Argued: August 3, 2017
from the United States District Court for the Eastern
District of Tennessee at Knoxville. No. 3:10-cv-00407-Pamela
Lynn Reeves, District Judge.
Lochlin B. Samples, SMITH, CURRIE & HANCOCK, LLP,
Atlanta, Georgia, for Appellant.
G. Corgan, KILPATRICK TOWNSEND & STOCKTON, LLP, Atlanta,
Georgia, for Appellee.
Lochlin B. Samples, Karl Frederick Dix, SMITH, CURRIE &
HANCOCK, LLP, Atlanta, Georgia, for Appellant.
G. Corgan, Ian M. Goldrich, Reginald A. Williamson,
KILPATRICK TOWNSEND & STOCKTON, LLP, Atlanta, Georgia,
Before: SUTTON, McKEAGUE, and THAPAR, Circuit Judges.
THAPAR, Circuit Judge.
World War II, the United States launched the Manhattan
Project-the military's effort to build the world's
first atomic bomb. Building the bomb was a big project.
Cleaning up afterward turned out to be a big one, too. Since
the mid-1980s, the Project's original uranium-enrichment
facilities in Oak Ridge, Tennessee, have been inactive, and
the Department of Energy ("DOE") has worked to
clean up the hazardous waste left behind.
case arises out of that cleanup. To manage its effort, DOE
hired Bechtel Jacobs Company ("Bechtel"), a global
engineering and construction firm. Bechtel, in turn, hired
Eagle Supply & Manufacturing ("Eagle") to help
decontaminate the complex. Circumstances changed, and
litigation ensued. Now, years after the work finished, Eagle
and Bechtel continue to fight over the payment owed for
Eagle's work, over the meaning of certain contractual
provisions, and even over what happened at the site. The
district court found for Eagle, and Bechtel appealed. We now
affirm the district court's award of damages and
attorney's fees to Eagle, but remand so that the court
can recalculate the interest to which Eagle is entitled under
the Tennessee Prompt Pay Act.
hired Bechtel to clean up the uranium-enrichment site at Oak
Ridge, with plans to convert the area into a commercial
industrial park. That required not only the demolition of
buildings and equipment across the 2, 200-acre complex but
also the careful removal of radioactive nuclear waste. After
removing the waste, the team would need to decontaminate the
soil and groundwater to ensure that the site would be safe
for redevelopment. In short, the Oak Ridge project was a
massive undertaking. Accordingly, Bechtel sought additional
manpower and requested bids from potential subcontractors.
submitted one of those bids. Eagle relied on Bechtel's
forecasts for the project but also factored in administrative
costs and profit. As it turned out, one of Eagle's
competitors submitted a cheaper bid, and another received a
higher technical rating. But Bechtel determined that Eagle
promised the right balance of merit and price. Bechtel also
considered it "advantageous" that Eagle was a
federally certified small business and a Historically
Underutilized Business Zone contractor. Still Bechtel haggled
after deciding that it would likely award the subcontract to
Eagle. Bechtel convinced Eagle to accept a price reduction of
over $444, 000, implying that Eagle would otherwise lose the
bid. The two companies eventually agreed to a fixed-price
subcontract for the full cost of performing the demolition
and decontamination work.
things did not go as planned. Soon after the work began, the
parties realized that the project would be much more
challenging and costly than they had anticipated. At the
first set of facilities, Eagle discovered that it would need
to remove a lot more sediment than expected. More sediment
meant more employees. And to get more employees, Eagle had to
reallocate employees from another area of the project. This
staffing adjustment forced Eagle to abandon its original plan
to tackle multiple areas simultaneously and resulted in
delays and increased costs.
after the sediment setback, Bechtel announced a change to the
security clearance requirements for the main facility at
issue in this case-the K-1004-L facility. Workers at K-1004-L
would now have to carry a higher security clearance and
contend with an additional security perimeter. This caused
two problems: (1) increased congestion meant the work took
longer, and (2) increased security meant that Eagle had to
hire new workers and subcontractors with the requisite
security clearance. Not surprisingly, Eagle soon exceeded its
problems were not over. When Eagle began work on K-1004-L, it
discovered substantial amounts of asbestos and fluorine gas.
These unanticipated hazards sidelined Eagle's crews while
the company hired remediation experts. And the new dangers
meant more protective gear, which in turn slowed down
over an eight-month period, Bechtel made over sixty
modifications to the subcontract's mandatory contractor
procedures. These modifications affected nearly every aspect
of Eagle's work-from environmental-health-and-safety
requirements to personnel-change procedures. Apart from
Bechtel's modifications, Eagle catalogued thirty-nine
separate incidents of site conditions that differed from the
initial forecast. All in all, Eagle's work proved
significantly more challenging and expensive than either
party had anticipated.
happen-especially in long-term construction projects. Bechtel
and Eagle planned for that eventuality by including a
"Changes" provision in their contract (GC-18).
GC-18 allowed Bechtel to make changes. But if those changes
caused Eagle's costs to increase, GC-18 required Bechtel
to make appropriate "equitable adjustment[s]" in
price and time for performance.
the changes occurred, Eagle requested equitable adjustments.
Bechtel, however, dragged its feet on compensating Eagle for
the overruns. When the financial burden became too great,
Eagle objected to continuing the project. Bechtel, in turn,
threatened to terminate Eagle, but ultimately agreed to pay
Eagle's immediate labor and materials costs for the
duration of the project. This preliminary payment only
covered Eagle's labor and materials-not overhead,
administrative expenses, or profit. So Eagle submitted
another two requests for adjustment to its bid price to cover
these outstanding expenses. Eight years after completing its
work at K-1004-L-and still waiting to be paid for its
requested price adjustments-Eagle filed this suit.
alleges breach of contract and seeks compensation for its
extra work on the Oak Ridge project. Specifically, Eagle
seeks damages for the two "Requests for Equitable
Adjustment" that it submitted to Bechtel. The first
addressed the additional costs that Eagle incurred at the
K-1004-L site (the parties call this the "Combined
Changes REA"). Bechtel conceded some equitable
adjustment for these additional costs, but the parties were
unable to settle upon an appropriate figure. The second
request sought a price adjustment for excess waste that Eagle
removed across the project (the parties call this "Waste
Generation REA"). Bechtel contests liability for this
district court awarded Eagle the full amount of each request,
plus interest and attorney's fees. Bechtel now appeals.