2009-1067 | Omnilex

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United States Court of Appeals for the Federal Circuit
2009-1067
STATES ROOFING CORPORATION,
Appellant,
v.
Donald C. Winter, SECRETARY OF THE NAVY,
Appellee.
David W. Lannetti, Vandeventer Black LLP, of Norfolk, Virginia, argued for
appellant. With him on the brief was Neil S. Lowenstein.
Jane C. Dempsey, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for appellee. With her
on the brief were Michael F. Hertz, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Mark A. Melnick, Assistant Director.
Appealed from: Armed Services Board of Contract Appeals
Judge Carol N. Park-Conroy

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Norfolk, Virginia.1 The claim is brought in accordance with the Contract Disputes Act of
1978, 41 U.S.C. §601 et seq., and turns on whether States Roofing reasonably
interpreted certain aspects of the contract, such that the Navy’s divergent interpretation
is appropriately viewed as a constructive change and warrants compensation. The
Board allowed the claim as applied to work in some areas of the roof, and denied the
claim as to the same work in other areas of the roof. States Roofing appeals the denial,
and disputes the measure of the compensation awarded for the allowed portion of the
claim.
BACKGROUND
States Roofing and the Navy entered into Contract No. N62470-97-C-8319 for
“Building W-143 Roof Replacement, Wall Repair & Painting,” at a fixed price of
$2,370,000. Building W-143 is a large structure, and in the contract the roof is divided
into eleven “cells,” labeled A through K. These cells include penthouses located on the
main roof, and both the main roof itself and the penthouses have vertical elements
called parapet walls. This appeal relates to the contract’s requirements for
waterproofing of the parapet walls.
Pursuant to Federal Acquisition Regulation (“FAR”) 52.236-3 (“Site Investigation
and Conditions Affecting the Work”), States Roofing’s President, Hugh DeLauney, had
inspected the roof of Building W-143 before bidding. Mr. DeLauney observed the
roofing work that had previously been performed in cells A and B by a different
contractor, RayCo Roofing. RayCo had used waterproofing paint on the parapet walls
in these cells; States Roofing formulated its bid accordingly. The Board found that the
1 Appeal of States Roofing Corp., ASBCA No. 54854, 08-02 BCA ¶33,912
(“Board Opinion”).
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use of paint to waterproof parapet walls is not uncommon, and that States Roofing had
used this method of waterproofing in other government contracts. The Board found that
“[a]t the time of the bid, SRC intended to paint the parapet walls after cleaning them; it
did not intend to apply any type of wall flashing to them.” Board Opinion at 9.
After States Roofing had been awarded the contract and had begun work on the
project, the Navy objected to the use of waterproofing paint on the parapet walls. Lt.
Darren R. Hale, the Assistant Resident Officer in Charge of Construction, disagreed
with States Roofing’s understanding of the contract, and required use of three-ply felt
flashing material to waterproof the parapet walls. It was eventually agreed that States
Roofing would apply a one-ply waterproofing flashing material having the brand name
“DynaClad,” but only because the commercially available three-ply flashing material was
found not suitable for this application and DynaClad was deemed a comparable
substitute. States Roofing complied with the Navy’s instructions and applied the
DynaClad to the parapet walls, and requested an equitable adjustment for the additional
cost of using DynaClad flashing material instead of paint on the parapet walls. The
Navy’s contracting officer held that the use of DynaClad was a no-cost change,
reasoning that the contract required three-ply flashing material, not paint.
The roofing work continued to completion. States Roofing’s accountant
performed an audit, including all adjustments and settled claims, and concluded that the
company had incurred costs totaling $3,329,317.51 in performing the contract,
excluding profit. The government’s corresponding audit concluded that total costs of
$3,336,636 were incurred, excluding profit. States Roofing was paid a total of
$2,934,346.07, placing it in an overall loss position.
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On appeal to the Board, States Roofing argued that it had reasonably interpreted
the contract as permitting use of waterproofing paint for the parapet walls, and that if the
contract were unclear or ambiguous, reasonable doubt should be resolved in favor of
the contractor under the rules of interpretation of federal procurement contracts. The
Board found that for the parapet walls of the penthouses of roof cells A and B, only
waterproofing paint was required, but that for parapet walls in cells C through J, three-
ply flashing material was required. The Board found that States Roofing erroneously
assumed that the acceptability of paint for cells A and B also applied to cells C through
J, and that States Roofing failed to take account of certain detail appearing on drawing
A38, which was one of the 48 sheets of drawings included with the contract. The Board
found that there was “no specification for the parapet wall waterproofing membrane,” for
the Navy stated that it had “inadvertently” omitted this specification. Board Opinion at 7.
However, the Board held that drawing A38 provided sufficient indication that felt flashing
material was required on the parapet walls, to render States Roofing’s interpretation
“not within the zone of reasonableness.” Id. at 20.
The Board also stated, as an alternative ground for denying relief for the roof
cells other than cells A and B, that “[a]t a minimum, there was a patent ambiguity in the
specifications and drawings arising out of the references to ‘coats,’ ‘layers’ and ‘plies’
about which [States Roofing] was obligated to inquire.” Id.
DISCUSSION
Contract interpretation under the Contract Disputes Act is a question of law,
requiring plenary determination on appeal to this court, with “no deference owing to the
interpretation adopted by either the agency or the Board.” Lockheed Martin IR Imaging
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Systems, Inc. v. West, 108 F.3d 319, 322 (Fed. Cir. 1997); see 41 U.S.C. §609(b) (“the
decision of the agency board on any question of law shall not be final or conclusive”);
Textron Def. Systems v. Widnall, 143 F.3d 1465, 1468 (Fed. Cir. 1998) (“Contract
interpretation is a question of law over which we exercise complete and independent
review.”). In addition, “[c]onstruction of the language of the contract to determine
whether there is an ambiguity is a question of law which we review without deference.”
Gardiner, Kamya & Assocs., P.C. v. Jackson, 467 F.3d 1348, 1353 (Fed. Cir. 2006).
“[W]hether ambiguities are latent or patent and whether the contractor’s interpretation
thereof is reasonable are also questions of law subject to de novo review.” Interwest
Constr. v. Brown, 29 F.3d 611, 614 (Fed. Cir. 1994). However, the Board’s factual
findings “shall be final and conclusive and shall not be set aside unless the decision is
fraudulent, or arbitrary, or capricious, or so grossly erroneous as to necessarily imply
bad faith, or if such decision is not supported by substantial evidence.” 41 U.S.C.
§609(b).
I
A
States Roofing argues that its interpretation of the contract as permitting use of
waterproofing paint on the parapet walls of all roof cells was reasonable in light of the
contract documents and the circumstances surrounding its bid. States Roofing states
that when a contractor relies in its bid on a reasonable interpretation of the contract
documents and specifications, any change based on a different interpretation by the
government is not chargeable to the contractor, as explained in WPC Enterprises, Inc.
v. United States, 323 F.2d 874, 877–78 (Ct. Cl. 1963) (citations omitted):
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[I]f some substantive provision of a government-drawn contract is fairly
susceptible of a certain construction and the contractor actually and
reasonably so construes it, in the course of bidding or performance, that is
the interpretation which will be adopted, unless the parties’ intention is
otherwise affirmatively revealed. This rule is fair both to the drafters and
to those who are required to accept or reject the contract as proffered,
without haggling. . . . If the [government] chafes under the continued
application of this check, it can obtain a looser rein by a more meticulous
writing of its contracts and especially of the specifications.
This rule of contra proferentem continues to apply, as illustrated in Lockheed
Martin IR Imaging Systems, 108 F.3d at 322, where this court declined to impose a
contract interpretation sought by the Army but to which the contractor never intended to
agree. States Roofing points out that this principle has particular force where, as here,
the Navy “inadvertently” omitted a specification that could have avoided
misunderstanding. See Appeal of City Elec., Inc., ASBCA No. 24565, 82-2 BCA
§16,057 (contractor’s interpretation was reasonable where it was “conceded by the
Government that neither the contract specifications nor the contract drawings provide
any details for constructing” the relevant feature).
In determining whether States Roofing’s interpretation was reasonable, as to
whether paint or flashing material was required for the parapet walls, we need not
conclude that it was the only possible reasonable interpretation, or even the best one.
See United Pac. Ins. Co. v. United States, 497 F.2d 1402, 1407 (Ct. Cl. 1974) (“[I]t is
well established that if a drawing or specification is ambiguous and the contractor
follows an interpretation that is reasonable, this interpretation will prevail over one
advanced by the Government, even though the Government’s interpretation may be a
more reasonable one, since the Government drafted the contract.”); City Elec., ASBCA
No. 24565, 82-2 BCA §16,057 (“A contractor’s reasonable interpretation need not be
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the best interpretation. It need only be within the zone of reasonableness.”). Thus
States Roofing states that the Board erred in ruling that States Roofing’s understanding
of the contract’s requirement for waterproofing the parapet walls was “not within the
zone of reasonableness.”
States Roofing argues that it was reasonable to interpret the provision for
waterproofing the parapet walls in cells C through J in the same way as for cells A and
B, for which the Board agrees that only paint was required. States Roofing argues that
contract drawing A38, on which the Navy relies, does not clearly indicate the use of
flashing material rather than paint for this area, and does not fill the gap left by the
Navy’s admitted failure to provide a specification for this material, as would have
clarified this aspect of the proposal. States Roofing states that the reasonableness of
its understanding is reinforced by Mr. DeLauney’s pre-bid site inspection which showed
that paint had previously been used to waterproof the parapet walls in roof cells A and
B, and in light of States Roofing’s acknowledged use of waterproofing paint for the
same kind of roofing structures in other government contracts, and which practice the
Board found was “not uncommon in the industry.” Board Opinion at 10.
As summarized by the Board, States Roofing “read the contract documents as
requiring it to paint the parapet walls, pointing specifically to Demolition Note 23 on
Sheet A2, contract specifications from Section 09900, New Work Notes 28 and 61 on
sheet A2, and General Work Notes 12 and 18 on sheet A3 (R4, tab 25).” Id. As found
by the Board, Demolition Note 23 on drawing A2 required removal of existing flashing or
other surfacing from the “inside face and top of parapet wall,” and stated “repair wall as
required.” Id. at 7. Contract Specification 09900, which related to “Paints and
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Coatings,” specified that it applied to “existing coated surfaces made bare by cleaning
operations,” and that “three coats of paint (primer, intermediate, and topcoat)” were to
be applied. Id. New Work Note 28 on drawing A2 required repainting of existing
painted concrete and brick, while New Work Note 61 provided: “Back side of parapet
wall – paint down to surface applied counter flashing.” Id. at 8. The Board found that
the “‘back side’ of the parapet wall means its interior side.” Id. The Board found that
General Work Notes 12 and 18 on drawing A3 “described work similar to New Work
Notes 28 and 29” on drawing A2, and that “General Work Note 18 explicitly refers to the
parapets.” Id. States Roofing also read General Note 2 on drawing A8, which referred
to these notes on drawings A2 and A3 and designated the work as “typical,” with the
word “typical” indicating that the combined details of these drawings and notes would
not be repeated in the other drawings. Id. at 13.
States Roofing states that these provisions of the contract and drawings, read
together, support its position that it was reasonable to read the contract as requiring the
use of paint on the parapet walls. However, the Board found that States Roofing’s
“interpretation does not fully consider the other drawings, in particular Sheet A38.” Id. at
19. Sheet A38 is titled “Typical Flashing Detail @ Roof Drains & Parapet Walls” and
contains New Work Note 2, which calls for a “Waterproofing Membrane (3 Layers)” to
be applied to the parapet walls in cells C through J. States Roofing argued that, in light
of the various provisions specifying the use of paint in connection with parapet walls, it
reasonably understood the reference to “3 Layers” as requiring three layers of paint. Id.
at 13. The Board held that this work note, combined with the drawing itself, adequately
specified that three-ply flashing material was intended as the “waterproofing membrane
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3-Layers,” and gave no weight to States Roofing’s assorted evidence of the
reasonableness of its interpretation.
States Roofing asserts that the Board unlawfully resolved against the contractor,
what is at most unclear, citing the Navy’s admitted failure to include the specification
that would have avoided uncertainty. States Roofing argues that, even apart from the
missing specification, if the Navy had intended to require three-ply flashing material,
rather than paint, to be applied to the parapet walls, it could easily have used clearer
words to state this intention on drawing A38, as indeed it had done elsewhere in the
contract. For instance, other Work Notes on drawings A37 and A38, referring to areas
other than the parapet walls, call for “Waterproofing Membranes (3-Ply)” and “Multiple-
Ply Membrane Base Flashing.” Both States Roofing and the Navy understood these
Work Notes as requiring plies of flashing material. States Roofing refers to the canon of
statutory interpretation whereby different terms are presumed to have different
meanings, see, e.g., United States v. Maria, 186 F.3d 65, 71 (2d Cir. 1999) (“As a
general matter, the use of different words within the same statutory context strongly
suggests that different meanings were intended.”), and argues that the same
presumption reasonably applies in contract interpretation. Thus States Roofing argues
that it was reasonable for it to understand “3 Layers” on drawing A38 to refer to three
layers of paint, as distinguished from the “multiple-ply flashing material” that was
expressly specified elsewhere on the same drawing and throughout the contract for
other areas of the roof.
The Board offered no explanation for the contract’s use of these different terms if
the same three-ply flashing material were intended and required to be used to
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waterproof the parapet walls, and acknowledged a potential ambiguity “arising out of the
references to ‘coats,’ ‘layers’ and ‘plies.’” Board Opinion at 20. Nor has the Navy, in its
brief, provided any explanation for this inconsistent terminology. The Navy merely
argues that it used “layers” and “plies” “interchangeably,” and thus that the presumption
that different words have different meanings holds no sway. The Navy also argues that
the contract elsewhere uses “coats” or “coatings” when referring to paint, and offers the
theory that “layers” is more like “plies” than it is like “coats.”
The Navy argues that the drawing of sheet A38, which shows three thin, narrowly
spaced, parallel black lines along the parapet walls, shows that a three-ply flashing
material, rather than three layers of paint, was specified. The Board did not find the
drawing to be as clear as the Navy proposes. The Board found that “Sheet A38 does
not specify any required thickness for the waterproofing layers,” id. at 8, and rejected
the testimony by the Navy’s roofing witness, Mark deOgburn, who stated that the three
narrowly spaced lines show layers of felt material that “were supposed to be 1/2-inch
thick,” id. at 19. This Board finding is consistent with States Roofing’s position that this
detail was inadequate to specify that flashing material was required for the parapet
walls.
The Navy also argues that drawing A38 shows the use of fasteners, and that
fasteners are consistent with the use of flashing material rather than paint. States
Roofing responds that the placement of these fasteners shows that their purpose is to
attach sheet metal coping to the sides of the parapet wall and to attach the base
flashing used for the roof to the bottom of the parapet walls. Drawing A38 shows
fasteners only where other roofing features overlap with the waterproofing membrane;
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no fasteners are shown along the portion of the parapet wall covered only by the three
lines that the Navy says is three-ply flashing material, although not so designated. We
agree that this argument about fasteners does not support the government’s position
that the three lines in the A38 drawing are consistent only with three-ply flashing
material.
The Navy also argues that States Roofing’s interpretation would render drawing
A38 superfluous. In response, States Roofing points to several aspects of drawing A38
that relate to other contract requirements, unrelated to the waterproofing of the parapet
walls. States Roofing is correct that these aspects of drawing A38 negate the
suggestion that States Roofing’s interpretation would render this drawing superfluous.
The Board’s opinion contains other indications of the Board’s concern with the
contract, for the Board observed that “[t]he individual who drafted the contract drawings
did not testify at the hearing.” The Navy witnesses were the architect who had worked
on the project, David Greenfield, and a subject matter expert in roofing, Mr. deOgburn.
The Board observed that these two witnesses did not agree, for Mr. Greenfield read the
contract as “indicating that all of the penthouse parapet walls were to be cleaned and
painted,” Board Opinion at 18 (emphasis by Board), while Mr. deOgburn opined that the
parapet walls of cells C though J were to be covered with three-ply flashing material.
The Board observed that the Navy “disavow[ed]” Mr. Greenfield’s testimony and favored
Mr. deOgburn’s testimony. Id. On this appeal the Navy presses the contract
interpretation of a roofer who apparently had no connection to the project, over that of
the architect the Navy had hired to work on the project. The Board found that Mr.
Greenfield had not only reviewed and revised the contract drawings and prepared the
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government’s estimate, but actually added detail to drawing A38 in an attempt to clarify
it. The discord between the Navy’s witnesses does not strengthen the Navy’s position
that drawing A38 was clear and States Roofing’s interpretation unreasonable.
We conclude that States Roofing’s interpretation was within the zone of
reasonableness, in view of all of the evidence and circumstances including the prior use
of waterproofing paint on parapet walls of the same roof, the Board’s agreement that
waterproofing paint was required for some parapet walls, the consistent use of “ply” and
other more precise terms wherever flashing material was specified, the Navy’s admitted
omission of the relevant specification, the conflicting expert testimony, and with due
attention to the rule of contra proferentem. The Board’s contrary ruling is reversed.
B
The Board made the alternative holding that any contract ambiguity was “patent,”
arising “out of the references to ‘coats,’ ‘layers’ and ‘plies’ about which [States Roofing]
was obligated to inquire.” Board Opinion at 20.
A “patent ambiguity” is one that is “obvious, gross, glaring, so that plaintiff
contractor had a duty to inquire about it at the start.” H&M Moving, Inc. v. United
States, 499 F.2d 660, 671 (Ct. Cl. 1974). As explained in Grumman Data Systems
Corp. v. Dalton, “a patent ambiguity does not exist where the ambiguity is neither
glaring nor substantial nor patently obvious.” 88 F.3d 990, 997 (Fed. Cir. 1996) (internal
quotation marks omitted). See generally WPC Enters., 323 F.2d at 877 (“Although the
potential contractor may have some duty to inquire about a major patent discrepancy, or
obvious omission, or a drastic conflict in provisions, he is not normally required (absent
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a clear warning in the contract) to seek clarification of any and all ambiguities, doubts,
or possible differences in interpretation.”).
States Roofing contends that the contract did not include a glaring conflict or
omission. States Roofing states that it reasonably understood the different words
“layers” and “plies” to have different meanings, citing its knowledge of the past use of
paint as the waterproofing material for these parapet walls, and the fact that plies of
flashing material were plainly specified in the contract where flashing was intended for
use elsewhere on the roof. The Navy does not dispute that States Roofing genuinely
understood the contract to require paint for waterproofing of the parapet walls in all roof
cells, and that States Roofing relied on this understanding in its bid.
We agree with States Roofing that any ambiguity in the contract was latent,
rather than patent. As precedent explains, there must be a glaring conflict or obvious
error in order to impose the consequences of misunderstanding on the contractor. See
HPI/GSA 3C, LLC v. Perry, 364 F.3d 1327, 1334 (Fed. Cir. 2004) (“Where an ambiguity
is not sufficiently glaring to trigger the patent ambiguity exception, it is deemed latent
and the general rule of contra proferentem applies.”); Blount Bros. Const. Co. v. United
States, 346 F.2d 962, 973 (Ct. Cl. 1965) (“[Contractors] are not expected to exercise
clairvoyance in spotting hidden ambiguities in the bid documents, and they are
protected if they innocently construe in their own favor an ambiguity equally susceptible
to another construction, for . . . the basic precept is that ambiguities in contracts drawn
by the Government are construed against the drafter.”). We conclude that the
waterproofing requirement for the parapet walls, as set forth in the contract, does not
meet the criteria of a patent ambiguity.
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C
We conclude that the requirement that flashing material be used on all of the
parapet walls instead of waterproofing paint was a constructive change, for which
compensation is appropriate. States Roofing is entitled to recover the additional costs
incurred for the use of DynaClad as compared with paint on the roof parapet walls,
including a reasonable profit on this work. We reverse that portion of the Board
decision that denied this claim for the roof cells other than cells A and B, and remand for
determination of quantum.
II
The Board granted an equitable adjustment to States Roofing for the additional
costs incurred in connection with using DynaClad waterproofing material rather than
paint for the parapet walls in roof cells A and B. The Board awarded the difference
between States Roofing’s actual costs in using the DynaClad for these walls, and the
estimated reasonable cost of painting these features as included in States Roofing’s
bid. This cost estimate for painting work incorporated a profit component, and States
Roofing takes issue with the subtraction of this profit component from the adjustment for
roof cells A and B. States Roofing argues that deprivation of this profit component is
unfair because it is in a loss position on the contract as a whole, citing several board
decisions that considered the contractor’s overall loss position in evaluating equitable
adjustments. See Appeal of CRF, ASBCA No. 17340, 76-1 BCA ¶11,857 (quoting
Appeal of G.M. Co. Mfg. Inc., ASBCA No. 2883, 57-2 BCA ¶1505) (“On a losing contract
the price adjustment should not add to the loss the contractor would have experienced if
there had been no change order.”); Appeal of Banta Co., GPOBCA No. 3-91, 1993 WL
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526843 at n.38 (“Indeed, the ASBCA has held that it is improper for the Government to
add profit to a deductive change because, on a losing contract, the price adjustment
should not add to the loss the contractor would have experienced if there had been no
change order.”).
As the Navy points out, the decisions on which States Roofing relies arose in the
context of “deductive” changes to the contract, in which the government required that
the contractor perform less, rather than more, than the contract provided. In such
circumstance, it may be appropriate to compensate for profit the contractor would have
received as the contract was initially mutually agreed. Here, in contrast, the
constructive change for cells A and B resulted in an increase in the total contract
payment; that is, it was not a deductive change.
The Navy advises that States Roofing received a profit component on the
DynaClad installation, in a payment formula whereby States Roofing’s bid price for
painting parapet walls in cells A and B, which included profit on that work, was replaced
with the actual cost plus profit for the use of DynaClad. We agree that this was correct
and equitable, and affirm the Board’s methodology for the quantum adjustment for cells
A and B.
CONCLUSION
States Roofing’s interpretation of the contract as requiring waterproofing paint on
the parapet walls was within the zone of reasonableness, and States Roofing is entitled
to compensation for the additional costs incurred due to use of DynaClad instead of
paint. We remand for determination of quantum. We affirm the Board’s methodology
as described for roof cells A and B.
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Costs to States Roofing.
REVERSED AND REMANDED; METHODOLOGY AFFIRMED

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United States Court of Appeals for the Federal Circuit
2009-1067
STATES ROOFING CORPORATION,
Appellant,
v.
Donald C. Winter,
SECRETARY OF THE NAVY,
Appellee.
Appeal from the Armed Services Board of Contract Appeals in No. 54854,
Administrative Judge Carol N. Park-Conroy.
LOURIE, Circuit Judge, dissenting.
I agree with the majority that the contract in question is ambiguous, but I disagree
that the ambiguity is latent. I find the contract to be patently ambiguous and thus States
Roofing Corporation (“States Roofing”) should have inquired about the patent ambiguity.
Because States Roofing failed to do so, it did not act as a reasonable contractor, and its
interpretation of the contract cannot govern. Therefore, I respectfully dissent.
This dispute centers on the proper interpretation of the term “waterproofing
membrane (3 layers)” for roof cells C through J. This term is used in a new work note of
drawing A38, which is entitled “Typical Flashing Detail @ Roof Drains & Parapet Walls.”
The essence of the parties’ disagreement is whether the contract required the three-
layer waterproofing membrane to be made of flashing material, as the government
argues, or whether waterproof paint was sufficient, as States Roofing contends. I do

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not pretend to know the correct answer, but the ambiguity of the drawings is abundantly
clear.
“A patent ambiguity is one that is glaring, substantial, or patently obvious.”
Comtrol, Inc. v. United States, 294 F.3d 1357, 1365 (Fed. Cir. 2002) (citation omitted).
“A patent ambiguity is present when the contract contains facially inconsistent
provisions that would place a reasonable contractor on notice and prompt the contractor
to rectify the inconsistency by inquiring of the appropriate parties.” Stratos Mobile
Networks, USA, LLC v. United States, 213 F.3d 1375, 1381 (Fed. Cir. 2000). If a
contract contains a patent ambiguity, “the rules of government contracting place the
obligation of inquiry upon the contractor.” Lockheed Martin IR Imaging Sys., Inc. v.
West, 108 F.3d 319, 322 (Fed. Cir. 1997). If the contractor fails to inquire about a
patent ambiguity, this failure will preclude acceptance of its interpretation of the
contract. Stratos Mobile, 213 F.3d at 1381.
In this case, the government admits to having mistakenly omitted the
specification for the three-layer waterproofing membrane. Without that specification, the
word “layer” is unexplained in the contract, in contrast to “ply,” which was used in
drawing A38 for the base flashing, or “coat,” which is used elsewhere in the contract for
applications of paint. Despite States Roofing’s insistence that the new work notes on
sheet A2, which describe painting the parapet walls, apply to the roof cells in question,
those work notes are referenced in drawing A8, not drawing A38. Drawing A8 has a
key in the bottom right corner that shades Roof Cells A and B only, evidencing that A8
does not apply to Roof Cells C-J. In contrast, drawings A4-A7 shade Roof Cells C-J
and reference drawing A38. “We must interpret [a contract] as a whole and ‘in a
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manner which gives reasonable meaning to all its parts and avoids conflict or
surplusage of its provisions.’” United Int'l Investigative Serv. v. United States, 109 F.3d
734, 737 (Fed. Cir. 1997) (citing Granite Const. Co. v. United States, 962 F.2d 998,
1003 (Fed. Cir. 1992)). We must, then, look to drawing A38 and its new work notes to
determine the meaning of “waterproofing membrane (3 layers)” for Roof Cells C-J.
In drawing A38, the three-layer waterproofing membrane is depicted by three
lines that run along the vertical parapet wall and continue over the top of the wall. The
bottom of the three-layer waterproofing membrane overlaps with “multiple-ply
membrane base flashing” that runs along the surface of the roof and reaches part-way
up the parapet wall. At the intersection of the three-layer waterproofing membrane and
the multiple-ply membrane base flashing are “fasteners,” indicated by dark shading
between the membranes, that appear to lock the two membranes to each other.
Drawing A38 also depicts “sheet metal coping” that caps the tops of the parapets.
Fasteners also appear to connect the sheet metal coping with the three-layer
waterproofing membrane. Drawing A38, therefore, seems to indicate that the three-
layer waterproofing membrane has some substance to it, rather than being just paint. If
the waterproofing membrane were just waterproofing paint, the fasteners between the
base flashing and the waterproofing membrane would be superfluous, since one could
simply paint three layers of waterproofing paint on top of the base flashing to obtain the
same overlap portrayed in drawing A38 without any fasteners. However, drawing A38
clearly uses the undefined term “layer” to describe the waterproofing membrane, in
contrast to “ply,” which is used for the base flashing, which would indicate that the
waterproofing membrane is not made up of flashing material.
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Thus, the contract contains a glaring ambiguity regarding the meaning of “layers.”
A reasonable contractor would have inquired about the meaning of the term. States
Roofing failed to do so. Because of this failure, we are precluded from adopting States
Roofing’s interpretation of the contract. Thus, States Roofing was required to abide by
the Navy’s interpretation and use three-ply flashing material as the waterproofing
membrane on the parapet walls of Roof Cells C-J.
Because I would hold the contract to be patently ambiguous, I would not reach
the question whether States Roofing’s interpretation of the contract was reasonable.
For the foregoing reasons, I respectfully dissent.

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States Roofing Corporation v. Donald C. Winter, SECRETARY OF THE NAVY

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