Hydro Group, Inc. v. United States

35 Cont. Cas. Fed. 75,723, 17 Cl. Ct. 668, 1989 U.S. Claims LEXIS 142, 1989 WL 83133
CourtUnited States Court of Claims
DecidedJuly 25, 1989
DocketNo. 190-87C
StatusPublished
Cited by1 cases

This text of 35 Cont. Cas. Fed. 75,723 (Hydro Group, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hydro Group, Inc. v. United States, 35 Cont. Cas. Fed. 75,723, 17 Cl. Ct. 668, 1989 U.S. Claims LEXIS 142, 1989 WL 83133 (cc 1989).

Opinion

OPINION

RADER, Judge.

In 1985, the Department of Interior awarded plaintiff a contract to inject cement slurry into an abandoned coal mine below the town of Portercrest, Alabama. The contract was necessary to reduce the danger of subsidence. Plaintiff, Hydro Group, Inc., filed this suit seeking payment for two chemicals added to the grout.

In performing the contract, plaintiff used two chemical additives — bentonite and plas-ticizer. Bentonite controls the viscosity of the grout mixture; plasticizer controls the grout’s flexibility during pumping. After completing the contract work, plaintiff sought payment for these chemicals over and above the contract bid price.

The contracting officer, however, denied plaintiff’s claim for additional compensation. According to the contracting officer, the invitation for bids (IFB) required plaintiff to include the costs of the additives in the bid price. Plaintiff sought recovery in the United States Claims Court.

The case is now before the Claims Court on defendant’s motion for summary judgment. After oral argument, this court denies defendant’s motion. Genuine issues of material fact prevent this court from granting the motion. This motion, however, has served to narrow the issues for trial. On the basis of the motion, this court presents some narrow issues for expeditious resolution at trial.

FACTS

The Portercrest project was not the first dealing between plaintiff and the Department of Interior’s Office of Surface Mining (OSM). In 1984-1985, plaintiff performed an OSM contract to prevent subsidence in Willowbend, Alabama. At Willowbend, plaintiff also used cement slurry to stabilize underground mines.

The Willowbend contract required addition of bentonite to the grout, but left the use of plasticizer to the discretion of the contractor.1 Under the Willowbend contract, OSM paid plaintiff for bentonite on [670]*670the basis of the amount actually used. The Willowbend IFB requested the bidder to include a specific bid price per pound for bentonite. After completion of the work, OSM computed the payment for bentonite by multiplying this bid price per pound times the number of pounds included in the grout.2

Thus, plaintiff’s winning bid on the Wil-lowbend project contained a bid price per pound for bentonite, but no such price for plasticizer. In performing the Willowbend contract, Hydro Group used both bentonite and plasticizer. Later, plaintiff submitted a bill to OSM for the plasticizer. OSM issued a change order to pay Hydro Group for the plasticizer. A formal written contract modification confirmed the change order. As with bentonite, OSM paid for plas-ticizer on the basis of the amount actually used.

In August 1985, OSM issued an IFB for the Portercrest project. OSM’s Portercrest solicitation differed from the Willowbend IFB with regard to these key additives. With regard to plasticizer, the language in section 4.2.1 was changed from “may only be used” in the Willowbend contract to “will be used” in the Portercrest contract.3 Under the Portercrest contract, plasticizer was mandatory. The IFB, however, did not contain a separate bid line item for the pumping agent. The bid solicitation also required the use of bentonite in the grout mixture.4 The IFB’s itemized bid sheet, however, included no separate per pound listing for bentonite.

In sum, the Portercrest contract, unlike the earlier Willowbend contract, required use of plasticizer. Neither contract included a separate line bid per pound for plasti-cizer. The Portercrest IFB also required use of bentonite, but — unlike the Willow-bend contract — contained no separate per pound line item for the additive.

On August 28, Mr. John Cagnassola, Vice President of Hydro Group’s Drilling and Grouting Division, attended a pre-bid conference held for prospective bidders on the Portercrest project. Immediately after the conference, Mr. Cagnassola telephoned the contracting officer, Mr. Owens, and expressed concern that the bid solicitation contained no line item for chemical additives.

As a result, Mr. Owens amended the Portercrest IFB to include a new section requesting a line item bid for bentonite. The amendment to the Portercrest IFB stated:

[671]*671NOTE: OPTIONAL — NOT TO BE USED FOR EVALUATION PURPOSES “Chemicals”
a. Bentonite — delivered, stored, mixed, and pumped into mine as part of grout mix — cost per pound $__

Plaintiff noted that this section still left several important issues unresolved. Mr. Cagnassola stated in his affidavit:

This new section neither provided nor requested an estimated quantity of ben-tonite by which to multiply the unit price, nor did the new section request a unit price for plasticizer.

Affidavit of John Cagnassola, No. 190-87C, filed July 11, 1988, at ¶ 11.

In a supplemental affidavit filed after oral argument,5 plaintiff further alleged that the questions raised by the amendment prompted it to inquire a second time. Mr. Cagnassola allegedly called Mr. Owens again “in an effort to point at these deficiencies.” Cagnassola Supp.Aff., No. 190-87C, filed June 1, 1989, tl 4. According to plaintiff, Mr. Owens refused to issue another modification or otherwise clarify the ambiguities.

On September 11, 1985, plaintiff submitted a bid which contained a price per pound for bentonite, but no bid price for plasticizer. On September 24, 1985, plaintiff received the contract award. During performance of the contract, Hydro Group used both bentonite and plasticizer. After performance, plaintiff requested payment for both additives above and beyond the contract price.

On October 3, 1986, OSM rejected plaintiff’s claim. The contracting officer decided that plaintiff should have included the costs of the mandatory additives in the bid. Mr. Owens also considered potential ambiguities in the IFB. He decided that, even if ambiguities were present, plaintiff failed to seek clarification prior to submitting its bid.

[672]*672Plaintiff brought this action seeking payment for the additives. Plaintiff contends the contract language does not require inclusion of the cost of additives in the original bid. Rather, plaintiff maintains that it reasonably interpreted the Portercrest IFB in light of past dealings in the Willowbend contract. Plaintiff argues that OSM did not notify Hydro Group that payment under the Portercrest contract would differ from payment under the prior Willowbend contract. Furthermore, plaintiff asserts that it brought ambiguities in the IFB to the attention of the contracting officer, thus appropriately responding to any patent ambiguity.

Defendant, in moving for summary judgment, contends that the plain language of the IFB required plaintiff to request payment for bentonite and plasticizer as part of its original bid. In the alternative, defendant contends that IFB is patently ambiguous. In the face of the patent ambiguity, according to defendant, plaintiff did not seek clarification.

The parties present the following issues:

(1) Did the contract require inclusion of the price of the additives in the bid?
(2) Was the contract ambiguous?

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Steve Altman Photography v. United States
18 Cl. Ct. 267 (Court of Claims, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
35 Cont. Cas. Fed. 75,723, 17 Cl. Ct. 668, 1989 U.S. Claims LEXIS 142, 1989 WL 83133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hydro-group-inc-v-united-states-cc-1989.