P.J. Maffei Bldg. Wrecking Corp. v. U.S.

• Decision Date: 19 April 1984
• Docket Number: No. 83-1228,83-1228
• Citation: 732 F.2d 913
• Parties: 32 Cont.Cas.Fed. (CCH) 72,426 P.J. MAFFEI BUILDING WRECKING CORPORATION, Appellant, v. The UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 913

732 F.2d 913

32 Cont.Cas.Fed. (CCH) 72,426

P.J. MAFFEI BUILDING WRECKING CORPORATION, Appellant, v. The UNITED STATES, Appellee.

Appeal No. 83-1228.

United States Court of Appeals, Federal Circuit.

April 19, 1984.

Alvin S. Nathanson, Boston, Mass., for appellant.

Robert M. Hollis, Washington, D.C., for appellee. With him on the brief were J. Paul McGrath, Asst. Atty. Gen., and David M. Cohen, Director, Washington, D.C.

Before DAVIS, Circuit Judge, SKELTON, Senior Circuit Judge, and BALDWIN, Circuit Judge.

DAVIS, Circuit Judge.

This appeal is from a decision of the United States Claims Court, granting summary judgment for the appellee, the United States (the Government), and dismissing appellant P.J. Maffei Building Wrecking Corporation's (Maffei's) claim that the General Services Board of Contract Appeals (the Board) incorrectly held that Maffei was not entitled to an equitable adjustment for a shortfall of salvageable steel in its demolition contract with the Government. ¹ We affirm, but partially for different reasons than those advanced by the Claims Court.

I

In June 1976 the Government issued an Invitation for Bids (IFB) for the demolition and removal of the United States Pavilion (and restoration of the grounds) in Flushing Meadow Park, New York. The Pavilion had been built for the 1964 World's Fair. The IFB advised prospective contractors that the salvage value of the construction materials to be removed from the project site should be reflected in the bids, because those materials would become the property of the contractor. This appeal primarily concerns the proper construction and application of another IFB provision, found in the Special Conditions section:

1.2 Some drawings of some of the existing conditions are available for examination at the New York City Parks Department's Administration Building at Flushing Meadow Park, Flushing, New York. These drawings are for information only and will not be part of the contract documents. The quantity, quality, completeness accuracy and availability of these drawings are not guaranteed. Prospective bidders shall telephone Mr. S. Dubowy or Mr. S. Adler of the New York City Parks Department, at 212-699-4288, for an appointment to examine drawings of the existing conditions.

Maffei's estimator, Laurence Brady, Jr., visited the site, reviewed drawings he obtained from a man named "Charlie" at the Parks Department, consulted a "steel book," ² and subsequently arrived at a bid based on his estimate of the amount of salvageable steel in the Pavilion. On October 7, 1976, the Government awarded Maffei the demolition contract.

Maffei recovered 1,075 tons of steel less (approximately 20%) than it had estimated it would salvage from the project. Contending that the Government owed it compensation for the shortfall under the Differing Site Conditions clause of its contract, Maffei submitted a claim to the Government for an equitable adjustment of the contract price. The Differing Site Conditions clause provides:

The Contractor shall promptly, and before such conditions are disturbed, notify the Contracting Officer in writing of: (1) Subsurface or latest [sic for latent] physical conditions at the site differing materially from those indicated in this contract, or (2) unknown physical conditions at the site, of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in this contract. ³ The Contracting Officer shall promptly investigate the conditions, and if he finds that such conditions do materially so differ and cause an increase or decrease in the Contractor's cost of, or the time required for, performance of any part of the work under this contract, whether or not changed as a result of such conditions, an equitable adjustment shall be made and the contract modified in writing accordingly. (Emphasis added.)

The contracting officer denied Maffei's claim on the ground that the Government had explicitly excluded the drawings upon which Maffei allegedly relied from the contract's coverage and disclaimed their accuracy. See IFB provision 1.2, supra. He also said that the IFB required that prospective contractors estimate salvageable structural steel through on-site inspection and examination.

On appeal, the General Services Board of Contract Appeals affirmed the contracting officer's denial of Maffei's claim for an equitable adjustment for the steel shortfall. P.J. Maffei Building Wrecking Corporation, 80-2 B.C.A. (CCH) p 14,647 (August 1980). It decided that the contract contained no "indication" of the amount of steel in the Pavilion. The Board said:

... the contract provided the appellant with no information or estimate of the type or quantity of steel in the building. The Government was aware that some drawings pertaining to the structural steel were available at the Parks Department. The drawings were to serve as a source for providing potential bidders with leads to more reliable information, such as the as-built drawings or the contractor who installed the steel.

Id., at 72,259. The Board also held against Maffei on its claim that the Government had misrepresented by withholding pertinent information.

In 1981 Maffei sought review of the Board's decision on these claims in the then United States Court of Claims under the Wunderlich Act, 41 U.S.C. Secs. 321-322 (1976). ⁴ On October 1, 1982, the case was transferred to the United States Claims Court by the Federal Courts Improvement Act of 1982, Pub.L. No. 97-164, 96 Stat. 25 (April 2, 1982). Both Maffei and the Government moved for summary judgment.

The Claims Court granted the Government's cross-motion for summary judgment and dismissed Maffei's claims. Although the court upheld the Board's determination, it did so on the basis that Maffei had not shown that it actually relied on the information shown in the drawings. In contrast to the Board, the Claims Court ruled that the Government's reference to the drawings in the IFB was sufficient to satisfy the requirement of a "contract indication" under the Differing Site Conditions clause. That reference, however, did not amount to a misrepresentation (in the Claims Court's view) because it came replete with caveats. The Claims Court also found, like the Board, that Maffei had failed to show that the Government concealed any information. P.J. Maffei Building Wrecking Corp. v. United States, 3 Cl.Ct. 482 (1983).

II

We uphold the Claims Court's grant of summary judgment for the Government and dismissal of Maffei's claim for an equitable adjustment of the contract price. The ground for our decision, however, is the position rejected by the Claims Court. Unlike that court, we agree with the Board that the contract documents did not "indicate" the amount of steel recoverable from the Pavilion, within the meaning of the Differing Site Conditions clause. We also decide (as did the Claims Court) that Maffei failed to show that the Government misrepresented conditions at the Pavilion or that it possessed pertinent information regarding the Pavilion steel structure which it concealed.

Differing Site Conditions Claim

Success on a Type I Differing Site Conditions claim ⁵ turns on the contractor's ability to demonstrate that the conditions "indicated" in the contract differ materially from those it encounters during performance. Arundel Corporation v. United States, 515 F.2d 1116, 1128 (Ct.Cl.1975). As a threshold matter, then, this kind of Differing Site Conditions claim is dependent on what is "indicated" in the contract. Foster Construction C.A. and Williams Brothers Company v. United States, 435 F.2d 873, 881 (Ct.Cl.1970). A contractor cannot be eligible for an equitable adjustment for changed conditions unless the contract indicated what those conditions would supposedly be. S.T.G. Construction Co., Inc. v. United States, 157 Ct.Cl. 409, 414 (1962).

In this case, we cannot accept the view that the Government's reference, in the IFB, to structural drawings available from the New York City Parks Department amounted to an "indication," representation, or undertaking by the Government that the dimensions of the steel in the Pavilion were accurately or reliably depicted by the drawings. While it is true that a contract "indication" need not be explicit or specific, the contract documents must still provide sufficient grounds to justify a bidder's expectation of latent conditions materially different from those actually encountered. Foster Construction, supra, at 875. "[T]here must be reasonably plain or positive indications in the bid information or contract documents that such subsurface conditions would be otherwise than actually found in contract performance ...." Pacific Alaska Contractors, Inc. v. United States, 436 F.2d 461, 469 (Ct.Cl.1971).

Determining whether Maffei's contract with the Government contained any "indications" regarding the steel within the Pavilion is a matter of contract interpretation and thus presents a question of law which may be decided by this court for itself. Foster Construction, supra, at 880; Hercules Inc. v. United States, 626 F.2d 832, 835 (Ct.Cl.1980); B.D. Click Co., Inc. v. United States, 614 F.2d 748, 752 (Ct.Cl.1980). A proper technique of contract interpretation on this problem is for the court to place itself "into the shoes of a 'reasonable and prudent' contractor" and decide how such a contractor would act in appellant's situation. H.N. Bailey & Associates v. United States, 449 F.2d 387, 390 (Ct.Cl.1971); Hegeman-Harris & Co., Inc. v. United States, 440 F.2d 1009, 1016 (Ct.Cl.1971).

From this vantage point of the "reasonable contractor" or "reasonable bidder," we see that IFB provision 1.2 can be interpreted only as an effort by the Government to direct prospective contractors to information which might prove helpful in formulating their bids, but not as proffering any specific information bearing directly...