Opinion ID: 749857
Heading Depth: 2
Heading Rank: 5

Heading: The Pay Factor Claim

Text: 59 The contract required that the subbase, base material, hot mix and open graded friction materials would be subjected to gradation tests. During gradation testing, the material is passed through a stack of progressively smaller sieves. The amount passing through each sieve is then measured to determine the relative composition of the material. The specification further specifies the percentage mixture, plus or minus an allowable deviation, for each sieve size. 60 The contractor's pay for the material was a function of the gradation test results. The higher the statistical quality level, as measured by the gradation test results, the higher the contractor's per unit price. The per unit price was arrived at by multiplying a base rate by a so-called pay factor. The pay factor was linked to the statistical quality of the material and ranged from a low of 0.75, resulting in a 25 % reduction in price, to a high of 1.05, yielding a 5 % premium for the contractor. The manner in which the pay factor was arrived at is the source of the present claim. 61 In practice, the FHWA performed gradation tests of five sublots taken from a given lot of material. For each sublot, the FHWA computed a pay factor for each sieve size. The pay factors for each sieve size were then averaged to produce the arithmetic mean for the five sublots. To determine the overall pay factor for the lot, the FHWA not surprisingly selected the lowest of the mean pay factors. Brown objected to this methodology. Instead, Brown thought that the mean pay factors should be further averaged to produce an average pay factor, which would more accurately represent the overall quality of the lot. The FHWA responded by asserting that it does not make engineering sense to average the pay factors because each is a separate statistical measurement of quality. 62 The Board concluded that the contract was patently ambiguous on this point, and that Brown's failure to inquire before performing precluded his requested relief. Alternatively, the Board held that Brown could not prevail even if the contract was only latently ambiguous because Brown did not rely on its interpretation when bidding the contract. 63 On appeal Brown argues that the Board improperly relied on an old version of the Government's specification to create the patent ambiguity. This older version did use more than one pay factor--one for the deviation and another for the range. Brown, however, fails to address the other independent basis for the Board's decision--lack of reliance. Brown admits that the contract permits a separate pay factor for each sieve and further that only one pay factor is used for each lot. Since the contract is silent, according to Brown, on the method of how the single pay factor is produced there is a latent, if not patent, ambiguity. In order for Brown to prevail on its claim it must have relied on its interpretation when bidding the contract. See Fruin-Colnon, 912 F.2d at 1430 (This rule of law is well settled.). And yet the Board found that it did not. This finding is virtually unassailable since it is based on an assessment of Mr. Brown's credibility. See Planning Research Corp. v. United States, 971 F.2d 736, 741 (Fed.Cir.1992). Accordingly, we affirm the Board's decision on this issue.