Lakeshore Engineering Services, Inc. v. United States, 110 Fed. Cl. 230

Lakeshore was awarded an IDIQ contract to perform repair, maintenance, and construction for the Army at Fort Rucker, with task orders priced using a Gordian UPB multiplied by the bidder coefficient.
The Solicitation required three coefficients for pre-priced items, overtime, and non-pre-priced items, and allowed adjustments for option years via an economic price adjustment clause based on ENR Building Cost Index.
Gordian Book introduction warned that prices may vary and contractors must verify unit prices and adjust their coefficients; it explicitly stated the contractor bears risk for costs not included in pre-priced prices.
Lakeshore submitted offers with coefficients and representations claiming UPB prices were lower than Lakeshore’s past costs, and conducted internal analyses to derive proposed coefficients (1.28 normal, 1.46 OT, 1.22 NPP).
The Army awarded the Contract in April 2007; Lakeshore performed base-year work under firm fixed-price task orders negotiated against cost estimates from the Gordian Book.
Lakeshore later claimed an equitable adjustment for losses alleging the Gordian UPB underrepresented local prices, seeking recovery of approximately $2 million; the CO denied, and Lakeshore filed suit seeking relief.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Contract pricing risk allocation	Lakeshore contends Gordian UPB underpriced local costs and the contract failed to account for inflation and local price realities.	United States notes the contract fixed-price structure and that the coefficient is to include all non-prepriced costs with no post-award adjustment beyond the EA clause.	No breach; contract assigns pricing risk to the contractor.
Implied warranty/good faith and fair dealing	Lakeshore asserts implied warranties to reflect accurate local prices and equitable adjustment for underpricing.	Government did not promise accurate local pricing or adjust coefficients beyond the contract terms; good-faith claim fails absent misrepresentation harming expectations.	No breach of the covenant; good-faith claim rejected.
Mutual or unilateral mistake claims	Lakeshore argues mutual or unilateral mistake regarding Gordian UPB’s accuracy for Fort Rucker.	No mutual or unilateral mistake; contractor bore the risk of price book accuracy and contract contemplated such risk.	Mutual and unilateral mistake claims rejected.
Spearin warranty applicability	Lakeshore invokes Spearin to claim the UPB reflected fair local rates and contractor should be protected from defective specifications.	Spearin applies only when owner-provided plans are defective; here the contract placed pricing risk on Lakeshore and no Spearin protection applies.	Spearin doctrine inapplicable; no protection awarded.

Centex Corp. v. United States, 395 F.3d 1283 (Fed. Cir. 2005) (implied covenants and contract interpretation under government contracts)
Spearin v. United States, 248 U.S. 132 (Supreme Court 1918) (owner-provided plans; contractor not responsible for plan defects)
ConocoPhillips v. United States, 501 F.3d 1374 (Fed. Cir. 2007) (contract interpretation and pricing risk considerations in government contracts)
Philippine Sugar Estates Dev. Co. v. Gov't of Philippines, 247 U.S. 385 (Supreme Court 1918) (reformation for mutual mistake; historical context for contract corrections)
Gould, Inc. v. United States, 935 F.2d 1271 (Fed. Cir. 1991) (contract interpretation to harmonize provisions)