Court of Appeals Torpedoes the Navy’s Case! But is Metcalf Ship-Shape?

Attorney John Swansinger first reported on the perils of relying on pre-bid information from the government in this post discussing Metcalf Construction Company, Inc. v United States Fed Cir. App. Case No. 2013-5041. He now provides the following update on the recent decision by the court of appeals:

On February 11, 2014  the United States Court of Appeals for the Federal Circuit found that the trial court utilized an “improperly narrow” view of the court’s precedent for determining that the Navy did not violate the duty of good faith and fair dealing when it socked Metcalf with the consequences of inaccurate pre-bid soil studies.  The Court stated that the standard of an implied duty of good faith and fair dealing “…imposes obligations on both contracting parties that include the duty not to interfere with the other party’s performance and not to act so as to destroy the reasonable expectations of the other party regarding the fruits of the contract”.  The matter now goes to back to the trial court where reasonable persons can determine if  the Navy’s refusal to grant change orders to Metcalf for the change in actual soil conditions was in good faith and fair.

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