Opinion ID: 506325
Heading Depth: 2
Heading Rank: 2

Heading: GSAI's arguments

Text: 14 GSAI says [t]he text of the contract ... requires the interpretation that the government agreed to exercise renewal options annually, provided funds were available because Article XVIII of the contract makes the government's obligation under this contract ... contingent upon the availability of appropriated funds and further states that [n]o legal liability shall arise unless and until funds are made available to the Contracting Officer. According to GSAI, [i]f, as the trial court argued, there was no obligation, even in the event of available funds, this language would be superfluous.... 15 GSAI further argues that interpreting Provision 102 to allow total discretion to renew would 1) violate the order of precedence clause of the contract, 2) contravene the rule that contract provisions are to be read together and harmonized and 3) ignore the rule that ambiguous clauses be construed contra preferendum. 16 GSAI reads too much into Article XVIII, which is a limitation on the government's liability. GSAI's interpretation would turn a passive exculpatory provision into an affirmative obligation and would twist the clause beyond recognition. That provision, a virtually verbatim transfer from the Code of Federal Regulations, does no more than shield the government from liability when it fails to secure funding. GSAI's attempt to use it as a sword is without merit. 17 GSAI's order of precedence and harmonization arguments erroneously assume that the government's interpretation of Provision 102 conflicts with Article XVIII, and its contra preferendum  argument fails because Provision 102 is unambiguous and GSAI's reading is unreasonable. See United States v. Turner Constr. Co., 819 F.2d 283, 286 (Fed.Cir.1987) (Contra preferendum applies when a contractor's reading of an ambiguous contract provision is reasonable in itself.). 18 GSAI's citation of Municipal Leasing Corp. v. United States, 1 Cl.Ct. 771 (1983), Manloading & Management Assoc. v. United States, 461 F.2d 1299, 198 Ct.Cl. 628 (1972), and similar cases is without effect. Those cases involved actions of the government independent of the wording of the involved contracts, which actions were found to have bound the government to exercise its renewal option. No such actions are present here. 19 That title to the equipment would have vested if the government had exercised its renewal rights and made payments for sixty months, and that the equipment was customized, are factors that cannot convert what is a true contract option into something else. Interpreting the present contract to give effect to the renewal option impedes no ascertainable intent of the parties. See Alvin Ltd. v. United States Postal Service, 816 F.2d 1562, 1565 (Fed.Cir.1987). Whether it would have been a good idea to write a contract obligating the government to renew when funds became available is irrelevant. This is not such a contract.