$51 Million Daewoo v. U.S. Judgment Paid Resolving the Largest Counterclaim Judgment in U.S. Army Corps of Engineers’ History

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BY PACIFIC OCEAN DIVISION, U.S. ARMY CORPS OF ENGINEERS – On October 11, 2010, Daewoo Engineering & Construction Co., Inc., paid $51.2 million to the United States government to resolve the largest counterclaim judgment in the U.S. Army Corps of Engineers’ history.  The payment satisfies in full the 2006 Court of Federal Claims fraud counterclaim judgment in Daewoo v. United States, as well as a $2,000 discovery sanctions award and a $600,000 portion of the claim investigation costs sought by the Government.

The case arose out of Daewoo’s construction of a 53-mile road in the Republic of Palau under a Corps of Engineers contract, and the counterclaim judgment occurred because of serious defects in Daewoo’s $64 million certified equitable adjustment claim.  The trial court’s decision, which was affirmed on appeal, can be found at 73 Federal Claims Reporter 547.


The taxpayers of the United States have been well-served by the Government throughout this project and litigation” said Col. Edward J. Kertis, commander of the Pacific Ocean Division, U.S. Army Corps of Engineers.  “Daewoo completed the project, the people of Palau have a good road, and the claim and litigation system functioned as it should.”

“Daewoo recognized the serious nature of this judgment and is determined to make good on all aspects of the case” said Bom Sik Cho, Vice-President of Daewoo, who is working to resolve all Palau-related matters with the U.S. Government.  “We intend to move forward as a responsible contractor and regain our reputation as a reliable partner with whom the U.S. Government can do business.”

“This was a team effort” said Brian S. Smith, who was the Department of Justice Trial Attorney on the Daewoo case before becoming the Corps’ Pacific Ocean Division Counsel currently conducting the final negotiations with Daewoo.  “It took a lot of great work from our trial witnesses, experts, and lawyers, along with support from Corps senior leaders, to win this case, establish it as a precedent, and resolve it with this payment.  I toast that effort, and applaud Daewoo for stepping up to the plate to make things right.”

The Corps’ Pacific Ocean Division is responsible for major design and construction and real estate management for the Army and Air Force in Alaska and Hawaii, and for all Department of Defense agencies in Japan, Republic of Korea and Kwajalein Atoll, Marshall Islands.  The Corps also provides international engineering assistance for the Republic of the Marshall Islands, Federated States of Micronesia, Republic of Palau and other countries, as requested by the State Department.