916 F.3d 1006
Fed. Cir.2019Background
- VA issued a Solicitation for Offers (SFO) for leased space in Parma, Ohio for a VA outpatient clinic; SFO §4.2.7 required compliance with Interagency Security Committee (ISC) security criteria and included a Physical Security Table listing seven labeled spaces.
- Amendment #1 (issued pre-award) clarified the security level question, stating: “Based upon ISC Standards, the project would be a Level II.” Premier acknowledged receipt of Amendment #1 before signing the Lease, which incorporated the SFO and amendments.
- After award, VA communications were inconsistent about whether ISC standards or the VA Life‑Safety Guide controlled; VA ultimately instructed Premier that the ISC Level II requirement applied to the entire building and that Premier must comply at no additional cost.
- Premier attempted to obtain ISC documents (initially denied to non‑federal entities); VA later provided ISC materials. Premier contended ISC Level II applied only to the seven listed spaces and sought payment for costs of applying Level II to the whole facility.
- Premier filed a certified claim and then suit in the Court of Federal Claims seeking compensation for alleged extra costs; the Court of Federal Claims granted summary judgment to the government, holding Amendment #1 unambiguously required ISC Level II for the entire project.
- On appeal, the Federal Circuit affirmed, concluding Amendment #1’s reference to the “project” unambiguously means the whole facility and thus Premier’s Level II design/construction was within the contract scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Lease requires ISC Level II for the entire facility | Amendment #1 is ambiguous and applies only to the seven spaces listed in the Physical Security Table | Amendment #1 unambiguously requires ISC Level II for the entire project/facility; it was incorporated into the Lease | Held for defendant: Amendment #1 unambiguously requires ISC Level II for the whole facility |
| Whether Amendment #1 resolved any ambiguity in §4.2.7 | Amendment #1 should be read narrowly to clarify only those tabled spaces | Amendment #1 was issued to clarify §4.2.7 and its use of “project” reasonably refers to the entire facility | Held: Amendment #1 resolves ambiguity and its plain meaning of “project” covers the entire Parma Clinic |
| Whether extrinsic evidence (post‑award VA communications) changes contract meaning | VA’s inconsistent post‑award directions show ambiguity and estop VA from enforcing broader ISC requirement without payment | Contract language (including Amendment #1) is clear; extrinsic inconsistent statements do not alter an unambiguous term | Held: Post‑award communications do not override the clear contract language requiring ISC Level II |
| Whether Premier is entitled to extra costs for applying ISC Level II | Premier sought compensation for additional design/construction costs incurred applying ISC Level II to whole building | Government refused payment, asserting requirements were in SFO and Amendment #1 before bid/award | Held: Premier not entitled—work was within contractual scope because Amendment #1 put Premier on notice pre‑award |
Key Cases Cited
- Hartman v. United States, 694 F.3d 96 (Fed. Cir.) (standard of review for mixed questions on appeal to Federal Circuit)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Varilease Tech. Grp., Inc. v. United States, 289 F.3d 795 (Fed. Cir.) (contract interpretation is generally amenable to summary judgment)
- NVT Techs., Inc. v. United States, 370 F.3d 1153 (Fed. Cir.) (contract must be read as a whole; ambiguity is a question of law)
- McAbee Constr., Inc. v. United States, 97 F.3d 1431 (Fed. Cir.) (may not resort to extrinsic evidence when contract language is unambiguous)
- C. Sanchez & Son, Inc. v. United States, 6 F.3d 1539 (Fed. Cir.) (definition of unambiguous contract term)
- Metric Constructors, Inc. v. Nat’l Aeronautics & Space Admin., 169 F.3d 747 (Fed. Cir.) (both party interpretations must be reasonable to show ambiguity)
- Coast Fed. Bank, FSB v. United States, 323 F.3d 1035 (Fed. Cir.) (when language is unambiguous, plain meaning controls)