Source: http://www.christophllc.com/articles/how-to-interpret-a-government-contract/
Timestamp: 2019-04-20 19:15:19+00:00

Document:
Do you understand every word and clause in your government contract? Hire an expert to give you valuable insights and save you the time, cost, and frustration of big problems in the future! Contact Christoph@ChristophLLC.com for an expert analysis of your government contracts.
The paramount goal of contract interpretation is to find a single interpretation that accurately reflects the intent of the parties. Once that intent is determined, courts will generally hold the parties to it. See Firestone Tire & Rubber Co. v. United States, 444 F.2d 547 (Ct. Cl. 1971). This sounds simple but can be complicated by shoddy contract drafting and poor communication. Vague contracts reduce efficiency, invite costly litigation, and sour the Government-contractor relationship. Eliminate ambiguity and avoid confusion by crafting clear solicitations and contracts. Learn the basic rules of contract interpretation and apply them to acquisitions.
Courts look to intrinsic evidence first, which includes everything within the four corners of the contract itself. In contrast, extrinsic evidence concerns external factors. Extrinsic evidence involves the circumstances surrounding the contract, e.g., pre-award negotiations, prior course of dealing, or industry standards. Generally, intrinsic evidence is preferred to extrinsic evidence. Courts will only consider extrinsic evidence if the intent of the parties cannot be determined from the contract itself (using intrinsic evidence). See Coast Federal Bank, FSB v. United States, 323 F.3d 1035 (Fed. Cir. 2003). This policy encourages parties to draft contracts that stand on their own merit, rather than rely on outside information.
Words derive meaning from context. The same word has different meanings depending on when, where, and how it is used. For this reason, contracts often include a “Definitions” section to clarify key words. Do not neglect the “Definitions” section; it is vital to the contract. For acquisition-related terms, a common practice is to fix the meaning of the word as defined in FAR 2.101 or another section. Consider carefully the implications of each definition and always remember that context matters.
Beyond specific definitions in the contract, courts may use outside sources to define key terms. The Restatement (Second) of Contracts states in section 202(3) that “Unless a different intention is manifested, [where] language has a general meaning it is interpreted in accordance with that meaning [and] technical terms and words of art are given their technical meaning when used in a transaction within their technical field.” As such, courts rely on two key sources of information for words not defined in the contract.
Authoritative dictionaries or “common usage” are the first source. Plain meaning or common usage is strong evidence of the intent of the parties. See Ahrens v. United States, 62 Fed. Cl. 664 (2004). Alternatively, if the term is not defined in the contract and it is clearly not used in its common context, courts will consider it to be a “technical” term. In that case, courts will use extrinsic evidence to select an appropriate technical definition. See Western States Constr. Co. v. United States, 26 Cl. Ct. 818 (1992). This could include trade journals, industry practice, or the testimony of technical experts in the field.
A contract must be read as a whole. When applying this axiom, courts use two cardinal principles: (1) parts of a contract must be read together and harmonized if possible and (2) preference is given to an interpretation which gives effect to all terms and leaves no clause meaningless. See NVT Techs., Inc. v. United States, 370 F.3d 1153 (Fed. Cir. 2004). This means the winning interpretation usually refers to multiple sections of the contract, rather than relying on one portion and ignoring others.
Courts assume that if the parties include language in the contract, it was included for a reason. Arguments that assume that a portion of the contract (such as the “Definitions” section) is meaningless will fall upon deaf ears. Courts will consider all parts of the contract relevant and are reluctant to ignore entire sections. See Big Chief Drilling Co. v. United States, 26 Cl. Ct 1276 (1992).
Common law precedent developed a policy to encourage the drafter of the contract to do a good job—confusing or inconsistent portions are interpreted against the drafter. In this way, sloppy contract writers are punished by their own mistakes. As the Restatement (Second) of Contracts, section 206 puts it, “that meaning is generally preferred which operates against the party who supplies the words.” The legal concept is called contra proferentem, which is Latin for “against the drafter.” This doctrine holds the drafter accountable for errors, as long as the interpretation of the non-drafting party is reasonable. See Oenga v. United States, 96 Fed. Cl. 479 (2010).
The rules of contract interpretation discussed above share an important similarity. They encourage everyone to write and negotiate contracts in a careful and collaborative manner. Contracts are meant to represent a “meeting of the minds” between the signing parties. There should be meaningful discussions while developing contracts and both parties should be comfortable and familiar with the final product. Discover and resolve disputes, mistakes, and inconsistencies as early as possible to avoid future problems.
CHRISTOPH MLINARCHIK, JD, CFCM, PMP is an attorney, expert witness, professional instructor, consultant, and author of 50+ publications on contract law and acquisitions. As owner of www.ChristophLLC.com, he teaches courses and advises on contracting, source selections, proposals, bid protests, and Government contract law to federal, military, and private industry professionals nationwide—from novices to C-level executives. Christoph was a senior contracting officer for the Department of Defense and has diverse Defense contracting experience across the Air Force, Navy, Pentagon, and Office of the Secretary of Defense. He also previously served as an Air Force JAG acquisitions attorney. Christoph was recently honored with the “Top Professionals Under 40” award by National Contract Management Association.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.