Skanska Usa Building, Inc. v. United States

In the United States Court of Federal Claims

No. 07-143 C

(Filed: March 21, 2013)

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SKANSKA USA BUILDING, INC., *

*

Plaintiff, *

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v. *

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THE UNITED STATES, *

*

Defendant. *

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OPINION AND ORDER

Before the court are the parties’ cross-motions for summary judgment and renewed cross-

motions for summary judgment. In this action, plaintiff seeks to recoup the additional costs it

incurred to dispose of certain excavated material upon the discovery of lead contamination in that

material during contract performance. According to plaintiff, its costs to dispose of the lead-

contaminated material were greater than the costs that it reasonably expected to incur at the time

it submitted its bid. Defendant, on the other hand, contends that the costs to dispose of the lead-

contaminated material were included in the total contract price. For the reasons set forth below,

the court grants in part and denies in part both parties’ motions for summary judgment.

I. BACKGROUND

On March 31, 2003, the United States Army Corps of Engineers (“Corps”) awarded

contract number DACA67-03-C-0203, FY03 Whole Barracks Renewal, Fort Lewis, WA, to

Skanska USA Building, Inc. (“Skanska”).1 App. 1-2. The contract concerned the construction of

1

The court derives the facts in this section from the Declaration of Wes Johnson in

Support of Plaintiff’s Motion for Partial Summary Judgment on Liability (“Johnson Decl.”); the

exhibit attached to Mr. Johnson’s declaration (“Johnson Ex.”); the Declaration of Dave Berglund

in Support of Plaintiff’s Motion for Partial Summary Judgment on Liability (“Berglund Decl.”);

the Declaration of Terry R. Marston in Support of Plaintiff’s Motion for Partial Summary

Judgment on Liability (“Marston Decl.”); the exhibits attached to Mr. Marston’s declaration

(“Marston Ex.”); the appendix to Defendant’s Motion for Summary Judgment (“App.”); the

exhibit attached to Defendant’s Reply in Support of Its Motion for Partial Summary Judgment on

Liability (“Def.’s Ex.”); and the exhibit attached to the Supplemental Declaration of Terry R.

Marston in Support of Plaintiff’s Motion for Partial Summary Judgment on Liability (“Marston

nine buildings at North Fort Lewis. Marston Ex. 11 at 4. Skanska retained Nacon Inc.

(“Nacon”) to serve as a subcontractor to perform some of the work required by the contract. Id.

at 5. Nacon, in turn, retained Active Construction, Inc. (“Active”) to perform one of those areas

of work–the earthwork.2 Id. at 7; Marston Ex. 12 at 4. The earthwork generally consisted of the

excavation, transportation, and placement of soil and other material. See Marston Ex. 3 at 2, 4.

In preparing its proposal to perform the earthwork portion of the contract, Active’s lead

estimator, Dave Berglund,3 reviewed both the contract documents and the reports from a site

visit. Berglund Decl. ¶ 8. Mr. Berglund found that neither the contract documents nor the site

visit reports indicated that the soil on the project site was contaminated. Id. ¶¶ 9-11. Further,

Mr. Berglund’s review of the contract documents led him to understand that “any soils that were

not needed on the project would have to be disposed away from Ft. Lewis,” id. ¶ 20, and that the

contractor had the right to retain the salvage value of the surplus soil, id. ¶¶ 14-16. Mr. Berglund

ultimately estimated that Active would likely need to dispose of “several thousand” cubic yards

of surplus soil. Id. ¶ 21. Although the cost of hauling and disposing that amount of surplus soil

was normally high, id. ¶ 22, Mr. Berglund knew “that there was a market for clean fill material

(soil) through which” Active could recover any hauling and disposal costs, id. ¶ 23. Accordingly,

because he believed the contract permitted Active to “retain any savings it could obtain in the

course of disposing of any surplus soil [Active was] required to remove from the site,” id. ¶ 22,

he did not include any amounts for this expense in Active’s proposal, id. ¶¶ 22, 24.

Through the course of the project, the contractors accumulated a stockpile of

approximately 15,000 cubic yards of material. See id. ¶ 25; Marston Ex. 1 at 1-2. In Request for

Information number 318 dated September 26, 2003, Skanska posed the following question to the

Corps:

Due to a surplus in satisfactory soils on the project, approximately 15,000

cubic yards, Active is requesting permission to place a portion of this material in

the low area next to the revised location of the North irrigation vault per FY03

RFI #25. . . . Active is also requesting that [it] be allowed to remove the

remaining material from the project site.

Please note that this work will be done at no cost to the Government.

Supp’l Ex.”).

2

Active was a civil construction firm that had been doing business in the Fort Lewis

region for forty-one years. Berglund Decl. ¶ 4.

3

Mr. Berglund had seventeen years of experience working in civil construction in the

Fort Lewis region. Berglund Decl. ¶ 5.

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Marston Ex. 1 at 1. On October 1, 2003, Jim Packard, the Corps’ project engineer,4 Marston Ex.

4 at 1, responded: “Fort Lewis has no problem with us depositing surplus satisfactory soils in the

low area . . . . Coordinated with Larry Mc Vay of Public Works 1 Oct 03,” Marston Ex. 1 at 1.

Skanska followed-up Mr. Packard’s response with Request for Information number 318R, which

contained the same question and answer exchange as well as an additional inquiry:

Post Note: In response to conversation between Jason Hynes and Doug

Mc[N]iesh with Skanska and Jim Packard and Tom Wilkin with the [Corps] on

10/3/03,5 Active has noted that approximately 5,000 cubic yards of soil will be

spread near the North irrigation vault. . . . Active is requesting to remove 10,000

cubic yards of soil from the Post. Please confirm that this is acceptable.

Id. at 2 (footnote added). Mr. Packard provided the following response on October 7, 2003:

“Post Note: Confirmed. Regrade elevated area to grade to existing catch basin and/or add rings

to adjust height of same. Continue erosion control around catch basin.” Id.

In accordance with the Corps’ apparent permission to dispose of the surplus soil off of

Fort Lewis,6 Active made arrangements with ESE Corporation on March 3, 2004, to haul away

the soil at no cost to Active. Berglund Decl. ¶ 25; Johnson Decl. ¶ 5; Johnson Ex.; App. 36.

ESE Corporation planned to use the soil on its own project, but conditioned its agreement with

Active on soil sampling certifying that the soil was not contaminated. Johnson Decl. ¶¶ 4, 6;

Johnson Ex.

4

Mr. Packard described himself as the Corps’ “voice to the contractor for day-to-day

work,” but as lacking the authority to “direct changes to the contract . . . .” Marston Ex. 8 at 9.

He further explained that the administrative contracting officer had the authority to issue change

orders for work priced below $100,000 and that all other changes were within the authority of the

contracting officer. Id. at 10.

5

Mr. Wilkin was the assistant project engineer. See Marston Decl. ¶ 10.

6

The court writes “apparent” because deposition testimony from November 2007 reflects

some dispute within the Corps regarding the meaning of Mr. Packard’s response to the amended

request for information. Compare Marston Ex. 7 at 6-7 (indicating the view of the contracting

officer, Nancy Gary, that the Corps had authorized Active to remove the surplus soil from Fort

Lewis), and Marston Ex. 9 at 4, 7-8 (indicating Mr. Wilkin’s view that the Corps had confirmed

the acceptability of Active removing the surplus soil from Fort Lewis), with App. 70-72

(indicating Mr. Packard’s view that the requests for information merely reflected the Corps’

written confirmation of prior oral agreements concerning the placement of some surplus soil near

the irrigation vault).

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Corps personnel performed soil sampling of the stockpile on March 23, 2004.7 App. 28.

The Corps’ main objective in testing the soil was to ascertain the existence of lead

contamination.8 Id. at 27-30. The Corps explained in its April 7, 2004 “Stockpile

Characterization Report” that the stockpile contained soil underlying World War II-era buildings,

painted with lead-based paint, that were demolished in the 1990s. Id. at 26-27. Because the

lead-based paint on those buildings had chipped and accumulated in the surrounding soil, the

Corps determined that it was necessary to test the soil for lead content to determine whether

reuse was possible or disposal was necessary. Id. at 27-28; cf. Marston Ex. 7 at 11 (containing

Ms. Gary’s acknowledgment that Skanska and its subcontractors were not responsible for the

existence of lead in the soil). However, although the Corps decided to test the stockpile for lead

contamination, the contract contained no indication that the excavated soil might contain lead,

Marston Ex. 7 at 15; Marston Ex. 8 at 7, and Ms. Gary acknowledged that Skanska and its

subcontractors had no reason to suspect that the soil might contain lead, Marston Ex. 7 at 11; see

also Berglund Decl. ¶¶ 27-29 (noting that Active did not expect to encounter lead in the soil, that

lead contamination was “unusual” for the region, and that the contaminated soil “differed

materially from the soil[] conditions ordinarily encountered and generally recognized as inhering

in the work of the character [Active] performed in this contract”).

Of the twenty-five soil samples collected and analyzed by the Corps, App. 27-28, only

one sample contained “total lead” that “exceed[ed] the decision criteria,”9 id. at 29. Because a

reanalysis of this sample “yielded a much lower result,” the Corps inferred that “the soil [was]

not grossly contaminated with lead, but that paint chips [were] randomly mixed in with the soil.”

Id. The Corps concluded:

7

It is unclear from the record whether the soil sampling was performed at the request of

Skanska, Nacon, or Active, or whether the Corps tested the stockpile on its own initiative.

8

It appears that the stockpile contained more than the material excavated by Skanska and

its subcontractors. According to Mr. Packard, the stockpile contained “a mixture of materials,”

including “unidentified materials” from work done on a prior contract, the material contaminated

by lead, and both satisfactory and unsatisfactory materials from work done on the instant

contract. App. 76. Thus, the Corps’ decision to test the stockpiled material for the presence of

lead may have been due to the existence of material in the stockpile that was not placed there by

Skanska or its subcontractors. If this is the case, it is unclear to the court why the Corps did not

test the material in the stockpile either prior to awarding the contract to Skanska or prior to

allowing Active to place additional material on the stockpile.

9

The “decision criteria” consisted of two standards. App. 29. One standard, derived

from the Washington Model Toxics Control Act, was titled “MTCA Method A Cleanup Criteria

for Unrestricted Use,” which required soil samples to contain no more than 250 mg/kg total lead.

Id. The second standard was titled “WA Dangerous Waste TCLP Limits,” which limited TCLP

lead in soil samples to no more than 5 mg/L. Id. The acronym “TCLP” was not defined in the

excerpts of the report provided to the court.

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[T]he stockpiled soil is mostly free of lead contamination, but does contain some

total lead concentrations exceeding Washington State MTCA Method A

Unrestricted Use criteria. . . . However, the soil does not appear to be a

“dangerous waste” according to [Washington Administrative Code] 173-303 and

does not need to be handled as such.

Id. at 30. Based upon its conclusion, the Corps made the following recommendations:

In light of both the near and far term goals, the best use of this stockpile is to keep

it on base for reuse or disposal. The soil could be kept on base at Fort Lewis

under restricted use. . . .

It would be beneficial to both the contractor currently in charge of the

stockpile and Fort Lewis to find other projects for which this soil could be reused.

One possible reuse project is for building up and fortifying worn berms within

active ranges. . . .

Another possible reuse project would be to use the stockpiled soil for

filling in around new construction footings and foundations. By keeping the soil

on base, transportation costs are significantly reduced, disposal costs are

eliminated, and the cost to purchase fill material is eliminated.

If the soil is to be disposed, two options are available–disposal on base or

disposal off base. Again, it would be beneficial to both the contractor currently in

charge of the stockpile and Fort Lewis to dispose the soil on base. By disposing

the soil at the Fort Lewis landfill, transportation costs are reduced and disposal

costs are significantly reduced. The Fort Lewis landfill is currently trying to close

its cell #6 at Landfill 5. They need soil to bring the fill to grade . . . .

If it is decided that off-site disposal will be used, most Subtitle D facilities

will be able to accept this waste.10

Id. (footnote added); cf. Marston Ex. 7 at 12 (containing Ms. Gary’s confirmation that plaintiff

was unable to sell the lead-contaminated soil). Mr. Packard hand-delivered a copy of the report

to Skanska on April 9, 2004. Marston Ex. 4 at 1.

10

“Subtitle D” is a reference to the portion of the Resource Conservation and Recovery

Act of 1976, Pub. L. No. 94-580, § 2, 90 Stat. 2795, 2813-20, that added subtitle D to the Solid

Waste Disposal Act, Pub. L. No. 89-272, title II, 79 Stat. 992, 997-1001 (1965) (codified as

amended at 42 U.S.C. §§ 6941-6949a (2006)). See Marston Supp’l Ex. 14 (indicating that

“subtitle D” referred to the “RCRA”). The “Subtitle D” facility nearest to Fort Lewis was

located approximately thirty-one miles away in Graham, Washington. App. 79.

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Among the various Corps and Army personnel receiving a copy of the report on the day it

was issued was Phil Crawford, the Chief of the Environmental Compliance Branch of the

Environmental Division of the Fort Lewis Public Works. App. 31, 33; Marston Supp’l Ex. 2.

On April 12, 2004, Mr. Crawford directed Mike Roberts, a contractor in the Environmental

Division whose expertise was lead-based paint, to head the effort to find a use for the stockpile.

App. 31, Marston Supp’l Ex. 6. Subsequently, consideration was given to using the soil to

enhance a berm on one of the ranges on Fort Lewis. App. 33-34. Carl Ramsey, a United States

Army employee in charge of the ranges, rejected the use of the soil for this purpose out of fear

that the lead would leach into the groundwater. Id. at 34; Marston Supp’l Ex. 6. In response to

Mr. Ramsey’s concerns, Mr. Crawford wrote:

This soil is minimally contaminated with traces of lead in paint chip form. It is,

for all intents and purposes, clean fill. It is below all regulatory levels, and easily

passes the TCLP leaching test. It poses no threat to groundwater. I can see no

environmental reason not to use it in enhancing berms; it’s going to be a lot

cleaner than anything else around it. I can foresee no situation in which this soil

could cause a range to be shut down. The lead from bullets plowing into it will be

a far greater source than the few paint chips left in this stuff. I cannot think of a

better place to use it than as a range berm; sounds like a win-win to me.

App. 33; see also Marston Supp’l Ex. 4 (containing Mr. Crawford’s explanation that “clean fill”

can be “anything that falls below . . . regulatory limits, and, therefore, has no restrictions on its

use”).

Subsequently, in an April 16, 2004 letter to Skanska regarding the “Stockpile

Characterization Report,” the administrative contracting officer for the contract, Troy D. Collins,

P.E., wrote:

As you can see, the report indicates that, while this material is not hazardous, the

lead content exceeds the limit for reuse and must be disposed of in a Class ‘D’

landfill if disposed of off Post.11 It can be used on site in locations where it would

be encapsulated such as under footings, pavement or grass/vegetation.

Marston Ex. 4 at 1 (footnote added). Some time after Skanska received the report and the letter

from Mr. Collins, Active began to research the costs of transporting the surplus soil to a Class D

landfill. Marston Ex. 13 at 8, 12.

Active also communicated with Nacon regarding the disposal of the surplus soil. In a

June 29, 2004 letter, Robert A. Matthews, Active’s project manager, indicated that Active had

been “informed that the surplus Soil was contaminated, and that the Soil had to be utilized on-

11

According to Mr. Crawford, “a class D landfill is just a regular sanitary landfill. That’s

subtitle D of the RCRA.” Marston Supp’l Ex. 14.

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site or hauled to a class D disposal site.” Marston Ex. 6 at 1; see also Marston Ex. 13 at 8

(containing Mr. Matthews’s deposition testimony that the Corps informed him that the soil had to

be “placed in a Class D landfill” because “the contaminant level was higher than the tolerance

allowed for placing it as general fill where the public can . . . have access to it”). Active had

been using the “contaminated” surplus material from its grading operations “to meet all finished

grade elevations,” but had determined that the stockpiled material was not necessary for that use.

Marston Ex. 6 at 1. Accordingly, Active sought “direction for the disposal of the contaminated

surplus soil,” contending that such disposal was “outside of [its] scope of work . . . .” Id.

It appears that in August 2004, the Corps informed Active that it could dispose of the

surplus soil at Landfill #2 at the Fort Lewis Logistics Center, which was nine miles away from

the project site. See App. 36, 74-75. As a result, on August 17, 2004, Skanska submitted, on

behalf of Nacon and Active, a written request for compensation in the amount of $204,533 for

the “additional costs” the contractors would “incur to remove approximately 15,000 cubic yards

of contaminated soil from the project site.” Id. at 36. As outlined by Skanska’s project

executive, Stewart M. Grauer, the Corps initially notified Skanska that the surplus material

“would need to be used on Fort Lewis[] or transported to a Class ‘D’ Landfill for disposal.” Id.

Mr. Packard subsequently informed Skanska that the surplus “soil could be used at Fort Lewis

Landfill #2.” Id. Mr. Grauer indicated that Skanska, Nacon, and Active would “proceed with

this work immediately when Landfill #2 [was] ready for the material in approximately a week[’s]

time to avoid schedule impacts to the FY04 project.” Id. But, because the surplus material could

“no longer be classified as clean suitable material useful for pre-load at ESE’s project,” the

contractors believed that “compensation for loading and hauling this material off site to dispose

of it at Landfill #2” was warranted.12 Id.

The Corps denied Skanska’s request for compensation in an August 26, 2004 letter. Id. at

37. In that letter, Theodore S. Lewis, the contracting officer’s representative, confirmed that the

surplus material was “of no use to the Government” and noted that the contract accordingly

required Skanska to dispose of the material off of government-controlled land at no additional

cost to the Corps. Id. However, although he “authorized” Skanska to dispose of the surplus

material off of government-controlled land, Mr. Lewis explained that the government was

offering Skanska an alternative:

Because of its mild lead content, the dumping of it would of necessity need to

meet all environmental regulations, and the Government would have to be notified

of its proper disposal. The Government is offering to allow the material to be

12

There is evidence in the record suggesting that plaintiff submitted a change order

request seeking compensation for the disposal of the surplus material at a Class D landfill (and

not Landfill #2). See Marston Ex. 7 at 12; Marston Ex. 8 at 5-6, 8. But see App. 75 (noting that

Mr. Packard was not aware of a cost estimate for hauling the material to a Class D landfill).

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disposed of in Fort Lewis landfill #2 to mitigate any potential costs of disposal

outside of Government-controlled land.

Id.

The next day, Doug McNiesh of Skanska sent an electronic-mail message to Mr. Packard

indicating Active’s decision “to discontinue hauling efforts” until the compensation issue could

be resolved. Id. at 39. Mr. Packard forwarded the message to Arill Berg, P.E., the administrative

contracting officer,13 who responded to Mr. McNiesh in an August 27, 2004 electronic-mail

message, as follows:

I understand that you have mobilized equipment to dispose of excess excavated

soil from your project site and are disposing of it at the Fort Lewis Logistics

Center. In my opinion, this direction by the Government alters the terms of the

contract to mitigate future risk. You are directed to complete the relocation of this

material to mitigate any potential demobilization and remobilization costs. At this

point, we are operating on the assumption that this is either a credit or no cost to

the Government.

Id. at 40. The Corps expanded upon this communication with a September 8, 2004 letter, in

which the contracting officer’s representative, George P. Henry, P.E., confirmed that Skanska

was disposing of the surplus soil at the Fort Lewis Logistics Center and formally directed

Skanska “to complete the relocation of this material to mitigate any potential demobilization and

remobilization costs.” Marston Ex. 5 at 1. Mr. Henry also reiterated that the Corps was

“operating on the assumption that this is either a credit or no cost to the Government.” Id.

Despite this directive from the Corps, Skanska and its subcontractors discontinued their

relocation of the surplus material to the Fort Lewis Logistics Center. App. 42. In a September

21, 2004 letter, Mr. Henry chastised Skanska for refusing to comply with the directive in his

earlier letter and Mr. Berg’s electronic-mail message:

You have taken this action, although you were made aware of their interference

with the FY04 Barracks project.

If you choose not to move these materials to the Log[istics] Center site

which has been provided for your convenience prior to October 30, 2004, then

you may relocate them off the unauthorized FY04 Barracks site and back on to

your FY03 Barracks Site, and then remove them from the FY03 site at a later date

which will not impact the completion of your contract.

13

Mr. Collins had been the administrative contracting officer in April 2004. Marston Ex.

4 at 1. The record does not indicate when Mr. Berg assumed this position.

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You are directed to remove these materials from the FY04 Barracks site no

later than October 30, 2004.

Id. Skanska and its subcontractors resumed moving the surplus soil to Landfill #2 on October

19, 2004. See id. at 43. In a November 5, 2004 letter to Nacon, later revised on December 29,

2004, Mr. Matthews described Active’s costs for moving the surplus soil to Landfill #2, which

totaled $123,272.68. Marston Ex. 14 at 1-2.

Ultimately, on December 5, 2005, Skanska submitted a certified claim to the contracting

officer seeking “compensation for costs associated with encountering contaminated soils” on the

project site in the amount of $148,498. Def.’s Ex. 1. The contracting officer granted in part and

denied in part Skanska’s claim on May 4, 2006. Id. Skanska timely filed the instant complaint

for breach of contract. The court denied the parties’ original cross-motions for summary

judgment. However, believing that the case presented no genuine issues of material fact, the

parties renewed their motions. After reviewing the parties’ original summary judgment briefing

and the briefs in support of their renewed motions for summary judgment, the court vacated its

earlier ruling. This decision supersedes the court’s earlier ruling.

II. LEGAL STANDARD FOR SUMMARY JUDGMENT

The parties have both moved for summary judgment pursuant to Rule 56 of the Rules of

the United States Court of Federal Claims (“RCFC”). Summary judgment is appropriate when

there is no genuine issue of material fact and the moving party is entitled to a judgment as a

matter of law. RCFC 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is

material if it “might affect the outcome of the suit under the governing law.” Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if it “may reasonably be

resolved in favor of either party.” Id. at 250.

The moving party bears the initial burden of demonstrating the absence of any genuine

issue of material fact. Celotex Corp., 477 U.S. at 323. The moving party may discharge its

burden by “pointing out . . . that there is an absence of evidence to support the nonmoving party’s

case.” Id. at 325. The moving party is not required to support its application with affidavits, but

instead may rely solely on the pleadings, depositions, answers to interrogatories, and admissions.

Id. at 324. The nonmoving party then bears the burden of showing that there are genuine issues

of material fact for trial. Id. The nonmoving party must go beyond the pleadings and support its

opposition with affidavits or with depositions, answers to interrogatories, and admissions. Id.

The court must view the inferences to be drawn from the underlying facts in the light most

favorable to the nonmoving party. Matsushita Elec. Ind. Co. v. Zenith Radio Corp., 475 U.S.

574, 587 (1986).

When ruling on a motion for summary judgment, the court must not weigh the evidence

or make findings of fact. See Anderson, 477 U.S. at 249 (“[A]t the summary judgment stage the

judge’s function is not himself to weigh the evidence and determine the truth of the matter but to

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determine whether there is a genuine issue for trial.”); Contessa Food Prods., Inc. v. Conagra,

Inc., 282 F.3d 1370 (Fed. Cir. 2002) (“On summary judgment, the question is not the ‘weight’ of

the evidence, but instead the presence of a genuine issue of material fact . . . .”), abrogated on

other grounds by Egyptian Goddess, Inc. v. Swish, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc);

Ford Motor Co. v. United States, 157 F.3d 849, 854 (1998) (“Due to the nature of the

proceeding, courts do not make findings of fact on summary judgment.”); Mansfield v. United

States, 71 Fed. Cl. 687, 693 (2006) (“[T]he Court may neither make credibility determinations

nor weigh the evidence and seek to determine the truth of the matter. Further, summary

judgment is inappropriate if the factual record is insufficient to allow the Court to determine the

salient legal issues.”). Entry of summary judgment is mandated, “after adequate time for

discovery,” against a party who fails to establish “an element essential to that party’s case, and on

which that party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322.

However, if neither party meets this burden on the filing of cross-motions for summary

judgment, then the court must deny both motions. See, e.g., Canal 66 P’ship v. United States, 87

Fed. Cl. 722, 723 (2009); Dick Pac./GHEMM, JV v. United States, 87 Fed. Cl. 113, 126 (2009).

III. DISCUSSION

Plaintiff contends that the then-newly discovered lead in the stockpiled soil constituted a

differing site condition and that defendant’s refusal to compensate it for the disposal of the

surplus soil constitutes a breach of contract. Compl. ¶¶ 46, 50, 52-53. The dispute in this case

is predicated on the interpretation of several contract provisions, taken both individually and as a

whole, as well as the determination of which contract provisions were relied upon by the parties

during contract performance.

A. Contract Interpretation

“Contract interpretation is a question of law generally amenable to summary judgment.”

Varilease Tech. Group, Inc. v. United States, 289 F.3d 795, 798 (Fed. Cir. 2002). In interpreting

a contract, the court begins by examining its language. TEG-Paradigm Envtl., Inc. v. United

States, 465 F.3d 1329, 1338 (Fed. Cir. 2006). The court considers the contract as a whole and

interprets it “so as to harmonize and give reasonable meaning to all of its parts.” NVT Techs.,

Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004). “An interpretation that gives

meaning to all parts of the contract is to be preferred over one that leaves a portion of the contract

useless, inexplicable, void, or superfluous.” Id. “When the contract’s language is unambiguous

it must be given its ‘plain and ordinary’ meaning and the court may not look to extrinsic evidence

to interpret its provisions.” TEG-Paradigm Envtl., Inc., 465 F.3d at 1338.

B. Section 02300, “Earthwork”

The parties cite provisions from three sections of the contract: (1) section 01410,

“Environmental Protection,” App. 3-5; (2) section 01572, “Construction and Demolition Waste

Management,” Marston Ex. 2 at 1-3; and (3) section 02300, “Earthwork,” Marston Ex. 3 at 1-8.

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The court turns first to section 02300, which addresses the topic directly at issue in this case:

earthwork.

To begin, the “General Excavation” requirements are described in section 02300, as

follows:

The Contractor shall perform excavation of every type of material

encountered within the limits of the project to the lines, grades, and elevations

indicated and as specified. . . . . Satisfactory excavated materials shall be

transported to and placed in fill or embankment within the limits of the work. . . .

Surplus satisfactory excavated material not required for fill or embankment shall

be disposed of outside the limits of Government-controlled land. Unsatisfactory

excavated material shall be disposed of outside the limits of Government-

controlled land.

Id. Then, in the same section, the “Utilization of Excavated Materials” is addressed, as follows:

Unsatisfactory materials removed from excavations shall be disposed of

outside the limits of Government-controlled land. Satisfactory material removed

from excavations shall be used, insofar as practicable, in the construction of fills,

embankments, subgrades, shoulders, bedding (as backfill), and for similar

purposes. No satisfactory excavated material shall be wasted without specific

written authorization. Satisfactory material authorized to be wasted shall be

disposed of outside the limits of Government-controlled land.

Id. Section 02300 also contains definitions for “satisfactory materials” and “unsatisfactory

materials,” as follows:

1.4.1 Satisfactory Materials

Satisfactory materials shall comprise of any materials classified by ASTM

2487 as GW, GP, SW, and SP.14 Materials classified by ASTM D 2487 as GP-

GM and SP-SM are satisfactory provided they contain moisture contents suitable

for the intended use.15 Black organic-rich gravel (GM) is satisfactory only for

open, seeded, turfed, or other landscaped areas provided they contain moisture

14

“ASTM D 2487” refers to a publication of the American Society for Testing and

Materials titled “Classification of Soils for Engineering Purposes (Unified Soil Classification

System).” Marston Ex. 3 at 1. According to this publication, these four classifications describe

well-graded gravel, poorly graded gravel, well-graded sand, and poorly graded sand. App. 12-13.

15

These two classifications describe, respectively, poorly graded gravel with silt and

poorly graded sand with silt. App. 13.

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contents suitable for the intended use. . . .

1.4.2 Unsatisfactory Materials

Materials which do not comply with the requirements for satisfactory

materials are unsatisfactory. Unsatisfactory materials also include man-made fills;

trash; refuse; backfills from previous construction; and material classified as

satisfactory which contains root and other organic matter or frozen material. The

Contracting Officer shall be notified of any contaminated material.

Id. at 2 (footnotes added). Notably, neither definition indicated whether it encompassed

contaminated material.

According to these provisions, the contractor was required to excavate all material

necessary to achieve the specified lines, grades, and elevations in the project. Id. at 4. The

excavated material would fall into one of two mutually exclusive categories: (1) satisfactory

material, which included well-graded gravel, poorly graded gravel, well-graded sand, poorly

graded sand, some poorly graded gravel with silt, some poorly graded sand with silt, and some

black organic-rich gravel and (2) unsatisfactory material, which included all material that was not

satisfactory. Id. at 2, 4. The contractor was instructed to place satisfactory excavated material

“in fill or embankment within the limits of the work.” Id. at 4; see also id. (“Satisfactory material

removed from excavations shall be used, insofar as practicable, in the construction of fills,

embankments, subgrades, shoulders, bedding (as backfill), and for similar purposes.”). If the

contractor had surplus satisfactory excavated material, it was required to dispose of it, along with

all unsatisfactory excavated material, “outside the limits of Government-controlled land.” Id.

Prior to disposing of surplus satisfactory material, however, the contractor was required to obtain

“specific written authorization.” Id. Thus, looking at section 02300 in isolation, Skanska and its

subcontractors could assume that they were required to bear the responsibility for and cost of

transporting and disposing of surplus satisfactory excavated material and all unsatisfactory

excavated material off of Fort Lewis.16

C. Section 01572, “Construction and Demolition Waste Management”

Of course, neither party contends that section 02300 should be considered in isolation.

Plaintiff argues that the provisions of section 01572, which concerns construction and demolition

waste management, relate directly to its transportation and disposal costs for surplus satisfactory

material. Pl.’s Mot. Partial Summ. J. Liability (“Pl.’s Mot.”) 13-14. At the outset of section

01572, the “Government Policy” concerning waste management is recited: “Government policy

16

There is nothing in the record before the court to suggest that at the time of contract

performance, the Corps characterized the surplus stockpiled material as unsatisfactory material.

Accordingly, the court proceeds on the assumption that all of the stockpiled material was

satisfactory material.

-12-

is to apply sound environmental principles in the design, construction and use of facilities. As

part of the implementation of that policy[,] the Contractor shall . . . divert construction and

demolition waste from landfills and incinerators and . . . facilitate their recycling or reuse.”

Marston Ex. 2 at 1. Implementation of this policy is described in the “Management” provision:

The Contractor shall take a pro-active, responsible role in the management

of construction and demolition waste and require all subcontractors, vendors, and

suppliers to participate in the effort. Construction and demolition waste includes

products of demolition or removal, excess or unusable construction materials,

packaging materials for construction products, and other materials generated

during the construction process but not incorporated into the work. In the

management of waste[,] consideration shall be given to the availability of viable

markets, the condition of the material, the ability to provide the material in

suitable condition and in a quantity acceptable to available markets, and time

constraints imposed by internal project completion mandates. . . . Revenues or

other savings obtained for salvage[] or recycling shall accrue to the Contractor.17

Firms and facilities used for recycling, reuse, and disposal shall be appropriately

permitted for the intended use to the extent required by federal, state, and local

regulations.

Id. (footnote added). Plaintiff contends that the language of this provision applies to the soil

classified as surplus satisfactory material pursuant to section 02300. Pl.’s Mot. 13. In further

support of this contention, plaintiff cites two other provisions contained in section 01572. One

provision, titled “Mandatory Materials for Collection,” states: “The collection and segregation of

certain waste materials is mandatory. These materials shall include: soils, organic materials

(clean green), concrete, asphalt, masonry, metals, aluminum, glass, paper, cardboard, recyclable

plastics, gypsum board, [and] clean dimensional lumber.” Marston Ex. 2 at 3 (emphasis added).

The other provision, titled “Project Waste Management Requirement,” states: “The contractor

shall salvage or recycle at least 50 percent (by weight) of the generated construction, demolition

and land clearing waste.” Id. (emphasis added). According to plaintiff, these two provisions

17

Defendant contends that the underlining of this sentence in the contract is “nothing

more than an editing mark.” Def.’s Mot. Summ. J. (“Def.’s Mot.”) 15 n.2; Def.’s Reply Supp. Its

Mot. Partial Summ. J. Liability (“Def.’s Reply”) 5. The court cannot draw the same conclusion

based upon the contract excerpts submitted by the parties. See Marston Exs. 2-3; App. 3-10;

Supp’l Br. Issue “Clean Fill Materials” (“Pl.’s Supp’l Mem. Ex.”) 1-3. In these excerpts, deleted

text is stricken, see App. 3, and added text is underlined, see id. at 3-5; Pl.’s Supp’l Mem. Ex. 1.

In addition, all of the altered text is clearly designated by a vertical line in the right margin. See

App. 3-5; Pl.’s Supp’l Mem. Ex. 1. Such a vertical line is not present to the right of any part of

the “Management” provision. See App. 6; Marston Ex. 2 at 1. Thus, the court presumes that the

underlining present in that provision constituted intentional emphasis. The court invited

defendant to rebut this presumption in its October 8, 2008 order, but defendant failed to do so.

-13-

reinforce its assertion that section 01572 in general, and the “Management” provision

specifically, applies to soil. Pl.’s Mot. 13.

Defendant rejects any suggestion that section 01572 applies to soil. Def.’s Mot. 12-14.

At the outset, defendant focuses on the express language of the “Management” provision, noting

that the provision concerns only “construction and demolition waste.” Id. at 13. Defendant

argues that because soil is not included in the list of items constituting “construction and

demolition waste” and because “it . . . cannot reasonably be said that earth that existed on the site

long before any demolition and removal efforts on this project ever took place[] can ever be a

‘product’ of those demolition and removal efforts, much less ‘generated by the construction

process,’” the “Management” provision “has nothing to do with soil.” Id. Defendant then

addresses the other provisions of section 01572 cited by plaintiff, arguing first that the

“Mandatory Materials for Collection” provision “merely provides that soil should be segregated

from other materials, has nothing to do with any purported ‘right to revenue’ . . . , and, if

anything, demonstrates that[] when provisions of the contract pertain to soil, soil is specifically

identified as the subject of that provision.” Id. at 14. Second, with respect to the “Project Waste

Management Requirement” provision, defendant contends that “[t]he idea that ‘land clearing

waste,’ i.e., materials that are cleared off the land, are the same thing as the land itself is absurd

on its face.” Id. at 13.

Defendant’s interpretation of the “Management” provision of section 01572 cannot stand.

The provision clearly states that “[c]onstruction and demolition waste includes products of

demolition or removal, excess or unusable construction materials, packaging materials for

construction products, and other materials generated during the construction process but not

incorporated into the work.” Marston Ex. 2 at 1. Although the term “material” is not defined in

section 01572, elsewhere in the contract, including in the “Earthwork” section, “material” is

defined so as to specifically include soil. See Marston Ex. 3 at 2. Based on the contract’s

language, it seems logical that surplus excavated soil is a “material[] generated during the

construction process but not incorporated into the work.” The surplus soil would not have

existed but for the excavation activities. Moreover, the “Mandatory Materials for Collection”

provision clearly includes soil within the definition of “waste materials.” Indeed, if the court

adopted defendant’s interpretation of this provision, it would lead to the illogical conclusion that

none of the other items mentioned along with soil– “organic materials (clean green), concrete,

asphalt, masonry, metals, aluminum, glass, paper, cardboard, recyclable plastics, gypsum board,

[and] clean dimensional lumber”–could be considered “construction and demolition waste”

because none of those items was listed in the “Management” provision.

Having established that soil is within the ambit of section 01572, the court must

determine the import of the penultimate sentence of the “Management” provision: “Revenues or

other savings obtained for salvage[] or recycling shall accrue to the Contractor.” Plaintiff

contends that “[t]he clause assigns to the contractor the financial benefit (whether in savings or

profit) of disposing of unneeded materials generated in the course of the construction project.”

Pl.’s Mot. 13. Plaintiff explains that by incorporating the clause into the contract, the

-14-

government is “harnessing the ingenuity of its contractors for its own financial benefit by

encouraging them to find the most economical way to recycle, salvage, or dispose of construction

byproducts,” and, as such, is “gain[ing] the assurance that bidders will be forced to reduce their

bid prices by the savings they expect to accrue through salvage, or risk being underbid for the

work should they fail to [do so].” Id. Thus, according to plaintiff, “it had the right to retain any

savings accrued through the disposal of surplus soils.” Id. Although defendant rejects plaintiff’s

interpretation of the clause,18 its position that the clause “does nothing more than entitle the

contractor to keep the proceeds of its recycling and salvage efforts (as opposed to turning them

over to the Government), if those efforts are successful,” Def.’s Mot. 14-15, is, in actuality,

similar to plaintiff’s position. Thus, the court agrees with both parties. Through the

“Management” provision of section 01572, the Corps assigned the contractor the “[r]evenues or

other savings obtained for salvage[] or recycling” to the extent that the contractor was able to

realize such revenues or savings. Consequently, the contractor could benefit from this provision

by gauging its potential salvage and recycling revenues and savings and incorporating those

revenues and savings in its bid. As plaintiff notes, though, if the contractor did not adjust its bid

price to reflect its expected savings, it bore the risk of losing the contract to a lower-priced

bidder. Accordingly, looking at section 01572 in conjunction with section 02300, the court

concludes that plaintiff was entitled to lower its bid price by the amount it reasonably believed it

could receive through the sale of surplus satisfactory material.

D. Section 01040, “Environmental Protection”

One other contract section must be considered: section 01410, which concerns

environmental protection. Defendant contends that the provision titled “Clean Fill Materials” in

section 01410 precluded plaintiff from removing any soil from Fort Lewis that the Corps deemed

to be “clean fill.” Id. at 11. The “Clean Fill Materials” provision appears under the heading

“Disposal of Solid Waste,” as follows:

18

The primary source of the parties’ disagreement concerns plaintiff’s contention that it

has “the right to any compensation obtained for the value of materials removed . . . .” Pl.’s Mot.

13. Defendant interprets plaintiff’s contention as providing that “in the event that there is no

available market for a particular item of construction or demolition waste, or if the contractor

cannot resell the waste for the amount that it hoped, the contractor can then turn to the

Government to be paid for ‘lost’ salvage value, whether measured in terms of transportation costs

or otherwise.” Def.’s Mot. 15. Defendant misconstrues plaintiff’s argument. Had plaintiff

advanced such a contract interpretation, the court would have rejected it as overly broad. In sum,

if plaintiff wrongfully assumed that there was a market for a particular waste item (as that item

appeared at the time that the Corps was soliciting bids) or if plaintiff erroneously estimated the

salvage value of a waste item, it would not be able to recoup the difference in cost from the

government.

-15-

3.5.2 Clean Fill Materials

Clean fill materials shall be disposed of on Fort Lewis at a site as directed by

[Public Works], Engineering & Contract Management Division. Clean fill shall

not contain any items such as vegetative material, asphalt, concrete or metals.

App. 5. The term “[c]lean fill materials” is not affirmatively defined in the contract; it is defined

only by what clean fill does not contain. However, the parties expand on this loose formulation

by citing other provisions of section 01410.

Defendant, on one hand, contends that clean fill is, “‘technically, anything that falls

below . . . regulatory limits, and therefore, has no restrictions on its use.’” Def.’s Resp. Pl.’s

Supplemental Briefing Dep. Philip Crawford (“Def.’s Dep. Br.”) 3 (quoting the deposition of Mr.

Crawford); accord Def.’s Supplemental Mem. (“Def.’s Supp’l Mem.”) 2. Defendant further

explains:

[T]he term “clean fill” is of necessity a catchall category whose precise definition

depends first and foremost upon excess soil’s suitability for beneficial use outside

of the immediate limits of a construction site . . . , and, as a secondary matter,

upon state and Federal regulatory definitions of what materials necessitate special

use or disposal considerations.

Def.’s Supp’l Mem. 2; accord id. at 6. According to defendant, this definition is “informed by

reference” to the definitions of “hazardous material” and “hazardous waste” contained in the

same section. Id. at 2-3. Those two terms are defined as follows:

a. Hazardous material (HM): A useful product that requires special management

because it has hazardous characteristics (ignitability, corrosivity, reactivity, or

toxicity) that could pose dangers to human health or the environment. A[n] HM

becomes a Hazardous Waste when it can no longer be used for its intended

purpose.

b. Hazardous waste (HW): A discarded material with properties that could pose

dangers to human health or the environment. A[n] HW either exhibits a

hazardous characteristic (ignitability, corrosivity, reactivity, or toxicity) or is

specifically listed as a[n] HW by the EPA or by the State.

App. 3. Defendant argues that “[t]he term ‘clean fill materials’ is defined broadly, encompassing

all materials other than those soils containing a handful of prescribed categories of excluded

characteristics, because the contractual focus is–and must be–upon what can be reused consistent

with applicable environmental regulatory requirements.” Def.’s Supp’l Mem. 3; see also Def.’s

Resp. Pl.’s Supplemental Mem. (“Def.’s Supp’l Resp.”) 5 (“[C]lean fill is, as a matter of that

-16-

contract, quire broad, encompassing any material that does not fit within the contractual

definitions of ‘hazardous material’ or ‘hazardous waste.’”).

On the other hand, plaintiff defines “clean fill materials” simply as “material that is not

contaminated by a hazardous substance.”19 Supplemental Br. Issue “Clean Fill Materials” (“Pl.’s

Supp’l Mem.”) 1; accord Pl.’s Resp. Def.’s Supplemental Mem. (“Pl.’s Supp’l Resp.”)

(contending that clean fill is “uncontaminated fill material”). Plaintiff asserts that its definition is

supported by two provisions from the “General Requirements” portion of section 01410. The

first, untitled, provision describes the contractor’s responsibilities with respect to environmental

protection:

The contractor shall perform the work minimizing environmental pollution and

damage as the result of construction operations under this contract. For the

purpose of this specification, environmental pollution and damage is defined as

the presence of chemical, physical, or biological elements or agents which

adversely affect human health or welfare; unfavorably alter ecological balances of

importance to human life; affect other species of importance to humankind; or

degrade the utility of the environment for aesthetic, cultural, and/or historical

purposes.

Pl.’s Supp’l Mem. Ex. 1. The second provision, titled “Laws and Regulations,” states: “The

Contractor shall comply with all applicable Federal, State, and Local environmental, natural and

cultural resources, and historic preservation laws and regulations. . . . These specifications

supplement these laws and regulations.” Id. at 2-3. Plaintiff also contends that the Washington

Model Toxics Control Act regulations, which define “‘cleanup level’” as “‘the concentration of

hazardous substance in soil, water, air, or sediment that is determined to be protective of human

health and the environment under specified exposure conditions,’” support its proffered

definition. Pl.’s Supp’l Mem. 2 (quoting Wash. Admin. Code 173-340-700 (2007)).

Ultimately, despite the parties’ reliance on different contractual provisions, the court does

not find significant difference between the parties’ definitions of “clean fill materials.” On the

one hand, defendant contends that clean fill “encompass[es] any material that does not fit within

the contractual definitions of ‘hazardous material’ or ‘hazardous waste,’” Def.’s Supp’l Resp. 5,

while on the other hand, plaintiff asserts that clean fill is “material that is not contaminated by a

hazardous substance,” Pl.’s Supp’l Mem. 1. Thus, the court concludes that clean fill consists of

19

In its reply brief, plaintiff advances the additional contention that lead-contaminated

soil cannot be included within the definition of “clean fill materials” due to the exclusion of

“metals” from the definition. Pl.’s Reply Supp. Mot. Summ. J. Liability & Opp’n Def.’s Cross-

Mot. Summ. J. (“Pl.’s Reply”) 6-7. Given that “metals” are listed as “items” along with

“vegetative material, asphalt, [and] concrete,” it is likely that “metals” refers to scrap metal and

not elemental metal.

-17-

fill that neither contains nor constitutes “hazardous material” or “hazardous waste” and does “not

contain any items such as vegetative material, asphalt, concrete or metals.”

Although the parties do not have a significant dispute concerning the contract’s definition

of “clean fill materials,” they are at odds over whether the surplus material at issue in this case

fits within that definition. As an initial matter, the parties appear to agree that the Corps, and not

plaintiff, was responsible for determining whether particular material constituted clean fill. See

Def.’s Supp’l Mem. 2, 4-5 (citing the deposition testimony of Mr. Berglund and Mr. Matthews of

Active and Mr. Hynes of Skanska for the proposition that the “contract . . . vested in the

Government sole discretion to determine what constituted ‘clean fill materials’”). However,

contrary to defendant’s contentions that the Corps had the “sole discretion to determine in the

first instance what constituted clean fill that was clean enough for use by the Government,”

Def.’s Dep. Br. 4, and that “[t]he determination of whether excess soils from the project site were

clean enough to fulfill the Government’s needs . . . is one that is solely for the government to

make,” id. at 5, any discretion that the Corps had to designate material in the stockpile as clean

fill is limited by the section’s exclusion of “hazardous material” and “hazardous waste” from the

material that can constitute clean fill. In other words, the Corps was not entitled to declare

material to be clean fill if that material contained or constituted “hazardous material” or

“hazardous waste.”

Defendant contends that the Corps properly designated the surplus satisfactory material in

the stockpile as clean fill for two reasons. First, defendant asserts that the material was neither

“hazardous material” nor “hazardous waste” because “the soils were put to deliberate and

beneficial reuse at Landfill No. 2 . . . .” Def.’s Supp’l Mem. 3. Specifically, defendant contends

that the material was not “hazardous material” because it was used for its intended purpose and

that the material was not “hazardous waste” because it had not been discarded. Defendant

misinterprets the definitions of “hazardous material” and “hazardous waste.” A “hazardous

material” is a “useful product that requires special management because it has hazardous

characteristics . . . that could pose dangers to human health and the environment.” App. 3. Thus,

contrary to defendant’s assertion, using a hazardous material for its intended purpose does not

transform it into nonhazardous material. Similarly, while a “hazardous waste” is a “discarded

material with properties that could pose dangers to human health or the environment,” id.,

retaining a hazardous material does not render the material nonhazardous. The key inquiry is not

whether the material was used or discarded, it is whether the material has “hazardous

characteristics” or “is specifically listed as a [hazardous waste]” by the federal or state

governments.

The second reason advanced by defendant to support the Corps’ designation of the

surplus material in the stockpile as clean fill addresses this more relevant inquiry. Defendant

contends that the lead content of the soil “fell below state and Federal regulatory action limits,”

thus excluding it from the definition of “hazardous waste.” Def.’s Supp’l Mem. 4. Plaintiff

disagrees, arguing that because the Corps reported “some total lead concentrations exceeding

Washington State MTCA Method A Unrestricted Use criteria,” App. 30, the soil was “hazardous

-18-

waste,” Pl.’s Supp’l Resp. 3-5. Plaintiff further asserts that, contrary to the “Stockpile

Characterization Report,” the soil was a “dangerous waste” pursuant to the Washington law. Id.

at 2-3 (citing Wash. Rev. Code § 70.105.010 (2008) (“‘Dangerous wastes’ means any discarded,

useless, unwanted, or abandoned substances, . . . which are disposed of in such quantity or

concentration as to pose a substantial present or potential hazard to human health, wildlife, or the

environment because such wastes or constituents or combinations of such wastes . . . [h]ave

short-lived, toxic properties that may cause death, injury, or illness . . . .”)). And, plaintiff avers,

because the soil is a “dangerous waste,” it is also a “hazardous waste.” Id. (citing Wash. Rev.

Code § 70.105.010 (“‘Hazardous waste’ means and includes all dangerous and extremely

hazardous waste . . . .”)). As evidence that the Corps considered the soil to be a “dangerous

waste,” plaintiff again cites the “Stockpile Characterization Report,” which included the Corps’

suggestion that off-site disposal would need to be done at a “Subtitle D” facility. Id. at 3-4

(citing App. 30).

Plaintiff’s reliance on Washington law is not well-founded. Certainly, one way in which

the material could qualify as “hazardous waste” pursuant to the contract was if the material was

“specifically listed” as a “hazardous waste” by the state. See App. 5. And, under Washington

law, “hazardous waste” is synonymous with “dangerous waste.” See Wash. Rev. Code §

70.105.010 (defining “hazardous waste” as “all dangerous and extremely hazardous waste” and

defining “extremely hazardous waste” as a subset of “dangerous waste”). However, the

“Stockpile Characterization Report” indicated that while some lead concentrations exceeded the

relevant state criteria, the soil did not “appear to be a ‘dangerous waste’” pursuant to the

applicable state law. Presumably, the Corps believed that lead concentrations did not “pose a

substantial present or potential hazard to human health, wildlife, or the environment,” as required

by the Washington statute. See App. 5. Plaintiff’s only evidence that the soil was a “dangerous

waste”–the report’s reference to a “Subtitle D” facility, i.e., a Class D landfill–is unconvincing.

The plain language of the Resource Conservation and Recovery Act of 1976 demonstrates that a

“Subtitle D” facility is one that handles regular solid waste, while a “Subtitle C” facility would

be one that handles hazardous waste. Compare 90 Stat. at 2814 (codified at 42 U.S.C. § 6943)

(“The plan shall . . . contain requirements that all solid waste ( . . . not including hazardous

waste) shall be . . . disposed of in sanitary landfills . . . or otherwise disposed of in an

environmentally sound manner.”), with id. at 2807 (codified at 42 U.S.C. § 6924) (“[T]he

Administrator shall promulgate regulations establishing such performance standards, applicable

to owners and operators of facilities for the treatment, storage, or disposal of hazardous waste

identified or listed under this subtitle, as may be necessary to protect human health and the

environment. ”). The plain language of the statute is reinforced by the deposition testimony of

Mr. Crawford. See Marston Supp’l Ex. 14 (“[A] Class D landfill is just a regular sanitary

landfill.”). But see Marston Ex. 13 at 8 (containing the implication by Mr. Matthews that a Class

D landfill could accept contaminated soil that was not considered to be “general fill”).

Altogether, the surplus material at issue in this case was not a “hazardous waste” by virtue of

being listed as such by the state of Washington. However, this conclusion does not end the

court’s inquiry.

-19-

As noted above, section 01410 provides that a “hazardous waste” is either listed as such

by the state or federal government or “exhibits a hazardous characteristic” that “could pose

dangers to human health or the environment,” App. 5, which implies that state or federal

standards are not necessarily controlling. The parties do not directly address this portion of the

“hazardous waste” definition and the court finds conflicting evidence in the record on whether

the soil posed any danger. On the one hand, the Corps informed plaintiff and its subcontractors

that the soil was contaminated and could not be used as general fill material. See Marston Ex. 4

at 1; Marston Ex. 6 at 1; App. 36-37. On the other hand, because, according to Mr. Crawford,

the soil was “for all intents and purposes, clean fill,”20 App. 33, the Corps determined that the

soil could be used in various locations for various purposes on Fort Lewis, id. at 30, 33; Marston

Ex. 4 at 1; Marston Ex. 6 at 1, and ultimately directed plaintiff to transport it to Landfill #2 on

Fort Lewis, App. 36, 74-75. In other words, the Corps claimed that the surplus material was not

hazardous while at the same time restricting the use of the material. The issue that has not been

addressed to the court’s satisfaction is whether, by restricting the use of the surplus material in

the stockpile, the Corps was, in effect, conceding that the material could pose a health or

environmental danger.21 Thus, the court finds that there is a genuine issue of material fact with

respect to whether the surplus material in the stockpile contained or constituted “hazardous

waste,” and, therefore, whether the Corps properly classified the material as clean fill.

The presence of this genuine issue of material fact does not end matters, however. As the

court has interpreted the individual provisions of the contract thus far, sections 02300 and 01410

of the contract appear to contain conflicting directives for the disposal of excavated material.

Consider the following illustration:

20

It bears noting that there is no evidence in the record that the Corps, during plaintiff’s

performance of the contract, actually invoked section 01410 and informed plaintiff that it had

designated the surplus material in the stockpile as clean fill. See App. 37 (informing plaintiff

that it was required to dispose of the material off of Fort Lewis pursuant to section 02300, but

that the Corps was offering a less expensive alternative to mitigate the costs of disposal), 40

(informing plaintiff that the Corps’ direction to plaintiff to dispose of the material at Landfill #2

“alter[ed] the terms of the contract to mitigate future risk”); see also Def.’s Reply 1-2 (“[B]ased

upon contractual provisions not relied upon by the contract administrator at the time that it

directed Skanska to transport project soils to Landfill #2, but relied upon by the contracting

officer in her decision on Skanska’s claim, . . . the Government was . . . empowered . . . to direct

Skanska to transport project soils to Landfill #2 . . . .” (emphasis added)). The failure of the

Corps to invoke section 01410 at the time of contract performance is addressed below.

21

Moreover, the definition of “clean fill materials” also excludes “hazardous

material[s],” which, like “hazardous waste,” have “hazardous characteristics . . . that could pose

dangers to human health or the environment.” App. 5. Neither party addressed whether the

surplus material in the stockpile could constitute a “hazardous material” pursuant to this

definition.

-20-

The contractor, during the course of constructing a building on a military base,

excavated a large amount of soil and other material. In compliance with the

contract, the contractor used the satisfactory material on the project site to

construct fills, embankments, subgrades, shoulders, and bedding. However, after

the contractor had completed its construction of all of the fills, embankments,

subgrades, shoulders, and bedding on the project site, some satisfactory

excavated material remained unused. In compliance with the contract, the

contractor explored the possibility of disposing this surplus material off of the

base, sought the necessary permission for disposal from the government, and

received (it believed) the government’s permission. However, the government

subsequently directed the contractor to place the same surplus material that,

pursuant to the contract, could only be used on the project site or off of the base

altogether, on other parts of the base, purportedly pursuant to another provision

of the contract.

In the above illustration, which generally describes the case at bar, the contract contains two

apparently conflicting provisions concerning the disposal of the surplus material in the stockpile.

The court addresses the apparent conflict between section 02300 and section 01410 below.

E. Reconciling Section 02300 and Section 01410

Based upon the definitions and descriptions contained in sections 02300 and 01410, it is

apparent that material could be classified as both satisfactory material and clean fill. The parties

agree with this proposition. Def.’s Mot. 20-21, 23; Def.’s Reply 13; Def.’s Supp’l Mem. 6; Pl.’s

Supp’l Mem. 2-3; Def.’s Supp’l Resp. 6. Indeed, defendant contends that the material excavated

by plaintiff and its subcontractors actually constituted both clean fill and satisfactory material.22

Def.’s Mot. 20-21; Def.’s Reply 13; Def.’s Supp’l Mem. 7. However, the contract provides

different disposal requirements for clean fill and satisfactory material. Section 01410 clearly

requires the contractor to dispose of “clean fill materials” on any part of Fort Lewis identified by

Fort Lewis officials.23 But, as the court has interpreted section 02300, satisfactory excavated

22

It appears that defendant’s contention is based, in part, on its belief that the “General

Excavation” provision in section 02300 permitted the government to direct the disposal of

satisfactory material on any part of Fort Lewis and not just on the project site. See Def.’s Reply

12. As noted above, the court disagrees with this interpretation. Plaintiff was allowed to dispose

of satisfactory material pursuant to section 02300 in only two locations: on the project site or

away from Fort Lewis.

23

Plaintiff contends that there is no evidence that an official from the “[Public Works],

Engineering & Contract Management Division” directed the disposal of the excavated material at

Landfill #2, as was required by the contract. Supplemental Briefing Following Crawford Dep. 4-

5. To the extent that the government directed plaintiff to dispose of the surplus material at

Landfill #2 pursuant to section 01410–a proposition examined and rejected by the court

-21-

material must either be used at the project site or away from Fort Lewis altogether. In other

words, if satisfactory excavated material is deemed to be both surplus to the work on the project

site and clean fill, the contract demands two mutually exclusive disposal locations: on Fort Lewis

and off of Fort Lewis.

As a general rule, the court must attempt to “give[] meaning to all parts of the contract”

without rendering any part of the contract meaningless. NVT Techs., Inc., 370 F.3d at 1159.

The court can give meaning to both section 01410 and section 02300 if one of the sections is

subordinate to the other. Defendant’s position is that section 01410 trumps section 02300.

Specifically, defendant asserts that “‘clean fill’ may be comprised of either satisfactory materials

or some types of unsatisfactory materials” and that the “the question of whether the Government

has a reuse for its own property is one that must of necessity be addressed before there is a

determination of what, if any, materials must be hauled off Government-controlled land as

surplus or excess satisfactory materials, or as unsatisfactory materials.” Def.’s Supp’l Mem. 6;

accord id. at 7-8; Def.’s Mot. 20; Def.’s Supp’l Resp. 6, 8. Plaintiff suggests the opposite

position, contending that section 01410 can be interpreted as being “subject to” section 02300 if

the requirement that “[c]lean fill materials shall be disposed of on Fort Lewis” is read as

requiring “clean fill materials” to be disposed of on the project site.24 Pl.’s Supp’l Mem. 4; Pl.’s

Supp’l Resp. 5. Plaintiff’s interpretation is untenable because it would rewrite the express terms

of section 01410. On the other hand, defendant’s position–that the government was entitled to

reuse the material excavated from its land as it saw fit–is reasonable. Section 01410 allowed the

government to determine whether any of the excavated material could be used elsewhere on Fort

Lewis, and if it could not be so used, the Corps could permit the disposal of the excavated

material off of Fort Lewis pursuant to section 02300. Indeed, plaintiff was not allowed to

remove any satisfactory excavated material from Fort Lewis until it had received written

permission from the Corps, strongly suggesting that the Corps had expansive control over the

ultimate disposition of the material.25 Accordingly, the court finds that section 02300 should be

below–plaintiff’s contention lacks merit. Had Fort Lewis officials not wanted the excavated

material to be placed at Landfill #2, they would have raised the relevant objections or the

disposal would not have occurred.

24

Plaintiff also argues that there is “no evidence that the Plaintiff either actually knew (or

should have known) . . . of the presence within § 01410, the Environmental Protection section of

the contract, of a term addressing disposition of soils in addition to those found, as is the normal

practice, in § 02300 Earthwork.” Pl.’s Supp’l Resp. 6. This argument is facially absurd. “Both

parties to a contract are charged with knowledge of its terms. Neither the contractor nor the

government can avoid its legal responsibilities by asserting ignorance.” Maxima Corp. v. United

States, 847 F.2d 1549, 1556 (Fed. Cir. 1988).

25

As noted above, while the Corps’ control was expansive, it was not exhaustive. The

Corps could only direct the disposal of excavated material on those parts of Fort Lewis outside of

the immediate project site if the material did not contain or constitute “hazardous waste” or

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read as being subject to section 01410. Once again, however, this finding does not end the

court’s inquiry. While section 01410 takes precedence over section 02300 as the contract is

written, such precedence has been rendered meaningless here by the Corps’ actions.

F. The Corps’ Failure to Invoke Section 01410

As noted above, the Corps did not, as required by the contract, invoke section 01410

when directing plaintiff to dispose of the excavated material in the stockpile at Landfill #2. See

supra note 20. Defendant concedes that fact. See Def.’s Reply 1-2. The evidence in this case

plainly shows that Mr. Lewis, the contracting officer’s representative, informed plaintiff on

August 26, 2004, that the surplus material was “of no use to the Government” and that plaintiff

was required to dispose of the material off of Fort Lewis pursuant to section 02300, but that the

Corps was offering a less expensive alternative to mitigate the costs of disposal. App. 37. And,

on August 27, 2004, Mr. Berg, the administrative contracting officer, informed plaintiff that the

Corps’ direction to plaintiff to dispose of the material at Landfill #2 “alter[ed] the terms on the

contract to mitigate future risk.” Id. at 40. None of these communications mentioned section

01410. In fact, not one representative of the Corps informed plaintiff that the Corps considered

the surplus excavated material to be clean fill; the only use of this term at the time of contract

performance was in an April 15, 2004 electronic-mail message sent by Mr. Crawford to Corps

and Fort Lewis personnel, and even then, Mr. Crawford merely indicated that the material was,

“for all intents and purposes,” clean fill, without actually declaring it to be clean fill. See App.

33. Indeed, even after plaintiff objected to disposing of the excavated material at Landfill #2

without additional compensation, the Corps chose not to invoke section 01410. Thus, it is clear

that even though section 01410 was available to the Corps as a means to direct the disposal of the

surplus excavated material, the Corps relied solely on section 02300 when it directed the

disposal.

Because the Corps relied solely on section 02300, the proper interpretation and

application of section 01410, particularly the question of whether the surplus material in the

stockpile was properly classified as clean fill, is rendered irrelevant by the Corps’ conduct.

Consequently, the court’s task is limited to addressing whether plaintiff complied with section

02300; whether the discovery of lead in the surplus material in the stockpile constituted a

differing site condition; and whether the Corps’ directive to plaintiff to dispose of the surplus

material in the stockpile at Landfill #2 constituted a constructive change to the terms of the

contract.

G. Plaintiff’s Compliance With Section 02300

Pursuant to section 02300, plaintiff was required to obtain “specific written

authorization” prior to disposing satisfactory excavated material “outside the limits of

Government-controlled land.” Marston Ex. 3 at 4. On September 26, 2003, plaintiff requested

“hazardous material.”

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permission to dispose of the surplus material in the stockpile in Request for Information number

318. Marston Ex. 1 at 1. When the Corps, via Mr. Packard, neglected to address this request,

plaintiff reiterated it in Request for Information number 318R, specifying that it would like to

“remove 10,000 cubic yards of soil from the Post” and requesting that the Corps “confirm that

this is acceptable.” Id. at 2. Mr. Packard responded to the amended request for information on

October 7, 2003, writing: “[c]onfirmed.” Id.

Understandably, plaintiff interpreted Mr. Packard’s response as the “specific written

authorization” required by section 02300, and proceeded to make arrangements to dispose of the

surplus material at no cost to itself or the Corps. See Berglund Decl. ¶ 25; Johnson Decl. ¶¶ 4-6;

Johnson Ex.; App. 36; Pl.’s Mot. 12; Pl.’s Reply 14. Defendant contests plaintiff’s

interpretation, arguing that “[t]here is a genuine issue of material fact as to whether such

authorization was, in fact, given in the first instance, given the facial ambiguity of the RFI

responses and the testimony of James Packard . . . .” Def.’s Mot. 21 n.6. Defendant is mistaken.

Mr. Packard’s response to the amended request for information is not ambiguous and Mr.

Packard’s testimony, provided more than four years after he supplied his response, is not credible

on this topic, especially given the contrary testimony from the contracting officer and the

assistant project engineer. Conceding that it might be incorrect, defendant then asserts that even

if the Corps had granted plaintiff permission to remove the surplus material from Fort Lewis, the

Corps was not prevented from “retracting or changing its determination.” Id.; accord Def.’s

Reply 13-14. The accuracy of defendant’s assertion is immaterial, because later statements by

the Corps indicate that it never revoked permission to dispose of the material off of Fort Lewis.

For example, Mr. Lewis informed plaintiff on August 26, 2004, that the surplus material was “of

no use to the Government” and “authorized” plaintiff to dispose of the material off of Fort Lewis.

App. 37. Thus, the Corps did not retract or change its written authorization. In sum, plaintiff

satisfied the prerequisites to off-site disposal set forth in section 02300.

H. Differing Site Condition

Having established that plaintiff obtained the necessary written authorization pursuant to

section 02300 to dispose of the surplus satisfactory material off of Fort Lewis, the court’s next

task is to determine whether the discovery of lead contamination in the material after plaintiff

had received the written authorization constitutes a differing site condition. The parties indicate

that the contract contained the following clause:

52.236-2 Differing Site Conditions.

(a) 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; or

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(2) Unknown physical conditions at the site, of an unusual nature, which

differ materially from those ordinarily encountered and generally

recognized as inhering in work of the character provided for in the

contract.

(b) The Contracting Officer shall investigate the site conditions promptly after

receiving the notice. If the conditions do materially so differ and cause an

increase or decrease in the Contractor’s cost of, or the time required for,

performing any part of the work under this contract, whether or not changed as a

result of the conditions, an equitable adjustment shall be made under this clause

and the contract modified in writing accordingly.

(c) No request by the Contractor for an equitable adjustment to the contract under

this clause shall be allowed, unless the Contractor has given the written notice

required; provided, that the time prescribed in paragraph (a) of this clause for

giving written notice may be extended by the Contracting Officer.

(d) No request by the Contractor for an equitable adjustment to the contract for

differing site conditions shall be allowed if made after final payment under this

contract.

Federal Acquisition Regulation (“FAR”) 52.236-2, cited in Pl.’s Mot. 7-8; Def.’s Mot. 23. Here,

plaintiff alleges a “Type II” differing site condition pursuant to FAR 52.236-2(a)(2).

“[T]o qualify as a [Type II differing site] condition, the unknown physical condition must

be one that could not be reasonably anticipated by the contractor from his study of the contract

documents, his inspection of the site, and his general experience if any, as a contractor in the

area.” Perini Corp. v. United States, 381 F.2d 403, 410 (Ct. Cl. 1967), quoted in Randa/Madison

Joint Venture III v. Dahlberg, 239 F.3d 1264, 1276 (Fed. Cir. 2001). “The purpose of the

Differing Site Conditions clause is to allow contractors to submit more accurate bids by

eliminating the need for contractors to inflate their bids to account for contingencies that may not

occur.” H.B. Mac, Inc. v. United States, 153 F.3d 1338, 1343 (Fed. Cir. 1998); accord Foster

Constr. C.A. v. United States, 435 F.2d 873, 887 (Ct. Cl. 1970). The clause limits a contractor’s

responsibility to consider, prior to bidding on a contract, contingencies such as “latent or

subsurface conditions, for which the Government has assumed responsibility,” and, as a result,

does not endow bidders with an expansive duty to investigate the site. Foster Constr. C.A., 435

F.2d at 887; accord Servidone Constr. Corp. v. United States, 19 Cl. Ct. 346, 356 (1990), aff’d,

931 F.2d 860 (Fed. Cir. 1991). However, a contractor seeking to establish a Type II differing site

condition “is confronted with a relatively heavy burden of proof” because “the Government has

elected not to presurvey and represent the subsurface conditions with the result that a claimant

must demonstrate that he has encountered something materially different from the ‘known’ and

the ‘usual.’” Charles T. Parker Constr. Co. v. United States, 433 F.2d 771, 778 (Ct. Cl. 1970).

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Plaintiff contends that it has established all three elements of a Type II differing site

condition: a physical condition that is (1) unknown, (2) unusual, and (3) materially different from

what is ordinarily encountered in similar work. Pl.’s Mot. 10. First, plaintiff avers that it was

unaware of the lead contamination in the excavated material in the stockpile until the Corps

discovered the contamination during contract performance. Id.; see also Proposed Findings

Uncontroverted Fact (“Pl.’s Facts”) ¶¶ 7-10 (citing deposition testimony from Mr. Packard, Ms.

Gary, Mr. Matthews, and Mr. Berglund). Second, citing the declaration of Mr. Berglund,

plaintiff avers that “it is unusual for soils encountered in the course of earthwork to be

contaminated with lead.” Pl.’s Mot. 10. Third, plaintiff contends that “[t]he presence of lead

contamination was material because contamination of this type necessitates that the soils be

disposed of in restricted landfills for this purpose,” and, unlike the clean soil that it expected,

“lead contaminated soils ha[ve] no market value . . . .” Id.; see also Pl.’s Reply 5-6 (citing the

“Stockpile Characterization Report,” Mr. Lewis’s letter to plaintiff, and the declarations of Mr.

Johnson and Mr. Berglund); Pl.’s Facts ¶ 11 (citing the declaration of Mr. Berglund).

Defendant responds that the Differing Site Conditions clause is inapplicable, analogizing

the facts of this case to those in Martin Paving Co., ASBCA No. 48279, 97-2 BCA ¶ 29,085,

aff’d, 173 F.3d 433 (Fed. Cir. 1998) (unpublished table decision).26 See Def.’s Resp. Pl.’s

Renewed Cross-Mot. Partial Summ. J. Liability & Def.’s Cross-Mot. for Partial Summ. J. on

Liability 5-9. The contract in that case concerned the resurfacing of a runway at Patrick Air

Force Base. The runway had not been resurfaced for several years. Instead, cracks that

developed had been filled with joint sealant material. The contractor was required to mill the

runway and then overlay the runway with hot mix asphalt. The contract specified that the milled

material was “to be hauled off base and [was] not the property of or responsibility of the

Government.”

When preparing its bid, but without performing a site inspection, the contractor decided

to reduce its costs by reusing the milled material in its hot asphalt mix; the standard specification

incorporated in the contract permitted the use of recycled asphalt and no other contract provision

prohibited the use of recycled asphalt. The contractor did not inform the government of its intent

to reuse the milled material in its hot asphalt mix until the preconstruction conference, when it

26

While the decisions of the boards of contract appeals are not binding on the United

States Court of Federal Claims, the analyses contained in those decisions may be instructive. See

Gen. Elec. Co., Aerospace Grp. v. United States, 929 F.2d 679, 682 (Fed. Cir. 1991) (stating that

the decision of a board of contract appeals that was “confronted with the same issue” was not

binding on the United States Court of Federal Claims). Similarly, unpublished decisions of the

United States Court of Appeals for the Federal Circuit (“Federal Circuit”) do not constitute

binding precedent, but they may contain persuasive reasoning. See Fed. Cir. R. 32.1(d) (“The

court may refer to a nonprecedential disposition in an opinion or order and may look to a

nonprecedential disposition for guidance or persuasive reasoning, but will not give one of its own

nonprecedential dispositions the effect of binding precedent.”).

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requested permission to take core samples of the runway to determine the suitability of the

material for reuse. Because the runway was still in use, the government permitted the contractor

to take core samples only from the shoulder of the runway. The samples taken by the contractor

included some taken over sealed cracks. Testing did not reveal anything unusual about the

asphalt. The government ultimately approved the contractor’s asphalt mix design, which

included thirty-five percent recycled asphalt from the material milled from the runway.

Soon after beginning the resurfacing of the runway, unacceptable foreign material began

to appear on the asphalt’s surface. With the government’s approval, the contractor stopped the

resurfacing and created a new hot asphalt mix using a new source of recycled asphalt. Upon

investigation, the contractor discovered that the source of the unacceptable foreign material was a

coal-tar-based joint sealant material. Coal-tar-based materials are not compatible with asphalt

and therefore are used only by mistake or when there is a need for a fuel-resistant material.

Indeed, federal and industry standards require the use of an asphalt-based joint sealant material

on asphalt pavement. In preparing its bid and assessing whether to reuse the milled material in

its hot asphalt mix, the contractor had relied on its assumption that the government would have

complied with these standards.

Because of the unexpected presence of coal-tar-based joint sealant material on the

runway–a condition that could not have been discovered during a site inspection or through the

limited core sampling permitted by the government–the contractor filed a claim for the additional

costs it incurred in resurfacing the runway with a new hot asphalt mix. The contracting officer

denied the claim, and both the Armed Services Board of Contract Appeals (“board”) and the

Federal Circuit affirmed that decision.

The board concluded that it was unnecessary for it to determine whether the contractor

had established a differing site condition because the government, by providing “in the contract

that the millings were to be hauled off base and were neither the property nor the responsibility of

the Government,” expressly “disclaimed responsibility for this material and thus [did] not bear

the risk of the materials failing to conform to the specifications.” 97-2 BCA ¶ 29,085. It further

explained:

It was the contractor’s responsibility to investigate and select sources of supply

and prior to bidding obtain assurances that the materials needed to perform the

contract work in accordance with the contract terms would be available.

Appellant made no efforts to determine prior to bidding that recycled materials

from the runway, which were not Government-furnished property and for which

the Government disclaimed responsibility, could be used to meet all the contract

requirements. Appellant knew or reasonably should have known of risks inherent

in the use of [recycled asphalt]. Appellant should have recognized the

uncertainties involved in using [recycled asphalt] from a source that it had not

used on other projects. The failure to appreciate a risk in using an untested source

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of materials for contract performance which led to appellant’s increased costs of

doing replacement work is not a failure for which the Government is held liable.

Id. (citations omitted). The Federal Circuit agreed with the board’s analysis. It found that

although there was “evidence supporting the proposition that the coal-tar-based joint sealant

constituted an unknown and unusual physical condition at the site,” that evidence was irrelevant

because “the provisions of the contract . . . placed the risk that milled material from the runway

would not be suitable for use as [recycled asphalt] on the contractor.” 173 F.3d at 433. It

therefore concluded that “[t]o the extent that [the contractor] could not be certain” that the milled

material was suitable for reuse, “it proceeded at its own risk when it used the material.” Id.

The situation presented in Martin Paving Co. is distinguishable from the facts of this

case. In general, breach of contract cases are factually unique; their resolution depends on,

among other things, the terms of the contract at issue. The paving contract in Martin Paving Co.

differs from the construction contract in this case in at least one critical aspect: in Martin Paving

Co., the government expressly disclaimed ownership of, and responsibility for, the milled

material, while in this case, there was no such disclaimer. In fact, the contract reflects the Corps’

intent to retain ownership of and responsibility over the excavated material: (1) satisfactory

excavated materials were to be used on the project site; (2) surplus satisfactory excavated

materials could not be disposed of without the Corps’ written authorization; and (3) the Corps

could direct the placement of any material it designated as clean fill anywhere on Fort Lewis.

Moreover, the contracting officer, Ms. Gary, admitted during her deposition that she was not

aware of any facts that would lead her to conclude that plaintiff should have been aware of the

lead contamination in the soil prior to contract award. Ms. Gary would not have made such an

admission if the contract had placed the onus on plaintiff to ascertain whether the excavated

material was contaminated with lead. Because the contracts in the two cases differ substantially,

the court declines to apply the reasoning in Martin Paving Co. to the facts of this case.

Addressing plaintiff’s differing site condition argument head-on, defendant contends that

plaintiff has not established that the lead contamination was an unknown physical condition, that

there existed a material difference in conditions due to the lead contamination, or that any

material difference caused an increase in plaintiff’s cost or time of performance. Def.’s Mot. 23;

Def.’s Resp. Pl.’s Proposed Findings Uncontroverted Fact (“Def.’s Resp.”) ¶¶ 10-11. With

respect to the first element of a Type II differing site condition, defendant contends that the issue

of whether plaintiff should have been aware of the lead contamination when it prepared its bid is

a question of law, not a question of fact. Def.’s Resp. ¶ 10. As noted above, an unknown

physical condition is “one that could not be reasonably anticipated by the contractor from his

study of the contract documents, his inspection of the site, and his general experience if any, as a

contractor in the area.” Perini Corp., 381 F.2d at 410. Plaintiff has presented evidence that (1)

the contract documents did not disclose the lead contamination, see, e.g., Berglund Decl. ¶¶ 10-

11; Marston Ex. 7 at 15; Marston Ex. 8 at 7; (2) the site inspection did not reveal the lead

contamination, see, e.g., Berglund Decl. ¶ 9; and (3) an estimator with seventeen years of

experience in the Fort Lewis region who was working for a construction firm doing business in

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the region for more than forty-one years found lead contamination to be an unusual condition,

see, e.g., id. ¶¶ 4-5, 27-29. Defendant has not provided any evidence, in the form of affidavits,

deposition testimony, or otherwise, that contradicts plaintiff’s position. See RCFC 56(c).

Indeed, as Ms. Gary testified during her deposition, plaintiff was not responsible for the lead

contamination, nor could plaintiff had known of the lead contamination. Marston Ex. 7 at 11.

Accordingly, the court is foreclosed from finding any genuine issue of material fact with respect

to the existence of an unknown physical condition; plaintiff has established this element of a

Type II differing site condition.

Next, with respect to the third element of a Type II differing site condition, defendant

argues that “the presence of lead paint chips in project soils had no impact whatsoever on

plaintiff’s obligation to dispose of project soils within the contract price on Fort Lewis, if

directed to do so by the Government.” Def.’s Mot. 23; accord id. at 24 (“[T]he fact that the

project soils at issue in this case contained lead paint chips does not mean that they differed

materially from ordinarily encountered project soils that were completely free of contaminants.”).

However, it is apparent that defendant’s position is premised on the authority granted to the

Corps in section 01410 of the contract, id. at 23-24, which the court has already determined is

immaterial to its analysis because the Corps was not operating under that section when it directed

plaintiff to dispose of the surplus material at Landfill #2. Consequently, to prevail on the third

element, defendant must present evidence supporting its contention that the lead-contaminated

soil was not materially different from the soil ordinarily encountered in such work. Defendant

has not done so; instead, it asserts only that the issue of material difference is a question of law,

not a question of fact. Def.’s Resp. ¶ 11. On the other hand, plaintiff has supplied evidence that

the disposal costs for uncontaminated material would have been $0, see, e.g., Berglund Decl. ¶

25; Johnson Decl. ¶ 5; Johnson Ex.; Marston Ex. 12 at 5-6; App. 36, whereas the disposal costs

for contaminated material were over $120,000, see, e.g., Marston Ex. 14 at 1-2; App. 36; Def.’s

Ex. 1, and that it was not able to sell the surplus material as it reasonably anticipated at the time it

submitted its bid due to the presence of lead contamination, see, e.g., Berglund Decl. ¶ 30. Thus,

the court finds no genuine issue of material fact that the lead-contaminated material was

materially different from what is ordinarily encountered in such work. Moreover, there is no

dispute that but-for the discovery of lead contamination, plaintiff would have been able to

dispose of the surplus material pursuant to section 02300–the relevant provision here–at no cost.

Thus, plaintiff has established causation.

Overall, defendant has provided no evidence pursuant to RCFC 56(c) contradicting

plaintiff’s establishment of all of the elements of a Type II differing site condition. Accordingly,

the court grants summary judgment in plaintiff’s favor on its differing site condition claim.

I. Constructive Change

The second theory of recovery advanced by plaintiff is the doctrine of constructive

change. Plaintiff contends that when the government “has directed a contractor to perform work

that was not required under the terms of the contract” or “has instructed the contractor to perform

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work in a manner more costly than it had reasonably anticipated, the Federal Courts have utilized

the concept of ‘constructive change’ to support a contractor’s right to recover additional

compensation for the added cost of the changed work.” Pl.’s Mot. 10-11.

“A constructive change occurs where a contractor performs work beyond the contract

requirements without a formal order, either by an informal order or due to the fault of the

Government.” Int’l Data Prods. Corp. v. United States, 492 F.3d 1317, 1325 (Fed. Cir. 2007)

(citing Miller Elevator Co. v. United States, 30 Fed. Cl. 662, 678 (1994)); accord Ets-Hokin

Corp. v. United States, 420 F.2d 716, 720 (Ct. Cl. 1970). “A constructive change entails two

base components, the change component and the order or fault component. . . . The ‘change’

component describes work outside of the scope of the contract, while the ‘order/fault’ component

describes the reason that the contractor performed the work.” Miller Elevator Co., 30 Fed. Cl. at

678.

In the instant case, plaintiff was not required to perform work beyond the requirements of

the contract. Rather, the Corps initially directed plaintiff to dispose of the surplus material off of

Fort Lewis–a task entirely within the scope of section 02300. The later directive by the Corps to

dispose of the material at Landfill #2 constituted a change to the terms of the contract only in the

sense that it would lessen the costs of disposal. There is no dispute that but for the Corps’

directive to dispose of the material at Landfill #2, plaintiff would have incurred greater disposal

costs due to the lead contamination in the material. See Marston Ex. 8 at 9 (indicating Mr.

Packard’s opinion that disposal on Fort Lewis would cost “substantially” less than disposal off of

Fort Lewis); App. 30 (noting, in the “Stockpile Characterization Report,” that disposal of the

material on Fort Lewis would reduce transportation and disposal costs), 37 (indicating, in a letter

from Mr. Lewis, that disposal on Fort Lewis would mitigate costs). Regardless of cost, however,

plaintiff was required to dispose of the material off of Fort Lewis. Accordingly, because plaintiff

seeks reimbursement for the additional costs of disposal but does not challenge the fact that the

contract required it to dispose of the excavated material in the first instance, plaintiff’s

allegations are properly considered under the Differing Site Conditions clause and not as a

constructive change. The court therefore grants summary judgment in defendant’s favor on

plaintiff’s constructive change claim.

IV. CONCLUSION

For the reasons set forth above, the court GRANTS IN PART AND DENIES IN PART

plaintiff’s original and renewed motions for summary judgment and GRANTS IN PART AND

DENIES IN PART defendant’s original and renewed motions for summary judgment. The

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court has determined that defendant is liable for plaintiff’s costs of disposal of the surplus

material at Landfill #2. By no later than Tuesday, April 9, 2013, the parties shall file a joint

status report suggesting a schedule for future proceedings on damages.

IT IS SO ORDERED.

s/ Margaret M. Sweeney

MARGARET M. SWEENEY

Judge

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