Case: 20-1260 Document: 40 Page: 1 Filed: 02/04/2021
United States Court of Appeals
for the Federal Circuit
______________________
P.K. MANAGEMENT GROUP, INC.,
Appellant
v.
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT,
Appellee
______________________
2020-1260
______________________
Appeal from the Civilian Board of Contract Appeals in
No. 6185, Administrative Judge Kyle E. Chadwick, Admin-
istrative Judge Allan H. Goodman, Administrative Judge
Beverly M. Russell.
______________________
Decided: February 4, 2021
______________________
NICHOLAS SOLOSKY, Fox Rothschild LLP, Washington,
DC, argued for appellant. Also represented by DOUGLAS
HIBSHMAN, RONNI TWO.
GEOFFREY MARTIN LONG, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for appellee. Also repre-
sented by JEFFREY B. CLARK, MARTIN F. HOCKEY, JR.,
ROBERT EDWARD KIRSCHMAN, JR.; JONATHAN ENGLISH,
Case: 20-1260 Document: 40 Page: 2 Filed: 02/04/2021
2 P.K. MANAGEMENT GROUP, INC. v. HUD
Office of General Counsel, United States Department of
Housing and Urban Development, Washington, DC.
______________________
Before PROST, Chief Judge, LOURIE and HUGHES, Circuit
Judges.
HUGHES, Circuit Judge.
P.K. Management Group, Inc. appeals a Civilian Board
of Contract Appeals decision denying its claim that it
should receive individual payments for inspections of Cus-
todial properties under a contract with the Department of
Housing and Urban Development. Because we agree with
the Board’s determination that the contract terms unam-
biguously cover routine inspections through a monthly fee
rather than individual payments, we affirm.
I
Under contract DU204SA-14-D-06 with HUD (the Con-
tract), P.K. Management Group (PKMG) manages multiple
types of properties in HUD’s possession, including “HUD-
Owned Vacant” properties and “Custodial” properties.
HUD-Owned properties are those that “HUD owns,”
J.A. 139, while Custodial properties are those of which
HUD has taken possession but does not yet have title,
J.A. 143–44.
The Contract requires PKMG to perform various ser-
vices related to the properties. For example, for each rele-
vant property that comes into HUD’s possession, PKMG
must perform an initial inspection and some initial services
maintaining the property. As HUD’s possession of the prop-
erty continues, PKMG must conduct ongoing management
of the property. The specifics of ongoing management vary
by property type. HUD does not own Custodial properties,
so they are “not marketable” and have “limited property
management tasks.” Id. Relevant here, PKMG must per-
form bi-weekly inspections of each property type. See
Case: 20-1260 Document: 40 Page: 3 Filed: 02/04/2021
P.K. MANAGEMENT GROUP, INC. v. HUD 3
J.A. 163, 171. These inspections are more thorough for
HUD-Owned properties because HUD-Owned properties
must be in “Ready to Show Condition,” while Custodial
properties generally do not need to be ready for showing.
Compare J.A. 163, with J.A. 171.
The Contract lists the compensation for each contrac-
tual service in a series of Contract Line Item Numbers
(CLINs). The Contract requires HUD to pay “as full com-
pensation for all work required, performed and accepted
under [the] contract, inclusive of all costs and expenses, the
fixed-unit-rate for the applicable CLINs and applicable pe-
riods, as stated in Part I, Section B of [the] contract.”
J.A. 191. The contract requires some services to be compen-
sated individually, while others are covered under monthly
fees.
The issue here is which CLIN specifies the compensa-
tion for routine, bi-weekly inspections of Custodial proper-
ties.
At first, HUD paid PKMG individually for every bi-
weekly inspection, applying the per-inspection fee from
CLIN 0005AA regardless of property type. Later, HUD be-
gan rejecting invoices for inspections of Custodial proper-
ties and only providing individual payments for HUD-
Owned properties. P.K. Mgmt. Grp., Inc. v. HUD, 2019
CIVBCA Lexis 208, *5 (Aug. 20, 2019). PKMG submitted a
claim to the HUD contracting officer seeking a determina-
tion that PKMG is entitled to CLIN 0005AA fees for inspec-
tions of Custodial properties. Id. The officer denied the
claim, stating that “the contract is clear that CLIN 0005AA
applies to HUD-Owned Vacant Properties only.” Id. at *5–
6. The officer explained the prior payments by noting that
HUD’s payment system “was erroneously programmed” to
pay for each inspection individually, and that the change
in behavior did not signal a change in interpretation. Id. at
*6. PKMG appealed to the Board, which denied the appeal,
Case: 20-1260 Document: 40 Page: 4 Filed: 02/04/2021
4 P.K. MANAGEMENT GROUP, INC. v. HUD
deeming the Contract language unambiguous. See id. at
*6–14. PKMG now appeals to this court.
II
Pursuant to the Contract Disputes Act,
41 U.S.C.
§ 7107(b)(1), we review the Board’s decisions on questions
of law de novo. Dai Glob. v. Adm’r of the United States
Agency for Int'l Dev.,
945 F.3d 1196, 1198 (Fed. Cir. 2019).
However, “we give the Board’s interpretation of govern-
ment contracts careful consideration given its considerable
experience and expertise.” Agility Logistics Servs. Co. KSC
v. Mattis,
887 F.3d 1143, 1148 (Fed. Cir. 2018). Contractual
interpretation is a pure legal issue.
PKMG argues that CLIN 0005AA requires HUD to pay
individually for each inspection of Custodial properties.
However, for the following reasons, we hold that the plain
meaning of the contract is that CLIN 0006 covers these in-
spections through a monthly fee.
First, the title of CLIN 0005AA indicates that it applies
only to HUD-Owned properties. CLIN 0005AA is entitled
“On-Going Property Inspection HUD-Owned Vacant.” J.A.
278. Although Custodial properties are in HUD’s posses-
sion, they are not owned by HUD. See J.A. 143 (noting that
for Custodial properties, “[t]itle is not yet in HUD’s
name.”). Thus, as the Board noted, “[i]n order to accept
PKMG’s position that CLIN 0005AA sets the unit price of
inspections of custodial properties, we would need to read
the words ‘HUD-owned vacant’ out of CLIN 0005AA . . . .”
P.K. Mgmt. Grp., Inc., 2019 CIVBCA Lexis 208, at *10. “An
interpretation that gives meaning to all parts of the con-
tract is to be preferred over one that leaves a portion of the
contract useless, inexplicable, void, or superfluous.” NVT
Techs., Inc. v. United States,
370 F.3d 1153, 1159 (Fed. Cir.
2004) (citing Gould, Inc. v. United States,
935 F.2d 1271,
1274 (Fed. Cir. 1991)). PKMG’s argument would make the
title of CLIN 0005AA inexplicable.
Case: 20-1260 Document: 40 Page: 5 Filed: 02/04/2021
P.K. MANAGEMENT GROUP, INC. v. HUD 5
Another indication that CLIN 0005AA only applies to
HUD-Owned Vacant properties is its connection with
CLIN 0005. Neither party disputes that CLIN 0005 (enti-
tled “On-Going Property Management (PM) Fee, HUD-
Owned Vacant”) applies only to HUD-Owned vacant prop-
erties, and the two CLINs are linked by both their number-
ing and titles. See P.K. Mgmt. Grp., Inc., 2019 CIVBCA
Lexis 208, at *4. Thus, the Board called CLIN 0005AA a
“sub-CLIN” of CLIN 0005. Id. at *9. PKMG disputes this
“sub-CLIN” characterization because “sub-CLIN” isn’t a
term in the Contract, but regardless, the most sensible in-
terpretation is that provisions with related numbering ap-
ply to the same properties, particularly when both have
titles that say “HUD-Owned Vacant.” PKMG’s interpreta-
tion would require us to deem the CLIN numbering system
and titles meaningless.
Only CLIN 0006 refers to Custodial properties, and we
hold that this CLIN governs the compensation for routine
inspections of Custodial properties. Entitled “Inspection,
Initial Services, On-Going [Property Management] For
Custodial Properties,” CLIN 0006 sets a monthly fee that
covers a variety of services. J.A. 278. The parties do not
dispute that all other services associated with Custodial
properties are covered by this monthly fee, so it would be
anomalous to interpret this one service, routine inspections
of Custodial properties, to be covered by a separate provi-
sion, which by its title only addresses fees for HUD-Owned
properties. Thus, we agree with the Board that “the fixed
monthly price in CLIN 0006 includes inspections of custo-
dial properties.” P.K. Mgmt. Grp., Inc., 2019 CIVBCA Lexis
208, at *13.
PKMG raises several arguments to the contrary, but
we find none of them persuasive. PKMG contends that be-
cause one section of the Contract lays out criteria for re-
ceiving “credit” for routine inspections of Custodial
properties, the inspections must be individually compen-
sated. See Appellant’s Br. 16 (citing J.A. 163–64). But
Case: 20-1260 Document: 40 Page: 6 Filed: 02/04/2021
6 P.K. MANAGEMENT GROUP, INC. v. HUD
“credit” does not equate to payment. One can receive credit
for a required task without being individually paid for that
task. In another section, the Contract describes the conse-
quences of the “failure of the Contractor to perform . . . any
routine inspection” under CLIN 0005AA. J.A. 125 (empha-
sis added). PKMG argues that the use of the word “any”
here indicates that CLIN 0005AA deals with all routine in-
spections, not just those of HUD-Owned properties. Appel-
lant’s Br. 12–13. But a more reasonable interpretation is
that, to the extent this passage discusses CLIN 0005AA, it
simply refers to any routine inspection under
CLIN 0005AA, i.e., any inspection of a HUD-Owned prop-
erty.
Reading the Contract as a whole, we hold that the plain
meaning places compensation for routine inspections of
Custodial properties under CLIN 0006 rather than
CLIN 0005AA. Because the Contract is unambiguous, we
follow the plain meaning without considering extrinsic ev-
idence or related arguments. Nw. Title Agency, Inc. v.
United States,
855 F.3d 1344, 1347 (Fed. Cir. 2017) (citing
Coast Fed. Bank, FSB v. United States,
323 F.3d 1035,
1040 (Fed. Cir. 2003) (en banc)).
III
We have considered PKMG’s remaining arguments
and find them unpersuasive. Because we agree with the
Board that CLIN 0006, rather than CLIN 0005AA, governs
compensation for routine inspections of Custodial proper-
ties, we affirm.
AFFIRMED
