEDCON used the information gathered from meetings with GLF's personnel to develop its bid.²⁶ During at least one of these meetings, GLF and FEDCON discussed production, as that would determine how long the projects would take to construct and implicate FEDCON's costs for the projects.²⁷ GLF and FEDCON also discussed what GLF needed or wanted in terms of a work platform, an access road, and the materials and provision thereof.²⁸ FEDCON used the production information to develop "prebid schedules" so that it knew the duration of the project, and, in terms of GLF's requests for an access road or a temporary work platform, FEDCONensured that it priced such work accordingly.²⁹

11. Both the 2.2 Project Subcontract Agreement and the 1.2a Project Subcontract Agreement expressly incorporated the respective prime contract for the projects, providing, in a section labeled "Contract Documents":

1.A This Subcontract Agreement consists of the terms and provisions of this agreement including all documents or specific portions of documents referred to herein or in the Exhibits attached hereto and hereby incorporated by reference thereby making them a part hereof, the Prime Contract between the Owner and the Contractor, including all general, supplementary and special conditions, drawings, specifications, addenda, forms, and documents forming a part of said Prime Contract and any modifications to the Prime Contract subsequent to the execution of this Subcontract Agreement; all of which are hereinafter referred to as the "Contract Documents."³⁰

12. Additionally, both the 2.2 Project Subcontract Agreement and the 1.2a Project Subcontract Agreement require GLF, as subcontractor, to furnish and pay for all labor, testing, materials, scaffold, transportation, machinery, tools, apparatus, required shop drawings, services, and equipment necessary to perform certain work described in an attached Exhibit "A," which, in turn, required GLF to furnish and provide these things to complete the work as depicted on the contract drawings and set forth in specifications pertaining to concrete, sheet piling, pile load tests, steel pipe piles, and scour protection.³¹

13. Generally, the sequence of the work on both projects involved: (a) demolition of the scour protection and degrading of the existing earthen levee; (b) construction of temporary flood protection ("TFP"), which is an earthen levee that is faced with stone to provide flood protection on a temporary basis while the levee is breached and construction is in process; (c)driving of steel sheet piles, which were used to prevent water from seeping underneath the floodwall; (d) driving of steel pipe piles; (e) placement of the stabilization slab; (f) placement of reinforcing steel and the concrete foundation on the stabilization slab; and (g) placement of reinforcing steel and the concrete wall on the foundation.³²

14. Per the subcontracts for each project, GLF was to provide work on two work fronts for each project.³³

15. In accordance with FEDCON's coordination and scheduling of the work to be performed by its subcontractors, construction of the access road, construction of the TFP, and degrading of the levee and construction of the work platform, all of which were to be performed by FEDCON's subcontractor, HDB Construction, Inc. were predecessor work activities to GLF's performance of its work activities including driving sheet pilings, driving pipe pilings and forming and pouring the concrete T-walls (furnishing and placement of steel rebar which was performed by a separate subcontractor on each project was also a predecessor activity to GLF's pouring the concrete T-walls).³⁴

16. FEDCON received both compensable and non-compensable extensions of time from the Corps on each project such that the actual completion date aligns with the adjusted contract completion date for both projects and, as a result, FEDCON was not assessed any liquidated damages by the Corps on either project.³⁵

ii. 2.2 Project

17. The 2.2 Project involved a 6,800-foot lineal foot floodwall constructed of concrete, steel sheet piles, steel pipe piles as a foundation, concrete foundation, and a concretewall.³⁶ The 2.2 Project was comprised of 118 "monol...