December 19, 1996
Appeals of
D.E.R. CONSTRUCTION, INC.
BUNNELL HILL DEVELOPMENT CO., INC.
LEASE AGREEMENTS
PSBCA Nos. 3958 & 3959
APPEARANCE FOR APPELLANTS:
Scott H. Herriott, Esq.
APPEARANCE FOR RESPONDENT:
Deborah A. Davis, Esq.
OPINION OF THE BOARD
These appeals arose out of two leases under which facilities to be used as post offices in Buckeye Lake and Hebron, Ohio were constructed for, and leased to, Respondent, United States Postal Service. In each case, a dispute arose between
the lessor[1] and Respondent as to the responsibility for supplying hardware for "double action traffic doors" installed as part of the construction of the facilities. These appeals are being decided on the record under the Board's Accelerated Procedure. 39 C.F.R. §§955.12, 955.13.
FINDINGS OF FACT
1. Leases for post offices in Buckeye Lake and Hebron, Ohio were executed on June 19, 1995, and July 17, 1995, respectively. Each of the leases anticipated the construction of a one-story building for Respondent's use. Each lease also included a "Construction Rider" that incorporated drawings and specifications into the lease. (PSBCA 3958 Appeal File Tab (3958 AF) 1; PSBCA 3959 Appeal File Tab (3959 AF) 1).
2. Drawing A.3, which was incorporated into both leases, included a "Door Schedule." The Door Schedule provided for the installation of two sets of "Double-Action Traffic Doors" (at each facility) and referred to "Note C" for information about hardware. Note C read: "HARDWARE FOR DOUBLE-ACTION TRAFFIC DOOR SUPPLIED BY USPS FOR INSTALLATION BY LESSOR. SEE SPECS." (Id.; AF 4, section 16)[2]
3. Specification Section 08302, "Double Action Traffic Doors," contained the following relevant language in paragraph 2.2, "Materials":
"A. Door Body: Provide listed acceptable manufacturer's standard door body construction available for the identified door series.
B. Hardware: Provide listed acceptable manufacturer's V-cam hinges available for the identified door series.
C. Gaskets:....
D. Top and Bottom Hinge Seal Covers:....
E. Viewing Area:....
F. Fasteners:....
G. Black Spring Polyethylene Bumper:....
H. Security Features: In addition to the items listed above, the following features shall be included in the door units:
1. Lower hinge guard.
2. Upper and lower cane bolts.
3. A 2" diameter chain hole with grommet in each door leaf.
4. A chain locking system consisting of a 1/2", case-hardened chain and 1/2" case hardened shackle in a case-hardened, steel-cased padlock. (USPS supplied)." (AF 4, section 13).
With the exception of items C and E (which were part of the door panels) and H4 (padlock and chain), and with the possible exception of item D, all of the remaining items listed above (B, F, G, H1-3) were part of what D.E.R.'s door supplier[3] designated the "hardware package" required for each set of doors. Also included in the supplier's "hardware package" were a number of items not specifically listed or addressed in the specification. (AF 4, sections 13, 15, 17).
4. In letters dated May 3, 1996, to Respondent's project manager, D.E.R. Construction filed a claim on each project seeking the payment of $2,751.19, alleged to be the cost of hardware for two sets of double-action traffic doors. This amount included $2,419.94 for hardware, $151.25 for sales tax, and $180 for overhead. D.E.R. Construction did not include the cost of the door hardware in its construction cost estimates for either facility. (3958 AF 3; 3959 AF 3; AF 4, section 2 (affidavit of Allen Schultz)). The estimator who originally estimated the construction costs for Appellant Bunnell Hill Development, before it contracted with D.E.R. Construction, also did not include the cost of the door hardware in his estimate (Affidavit of Greg Rost).
5. In final decisions dated May 15, 1996, (Hebron) and May 29, 1996, (Buckeye Lake), the contracting officer denied both claims. In his decisions, the contracting officer concluded that the specifications required Appellants to provide all of the door hardware except for the chain and padlock specifically identified (see Finding 3) as "USPS supplied." (3958 AF 2; 3959 AF 2). Appellants filed timely appeals of the final decisions.
6. The cost of those items identified by the door supplier as comprising the "hardware package" required for each set of doors was $1,209.97. (AF 4, section 17).
DECISION
Appellants argue that they reasonably understood the drawing and specifications to require that Respondent would provide all of the door hardware. They argue that there is no conflict between the two and that the specifications do not contravene the general drawing language stating that the door hardware would be provided by Respondent. Appellants also argue that, at worst, the contract requirements are ambiguous and that any ambiguity is to be resolved against Respondent, as the drafter of the contract language. Finally, Appellants argue that any ambiguity found was not patent or obvious and thus Appellants cannot be faulted for failing to bring the problem to the attention of the contracting officer prior to bidding.
Respondent, on the other hand, argues that Note C merely directs the contractor to the specifications to determine what material is to be supplied by Respondent and that the specifications place the responsibility for providing door hardware on Appellants, except for the chain and padlock expressly indicated in the specification as "USPS Supplied." Alternatively, Respondent argues that if the contract requirements were ambiguous, the ambiguity was patent and Appellants did not fulfill their duty to inquire in advance of bidding and, therefore, are bound by Respondent's interpretation.
We conclude that it was reasonable for Appellant to have read the specifications and drawings as requiring Respondent to supply the door hardware. Note C ("HARDWARE FOR DOUBLE-ACTION TRAFFIC DOOR SUPPLIED BY USPS....") unambiguously provides that hardware for the doors is to be supplied by Respondent and references the specifications ("SEE SPECS.") to determine, among other things, the specific hardware to be provided by Respondent and whether there was to be any contractor provided hardware. We do not accept Respondent's interpretation of Note C since, under that interpretation, Note C would have the same effect if it read only "SEE SPECS," thereby making the remainder of the Note superfluous. See Hol‑Gar Manufacturing Corp. v. United States, 351 F.2d 972, 979 (Ct.Cl. 1965).
Examining the specification language to determine whether it explicitly makes any part of the door hardware Appellants' responsibility, we conclude that it does not. Respondent points to the language making the Postal Service responsible for providing the padlock and chain and argues that such language implicitly makes the contractor responsible for providing the rest of the door hardware. While that reference may have created an ambiguity, it was not so glaring as to be patent and to have created a duty on Appellants' part to seek clarification. As argued by Appellants, it is more reasonable that the "USPS Supplied" notation regarding the padlock and chain was a clarification of that item, since, with one possible, minor exception, all of the other items listed in the specification were part of the normal door hardware (see Finding 3), and would clearly be covered by Note C. Accordingly, absent any contrary language in the specifications, we conclude that Respondent was liable under the contracts for the cost of providing the door hardware.
The appeals are sustained. Appellants may recover $2,751.19 for each site ($2,419.94 (the cost of two sets of door hardware at each site) plus $151.25 (a proportional share of the sales tax) plus overhead of $180), for a total recovery of $5,502.38, plus Contract Disputes Act interest.
David I. Brochstein
Administrative Judge
Vice Chairman
I concur:
James A. Cohen
Administrative Judge
Chairman
[1] The lessors in PSBCA Nos. 3958 (Buckeye Lake) and 3959 (Hebron) were Dale E. Roe and Bunnell Hill Development Co., Inc., respectively. However, the claims in this appeal were filed on behalf of both lessors by D.E.R. Construction, Inc., which was the entity actually performing the construction for both lessors.
[2] References to "AF" may be found in either appeal file, which are nearly identical.
[3] The company that supplied the doors to Appellants was one of the "acceptable manufacturers" listed in specification section 08302.