Industrial Indemnity Co. v. United States

34 Cont. Cas. Fed. 75,437, 14 Cl. Ct. 351, 1988 U.S. Claims LEXIS 13, 1988 WL 7022
United States Court of Claims·Decided February 4, 1988·No. No. 570-84C·Published·Cited by 12 cases

Opinion

OPINION

ROBINSON, Judge.

This action is before the Court on Cross-motions for Summary Judgment filed pursuant to Rule 56(b) of the Rules of the United States Claims Court by the plaintiffs and defendant. The plaintiffs are a contractor and its surety. Jurisdiction is conferred upon this Court by 28 U.S.C. § 1491(a)(1) and 41 U.S.C. § 609(a)(1). The claim is founded upon an express contract between the plaintiff FEDCON and the United States. The defendant’s Motion for Summary Judgment is granted and the plaintiffs’ Cross-motion for Summary Judg[352] ment is denied for the reasons which follow.

Factual Background

On March 24, 1983, PEDCON Corporation entered into Contract No. DACA 67-83-C-0041 (Contract) with the United States for the sum of $6,445,360, covering the construction of a helicopter hangar apron, parking pads, hoverlanes, wash area, access road, parking lot, and storage area for the 1st and 2nd Attack Helicopter Battalions at Fort Lewis, Washington.

On April 4, 1983, Industrial Indemnity Company, acting as surety for FEDCON issued performance bond No. 8536505 in the penal sum of $6,445,360, naming the United States as obligee. The bond was conditional upon, inter alia, FEDCON’s performance of all the undertakings, covenants, terms, conditions, and agreements of the Contract. FEDCON received the notice to proceed on April 18, 1983. The work was to be completed in 365 calendar days after receipt of the notice to proceed.

The solicitation which resulted in the Contract contained separate bid items. The solicitation called for Item No. 1, the helicopter hangar “complete to a line 5 feet outside the building walls, except Item Nos. 3 through 7,” to be bid on a lump sum basis. The solicitation called for Item No. 2, “site work and utilities outside the line 5 feet outside the building walls, except Item Nos. 3 through 7,” to be bid on a lump sum basis. Item No. 3, “Excavation,” and Item No. 4, “Satisfactory Borrow Material,” were each bid on the basis of a unit price per cubic yard.

Under the heading “CEMENTING MATERIALS FOR CONCRETE PAVEMENT,” the solicitation contained alternative bid items. The contractor was to bid either on Item No. 5, “Portland cement,” or on Item No. 6, “Portland cement (used with pozzolan class F),” on the basis of a unit price per hundredweight (CWT). FEDCON elected to bid on Item No. 5, “Portland cement” and the Contract was awarded on that basis.

Finally, Item No. 7, “water-reducing admixture” was bid on the basis of a combined price: a lump sum for the mobilization and demobilization of storage, batching, and recording equipment, and a unit price per cubic yard for the water-reducing admixture.

The Corps of Engineers on February 28, 1983, received oral inquiries from one of the competing bidders on the project, Mr. Bruce Blake, seeking clarification of items under the Contract to which the Corps of Engineers responded orally. These inquiries were addressed to Mr. Will Al-dridge, who wrote two memoranda both dated February 28, 1983, describing these inquiries and his responses thereto. Thereafter, FEDCON, by letter dated July 12, 1983, wrote to the Department of the Army regarding the Contract in which FEDCON expressed the view that due to the exception clause in the Contract, “the cement used in the foundation, slabs, electrical and mechanical concrete will be paid for by Bid Item No. 5.” Further, the letter stated: “Conversations with people in your office have left us with the feeling that this is not the case.” The letter closed by stating that FEDCON wished a response from the Department of the Army prior to the starting of building concrete work regarding FED-CON’s interpretation of the Contract that all Portland cement would be paid for based on quantity, under Item No. 5.

The Contracting Officer’s representative, James D. Lonsford, responded to FEDCON by letter dated August 29, 1983. The letter rejected FEDCON’s interpretation and directed attention to the fact that Item No. 5 pertained only to cementing materials for concrete pavement. It further directed attention to paragraph 2.2 of the Contract, Technical Provision 1C, which states:

The quantity of “Portland Cement” to be paid for will be the number of short CWT (100 pounds) of “Portland Cement” actually used in the completed and accepted pavements.

The letter also stated:

We conclude that the cement used in the hangar is to be paid for under Bid Item 1. Only the cement used in the pavement, including, the pavement from the building wall to a line five feet [353] outside the building will be paid for under Bid Item 5. (emphasis added)

On September 9, 1983, FEDCON sent a letter to the Army requesting a Contracting Officer’s decision in writing, pursuant to the “disputes” clause of the Contract. In a decision dated November 3, 1983, the Contracting Officer denied FEDCON’s claim finding it without merit. The Contracting Officer’s opinion states:

It is clear that the Bid Items for portland cement, pozzolan and water-reducing admixture are for pavement concrete only. The many references to pavement directly conflict with your assertion that Bid Item 5 is to cover slabs, foundations and utility concrete. They are entirely consistent, on the other hand, with the notion that Item 5 covers those portions of paved areas lying within 5 feet of the hangar walls, and that the lump sum price for Bid Item 1 covers all remaining concrete associated with the building. The distinction between pavement and building concrete is further demonstrated by the separate treatment given each in the Technical Provisions of the contract, and by the fact that there is a provision for measuring quantities used in paving (Para. 8.2 of TP 21), but none for measuring quantities used in building construction.

The Issue

The central issue in this action is whether Bid Item No. 5, providing for payment for Portland cement based upon quantity, which appeared in capital letters under the heading “CEMENTING MATERIALS FOR CONCRETE PAVEMENT,” covers only the Portland cement used for the concrete pavement surrounding the hangar building.

The Contentions of the Parties1

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Industrial Indemnity Co. v. United States, 34 Cont. Cas. Fed. 75,437, 14 Cl. Ct. 351, 1988 U.S. Claims LEXIS 13, 1988 WL 7022 (cc 1988).

34 Cont. Cas. Fed. 75,437 (Industrial Indemnity Co. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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