C. Sanchez and Son, Inc. v. U.S.

• Decision Date: 05 October 1993
• Docket Number: No. 92-5010,92-5010
• Citation: 6 F.3d 1539
• Parties: 39 Cont.Cas.Fed. (CCH) 76,578 C. SANCHEZ AND SON, INCORPORATED, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1539

6 F.3d 1539

39 Cont.Cas.Fed. (CCH) 76,578

C. SANCHEZ AND SON, INCORPORATED, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 92-5010.

United States Court of Appeals Federal Circuit.

Oct. 5, 1993.

Durward E. Timmons, Sherman & Howard, Colorado Springs, CO, for appellant. Of counsel was Robert S. Gardner.

Joan M. Bernott, Dept. of Justice, for appellee. With her on the brief were Stuart M. Gerson and David M. Cohen. Of counsel was Lisa H. Clay, U.S. Army Corps of Engineers.

Before NEWMAN, Circuit Judge, BENNETT, Senior Circuit Judge, and CLEVENGER, Circuit Judge.

PAULINE NEWMAN, Circuit Judge.

C. Sanchez and Son was awarded a fixed price contract with the United States Army Corps of Engineers in connection with the construction of an artificial battlefield at Fort Hunter Liggett, California. The contract required the installation of several electrical systems including interior wiring, an underground electrical distribution system, a telephone system, a lighting system and a lightning protection system, and included trenching and backfilling of ground in the course of installation of underground wiring. Sanchez subcontracted with I.C.G. Electric, Inc. to perform work on the project. Sanchez, on behalf of I.C.G., seeks equitable adjustments to compensate for certain increased costs. The United States Claims Court granted summary judgment against Sanchez on three claims. ¹ We affirm as to two claims and reverse and remand as to one claim.

Summary Judgment

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." RUSCC 56(c) ². The moving party has the burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). In response to a properly supported motion for summary judgment the opposing party "must set forth specific facts showing that there is a genuine issue for trial". RUSCC 56(f).

The evidence of the nonmoving party is to be believed, and all reasonable factual inferences are to be drawn in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970). A genuine issue of material fact arises when the nonmovant presents sufficient evidence upon which a reasonable fact finder, drawing the requisite inferences and applying the applicable evidentiary standard, could decide the issue in favor of the nonmovant. Anderson, 477 U.S. at 254-55, 106 S.Ct. at 2513-14. The grant of summary judgment is reviewed for correctness, seeMingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed.Cir.1987), the appellate court determining whether the matter was amenable to summary resolution and, if so, whether the law was correctly applied to the facts.

I Aluminum-Sheathed Cable

The contract specified the use of certain steel-sheathed cable for the data transmission line. The Okonite Company, as supplier, experienced delay in acquiring adequate quantities of the specified steel-sheathed cable, and proposed substituting, at no additional cost, aluminum-sheathed cable. Aluminum-sheathed cable is more expensive than steel-sheathed cable, and Sanchez described aluminum-sheathed cable as "superior". The Army rejected the requested substitution, stating that steel was superior in blocking magnetic interference on the data line.

Sanchez states that the Army conducted no investigation and cited no technical authority concerning the interference-blocking properties of aluminum versus steel, and that the Army's denial of this request without adequate technical review breached the duty to cooperate and not hinder the contractor's performance. As a result of this denial Sanchez experienced delay in the contract schedule, for which it seeks recompense.

The government must avoid actions that unreasonably cause delay or hindrance to contract performance. Malone v. United States, 849 F.2d 1441, 1445 (Fed.Cir.1988); Lewis-Nicholson, Inc. v. United States, 550 F.2d 26, 32, 213 Ct.Cl. 192 (1977); George A. Fuller Co. v. United States, 69 F.Supp. 409, 108 Ct.Cl. 70, 94 (1947). The Army promptly informed Sanchez of its view that the purpose of the requirement for steel-sheathed cable would not be met by aluminum. The record does not contain facts tending to show that the Army acted arbitrarily or unreasonably, or that aluminum-sheathed cable was known to have the requisite interference-blocking properties of steel-sheathed cable. Indeed Sanchez does not assert that aluminum is as effective as steel in this regard. The only statement of superiority in the record is that aluminum provides a superior hermetic seal, a property not asserted by Sanchez to be related to the property of blocking magnetic interference.

The burden of showing suitability for the intended purpose was upon Sanchez. Sanchez has not presented facts which, if established, would support entitlement to delay damages for the Army's refusal to accept the substitution of aluminum-sheathed cable. Summary judgment on this claim was correctly entered in favor of the government.

II The Rollover Protective Structure

I.C.G. planned to use a Vermeer T-600D trenching machine to dig the trenches required by the contract, and the contract was bid accordingly. Not included in the bid was the cost of installing a rollover protective structure ("ROPS") on the trencher. After contract performance had begun, the Army directed I.C.G. to install a ROPS. I.C.G. objected but complied, and seeks recovery of the costs incurred. See J.B. Williams Co. v. United States, 450 F.2d 1379, 1394, 196 Ct.Cl. 491 (1971) (government directive to proceed beyond contractor's reasonable interpretation of contract was a constructive change and entitled contractor to an equitable adjustment).

I.C.G. explained that it did not believe a ROPS was required on the Vermeer T-600D trencher, because of the contract terms and because of its past experience using this trencher in government construction projects. I.C.G. referred to the absence of a requirement for a ROPS on trenchers in the Army Corps of Engineers Safety and Health Requirements Manual ("Safety Manual"), which was incorporated by reference into the contract. The Safety Manual does not mention trenchers in its section on requirements for rollover protection structures:

a. ... rollover protective structures (ROPS) shall be installed on crawler and rubber-tire tractors such as dozers, push and pull tractors, winch tractors, and mowers (except side boom pipe-laying equipment); off-the-highway self-propelled pneumatic-tire earth movers such as trucks, pans, scrapers, bottom dumps and end dumps; motor graders; water tank trucks having a tank height less than the case; and other self-propelled construction equipment such as front-end loaders, backhoes, rollers, and compactors. ROPS are not required on trucks designed for hauling on public highways, crane-mounted, dragline backhoes, tractors or front-end loaders only when used to unload material from barges, sections of rollers and compactors of the tandem steel-wheeled and self-propelled pneumatic tired type that do not have an operator's station, self-propelled rubber-tired lawn and garden tractors under 20 drawbar horsepower, cranes, draglines, or equipment on which the operator's cab and boom rotate as a unit

....

b. ROPS shall be installed in accordance with the manufacturer's or designer's recommendation....

Safety Manual Sec. 18.B.20.

A contract is read in accordance with its express terms and the plain meaning thereof. Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 169 Ct.Cl. 384 (1965); Hills Materials Co. v. Rice, 982 F.2d 514, 516 (Fed.Cir.1992). When the matter in dispute is not expressly provided for in the contract, it is necessary to determine whether the contractor's interpretation of the contract requirements was reasonable. The Claims Court, granting summary judgment in favor of the government, stated that the Safety Manual was "unambiguous" in requiring ROPS on trenchers. The court stated that although trenchers are not specifically mentioned in the Safety Manual, the Manual requires ROPS on "crawler and rubber-tire tractors such as dozers" and certain "other self-propelled construction equipment". The court held that trenchers are like crawler tractors.

Sanchez' position is that a "trencher" is a specifically defined class of construction vehicle, is not a "crawler tractor" or a "dozer", and is not similar to any of the equipment the Safety Manual lists to illustrate "other self-propelled construction equipment". Sanchez states that an experienced engineer would understand that these classes of vehicle have well-recognized meanings, and would so read the Safety Manual. Sanchez provided the affidavit of Mr. Brand, the Product Safety Manager for Vermeer Manufacturing Co., who averred that based on the standards and definitions of the Society of Automotive Engineers and his own extensive experience, a trencher is not a crawler tractor or a dozer, and is not like a crawler tractor or a dozer. He stated that the Vermeer trencher model T-600D has a boom which in operation extends down into the ground thereby preventing rollover, that the machine has a low center of gravity and wide track base making it very stable, and that the operator is side-mounted which provides a quick and virtually unhindered egress. Mr. Brand averred that neither Vermeer nor any other manufacturer of similar trenchers included factory-installed ROPS on such trenchers, and that Vermeer had sold T-600D trenchers to both the Air Force and the Navy without any requirement for installation of a ROPS.

Mr. Gilbreth, the...