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Govt.'s Bid Clarification Didn't Promise On-Site Backfill Material

Friday, July 07, 2017 07:30 am


Contract Interpretation---Differing Conditions

Senate Builders and Constr. Managers, Inc. v. U.S., 2017 U.S. Ct Fed. Cl. Lexis 416 (April 29, 2017)

The nature of yet-to-be excavated materials is inherently unpredictable. Here, a contractor improperly based its bid predictions for an entire project on the government's assurance regarding just one, unique aspect of the work.

Senate Builders and Construction Managers, Inc. (Senate) entered into a $1.7-million design/build contract with the U.S. Army Corps of Engineers (Corps) to demolish and replace two buildings at Picatinny Arsenal in New Jersey. Although Senate completed the contract on time, a conflict arose over what constituted "satisfactory material" to use as backfill around the new buildings. Senate claimed the government breached the contract by failing to pay for the extra cost of importing backfill material---since onsite material was deemed unsatisfactory. Senate's claim hinged on the Corps' response to one question asked during the procurement process. Senate applied a broad interpretation, but the U.S. Court of Federal Claims favored the government's more narrow interpretation of its answer.

The contract work involved digging trenches for a storm sewer. During bidding, an offeror asked for clarification on this task:

"Note 2 for detail 'Typical Trench, Storm Sewer System' on Page C-501 shows that additional excavation may be required if unsuitable material is encountered. The unsuitable material will be replaced with 12 [inches] of additional suitable bedding. The same applies to the buildings excavation, as indicated in paragraph 1.1.1 Excavation, in section 31-00-00 Earthwork, of the specifications. Shouldn't a separate item be created for the select backfill material required to replace the excavated unsuitable material? It is impossible to figure out a quantity at this time since we don't know what the existing conditions will be until excavation is started?"

Both this question---Question #27---and the Corps' response were included in the solicitation's Amendment 6; the answer was: "Contractor to assume unsuitable material is not encountered."

Senate took the Corps' answer to mean that a contractor should assume that no soil failing to meet the specification requirements for use as backfill would be encountered on site---regarding all aspects of the contract work, not just digging trenches.

According to that reasoning, the Corps would then be obligated to shoulder the costs of imp[...]

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