## United States Court of Appeals for the Federal Circuit

06-5007 TEG-PARADIGM ENVIRONMENTAL, INC., Plaintiff-Appellant,

v. UNITED STATES, Defendant-Appellee.

Robert C. Haase, Jr. , Robins, Kaplan, Miller & Cire si L.L.P., of Los Angeles, California, argued for plaintiff-appell ant. With him on the brief was Edward D. Lodgen

. Of counsel was David C. Veis

. Andrew P. Averbach , Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Peter D. Keisler , Assistant Attorney General, David M. Cohen , Director, and Donald E. Kinner , Assistant Director. Appealed from: United Stat es Court of Federal Claims Judge Nancy B. Firestone

## United States Court of Appeals for the Federal Circuit

06-5007

TEG-PARADIGM ENVIRONMENTAL, INC., Plaintiff-Appellant,

v.

UNITED STATES, Defendant-Appellee.

______________________ ____ _ DE CIDED: September 29, 2006

______________________ ____ _

Before MICHEL, Chief Judge , RADER, and SCHALL, Circuit Judges

. SCHALL, Circuit Judge

. TEG-Paradigm Environmental, Inc. (“T EG”) entered into a contract with the United States Department of Housing and Urban Development (“HUD”). Pursuant to the contract, TEG agreed to perform asbesto s abatement work at the Geneva Towers, an apartment complex, in San Francisco. After the contract work was completed, TEG submitted a claim to the contracting officer in which it sought an equi table adjustment in the contract price. In support of its cl aim, TEG asserted that it had been required to perform excessive cleaning and that it had been required to remove excessivequantities of asbestos. After the contracting officer denied the claim, TEG filed suit in the United States Court of Federal Claims under the Contract Dis putes Act of 1978, 41 U.S.C. §§ 601-613 (2000). TEG’s complaint in the Court of Federal Claims contained three c ounts. In Count One, TEG alleged breach of contract based upon HUD not permitting TEG to perform the contract work in accordanc e with its origi nal work plan. In Count Two, T E G alleged that HUD breached the contract by requiring what it c harac terized as extraordinary and unnecessary cleaning of the surfaces of the buildings . Finally, in Count T h ree, TEG alleged that it was enti t led to additional co m pensation under the contract based upon its removal of excessive quantities of asbest o s. TEG sought a combined breach of contract and equitable adjustment recovery i n the amount of approxim ately $4 million. In due course, the parties filed c r oss-mo tions for summary judgment. The court granted summary judgment for the gover nment on Counts One and Two of the complaint and for TEG on Count Three of the complaint. TEG-Paradigm Envtl., Inc. v

. United Stat es , No. 00-507C, slip op. at 26 (Fed. Cl. Aug. 30, 2002). TEG now appeals from the court’s decision granting the gover nment’s motion for summary judgment on its two claims of breach of contract. Finding no error in the Cour t of Feder al Claims’s decision, we affirm. 1
BACKGROUND
I. The Genev a Towers were two high-rise apartment buildings in San Franc i sco. HUD ac quired the buildings in 19 91 and dec ided to imp l ode them to make wa y for new

1 The gover nment has not cross-appeal ed the court’s grant of summary judgment in favor of TEG on Count Three.

06-5007 2development. Id. , slip op. at 2. Howev e r, the bu ildings contained asbestos , which ha d to be removed before implosion. Id. HUD so lic ite d bids on a contract for asbestos abatement and TEG was awarded the contract on May 8, 1997, for a fixed price of $5,153,625.00. The contract required that the abatement be complete on or by December 31, 1997, and provid ed for liquidated damages of $5, 000 per day of delay. After several extensions, the deadline fo r finishing the abatement was changed to February 15, 1998. Id. , slip op. at 7. However, TEG did not finish the abatement work until March 31, 1998, causing HUD to a ssess $220,000 in liquidated damages agains t it. Id. , slip op. at 8. This delay was purportedly caus ed at least in part by disagreem ents between TEG and HUD o v er contra ct requirements. Specifically, the parties dis agreed as to (i) whether the cont ract required TEG to abate asbestos in the pores and cracks of the Geneva Towers’ s u rfac es and (ii) whether TEG was required to comply with the contract specificat ions rather than TEG’s work plan.
A. We begin with the facts relevant to t he first point of contention between the parties, which concerns the level of asbe stos abatement required by the contract (Count Two of the complaint). The original contract s pecifications provided two separ ate abatement standards, one for friable and one for non-friable asbestos- containing materials. Fria ble materials are capable, when dry, of bei ng crumbled, pulverized, or reduced to powd e r by hand
pressure. Id. , slip op. at 2. The original as besto s abatement standard was set forth at Section 2080, 4.3C of the cont ract, which provided as follows: Friable materials applied to c oncrete, mas onry, w o od and nonporous surfaces, including but not limited to, steel

06-5007 3structural members (decks, beams and columns), pipes and tanks, shall be c l eaned to a degr ee that no trac es of debris or residue are visible. Nonf riable materials applied to concrete, masonry, [or] wood shall be c l eaned unt il no residue is visible other than t hat which is embedded in the pores, cracks, or other small vo ids below t he surface of the material. Thus, the origina l sp ecifications establish e d a string ent visib ilit y standard for friable materials and a less stringent standard, one wh ich allowed the contrac t or to leav e asbestos in the pores and cracks, for non -friabl e materials. The original Section 2080, 4.3C likely provided the st ringent visibility standard for friable asbestos-containing materials because they are more likely to become airborne and thus pose a health risk. In the cour se of the bidding proc ess, prospective bidd ers, including TEG, raised questions about whic h standard appli ed to the concrete on the ex terior of the buildings. During a conference call concer ning the pros pective contract, TEG’s representative noted, “It’s a signific ant difference, becau se on one it has to be clea n to a degree there’s no trace; on the other, it’s clean to a degree that material can still be embedded in pores, cracks and voids.” In response to the questions raised duri ng the bidding process about the origina l asbestos abatement standard, the government modified the standard. The revised section 2080, 4.3C s e t forth a single standard for all asbesto s-containing materials a n d provided as follows: Asbestos-containing materials a pplied to c oncrete, masonry, wood and nonporous surfaces, i n cl uding, but not limited to, steel structural members ( decks, beams and columns), pipes and tanks, shall be c l eaned to a degree that no traces of debris or r e sidue are visible by the Observation Ser v ices Contractor.

06-5007 4Thus, the revised Section 2080, 4.3C abolished the old standard applicable for nonfriable materials that stated that it was acceptable to leav e asbestos-containin g materials in pores and cracks. Instead, a standard requiring that there be no v i sible asbestos, similar to the orig inal standard for friable asbesto s-containing mat e rials, was adopted for all asbestos-containing materials. 2 As noted by the Court of Federal Clai m s , trade practice and custom in the asbestos abatement field inc l ud es presuming that any “deb ris and residue” contains asbestos. Id. , slip op. at 13. The court bas ed it s fin d ing on the Am erican Society for Testing M a terial (“ASTM”) sta ndard for as bestos abatement, which pr ovides, “Any residue, dust, or debris found during the inspections is assumed to contain asbestos
. . . .” Id.

2 In a joint status report, the gover nment provided an explanation for why the stringent visibility standar d was adopted for both friable and non-friable materials. The government stated that asbestos is a carcinogenic s ubstance and is regulated under the National Emiss i on Stand ards for Hazardous Air Pollutants (NESHAP), promul gated by the EPA un der the Clean Air Act at 40 CFR 61.145(c)(1). The NESHAP required t hat all friable [a sbestos-containing materials (ACM)] be removed prior to demolition of a regulated structure. . . . Non-fri able AC M may be left in plac e prior to demolition by standard techniques such as a wrecking ball. Howev e r, allowing non- friable ACM to remain in a building prior to an implosion was consi dered to be a gray area of the regulation that may be impermi ssible due to the poss i bility that the ACM c ould bec om e friable under such circumstances.

06-5007 5B. The parties ’ second disagreem ent concerns whether the c ontract’s specificat ions or TEG’s work plan controlled the terms of TEG’s performance (Count One of the complaint). Section C of the cont ract specifications states that the contractor will prov ide a work plan for approval. The relev ant portion of Section C provides: Contractor[’]s Work Plan: Subm it for approval a detailed plan of engineering controls and the work procedures to be used in the removal, repair, clean-up or encaps ula t ion of materials containing Asbestos. 1. For all projects submit: a. Names of Superintendent, Foremen, Project Manager and other key personnel, and their day time and emergency telephone and pager numbers. b. Detailed description of the method to be employ ed in order to control pollution, inc l uding negative air equipment calculations. c. Personal air monitoring procedures. d. Safety Plan in accordanc e with Contract Document requirements. (MATERIAL OMITTE D) e. Location of Asbestos Work Areas. f. Layout and construction det ails of Decontamination Enclosure Systems. g. Project schedule includi ng important milestones, critical pat hs and interface of trades involved in the Work. h. Security Plan including sketches necessary to clearly describe the plan. i. Emergency evacuation pl an for injured workers, compressor failure, fire and other emergencies. j. Firewatch Plan inc l udi ng names, telephone and pager numbers, and qualifications of personnel, firewatch duties, sketches necessary to clearly des cribe the plan and, when appli cable, specific requirements of local building/fire department regulations. k. A contingency plan, in the event of a major contamination incident caused by fire (on or off the floor being abated), a large br eech in the Work area containment barrier, the openi ng of stairwell doors,

06-5007 6breakage of the buildings[’ ] exterior windows or sabotage. Such a plan will focus on how to maintain safety and order when the building is oc cupied by building occupants, the public and other building users. Pursuant to this provision, HUD requested that TE G submit its work plan on April 21, 1997. On April 25, 1997, TEG s ubmitted a first version of its work plan. In response to deficienc ie s pointed out by HUD and AT C Associat es, Inc. (“ATC”), HUD’s asbest o s engineer and technic a l advisor for the cont ract, TEG revised the work plan several times in lat e April and early May of 1997. Two weeks after the i n it ial submittal of the work plan, TEG was awarded the contract. Disputes arose during contract performanc e as to whether the w o rk plan or the contract specifications gov erned performanc e. TEG point ed out discrepancies between the two documents in a letter dated June 17, 1997. For ex am ple, TEG noted in the letter that it had not closed ve rtical pipe cavities, as required by the specifications , because the work plan required the cavities to remain open in order to complete the project. The discrepancies between the work pl an and the contra ct s pecifications led to the issuance of a Stop Work Order. After over a month of dis p utes, HUD accepted a Value Engineering Change Proposal (“VECP”) 3 from TEG that made changes to the contract specifications to bring it more in line with the work plan. Work then continued under the revised specifications.

3 A VECP is a contractor’s propos al to make a cost-reducing c h ange to a government contract. See 48 C.F.R. §§ 48-201, 52.248-1–.248-3 (2006); see also Joh n Cib inic, Jr., Ralph C. Nash, Jr. & James F. Nagle, Administration of Government Contracts 409 (4th ed. 2006).

06-5007 7II. The Court of Federal Cla ims iss ued an opinion on Au gust 30, 2002, evaluating the parties’ cross-motions for summary j udgment. The court outlined three issue s before it, corresponding to each of TEG’s three claims: (i) whether the contract required the removal of asbestos residue in pores and cracks; (i i) whether TEG was required to follow the contract specificati ons rather than its work pl an; and ( iii) whether TEG wa s entitled to compensation for removing what it alleged were excess ive quantities of asbestos. Id. , slip op. at 10. The court began with the issue of the remo val of asbes tos resi due from the pores and cracks in the sur f aces of the Geneva Towers. Id. , slip op. at 10-16. The court noted that the lang uage of the contract r equired that “[a]sbestos-containing materials applied to concrete, masonry, wood and nonporous surfaces . . . shall be cleaned to a degree that no traces of debris or residue are visible.” Id. , slip op. at 11. Based on this language, the court identified tw o issues to be dec ided. First, it had to decide if the
contract re quired the removal of asbestos wit hin pores and cracks. Second, it had to determine what asbes tos-containing “debris or residue” meant. Beginning with whether the cont ract required the c l eaning of pores and c r acks, the court found that any asbes tos-containing material “applied to” a porous surface would necessarily enter any por es or cracks. Thus, it fo und that pores and cra cks were in fact part of the surface of the material. Id. , slip op. at 12. Furt her, the court reasoned that asbestos-containing material coul d be visible within pores or cracks. Id. Therefore, the court concluded, the c ontract required that the pores and cracks o f the poro us

06-5007 8surfaces of the Geneva Towers be cleaned of all visible traces of asbestos. Id. , slip op.
at 13. Turning to the question of what asbesto s-containing “debris or residue” meant, the Court of Federal Claims foun d that there was no definition in the contract. Industry standards clarified, however, that any residue, dus t, or debris found d u ring an inspection was assumed to contain asbestos. Id. Thus, the court reasoned, TEG was required to remove any residue, dust, or debr is found . The court concluded that the contract required that TEG remove all mate rial containing more than 1% as bestos and that TEG remove all visible traces of asbest os, including materials recessed in pores or cracks. Ac cordingly, t he court gr anted sum m ary judgment in fav o r of the government on the abatement standard issue. Id. , slip op. at 16. Addressing the iss ue of whether TEG’s work plan or t he contract specific ations governed T E G’s performance, the Court of F ederal Claims noted that the parties agreed that there were conflicting provisions of the work plan and the contract specifications

. Id. , slip op. at 21. Continuing, the court poi nted out that one of the reasons for requiring strict compliance with contract specificati ons is to prevent lo w bidders from using substandar d materials. Id. , slip op. at 22. The cour t also pointed o u t that the government awards contracts to thos e bidders whose bid “conforms to the specification.” Id. , slip op. at 23. The court found that generally the purpose of contrac t work plans is to enable the gov ernment to determine whether or not the contractor is able to perform. Id. , slip op. at 24 (citing John Cibin ic, Jr. & Ralph C. Nash, Jr., Formation of Government Contracts 405-06 (3d ed. 1995)). Fu rther, the court noted that when sealed bids are used, as was the case with the Genev a Towers c o ntract, the

06-5007 9contract cannot be modified afte r bids are received; the only criterion for contract award other than the bid’s responsiveness to the s pecifications is bidder responsibility. Id. , slip op. at 24. The Court of Federal Claims reasoned that if, as TEG argued, HUD had negotiated to replace the conflic t i ng portions of the contract specifications with TEG’s work plan, then it w ould have been violati ng these rules governing contracts made through the solicitation of sealed bids and the contract would be void. Id. , slip op. at 25. The court c oncluded t hat the wor k plan was not inc o rporated into the contract. Id. , slip op. at 25-26. The court therefore denied TEG’s motion for su mmary judgment and granted the government’s cross-moti on on the work pla n issue. Id. , slip op. at 26. Finally, the Court of Federal Claims gr anted summary judgment in favor of TEG on its claim, in Count Three of the compla int, that it was entitled to an equitable adjustment in the contract price by reason of having r e moved excessive quantities of asbestos. As seen, the government has not appealed the court’s grant of summary judgment on the “[e]xcess quantit ies” claim. TEG appeals th e court’s grant of summar y judgment in favor of the government on the breach of contract claims in Counts On e and Two of the complaint. We have jurisd iction over TEG’s appeal pursuant to 28 U.S.C. § 1295(a)(3). DISCUSSI ON
I. Under Court of Federal Claims Rule 56(c) summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ca stle v. Unit ed States , 301 F.3d 1328, 1336 (Fed. Cir. 2002). We review the grant of summary j udgment by the Court of Federal Claims de

06-5007 10novo. Barron Bancs h ares, Inc. v. United St ates , 366 F.3d 1360, 1368 (Fed. Cir. 2004). Contract interpretation is a question of law, which we als o review de novo. Id.
II. On appeal, TEG argues that the Court of Federal Claims erred in holding that HUD ap plied the proper cleanin g standard fo r abatement under the contract. TEG argues that the contract at Section 2080, 4.3C required that asbestos-containing materials be cleaned from “surfaces” so that no traces of debris or residue were visible. TEG contends that “surfaces” are not defi ned in the contract, but that from common usage dictionaries it is apparent t hat that they include only “ [t]he outer-face, outside, or exterior boundary of a thing; outermost or uppermost layer or ar ea.” Appellant’s Br. at 21 (quoting a definition found in Random House Webster’s College Dictionar y 1314 (2d ed. 1999)). TEG argues that the pores and cracks are not part of the “surface” because they are not on the “outer-fac e” of the concrete. Industr y definitions of “debris” and “residue” refer to visible particles that have settled in a work area or on an abated “surface.” Thus, TEG argues, the dust in t he pores and cracks of the conc rete of the buildings was not “debris” or “residue” on a “surface” and t herefore not required to be removed. TEG supports its argument by pointi ng to what it says was HUD’s own interpretation of the contrac t. First, TEG argues that ev en HUD recogniz ed that its Observation Servic es Contractor, Kellc o Envi ronmental Serv ices, Inc. (“Kellco”), which was responsible for observing the abatement pr ocess, enforced the vis i bility standard of Section 2080, 4.3C in a “fanatical” way by r equiring abat ement of asbestos in the pore s and cracks . TEG points to an email author ed by a HUD employ ee in whic h Ke llco is

06-5007 11described as hav ing interpreted “what the c ontract says on a fanatical mode. ” Second, TEG recites a portion of a letter to HUD from ATC, which purported to clarify the visual inspection standard set forth in Section 2 080, 4.3C. ATC stated in the letter that “[r]esidue recessed within the pores and cra cks of the concrete substrate is no t
exp e cted t o be e x tracted.” Third , TEG dra w s attentio n to a lette r from HUD stating that HUD ha d gone beyo nd federal standards fo r asbestos abatement on the Geneva Towers pr oject as well as deposition testim ony to t he same effect . In addition, TEG claims that the court erred by failing to cons ider several pieces of evidenc e including the ATC opinion and an expert opinion rendered by Andrew F. Ober ta, the Task Group Chairman of the AST M Committee on Asbestos Management, to the effect that it would be unreasonable to require a contra ctor to “chisel or grind away c oncrete to extract . . . imbedded material even if it was asbestos cont aining material.” Mr. Oberta further opined that he did not believe that the contract requi red abatement beyond in dustry standards. TEG also argues that the government inte rfered with its work plan, which was a part of the contract. In s upport of its argument, TEG points out that the work plan was physically attached by HUD to t he contract. Further, TEG contends that under Federal Acquis i tion Regulation (“FAR”) § 14.201-1(c), see 48 C.F.R. § 14.201-1(c) (2006), the work plan, which is a represent ation or a st atement of a bi dder, was inc o rporated into the contract. TEG also contends that it was required to proceed under the work plan under FAR § 1552.211-74, 48 C.F. R. § 1552.211-74 (2006), and that therefore the work plan was part of the contract . The Court of Federal Cla ims erred, TEG argues, in finding that the work plan merely required that the contractor provide certain information

06-5007 12because the contract itself r equir ed that the work plan comprise “a detailed plan for engineering control and the wo rk procedures to be used.” The Court of Federa l Claims’s reliance on the Cibi nic and Nash gov e rnment contracts treatise was misplaced, TEG cont ends, bec ause the s e ction cited by the c ourt pertained to the determination of a contractor’s res ponsibility and not its work plan. The gover nment defends the Court of Feder al Claims’s interpretation of the contract’s provisions concerni ng the level of abatement, argui ng that the contract’s plain language r equires abatement of all traces of visible debr is and r e sidue. In support of this interpretation, the government notes that Section 2080, 4.3C was amended to

exc l ude any distinction bet ween the abatement standard for friable and non-friable materials. The revised secti on eliminated provisions t hat allowed non-friable materials to remain in pores and cracks and instead appl ied a v i sibility standard to all asbestoscontaining materials. The gov ernment argues that even if we accept TEG’s arguments concerning the abatement of asbestos on “ s urfa ces,” the contract requires abatement of all as bestos that has been applied to surfaces, including asbestos that seeps into pores and cracks after ap plication to the surfaces. The evidenc e presented by TE G concerning trade usage and custom should be disregarded, the government urges, because it is not directed to interpreting a particular term, but ra ther the abatement standard as a whole. Additionally, the gov ernment contends that trade usage cannot create an ambiguity in an otherwise unam biguo us co ntract. The government also argues that the court did not err by not co nsidering the AT C opinion and Mr. Oberta’s opinion because these sources could not be us ed to contradict the plain meaning of the
contract.

06-5007 13The government argues that the Court of Federal Claim s correctly found that the work plan was not incorporat ed into the c ontract. The gov ernment notes that in ord e r for a document to be incorporated into a cont ract, there must be an express reference in the incorporating document. Although secti ons J and K of the c ontract incorporated certain materials by reference, they did not incorporate the work plan, the governmen t notes. The work plan, the gov ernment argues , was merely a pre-award submittal that was meant to show that TEG was capable of doing the work. The government claims that this is demonstrated by the fact that HUD nev er approved t he work plan. Even i f the work plan had been approv ed, the government contends , that approval would not have waived compliance with the contract spec ifications . The gover nment argues that if we were to hold that the work plan trumped the contract itself, we would be allowin g bidders to underbid c o mpetitors and then use non-conforming sub-par materials and procedures . The gov ernment also argues that FAR §§ 14.201-1(c) and 1552.211-74, which were cited by TEG for the proposition that external document s are incorporated into government contracts, are not applicable to work plans. See 48 C.F.R. §§ 14.201- 1(c), 1552.211-74. Finally, the go vernment urges that TEG’s efforts to have parts of its work plan incorporated into the c ontract th rough the VECP show that the work plan was not incorporated into the contract; it woul d have been unnecessary to have the contract modified through the VECP if the work plan were already a part of the contract.
III. When interpreting a c ontract, “‘the language of [the] contract must be given t h at meaning t hat would be derived from the contract by a r easonably intelligent person acquainted with the contem poraneous c i r c umstances.’” Metric Constructors, Inc. v.

06-5007 14Nat’l Aeron a tics & Sp ace Admin. , 169 F.3d 747, 752 (Fed. Cir. 1999) (quoting Hol-Gar Mfg. Corp. v. United States , 351 F.2d 972, 975 (Ct. Cl. 1965)). When deriving this meaning, we begin with t he contract’s language. Coast Fed. Bank, FSB v. United States , 323 F.3d 1035, 1038 (Fed. Cir. 2003) (en ban c). When the contract’s language is unambiguous it must be given its “plain and ordinary ” meaning and the court may not look to ext r insic evidence to interpret its provisions. Id. at 1040; McAbee Constr. , 97 F.3d at 1435. Although ext r insic evidenc e may not be used to interpret an unambiguous contract provision, we have l ooked to it to confirm that the parties intended for the term to have it s plain and ordinary meaning. Se e Coast Fed. Bank , 323 F.3d at 1040 (looking to c ontemporaneous evidence of the parties’ understanding and “not[ing] that much of it is consistent with the [contract’s] pl ain meaning”). When a provision in a contract is susceptible to more than one reasonable in terpretation, it is ambiguous , Edward R. Marden Co rp. v. United Stat es , 803 F.2d 701, 705 (Fed. Cir. 1986), and we may then resort to extrin s i c evidenc e to resolve the ambiguity, see McAbee , 97 F.3d at 1 435. We utilize e x trinsic eviden ce to deriv e a construction that effectuates the parties’ intent at t he time they execut ed the contract. See Dureiko v. United States , 209 F.3d 1345, 1356 (Fed. Cir. 2000). Even when a c ontract is unam biguous, it may be appropriate to turn to one common form of extrinsic evidence—evid ence of trade practice and custom. Hu nt Constr. Group, Inc. v. United St ates , 281 F.3d 1369, 1373 (Fed. Cir. 2002). We have stated that “evidence of trade practice may be useful in interpreting a contract term having an accepted industry meaning differ ent from its ordinary meaning— even wher e the contract otherwise appears u nambiguous—becaus e the ‘parties to a contract . . .

06-5007 15can be their own lexicographers and . . . trade practice may serve that lexic ographic function in some cases.’” Id. (quoting Jowett, Inc. v. United States , 234 F.3d 1365, 1368 (Fed. Cir. 2000) ). Trade practice and custom may not be used, however, “to create an ambiguity where a c ontract was not reasonably sus c eptible of differing interpretations at the time of contracting.” M e tric Constr uctors , 169 F.3d at 752. The parol evidenc e rule provides a furt her limitation on the use of ext r insic evidenc e in interpreting contracts. Under the parol evidence rule, extrinsic evidence pre-dating a written agreement may not be used “to add to or otherwise modify the terms of a written agreement in instances where the written agreement has been adopted by the part i es as an expressi on of their final understanding. ” Barron Bancshares , 366 F.3d at 1375 (citation and quotat ion marks omitted). However, extrinsic ev idence suc h as prior agreement s and docum ents will b e considere d part of a contract when they are incor porated into the contract. See S. Cal. Fed. Sav. & Lo an Ass’n v. United States , 422 F.3d 1319, 1330 (Fed. Cir. 2005). One common way to incorporate extrinsic evidenc e is through an int egration c l ause that express l y incorporates the extrinsic evidence. Id. ; McAbee Constr. v. United States , 97 F.3d 1431, 1434 (Fed. Cir. 1996). Alt hough the parol evidence rule bars the use of extrinsic evidenc e to supplem ent or modify a written agreement, the rule does not bar the use of extrinsic evidence to interpre t the terms of a contract when the plain and ordinar y meaning is not clear from the contract itself. See Restatement (Second) Contracts § 215 cmt. b (1981); 6-26 Corbin on Contr a cts § 579 (2006); Cibini c, Nash & Nagle,
supra , at 199. Armed with these rules, we turn to the issues TEG raises on appeal.

06-5007 16IV. We consider first TEG’s claim that the Court of Federal Claims erred in ho lding that it was required to clean debris and re sidue from pores and c r acks of th e Geneva Towers under the contract’s abatement standard. As seen, t he provision of the contract containing the abatement standard for the Geneva T o wers project, Section 2080, 4.3C, provided: Asbestos-containing materials a pplied to c oncrete, masonry, wood and nonporous surfaces, i n cl uding, but not limited to, steel structural members ( decks, beams and columns), pipes and tanks, shall be c l eaned to a degree that no traces of debris or r e sidue are visible by the Obse rvation Ser v ices Contractor. The Court of Federal Claims co rrectly identified two issues rais ed by the abatement standard. First, we must det ermine whether this standard requires the r e moval of asbestos within pores and cracks. Sec ond, we must determine what asbestos

containing “debris or residue” means. Based upon the plain language of the abatem ent standard, we conclude that the Court of Federal Claims did not err in ruling that TEG was required to remove asbesto s within pores and cracks. The pl ain language of the contract indicates that i t requires abatement to the point t hat there is no “debris or residue . . . visible.” Thus, to the extent that “debris or resi due” was “visible” within the por es and cracks of concrete or other porous surfaces, it had to be abated under the c ontract. However, if t he “debris or residue” was not “visible” within the pores and cracks, it was not required to be abated under the contract. Accordingly, we find that the plain and or dinary meaning of the abatement standard required T E G to remove visible asbestos within the pores and cracks of the towers.

06-5007 17As we did in Coast Federal Bank , we turn to extrinsic evidenc e, specifica lly, the course of dealing of the parties , to confirm that our interpretation of the plain and ordinary meaning was, in fact , the parties’ understanding. See Coast Fed. Bank , 323 F.3d at 1040. The original s pecifications provided for two different abatement standards for friable and non-friable materials. As fa r as friable materials were conc erned, the specifications express l y st ated that materi als must be cleaned “to a degree that no traces of debris or res i due are visible.” In c ontrast, the s pecifications pr ovided that nonfriable materials “shall be c l eaned until no residue is visible other than that which is embedded in the pores, cracks, or other small voids below the surface of the material.” Thus, the original spec ifications expressly a llowed for the contractor to leave non-friable asbestos in pores and cracks. In a pre-bid conference call, TEG’s representative stated that it was not clear which st andard, friable or non-friable, would apply and that this was an important difference. TEG’ s representative noted, “It’ s a signific ant difference, because on one it has to be clean to a degree there’s no trace; on t he other, it’s c l ean to a degree that material can still be embedded in pores, cracks and voids.” In our view, the conference call dem onstrates that TEG understood t he v i sibility standard, whic h was eventually adopted for all as bestos abatem ent under the contract, to require that no asbestos remain in the pores and cracks. We find unpersuasive TEG’s argument that t he Court of Federal Claims erred by failin g to consider ot her pieces of eviden ce, includ ing AT C’s letter and Mr. Oberta’s expert opinion. Thes e documents could be considered evidenc e of trade practice and custom, which we have found appropriate to consider in some cases ev en when a contract is unambiguous. See Hunt Cons tr. , 281 F.3d at 1373. However, neither of

06-5007 18these documents aids in the interpretation of a term of art in the asbestos abatement field. Rather each document offers an alter nate explanation of the contract’s abatement standard generally. Under Hunt Construction , it is not permissible to use thes e extrinsic s ources to impart ambiguity in to an otherwise unambi guous cont ract—they may only be used to interpret a term of art. Id. at 1369; see als o Metric Co nstructors , 169 F.3d at 752. Given the clarity of the meaning from the lang uage and the parties ’ pre-contractual negotiations, none of the extrinsi c evidence cited by TEG carri es weight. We are also not sway ed by TEG’s argumen t that Secti on 2080, 4

. 3C requires only that “surfaces” be abated and that “surfaces” d o not include pores and cracks. TEG turns to a common usage dictionary that defines a “surface” as “[t]he outer-face, outside, or exterior boundary of a thing; outermost or uppermost layer or area.” Appellant’s Br. at 21 (quoting Random House Webst e r’s College Dictionar y 1314 (2d ed. 1999)). We reject TEG’s argument based on this definition that a “surface,” as used in section 2080, 4.3C, is only the “outer-face” of the c oncrete and not the pores and cracks. The definition upon whic h TEG relies does not expressly stat e that “surfaces” do not include pores and cracks

. Further, if we were to accept TEG’s argument we would have to decide how small a crack or pore had to be in order to be excluded from “surfaces.” The Court of Federal Claim s correctly noted that we “would be left to quarreling over the depth of recess needed to differentiate a crack or pore from a smooth surface” if we adopted T E G’s interpretation. T E G-Paradigm , slip op. at 13. W e also find that TEG’s “surfaces” argument is weak in comparison to the evidence of the parties’ understanding of the language in t he con t ract as demonstrated by the

06-5007 19conference call. Thus, we believ e that the strict visibilit y abatement standard is more in line with the parties’ contemporaneous understanding of Se ction 2080, 4.3C. Turning to the second issue relevant to TEG’s abatement standard claim, the meaning of “debris or residue,” we see no error in the C ourt of Federal Claims’s holding that, under the contract, any dus t or powder found on inspection was assumed to be asbestos-containing “ debris or r e sidue” that had to be abated. “ D ebris” and “residue” are not defined in the contract. As previo usly noted, evidenc e of trade custom may be used to interpret terms of art such as “debris” and “residue.” See Hu nt Constr. , 281 F.3d at 1373. The ASTM standard for as bestos abatement provides that debris and residue is “ a ssumed” to contain asbestos. TEG-Paradigm , slip op. at 13. Therefore, we agree with the Court of Federal Claims that trade practice and custom demonstrates that in the asbestos abatement field any “debris and residue” f ound is assumed to contain as bestos. Id. . Thus, we affirm the Co urt of Federal Claims’s holding that the contract required TEG to clean all vis i ble powder and dust found on inspection, including powder and dust in cracks and pores.
V. Turning to the work plan issue, we hold t hat the Court of Federal Claims correctly determined that the c ontract specifications, rather than TE G’s wor k plan, gov erned the terms of contract performance. The governm ent required a work plan confor ming to the contract specifications before it accept ed TEG’s bid. Therefore, the work plan comprises a piec e of extrinsi c ev idence pre-dating the formation of the contract. HUD required that bidders subm it a work plan stating the deta ils of the bidder ’s engineering controls and work procedures. Nowhere does the c o ntract stat e that the work plan is to

06-5007 20be integrated into the contract and supersede the contract specif ic ations. In contrast to the work plan, several sections of the FAR are incorporated by Sectio n F of the specifications. 4 Additionally, Sections I, J, and K to the contract lis t not only numerous sections of the FAR that are incorporat ed by reference, but also several other documents relating to payment bonds, per fo rmance bonds, and wage rates. Further, we find unpersuasive TEG’s argument that the work plan was incorpor ated into the contract merely by virtue of the fact t hat the plan was phys i cally attac h ed to the
contract. Rumsfeld v. Freedom NY, Inc. , 346 F.3d 1359, 1361 (Fed. Cir. 2003) (per curiam) (“One party to a contract cannot bind the other simply by attaching a document to a copy of the contract, even if that part icular copy is sign ed. . . . Rather, the documents must clearly indic a te that the parties intended that they be considere d together as a single contract.”) (i nternal cita tions omitted). Although the attachment of the two documents lends some support to TEG’ s argument, we conclude that it is not enough to incorporate the work plan given the fa cts of this case, which otherwise show that the work plan was not inco rporated. Given that the cont ract express l y incorporates certain extrinsic documents, but does not inco rporate the work plan, we find that the work plan is an extrinsic document that c annot be used to contradict or modify the contract under the parol evidenc e rule. Se e S. Ca l. Fed. Sav. & Loa n , 422 F.3d at
1330.

4 For ex ampl e, S e ction F incorporat es FAR sections 52.252-2 ( “ Clauses Incorporated by Reference”), 52.242-15 (“S top-Work Order”), 52.242-17 (“Government Delay of Work”), and 52.211-12 (“Liqui dated Damages—Supplies, Services, or Research and Development”). See 48 C.F.R. §§ 52.252-2, 52.242-15, 52.242-17, 52.211-12.

06-5007 21We also find that there is no exc eption to the parol evidence rule for work plans in government contracts. T he Court of Federal Claims co rrectly characterized TEG’s work plan not as part of the contract, but rather as a pre- award s ubmission used to aid the government in assessing TE G’s ability to perform the contract. TEG-Paradigm , slip op. at 21. Under FAR 9.103, the government must award contracts to “responsible prospective contractors only.” 48 C.F.R. § 9.103(a) (2006); see also Cibin i c & Nash, Formation of Government Contracts , supra , at 404-06. Thus, th e governm ent requires pre-award submission s to asse s s whether the contractor will be able to p e rform the contract. Pre-award submissi ons, such as a work plan, are not part of the contract unless the contract specifically pr ovides that they are to be incorporated. Examination of the contract at issue conf irms that TEG’s work plan was a pre-award sub m ission that did not ov erride the contract specifications

. Section C of the c ont ract specifications requires that the contractor submit a “work plan” containing inf o rmation such as the names and contact inf o rmation of the key pe rsonnel who would perform the contract, a detailed description of polluti on c ontrol methods, and va rious saf e ty and c o ntingency plans. Again, nowhere in the cont ract is it stated that the c ontract incorporat es the wor k plan. Thus , the government is correct that TEG’s wor k plan was not part of the contract, but rather a piece of information that wa s used by the government to assess TEG’s ability to perform in the pre-award stage. Contrary to TEG’s arguments, FAR se ctions 14.201- 1 and 1552.22-74 do not compel us to find that work plans are incorporated into government contracts. FAR 14.201-1 sets forth the uniform contract fo rmat that must be used “to the maximum practicable extent” for certain types of cont racts. 48 C.F.R. § 14. 201-1 (2006). Section

06-5007 2214.201-1(c) states that accept ance of a bid “incorporates Section K, Representations, certifications, and other statem ents of bidders, in the resu ltant contract even though no t physically attached.” Section K of the contract at issue incorporates several sections of the FAR that require particular submissions , e. g., taxpayer identif i cation, FAR 52.204-3, whether or not the business is women-owned, FAR 52. 204-5, and the type of business, FAR 52.214-2, see 48 C.F.R. §§ 52.204-3, 52.204-5, 52.214-2 (2006), respectively

. Howev e r, the work plan is contained in Sec t i on C of the contract and is ther efore not a Section K r epresentation, cert ification, or st atement. We find T E G’s arguments under FAR 1552. 211-74(c) equally unper suasive. FAR 1552.211-74(c) sets forth procedures for stopping work when a wo rk plan is not approved. 5 It does not state that work plan s are incorporated into government contracts.

5 The contract provision contempl ated by FAR 1552. 211-74 states as follows: The Contractor shall acknowledge receipt of each work assignment by returni ng to the Contracting Officer a signed copy of the work assignment within __ calendar days after its receipt. The Co ntractor shall b e gin work immediately upon rec e ipt of a wo rk assignment. Within __ calendar days after receipt of a work assignment , the Contractor shall submit __ co pies of a work plan to the Project Offi cer and __ copies to t he Contracting Officer. The work plan shall inc l ude a deta iled technica l and staffing plan and a detailed cost es timate. Wi thin __ calendar days after recipt [sic] of the work pl an, the Contracting Officer will provide written approval or disapproval of it to the Contractor. If the Contractor has not receive d approval on a work plan within __ c a lendar days after its submission, the Contractor shall stop work on th at work as signment. Also, if the Contracting Offi cer disapproves a work plan, the Contractor shall stop work until the problem causing the disapproval is resolved. In ei ther case, the Contractor shall resume work only when the Contracting Officer finally approves the work plan.

06-5007 23Finally, our holding that work plans are not inc o rporated into gover n ment contracts is in accordance with the general pr inciple that the gover nment is entitled to strict compliance with contract specifications

. See Granite Constr. Co. v. United States , 962 F.2d 998, 1006-07 (Fed. Cir . 1992) (“[T]he government generally has t he right to insist on performance in strict complianc e with the contract specifications and ma y require a contractor to correct nonconformi ng wo rk.”). This principle prevents contractors from submitting low bids and t hen substit u ting less- expensiv e materials for those required by the specification. Cibinic, Nash & Nagle, supra , at 815. CONCLUS ION For the foregoing reasons, we therefor e affirm the decision of the Court of Federal Claims granting summa ry judgment in favor of the government on TEG’s claims for breach of contract. COSTS Each party shall bear its own costs.

AFFIRMED

(Cont’d. . . .) 48 C.F.R. 1552.211-74.

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