Court Opinion

ID: 4539418
Source: CourtListenerOpinion
Date Created: 2020-06-05 16:00:31.804216+00
Date Added: 2024-06-11T12:46:28.226679
License: Public Domain

Case: 19-1619     Document: 56    Page: 1   Filed: 06/05/2020

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                   ______________________

   ECC INTERNATIONAL CONSTRUCTORS, LLC,
                 Appellant

                             v.

                SECRETARY OF THE ARMY,
                          Appellee
                   ______________________

                         2019-1619
                   ______________________

     Appeal from the Armed Services Board of Contract Ap-
 peals in Nos. 59138, 59586, 59643, 60284, Administrative
 Judge Owen C. Wilson, Administrative Judge Richard
 Shackleford, Administrative Judge Timothy Paul McIl-
 mail.
                  ______________________

                    Decided: June 5, 2020
                   ______________________

    ROY DALE HOLMES, Cohen Seglias Pallas Greenhall &
 Furman, Philadelphia, PA, for appellant. Also represented
 by MICHAEL H. PAYNE.

     JESSICA R. TOPLIN, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, for appellee. Also represented by JOSEPH H.
Case: 19-1619    Document: 56      Page: 2    Filed: 06/05/2020

 2         ECC INT’L CONSTRUCTORS   v. SECRETARY OF THE ARMY

 HUNT, ROBERT EDWARD KIRSCHMAN, JR., PATRICIA M.
 MCCARTHY.
              ______________________
     Before LOURIE, LINN, and WALLACH, Circuit Judges.
 LINN, Circuit Judge
     ECC International Construction, LLC (“ECC”), the
 holder of Contract No. W912ER-10-C-0054 (“contract”)
 awarded under Solicitation No. W912ER-10-R-0062 (“solic-
 itation”) for the design and construction of a Special Oper-
 ations Facility Joint Operations Center (“JOC”), appeals
 the decision of the Board of Contract Appeals (“Board”)
 granting summary judgment in favor of the Army and
 denying ECC entitlement to additional compensation for
 costs and delays incurred in meeting heightened “inside
 the wire” security procedures imposed by the operator of a
 nearby International Security Assistance Force military
 base (“Base”) after it expanded the perimeter of the Base to
 envelop the JOC construction site. See Appeals of ECC Int’l
 Constructors, LLC, ASBCA No. 59138, 19-1 BCA ¶ 37252,
 2019 WL 495998 (Jan. 24, 2019). Because the Board cor-
 rectly concluded that the change in security procedures
 was not a constructive change in the contract for which
 ECC is entitled to compensation, we affirm.
                               I
     It is undisputed that the operator of the Base is a third
 party and that the Base expansion was the act of that third
 party and not the government. As the Board recognized,
 the government is not liable under contract for increased
 costs caused by acts of a third party absent the breach of
 an unqualified warranty that would amount to a construc-
 tive change in the agreed terms. Such liability exists only
 where “the parties in unmistakable terms agreed to shift
 the risk of increased costs [to the government].” Oman-
 Fischbach Int’l (JV) v. Pirie, 276 F.3d 1380, 1385 (Fed. Cir.
 2002).
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 ECC INT’L CONSTRUCTORS   v. SECRETARY OF THE ARMY            3

     Paragraph 1.2 of the contract states that the JOC “will
 be sited at Mazar-e-Sharif, Afghanistan, on a dedicated
 area located outside the perimeter fencing of the existing
 base.” J.A. 70. This is confirmed by Solicitation Drawing
 C-1. Paragraph 1.2 merely describes the location of the
 building site. It does not warrant the security procedures
 that will apply to the site.
      Paragraph 1.2 also does not limit the reading of ¶ Y of
 the contract. Paragraph Y explicitly provides that “Base
 security [the operator of the Base] maintains the ultimate
 authority for establishing, monitoring, and enforcing secu-
 rity requirements for the work site,” and that “[t]he Con-
 tractor shall be responsible for compliance with all Base
 security requirements.” J.A. 215. ECC argues that “work
 site” in this provision only applies to work sites within the
 Base. That limitation, however, nowhere appears in the
 contract. Moreover, limiting ¶ Y in that way would render
 it superfluous in light of special clause SC 1.53 of the con-
 tract, which states that “Base Security maintains the ulti-
 mate authority for establishing, monitoring, and enforcing
 security requirements . . . on the Base.” J.A. 74; see also
 Appellant’s Reply Br. at 6–7 (arguing that SC 1.53 applies
 to on-Base sites).
     Paragraph X of the contract obligates the contractor to
 “erect a temporary security fence around the construction
 limits of the project” and specifies that “[a]ccess to this se-
 cure area shall be controlled by the Contractor’s forces.”
 That paragraph is not inconsistent with the requirement of
 paragraph Y that Base security procedures be followed
 where and when necessary. The contractor’s obligation to
 control access to the site—either inside or outside the
 wire—does not grant the contractor the right to determine
 the security standards or procedures that might apply over
 the course of the contract. Nothing in that paragraph cre-
 ates an implied or express warranty that the work site
 would not be subject to Base security procedures until ECC
 decided it would be so.
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 4         ECC INT’L CONSTRUCTORS   v. SECRETARY OF THE ARMY

      Further, requiring that the contractor “shall sequence
 construction to complete the majority of the work outside
 the base perimeter fence before cutting the base perimeter
 fences” also does not warrant that the Base security proce-
 dures would not apply to the work site, or that the Base
 perimeter would not expand. It merely governs the Con-
 tractor’s sequencing of its work. This provision is wholly
 consistent with ¶ Y’s vesting of ultimate authority for se-
 curity procedures with the operator of the Base.
      The Board did not err in finding no meaningful distinc-
 tion between this case and Oman-Fischbach. In Oman-
 Fischbach, the mere fact that the contract depicted several
 routes to a disposal site on a map did not explicitly assure
 the contractor of access to any particular route. Oman-
 Fischbach, 276 F.3d at 1384–85. Here, ECC’s contractual
 responsibility to enforce security procedures on the work
 site did not unmistakably give it the right to determine the
 particular security procedures applicable thereto or the
 timing of when the work site might be brought within the
 Base perimeter fence and subject to heightened security
 procedures. This case, like Oman-Fischbach, is distin-
 guishable from D&L Construction, where “[t]he contract
 provided that defendant would make available to plaintiff
 existing off-site improvements, such as existing streets,”
 and where the contracting officer sent contractor a letter
 on the same day that the contract was executed, indicating
 that the United States “will provide suitable access and
 means of ingress and egress to and from the subject pro-
 ject.” D&L Const. Co. & Assoc. v. United States, 402 F.3d
 990, 997 (Ct. Cl. 1968). This case is also distinguishable
 from J.E. McAmis, where the contract included drawings
 showing haul routes, one of which explicitly required the
 use of designated roads and stated that “all designated ac-
 cess roads will be maintained for permanent access.” In re
 J.E. McAmis, Inc., ASBCA No. 54455, 10-2 B.C.A. (CCH) ¶
 34607, 2010 WL 4822734 (Nov. 18, 2010). There are no
 similar provisions in the contract at issue here.
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 ECC INT’L CONSTRUCTORS   v. SECRETARY OF THE ARMY            5

                               II
     In a series of chain cites, ECC argues that parole evi-
 dence in the form of the parties’ contemporaneous commu-
 nications reflects the parties’ understanding that the
 government warranted that the Base safety procedures
 would not apply to the JOC site. The Board did not err in
 not considering these communications. First, as explained
 above, the contract unambiguously stated that the opera-
 tor of the Base maintained ultimate authority for security.
 See Banknote Corp. of Am. v. United States, 365 F.3d 1345,
 1353 (Fed. Cir. 2004) (noting that we do not consider ex-
 trinsic evidence to interpret a contract or solicitation if the
 provisions “are clear and unambiguous”). Second, the cited
 communications occurred after the circumstances giving
 rise to this dispute. The parties entered into the Contract
 in 2010, but the cited communications are from 2012 when
 the Base expansion was in progress. ECC’s cases indicate
 that the relevant time frame for determining the scope of
 the contract warranties is before the changes that gave rise
 to the dispute. See Russel & Assocs.-Fresno Ltd. v. United
 States, 1979 WL 16491 (Ct. Cl. Mar. 9, 1979) (considering
 the parties’ performance of the contract over the first 18
 months “before any problems with the HVAC system
 arose”); Max Drill, Inc. v. United States, 427 F.2d 1233,
 1240 (Ct. Cl. 1970) (“The interpretation of a contract by the
 parties to it before the contract becomes the subject of con-
 troversy is deemed by the courts to be of great, if not con-
 trolling weight.”); Macke Co. v. United States, 467 F.2d
 1323, 1325 (Ct. Cl. 1972) (“[H]ow the parties act under the
 arrangement, before the advent of controversy, is often
 more revealing than the dry language of the written agree-
 ment by itself.”). These communications, therefore, do not
 aid in interpreting whether the government warranted the
 security procedures at the JOC.
     Moreover, nothing in the correspondence indicates that
 the government would pay ECC for the additional costs
 arising out of the expansion, or that such payments were
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 6         ECC INT’L CONSTRUCTORS   v. SECRETARY OF THE ARMY

 mandated by any warranty in the contract. At best, the
 letters indicate that the parties acknowledged that there
 was a change of circumstance, that ECC was asking for
 compensation due to this change, and that the government
 asked ECC for the estimated impact of the changes to the
 contract. J.A. 63 (Hayward Dec’l listing the communica-
 tions); J.A. 98 (Contracting Officer’s representative re-
 questing ECC to submit “a quantified request” of how it
 was affected by the change); J.A. 100 (Contracting Officer’s
 representative noting the interim security policy); J.A.
 102–05 (Contracting Officer’s representative noting that
 “everyone here is aware that there will be contractual im-
 plications from the security changes”); J.A. 107 (Contract-
 ing Officer’s representative noting changes in security
 policy). Even if considered, the correspondence does not
 show that the contract included an unmistakable war-
 ranty.
    We have carefully considered ECC’s remaining argu-
 ments and conclude that they have no merit.
    For the foregoing reasons, we see no error in the
 Board’s grant of summary judgment to the government.
                        AFFIRMED