Ultimate Concrete, LLC v. United States ( 2019 )

In the United States Court of Federal Claims
No. 14-549C
(Filed: March 26, 2019)
) Keywords: Contract Disputes Act
ULTIMATE CONCRETE, LLC, ) (“CDA”), 41 U.S.C. § 7104; Contract
) Interpretation; Motion for
Plaintiff, ) Reconsideration; RCFC 59(a).
)
v. )
)
THE UNITED STATES OF AMERICA, )
)
Defendant. )
)
)
)
Thomas M. Keranen, Clark Hill PLC, Detroit, Michigan, for Plaintiff, with whom was Jeffrey M.
Gallant, Clark Hill PLC.
James W. Poirier, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, Washington, D.C., for Defendant, with whom were Claudia Burke,
Assistant Director, Robert E. Kirschman, Jr., Director, and Joseph H. Hunt, Assistant Attorney
General.
OPINION AND ORDER
KAPLAN, Judge.
Plaintiff Ultimate Concrete, LLC (“UC”) has moved for reconsideration of the Court’s
January 10, 2019 Opinion and Order (ECF No. 139), in which the Court granted-in-part and
denied-in-part UC’s motion for summary judgment as to certain of its claims in this action
brought pursuant to the Contract Disputes Act, 41 U.S.C. § 7104 (“CDA”). For the reasons
discussed below, UC’s motion is DENIED.
BACKGROUND
The Court previously set forth the facts of this case in its January 10 opinion. See
Ultimate Concrete, LLC v. United States, 141 Fed. Cl. 463, 466–473 (2019) (“Ultimate Concrete
I”). It therefore presumes familiarity with the case and provides only a brief factual overview
below. The Court will focus exclusively on UC’s “REA 7-8-9” claim, which is the sole claim at
issue in UC’s motion for reconsideration.
This case concerns a contract dispute between UC and the United States Section of the
International Boundary and Water Commission (“IBWC”). In 2010, UC and IBWC entered into
a contract under which UC was to “rehabilitate, renovate, and perform new construction on an
existing levee on the Rio Grande River.” Id. at 465–66. The disputed question at issue in this
motion for reconsideration is whether an amendment to the solicitation allowed UC to leave in
place preexisting clay material placed on the levee by IBWC in-house crews in 2009 (“the 2009
clay”).
It is undisputed that the original specifications and drawings required the contractor to
excavate the 2009 clay. Id. at 476. About one week before bids were due, IBWC issued an
amended solicitation. Id. at 468. Among other changes, having received several questions about
the 2009 clay—including its quality and quantity—IBWC added language to the solicitation
specifications stating, in pertinent part: “Approximately 232,300 tons of impervious material has
been placed on the levee and may be suitable embankment at the contractor’s discretion.” Id. UC
interpreted this sentence to mean that it had the option of leaving the 2009 clay in place on the
levee. Id. at 468–69. Based on this assumption, UC significantly revised its price downward
immediately before submitting its bid. Id. at 469.
UC won the contract because it submitted the lowest bid. Id. As contract performance
progressed, however, it became clear that UC and IBWC disagreed as to whether UC was
required to excavate the 2009 clay or could permissibly leave it in place. According to the
government, the language stating that the subject clay material “may be suitable embankment at
the contractor’s discretion” meant that the contractor had the option to reuse the clay material by
placing it back on the levee in the process of rebuilding the structure after the required
excavation. Therefore, IBWC ordered UC to excavate the clay despite UC’s protests. Id. at 469–
70. UC complied with IBWC’s instructions, tracking all costs for what it perceived to be out-of-
scope work. Id. at 470. UC later submitted a certified claim to the contracting officer and
ultimately filed the present lawsuit, requesting an equitable adjustment in the amount of
$10,354,216.06. Id. at 472. UC labeled this claim its “REA 7-8-9 claim” because it concerned a
request for equitable adjustment (“REA”) on Typical Sections 7, 8, and 9 of the levee as denoted
on the solicitation drawings.
In Ultimate Concrete I, the Court considered the arguments of the parties in their
respective motions for summary judgment and found UC’s interpretation of the contract
unreasonable. Id. at 474–79. Conversely, the Court concluded that the government’s
interpretation was reasonable as a matter of law. Id. Accordingly, the excavation of the 2009 clay
fell within the scope of the contract and UC was not entitled to an equitable adjustment. The
Court denied UC’s motion for summary judgment as to its REA 7-8-9 claim and granted the
government’s motion on the same claim. Id. at 482.
UC has now moved for reconsideration of this part of the Court’s ruling. For the reasons
set forth below, UC’s motion for reconsideration is denied.
DISCUSSION
I. Standard for Granting a Motion for Reconsideration
Under Rule 59(a) of the Rules of the Court of Federal Claims, the Court may grant a
motion for reconsideration “(A) for any reason for which a new trial has heretofore been granted
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in an action at law in federal court; (B) for any reason for which a rehearing has heretofore been
granted in a suit in equity in federal court; or (C) upon the showing of satisfactory evidence,
cumulative or otherwise, that any fraud, wrong, or injustice has been done to the United States.”
To meet this standard, a party generally must demonstrate that the court has committed a
“manifest error of law[] or mistake of fact.” Johnson v. United States, 126 Fed. Cl. 558, 560
(2016) (quoting Bishop v. United States, 26 Cl. Ct. 281, 286 (1992)). “[O]rdinarily” the moving
party “must show either that an intervening change in controlling law has occurred, evidence not
previously available has become available, or that [granting] the motion is necessary to prevent
manifest injustice.” CBS Corp. v. United States, 75 Fed. Cl. 498, 501 (2007) (quotation omitted);
see also Johnson, 126 Fed. Cl. at 560. Whether to grant reconsideration lies within the sound
discretion of the court. See Yuba Nat. Res., Inc. v. United States, 904 F.2d 1577, 1583 (Fed. Cir.
1990). Because the standard for reconsideration is a high one, the court should not grant the
motion unless the party has made “a showing of extraordinary circumstances which justify
relief.” Biery v. United States, 818 F.3d 704, 711 (Fed. Cir. 2016) (quoting Caldwell v. United
States, 391 F.3d 1226, 1235 (Fed. Cir. 2004)), cert. denied, 137 S. Ct. 389 (Mem.) (2016).
II. UC’s Motion
In its motion for reconsideration, UC does not argue that there has been an intervening
change in controlling law or that previously unavailable evidence has become available. Its
motion is predicated on an argument that the Court committed an error of law when, rather than
applying what UC calls the “reasonable bidder” or “reasonable contractor” standard, it required
UC to demonstrate that its interpretation of the contract was “correct.” Quoting Renda Marine,
Inc. v. United States, 66 Fed. Cl. 639, 652 (Fed. Cl. 2005), UC observes that “a contractor ‘does
not bear the burden of interpreting [the] contract [documents] correctly, only of interpreting
[them] reasonably.’” Pl.’s Mot. for Reconsideration (“Pl.’s Mot.”) at 3, ECF No. 142 (alterations
in original). UC’s argument lacks merit.
First and foremost, UC has mischaracterized the legal standard the Court applied when it
entered summary judgment as to the REA 7-8-9 claim. The Court examined the language upon
which UC relied and determined its meaning on the basis of well-established principles of
contractual interpretation. It explicitly ruled that the government’s reading of the contract was a
reasonable one but that UC’s was not. See Ultimate Concrete I, 141 Fed. Cl. at 474 (“[T]he
Court concludes that UC’s interpretation of . . . the contract is not reasonable.”); id. at 475
(“UC’s interpretation of the contract is unreasonable.”) (capitalization altered). And, because it
found the government’s interpretation (but not UC’s) consistent with the language of the
contract, it declined to allow UC to rely upon extrinsic evidence “to create an ambiguity” that
otherwise did not exist. See City of Tacoma, Dep’t of Pub. Utils. v. United States, 31 F.3d 1130,
1134 (Fed. Cir. 1994).
Thus, as noted above, the issue before the Court was the proper interpretation of a
sentence that had been added to one of the specifications by an amendment to the solicitation.
The Court held that the government’s interpretation of the operative sentence comported with the
its language and also harmonized it with the rest of the contract. On the other hand, the Court
found UC’s reading of the sentence unreasonable because, among other reasons: 1) it could not
be reconciled with the specifications and drawings governing the construction of the levee,
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which required the contractor to excavate down to benching lines that were below the clay
material on the existing embankment; 2) it ignored that the subject of the sentence in question
was the “232,300 tons of impervious [clay] material” that had been placed on the levee; and 3) it
was grammatically unsustainable (because if the word “embankment” were intended to be used
as a noun, then it would have been preceded by an article). The Court also rejected as
unsupported by the record an argument UC repeats here, that the phrase “suitable embankment”
has a specialized meaning to persons experienced in the construction of levees.
“[A] motion for reconsideration is not a forum in which a losing party may re-argue its
case.” Prati v. United States, 82 Fed. Cl. 373, 377 (2008). Yet UC’s motion for reconsideration
largely repeats and/or repackages points that it made in its motion for summary judgment and
which the Court has already carefully considered and rejected as described above.
The Court declines to revisit these repeated and repackaged arguments but notes that UC
does not engage with, or even acknowledge, the primary principle upon which the Court relied in
its summary judgment decision, which is that a contract “must be considered as a whole and
interpreted so as to harmonize and give reasonable meaning to all of its parts.” Coast Fed. Bank,
FSB v. United States, 323 F.3d 1035, 1038 (Fed. Cir. 2003) (citing McAbee Constr., Inc. v.
United States, 97 F.3d 1431, 1435 (Fed. Cir. 1996)). Nor does UC come to terms with the
Court’s textual analysis of the operative sentence itself, which supports the government’s
interpretation and refutes UC’s.
The Court also notes that it is not persuaded by UC’s argument that in deciding whether
its reading of the contract was reasonable, the Court should have given consideration to “the
circumstances of the bidding process,” specifically that UC had “limited time to review” the
revisions that were made to the solicitation shortly before bids were due. Pl.’s Mot. at 11. As the
court observed in Renda Marine, “a government contractor, regardless of its size, locality, or
experience, is obligated to understand the complexities and consequences of its undertaking . . .
and to study all aspects of the contract before submitting its bid.” 66 Fed. Cl. at 655 (internal
citations, quotations, and alterations omitted); see also Giesler v. United States, 232 F.3d 864,
870 (Fed. Cir. 2000) (holding that it is incumbent upon contractors to “read and consider the
specifications thoroughly”) (quoting Liebherr Crane Corp. v. United States, 810 F.2d 1153, 1157
(Fed. Cir. 1987)); see also R.B. Wright Constr. Co. v. United States, 919 F.2d 1569, 1572 (Fed.
Cir. 1990) (quoting and applying same proposition from Liebherr).
Magnus Pacific Corp. v. United States (“Magnus”), the primary case on which UC relies
for a contrary proposition, is inapposite. See generally 133 Fed. Cl. 640 (2017). In that case,
shortly before bids were due on a levee reconstruction project, “the entire set of specifications for
the project was revised and fully replaced” and IBWC provided answers to bidder questions that
“encompassed fundamental changes to the project and revised or replaced contract language.” Id.
at 649. Expert testimony submitted by the plaintiff and credited by the court showed that “the
solicitation lacked essential data” and that “the levee design set forth in the plans and
specifications did not reflect the conditions on the existing levee.” Id. The court agreed with the
plaintiff’s expert “that the level of error and missing information in the solicitation documents,
and the sweeping last minute changes to the solicitation that were made during the bidding
process, were problematic.” Id.4
The Court disagrees with UC’s contention that the facts in Magnus were “very similar to
those here.” Pl.’s Mot. at 11. As the Court noted in its original opinion, the new provision on
which UC relies did not implement “sweeping changes”; it merely clarified existing
requirements in response to certain written questions submitted by other offerors after a site
visit.1 It is only when the provision is given the unreasonable reading UC proposes that it results
in a significant change to existing requirements.
Further, in Magnus, the issue to which the court found the last-minute changes relevant
was not whether the plaintiff had proffered a reasonable interpretation of the contract. Rather, it
was whether—for purposes of the plaintiff’s defective specifications claim—the defects were
“patent” or “latent” ones. 133 Fed. Cl. at 692. Resolution of that issue was dependent on
questions of fact, including the obviousness of the defects in the solicitation—i.e., whether there
were “facial discrepancies that a bidder noticed or should have noticed.” Id. In that context, the
court found as a matter of fact that “given the analytical effort required to discern th[e] particular
defect in the solicitation, particularly in light of the time constraints, the inconsistency [at issue]
was a hidden defect that would not be discovered upon facial inspection or through reasonable
and customary care.” Id. at 693.
The REA 7-8-9 claim is not a defective specifications claim, and the issue presently
before the Court does not involve whether such a defect existed or whether it was a latent or
patent one. The issue before the Court is the interpretation of one of the terms of the contract,
which involves a question of law. The Magnus decision therefore does not support UC’s
argument that the Court should have taken into account the amount of time UC had to submit its
bid when assessing the reasonableness of UC’s interpretation of the contract.
CONCLUSION
For the foregoing reasons, UC has not demonstrated that the Court committed a manifest
error of law or fact in its previous opinion and order. Therefore, UC’s motion for reconsideration
is DENIED.
1
In that regard, UC repeats its contention that the disputed language in the addendum was added
in response to a question posed during the site inspection asking if the existing embankment
could be left in place. Pl.’s Mot. at 5. As the Court previously observed, the pre-bid meeting
minutes stated that questions “must be submitted in writing” and “verbal answers to question[s]
[were] not binding.” Ultimate Concrete I, 141 Fed. Cl. at 467–68. Further, “there were no written
questions submitted about whether the embankment that had been rehabilitated the preceding
year by the in-house crews could be left in place.” Id. at 467. Rather, the Court observed, the
written questions concerned the quality and amount of clay material used to build the existing
embankment that would be available for salvage, which was consistent with the government’s
interpretation of the operative sentence in the amended solicitation. Id.
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IT IS SO ORDERED.
s/ Elaine D. Kaplan
ELAINE D. KAPLAN
Judge
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