The opinion
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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 22, 2002 Decided March 11, 2003
No. 01-7156
KISKA CONSTRUCTION CORPORATION, U.S.A., AND
KAJIMA ENGINEERING AND CONSTRUCTION, INCORPORATED,
A PARTNER IN KISKA–KAJIMA, A JOINT VENTURE,
APPELLANTS
v.
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 97cv02677)
Kenneth W. Starr argued the cause for the appellants.
Christopher Landau and Grant M. Dixton were on brief.
Kenneth B. Weckstein argued the cause for the appellee.
Phillip T. Staub was on brief.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Before: GINSBURG, Chief Judge, HENDERSON, Circuit Judge,
and WILLIAMS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: Appellee
Washington Metropolitan Area Transit Authority
(‘‘WMATA’’) contracted with Appellants KiSKA Construction
Corporation–U.S.A. and Kajima Engineering and Construc-
tion, Inc. (collectively ‘‘KiSKA’’) in early 1994 to construct two
subway tunnels in Washington, D.C. for a fixed price of $43
million. After experiencing various difficulties completing the
project, KiSKA filed suit against WMATA in the United
States District Court for the District of Columbia alleging
counts of: (1) fraudulent misrepresentation; (2) negligent
misrepresentation; (3) unilateral mistake; (4) material breach
of contract; and (5) quantum meruit.
The district court dismissed KiSKA’s two tort claims—
fraudulent misrepresentation and negligent misrepresenta-
tion—for lack of subject matter jurisdiction, concluding that
WMATA had not waived its sovereign immunity from liability
for torts occurring in the performance of a governmental
function. The district court then granted summary judgment
to WMATA on KiSKA’s quantum meruit claim. After a five-
week trial on the remaining contract claims, the jury returned
a verdict for WMATA on both counts. The district court
subsequently entered final judgment in WMATA’s favor on
March 23, 2001 and denied KiSKA’s motion for a new trial on
August 20, 2001.
On appeal, KiSKA challenges three pre-trial rulings that
the district court’s August 20, 2001 opinion and order incorpo-
rated by reference. First, KiSKA argues that the district
court erred in dismissing its tort claims on sovereign immuni-
ty grounds. Second, KiSKA argues that the district court
misinterpreted the contract’s dewatering provisions. Third,
KiSKA argues that the district court likewise misinterpreted
the contract’s grout hole provisions. We find all three of
KiSKA’s challenges to be without merit and, accordingly,
affirm the judgment of the district court.
3
I. Background
A. The 14th Street Tunnel Project
This litigation arises out of the extension of WMATA’s
Green Line subway train under 14th Street in Washington,
D.C. Before soliciting bids for the tunnel project, WMATA
retained an outside technical expert, GZA GeoEnvironmental,
Inc. (‘‘GZA’’), to analyze the subsurface conditions in the
project area and to study the feasibility of various tunneling
methods, tunneling equipment and dewatering systems.1
GZA submitted its first Tunnel Alternative Report (‘‘TAR’’) in
November 1992. The first TAR reported that ‘‘[g]roundwa-
ter for most of the [tunnel] alignment is anticipated to be
above the crown [i.e., the top of the tunnel],’’ and that, in light
of this soil condition, ‘‘even TTT fairly extensive dewatering’’
was not likely to be entirely ‘‘[e]ffective.’’ Joint Appendix
(JA) 30–31. Accordingly, GZA recommended not only that
‘‘some type of closed face tunnel boring machine’’ be used for
the project, but also that ‘‘open face tunneling be strictly
prohibited on this contract.’’2 JA 31.
GZA submitted a revised TAR in January 1993. The
second TAR reaffirmed the conclusions of the first, noting
that ‘‘dewatering considerations dictate closed face mining
methods,’’ JA 32, and that ‘‘[o]pen faced tunneling in conjunc-
tion with dewatering is not judged a viable construction
technique on this [c]ontract,’’ JA 33. After reviewing the
second TAR, WMATA’s Board of Engineers met with GZA.
Shortly thereafter, in March 1993, GZA issued a third and
final TAR, which authorized the use of an open face machine,
1 Dewatering systems use a combination of dewatering wells and
control piezometers to reduce hydrostatic pressure and to control
and remove both groundwater and surface water from the tunnel
excavation during construction.
2 An open face tunnel boring machine is ‘‘essentially a cylinder
with a digging mechanism in the center of it, much like a backhoe
that you might see on the streets of the city.’’ JA 495. A closed
face machine is also ‘‘a cylinder, but as its name describe[s], the face
is closed.’’ JA 495.
4
but cautioned that ‘‘[e]xtensive dewatering will be an essential
element of the open faced shield option.’’ JA 34. Noting
that ‘‘effective dewatering of the alignment is at best going to
be difficult,’’ the third TAR recommended that ‘‘an extensive
pre-support grouting/ground improvement program TTT be
required for most of the alignment.’’3 JA 35.
Following the issuance of the third TAR, GZA calculated
the extent of the dewatering and grouting necessary to allow
for open face tunneling. Even extensive pre-support grout-
ing would not permit open face tunneling, GZA warned
WMATA, ‘‘if groundwater is not depressed [through dewater-
ing] the recommended two feet below tunnel invert [i.e., the
bottom of the tunnel].’’ JA 35. WMATA then directed GZA
to design an appropriate dewatering system for the project.
GZA produced a dewatering design that included over three
hundred dewatering wells. JA 1045–46
On December 6, 1993, WMATA issued an Invitation for
Bids (‘‘IFB’’) on the 14th Street tunnel project. The IFB set
forth detailed design specifications and required bidders to
submit lump-sum bids for carrying out the work based upon
those specifications.4 WMATA did not include GZA’s TARs
in the bid package, however, nor did WMATA conform the
design specifications to GZA’s recommended dewatering sys-
tem. In particular, WMATA’s design specifications called for
only 61 dewatering wells. JA 40. Based upon the specifica-
tions provided by WMATA, KiSKA submitted a lump-sum bid
of approximately $43 million. WMATA accepted KiSKA’s bid
and, in early 1994, the two parties signed a construction
contract.
3 ‘‘Pre-support grouting involves drilling holes into the ground in
a regular pattern, and then filling them with a fluid mixture of
cement, water, and chemicals, which spreads out into the soil and
hardens to form a stable, continuous canopy over the tunnel.’’ Br.
for Appellant at 8.
4A design specification describes in precise detail the materials to
be employed and the manner in which the construction work is to
be performed. P.R. Burke Corp. v. United States, 277 F.3d 1346,
1357 (Fed. Cir. 2002).
5
B. The Dewatering and Grout Hole Provisions
Section 205 of the contract governed dewatering. It not
only set forth a detailed dewatering system for the project,
but also required KiSKA to implement the system specified
therein: ‘‘The Contractor shall proceed with the installation
of the specified dewatering system as soon as possible after
notice to proceed.’’ Contract § 205, ¶ 1.1(A). Two subsec-
tions touched on the question whether the contract required
the dewatering system to maintain the groundwater level at
two feet below tunnel invert. Section 205(1.2)(B)(3) read, in
pertinent part, as follows:
For mined earth tunnels, additional wells beyond the
specified minimum dewatering system may be re-
quired to effectively reduce hydrostatic pressure and
control groundwater in soil surrounding each tunnel
in order to prevent the following:
a. Heaving of the invert, blowups, hazardous
seepage and sudden flow of soil in tunnel face.
b. Loss of ground and surface subsidence.
c. Maintain groundwater 2 feet below invert.
Id. § 205, ¶ 1.2(B)(3). Section 205(1.1)(A) also addressed
dewatering, stating that ‘‘[t]he designed dewatering system
may not eliminate all groundwater from the tunnel excava-
tion. The Contractor shall be prepared to support the tunnel
face TTT and to handle and convey groundwater from the
tunnel to appropriate discharge locations.’’ Id. § 205,
¶ 1.1(A). This subsection further provided that ‘‘[a]dditional
dewatering wells may be required based on the observed
performance of the dewatering system.’’ Id.
Section 239 of the contract covered pre-support chemical
grouting, specifying the precise location of thousands of sur-
face pre-support grout holes to stabilize the soil around the
tunnels. In particular, Section 239(1.1)(B) provided that
‘‘[p]re-support chemical grouting shall be preformed [sic]
from the existing ground surface at locations shown on the
contract drawings.’’ Id. § 239, ¶ 1.1(B). Although these
drawings depicted grout holes drilled vertically at five-foot
6
intervals in a diamond grid pattern, see JA 1001, Section
239(3.2)(A) stated that grout piping should be installed ‘‘hori-
zontally, vertically or inclined, as required,’’ Contract § 239,
¶ 3.2(A). ‘‘In [the] case of [a] discrepancy between Drawings
and Specifications,’’ the contract’s General Provisions provid-
ed that ‘‘the Specifications shall govern.’’ JA 755.
C. The Pre–Trial Rulings
During the tunnel’s construction, KiSKA experienced a
number of difficulties with both the dewatering system and
the excavation methods required by the contract. Two com-
plications proved particularly troublesome: (1) the dewater-
ing system specified by WMATA failed to lower the ground-
water table two feet below the tunnel invert and (2) the great
majority of surface grout holes could not be drilled vertically
at their specified locations without damaging underground
utility lines. Although KiSKA overcame these difficulties and
eventually completed the project, it did so at a cost of almost
double its $43 million lump-sum bid. Upon completion of the
project, KiSKA filed a five-count complaint against WMATA
asserting both tort and contract claims.
Before the case went to trial, the district court issued
several pre-trial rulings, three of which KiSKA now chal-
lenges on appeal. First, the district court dismissed KiSKA’s
tort claims on sovereign immunity grounds, holding that ‘‘the
challenged decisions are ‘susceptible to policy judgment,’ and
therefore immune from judicial review, because they involve
planning and design rather than implementation or opera-
tion.’’ KiSKA Constr. Corp. v. WMATA, Civ. No. 97–2677 at
5 (D.D.C. Feb. 7, 2000) (mem.) (First Order). Second, the
district court held that the contract was ‘‘ambiguous, but not
patently so,’’ with respect to whether the contract required
that the dewatering system maintain the groundwater level at
two feet below tunnel invert. KiSKA Constr. Corp. v.
WMATA, Civ. No. 97–2677 at 7 (D.D.C. June 9, 2000) (mem.)
(Second Order).5 Third, the district court held that while
5 The district court reached this conclusion in the course of
rejecting WMATA’s motion for partial summary judgment, which
7
‘‘the contract affords no flexibility with regard to the loca-
tions of grout drillings,’’ KiSKA Constr. Corp. v. WMATA,
Civ. No. 97–2677 at 8 (D.D.C. Dec. 22, 2000) (mem.) (Third
Order) (emphasis in original), the contract permitted KiSKA
‘‘to drill all grout holes, including surface grout holes, ‘hori-
zontally, vertically or inclined,’ ’’ id. at 9 (quoting Contract
§ 239, ¶ 3.2(A)).6
II. Analysis
We review de novo the dismissal of KiSKA’s tort claims for
lack of subject matter jurisdiction, accepting as true all of the
factual allegations contained in the complaint.7 Sturm, Ruger
had asked the district court to ‘‘rule as a matter of law that the
contract did not require that the dewatering system lower the
groundwater to two feet below the bottom of the tunnel.’’ Second
Order at 1.
6 The district court addressed whether the contract mandated the
vertical drilling of grout holes in the course of rejecting WMATA’s
argument that the contract’s ‘‘utilities clause’’ rendered WMATA
immune from liability. Third Order at 1–9. The utilities clause
provided, in pertinent part, as follows:
a. TTT The Contract Drawings show some known public
and private utilities in their approximate locations within
the limits of the project which are expected to interfere
with the work. The Contractor is, however, cautioned that
these locations are not guaranteed, nor is there any guar-
antee that utilities lines in existence within the limits of the
project have been shownTTT.
b. TTT Before commencing construction, the Contractor
shall verify the locations of utilities which may be affected
by his operationsTTT.
Contract § 101, ¶ III(D)(18).
7 Relying on Herbert v. Nat’l Acad. of Sciences, 974 F.2d 192,
197–98 (D.C. Cir. 1992), WMATA argues that we should consider
facts outside of the pleadings in reviewing the district court’s
dismissal of KiSKA’s tort claims. We disagree. Under settled law,
the district court may dispose of a motion to dismiss for lack of
subject matter jurisdiction ‘‘on the complaint standing alone.’’ Id.
8
& Co. v. Chao, 300 F.3d 867, 871 (D.C. Cir. 2002). We review
the district court’s construction of the contract between
KiSKA and WMATA under the same de novo standard. LTV
Corp. v. Gulf States Steel, Inc., 969 F.2d 1050, 1055 (D.C.
Cir.), cert. denied, 506 U.S. 1022 (1992) (‘‘Interpretation of the
plain language of a contract is a question of law subject to de
novo review by this court.’’).
A. Sovereign Immunity
On appeal, KiSKA argues that the district court erred by
dismissing its two tort claims—fraudulent misrepresentation
and negligent misrepresentation—on sovereign immunity
at 197. Nevertheless, where necessary, the district court may also
consider undisputed facts evidenced in the record or disputed facts
resolved by the district court. Id. As we explained in Herbert,
however, ‘‘[t]he posture in which the motion is presented to [the]
trial court has a profound effect on the manner in which this Court
will review its disposition.’’ Id.
The district court’s February 7, 2000 Memorandum Opinion
dismissing KiSKA’s tort claims indicates—in a footnote—that ‘‘[a]
more thorough summary of the facts of this case can be found in the
Court’s Memorandum Opinion of June 19, 1998.’’ First Order at 2
n.2. This earlier opinion, which denied WMATA’s first motion to
dismiss, ‘‘deduced’’ certain jurisdictional facts ‘‘as presented in the
[c]omplaint and the contract.’’ KiSKA Constr. Corp. v. WMATA,
Civ. No. 97–2677 at 2 (D.D.C. June 19, 1998) (mem.). WMATA
relies upon the district court’s ‘‘incorporation’’ of the previously
‘‘deduced’’ facts in support of its position that the district court
looked beyond the four corners of the complaint in dismissing
KiSKA’s tort claims on sovereign immunity grounds. WMATA is
mistaken. A review of the district court’s February 7, 2000 Memo-
randum Opinion reveals that the district court made no determina-
tion of disputed jurisdictional facts in holding that KiSKA’s tort
claims involved discretionary decisions evincing policy judgment
and, as a result, that the claims were barred by sovereign immunity.
First Order at 3–7. Given that the district court accepted as true
the factual allegations of the complaint, see id. at 1–7, ‘‘the only
matter[ ] before us on appeal [is] whether the [d]istrict [c]ourt’s
application of the law is correct,’’ Herbert, 974 F.2d at 197.
9
grounds. Rejecting the district court’s conclusion that
WMATA had ‘‘broad discretion in defining the contours of the
invitation for bids,’’ First Order at 6, KiSKA asserts that
WMATA lacks the ‘‘ ‘discretion’ to conceal and/or misrepre-
sent material information’’ from contractors and that ‘‘such
tortious conduct does not involve the exercise of a ‘policy
judgment,’ ’’ Br. for Appellant at 20. Thus, KiSKA main-
tains, sovereign immunity does not shield WMATA from
KiSKA’s tort claims.
1. Discretionary Functions vs. Ministerial Functions
WMATA is the product of an interstate compact entered
into by Maryland, Virginia and the District of Columbia.
Watters v. WMATA, 295 F.3d 36, 39 (D.C. Cir. 2002). We
have frequently recognized that, ‘‘ ‘[a]s a quasi-governmental
entity created by its signatory parties, WMATA is entitled to
share the sovereign immunity of those parties with respect to
common law tort actions.’ ’’ Beatty v. WMATA, 860 F.2d
1117, 1126 (D.C. Cir. 1988) (quoting Heffez v. WMATA, 569 F.
Supp. 1551, 1552 (D.D.C. 1983)). We have also acknowl-
edged, however, that section 80 of the WMATA Compact
provides a limited waiver of WMATA’s sovereign immunity
for torts ‘‘ ‘committed in the conduct of any proprietary
function,’ ’’ but not for torts occurring ‘‘ ‘in the performance of
a governmental function.’ ’’ Beebe v. WMATA, 129 F.3d 1283,
1287 (D.C. Cir. 1997) (quoting D.C. CODE ANN.
§ 9–1107.01(80)). Unless the limited waiver of immunity
applies, ‘‘the district court lacks jurisdiction to enter a judg-
ment against [WMATA].’’ Watters, 295 F.3d at 39–40.
Because ‘‘the distinction between proprietary and govern-
mental functions has created a ‘quagmire that has long
plagued the law of municipal corporations,’ ’’ Beatty, 860 F.2d
at 1126 (quoting Indian Towing Co. v. United States, 350
U.S. 61, 65 (1955)), we have interpreted section 80 ‘‘as incor-
porating the distinction between discretionary and ministerial
functions,’’ a dichotomy set forth in the Federal Tort Claims
Act (‘‘FTCA’’), Dant v. District of Columbia, 829 F.2d 69, 74
(D.C. Cir. 1987). Given that ‘‘[o]nly those activities consid-
10
ered ‘discretionary’ are shielded by sovereign immunity,’’
Burkhart v. WMATA, 112 F.3d 1207, 1216 (D.C. Cir. 1997),
WMATA’s immunity ‘‘turns on whether the [challenged] ac-
tivity is ‘discretionary’ or ‘ministerial,’ ’’ Beebe, 129 F.3d at
1287.8
To determine whether a WMATA activity is discretionary,
and thus shielded by sovereign immunity, we apply a two-part
test culled from the FTCA’s ‘‘discretionary function’’ jurispru-
dence.9 See id. First, we ask ‘‘whether any ‘ ‘‘statute, regu-
lation, or policy specifically prescribes a course of action for
an employee to follow.’’ ’ ’’ Id. (quoting Cope v. Scott, 45 F.3d
445, 448 (D.C. Cir. 1995) (quoting United States v. Gaubert,
499 U.S. 315, 322 (1991))). If a course of action is so
prescribed, ‘‘sovereign immunity does not bar suits based on
an employee’s failure to follow the prescribed course of
conduct.’’ Burkhart, 112 F.3d at 1217. If the governing
statutes or regulations leave room for the exercise of discre-
tion, however, we ask a second question: ‘‘whether the exer-
cise of discretion is ‘grounded in ‘‘social, economic, or political
goals.’’ ’ ’’ Beebe, 129 F.3d at 1287 (quoting Cope, 45 F.3d at
448 (quoting Gaubert, 499 U.S. at 323)). If the exercise of
discretion is so grounded, and hence ‘‘susceptible to policy
judgment,’’ Cope, 45 F.3d at 448, the ‘‘activity is ‘governmen-
8 WMATA’s sovereign immunity likewise extends to ‘‘quintessen-
tial’’ governmental functions, such as law enforcement. Beebe, 129
F.3d at 1287. Indeed, we typically ask whether the challenged
activity amounts to a ‘‘quintessential’’ governmental function before
asking whether the activity is ‘‘discretionary’’ or ‘‘ministerial.’’ See
id. We need not ask the former question here, however, because
‘‘WMATA has not attempted to shoe-horn its activities into this
narrow category of conduct.’’ First Order at 4 n.4.
9 We have described the distinction between ‘‘discretionary’’ and
‘‘ministerial’’ functions as follows: ‘‘ ‘Generally speaking, a duty is
discretionary if it involves judgment, planning, or policy decisions.
It is not discretionary [i.e., ministerial] if it involves enforcement or
administration of a mandatory duty at the operational level, even if
professional expert evaluation is required.’ ’’ Beatty, 860 F.2d at
1127 (emphasis in original) (quoting Jackson v. Kelly, 557 F.2d 735,
737–38 (10th Cir. 1977)).
11
tal,’ thus falling within section 80’s retention of sovereign
immunity,’’ Beebe, 129 F.3d at 1287.
2. The Contents of the Bid Package:
A Discretionary Decision?
This case poses the following question: does WMATA’s
discretion to select a particular project design encompass the
discretion to determine the content of that project’s bid
package?10 On appeal, KiSKA answers this question in the
negative, arguing that (1) WMATA lacks the discretion to
‘‘conceal and/or misrepresent material information’’ from con-
tractors and (2) ‘‘such tortious conduct does not involve the
exercise of a ‘policy judgment.’ ’’ Br. for Appellant at 20.11
10 Not surprisingly, the parties disagree as to whether KiSKA’s
tort claims amount to a challenge to WMATA’s design decisions.
This dispute reflects the fact that we have long held that WMATA’s
design decisions are discretionary functions shielded by sovereign
immunity. See, e.g., Souders v. WMATA, 48 F.3d 546 (D.C. Cir.
1995) (WMATA immune from challenge to noise level guidelines);
Dant, 829 F.2d at 73–75 (WMATA immune from challenge to fare
collection system). A careful reading of the complaint reveals,
however, that KiSKA’s tort claims stem from WMATA’s decision
not to include GZA’s three TARs in the bid package and not
WMATA’s decision to select a particular project design over anoth-
er. JA 24–66.
KiSKA’s reliance upon Beatty is similarly misplaced. Although
Beatty recognized that WMATA may be held ‘‘liable for a broad
range of conduct which implements its discretionary decisions,’’
Beatty, 860 F.2d at 1127, the case involved the implementation of a
design decision, i.e., the Red Line’s uninstalled iron beams. It thus
sheds no light on whether WMATA’s selection of a particular bid
package is more properly cast as a ‘‘design’’ decision or as an
‘‘implementation’’ decision.
11 Noting that the FTCA contains both a ‘‘discretionary function’’
exception and a ‘‘misrepresentation’’ exception to the waiver of
sovereign immunity contained therein, whereas the WMATA Com-
pact includes only the former, KiSKA also argues that section 80
does not afford WMATA immunity from tort suits alleging claims of
misrepresentation. But, as WMATA correctly observes, we have
12
Applying the two-stage analysis outlined above, see supra
Part II.A.1, we find that KiSKA has failed to cite any statute,
regulation or policy that ‘‘specifically prescribes’’ the content
of WMATA’s IFBs. Unable to identify support for its posi-
tion within the four corners of the WMATA Compact, KiSKA
relies upon two external sources of authority to argue that
WMATA failed, in this case, to follow the prescribed course of
conduct: (1) contract cases that recognize a government
agency’s duty to disclose pertinent facts to contractors with
whom the agency contracts, Br. for Appellant at 23–24, and
(2) a Federal Transit Administration (‘‘FTA’’) circular provid-
ing that all contract solicitations must ‘‘ ‘[i]ncorporate a clear
and accurate description of the technical requirements for the
material, product, or service to be procured,’ ’’ id. at 24
(quoting JA 1068).
KiSKA maintains that the general obligation to abide by
the covenant of good faith and fair dealing ‘‘specifically pre-
scribed’’ the contents of the bid package, requiring WMATA
to disclose to KiSKA all ‘‘material’’ information. We dis-
agree. Although the covenant of good faith and fair dealing
undoubtedly constrains WMATA’s behavior within the con-
text of its contractual relationships, KiSKA’s misrepresenta-
tion claims sound in tort, not contract. Given that section 80
distinguishes between tort claims and contract claims, afford-
ing a limited waiver of sovereign immunity with respect to the
former and a complete waiver of sovereign immunity with
respect to the latter, D.C. CODE ANN. § 9–1107.01(80), we
must agree with the district court’s conclusion that the cove-
nant of good faith and fair dealing ‘‘is not the kind of specific
dictate that renders WMATA’s acts merely ministerial,’’ First
Order at 6 (emphasis in original). Cf. Burkhart, 112 F.3d at
1217 (holding that employment provisions of WMATA Com-
pact ‘‘hardly constrain’’ WMATA’s discretion over whom it
will employ and how it will train and supervise employees).
previously upheld the dismissal of fraud and misrepresentation
claims against WMATA where the challenged activities involved
discretionary decisions. See Beebe, 129 F.3d at 1286, 1288.
13
The FTA circular likewise fails to circumscribe WMATA’s
discretion with respect to the contents of the bid package.12
A regulation constrains discretion if it ‘‘ ‘specifically pre-
scribes a course of action for an employee to follow’ ’’ such
that ‘‘ ‘the employee has no rightful option but to adhere to
the directive.’ ’’ Gaubert, 499 U.S. at 322 (quoting Berkovitz
v. United States, 486 U.S. 531, 536 (1988)). Although the
FTA circular obligates WMATA to ‘‘[i]ncorporate a clear and
accurate description of the technical requirements for the
material, product, or service to be procured,’’ JA 1068, the
circular does not ‘‘specifically prescribe’’ a course of action for
WMATA to follow in specifying the contents of a bid package.
In our view, an administrative ukase that mandates only
clarity and accuracy does not constrain WMATA’s discretion
with respect to the particular documents to include within a
bid package. Cf. Appalachian Power Co. v. EPA, 208 F.3d
1015, 1023 (D.C. Cir. 2000). Given KiSKA’s failure to pro-
duce persuasive authority to the contrary, we conclude that
WMATA had broad discretion to determine the contents of
the tunnel project’s bid package.13
Next, KiSKA argues that WMATA cannot satisfy the sec-
ond step of the sovereign immunity inquiry, i.e., whether the
exercise of such discretion is ‘‘grounded in social, economic, or
political’’ policy. Cope, 45 F.3d at 448 (internal quotations
omitted). As we recognized in Cope, ‘‘[d]etermining whether
a decision is ‘essentially political, social, or economic’ is admit-
tedly difficult, since nearly every government action is, at
least to some extent, subject to ‘policy analysis.’ ’’ Id. (quot-
12 Although WMATA claims that KiSKA did not rely upon the
FTA circular before the district court, the record indicates other-
wise. JA 135. Accordingly, KiSKA has not waived this argument.
13 As WMATA correctly observes, at least one court has express-
ly held that government decisions regarding the content of plans
and specifications provided to contractors are immune discretionary
functions. See Frank Briscoe Co. v. County of Clark, 643 F. Supp.
93, 97–98 (D. Nev. 1986), aff’d, 857 F.2d 606 (9th Cir. 1988)
(interpreting discretionary function exemption under Nevada law in
accordance with FTCA principles). Unfortunately, the Frank Bris-
coe decision contains little reasoning in support of its decision. See
id.
14
ing Red Lake Band of Chippewa Indians v. United States,
800 F.2d 1187, 1195 (D.C. Cir. 1986)). ‘‘ ‘Budgetary con-
straints,’ ’’ we observed, ‘‘ ‘underlie virtually all economic ac-
tivity.’ ’’ Id. at 449 (quoting ARA Leisure Servs. v. United
States, 831 F.2d 193, 196 (9th Cir. 1987)).
To avoid the exception swallowing the rule, we have held
that the ‘‘mere association of a decision with regulatory
concerns is not enough [to render that decision ‘discretion-
ary’]; exempt decisions are those ‘fraught with TTT public
policy considerations.’ ’’ Id. (quoting Sami v. United States,
617 F.2d 755, 767 (D.C. Cir. 1979)). We therefore concluded
in Cope that ‘‘[t]he mere presence of choice—even if that
choice involves whether money should be spent—does not
trigger the [discretionary function] exemption.’’ Id.
WMATA argues that its ‘‘employees had to, and did, exer-
cise judgment when they decided that the [bid package]
would not benefit from [the] inclusion of superseded, discard-
ed design concepts.’’ Br. for Appellee at 31. Citing the
court’s decision in Red Lake, WMATA maintains that its
decisions regarding the manner in which its policies are
implemented or enforced are ‘‘themselves discretionary be-
cause such decisions directly affect the feasibility and prac-
ticality of the program, and require the agency to establish
priorities for the accomplishment of its policy objectives by
balancing the objectives sought to be obtained against such
practical considerations as staffing and funding.’’ Id. at 31–
32 (quoting Red Lake, 800 F.2d at 1196 (internal quotations
omitted)). WMATA thus reasons that its ‘‘decision not to
include thousands of pages of draft or superseded design
documents in the bid package is a perfect example of such
discretion.’’ Id. at 32.
While KiSKA’s claim presents a closer question than those
decided in cases past, we believe that the district court
correctly held that WMATA’s discretionary decision to ex-
clude certain design documents from the tunnel project’s bid
package is ‘‘susceptible to policy judgment.’’ Cope, 45 F.3d at
448. Specifically, WMATA’s decision required consideration
of budgetary constraints and economic expediency. While at
first glance WMATA’s fiscal considerations may appear to
pale in comparison to those implicated in hiring decisions, see
15
Beebe, 129 F.3d at 1287–88; Burkhart, 112 F.3d at 1217,
those considerations involve more than simply packaging,
duplication and distribution costs. If WMATA were to re-
lease unreliable or mistaken reports indicating an inflated
need for dewatering wells, for example, the reports could
cause contractors to similarly inflate their bids. Of course,
WMATA may not withhold all unfavorable information from
contractors; if it did, WMATA might soon find few firms
willing to submit bids on its projects. WMATA must there-
fore exercise its policy judgment to balance the goal of fair
disclosure against the sensible withholding of unreliable infor-
mation.
Although KiSKA argues that WMATA’s position ‘‘assumes
the merits of the issue, i.e., that the information concealed
from bidders was not ‘material,’ ’’ Reply Br. at 9 (emphasis in
original), KiSKA’s position, in contrast—given that the merits
of a claim will rarely be known before a court establishes its
jurisdiction over that claim—would permit endless contractor
challenges to WMATA’s final specifications. While KiSKA
may disagree with WMATA’s decisions regarding the materi-
ality of a given set of documents, such judgments are, in our
view, WMATA’s to make. We therefore conclude that the
content of the tunnel project’s bid package is a discretionary
decision susceptible to policy judgment and, accordingly, af-
firm the district court’s dismissal of KiSKA’s tort claims on
sovereign immunity grounds.14
B. The Contract Provisions
KiSKA’s remaining challenges involve the district court’s
interpretation of two contract provisions: section 205 (dewa-
tering) and section 239 (pre-support grouting). Both chal-
lenges rely upon United States v. Spearin, 248 U.S. 132
(1918), ‘‘[t]he seminal case recognizing a cause of action for
breach of contractual warranty of specifications,’’ Hercules
14Given our conclusion that the district court correctly dismissed
KiSKA’s tort claims on sovereign immunity grounds, we need not
consider WMATA’s alternative argument that the district court’s
dismissal of KiSKA’s tort claims constituted ‘‘harmless error.’’
16
Inc. v. United States, 516 U.S. 417, 424 (1996), which held
that ‘‘if [a] contractor is bound to build according to plans and
specifications prepared by the owner, the contractor will not
be responsible for the consequences of defects in the plans
and specifications,’’ Spearin, 248 U.S. at 136. Relying on
Spearin, KiSKA argues that WMATA warranted by implica-
tion that (1) its dewatering system would lower the ground-
water table in the project area two feet below the tunnel
invert and (2) the surface pre-support grout holes required
under the contract could be drilled vertically at the precise
locations specified by WMATA.
1. The Dewatering System
KiSKA maintains that the district court erred as a matter
of law in holding that the contract was ‘‘ambiguous’’ as to
whether the contract required—and thus warranted—that the
dewatering system would lower the groundwater table in the
project area two feet below the tunnel invert. Relying chiefly
on section 205(1.2)(B)(3), KiSKA argues that the contract
specifically and unambiguously warranted that the groundwa-
ter table would be lowered two feet below the invert of the
tunnel by the dewatering system WMATA designed. In
KiSKA’s view, none of the provisions relied on by WMATA
abrogates the ‘‘clear’’ statement contained in section
205(1.2)(B)(3) and, accordingly, KiSKA claims that its reading
of the contract provides the only ‘‘reasonable’’ interpretation
of the dewatering provisions contained therein. Its argument
fails.
Section 205(1.2)(B)(3) provided that ‘‘[f]or mined earth tun-
nels, additional wells beyond the specified minimum dewater-
ing system may be required to TTT control groundwater in
[the] soil surrounding each tunnel in order to TTT [m]aintain
groundwater 2 feet below invert.’’ Contract § 205, ¶ 1.2(B)(3)
(emphasis added). Noting that the groundwater table could
not be ‘‘maintain[ed]’’ two feet below the tunnel invert if it
was not already at that level, KiSKA asserts that section 205
required, and hence warranted, that WMATA’s dewatering
system would indeed lower the groundwater table to two feet
17
below tunnel invert. In KiSKA’s view, its reading of section
205(1.2)(B)(3) is confirmed by section 228(1.5)(A)(2)(a)((1)),
which provided: ‘‘The water table shall be lowered as speci-
fied in the Specification Section 205.’’ Id. § 228,
¶ 1.5(A)(2)(a)((1)) (emphasis added).
WMATA, however, reads section 205(1.2)(B)(3) not as an
implied warranty but as ‘‘a statement that the minimum
dewatering system might not lower the groundwater to two
feet below invert [and that KiSKA] might have to install
additional wells to accomplish that goal.’’ Br. for Appellee at
40 (emphasis in original).15 According to WMATA, section
205(1.1)(A) likewise put KiSKA on notice that groundwater
may remain in the tunnel despite the dewatering system.
Contract § 205, ¶ 1.1(A) (‘‘The designed dewatering system
may not eliminate all groundwater from the tunnel excava-
tion.’’). WMATA further asserts that both section
228(1.5)(A)(1) and section 228(3.5)(A) suggest that groundwa-
ter could remain above the tunnel invert without violating the
contract. Id. § 228, ¶ 1.5(A)(1) (providing that KiSKA must
‘‘[c]ontrol groundwater along the tunnel alignment and within
the tunnel heading to prevent’’ certain specified events from
occurring) (emphasis added); id. § 228, ¶ 3.5(A) (‘‘If the
tunnel invert is below groundwater level, [KiSKA must] main-
tain qualified personnel on duty to monitor conditions that
might threaten stability of heading whenever tunnel excava-
tion is suspended or shut down.’’) (emphasis added).
The law requires contracts to be read as a whole, with
meaning given to every provision contained therein. See Fort
15 WMATA also maintains that KiSKA waived any challenge to
the district court’s ruling that the dewatering provisions were
ambiguous because KiSKA never made its own motion seeking a
ruling that the contract was unambiguous. This argument is with-
out merit. Although the district court ruled on WMATA’s motion
for summary judgment, both KiSKA and WMATA argued that they
offered the only reasonable interpretation of the contract’s dewater-
ing provisions. Second Order at 5. As KiSKA correctly observes,
once the district court held that the contract was ‘‘ambiguous’’ in
this regard, KiSKA did not need to file its own motion for summary
judgment in order to preserve the issue for appeal.
18
Sumter Tours, Inc. v. Babbitt, 202 F.3d 349, 357 (D.C. Cir.
2000) (citing United States v. Ins. Co. of N. Am., 83 F.3d
1507, 1511 (D.C. Cir. 1996) (noting the ‘‘ ‘cardinal principle of
contract construction: that a document should be read to give
effect to all its provisions’ ’’) (quoting Mastrobuono v. Shear-
son Lehman Hutton, Inc., 514 U.S. 52, 63 (1995))). If the
contract ‘‘is susceptible to more than one reasonable interpre-
tation,’’ however, the court must find that the contract is
ambiguous as a matter of law. Metric Constructors, Inc. v.
NASA, 169 F.3d 747, 751 (Fed. Cir. 1999).
If the court finds the contract to be ambiguous, it must
then determine whether that ambiguity is patent or latent.
Id. An ambiguity is patent if it is ‘‘glaring, substantial, or
patently obvious.’’ Comtrol, Inc. v. United States, 294 F.3d
1357, 1365 (Fed. Cir. 2002). Patent ambiguities are construed
against a government contractor absent an inquiry ‘‘about the
correct meaning of the terms at issue.’’ P.R. Burke Corp. v.
United States, 277 F.3d 1346, 1353 (Fed. Cir. 2002). If the
ambiguity is ‘‘neither glaring nor substantial nor patently
obvious,’’ Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990,
997 (Fed. Cir. 1996) (internal quotations omitted), however,
and therefore latent, the ambiguity is ordinarily construed
against the drafting party, see, e.g., Jowett, Inc. v. United
States, 234 F.3d 1365, 1368 & n.2 (Fed. Cir. 2000).
Applying these principles, the district court concluded that
both KiSKA and WMATA proposed reasonable interpreta-
tions of the contract’s dewatering provisions, holding the
contract to be ‘‘ambiguous, but not patently so.’’ Second
Order at 7. We disagree and find the provisions to be
patently—not latently—ambiguous.
Although KiSKA provides a sensible explanation for each of
the provisions relied upon by WMATA,16 we do not accept
16Responding to WMATA’s reliance on section 205(1.1)(A),
KiSKA argues that ‘‘[a] recognition that the system might not
eliminate every last isolated pocket of groundwater from the project
area TTT is in no way inconsistent with a warranty that the design
would lower the overall groundwater table for the project area two
feet below the invert.’’ Br. for Appellant at 33 (emphasis in
19
KiSKA’s assertion that section 205(1.2)(B)(3) provided a
‘‘clear’’ statement that WMATA warranted that its design
would lower the groundwater table two feet below tunnel
invert. The grammatical difficulties of the provision aside,
see infra note 17, section 205(1.2)(B)(3) cannot, in our opinion,
carry the interpretive weight placed upon it by KiSKA.
Contract § 205, ¶ 1.2(B)(3). Section 228(1.5)(A)(2)(a)((1)) like-
wise fails to advance KiSKA’s cause as it appears to speak to
the manner of dewatering and not to the level at which the
groundwater must be maintained. Id. § 228,
¶ 1.5(A)(2)(a)((1)).
In our view, the grammatical errors of section
205(1.2)(B)(3) render the ambiguity of the dewatering provi-
sions sufficiently obvious that KiSKA had a duty to inquire as
to the true meaning of the contract.17 See P.R. Burke Corp.,
277 F.3d at 1353. By failing to so inquire, KiSKA assumed
the risk that the government would offer a reasonable, but
conflicting, interpretation, see Triax Pacific, Inc. v. West, 130
F.3d 1469, 1474–75 (Fed. Cir. 1997), which interpretation
would then be accepted by the court—a risk realized by our
rejection of KiSKA’s claim, see Jowett, 234 F.3d at 1368 & n.2.
2. Pre–Support Grout Holes
Finally, KiSKA argues that the district court erred as a
matter of law by holding that, while ‘‘the contract affords no
flexibility with regard to the locations of grout drillings,’’
Third Order at 8 (emphasis in original), the contract ‘‘permit-
ted [KiSKA] to drill all grout holes, including surface grout
original). Similarly, discussing WMATA’s reliance on section
228(3.5)(A), KiSKA asserts that the provision ‘‘merely anticipated a
contingency in the event that the groundwater table were to rise
above the invert.’’ Id.
17 As WMATA observes on appeal, the applicability of the verb
‘‘prevent’’ to section 205(1.2)(B)(3)(c) ‘‘makes no sense grammatical-
ly or syntactically.’’ Br. for Appellee at 40 n.15. KiSKA maintains,
however, that ‘‘[r]ead in context, it is perfectly clear that the verb
‘prevent’ does not apply to the clause beginning ‘[m]aintain.’ ’’
Reply Br. at 18 n.6.
20
holes, ‘horizontally, vertically or inclined,’ ’’ id. at 9 (quoting
Contract § 239, ¶ 3.2(A)). Specifically, KiSKA maintains that
the contract specified that ‘‘all such grout holes must be
drilled vertically.’’ Br. for Appellant at 37–38. Because
KiSKA could not drill the surface grout holes vertically at
many of the locations specified in the contract without drilling
into existing utilities, KiSKA reasons that WMATA breached
its contractual warranty of specifications. We reject KiSKA’s
argument.
Section 239(1.1)(B) provided that ‘‘[p]re-support chemical
grouting shall be preformed [sic] from the existing ground
surface at locations shown on the contract drawings.’’ Con-
tract § 239, ¶ 1.1(B). As even WMATA concedes, the con-
tract drawings depicted the surface grout holes as drilled
vertically. See JA 1001. Yet section 239(3.2)(A) provided
that grout pipes were to be installed ‘‘horizontally, vertically
or inclined, as required.’’ Contract § 239, ¶ 3.2(A). Observ-
ing that the contract contained ‘‘no clear directive that the
[surface grout] holes should be drilled at a particular angle,’’
the district court concluded that ‘‘the flexible language of
[section 239(3.2)(A)] applies.’’ Third Order at 8–9. Accord-
ingly, the district court held that ‘‘the contract permitted
[KiSKA] to drill all grout holes, including surface grout holes,
‘horizontally, vertically or inclined.’ ’’ Id. at 9 (quoting Con-
tract § 239, ¶ 3.2(A)).
On appeal, KiSKA argues that the district court’s reliance
upon section 239(3.2)(A) was misplaced because the provision
‘‘did not remotely purport to override any other provisions of
the contract requiring particular grout holes to be drilled at
particular angles.’’ Br. for Appellant at 40. KiSKA places
particular emphasis upon the fact that section 239(3.2)(A)
provided that ‘‘the contractor shall drill grout holes ‘as re-
quired.’ ’’ Id. at 41 (quoting Contract § 239, ¶ 3.2(A)). Be-
cause the contract drawings depicted the grout holes as
drilled vertically, KiSKA argues that the contract ‘‘required’’
the surface grout holes to be drilled vertically, thus warrant-
ing that the surface grout holes could be drilled vertically.
21
We find that KiSKA’s reading of the contract places too
much emphasis on the contract drawings, while ignoring
other crucial provisions of the contract. As WMATA correct-
ly observes, General Provision No. 2 of the contract clearly
stated that ‘‘[i]n [the] case of [a] discrepancy between Draw-
ings and Specifications, the Specifications shall govern.’’ JA
755. Given that the contract unambiguously indicated that
WMATA did not know the location of the utilities and, in
addition, expressly assigned KiSKA the responsibility of ulti-
mately locating the utilities, KiSKA’s reading of the contract
cannot stand. See, e.g., Contract § 101, ¶ III(D)(18)(a) (‘‘The
Contract Drawings show some known public and private
utilities in their approximate locations within the limits of the
project which are expected to interfere with the work. The
Contractor is, however, cautioned that these locations are not
guaranteed, nor is there any guarantee that utilities lines in
existence within the limits of the project have been shown.’’);
id. § 101, ¶ III(D)(18)(b) (‘‘Before commencing construction,
the Contractor shall verify the locations of utilities which may
be affected by his operations.’’); id. § 207, ¶ 1.5(A)(2) (‘‘[The
contractor must] [v]erify by field investigation locations of
[utility] facilities within and adjacent to limits of project which
may be affected by construction operations.’’). Read in con-
junction with section 239(3.2)(A)’s mandate to drill surface
grout holes ‘‘horizontally, vertically or inclined, as required,’’
id. § 239, ¶ 3.2(A), the aforementioned provisions sufficiently
refute KiSKA’s warranty argument.18
III. Conclusion
For the foregoing reasons, we conclude that (1) sovereign
immunity bars KiSKA’s tort claims; (2) the contract did not
unambiguously provide that the specified dewatering system
would maintain the groundwater level two feet below tunnel
invert; and (3) the contract did not require KiSKA to drill
18Because we conclude that the district court correctly interpret-
ed the contract’s dewatering and grout hole provisions, we need not
consider WMATA’s alternative argument that any error the district
court committed in interpreting the contract was harmless.
22
surface grout holes vertically. The judgment below is there-
fore
Affirmed.