Background
In 2020, the Department of Veterans Affairs contracted Sergent’s Mechanical Systems, Inc. to perform HVAC and asbestos abatement services at a medical center in Florida. The contract required completion by August 2021. Sergent encountered delays due to asbestos abatement issues and cooling coil replacements, submitting schedules indicating it could not meet the deadline. The VA terminated the contract for default in March 2021. Sergent filed suit in the Court of Federal Claims, which granted summary judgment to the VA in 2024, finding no excusable delay and no contract modification.
The court’s reasoning
The court reviewed the summary judgment de novo and found no genuine issue of material fact. The contract explicitly stated that asbestos quantities were estimates and placed the responsibility on the contractor to verify actual quantities and conditions. The court held that the contractor could not claim excusable delay based on a misunderstanding of the contract scope. Furthermore, the court found no evidence of a written contract modification shifting asbestos responsibilities to the government, as required by federal acquisition regulations.
The Contract explicitly clarified that VA had provided only estimate[s] of how much asbestos was within the abatement responsibility of Sergent and that Sergent bore the responsibility for investigating the site to identify what specific work was entailed by the abatement obligation.
Sergent’s Mechanical Systems, Inc. v. United States, 2026-1116 (Fed. Cir. May 21, 2026)
What it means going forward
The decision reinforces that government contractors bear the risk of verifying site conditions when contract documents explicitly assign that duty to them, even when the government provides preliminary estimates.