Sacramento Municpal Utility Dist. v. FCC Corp.
FCC Corporation, formerly named Fru-Con Construction Corporation (Fru-Con),[1] appeals from a judgment that awards approximately $54 million to the Sacramento Municipal Utility District (SMUD) for damages arising from the construction of the Cosumnes Power Plant. SMUD sought to build the power plant on a fast-track schedule after experiencing a critical shortage of electricity in 2000. SMUD retained Utility Engineering Corporation (Utility Engineering) to provide the engineering design and Fru-Con to build the power plant.
Construction difficulties plagued the project, and Fru-Con missed a sufficient number of intermediate construction milestones to trigger the maximum liquidated damages rate of $25,000 per day. SMUD terminated Fru-Con’s right to proceed with any further work after Fru-Con expressly refused to remove deficient concrete in the foundation for the power plant’s cooling tower. By terminating Fru-Con’s right to proceed, the practical effect of SMUD’s action was to terminate the construction contract with Fru-Con.
Comments on Sacramento Municpal Utility Dist. v. FCC Corp.