Premier Office Complex of Parma, LLC v. United States
134 Fed. Cl. 83
| Fed. Cl. | 2017Background
- Premier Office Complex of Parma, LLC contracted with the VA under Lease No. V101-08-RP-0034 to build an outpatient clinic in Parma, Ohio; the lease incorporated the Solicitation for Offers (SFO) and Amendments 1–3.
- SFO §4.2.7 (Physical Security Requirements) referenced physical security measures for listed "spaces or areas" and discussed ISC security levels for facilities; a Physical Security Table listed particular rooms with discrete requirements.
- Amendment #1 (issued before award and initialed by Premier) stated: "Based upon the ISC Standards, the project would be a Level 2," which the VA later treated as requiring ISC Level II for the entire facility.
- After construction began, VA staff inconsistently directed Premier about which security standards to apply (VA Design Guide vs. ISC Standards); VA ultimately required ISC Level II design for the whole project.
- Premier built the facility to ISC Level II, then sought $964,356.40 for alleged out-of-scope costs, claiming the ISC requirement applied only to table-listed spaces; VA denied the claim and the Court of Federal Claims granted the government summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the VA required ISC Level II design for the entire building, creating an out-of-scope change | Premier: §4.2.7 and the Physical Security Table limit ISC requirements to listed spaces; Amendment #1 merely corrected a sentence, not imposed project-wide ISC standards | U.S.: Amendment #1 unambiguously applied ISC Level II to the whole "project," and §4.2.7 and Amendment #1 together put offerors on notice pre-award | Court: Amendment #1 unambiguously required ISC Level II for the entire project; no compensable change by the VA |
| Whether ambiguity in §4.2.7 excused Premier from earlier inquiry | Premier: §4.2.7 was ambiguous and latently so; no duty to seek clarification | U.S.: Offerors were on notice (Amendment #1 clarified security level prior to bid) | Court: §4.2.7 was latently ambiguous, but Amendment #1 resolved it; Premier still bound by Amendment #1 |
| Whether ISC Standards were incorporated into the contract | Premier: ISC Standards were not expressly incorporated and conflict with Premier's incorporated proposal | U.S.: SFO language, Amendment #1, and incorporation clauses made ISC requirements binding | Court: Amendment #1’s project-wide ISC Level II statement resolved any incorporation question in government’s favor |
| Whether VA communications (conflicting directions) created grounds for relief | Premier: VA’s later conflicting directions demonstrate uncertainty and estop VA | U.S.: Conflicting communications at most show initial ambiguity; final directive matched Amendment #1 | Court: Inconsistent engineer communications evidenced ambiguity but do not overcome unambiguous Amendment #1; no relief granted |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (materiality and genuine dispute standard for summary judgment)
- Varilease Tech. Group, Inc. v. United States, 289 F.3d 795 (contract interpretation is a question of law amenable to summary judgment)
- McAbee Constr. v. United States, 97 F.3d 1431 (contract interpretation begins with plain language)
- Granite Constr. Co. v. United States, 962 F.2d 998 (interpret contract as whole to give reasonable meaning to all parts)
- Cmty. Heating & Plumbing v. Kelso, 987 F.2d 1575 (contractor’s interpretation of latent ambiguity adopted only if reasonable)
- Triax Pac. v. West, 130 F.3d 1469 (ambiguities in government contracts normally resolved against the drafter)