Court Opinion

ID: 4256267
Source: CourtListenerOpinion
Date Created: 2018-03-20 16:00:32.715657+00
Date Added: 2024-06-11T07:48:57.705829
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

      MERIDIAN ENGINEERING COMPANY,
              Plaintiff-Appellant

                          v.

                  UNITED STATES,
                  Defendant-Appellee
                ______________________

                      2017-1584
                ______________________

    Appeal from the United States Court of Federal
Claims in No. 1:11-cv-00492-SGB, Chief Judge Susan G.
Braden.
                ______________________

               Decided: March 20, 2018
               ______________________

   MARIA L. PANICHELLI, Cohen Seglias Pallas Greenhall
& Furman PC, Philadelphia, PA, argued for plaintiff-
appellant. Also represented by MICHAEL H. PAYNE.

    ERIC LAUFGRABEN, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, argued for defendant-appellee. Also
represented by CHAD A. READLER, ROBERT E. KIRSCHMAN,
JR., ALLISON KIDD-MILLER; JOHN FRANCIS BAZAN, SR.,
United States Army Corps of Engineers, Los Angeles, CA.
                ______________________
2                      MERIDIAN ENG’G CO.   v. UNITED STATES

Before PROST, Chief Judge, REYNA and WALLACH, Circuit
                       Judges.
WALLACH, Circuit Judge.
     Meridian Engineering Company (“Meridian”) appeals
two final decisions of the U.S. Court of Federal Claims
determining, inter alia, that (1) Meridian did not meet
standards of proof to show that the United States (“Gov-
ernment”) breached certain contractual obligations and
its duty of good faith and fair dealing in a dispute under
the Contract Disputes Act, 41 U.S.C. §§ 601−613 (2006)
(“CDA”) related to the construction of a flood control
project in Nogales, Arizona, see Meridian Eng’g Co. v.
United States (Meridian I), 122 Fed. Cl. 381, 384, 400
n.25, 426 (2015); J.A. 3000−53 (Second Amended Com-
plaint), and (2) Meridian was owed certain monies for
equitable adjustment and interest on the payments
running from the date Meridian submitted its claim,
January 7, 2014, see Meridian Eng’g Co. v. United States
(Meridian II), 130 Fed. Cl. 147, 172 (2016). We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(3) (2012). We
affirm-in-part, vacate-in-part, reverse-in-part, and re-
mand.
                      BACKGROUND 1
    In 2007, Meridian entered into a contract with the
Government to construct flood control structures, referred
to as the Chula Vista Project. Meridian I, 122 Fed. Cl. at
385−86. The Project contemplated construction of several
concrete channels, relocation of a sewer line, and dewater-
ing and water diversion. See J.A. 1044−627 (Contract).

    1   The undisputed facts and procedural history of
this case are extensive and are described in full in Merid-
ian I. See 122 Fed. Cl. at 385−97. We provide here only a
brief summary of the relevant facts and procedural histo-
ry necessary to resolve this appeal.
MERIDIAN ENG’G CO.   v. UNITED STATES                    3

After commencing the Project, Meridian encountered a
series of problems relating primarily to what it deemed
“subsurface organic/unsuitable material,” specifically, “a
layer of dripping saturated dark clay material under
which a clean layer of sand is producing water” that had
“the potential for serious structural damage.” J.A. 1810;
see Meridian I, 122 Fed. Cl. at 388 (describing “softer-
than-anticipated soils”), 390−92 (describing modifications
pursuant to discovery of “saturated soils”). Meridian
notified the Government about these problems, and the
Government issued several Contract modifications in
response. See Meridian I, 122 Fed. Cl. at 388−90 (describ-
ing modifications for increase in allotted funds for larger
pipe size, addition of a reinforced concrete access ramp,
investigation of soil properties, remediation of saturated
soils, and additional sheet piling). Eventually, the Gov-
ernment directed Meridian to suspend work on the Pro-
ject in January 2009 following a series of structural
failures, see J.A. 3127−28, and, while minor work contin-
ued, the Government ultimately terminated the Project
following a September 2009 final inspection of the Project
site, see Meridian I, 122 Fed. Cl. at 394−96.
     Following the parties’ disagreements over payment
owed to Meridian, Meridian filed suit in the Court of
Federal Claims for breach of contract, breach of the duty
of good faith and fair dealing, and a violation of the CDA.
See J.A. 127, 3000−53. The Government conceded liabil-
ity for costs relating to three counts of Meridian’s Second
Amended Complaint (Counts VII−IX), which were the
subject of a separate damages trial. See J.A. 3032−36
(Count VII (Suspension of Work), Count VIII (Channel
Fill), Count IX (Interim Protection)). See generally Merid-
ian II, 130 Fed. Cl. 147. Because the Government now
4                      MERIDIAN ENG’G CO.   v. UNITED STATES

concedes the only issue with respect to Meridian II, 2 the
remainder of this opinion addresses determinations from
Meridian I.
                       DISCUSSION
                  I. Standard of Review
    We review the Court of Federal Claims’ legal conclu-
sions de novo and its factual findings for clear error. See
John R. Sand & Gravel Co. v. United States, 457 F.3d
1345, 1353 (Fed. Cir. 2006), aff’d 552 U.S. 130 (2008). “A
finding may be held clearly erroneous when the appellate
court is left with a definite and firm conviction that a
mistake has been committed.” Ind. Mich. Power Co. v.
United States, 422 F.3d 1369, 1373 (Fed. Cir. 2005) (in-
ternal quotation marks, ellipsis, and citation omitted).
                     II. CDA Claims
    Meridian asserts that the Court of Federal Claims
erred when it “reasoned that only Meridian’s breach of
contract and breach of good faith and fair dealing claims

    2   Both parties agree that the Court of Federal
Claims erred in setting the date from which interest
accrued at January 7, 2014. See Appellant’s Br. 61−62;
Appellee’s Br. 60. Interest accrues from the date that the
contracting officer (“CO”) receives a claim. See 41 U.S.C.
§ 7109(a)(1) (2012) (“Interest on an amount found due a
contractor on a claim shall be paid to the contractor for
the period beginning with the date the [CO] receives the
contractor’s claim . . . until the date of payment of the
claim.”). Here, accrual commenced on January 7, 2011.
See J.A. 2511. We reverse Meridian II with respect to the
date of interest accrual with instructions for the court to
enter the correct accrual date as January 7, 2011, and
recalculate the amount of interest in accordance with the
correct accrual date.
MERIDIAN ENG’G CO.   v. UNITED STATES                     5

presented a viable cause of action,” because “Meridian’s
CDA claims should have been analyzed under the frame-
work contemplated by the CDA, and not under the rubric
of a ‘breach’ claim.” Appellant’s Br. 23, 24 (capitalization
modified). However, Meridian does not explain the alter-
nate CDA framework to which it refers, nor does it state
how analysis under a different hypothetical framework
would result in a finding in its favor. See id. at 22−25
(stating only that the use of the breach of contract stand-
ard “skewed” the Court of Federal Claims’ analysis).
     “The[] requirements of the CDA are jurisdictional pre-
requisites to any appeal.” M. Maropakis Carpentry, Inc.
v. United States, 609 F.3d 1323, 1328 (Fed. Cir. 2010)
(citation omitted); see K-Con Bldg. Sys., Inc. v. United
States, 778 F.3d 1000, 1004 (Fed. Cir. 2015) (reviewing de
novo whether the Court of Federal Claims had jurisdic-
tion under the CDA). Pursuant to the CDA, a party must
submit a “valid claim,” which is defined by regulation as a
demand seeking “as a matter of right, the payment of
money in a sum certain, the adjustment or interpretation
of contract terms, or other relief arising under or relating
to the contract.” M. Maropakis, 609 F.3d at 1327 (quoting
48 C.F.R. § 33.201 3). Thus, the CDA itself does not pro-
vide a cause of action to which money damages may
accrue; it is the claim asserted pursuant to the CDA that
is the source of potential damages and review by the trier
of fact. See Northrop Grumman Computing Sys., Inc. v.
United States, 709 F.3d 1107, 1112 (Fed. Cir. 2013) (ex-
plaining the prerequisites for a valid claim brought under
the CDA, which is a jurisdictional requirement to obtain
relief). Therefore, the Court of Federal Claims did not err

   3    Recodified at Federal Acquisition Regulation
(“FAR”) 2.101 (2002); see Federal Acquisition Regulation;
Definition of ‘Claim’ and Terms Relating to Termination,
67 Fed. Reg. 43,513, 43,513 (June 27, 2002).
6                       MERIDIAN ENG’G CO.   v. UNITED STATES

in finding it had jurisdiction under the CDA to evaluate
Meridian’s breach of contract claims.
III. The Court of Federal Claims Did Not Err in Its Differ-
      ing Site Conditions Analysis (Counts II and V)
    The Court of Federal Claims found that Meridian did
not offer sufficient evidence to satisfy its Type I differing
site condition (“DSC”) claim alleging that in the channel
and sewer line areas of the project the unexpected condi-
tions of “soupy” soil caused delays and imposed unantici-
pated costs. 4 Meridian I, 122 Fed. Cl. at 403; see id. at
408−09. Meridian posits several errors in the Court of
Federal Claims’ analysis. 5 See Appellant’s Br. 27−40.
After articulating the applicable legal standard, we ad-
dress each argument in turn.

    4   Meridian’s DSC claim originates from the stand-
ard “differing site conditions” clause located in the Con-
tract pursuant to FAR 52.236-2(a) (2017).                See
J.A. 1150−51.
    5   For example, Meridian argues that the Court of
Federal Claims only addressed Count V’s DSC claim with
respect to the sewer relocation work but “wholly failed to
address Meridian’s Count II [DSC] claim” related to the
area of construction around the concrete channels. Appel-
lant’s Br. 40 (capitalization modified). Meridian is incor-
rect. The Court of Federal Claims noted at the start of its
DSC analysis that, “because the parties’ briefs jointly
discuss [DSC] and sewer relocation, the court addresses
Counts [II] and [V] together.” Meridian I, 122 Fed. Cl. at
402 n.27; see id. at 402 (discussing Counts II and V jointly
under a common heading “Whether Meridian Is Entitled
to Costs for [DSC] in the Channel and at the Sewer Line”
(capitalization modified)).
MERIDIAN ENG’G CO.   v. UNITED STATES                      7

                      A. Legal Standard
     “A Type I [DSC claim] arises when the conditions en-
countered differ from what was indicated in the contract
documents.” Renda Marine, Inc. v. United States, 509
F.3d 1372, 1376 (Fed. Cir. 2007); see FAR 52.236-2(a)−(b)
(“The Contractor shall promptly . . . give a written notice
to the [CO] of (1) subsurface or latent physical conditions
at the site which differ materially from those indicated in
this contract. . . . The [CO] shall investigate the site
conditions promptly after receiving the notice. If the
conditions do materially so differ and cause an increase or
decrease in the Contractor’s cost of, or the time required
for, performing any part of the work under this contract,
whether or not changed as a result of the conditions, an
equitable adjustment shall be made under this
clause . . . .”). 6 To prevail on a Type I DSC claim, a con-
tractor must prove that: (1) “a reasonable contractor
reading the contract documents as a whole would inter-
pret them as making a representation as to the site
conditions”; (2) “the actual site conditions were not rea-
sonably foreseeable to the contractor, with the infor-
mation available to the particular contractor outside the
contract documents” (i.e., reasonable foreseeability);
(3) “the particular contractor in fact relied on the contract
representation”; and (4) “the conditions differed material-
ly from those represented and . . . the contractor suffered
damages as a result.” Int’l Tech. Corp. v. Winter, 523 F.3d
1341, 1348−49 (Fed. Cir. 2008). “Determining whether a
contract contained indications of a particular site condi-

    6   It “is distinguished from a Type II [DSC claim],
which arises when the conditions encountered are of an
unusual nature and differ materially from those normally
encountered in the kind of work contemplated by the
contract.”    Renda Marine, 509 F.3d at 1376 (citing
FAR 52.236-2(a)−(b)).
8                       MERIDIAN ENG’G CO.   v. UNITED STATES

tion is a matter of contract interpretation” that we review
de novo. Id. at 1350 (internal quotation marks and cita-
tion omitted).
B. Meridian Has Not Shown a Type I Differing Site Con-
                       dition
     The Court of Federal Claims found in relevant part
that Meridian’s interpretation of the Contract was not
reasonable, and that the existence of subsurface saturated
soil conditions was “reasonably foreseeable.” Meridian I,
122 Fed. Cl. at 409; see id. at 408−09. Specifically, the
Court of Federal Claims first found that the specification
stated that “[w]ater in varying quantities may be flowing
in natural washes throughout the length of the project,”
and “[t]he work site may be inundated because of [water]
runoff,” id. (quoting J.A. 1629, 1630), such that “a reason-
able contractor would interpret the Specification as repre-
senting water as a site condition,” id at 409. As for the
second element of reasonable foreseeability, the Court of
Federal Claims found that the original drawings in the
Contract showed saturated soil and that the worksite was
located on a floodplain, and a reasonable contractor would
have conducted a site visit which would have alerted the
contractor to the subsurface saturated soil conditions,
such that “the actual conditions at the site were reasona-
bly foreseeable.” Id. (citing J.A. 1664, 1725−26, 1729).
    We see no error in the Court of Federals Claims’ find-
ings with respect to the first two elements of a Type I
DSC claim. 7 As noted by the Court of Federal Claims,

    7   Meridian’s arguments related to the third and
fourth elements of the Type I DSC claim―reliance in fact
and material differences―are “premised on the [Court of
Federal Claims’] erroneous conclusions regarding [the
second element of reasonable foreseeability].” Appellant’s
Br. 39 (capitalization modified). We may affirm the Court
MERIDIAN ENG’G CO.   v. UNITED STATES                     9

several instances in the Specification and accompanying
drawings indicate the potential presence of water and
saturated soil. See, e.g., J.A. 1664, 1725−26; see also
J.A. 1729, 3274−76, 3286, 3367−68. Boring logs that
accompanied the Contract also recorded sub-surface
conditions near the boring holes that were “silty clay, with
sand, black, wet, medium to high plasticity, [and] soft.”
J.A. 1652; see J.A. 1653−63 (recording similar descriptions
in additional boring hole logs). Further, the boring hole
logs stated that “variations may exist in the subsurface
between boring locations,” J.A. 1736, and that the logs,
which recorded boring log data from nearly two decades
prior, “should not be construed as . . . defining construc-
tion conditions,” J.A. 1651; see, e.g., J.A. 1664 (dating
boring excavations to 1989). Therefore, even though the
Contract indicated “hard unyielding material” found at
parts of the site, J.A. 1737, a “reasonable and prudent
contractor would not have understood the [C]ontract
documents as providing an affirmative indication of the
subsurface conditions” to be non-saturated at the site,
H.B. Mac, Inc. v. United States, 153 F.3d 1338, 1347 (Fed.
Cir. 1998); see id. at 1346−47 (finding no representation
as to site conditions where both parties acknowledged the

of Federal Claims’ holding that Meridian has not proven a
DSC based on the failure of a single element of the DSC
claim. See Renda Marine, 509 F.3d at 1378 (affirming
denial of a DSC claim when contractor failed to establish
the first two elements of its claim); see also Int’l Tech.
Corp., 523 F.3d at 1353 (affirming denial of a DSC claim
based on failure to establish the first element “and, alter-
natively,” failure to establish the second element). How-
ever, even if we were to review the third and fourth
elements, because we affirm the Court of Federal Claims’
determination with regard to the first and second ele-
ments, we would find that Meridian’s conditional argu-
ments on the third and fourth elements fail.
10                     MERIDIAN ENG’G CO.   v. UNITED STATES

site contained highly variable subsurface conditions and
finding boring holes taken in proximity to site but not
directly in work zone that indicated certain conditions
could not be representative of entire site); see also Renda
Marine, 509 F.3d at 1378 (similar).
     A reasonable and prudent contractor would have fore-
seen the saturated soil condition, based on the Contract
documents and the fact that the actual conditions at the
site indicated such conditions. See H.B. Mac, 153 F.3d at
1346 (“It is well-settled that a contractor is charged with
knowledge of the conditions that a pre-bid site visit would
have revealed.” (citation omitted)); Meridian I, 122 Fed.
Cl. at 409 (relying on testimony from the Government’s
expert). The Government’s expert stated not only that
“[s]oft saturated soils with challenging groundwater
conditions can be, and typically are, encountered when
excavating in an active flood channel,” J.A. 442, but also
that a large presence of saturated soil was located “100
f[ee]t or so” away from where Meridian worked, J.A. 583.
Meridian’s President, Mark Sutton, acknowledged that he
reviewed the boring logs and understood that certain
dewatering efforts would need to take place before con-
struction began. See, e.g., J.A. 259–62. Moreover, Merid-
ian presents nothing but unsworn attorney argument to
rebut the Government’s testimony that a site visit would
have made a reasonable contractor aware of the saturated
soil conditions, see Reply Br. 17; that is not evidence and
cannot rebut the Government’s admitted evidence, see
Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d 1371,
1380 (Fed. Cir. 2009). Therefore, we find the Court of
Federal Claims did not err in finding no DSC with respect
to the channel and sewer relocation area.
C. Meridian’s Counterarguments on Its Type I DSC Claim
                   Are Unpersuasive
   Meridian makes four primary arguments why we
should find the Court of Federal Claims erred in finding
MERIDIAN ENG’G CO.   v. UNITED STATES                   11

that “the actual conditions at the site were reasonably
foreseeable,” 8 Meridian I, 122 Fed. Cl. at 409; see Appel-
lant’s Br. 26–39, all of which are unavailing.
    First, Meridian contends that the Court of Federal
Claims’ review “was based on an improper interpretation
of the Contract documents, which failed to give proper
weight to [certain] geotechnical information.” Appellant’s
Br. 29; see id. at 29−39. Specifically, Meridian alleges
that the geotechnical information provided in the solicita-
tion “indicated that there would be hard, unyielding
materials in the excavation areas” rather than the discov-
ered groundwater and clay materials. Id. at 31; see, e.g.,
J.A. 1737 (providing Section 3.2 of the Specification
stating certain areas of the Project contained “hard un-
yielding material”).
    Despite Section 3.2’s language, the Court of Federal
Claims noted several other portions of the Contract that
indicated areas of the site contained saturated soil. See
Meridian I, 122 Fed. Cl. at 409 (citing J.A. 1664, 1725−26
(portions of boring logs)). As discussed above, the boring
logs reviewed by the Court of Federal Claims also re-
vealed conditions of “silty clay, with sand, black, wet,

   8    Meridian also contends that the Court of Federal
Claims erred by determining “what specific representa-
tions the contract made” under the first element of the
Type I DSC claim, i.e., what representations were made to
a reasonable contractor, when that determination should
have been made under the second element of the Type I
DSC claim. See Appellant’s Br. 27. However, Meridian
does not allege this error would affect the disposition of
the Court of Federal Claims’ holding, nor does Meridian
present any evidence in support of its argument. Accord-
ingly, we find Meridian waived this undeveloped argu-
ment. See SmithKline Beecham Corp. v. Apotex Corp.,
439 F.3d 1312, 1320 (Fed. Cir. 2006).
12                      MERIDIAN ENG’G CO.   v. UNITED STATES

medium to high plasticity, [and] soft.” J.A. 1652; see J.A.
1653−63 (recording similar descriptions in additional
boring hole logs); see also H.B. Mac, 153 F.3d at 1346
(considering boring log data on a case-by-case factual
basis as part of the DSC analysis). Finally, Section 3.2,
which is the same portion of the Specification that Merid-
ian cites for the proposition that certain areas would
contain hard, unyielding material, instructs that the
contractor may encounter in certain areas “unstable
material,” J.A. 1739, defined as “materials too wet to
properly support the utility pipe, conduit, or appurtenant
structure,” J.A. 1735. We cannot say that the Court of
Federal Claims clearly erred in its determination that the
subsurface soil conditions were reasonably foreseeable
based on the Contract.
    Second, Meridian contends that the Court of Federal
Claims erred in not giving sufficient weight to Meridian’s
expert and witness testimony, which explained that
Meridian relied on certain statements in the Specification
in making its assessment. See Appellant’s Br. 32−34
(describing reliance on Meridian’s president, Mr. Sutton),
34–36 (asserting the findings of Meridian’s expert, Dr.
James W. Mahar, which it deems consistent with Mr.
Sutton’s conclusions that it was reasonable not to expect
groundwater flows or clay materials at the site). We do
not find clear error in the Court of Federal Claims’ con-
sideration of the expert and witness testimony. We have
stated that “weighing of conflicting evidence is a task
within the special province of the trial judge who, having
heard the evidence, is in a better position than we to
evaluate it.” Pac. Gas & Elec. Co. v. United States, 668
F.3d 1346, 1353 (Fed. Cir. 2012) (internal quotation
marks and citations omitted). Where “a trial judge’s
finding is based on his decision to credit the testimony of
one of two or more witnesses, each of whom has told a
coherent and facially plausible story that is not contra-
dicted by extrinsic evidence, that finding, if not internally
MERIDIAN ENG’G CO.   v. UNITED STATES                   13

inconsistent, can virtually never be clear error.” Id.
(quoting Anderson v. City of Bessemer, 470 U.S. 564, 575
(1985)). Here, the Court of Federal Claims reviewed
testimony submitted by both parties. See, e.g., Meridian
I, 122 Fed. Cl. at 403 (reviewing parties’ arguments with
respect to testimony of Dr. Mahar), 409 (reviewing testi-
mony of Mr. Sutton and the Government’s expert Mr.
Stephen G. Chickey). 9 It found the Government’s prof-
fered testimony to be more persuasive, and found that Mr.
Sutton’s testimony also demonstrated that Meridian had
reviewed the boring log data that showed the boring holes
had no bearing capacity due to saturated soils. Id. (citing
J.A. 281−83). Meridian’s argument that its proffered
testimony should be more persuasive does not leave us
with a “definite and firm conviction” that the Court of
Federal Claims made a clear error in its judgment here.
Ind. Mich. Power Co., 422 F.3d at 1373 (internal quota-
tion marks and citation omitted); see PGBA, LLC v.
United States, 389 F.3d 1219, 1232 (Fed. Cir. 2004) (find-
ing no clear error where the Court of Federal Claims’
denial of injunctive relief was supported by record evi-
dence and appellant merely asked us “to reweigh the
relative harms . . . and find in its favor”).
    Third, Meridian contends that the Court of Federal
Claims erred because its conclusion was based on an

   9    Meridian separately alleges that Mr. Chickey
“was not accepted by the [Court of Federal Claims] as an
expert,” such that his testimony should not be relied
upon. Appellant’s Br. 36. The Court of Federal Claims
commented in a supplemental hearing during trial, at
which Mr. Chickey testified, that Mr. Chickey was consid-
ered an “expert[].” J.A. 3411. Because Meridian does not
challenge that finding on appeal, we accept the Court of
Federal Claims’ determination and may rely on Mr.
Chickey’s testimony.
14                       MERIDIAN ENG’G CO.   v. UNITED STATES

improper finding that “a reasonable contractor would
have conducted an independent soils investigation.”
Appellant’s Br. 29. Meridian incorrectly summarizes the
Court of Federal Claims’ findings. The Court of Federal
Claims did not state that a reasonable contractor would
make an independent soils investigation. It stated that “a
reasonable contractor would want to investigate whether
there were unstable, saturated conditions upstream”
because the work site was in a floodplain and the plan
drawings showed saturated soil with no bearing capacity
as needed for the project, and “[a] site visit also would
have made these conditions known, because large por-
tions of saturated, alluvial soil were located ‘100 feet or so’
away from” the proposed worksite. Meridian I, 122 Fed.
Cl. at 409. The underlying contractual information avail-
able to Meridian, along with its ability to visit the site and
visually assess the ground conditions, support the Court
of Federal Claims’ finding that, based on the Contract and
“all information available,” Int’l Tech. Corp., 523 F.3d at
1349 (internal quotation marks and citation omitted), the
ground conditions would have been reasonably foreseea-
ble. Indeed, here, Meridian was aware that “[m]onsoons
are a common occurrence at the project site during the
summer months.” Meridian I, 122 Fed. Cl. at 391 n.13
(citing Mr. Sutton’s testimony). The Court of Federal
Claims did not impose an improper requirement for
investigation of the site conditions beyond what a reason-
able contractor would undertake here.
    Fourth, Meridian argues that the Government’s “vari-
ous modifications to address the soils issues” by the CO
acts as an admission that a Type I DSC claim exists.
Appellant’s Br. 38; see id. at 38−39. However, we have
stated that “in court litigation, a contractor is not entitled
to the benefit of any presumption arising from the [CO]’s
decision. De novo review precludes reliance upon the
presumed correctness of the decision.” Wilner v. United
States, 24 F.3d 1397, 1401 (Fed. Cir. 1994); see Renda
MERIDIAN ENG’G CO.   v. UNITED STATES                     15

Marine, 509 F.3d at 1378 n.1 (citing Wilner for the propo-
sition that “a CO’s decision to award additional compen-
sation is not binding upon the agency in subsequent CDA
litigation”). While the CO issued several contract modifi-
cations following the award of the Contract to Meridian,
see Meridian I, 122 Fed. Cl. at 387−90, the Court of Fed-
eral Claims explained that Meridian failed to show “by a
preponderance of the evidence” that all four elements of
the DSC claim were met, and gave sufficient reasoning for
its finding, id. at 409; see id. at 406−09. We conclude the
Court of Federal Claims did not err in its analysis of the
second element of the Type I DSC claim.
 D. Meridian’s Defective Pipe and Dewatering Specifica-
                       tion Claims
    The Court of Federal Claims found that Meridian’s
defective pipe and dewatering specification claims were so
intertwined with its DSC claim that they constituted a
single claim. Id. at 405. Meridian contends that analyz-
ing its defective pipe and dewatering specification claims
as part of the DSC analysis was error. Appellant’s
Br. 40−49. We address each claim in turn.
        1. The Defective Pipe Specification Claim
    Meridian alleges that “[e]ven if Meridian had not en-
countered a [DSC], it is entirely possible that Meridian
would be entitled to recover damages incurred as a result
of the defective pipe specification alone.” Id. at 46. We
disagree with Meridian.
   We have previously stated:
   Although [DSC] and defective specifications
   claims are distinct in theory, they collapse into a
   single claim . . . where the alleged defect in the
   specification is the failure to disclose the alleged
   [DSC]. Where the [DSC] claim and the defective
   specifications claim are so intertwined as to con-
   stitute a single claim, that claim will be governed
16                       MERIDIAN ENG’G CO.   v. UNITED STATES

     by the specific [DSC] clause and the cases under
     that clause.
Comtrol, Inc. v. United States, 294 F.3d 1357, 1362 (Fed.
Cir. 2002).
    The Specification called for Class IV unlined pipe to
be used in the sewer relocation project. J.A. 1449; see
J.A. 1446−47. Upon installation, the Class IV pipe bowed
and Meridian had to “remove and reinstall” the pipe with
stronger Class V pipe. J.A. 357. Meridian admits that
the bowing of the pipe “was undoubtedly exacerbated” by
the purported DSC, “i.e., the unanticipated subsurface
soil conditions.” Appellant’s Br. 45 n.7. However, it
incorrectly states that the “problems . . . were certainly in
part attributable to the defective specifications,” id.,
because all of the discussions on the inadequacy of the
Class IV pipe stem from the discovery of the soft subsur-
face conditions that also form the basis for Meridian’s
DSC claim, see J.A. 357−58 (providing admission by
Meridian that the “amount of water coming down”
through the soil contributed to pipe bowing), 646 (provid-
ing statement by Meridian’s witness that bowing was
caused by water coming through “voids of larger grain
materials” in the soil to “complete[] the liquification of the
crazy soft material adjacent to the pipe”); see also Appel-
lant’s Br. 14−15 (citing J.A. 2498 (stating, in Govern-
ment’s After Action Review, that the “[w]rong [c]lass of
pipe [was] specified” because it was “not adapted to site
constraints”)). Therefore, we agree with the Court of
Federal Claims that Meridian’s defective pipe specifica-
tion claim is “so intertwined” with its DSC claim as to
constitute a single claim. Comtrol, 294 F.3d at 1362.
    Meridian’s counterarguments are unpersuasive. To
the extent Meridian argues that the Specification was
defective because it should have required a contractor to
provide Class V pipe, see Appellant’s Br. 43 (stating that
the Arizona Department of Environmental Quality
MERIDIAN ENG’G CO.   v. UNITED STATES                    17

(“ADEQ”) “required Class V pipe”), we do not find suffi-
cient evidence in the record to support this claim. The
Government’s witness stated that Class IV was “right on
the line of being adequate,” J.A. 567, and that Class IV
was not “the wrong pipe” because alterations could have
been made to compensate for the later-discovered issues
and satisfy ADEQ requirements, J.A. 496. Meridian has
not presented evidence that, given the information in the
Specification, Class V was required. Rather, it claims
that the purported DSC caused Class IV pipes to be
inadequate.
     Meridian also contends that the Specification was de-
fective because the design drawings called for Class V
pipe, J.A. 1725, such that the discrepancy itself consti-
tutes error, see Appellant’s Br. 43. This argument is
without merit. The Contract states that “[i]n case of
difference between drawings and specifications, the
specifications shall govern.” J.A. 1156. Meridian does not
challenge this unambiguous contract language.           See
generally Appellant’s Br. Moreover, if the documents
were on their face ambiguous, as Meridian alleges, Merid-
ian “ha[d] a duty to seek clarification of a patent ambigui-
ty” on this basis. Comtrol, 294 F.3d at 1365 (citations
omitted). It is undisputed that Meridian failed to inquire
about the discrepancy before bidding. See J.A. 1760
(providing evidence that Meridian asked for clarification
post-award of Contract). Therefore, Meridian cannot
establish the discrepancy as a basis for its DSC claim.
     2. The Defective Dewatering Specification Claim
    In a footnote, the Court of Federal Claims found that
the dewatering requirements in the Specification were
performance requirements, rather than design require-
ments. Meridian I, 122 Fed. Cl. at 406−07 n.30; see Blake
Constr. Co. v. United States, 987 F.2d 743, 745 (Fed. Cir.
1993) (detailing differences between design and perfor-
mance specifications). Therefore, the Court of Federal
18                      MERIDIAN ENG’G CO.   v. UNITED STATES

Claims reasoned that Meridian had “discretion to deviate
from the specifications,” and any deviation from the
representations in the dewatering specification would not
be cause for a defective specification claim. Meridian I,
122 Fed. Cl. at 406 n.30.
      Meridian argues that the dewatering specification is a
design specification, not a performance specification, and
therefore the Court of Federal Claims was required to
consider it separately from a DSC analysis. Appellant’s
Br. 46−49; see J.A. 1628−31. However, Meridian does not
contest that the underlying allegations related to the
purported defective dewatering specification are so inter-
twined with the DSC claim as to constitute a single claim.
See generally Appellant’s Br. Nor does Meridian argue
that Comtrol’s instruction to treat DSC and defective
specification claims as a single claim would not apply to
its dewatering specification claim, regardless of whether
the dewatering specification is categorized as a perfor-
mance or design specification. See generally id. There-
fore, we reject the argument that the Court of Federal
Claims erred in determining that Meridian’s defective
dewatering specification claim fails under the DSC analy-
sis. 10

     10  Even if we were to review the dewatering specifi-
cation’s classification, we would not find that the Court of
Federal Claims erred.        The dewatering specification
unequivocally states that “[a]ll permanent construction
shall be carried on in areas free from water.” J.A. 1629.
However, it leaves the means by which to accomplish this
objective to the discretion of the contractor. See J.A. 1629
(ordering the contractor to submit a proposal “showing the
method that he proposes to use to divert water” (emphasis
added)), 1629 (ordering contractor to, in its plans “de-
scrib[e] the proposed methods to protect each construction
work area[] from storm runoff” (emphasis added)), 1630
MERIDIAN ENG’G CO.   v. UNITED STATES                     19

  IV. The Court of Federal Claims Provided Insufficient
  Analysis for Meridian’s Flood Event Claim (Count IV)
    Meridian sought additional damages below that it
purportedly accrued “due to the [Government’s] modifica-
tions and specification defects” that caused delay and
forced Meridian to work in “inclement weather” condi-
tions. Meridian I, 122 Fed. Cl. at 410 (internal quotation
marks and citation omitted); see J.A. 3015−21 (Count IV).
The Court of Federal Claims denied the claim, finding
that “the doctrine of accord and satisfaction bars Meridi-
an’s claims that the [Government] is responsible for costs
incurred for delays caused by flood events.” Meridian I,
122 Fed. Cl. at 412. The Court of Federal Claims based
its analysis on the accord and satisfaction standard
discussed in Community Heating & Plumbing Co. v.
Kelso, which states that:
   Discharge of a claim by accord and satisfaction oc-
   curs when some performance different from that
   which was claimed as due is rendered and such
   substituted performance is accepted by the claim-
   ant as full satisfaction of his claim. However,
   courts may refuse to bar a claim based upon the
   defense of accord and satisfaction where the par-
   ties continue to consider the claim after the execu-
   tion of a release.
987 F.2d 1575, 1581 (Fed. Cir. 1993) (citations omitted).
The Court of Federal Claims found that two bilateral
contract modifications executed in September 2008, which

(“The Contractor shall submit the method of dewatering to
[CO] for his approval.” (emphases added)). Because the
Specification does not “describe in precise detail the
materials to be employed and the manner in which the
work is to be performed,” it is properly considered a
performance specification. Blake Constr., 987 F.2d at 745.
20                      MERIDIAN ENG’G CO.   v. UNITED STATES

claimed that the modifications “reflect[] all credits due the
Government and all debits due the Contractor . . . for all
costs and markups directly or indirectly attributable for
the change ordered,” J.A. 3122, 3151, constituted accord
and satisfaction with respect to the flood events claim,
Meridian I, 122 Fed. Cl. at 411−12. As part of its analy-
sis, it further found that the Government’s “draft modifi-
cation,” dated August 2009, which considered additional
estimates for flood damage, did not negate the findings of
satisfaction because Meridian did not allege that the
“internal memorandum was known by Meridian prior to
discovery,” such that the memorandum could not be
evidence that “the parties” continued to negotiate the
claims. Id. at 412.
    Meridian asserts that the defense of accord and satis-
faction for Count IV 11 should be barred because the
parties continued to consider the claim after the bilateral
modifications, and the Court of Federal Claims’ finding to

     11 Meridian also contests the Court of Federal
Claims’ determination that Count V (Differing Site Condi-
tions) of Meridian’s Second Amended Complaint was
barred by accord and satisfaction. See Appellant’s Br.
54−57. Because we affirm the Court of Federal Claims’
determinations that Count V fails on its merits, see supra
Section III, we need not consider the Court of Federal
Claims’ alternative holdings with respect to the affirma-
tive defense of accord and satisfaction for Count V, see
Meridian I, 122 Fed. Cl. at 410 (holding that “even if,
arguendo, the sewer line were a [DSC],” certain modifica-
tions “constituted accord and satisfaction”); see also
Holland v. United States, 621 F.3d 1366, 1382 (Fed. Cir.
2010) (concluding accord and satisfaction barred appel-
lants’ breach of contract claims “[i]n the alternative” after
affirming that appellants failed to satisfy elements for
breach of contract).
MERIDIAN ENG’G CO.   v. UNITED STATES                   21

the contrary is clearly erroneous.         See Appellant’s
Br. 52−53. Meridian contends that the continued drafting
of Government estimates for flood damage, “even absent
any ‘negotiations’ with Meridian[,]” indicates that the
Government “did not believe there had been a release or
abandonment [of] Meridian’s claims.” Id. at 53. Meridian
further argues the Court of Federal Claims erred because
it did not use the four-part standard for accord and satis-
faction as articulated in Holland. See id. at 48−51; see
also 621 F.3d at 1382. We find the Court of Federal
Claims provided insufficient analysis of this defense.
    Accord and satisfaction has been “aptly described” as
a four-part test of “proper subject matter, competent
parties, meeting of the minds of the parties, and consider-
ation.” Brock & Blevins Co. v. United States, 343 F.2d
951, 955 (Ct. Cl. 1965) (internal quotation marks and
citation omitted); see Holland, 621 F.3d at 1382 (citing to
O’Connor v. United States, 308 F.3d 1233, 1240 (Fed. Cir.
2002) for the same proposition, which in turn cites to
Brock & Blevins, 343 F.2d at 955). While Community
Heating does not use the term “meeting of the minds,” see
generally 987 F.2d 1575, its discussion of parties’ contin-
ued consideration of a claim after execution of a release
forms part of this inquiry for purposes of the accord and
satisfaction doctrine, see id. at 1581 (citing Brock &
Blevins, 343 F.2d at 955). The Court of Federal Claims
erred in its analysis of the meeting of the minds part of
the accord and satisfaction claim when it analyzed
whether the parties “continue[d] to consider the claim
after execution of a release.” Id. at 1581 (citation omit-
ted). 12

   12   The Court of Federal Claims further erred by not
reviewing the other challenged element of the accord and
satisfaction claim. See Holland, 621 F.3d at 1382. Merid-
ian contested the elements of “meeting of the minds” and
22                      MERIDIAN ENG’G CO.   v. UNITED STATES

    The Court of Federal Claims solely considered wheth-
er Meridian knew of the August 10, 2009 Government
draft modification in determining whether the parties
continued to consider the flood events claim. See Meridi-
an I, 122 Fed. Cl. at 412 (stating Meridian does not allege
and the record does not support finding that the Govern-
ment’s “internal memorandum was known by Meridian
prior to discovery”). It failed to consider additional evi-
dence on record showing that the Government directed
Meridian to submit revised estimates for the flood claim
on multiple occasions after the execution of the bilateral
modifications, see J.A. 2486, 2491−93, to which Meridian
did not respond, see, e.g., J.A. 2492−93 (stating, in a price
negotiation memorandum on flood event damage dated
September 2009, that “[n]egotiations could not be entered
into because the Contractor failed to respond to the re-
quest for data” such that “[t]he modification will be issued
unilaterally”). It also did not consider the content of the
Government’s draft modification and supporting docu-
mentation to determine the Government’s intent in draft-

“proper subject matter” below, J.A. 901−02; see King
Fisher Marine Serv., Inc. v. United States, 16 Cl. Ct. 231,
236−37 (1989) (stating “proper subject matter” requires
showing the subject matter of the modification is the
same as that of the disputed claim), and we agree that the
other two elements have been satisfied, see Mil-Spec
Contractors, Inc. v. United States, 835 F.2d 865, 867 (Fed.
Cir. 1987) (defining the element of “competent parties” to
require that the officials with whom an agreement is
made had “authority to bind the Government”); Bogley’s
Estate v. United States, 514 F.2d 1027, 1033 (Ct. Cl. 1975)
(defining the element of “consideration” as “detriment
incurred by the promisee, or a benefit received by the
promisor” (citation omitted)). On remand, the Court of
Federal Claims shall consider meeting of the minds and
proper subject matter.
MERIDIAN ENG’G CO.   v. UNITED STATES                    23

ing the revisions, see J.A. 2484−93, or evidence that
Meridian submitted additional requests for equitable
adjustment after the 2008 releases that included adjust-
ments on the flood events claim, and that the Government
acknowledged receipt and planned review of those sub-
mitted adjustments in 2010, see J.A. 2510.
     In our precedent on accord and satisfaction, we have
never held that the affirmative defense of accord and
satisfaction may only be barred with evidence of formal
draft modifications negotiated between parties after a
release’s execution. Indeed, in several cases, we have
found accord and satisfaction barred when a contractor
submitted a proposed claim before the execution of a
release, and only one party, the Government, responded
in some fashion after execution. See, e.g., England v.
Sherman R. Smoot Corp., 388 F.3d 844, 850 (Fed. Cir.
2004); Winn-Senter Constr. Co. v. United States, 110 Ct.
Cl. 34, 65−66 (1948). The predecessor to the Court of
Federal Claims has also reviewed testimony by one or
more parties to determine intent with respect to a release
or considerations of a claim subsequent to a release. See,
e.g., A & K Plumbing & Mechanical, Inc. v. United States,
1 Cl. Ct. 716, 723 (1983), aff’d, 795 F.2d 1011 (Tbl.) (Fed.
Cir. 1986).
    Thus, the Court of Federal Claims’ assumption that
Meridian had to have known of the proposed draft modifi-
cation for the meeting of the minds requirement improp-
erly applied the law on accord and satisfaction. Our
precedent on the meeting of the minds inquiry accepts a
wide range of evidence in its fact-specific consideration.
Accordingly, we remand for the Court of Federal Claims
to consider whether the parties reached a meeting of the
minds on the flood event claims in light of all of the evi-
dence. See Yankee Atomic Elec. Co. v. United States, 536
F.3d 1268, 1274 (Fed. Cir. 2008) (remanding for Court of
Federal Claims to apply a proper legal analysis); Cienega
Gardens v. United States, 503 F.3d 1266, 1291 (Fed. Cir.
24                     MERIDIAN ENG’G CO.   v. UNITED STATES

2007) (similar). The Court of Federal Claims may con-
clude that the claims are barred by accord and satisfac-
tion on remand, but we are unwilling to say, based on the
Court of Federal Claims’ reasoning, that this is so without
further review.
 V. The Court of Federal Claims Erred When It Denied
Meridian’s Unpaid Contract Quantities Claim (Count VI)
     Meridian sought damages for “unpaid contract quan-
tities” of certain items purchased in excess of original
contract estimates in the amount of $358,913.63. Meridi-
an I, 122 Fed. Cl. at 412−13; see J.A. 2301. The Court of
Federal Claims found that Meridian was entitled to
“payment for items used” but was not entitled to payment
beyond what the Government had already made because
the Government “[wa]s entitled to withhold payment.”
Meridian I, 122 Fed. Cl. at 413 (quoting FAR 52.232-5
(Payments Under Fixed-Price Construction Contracts)
(“[I]f satisfactory progress has not been made, the [CO]
may retain a maximum of 10 percent of the amount of the
payment until satisfactory progress is achieved.”)). Me-
ridian argues that the Court of Federal Claims “erred
when denying Meridian’s unpaid contract quantities
claim” because, inter alia, here, “there has been no asser-
tion of unsatisfactory progress.” Appellant’s Br. 58, 60
(capitalization modified). It further argues that the
Government cannot claim its right to set off in withhold-
ing the unpaid contract quantities because the Court of
Federal Claims did not properly analyze the amount
allegedly owed to Meridian in relation to the Govern-
ment’s proposed set off. See Reply Br. 27−28. We agree
with Meridian.
   First, the Court of Federal Claims found the Govern-
ment was entitled to withhold up to 10% of payment
based on FAR 52.232-5. Meridian I, 122 Fed. Cl. at 413.
However, this FAR provision, while incorporated into the
Contract, only applies to periods with “progress payment,”
MERIDIAN ENG’G CO.   v. UNITED STATES                    25

J.A. 1137, which is not applicable to the unpaid contract
quantities identified by Meridian, see FAR 52.232-16
(“The Government will make progress payments to the
Contractor when requested as work progresses . . . .”); J.A.
183 (Court of Federal Claims: “[T]he requirements of
complying with the outline [of payment] as applied to
progress payments don’t apply.” Government: “Sure.”),
214 (Court of Federal Claims: “[A]bsent any other indica-
tion incorporating those payment provisions involving
estimates of work done, we don’t have an indication in the
contract to the contractor that the progress payment
provisions will apply.”). Indeed, the Government aban-
doned its arguments related to the progress payment
provisions with respect to the unpaid contract quantities
after the partial summary judgment phase of the trial.
Compare J.A. 166−214 (setting forth the Government’s
arguments on progress payments at the hearing on mo-
tion for summary judgment), with Def.’s Trial Br. at 82,
Meridian v. United States, No. 1:11-cv-00492-SGB (Fed.
Cl. Sept. 18, 2014), ECF No. 122 (hereinafter “Gov’t’s
Post-Trial Br.”). Moreover, withholding is only allowable
if “satisfactory progress has not been made” on a contract,
FAR 52.232-5, but the Government has conceded that
“unit priced quantity work was generally done” and there
was no allegation of unsatisfactory performance that
would merit withholding, Meridian I, 122 Fed. Cl. at 413
(internal quotation marks and citation omitted); see
Appellee’s Br. 54 (“[T]he Government acknowledged that
Meridian was entitled to a small amount of additional
funds for unpaid quantities associated with channel
improvements . . . .”). 13

   13   For the same reasoning, the Court of Federal
Claims’ citation to M.C. & D. Capital Corp. v. United
States, which applies the provisions of FAR 52.232-5,
would not apply here, see Meridian I, 122 Fed. Cl. at 413
26                      MERIDIAN ENG’G CO.   v. UNITED STATES

    The Court of Federal Claims also cited in part to
Johnson v. All-State Construction, Inc. to support its
holding supporting the Government’s refusal to pay any of
the alleged unpaid contract quantities.        Meridian I,
122 Fed. Cl. at 413 (citing 329 F.3d 848, 854 (Fed. Cir.
2003)). The Government on appeal relies on Johnson to
argue that it “was entitled to set off overpayments.”
Appellee’s Br. 55. In Johnson, we affirmed the Govern-
ment’s withholding of certain payments based on the
Supreme Court’s directive that “[t]he [G]overnment has
the same right [of set off] which belongs to every creditor,
to apply the unappropriated moneys of his debtor, in his
hands, in extinguishment of the debts due to him.” 329
F.3d at 852 (quoting United States v. Munsey Tr. Co., 332
U.S. 234, 239 (1947)).
    Meridian does not contest that the Government has a
common law right to a set off, rather, it argues that “the
amount of any potential set[]off” was not established by
the Government at trial because the issue was not ad-
dressed in the quantum phase. Reply Br. 27. The Gov-
ernment, which also argued before the Court of Federal
Claims that the issue would be “resolved at the damages
portion of trial,” Gov’t’s Post-Trial Br. 82, presented
evidence in the form of its expert Mr. Stephen Weathers’s
report that the Government overpaid Meridian for con-
tract items by $326,642.32, J.A. 3239; see J.A. 3227−39.
Meridian claimed in detail damages for unpaid contract
quantities in the amount of $358,913.63. J.A. 3030−32
(Second Amended Complaint); see J.A. 2301–13 (detailing
alleged unpaid quantities).
   The Court of Federal Claims did not provide any
analysis of the parties’ varying cost estimates to explain
why it found that Meridian had not shown by a prepon-

(citing 948 F.2d 1251, 1257 (Fed. Cir. 1991)), because
satisfactory progress has been made.
MERIDIAN ENG’G CO.   v. UNITED STATES                    27

derance of the evidence it was entitled to the amount
claimed. See Meridian I, 122 Fed. Cl. at 413 (stating, in a
conclusory fashion after discussing legal standards for set
off, “[f]or these reasons, the court has determined that the
Government did not breach the September 21, 2007
Contract based on alleged unpaid contract quantities”).
We are not inclined to resolve facts in the first instance.
See Cutter v. Wilkinson, 544 U.S. 709, 718 n.7 (2005)
(“[W]e are a court of review, not of first view.”). There-
fore, we find the Court of Federal Claims clearly erred in
dismissing Meridian’s unpaid contract quantities claim, in
light of the conflicting information contained in the Sec-
ond Amended Complaint and Mr. Weathers’s testimony.
See Dairyland Power Coop. v. United States, 645 F.3d
1363, 1376 (Fed. Cir. 2011) (remanding damages award
where Court of Federal Claims erroneously “concluded
that it was not required to apply” a “detailed inquiry” to a
factual question it should have decided in the first in-
stance). Count VI is therefore remanded to the Court of
Federal Claims for further review.
                         CONCLUSION
   We have considered Meridian’s remaining arguments
and find them unpersuasive. 14 We vacate and remand the
Court of Federal Claims’ findings in Meridian I on Counts
IV and VI, reverse and remand the Court of Federal

   14    Meridian states in a conclusory manner that be-
cause “[i]t is now clear that the [Government] did, indeed,
fail to pay Meridian even those sums that it agreed Me-
ridian was owed,” the Court of Federal Claims “erred in
denying Meridian’s good faith and fair dealing claim
[(Count XIV)].” Appellant’s Br. 62. “[M]ere statements of
disagreement with the [trial] court as to the existence of
factual disputes do not amount to a developed argument.”
SmithKline Beecham, 439 F.3d at 1320. Accordingly, we
find this argument waived.
28                       MERIDIAN ENG’G CO.   v. UNITED STATES

Claims’ interest calculation in Meridian II, and affirm the
remainder of the decisions. Accordingly, the Final Deci-
sions of the U.S. Court of Federal Claims are
      AFFIRMED-IN-PART, VACATED-IN-PART,
       REVERSED-IN-PART, AND REMANDED
                           COSTS
     Each party shall bear its own costs.