41 Fed. Cl. 585 | Fed. Cl. | 1998
OPINION
This contracts case is before the court on defendant’s motion for summary judgment and the cross-motion for summary judgment filed by plaintiff, Omni Corporation (“Omni”).
Factual Background
On June 2, 1992, the United States, acting through the Department of the Army Corps of Engineers, Vicksburg District (“Army Corps”), issued Request for Proposal No. DACW38-92-R-0029 for the operation and maintenance of two government-owned locks and dams located on the Red River Water
The solicitations contain several sections at the heart of this case. Section H.1.1, Minimum Personnel Requirements, states, “The Contractor shall provide the personnel necessary to accomplish all of work [sic] required by this specification within the time limits specified.”
Another section is labeled “DEDUCTIONS FOR DEFICIENT WORK.” That portion of the solicitations, H.26, provides that
[deductions ... will be made for services that have been cited as not clearly meeting the standards set forth in the ... “Performance Requirements” in Section C, the Performance Requirements tables in the appendices of Section C or any other portion of the contract specifications.4
Procedures are given for handling deductions for “documented defects” in the following situations: “[e]ach service found deficient and performed by the Government;” “[e]ach service found deficient and performed by another contractor;” and “[e]ach service found deficient and not reperformed by anyone, or work not performed at all.”
Section C provides a description and specification of the work to be performed. The scope of work is defined as “operation and routine maintenance of [the Overton L & D and L & D No. 3].”
Section L contains instructions, conditions, and notices to offerors. In Section L.30.2.1, offerors are instructed, in the manpower section of their proposals, to “[i]nclude all discussion of manpower proposed for accomplishment of work included [sic] travel, organization chart and seasonal nature of work.”
Section M details the evaluation factors for award of the contract. The solicitation informs offerors that in the evaluation of the proposal’s technical capability (among other categories), manpower is the most important factor.
by the submission of an offer pursuant to this solicitation, you, as the offeror,*588 agree that the capability presented in your proposal which is in excess of the minimum capability requirements of this solicitation, as accepted by the Government, and upon award of a contract, thereby becomes an additional contract requirement for equivalent capability. Subsequently, a failure to provide such additional capability which results in deficient contract performance, can place the contract in jeopardy of default.12
On October 6, 1992, Omni submitted its best and final offer, with accompanying technical and cost proposals. In the cover letter to its proposal, Omni offered:
The owners and officers of Omni Corporation commit the resources and capabilities of the Company, and the personal efforts of our professional managers, engineers, and administrators to the realization of the goals established by the Vicksburg District through this procurement. These are not just words in a proposal — this is a firm commitment — backed by integrity and a reputation of excellence in performance.
... Our staffing approach helps us retain flexibility as additional work is assigned or less work is required.... We firmly believe that if a competitor proposes a lesser staffing level ... it would result in critical work not getting accomplished to the standards desired by the Corps.13
In the Manpower section of its proposal, Omni discussed its staffing plan. Among the support personnel Omni planned for the Overton L & D and L & D No. 3 was an equipment mechanic.
Omni’s bid was accepted by the Army Corps, and Contract No. DACW38-93-D0002 was awarded to Omni on October 28, 1992. The contract is characterized as a competitively negotiated firm-fixed-price contract. On November 30,1993, November 28, 1994, December 4, 1995, and November 29, 1996, respectively, Contract Modification Nos. P00010, P00016, P00024, and P00031 were issued, exercising the contract’s first, second, third, and fourth option years.
The equipment méchame at the Overton L & D resigned on January 26, 1993. There was no equipment mechanic at the Overton L & D from January 26, 1993 to August 29, 1993, and also from July 4, 1994 to August 19, 1995. The equipment mechanic at L & D No. 3 resigned on November 7, 1993. There was no equipment mechanic at L & D No. 3 from November 7, 1993 to November 2, 1995. During the periods in which an equipment mechanic was not present, Omni asserts that the tasks ordinarily handled by the equipment mechanic were performed by the lock foreman.
Omni submitted monthly invoices to the Army Corps that contained contract line items (“CLINs”) for services performed pursuant to the contract. With one exception,
The minutes from weekly meetings between Omni and Army Corps officials indicate that the absence of an equipment mechanic was regularly noted. On November 14, 1994, the contracting officer (“CO”) notified Omni that section M.5 of the contract required that Omni staff a full-time equipment mechanic at each lock and dam. By letter dated February 1, 1995, Omni disputed this purported contract requirement and requested a CO’s final decision on the matter.
The CO issued a second final decision on November 7, 1995 in which he informed Omni he was exercising the reserved right of contract price reduction in the amount of $119,057.73. The CO calculated the deduction as the value of diminished services he found had been received by virtue of the lack of an equipment mechanic at the Overton L & D and L & D No. 3. The CO demanded payment within 30 days, and stated- that the failure to do so would result in crediting this amount to the government through withholdings from existing unpaid or future invoices. Further, the CO declared that future equipment mechanic vacancies would result in future deductions from the contract price. By a November 30, 1995 letter, Omni informed the CO that the Overton L & D and L & D No. 3 had equipment mechanics on staff as of August 20, 1995 and November 7, 1995, respectively. On December 8, 1995, the CO replied that his earlier calculations did not reflect adjustments applicable to vacancies during October and November 1995. As a result, the failure of Omni to have a full-time equipment mechanic in place at L & D No. 3 until November 7, 1995 resulted in the CO additionally deducting $3,473.30 from Omni’s October 1995 invoice, and $632.44 from the November 1995 invoice. The CO noted again that future failures to staff equipment mechanics would result in future deductions from invoices. In total, the government subsequently deducted $3,473.30 from Omni’s October 1995 invoice, -withheld the entire $82,719.21 amount of Omni’s November 1995 invoice, and deducted $36,970.96 from the December 1995 invoice. These deductions and withholdings totaled $123,163.47.
On January 19, 1996, Omni submitted a “certified claim” to the CO seeking “to recover $124,063.47 wrongfully withheld from Omni’s invoices.”
Omni filed its complaint on February 12, 1996 as an appeal from the CO’s final decisions of May 2, 1995 and November 7, 1995 as well as the CO’s January 29, 1996 refusal to issue a final decision from plaintiffs purported January 19, 1996 claim. Plaintiff seeks recovery of withheld monies plus interest, and attorney’ fees and other expenses pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (1994). Defendant filed its motion for summary judgment on January 27, 1997. On November 5, 1997, plaintiff filed its cross-motion for summary judgment.
Discussion
I. Motion for Summary Judgment
Summary judgment is appropriate when there are no genuine issues of material fact
The fact that both parties have moved for summary judgment does not relieve the court of its responsibility to determine the appropriateness of summary disposition. Prineville Sawmill Co. v. United States, 859 F.2d 905, 911 (Fed.Cir.1988) (citing Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed.Cir.1987)). Summary judgment will not necessarily be granted to one party or another simply because both parties have moved for summary judgment. Corman v. United States, 26 Cl.Ct. 1011, 1014 (1992) (citing LewRon Television, Inc. v. D.H. Overmyer Leasing Co., 401 F.2d 689, 692-93 (4th Cir.1968), cert. denied, 393 U.S. 1083, 89 S.Ct. 866, 21 L.Ed.2d 776 (1969)). A cross-motion is a party’s claim that it alone is entitled to summary judgment. A Olympic Forwarder, Inc. v. United States, 33 Fed.Cl. 514, 518 (1995). It, therefore, does not follow that if one motion is rejected, the other is necessarily supported. Id. Rather, the court must evaluate each party’s motion on its own merit and resolve all reasonable inferences against the party whose motion is under consideration. Id. (citing Corman, 26 Cl.Ct. at 1014).
The parties present the court with two issues for decision. First, the court is asked to decide whether the contract required that plaintiff staff each lock and dam with a full-time equipment mechanic.
II. Contract Interpretation
The first issue presents the court with questions of contract interpretation. The court may rule on those interpretations as a matter of law. National Rural Utils. Co-op Fin. Corp. v. United States, 14 Cl.Ct. 130 (1988), aff'd, 867 F.2d 1393 (Fed.Cir. 1989). Furthermore, questions of contract interpretation are issues of law and may be disposed of on summary judgment. P.J. Maffei Bldg. Wrecking Corp. v. United States, 732 F.2d 913, 916 (Fed.Cir.1984). The court must construe the contract by its plain and unambiguous language. National Rural, 14 Cl.Ct. at 136.
It is a well-established principle of contract interpretation that “the language of a contract must be given that meaning that would be derived from the contract by a reasonable intelligent person acquainted with the contemporaneous circumstances.” Hol-Gar Mfg. Corp. v. United States, 169 Ct.Cl. 384, 351 F.2d 972, 975 (1965). Contract interpretation ordinarily begins with “the plain meaning of the provision in question.” S.W. Aircraft Inc. v. United States, 213 Ct.Cl. 206, 551 F.2d 1208, 1212 (1977). “Generally, the plain language of a contract controls, and only language which is reasonably suscepti
A. Contentions of the parties
Defendant asserts the contract at issue was competitively negotiated as a firm-fixed-price contract. Defendant lists several conditions, without citation to authority, that plaintiff must meet to prevail.
Plaintiff responds that the contract was a firm-fixed-price contract for services, such that defendant contracted, and subsequently remitted payment, for maintenance and operation of the Overton L & D and L & D No. 3. Plaintiff argues that the contract contained no requirement for an equipment mechanic. Therefore, plaintiff argues that the government’s insistence upon equipment mechanics ignores the language of the contract and, instead, evidences an attempt to impose a solicitation evaluation criterion onto the contract. For support, plaintiff notes that the solicitation defines the scope of the contract as operation and routine maintenance of the two locks and dams at issue. Furthermore, the contractor is directed to provide “labor” in performance of the required tasks, without reference to filling any specific roles.
B. Capability, staffing, and manpower
Defendant asserts that the term “capability,” as used in the solicitation and contract documents, “explicitly encompasses minimum ‘staffing levels’ or, more precisely, ‘manpower’ requirements.”
Defendant fails to persuade the court that any specific “manpower” or “staffing levels” are mandated by these sections. While the solicitations inform bidders that manpower is the most important factor in the evaluation of technical capability, what the bidders are instructed to provide is an analysis of the proposed manpower to accomplish the work. In no way is the contractor placed on notice that the contents of this analysis will be incorporated into the contract as a staffing requirement. By also considering other sections of the solicitations, it becomes clear that to adopt defendant’s view would “aehieve[] a weird and whimsical result.” Arizona, 575 F.2d at 868.
Section H.1.1 also touches upon the issue of staffing. Whereas section L.31.1.2 required an analysis of manpower, section H.1.1 is specifically titled “Minimum Personnel Requirements.” In section H.1.1, the contractor is required only to “provide the personnel necessary to accomplish all ... work required by this specification within the time limits specified.”
In plaintiffs requests for admissions, defendant admitted that neither section L.31 nor section H.1, which directly address manpower issues, contained minimum capability requirements regarding staffing of equipment mechanics.
The court does not find that the term “capability” encompasses any required manpower or staffing levels. “Capability” is defined as “1. The quality or state of being capable: ABILITY. 2. Potential ability ... 3. The capacity to be used, treated, or developed for a particular purpose.” Webster’s II New Riverside University Dictionary (1988). This contract was one for services
Additionally, even if the court found that plaintiffs plan to employ equipment mechanics at the Overton L & D and L & D No. 3 evidenced a heightened capability such that it became a contract requirement, the failure to staff each lock and dam with equipment mechanics, alone, does not justify the withholding of monies from plaintiff. Section M.5 also states that to the extent the failure to provide heightened capability results in “deficient contract performance,” the contract can be placed in “jeopardy of default.” Reading the plain language of the contract, the court notes a contractor could propose but not provide heightened capability, and face no negative consequences so long as there was no resulting deficiency in performance. In any event, deficient contract performance could conceivably place the contract into default, but there is no provision in section M.5 for the withholding of monies due under the contract.
The issue of deductions for deficient performance is set out at section H.26. These sections further indicate that the government’s withholdings were unjustified. Section H.26 states that deductions will be made for “services that have been cited as not clearly meeting the standards set forth”
This, however, is not the situation presented by this case.
C. Omni’s statements and actions
Defendant cites Macke for its position that plaintiffs actions before the commencement of this litigation indicate plaintiffs “intent and understanding that these formal proposals would become contract requirements.”
Plaintiffs attempts to replace departed equipment mechanics do not evidence an urn derstanding that it was contractually committed specifically to provide equipment mechanics. In large part, defendant cites to minutes of meetings between Omni and Army Corps officials as evidence of this alleged intent. The minutes
Mr. Pittman [Army Corps representative] again inquired as to the status of the Mechanic position that is open at [L & D No. 3].... Mr. Pitman stated that the crane has not been operated in approximately 1 1/2 months and that after sixty days a crane operator will be brought out of Monroe to operate it. If this occurs, a deficiency will exist and the charges for the crane operator will be charged to Omni.40
The indication is that in December 1993, the time of this meeting, the Army Corps’ position relating to this equipment mechanic vacancy is that if it leads to work not being accomplished, a deficiency would exist. There is no indication that the vacancy itself was a deficiency. During the January 5,
D. Nature of the contract
Defendant acknowledges the contract at issue was a firm-fixed-price contract.
provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties.
48 C.F.R. § 16.202-1 (1997). Given the nature of the contract, plaintiff assuredly would have been responsible for those costs exceeding its expectations or calculations. A firm-fixed-price contract places this burden upon a contractor. The fact that plaintiff discovered it could meet its contractual responsibility to provide the services required without always having an equipment mechanic on-site does not reveal an attempt to gain undue profit. Had plaintiff learned during the course of performance that each lock and dam required two equipment mechanics, plaintiff, as party to a firm-fixed-price contract, would have been entitled to no price increase as a result. That plaintiffs costs were less than anticipated while managing to deliver the services for which the government contracted is not a justifiable reason for the withholdings that occurred in this case.
Based on the foregoing analysis, the court finds that there was no contractual requirement for plaintiff specifically to staff an equipment mechanic position at the Overton L & D and L & D No. 3.
III. Damages
Defendant fails to assert any services, relevant to the facts of this litigation, in which there existed a deficiency in plaintiffs performance. Arguendo, assuming the contract required the staffing of equipment mechanics, defendant failed to prove it suffered damages as a result. Therefore, defendant’s withholdings were unjustified; also, defendant is not entitled to any additional deductions, related to other purported equipment mechanic vacancies, for which defendant reserved a right to seek remittance.
Conclusion
For the above stated reasons, defendant’s motion for summary judgment is DENIED, and plaintiffs cross-motion for summary judgment is GRANTED. The Clerk is directed to enter judgment in favor of plaintiff in the amount of $123,163.47 plus interest from January 19, 1996, pursuant to the Contract Disputes Act, 41 U.S.C. § 611 (1994). Costs are denied at this time without prejudice pending plaintiffs application pursuant to 28 U.S.C. § 2412.
. The court permitted defendant to file under seal Defendant’s Response to Plaintiff’s Cross-Motion for Summary Judgment and Reply to Plaintiff’s Response to Defendant’s Motion for Summary Judgment, Defendant’s Statement of Genuine Issues, and Defendant's Supplemental Appendix. This opinion, however, is not filed under seal since it does not make specific reference to the sensitive and proprietary information defendant sought to protect.
. Appendix to Defendant’s Motion for Summary Judgment, Exhibit (Def.’s Ex.) 18 at 3; Appendix to Plaintiff's Motion for Summary Judgment, Exhibit (Pl.’s Ex.) 1 at 78.
. Def.’s Ex. 18 at 4; Pl.’s Ex. 1 at 79.
. Def.'s Ex. 18 at 6; Pl.'s Ex. 1 at 103.
. Def.’s Ex. 18 at 6-7; Pl.’s Ex. 1 at 103-104.
. Pl.’s Ex. 1 at 32.
. Id. at 44.
. Def.’s Ex. 18 at 8; Pl.’s Ex. 1 at 243.
. Def.'s Ex. 18 at 10; Pl.’s Ex. 1 at 245.
. Def.'s Ex. 18 at 13; Pl.'s Ex. 1 at 257.
. Def.’s Ex. 18 at 14; Pl.'s Ex. 1 at 258.
. Def.’s Ex. 18 at 14-15; Pl.'s Ex. 1 at 258-259 (second emphasis added).
. Def.'s Ex. 2 at 3-4.
. Id. at 17.
. Id. at 24.
. The Army Corps deducted $156.11 from Omni’s July 14, 1995 invoice. This deduction is not at issue in the present case.
. Def.’s Ex. 5 at 1; Pl.’s Ex. 17 at 1.
. Id.
. Def.’s Ex. 14 at 1. Omni, in this “claim” and its complaint, sought $124,063.47. Plaintiff explains in its motion to dismiss, at footnote 2, that it has decreased this amount by $900. The reason for the downward adjustment is that the original figure was based on what the Army Corps allegedly indicated it would withhold, which turned out to be less than expected. Therefore, plaintiff seeks $123,163.47 plus interest.
. Id.
. Plaintiff phrases the issue slightly differently. The court is asked to decide whether the only reasonable reading of the contract requires an equipment mechanic at each lock and dam.
. Defendant claims that to rule in favor of Omni, the court would have to hold that a contractor may propose "heightened” services to obtain a contract, include their costs in its best and final offer, deliver “diminished and/or different” services during performance, and charge "the now grossly-inflated 'fixed' price.” Defendant’s Motion for Summary Judgment (Def.’s Mot. Summ. J.) at 13.
. Def.’s Mot. Summ. J. at 15.
. Def.’s Ex. 18 at 10; Pl.’s Ex. 1 at 245.
. Def.’s Ex. 18 at 3; Pl.’s Ex. 1 at 78.
. Def.’s Ex. 18 at 4; Pl.’s Ex. 1 at 79.
. Plaintiff’s Opposition to Defendant's Motion for Summary Judgment, Appendix 1 at 2-3.
. Plaintiff's Motion for Summary Judgment (Pl.’s Mot. Summ. J.) at 11.
. For additional indication that the contract was for services, as opposed to manpower, plaintiff refers the court to the invoices sent from plaintiff to defendant, and from which defendant remitted payment to plaintiff. Generally speaking, the invoices bill the government for “services provided.” The invoices presented as evidence contain no billing item for an equipment mechanic, but rather, indicate that Omni billed the government for, among other things, "lock and dam maintenance.” Def.'s Ex. 10; Pl.’s Ex. 11.
. Plaintiff asserts it proposed no services beyond those specified in the solicitation. Pl.’s Mot. Summ. J. at 14.
. Def.’s Ex. 18 at 6; Pl.'s Ex. 1 at 103.
. Defendant also cites section E.l to justify the withholdings. Section E.l allows for contract price reductions "to reflect the reduced value of the services performed” in the event that "defects in services cannot be corrected by reperformance." Def.’s Ex. 18 at 2; Pl.'s Ex. 1 at 74. What the court finds interesting about that section is that it defines "services” as including "services performed, workmanship, and material furnished or utilized in the performance of services.” Id. Since this section fails to define the provision of any manpower as a service, the court wonders what basis this section would provide for any price reduction in the circumstances of this case.
. Def.’s Mot. Summ. J. at 18.
. While defendant essentially argues that plaintiff's understanding of its contractual duties changed with the onset of litigation, the court finds it interesting that the solicitation evaluation language of section M.5 was altered when the Army Corps issued Solicitation No. DACW6698-R-0003 in late 1997. See Plaintiff’s Reply to Defendant’s Response to Plaintiff’s Cross-Motion for Summary Judgment at 7-8. Plaintiff asserts this solicitation concerns the operation and
. Def.’s Ex. 2 at 3.
. Id. at 4.
. Id.
. Def.’s Ex. 8; Pl.’s Ex. 4.
. Def.'s Ex. 8 at 43; Pl.’s Ex. 4 at 43.
. Def.'s Ex. 8 at 14; Pl.’s Ex. 4 at 14 (emphasis added).
. Def.'s Ex. 8 at 16; Pl.'s Ex. 4 at 16.
. Def.'s Ex. 8 at 4; Pl.’s Ex. 4 at 4.
. Def.’s Mot. Summ. J. at 3.