Court Opinion

ID: 4525707
Source: CourtListenerOpinion
Date Created: 2020-04-15 20:00:06.902901+00
Date Added: 2024-06-11T09:25:51.281578
License: Public Domain

ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeal of --                                )
                                            )
CKY, Inc.                                   )      ASBCA No. 60451
                                            )
Under Contract No. W912P8-11-D-0007         )

APPEARANCE FOR THE APPELLANT:                      Daniel L. Baxter, Esq.
                                                    Wilke, Fleury, Hoffelt, Gould & Birney, LLP
                                                    Sacramento, CA

APPEARANCES FOR THE GOVERNMENT:                    Michael P. Goodman, Esq.
                                                    Engineer Chief Trial Attorney
                                                   William G. Meiners, Esq.
                                                   J. Emmanuel I. Santa Teresa, Esq.
                                                   Stephan C. Roth, Esq.
                                                    Engineer Trial Attorneys
                                                    U.S. Army Engineer District, New Orleans

                OPINION BY ADMINISTRATIVE JUDGE WILSON

       CKY, Inc. (CKY or appellant) appeals the U.S. Army Corps of Engineers’
(government or Corps) decision denying its claims for two water-related impacts to its
construction site near Southern University in Baton Rouge, LA. The first involves the
Mississippi River backflowing into CKY’s construction site due to work being
performed outside the low river level time period in contravention of a note on a
hydrograph in the task order. CKY contends that this resulted in higher water levels
which flooded the site, washed away work materials, and deposited debris on the site.
The second involves the discovery of two undocumented drainage culverts which
drained water from the surrounding areas into the site during and after rain events and
allegedly required additional dewatering and slope repair work. CKY asserts both
issues entitle it to compensation beyond the no-cost time extensions it has received to
date, and the Corps of Engineers contends CKY has already been compensated through
modifications incorporating two change orders. Only entitlement is before the Board.
For the reasons discussed below, we sustain this appeal in part and deny it in part.

                                FINDINGS OF FACT

       1. On July 22, 2010, the Corps issued Contract No. W912P8-11-D-0007 to
multiple contractors, including CKY. This was a multiple award task order contract for
civil works construction projects in the Greater New Orleans area and southern
Louisiana. (R4, tab 7) This contract included both Federal Acquisition Regulation
(FAR) 52.233-1, DISPUTES (JUL 2002) and FAR 52.236-2, DIFFERING SITE
CONDITIONS (APR 1984) (id. at CKY GOV 00250, 00253). The latter provides, in
pertinent part, “The Contractor shall promptly, and before the conditions are disturbed,
give a written notice to the Contracting Officer of (1) subsurface or latent physical
conditions at the site which differ materially from those indicated in this contract” (id.
at 00253).

        2. On September 29, 2012, the government opened bidding for Task
Order W912P8-11-D-0007-0002 (TO) for “reinforced concrete culvert installation”
alongside “placement of earthen fill, bedding, geotextile . . . dewatering . . . and other
incidental work” (R4, tab 7a at CKY GOV 00513-14). Bidding for this TO closed on
October 9, 2012. TO Box 13 required bids to be available for government acceptance
for at least 30 calendar days. (Id. at CKY GOV 00514)

        3. Box 12 required the awardee to submit performance and payment bonds
within three days of receiving the notice of award (id.). TO Section 00010 Note 3
stated, the government would issue the notice to proceed “immediately” once the
awardee’s performance and payment bonds were approved (id. at 00531). Box 11
required the awardee to begin performance 10 calendar days after receiving the notice
to proceed, and complete performance within 210 days of receipt. Compliance with
this performance period was marked “mandatory.” (Id. at 00514)

        4. TO Section 00700 Clause 3(b) required the awardee to “(1) [c]heck all
drawings furnished [by the government] immediately upon receipt. . . . (3) [p]romptly
notify the Contracting Officer of any discrepancies; (4) [b]e responsible for any errors
that might have been avoided by complying with this paragraph (b).” Clause 3(e) states
“[t]he work shall conform to the specifications and the contract drawings identified on
the following index of drawings” with Drawing Nos. PC-104 and PC-614 listed in the
index, among others. Clause 4 states “[t]he Government shall not be responsible for
any interpretation of or conclusion drawn from the data or information by the
Contractor.” (Id. at 00533-35)

        5. Drawing No. PC-104 is an existing site plan and identifies features of the work
area, including a single existing culvert (app. supp. R4, tab 177 at 5). Drawing No. PC-614
is a hydrograph identifying monthly gauge readings of the Mississippi River in feet. The
hydrograph begins at January 2001 and extends through early April 2012. Drawing
No. PC-614 contains a Note (Note 1) stating the following: “CONSTRUCTION SHALL
ONLY BE PERFORMED FROM AUGUST TO NOVEMBER WHEN MISSISSIPPI
RIVER LEVELS ARE LOWEST.” (App. supp. R4, tab 33 at CKY GOV 002174) During
the hearing, the administrative contracting officer testified that he became aware of Note 1 in
October 2014 (tr. 3/147-48). The contracting officer’s representative testified he learned of
Note 1 during his deposition in preparation for the hearing in this appeal (tr. 3/20-21, 29).

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       6. TO Section 31 23 19.00 12 paragraph 1.7 required the awardee to submit the
following:

              [c]omplete dewatering design package with details of the
              proposed dewatering facilities to the Contracting Officer for
              review and approval by the Contracting Officer. . . .
              [A]pproval of the plan for installation, either as submitted or
              revised as a result of the review, should not be interpreted as
              the Government accepting responsibility for the
              performance of the dewatering system and shall not relieve
              the Contractor of full responsibility for the proper design,
              installation, maintenance, operation, and actual performance
              of both the individual system components and the entire
              system. . . . If, during the progress of the work, the installed
              dewatering system proves inadequate to meet the
              requirements specified, the Contractor shall, at its expense,
              furnish, install, and operate such additional dewatering
              facilities . . . as may be necessary to perform the required
              dewatering without additional cost to the Government.

(R4, tab 7a at CKY GOV 00911-12) Paragraph 1.8 states the awardee’s plan must
“accomplish the following: (1) Collect and dispose of all surface water in the protected
area regardless of source” (id. at 00912).

        7. The government amended the solicitation on October 5, 2012, to answer two
requests for information (“RFIs”) received during bidding. These requests concerned
whether the head wall would remain in place and whether the new box culvert, the subject
of the TO, could be pre-cast or cast in place. (R4, tab 7a at CKY GOV 00517-18) The
record does not contain any evidence of inquiries about the dewatering requirements in
light of the impending contract schedule.

        8. As part of its evaluation, the government prepared an independent cost
estimate and identified the cost for dewatering at $39,802.87 for the duration of the
project, based on the TO documents (app. supp. R4, tab 134 at CKY GOV 004481;
tr. 2/35-41). This estimate also assumed construction time of 120 days (app. supp. R4,
tab 134 at CKY GOV 004477-78). In its bid, appellant projected dewatering costs at
$42,652.00, with a total bid of $932,349.00 (R4, tab 19).

       9. The government awarded appellant the TO on October 17, 2012 (R4, tab 7a
at CKY GOV 00513). The government issued the notice to proceed on November 5,
2012, though appellant indicates that it received the letter four days later (R4, tab 9).
Appellant submitted a construction schedule dated November 30, 2012, which

                                             3
identified a work schedule starting November 5, 2012, and ending May 28, 2013 (R4,
tab 35 at CKY 00145-46).

       10. Appellant was prevented from mobilizing to the site until January 24, 2013
due to heavy rainfall, over two months behind schedule (R4, tab 14 at CKY
GOV 00967-990, tab 35 at CKY 00145). Appellant and government personnel agreed
to suspend work when the level of the nearby Mississippi River reached 23 feet or
above. At that height, the river would backflow into the construction site. (App. supp.
R4, tabs 40, 56; tr. 1/62-63) The government extended the TO completion date through
three no-cost modifications to compensate for lost worktime due to “unusually high
water” from the Mississippi River and “severe weather” (R4, tabs 21, 27-28).

       11. Appellant sent two RFIs to the government for two culverts it discovered while
cleaning and grubbing the site, both dated and received by the government March 1, 2013
(R4, tab 17; see also R4, tabs 78-81, 83-86; app. supp. R4, tab 173. Pictures of the area
where the northern culvert was found do not show a culvert at all, but merely a slope with
foliage and rocks obscuring it, with pooled water in the foreground (id. at 174 at
CKY 00242). Testimony from both appellant’s and government’s personnel established
these culverts were hidden from view during a normal site visit (tr. 1/99, 103-04, 3/88-91).
In a Quality Assurance Report (QAR) dated March 15, 2013, a government construction
inspector noted:

               [T]here’s a 36” culvert that drains into the work area. The
               pipe drains the area from Southern University on top the hill
               in incorporates [sic] a big area during rain events a huge
               volume of water comes through this 36” CMP [corrugated
               metal pipe] which more than likely cause issues with the
               work being done there. 1

(R4, tab 15 at CKY GOV 01710) (syntax in original) See also tr. 1/87-94) (estimating
the drainage area involved). A QAR dated March 18, 2013 completed by the same
inspector acknowledged a meeting between government and appellant personnel
“discussing issues found on jobsite not shown on plans which could impact the job. It
was decided by USACE to suspend work until these issues could be resolved.” (R4,
tab 15 at 01714) A QAR from the following day noted:

               [t]wo culverts, one on the north slope and one on the south
               slope, were uncovered during excavation. These drainages
               are not shown on the drawings given to the contractor and

1
    The QARs covered most work days. The record does not appear to account for the
         two week discrepancy between the RFIs and the construction inspector’s
         acknowledgement of the culverts.

                                            4
             will have an impact on the work to be performed due to the
             volume of runoff that can be produced with very little
             rain[.]

(Id. at 01716) Appellant held a meeting with the government to discuss the two
culverts on March 15, 2013, and the government “requested that CKY draft a fix for the
problem and figure estimated costs” (R4, tab 6 at CKY GOV 00079). In the meantime,
appellant engaged in dewatering measures and other mitigation to manage the water
from the culverts (tr. 1/112-15).

       12. Appellant’s dewatering plan, submitted April 23, 2013, states “[t]he
objective of this plan is to provide the [government] with an outline of the means and
methods [appellant] intends to employ in accomplishing the dewatering and unwatering
work described in the project plans and specifications” (R4, tab 16 at CKY
GOV 02112, 02115). Section 2.7 of this plan reads as follows:

             2.7 UNFORESEEN WATER WITHIN THE
             CONSTRUCTION LIMITS

             If water is directed or enters into the construction site from
             unknown sources, CKY Inc. will investigate the source and
             notify the COR [contracting officer’s representative], in the
             event the water cannot be controlled. CKY Inc. will take all
             practical measures to limit damage to the construction site
             and will work with the COR to rectify the problem.

(Id. at 02117) The government approved appellant’s revised dewatering plan, dated
August 7, 2013, which included minor revisions from the April plan not relevant here
(R4, tab 50; tr. 3/135-39).

       13. By letter dated July 1, 2013, the government issued a Request for Proposal
(RFP) to appellant to “[p]rovide additional drainage pipes and swales to direct the flow
from three existing drainage outlets into the new proposed culvert and headwall,”
included a new Section 33 44 00 – Storm Drainage Utilities, and provided four new
drawings to replace previous drawings in the TO (app. supp. R4, tab 41 at CKY
GOV 002225). The letter requested a “complete itemized breakdown . . . . It should
cover all work involved in the modification . . . and the effects of the changes on
unchanged work (impact) if any.” (Id. at 002224)

      14. Appellant submitted its proposal for the changes by letter dated July 25,
2013. This proposal included an “itemized breakdown for all materials, labor and
equipment to make changes to the box culvert’s headwall installation and add a new
RCP inlet per the attached drawings.” (App. supp. R4, tabs 60-61) This proposal was

                                           5
accepted, and the government issued a notice to proceed with the change by two letters
dated May 7, 2014 (app. supp. R4, tabs 42-43).

       15. The government and appellant continued to negotiate over the price of the
additional work until September 5, 2014. The price negotiation memorandum prepared
by the government discussed negotiations with the contractor for “a fair and reasonable
settlement for the work of the change,” with the parties reaching an agreed amount of
$240,000. (App. supp. R4, tab 57 at CKY GOV 002340) “The government and the
contractor agreed that the final negotiated settlement as shown below was fair,
reasonable, and an equitable adjustment to the contract for all work associated with this
change will [sic] be forthcoming, including all applicable costs for overhead and
impact” (id. at 002341). This memorandum was signed December 17, 2014 (id.).
Testimony during the hearing indicated this discussion was only related to the work
which resulted from the RFP (tr. 1/146, 3/124, 129-34).

      16. During these negotiations, the government issued two unilateral
modifications, numbered 1E and 1L, which added a combined total of $150,000 to
CIN-003 (R4, tab 25). Both of these modifications acknowledge in their closing
statements that this is “a partial payment” and is “issued on a unilateral basis as
agreement has not been reached on the cost of the work” discussed by the July 2013
RFP (id. at CKY GOV 02150, 02152).

      17. The final modification related to this RFP was Modification No. 1M
(Mod 1M), signed by both parties on December 11 and 12, 2014. This added another
$90,000 to CIN-003 and contained the following closing statement:

              It is further understood and agreed that this adjustment
              constitutes compensation in full on behalf of the contractor,
              its subcontractors and suppliers for all costs and markups
              directly or indirectly attributable to the changes ordered, for
              all delays, impacts and extended overhead related thereto,
              and for performance of the change within the time frame
              stated.

(R4, tab 30 at CKY GOV 02164-66)

       18. On June 17, 2015, appellant submitted a claim to the contracting officer for
$1,146,226.00 incurred as a result of what appellant alleges is out of scope work
dealing with the Mississippi River’s backflow and the undocumented culverts’
discharge into the work site. Appellant’s claim stated it constructed and maintained a
downstream coffer dam in order to manage the river’s backflow, excavated debris
which had washed into the site, and replaced material which had washed out. For this
work, appellant claims it has to date only received no-cost extensions from the

                                             6
government, and it says it was told to submit a claim to the government for any
additional payment. (R4, tab 4 at CKY GOV 00056-58) Appellant’s claim also stated
the discharge from the undocumented culverts after heavy rain events “routinely
scoured the slopes and washed materials from the slopes into CKY’s excavation area,
which needed to be excavated and replaced on the slopes; at times, the water also
carried away some of the material previously placed by CKY, thus requiring additional
work” beyond the TO’s requirements. (R4, tab 4 at CKY GOV 00058) Appellant did
not identify how much of the total claimed amount was attributable to impacts from the
high river level and how much to the undocumented culverts, nor to a third claim which
it has since abandoned (compare R4, tab 4 with compl.). On December 11, 2015, the
contracting officer issued a final decision denying appellant’s claim in its entirety (R4,
tab 3 at CKY GOV 00052). This decision relied in part on the construction manager’s
advice, who understood the TO’s timeline as established in Note 1 of the hydrograph
(tr. 1/193-94). Appellant timely appealed on February 19, 2016, claiming only
$710,807.00, which was docketed as ASBCA No. 60451.

                                     DISCUSSION

I. High River Level Impact Claim

       Appellant’s first claim involves work performed to mitigate damage caused by
floodwaters backflowing into its work site from the nearby Mississippi River.
Appellant claims that this work, which included constructing and maintaining a coffer
dam, replacing lost materials, and removing debris, was beyond the scope of the TO, as
it would have been unnecessary had the government held to the August to November
time frame in Note 1, rather than issuing the notice to proceed in early November.
(Findings 9, 18) Appellant advances three theories in support of its claims: that the
government provided defective specifications by including a separate timeframe in
Note 1, that appellant encountered a Type 1 differing site condition in the water levels
than what it anticipated by relying on Note 1, and that there was a mutual mistake
between the parties regarding the condition of the site.

        The government argues that delays related to this claim were not shown to affect
the critical path, and that contractors may not be compensated for unusually severe,
unpredictable weather. The government further argues the notice to proceed was issued
in strict accordance with the terms of the TO, and that any defect in the performance
period was patent, imposing upon appellant a duty to inquire, which it failed to do.
Finally, the government argues that appellant elected to work outside the timeframe in
Note 1.

                                            7
       A. Defective Specifications

        There is “an implied warranty by the government that, when the contract
contains design specifications, satisfactory contract performance will result if the
contractor follows those specifications.” AAB Joint Venture v. United States, 75 Fed.
Cl. 414, 428 (2007). For a contractor to recover due to defective specifications, it
“must show that it was misled by the defect. To demonstrate that it was misled, the
contractor-claimant must show both that it relied on the defect and that the defect was
not an obvious omission, inconsistency or discrepancy of significance . . . .” E.L.
Hamm & Assocs., Inc. v. England, 379 F.3d 1334, 1339 (Fed. Cir. 2004). “The
government’s implied warranty of its design specifications and drawings does not
relieve a contractor of its duty to inquire about a patent ambiguity, inconsistency or
mistake when it recognized or should have recognized an error in the specifications or
drawings.” Versar, Inc., ASBCA No. 56857 et al., 12-1 BCA ¶ 35,025 at 172,124. As
stated further:

              Because the doctrine has the effect of relieving the
              government of the consequences of its own poorly drafted
              contract, it is applied narrowly to those cases where the
              ambiguity is so patent and glaring that it is unreasonable for
              a contractor not to inquire about them. More subtle
              ambiguities are deemed latent and accorded an
              interpretation favorable to the contractor.

R.L. Persons Constr., Inc., ASBCA No. 60121, 18-1 BCA ¶ 37,007 at 180,236. “The
existence of a patent ambiguity in a government contract ‘raises the duty of inquiry,
regardless of the reasonableness of the contractor’s interpretation. . . . Absent such
inquiry, a patent ambiguity in the contract will be resolved against the contractor.”
Triax Pacific, Inc. v. West, 130 F.3d 1469, 1474-75 (Fed. Cir. 1997) (quoting Fortec
Constructors v. United States, 760 F.2d 1288, 1291 (Fed. Cir. 1985)). “Whether an
ambiguity is patent or latent is a question of law. . . . This determination is made on a
case-by-case basis.” Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 997 (Fed.
Cir. 1996) (citations omitted).

       Appellant relies on Note 1 on Drawing No. PC-614, which states work time should
be restricted to between August and November (finding 5). The TO states “[t]he work
shall conform to the specifications and the contract drawings identified on the following
index of drawings,” referring to an index which includes Drawing No. PC-614 (finding 4).
However, there were other inconsistent indications in the TO of when the period of
performance was meant to take place. The TO was open for bids until October 9, 2012,
and required bids to be available for government acceptance for 30 days (finding 2). This
indicates the government intended to accept them within that time. Boxes 12a and 12b of
the TO mandate that the contractor submit performance and payment bonds within three

                                             8
calendar days of award (finding 3). After the government’s verification of those bonds, the
TO stated, the government would issue the Notice to Proceed “immediately” afterwards.
Box 11 allows the contractor 210 days from the Notice to Proceed to complete
performance, and the performance period is marked as mandatory. (Id.) This presents an
entirely different timeline than that specified in Note 1, and begins predictably some time
in November or December 2012. We conclude that Note 1 presented an inconsistency with
these other parts of the TO sufficient to create a patent ambiguity, and triggered appellant’s
duty to inquire prior to the closing of the solicitation. 2 There is no evidence in the record
of appellant’s inquiring about this inconsistency (see, e.g., finding 7).

        Buttressing this finding, the TO required the contractor to “[c]heck all drawings
furnished . . . immediately upon receipt,” and “[p]romptly notify the Contracting
Officer of any discrepancies.” It then made the contractor “responsible for any errors
that might have been avoided by complying” with these requirements,” stating “[t]he
government shall not be responsible for any interpretation of or conclusion drawn from
the data or information [drawings and specifications] by the Contractor.” (Finding 4)
The contractor had a duty to inquire about the patent ambiguity, and having failed to do
so, is barred from recovering based on its interpretation of the period of performance.

         B. Differing Site Condition

       The presence of the patent ambiguity in the performance period defeats this
theory for recovery related to the high river level impact claim. The underlying
contract contained the clause FAR 52.236-2, DIFFERING SITE CONDITIONS
(APR 1984) (finding 1). To establish a Type 1 differing site condition,

               a contractor must prove, by preponderant evidence, that:
               the conditions indicated in the contract differ materially
               from those actually encountered during performance; the
               conditions actually encountered were reasonably
               unforeseeable based on all information available to the
               contractor at the time of bidding; the contractor reasonably
               relied upon its interpretation of the contract and contract-
               related documents; and the contractor was damaged as a

2
    This ambiguity appears to have confused government personnel as well. The cost
         engineer created his government estimate based on a 120 day schedule which
         reflected the August-November timeline, and the construction manager evaluated
         appellant’s claim assuming Note 1 controlled the timeline (findings 8, 18).
         However, the administrative contracting officer became aware of Note 1 two years
         after bidding closed, and the contracting officer’s representative learned of it
         almost four years after that (findings 2, 5).

                                             9
              result of the material variation between expected and
              encountered conditions.

Comtrol, Inc. v. United States, 294 F.3d 1357, 1362 (Fed. Cir. 2002) (citing H.B. Mac,
Inc. v. United States, 153 F.3d 1338, 1345 (Fed. Cir. 1998)). Recovery is barred when
there is a patent ambiguity in the contract related to the differing site condition, because
this ambiguity should put appellant on notice that the encountered condition may be
present. Comtrol, 294 F.3d at 1365.

        Appellant complains it encountered differing site conditions than those it would
have encountered if the TO work were performed within the period of time discussed by
Note 1. This argument suffers from at least two defects. First, Note 1 is not a site
condition, but a restriction as to the period of performance, i.e. a term of the TO.
Second, as the river level indicated by the hydrograph is the site condition, the projected
river level was laid out in Drawing No. PC-614 for January 2001 through April 2012
(finding 5). Appellant cannot claim the conditions of the water level during any time of
year would be reasonably unforeseeable based on all the information it had available at
the time of bidding. The hydrograph estimated the river’s annual level and, as stated
above, the timing of the TO’s work performance was unclear. To the extent appellant
claims compensation due to unusually heavy rains, we view extreme weather as an Act
of God and not compensable under the Differing Site Condition clause absent a
governmental act or fault. Tidewater, Inc., ASBCA No. 61076, 18-1 BCA ¶ 37,195
at 181,076-77. Despite appellant’s arguments to the contrary, we also do not believe the
government committed a qualifying act or fault within the meaning of this doctrine. The
government’s enforcement of the period of performance beginning in November cannot
be such an act or fault, as it enforces one of the possible reasonable interpretations of the
TO’s period of performance.

       C. Mutual Mistake

        The patent ambiguity related to the TO’s period of performance identified above
defeats the mutual mistake claim as well. A claim for mutual mistake requires the
appellant to prove 1) the parties to the contract were mistaken in their belief regarding a
fact, 2) the mistaken belief was a basic assumption underlying the contract, 3) this
mistake had a material effect on the bargain, and 4) the contract did not put the risk of
the mistake on the party seeking reformation. SKE Base Servs. GmbH, ASBCA
No. 60101, 18-1 BCA ¶ 37,159 at 180,902 (citing Nat’l Austl. Bank v. United States,
452 F.3d 1321, 1329-30 (Fed. Cir. 2006)). However, “a party cannot rely upon a
mutual mistake of fact to avoid enforcement of a contract where . . . the ‘mistake’ is a
result of that party’s failure to exercise due diligence.” CanPro Invs. Ltd. v. United
States, 130 Fed. Cl. 320, 342 (2017) (quoting Griffin & Griffin Expl., LLC v. United
States, 116 Fed. Cl. 163, 175 (2014)) (omission in original). Thus, “even if [appellant]

                                            10
had provided a basis for reformation, the patent ambiguity doctrine would preclude
recovery.” C.W. Over & Sons, Inc. v. United States, 54 Fed. Cl. 514, 528 (2002).

        Here, the presence of the performance period’s patent ambiguity bars recovery
under a theory of mutual mistake. Appellant’s failure to inquire is a failure to exercise
due diligence. As part of its argument, appellant points to its bid containing a similar
dewatering cost as the government developed in the project cost estimate (app. br.
at 38; finding 8). However, this suggests the parties may have had similar beliefs about
the costs associated with the project, but does not excuse appellant’s failure to inquire.

       In light of the foregoing, we conclude that appellant’s failure to inquire about
Note 1 in the face of contractual language establishing an incompatible period of
performance prevents recovery of costs associated with the impact of the high river
level under all three theories.

II. Undocumented Culverts Claim

        Appellant’s second claim concerns mitigation work related to two culverts it
discovered in the construction site during the course of performance. Discharge from
these culverts after heavy rain events allegedly resulted in damage to slopes, debris
washing into the work site, and appellant having to replace lost material that was
displaced by the water. Appellant asserts discharge from these culverts also caused the
site to become too wet and unmanageable for it to continue work on some days, and it
was required to perform mitigation measures prior to execution of the change orders.
(Findings 11, 18) Though the government asserts in its briefing that Mods 1E, 1L, and
1M compensated appellant for all the extra work related to these culverts, appellant
claims this compensation related only to work developed as a result of the July 2013
RFP. Appellant asserts these modifications did not include work appellant performed
to mitigate damage to the site caused by the culverts prior to the government and
appellant executing the two change orders.

        Appellant relies on the same three legal theories for its second claim. Appellant
argues primarily that it has established a Type 1 differing site condition for these
culverts. In the alternative, it further argues the government provided defective
specifications, as evidenced by the failure of the drawings to disclose the culverts, and
finally it argues it and the government were mutually mistaken as to the site conditions.

       The government argues that appellant was compensated for these delays through
Mod 1M, which precludes further recovery by appellant The government further
argues the TO charged appellant with managing all water found on the site. Further,
appellant’s dewatering plan was created a month after discovery of the culverts, and
thus appellant’s planned dewatering must have accounted for the extra water, making

                                            11
the discharges within the scope of the TO. We find appellant has shown a Type 1
differing site condition and that the government’s arguments are without merit.

       “It is well settled that contractors are charged only with the knowledge of any
defects that a reasonable site investigation would have revealed.” Dan G. Trawick, III
Contractors, ASBCA No. 47779, 98-2 BCA ¶ 29,781 at 147,571. Appellant has
established materially different conditions from those indicated by the TO, and that
these conditions were reasonably unforeseeable. The TO’s drawings indicated a single
culvert which would drain water into the work site during and after rain events, though
there were ultimately three culverts present. These extra two were hidden from view on
a normal site visit. Indeed, pictures of the northern culvert do not show a culvert at all,
but merely a slope with foliage and rocks obscuring it, with pooled water in the
foreground. (Finding 11)

        Appellant has also shown it relied on the TO’s documents in preparing its bid.
Its bid for the dewatering efforts did not vary significantly from the government-
prepared estimate for this same expense, which were based on the TO’s documents
(finding 8). This suggests that the bid was in line with the government’s understanding
of the cost and scope of the work. These documents did not include the two
undiscovered culverts (finding 5). The eventual solution to this condition was
incorporated into a modification to the TO, confirming that the work related to these
two culverts was beyond the TO’s scope of work (findings 11-15, 17).

       Finally, appellant has shown that these culverts caused the damage. As only
entitlement is before us, appellant need not quantify this damage, but only show that it
happened. These culverts discharged a significant amount of water during and after
rain events, draining a much larger area into the site than appellant anticipated (see
finding 11). These culverts affected the project enough that the government both shut
down work while it decided how to deal with them, and subsequently modified the TO
and TO price to include additional work for the appellant to reduce their impact
(findings 11, 13-14, 17).

       The government argues that the closing statement in Mod 1M encompasses all
damages appellant suffered due to these culverts (see gov’t br. at 16, 31-32, 43; gov’t
reply br. at 13-16). However, the plain language of Mod 1M’s closing statement does
not support this argument. The closing statement says in pertinent part, “this
adjustment constitutes compensation in full . . . for all costs and markups directly or
indirectly attributable to the changes ordered, for all delays, impacts and extended
overhead related thereto.” (Finding 17) (emphasis added) The word “thereto” in this
sentence cannot relate to “the undisclosed culverts,” as the government claims, since
this phrase does not appear in the document (gov’t br. at 31; finding 17). So much as
the government may be arguing “thereto” refers to “delays,” this would present an
ambiguity. The lack of a comma after “impacts,” may mean “impacts and extended

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overhead” are a separate list discussing aspects of the delays, with “thereto” then
referring to “delays.” If this is the case, the term “delays” would then be ambiguous as
to which delays, whether it is delays existing prior to the modification, or delays related
solely to the work encompassed in Mod 1M. However, the language in the July 2013
RFP; appellant’s responsive bid; and the prior two modifications, 1E and 1L, which
discuss the work to be added, and to which Mod 1M refers, indicate the subject of this
closing statement was only other work resulting from the change orders, and not pre-
change order work. (Findings 13-17) The price negotiation memorandum prepared for
the file is also informative, as it was signed only a few days after Mod 1M, and yet
makes no mention of anything but the work in the change orders. The compensation
amount in this memo and Mod 1M is the same, and it also refers to work using
language similar to that in Mod 1M’s closing statement, illuminating the latter’s
meaning. (Finding 15) We believe the closing statement in Mod 1M does not include
the delays and added costs attributable to the culverts prior to the execution of the
change order, but only costs associated with the mitigation work added thereby. Thus,
Mod 1M did not compensate appellant for delays or impacts prior to engaging in the
change order work.

        Additionally, the government argues that since appellant’s initial dewatering plan
was issued in April 2013, a month after the discovery of the culverts in March 2013, the
plan “could have accounted for these two culverts” (gov’t reply br. at 18). Further, TO
Section 31 23 19.00 12, paragraph 1.8 charges appellant to “[c]ollect and dispose of all
surface water in the protected area regardless of source” (gov’t reply br. at 17; finding 6).
However, we must consider the contract as a whole and interpret it so as to avoid conflicts.
Zebel, LLC v. United States, 135 Fed. Cl. 47 (2017), NVT Tech., Inc. v. United States,
370 F.3d 1153 (Fed. Cir. 2004). Paragraph 1.8 is referring back to Paragraph 1.7’s
discussion of the dewatering plan to be submitted by the awardee. It is inconsistent to read
paragraph 1.7 to discuss the TO awardee shaping its dewatering plan “to meet the
requirements specified” in the rest of the TO, and then read paragraph 1.8 as assigning the
awardee’s eventual plan responsibility for all sources of water which will interact with the
project site in any way during performance (finding 12). Further, the plain language of
appellant’s plan states it is designed to “accomplish[] the dewatering and unwatering work
described in the project plans and specifications” (finding 12) (emphasis added). The
earliest TO drawings to include the additional culverts were those included with the
July 2013 RFP, two months after the initial dewatering plan (finding 13). Thus, we find
appellant was pursuing a solution to the undocumented culverts under Section 2.7 of the
dewatering plan, which was to request further information and direction from the
government (finding 12). We find the government’s argument is without merit.

       In summary, we find that the presence of the patent ambiguity related to the
TO’s period of performance prevents any recovery for impacts by the high river level.
However, we find appellant has established the presence of a Type 1 differing site
condition due to the two undocumented culverts and should recover on that basis. We

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have considered the other arguments advanced by both parties and, in light of the
above, find them to be without merit.

                                     CONCLUSION

       For the reasons stated above, this appeal is sustained in part and denied in part,
and returned to the parties to determine quantum.

       Dated: April 13, 2020

                                                   OWEN C. WILSON
                                                   Administrative Judge
                                                   Vice Chairman
                                                   Armed Services Board
                                                   of Contract Appeals

 I concur                                          I concur

 JOHN J. THRASHER                                  RICHARD SHACKLEFORD
 Administrative Judge                              Administrative Judge
 Chairman                                          Vice Chairman
 Armed Services Board                              Armed Services Board
 of Contract Appeals                               of Contract Appeals

       I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 60451, Appeal of CKY, Inc.,
rendered in conformance with the Board’s Charter.

       Dated: April 13, 2020

                                                   PAULLA K. GATES-LEWIS
                                                   Recorder, Armed Services
                                                   Board of Contract Appeals

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