Medlin Const. Group, Ltd. v. Harvey

• Decision Date: 01 June 2006
• Docket Number: No. 05-1514.,05-1514.
• Citation: 449 F.3d 1195
• Parties: MEDLIN CONSTRUCTION GROUP, LTD., Appellant, v. Francis J. HARVEY, Secretary of the Army, Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

449 F.3d 1195

MEDLIN CONSTRUCTION GROUP, LTD., Appellant, v. Francis J. HARVEY, Secretary of the Army, Appellee.

No. 05-1514.

United States Court of Appeals, Federal Circuit.

June 1, 2006.

Johnathan M. Bailey, Bailey & Bailey, P.C., of San Antonio, Texas, for appellant.

Dawn S. Conrad, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for appellee. With her on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Deborah A. Bynum, Assistant Director. Of counsel on the brief was Lloyd R. Crosswhite, Attorney, United States Army Corps of Engineers, of Fort Worth, Texas.

Before LINN, DYK, and PROST, Circuit Judges.

PROST, Circuit Judge.

Medlin Construction Group, Ltd. ("Medlin") appeals from the summary judgment decision of the Armed Services Board of Contract Appeals (the "Board"), Medlin Constr. Group, Ltd., A.S.B.C.A. No. 54,772, 05-1 BCA ¶ 32,939, which held that Medlin is not entitled to recover certain increased costs incurred in performing Contract No. DACA63-02-C-0015 (the "Contract") with the Army. Because we find that Medlin's interpretation is the only reasonable interpretation that gives meaning to all of the Contract provisions, we reverse and remand.

I. BACKGROUND

On July 29, 2002, the government awarded the Contract to Medlin for the construction of the vehicle maintenance facility at Fort Hood, Texas, at the fixed price of $14,267,011.06. The Contract specifications describe the products to be used in performing this section of the Contract. Paragraph 2.2, "FIBER VOID RETAINERS," provides as follows:

2.2 FIBER VOID RETAINERS

2.2.1 Polystyrene Rigid Insulation

Polystyrene rigid insulation shall conform to ASTM C 578, Type V, VI, or VII, square edged. Size shall be 38 mm thick by 400 mm in height by 1 meter in length, unless otherwise indicated.

2.2.2 Precast Concrete

Precast concrete units shall have a compressive strength of no less than 17 MPa, reinforced with 150 mm by 150 mm by W1.4 WWF wire mesh, and 300 mm (height) by 1 m (length) by 40 mm (thickness) in size unless indicated.

Fort Hood Contract No. DACA63-02-C-0015, Specification Section 03100A, Paragraph 2.2. There is no dispute between the parties that paragraph 2.2 permits the contractor to choose between two materials for fiber void retainers: polystyrene rigid insulation ("polystyrene retainer") or precast concrete ("concrete retainer"). Part 3.1.3 describes the installation of the Fiber Void Retainers, and provides that "[f]iber void retainers shall be installed, continuously, on both sides of fiber voids placed under grade beams in order to retain the cavity after the fiber voids biodegrade."

Contract Drawing Sequence No. A-3101 states at "FOUNDATION NOTES: (SLAB—ON—GRADE)," note 11, that "ALL GRADE BEAMS SUPPORTED BY DRILLED PIERS SHALL HAVE VOIDS UNDER THEM. (SEE `TYP. GRADE BEAM VOID' DETAIL THIS SHEET.)" The "TYPICAL GRADE BEAM VOID DETAIL" shows an arrow pointing to the retainer and states "41 × 304 × 914 mm PRECAST CONC. CONT. RETAINERS." The detail also provides that the "BOTTOM OF GRADE BEAMS SHALL BE FORMED w/ PLYWOOD OF SUFFICIENT THICKNESS TO SUPPORT WET CONCRETE DURING PLACEMENT (TYP. ALL BEAMS)" and that "51 × 152mm PRECAST CONC. SPACERS @ 914mm O.C." should be used at the joints of the side retainers.

The Contract contains the standard clauses for construction contracts, including FAR 52.236-21 SPECIFICATIONS AND DRAWINGS FOR CONSTRUCTION (FEB 1997) which provides:

(a) The Contractor shall keep on the work site a copy of the drawings and specifications and shall at all times give the Contracting Officer access thereto. Anything mentioned in the specifications and not shown on the drawings, or shown on the drawings and not mentioned in the specifications, shall be of like effect as if shown or mentioned in both. In case of difference [sic] between drawings and specifications, the specifications shall govern....

(b) Wherever in the specifications or upon the drawings the words "directed", "required", "ordered", "designated", "prescribed", or words of like import are used, it shall be understood that the "direction", "requirement", "order", "designation", or "prescription", of the Contracting Officer is intended ....

(c) Where "as shown," "as indicated", "as detailed", or words of similar import are used, it shall be understood that the reference is made to the drawings accompanying this contract unless stated otherwise. The word "provided" as used herein shall be understood to mean "provide complete in place," that is "furnished and installed."

Fort Hood Contract No. DACA63-02-C-0015 at 00700-67 (emphasis added).

By letter dated January 27, 2003, Medlin wrote to the Central Texas Office of the Army Corps of Engineers stating that Medlin was informed at informal discussions with Army representatives that the government believes the contract requires Medlin to install "precast concrete continuous retainers at all grade beams." Letter from Jerry Hallmark, Project Manager, to Tom Hamilton, U.S. Army Corps of Eng'rs., Cent. Tex. Office (Jan. 27, 2003) (emphasis added). Medlin then stated its understanding of the Contract: that the specifications provide two options regarding the type of retainers that can be used, namely, polystyrene or concrete retainers, and that the contractor can choose between either of the two types. Id. Medlin also stated that it calculated its bid for the Contract based on the less expensive polystyrene material and the cost savings were reflected in its bid. Id.

In a subsequent letter, Medlin sent a sketch of "the construction of space beneath grade beams and utilization of specified polystyrene rigid insulation" and provided information on the polystyrene retainers Medlin proposed to use. Letter from Jerry Hallmark, Project Manager, to Tom Hamilton, U.S. Army Corp of Eng'rs., Cent. Tex. Office (Jan. 31, 2003) (emphasis added).

The government responded by letter dated March 17, 2003, in which it stated that there is "no conflict between the drawings and the specifications" because "the specifications list[ ] two acceptable products and [the] drawings authoriz[e] the use of only one of the acceptable products[,] ... pre-cast concrete retainers...." Letter from Michael C. Bormann, Administrative Contracting Officer, to Medlin Construction Group, Ltd. (Mar. 17, 2003).

Medlin subsequently filed a claim with the Board in the amount of $56,140.38¹ for the extra costs associated with furnishing precast concrete fiber void retainers, as opposed to polystyrene retainers.

The issues, as framed by the Board, are "whether there is a conflict between the specification and drawing detail, and if so, ... [whether] that conflict [can] be resolved by the normal rules of contract interpretation and the application of the SPECIFICATIONS AND DRAWINGS FOR CONSTRUCTION clause." Before the Board, both the government and Medlin argued that the specification and drawing detail were not in conflict, albeit for different reasons. The government argued there was no conflict because although the specifications allowed some "latitude or option to the contractor, the ... drawings narrow the latitude or options by providing additional details regarding the grade beam void retainers." Narrowing the options available, according to the government, did not present a conflict. Medlin argued that the specifications and drawings were not in conflict because the specifications allowed the contractor to choose between two types of retainer material, and while the drawings altered the dimensions for the concrete retainers, the drawings did not eliminate the contractor's ability to choose to use polystyrene retainers.

In considering cross-motions for summary judgment filed by both the government and Medlin, and the parties' assertion that the essential facts are undisputed, the Board recognized that "only the legal effect" of the provisions of the specifications and drawing were at issue. While noting that "there is a difference between the language in subpart 2.2 of the specification and the Contract drawing detail regarding the typical grade beam void," the Board determined that the specification and the drawing were not in conflict because the drawings merely narrowed the options available to the contractor from two choices (i.e., polystyrene or concrete retainers), to one choice (i.e., only concrete retainers).

The Board reached that conclusion by relying on its previous decisions in Caddell Construction Co., A.S.B.C.A. No. 32,641, 87-1 BCA ¶ 19,359, and A.R. Mack Construction Co., A.S.B.C.A. No. 49,526, 97-1 BCA ¶ 28,742, in which it held that a specification provision that allows latitude or options is not in conflict with contract drawings that narrow the latitude or options because the specific requirements of the drawings did not contradict or override the specifications, but rather complemented them by providing particularization and additional detail. Although the Board agreed with Medlin that there are factual distinctions between the facts of the present case and the facts of Caddell and A.R. Mack, the Board did not find those distinctions sufficient to distinguish the holdings in those cases. Thus, the Board agreed with the government's interpretation that the contractor was limited by the drawing to only one retainer type, concrete. Accordingly, the Board granted the government's motion for summary judgment and denied Medlin's cross-motion for summary judgment.

Pursuant to 41 U.S.C. § 607(g)(1)(A), Medlin appeals the Board's grant of summary judgment in favor of the government. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(10).

II. DISCUSSION

A. Standard of Review

The standard of review in cases under the Contract Disputes Act is governed by 41 U.S.C. § 609(b), which provides:

In the event of an appeal by a contractor or the Government from a decision of any agency board pursuant to ...