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 & Ciresi L.L.P., of Los Angeles, 

California, argued for plaintiff-appellant. 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 States 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. 

 ___________________________ 

 

 DECIDED: September 29, 2006 

 ___________________________ 

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

SCHALL, Circuit Judge. 

 TEG-Paradigm Environmental, Inc. (“TEG”) entered into a contract with the 

United States Department of Housing and Urban Development (“HUD”). Pursuant to 

the contract, TEG agreed to perform asbestos 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 equitable adjustment in 

the contract price. In support of its claim, TEG asserted that it had been required to 

perform excessive cleaning and that it had been required to remove excessive 
quantities of asbestos. After the contracting officer denied the claim, TEG filed suit in 

the United States Court of Federal Claims under the Contract Disputes Act of 1978, 41 

U.S.C. §§ 601-613 (2000). 

TEG’s complaint in the Court of Federal Claims contained three counts. In Count 

One, TEG alleged breach of contract based upon HUD not permitting TEG to perform 

the contract work in accordance with its original work plan. In Count Two, TEG alleged 

that HUD breached the contract by requiring what it characterized as extraordinary and

unnecessary cleaning of the surfaces of the buildings. Finally, in Count Three, TEG 

alleged that it was entitled to additional compensation under the contract based upon its 

removal of excessive quantities of asbestos. TEG sought a combined breach of

contract and equitable adjustment recovery in the amount of approximately $4 million. 

In due course, the parties filed cross-motions for summary judgment. The court

granted summary judgment for the government on Counts One and Two of the 

complaint and for TEG on Count Three of the complaint. TEG-Paradigm Envtl., Inc. v.

United States, No. 00-507C, slip op. at 26 (Fed. Cl. Aug. 30, 2002). TEG now appeals

from the court’s decision granting the government’s motion for summary judgment on its

two claims of breach of contract. Finding no error in the Court of Federal Claims’s

decision, we affirm.1

BACKGROUND 

I. 

The Geneva Towers were two high-rise apartment buildings in San Francisco. 

HUD acquired the buildings in 1991 and decided to implode them to make way for new 

 1 The government has not cross-appealed the court’s grant of summary 

judgment in favor of TEG on Count Three.

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development. Id., slip op. at 2. However, the buildings contained asbestos, which had 

to be removed before implosion. Id. HUD solicited 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 provided for liquidated damages of $5,000 per day of delay. 

After several extensions, the deadline for 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 assess $220,000 in liquidated damages against 

it. Id., slip op. at 8. This delay was purportedly caused at least in part by

disagreements between TEG and HUD over contract requirements. Specifically, the

parties disagreed as to (i) whether the contract required TEG to abate asbestos in the 

pores and cracks of the Geneva Towers’ surfaces and (ii) whether TEG was required to 

comply with the contract specifications rather than TEG’s work plan. 

A. 

We begin with the facts relevant to the first point of contention between the 

parties, which concerns the level of asbestos abatement required by the contract 

(Count Two of the complaint). 

The original contract specifications provided two separate abatement standards, 

one for friable and one for non-friable asbestos-containing materials. Friable materials 

are capable, when dry, of being crumbled, pulverized, or reduced to powder by hand 

pressure. Id., slip op. at 2. The original asbestos abatement standard was set forth at 

Section 2080, 4.3C of the contract, which provided as follows: 

Friable materials applied to concrete, masonry, wood and 

nonporous surfaces, including but not limited to, steel 

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structural members (decks, beams and columns), pipes and 

tanks, shall be cleaned to a degree that no traces of debris 

or residue are visible. Nonfriable materials applied to 

concrete, masonry, [or] wood shall be cleaned 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 specifications established a stringent visibility standard for friable

materials and a less stringent standard, one which allowed the contractor to leave 

asbestos in the pores and cracks, for non-friable materials. The original Section 2080,

4.3C likely provided the stringent visibility standard for friable asbestos-containing 

materials because they are more likely to become airborne and thus pose a health risk. 

In the course of the bidding process, prospective bidders, including TEG, raised 

questions about which standard applied to the concrete on the exterior of the buildings. 

During a conference call concerning the prospective contract, TEG’s representative 

noted, “It’s a significant difference, because on one it has to be clean 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 during the bidding process about the original

asbestos abatement standard, the government modified the standard. The revised 

section 2080, 4.3C set forth a single standard for all asbestos-containing materials and 

provided as follows: 

Asbestos-containing materials applied to concrete, masonry, 

wood and nonporous surfaces, including, but not limited to, 

steel structural members (decks, beams and columns), pipes

and tanks, shall be cleaned to a degree that no traces of 

debris or residue are visible by the Observation Services 

Contractor. 

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Thus, the revised Section 2080, 4.3C abolished the old standard applicable for nonfriable materials that stated that it was acceptable to leave asbestos-containing

materials in pores and cracks. Instead, a standard requiring that there be no visible 

asbestos, similar to the original standard for friable asbestos-containing materials, was

adopted for all asbestos-containing materials.2

As noted by the Court of Federal Claims, trade practice and custom in the 

asbestos abatement field includes presuming that any “debris and residue” contains 

asbestos. Id., slip op. at 13. The court based its finding on the American Society for

Testing Material (“ASTM”) standard for asbestos abatement, which provides, “Any

residue, dust, or debris found during the inspections is assumed to contain asbestos

. . . .” Id.

 2 In a joint status report, the government provided an explanation for why

the stringent visibility standard was adopted for both friable and non-friable materials. 

The government stated that 

asbestos is a carcinogenic substance and is regulated under 

the National Emission Standards for Hazardous Air

Pollutants (NESHAP), promulgated by the EPA under the

Clean Air Act at 40 CFR 61.145(c)(1). The NESHAP 

required that all friable [asbestos-containing materials 

(ACM)] be removed prior to demolition of a regulated 

structure. . . . Non-friable ACM may be left in place prior to 

demolition by standard techniques such as a wrecking ball.

However, allowing non-friable ACM to remain in a building 

prior to an implosion was considered to be a gray area of the 

regulation that may be impermissible due to the possibility

that the ACM could become friable under such 

circumstances. 

06-5007 5
B.

The parties’ second disagreement concerns whether the contract’s specifications

or TEG’s work plan controlled the terms of TEG’s performance (Count One of the 

complaint). 

Section C of the contract specifications states that the contractor will provide a 

work plan for approval. The relevant portion of Section C provides: 

Contractor[’]s Work Plan: Submit for approval a detailed plan 

of engineering controls and the work procedures to be used 

in the removal, repair, clean-up or encapsulation 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 employed in 

order to control pollution, including negative air

equipment calculations. 

c. Personal air monitoring procedures. 

d. Safety Plan in accordance with Contract Document

requirements. 

 (MATERIAL OMITTED)

e. Location of Asbestos Work Areas. 

f. Layout and construction details of Decontamination 

Enclosure Systems. 

g. Project schedule including important milestones, 

critical paths and interface of trades involved in the 

Work. 

h. Security Plan including sketches necessary to clearly 

describe the plan. 

i. Emergency evacuation plan for injured workers, 

compressor failure, fire and other emergencies. 

j. Firewatch Plan including names, telephone and pager

numbers, and qualifications of personnel, firewatch 

duties, sketches necessary to clearly describe the 

plan and, when applicable, 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 breech in the Work area 

containment barrier, the opening of stairwell doors, 

06-5007 6
breakage of the buildings[’] exterior windows or

sabotage. Such a plan will focus on how to maintain 

safety and order when the building is occupied by

building occupants, the public and other building 

users. 

Pursuant to this provision, HUD requested that TEG submit its work plan on April 21,

1997. On April 25, 1997, TEG submitted a first version of its work plan. In response to 

deficiencies pointed out by HUD and ATC Associates, Inc. (“ATC”), HUD’s asbestos

engineer and technical advisor for the contract, TEG revised the work plan several 

times in late April and early May of 1997. Two weeks after the initial submittal of the 

work plan, TEG was awarded the contract.

Disputes arose during contract performance as to whether the work plan or the 

contract specifications governed performance. TEG pointed out discrepancies between 

the two documents in a letter dated June 17, 1997. For example, TEG noted in the 

letter that it had not closed vertical 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 plan and the contract specifications led to 

the issuance of a Stop Work Order. After over a month of disputes, 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 proposal to make a cost-reducing change to a 

government contract. See 48 C.F.R. §§ 48-201, 52.248-1–.248-3 (2006); see also John

Cibinic, Jr., Ralph C. Nash, Jr. & James F. Nagle, Administration of Government 

Contracts 409 (4th ed. 2006). 

06-5007 7
II. 

The Court of Federal Claims issued an opinion on August 30, 2002, evaluating 

the parties’ cross-motions for summary judgment. The court outlined three issues

before it, corresponding to each of TEG’s three claims: (i) whether the contract required 

the removal of asbestos residue in pores and cracks; (ii) whether TEG was required to 

follow the contract specifications rather than its work plan; and (iii) whether TEG was

entitled to compensation for removing what it alleged were excessive quantities of

asbestos. Id., slip op. at 10. 

The court began with the issue of the removal of asbestos residue from the pores 

and cracks in the surfaces of the Geneva Towers. Id., slip op. at 10-16. The court 

noted that the language of the contract required 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 two issues to be decided. First, it had to decide if the 

contract required the removal of asbestos within pores and cracks. Second, it had to 

determine what asbestos-containing “debris or residue” meant. 

Beginning with whether the contract required the cleaning of pores and cracks, 

the court found that any asbestos-containing material “applied to” a porous surface 

would necessarily enter any pores or cracks. Thus, it found that pores and cracks were 

in fact part of the surface of the material. Id., slip op. at 12. Further, the court reasoned 

that asbestos-containing material could be visible within pores or cracks. Id. Therefore, 

the court concluded, the contract required that the pores and cracks of the porous 

06-5007 8
surfaces of the Geneva Towers be cleaned of all visible traces of asbestos. Id., slip op.

at 13. 

Turning to the question of what asbestos-containing “debris or residue” meant, 

the Court of Federal Claims found that there was no definition in the contract. Industry 

standards clarified, however, that any residue, dust, or debris found during an 

inspection was assumed to contain asbestos. Id. Thus, the court reasoned, TEG was

required to remove any residue, dust, or debris found. The court concluded that the 

contract required that TEG remove all material containing more than 1% asbestos and 

that TEG remove all visible traces of asbestos, including materials recessed in pores or

cracks. Accordingly, the court granted summary judgment in favor of the government 

on the abatement standard issue. Id., slip op. at 16. 

Addressing the issue of whether TEG’s work plan or the contract specifications 

governed TEG’s performance, the Court of Federal 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 pointed out that one of the reasons for requiring 

strict compliance with contract specifications is to prevent low bidders from using 

substandard materials. Id., slip op. at 22. The court also pointed out that the 

government awards contracts to those bidders whose bid “conforms to the 

specification.” Id., slip op. at 23. The court found that generally the purpose of contract

work plans is to enable the government to determine whether or not the contractor is

able to perform. Id., slip op. at 24 (citing John Cibinic, Jr. & Ralph C. Nash, Jr.,

Formation of Government Contracts 405-06 (3d ed. 1995)). Further, the court noted 

that when sealed bids are used, as was the case with the Geneva Towers contract, the

06-5007 9
contract cannot be modified after bids are received; the only criterion for contract award 

other than the bid’s responsiveness to the specifications 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 conflicting portions of the contract specifications with TEG’s

work plan, then it would have been violating these rules governing contracts made 

through the solicitation of sealed bids and the contract would be void. Id., slip op. at 25. 

The court concluded that the work plan was not incorporated into the contract. Id., slip

op. at 25-26. The court therefore denied TEG’s motion for summary judgment and 

granted the government’s cross-motion on the work plan issue. Id., slip op. at 26. 

Finally, the Court of Federal Claims granted summary judgment in favor of TEG 

on its claim, in Count Three of the complaint, that it was entitled to an equitable 

adjustment in the contract price by reason of having removed excessive quantities of

asbestos. As seen, the government has not appealed the court’s grant of summary 

judgment on the “[e]xcess quantities” claim. TEG appeals the court’s grant of summary

judgment in favor of the government on the breach of contract claims in Counts One 

and Two of the complaint. We have jurisdiction over TEG’s appeal pursuant to 28 

U.S.C. § 1295(a)(3). 

DISCUSSION 

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. Castle v. United States, 301 F.3d 1328, 1336 (Fed. Cir.

2002). We review the grant of summary judgment by the Court of Federal Claims de 

06-5007 10
novo. Barron Bancshares, Inc. v. United States, 366 F.3d 1360, 1368 (Fed. Cir. 2004). 

Contract interpretation is a question of law, which we also review de novo. Id.

II. 

On appeal, TEG argues that the Court of Federal Claims erred in holding that

HUD applied the proper cleaning standard for 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 defined in the contract, but that from common 

usage dictionaries it is apparent that that they include only “[t]he outer-face, outside, or

exterior boundary of a thing; outermost or uppermost layer or area.” Appellant’s Br. at 

21 (quoting a definition found in Random House Webster’s College Dictionary 1314 (2d 

ed. 1999)). TEG argues that the pores and cracks are not part of the “surface” because 

they are not on the “outer-face” of the concrete. Industry 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 the pores and cracks of the concrete of the 

buildings was not “debris” or “residue” on a “surface” and therefore not required to be 

removed. 

TEG supports its argument by pointing to what it says was HUD’s own

interpretation of the contract. First, TEG argues that even HUD recognized that its 

Observation Services Contractor, Kellco Environmental Services, Inc. (“Kellco”), which 

was responsible for observing the abatement process, enforced the visibility standard of 

Section 2080, 4.3C in a “fanatical” way by requiring abatement of asbestos in the pores

and cracks. TEG points to an email authored by a HUD employee in which Kellco is

06-5007 11
described as having interpreted “what the contract 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 2080, 4.3C. ATC stated in the letter that 

“[r]esidue recessed within the pores and cracks of the concrete substrate is not

expected to be extracted.” Third, TEG draws attention to a letter from HUD stating that 

HUD had gone beyond federal standards for asbestos abatement on the Geneva

Towers project as well as deposition testimony to the same effect. In addition, TEG 

claims that the court erred by failing to consider several pieces of evidence including the 

ATC opinion and an expert opinion rendered by Andrew F. Oberta, the Task Group 

Chairman of the ASTM Committee on Asbestos Management, to the effect that it would 

be unreasonable to require a contractor to “chisel or grind away concrete to extract . . . 

imbedded material even if it was asbestos containing material.” Mr. Oberta further 

opined that he did not believe that the contract required abatement beyond industry 

standards. 

TEG also argues that the government interfered with its work plan, which was a 

part of the contract. In support of its argument, TEG points out that the work plan was 

physically attached by HUD to the contract. Further, TEG contends that under Federal 

Acquisition Regulation (“FAR”) § 14.201-1(c), see 48 C.F.R. § 14.201-1(c) (2006), the 

work plan, which is a representation or a statement of a bidder, was incorporated 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 Claims erred, TEG argues, in 

finding that the work plan merely required that the contractor provide certain information 

06-5007 12
because the contract itself required that the work plan comprise “a detailed plan for

engineering control and the work procedures to be used.” The Court of Federal 

Claims’s reliance on the Cibinic and Nash government contracts treatise was 

misplaced, TEG contends, because the section cited by the court pertained to the 

determination of a contractor’s responsibility and not its work plan. 

The government defends the Court of Federal Claims’s interpretation of the 

contract’s provisions concerning the level of abatement, arguing that the contract’s plain

language requires abatement of all traces of visible debris and residue. In support of 

this interpretation, the government notes that Section 2080, 4.3C was amended to 

exclude any distinction between the abatement standard for friable and non-friable 

materials. The revised section eliminated provisions that allowed non-friable materials 

to remain in pores and cracks and instead applied a visibility standard to all asbestoscontaining materials. The government argues that even if we accept TEG’s arguments

concerning the abatement of asbestos on “surfaces,” the contract requires abatement of 

all asbestos that has been applied to surfaces, including asbestos that seeps into pores 

and cracks after application to the surfaces. The evidence presented by TEG

concerning trade usage and custom should be disregarded, the government urges,

because it is not directed to interpreting a particular term, but rather the abatement 

standard as a whole. Additionally, the government contends that trade usage cannot 

create an ambiguity in an otherwise unambiguous contract. The government also 

argues that the court did not err by not considering the ATC opinion and Mr. Oberta’s

opinion because these sources could not be used to contradict the plain meaning of the 

contract. 

06-5007 13
The government argues that the Court of Federal Claims correctly found that the 

work plan was not incorporated into the contract. The government notes that in order

for a document to be incorporated into a contract, there must be an express reference in 

the incorporating document. Although sections J and K of the contract incorporated 

certain materials by reference, they did not incorporate the work plan, the government

notes. The work plan, the government 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 never approved the work plan. Even if

the work plan had been approved, the government contends, that approval would not

have waived compliance with the contract specifications. The government argues that if 

we were to hold that the work plan trumped the contract itself, we would be allowing

bidders to underbid competitors and then use non-conforming sub-par materials and 

procedures. The government also argues that FAR §§ 14.201-1(c) and 1552.211-74, 

which were cited by TEG for the proposition that external documents 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 government urges that TEG’s efforts to have parts of its 

work plan incorporated into the contract through the VECP show that the work plan was

not incorporated into the contract; it would 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 contract, “‘the language of [the] contract must be given that 

meaning that would be derived from the contract by a reasonably intelligent person 

acquainted with the contemporaneous circumstances.’” Metric Constructors, Inc. v.

06-5007 14
Nat’l Aeronatics & Space 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 the contract’s language. Coast Fed. Bank, FSB v. United 

States, 323 F.3d 1035, 1038 (Fed. Cir. 2003) (en banc). When the contract’s language 

is unambiguous it must be given its “plain and ordinary” meaning and the court may not 

look to extrinsic evidence to interpret its provisions. Id. at 1040; McAbee Constr., 97 

F.3d at 1435. Although extrinsic evidence may not be used to interpret an 

unambiguous contract provision, we have looked to it to confirm that the parties 

intended for the term to have its plain and ordinary meaning. See Coast Fed. Bank, 323 

F.3d at 1040 (looking to contemporaneous evidence of the parties’ understanding and 

“not[ing] that much of it is consistent with the [contract’s] plain meaning”). When a 

provision in a contract is susceptible to more than one reasonable interpretation, it is 

ambiguous, Edward R. Marden Corp. v. United States, 803 F.2d 701, 705 (Fed. Cir.

1986), and we may then resort to extrinsic evidence to resolve the ambiguity, see

McAbee, 97 F.3d at 1435. We utilize extrinsic evidence to derive a construction that

effectuates the parties’ intent at the time they executed the contract. See Dureiko v.

United States, 209 F.3d 1345, 1356 (Fed. Cir. 2000). 

Even when a contract is unambiguous, it may be appropriate to turn to one 

common form of extrinsic evidence—evidence of trade practice and custom. Hunt 

Constr. Group, Inc. v. United States, 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 different from its ordinary meaning—even where 

the contract otherwise appears unambiguous—because the ‘parties to a contract . . . 

06-5007 15
can be their own lexicographers and . . . trade practice may serve that lexicographic 

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 contract was not reasonably susceptible of differing 

interpretations at the time of contracting.” Metric Constructors, 169 F.3d at 752. 

The parol evidence rule provides a further limitation on the use of extrinsic

evidence 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 parties as an expression of their final understanding.” Barron 

Bancshares, 366 F.3d at 1375 (citation and quotation marks omitted). However, 

extrinsic evidence such as prior agreements and documents will be considered part of a

contract when they are incorporated into the contract. See S. Cal. Fed. Sav. & Loan

Ass’n v. United States, 422 F.3d 1319, 1330 (Fed. Cir. 2005). One common way to 

incorporate extrinsic evidence is through an integration clause that expressly 

incorporates the extrinsic evidence. Id.; McAbee Constr. v. United States, 97 F.3d 

1431, 1434 (Fed. Cir. 1996). Although the parol evidence rule bars the use of extrinsic

evidence to supplement or modify a written agreement, the rule does not bar the use of 

extrinsic evidence to interpret the terms of a contract when the plain and ordinary

meaning is not clear from the contract itself. See Restatement (Second) Contracts 

§ 215 cmt. b (1981); 6-26 Corbin on Contracts § 579 (2006); Cibinic, Nash & Nagle, 

supra, at 199. Armed with these rules, we turn to the issues TEG raises on appeal. 

06-5007 16
IV. 

We consider first TEG’s claim that the Court of Federal Claims erred in holding 

that it was required to clean debris and residue from pores and cracks of the Geneva 

Towers under the contract’s abatement standard. As seen, the provision of the contract 

containing the abatement standard for the Geneva Towers project, Section 2080, 4.3C,

provided: 

Asbestos-containing materials applied to concrete, masonry, 

wood and nonporous surfaces, including, but not limited to, 

steel structural members (decks, beams and columns), pipes

and tanks, shall be cleaned to a degree that no traces of 

debris or residue are visible by the Observation Services 

Contractor. 

The Court of Federal Claims correctly identified two issues raised by the abatement

standard. First, we must determine whether this standard requires the removal of

asbestos within pores and cracks. Second, we must determine what asbestoscontaining “debris or residue” means. 

Based upon the plain language of the abatement standard, we conclude that the 

Court of Federal Claims did not err in ruling that TEG was required to remove asbestos

within pores and cracks. The plain language of the contract indicates that it requires

abatement to the point that there is no “debris or residue . . . visible.” Thus, to the 

extent that “debris or residue” was “visible” within the pores and cracks of concrete or 

other porous surfaces, it had to be abated under the contract. However, if the “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 ordinary meaning of the 

abatement standard required TEG to remove visible asbestos within the pores and 

cracks of the towers. 

06-5007 17
As we did in Coast Federal Bank, we turn to extrinsic evidence, specifically, 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 specifications provided for two different abatement standards 

for friable and non-friable materials. As far as friable materials were concerned, the 

specifications expressly stated that materials must be cleaned “to a degree that no 

traces of debris or residue are visible.” In contrast, the specifications provided that nonfriable materials “shall be cleaned 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 specifications expressly allowed 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 standard, friable or non-friable, would apply and that this was

an important difference. TEG’s representative noted, “It’s a significant difference, 

because on one it has to be clean 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 our view, 

the conference call demonstrates that TEG understood the visibility standard, which 

was eventually adopted for all asbestos abatement under the contract, to require that no 

asbestos remain in the pores and cracks. 

We find unpersuasive TEG’s argument that the Court of Federal Claims erred by 

failing to consider other pieces of evidence, including ATC’s letter and Mr. Oberta’s

expert opinion. These documents could be considered evidence of trade practice and 

custom, which we have found appropriate to consider in some cases even when a 

contract is unambiguous. See Hunt Constr., 281 F.3d at 1373. However, neither of 

06-5007 18
these documents aids in the interpretation of a term of art in the asbestos abatement 

field. Rather each document offers an alternate explanation of the contract’s abatement

standard generally. Under Hunt Construction, it is not permissible to use these 

extrinsic sources to impart ambiguity into an otherwise unambiguous contract—they 

may only be used to interpret a term of art. Id. at 1369; see also Metric Constructors, 

169 F.3d at 752. Given the clarity of the meaning from the language and the parties’

pre-contractual negotiations, none of the extrinsic evidence cited by TEG carries weight. 

We are also not swayed by TEG’s argument that Section 2080, 4.3C requires 

only that “surfaces” be abated and that “surfaces” do 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 Webster’s College Dictionary 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 concrete and not the pores and

cracks. The definition upon which TEG relies does not expressly state 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 Claims 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 TEG’s interpretation. TEG-Paradigm, slip op. at 13. We

also find that TEG’s “surfaces” argument is weak in comparison to the evidence of the 

parties’ understanding of the language in the contract as demonstrated by the 

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conference call. Thus, we believe that the strict visibility abatement standard is more in 

line with the parties’ contemporaneous understanding of Section 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 Court of Federal Claims’s holding 

that, under the contract, any dust or powder found on inspection was assumed to be 

asbestos-containing “debris or residue” that had to be abated. “Debris” and “residue”

are not defined in the contract. As previously noted, evidence of trade custom may be 

used to interpret terms of art such as “debris” and “residue.” See Hunt Constr., 281 

F.3d at 1373. The ASTM standard for asbestos abatement provides that debris and 

residue is “assumed” 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” found is assumed to 

contain asbestos. Id.. Thus, we affirm the Court of Federal Claims’s holding that the

contract required TEG to clean all visible powder and dust found on inspection,

including powder and dust in cracks and pores. 

V. 

Turning to the work plan issue, we hold that the Court of Federal Claims correctly 

determined that the contract specifications, rather than TEG’s work plan, governed the 

terms of contract performance. The government required a work plan conforming to the 

contract specifications before it accepted TEG’s bid. Therefore, the work plan 

comprises a piece of extrinsic evidence pre-dating the formation of the contract. HUD 

required that bidders submit a work plan stating the details of the bidder’s engineering 

controls and work procedures. Nowhere does the contract state that the work plan is to 

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be integrated into the contract and supersede the contract specifications. In contrast to 

the work plan, several sections of the FAR are incorporated by Section F of the

specifications.4

 Additionally, Sections I, J, and K to the contract list not only numerous

sections of the FAR that are incorporated by reference, but also several other 

documents relating to payment bonds, performance bonds, and wage rates. Further, 

we find unpersuasive TEG’s argument that the work plan was incorporated into the 

contract merely by virtue of the fact that the plan was physically attached 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 particular copy is signed. . . . Rather, the 

documents must clearly indicate that the parties intended that they be considered

together as a single contract.”) (internal citations 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 facts of this case, which otherwise show 

that the work plan was not incorporated. Given that the contract expressly incorporates

certain extrinsic documents, but does not incorporate the work plan, we find that the 

work plan is an extrinsic document that cannot be used to contradict or modify the 

contract under the parol evidence rule. See S. Cal. Fed. Sav. & Loan, 422 F.3d at

1330. 

 4 For example, Section F incorporates FAR sections 52.252-2 (“Clauses 

Incorporated by Reference”), 52.242-15 (“Stop-Work Order”), 52.242-17 (“Government 

Delay of Work”), and 52.211-12 (“Liquidated Damages—Supplies, Services, or 

Research and Development”). See 48 C.F.R. §§ 52.252-2, 52.242-15, 52.242-17, 

52.211-12.

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We also find that there is no exception to the parol evidence rule for work plans 

in government contracts. The Court of Federal Claims correctly characterized TEG’s

work plan not as part of the contract, but rather as a pre-award submission used to aid 

the government in assessing TEG’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 Cibinic & Nash,

Formation of Government Contracts, supra, at 404-06. Thus, the government requires 

pre-award submissions to assess whether the contractor will be able to perform the 

contract. Pre-award submissions, such as a work plan, are not part of the contract 

unless the contract specifically provides that they are to be incorporated. Examination 

of the contract at issue confirms that TEG’s work plan was a pre-award submission that 

did not override the contract specifications. Section C of the contract specifications

requires that the contractor submit a “work plan” containing information such as the

names and contact information of the key personnel who would perform the contract, a 

detailed description of pollution control methods, and various safety and contingency

plans. Again, nowhere in the contract is it stated that the contract incorporates the work

plan. Thus, the government is correct that TEG’s work plan was not part of the contract, 

but rather a piece of information that was used by the government to assess TEG’s

ability to perform in the pre-award stage. 

Contrary to TEG’s arguments, FAR sections 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 format that must be used “to the maximum

practicable extent” for certain types of contracts. 48 C.F.R. § 14.201-1 (2006). Section 

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14.201-1(c) states that acceptance of a bid “incorporates Section K, Representations, 

certifications, and other statements of bidders, in the resultant contract even though not

physically attached.” Section K of the contract at issue incorporates several sections of 

the FAR that require particular submissions, e.g., taxpayer identification, 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.

However, the work plan is contained in Section C of the contract and is therefore not a 

Section K representation, certification, or statement. We find TEG’s arguments under 

FAR 1552.211-74(c) equally unpersuasive. FAR 1552.211-74(c) sets forth procedures

for stopping work when a work plan is not approved.5

 It does not state that work plans

are incorporated into government contracts. 

 5 The contract provision contemplated by FAR 1552.211-74 states as 

follows: 

The Contractor shall acknowledge receipt of each 

work assignment by returning to the Contracting Officer a 

signed copy of the work assignment within __ calendar days 

after its receipt. The Contractor shall begin work 

immediately upon receipt of a work assignment. Within __ 

calendar days after receipt of a work assignment, the 

Contractor shall submit __ copies of a work plan to the 

Project Officer and __ copies to the Contracting Officer. The 

work plan shall include a detailed technical and staffing plan 

and a detailed cost estimate. Within __ calendar days after 

recipt [sic] of the work plan, the Contracting Officer will 

provide written approval or disapproval of it to the 

Contractor. If the Contractor has not received approval on a 

work plan within __ calendar days after its submission, the 

Contractor shall stop work on that work assignment. Also, if

the Contracting Officer disapproves a work plan, the 

Contractor shall stop work until the problem causing the 

disapproval is resolved. In either case, the Contractor shall 

resume work only when the Contracting Officer finally 

approves the work plan. 

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Finally, our holding that work plans are not incorporated into government 

contracts is in accordance with the general principle that the government 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 the right to 

insist on performance in strict compliance with the contract specifications and may

require a contractor to correct nonconforming work.”). This principle prevents 

contractors from submitting low bids and then substituting less-expensive materials for 

those required by the specification. Cibinic, Nash & Nagle, supra, at 815. 

CONCLUSION 

For the foregoing reasons, we therefore affirm the decision of the Court of 

Federal Claims granting summary 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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