THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND

THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND

IS BEING PUBLICLY RELEASED IN ITS ENTIRETY ON AUGUST 30, 2024

GRANTED: August 22, 2024

CBCA 7625

FRAMACO INTERNATIONAL INC.,

Appellant,

v.

DEPARTMENT OF STATE,

Respondent.

Douglas L. Patin and Erik M. Coon of Bradley Arant Boult Cummings LLP,

Washington, DC; Sam Z. Gdanski and Abraham S. Gdanski of Gdanski Law PC, Teaneck,

NJ, counsel for Appellant.

Thomas D. Dinackus, Matthew S. Tilghman, and Alexandra N. Wilson, Office of the

Legal Adviser, Buildings and Acquisitions, Department of State, Washington, DC, counsel

for Respondent.

Before Board Judges BEARDSLEY (Chair), RUSSELL, and O’ROURKE.

RUSSELL, Board Judge.

Appellant, Framaco International Inc. (Framaco), has filed 131 cases with the Board

(certain of which are consolidated) based on its contract with respondent, Department of

State (State or agency), Bureau of Overseas Building Operations (OBO), to construct an

embassy compound in Port Moresby, Papua New Guinea.

CBCA 7625

2

This decision is being issued in accordance with the Board’s order on further

proceedings of October 19, 2023 (Order), which largely adopted the parties’ proposal to

resolve approximately 100 of appellant’s non-consolidated appeals brought pursuant to

Board Rule 53 (48 CFR 6101.53 (2023)), along with certain claims in four of its consolidated

appeals that were not based on Government-caused delay. See Rule 53 (governing

accelerated procedures, which are available at an appellant’s election and are limited to

appeals in which there is a monetary amount in dispute of $100,000 or less); see also

Rule 1(a) (“The Board may alter [its] procedures on its own initiative or on request of a party

to promote the just, informal, expeditious, and inexpensive resolution of a case.”). The Order

states that “[t]he presiding judge with the two members of the panel . . . will decide the

following appeals for which the parties will submit briefing: CBCA 7508, 7512, 7513, 7549,

7561, 7572, 7573, 7625, 7695, 7712, 7847, and 7859 (‘Selected Appeals’).” The Order

additionally states, “Decisions rendered by the panel will be in summary form either in

writing or orally, if a hearing is held; will be final and conclusive; will not be set aside,

except for fraud; and will not be precedential.”

As agreed to by the parties, quantum in the non-consolidated appeals and certain

claims in four of Framaco’s consolidated appeals to which the Order applies will be decided

based on a formula derived from any damage amounts awarded to Framaco in the Selected

Appeals. In a subsequent joint response filed with the Board on March 19, 2024, the parties

confirmed that the Order applies to the appeals described above.

In this appeal, Framaco challenges the contracting officer’s deductive change to the

contract that removed the requirement for Framaco to submit an updated basis of design and

issued State a credit of $35,918.23. While the Board agrees with State’s interpretation of key

contract provisions, we nevertheless find that State’s deduction was improper. The

applicable specification on which State relied for the deduction required Framaco to produce

many final record documents during project closeout. State does not allege that these tasks

were not completed. Further, we cannot be sure how Framaco allocated its cost for this work

given that the contract was firm-fixed-price and the amount used by State for its deduction

for the work was based on a payment estimate provided by Framaco that, per the contract,

was not conclusive proof of the value of the work. Therefore, we grant the appeal.

Background

I.

The Contract

In September 2015, State awarded Framaco a firm-fixed-price contract, initially

valued at approximately $97 million, to construct the New Embassy Compound (NEC) in

CBCA 7625

3

Port Moresby, Papua New Guinea.1 Appeal File, Exhibit 1 at DOS-PTMO-00982321.2 The

project was originally designed in 2010 as a “Standard Secure mini-Compound” (SSmC)

with a scope that included a lock-and-leave new office building, a perimeter security wall

and fence, a main compound entry pavilion (MCAP), a service entry/utility building, and a

support annex. Exhibit 2 at DOS-PTMO-00982414. Construction of the SSmC facility

began in 2012. Id. In 2013, however, after forty percent of the project was completed, a

future marine detachment was planned for Port Moresby and the embassy staffing

requirement was increased. Id. State therefore descoped the work under the 2012 contract

and closed out that contract. The project was redesigned under an expanded NEC,

incorporating the completed portions of the SSmC project as well as surplus equipment and

materials, as appropriate. Id. The redesigned project included the perimeter security wall

and fence, the MCAP, a new service compound entry pavilion, a new four-story office

building, a marine service guard residence, a service entry/utility building, an enlarged

support annex, and a new recreation facility. Id.

II.

Applicable Contract Provisions

This dispute arose during the closing stages of the construction contract. See

Exhibit 24. The contract incorporated Section 019115A, “OBO Generic Commission Plan,”

which was required “on all OBO major construction projects.” Exhibit 6 at DOS-PTMO00007772. The preface to the section explained:

[T]he term ‘Contractor’ means the Architect/Engineer of Record (A/E) for the

project during the design phase and the Construction Contractor during the

construction phase. The second aspect is that the Basis of Design created by

the A/E must be updated by a responsible party to include all changes during

the construction phase. As a general rule, the A/E assigned for Title II

consulting services shall update the Basis of Design. Otherwise the

Commissioning Agent or OBO will update the Basis of Design. Updating of

the Basis of Design will be coordinated with the construction contractor.

Id. (emphasis added). The section defines “[c]ontractor” as “[d]esign and [c]onstruction

[c]ontractor.” Id. at DOS-PTMO-00007773.

1

The contract was awarded on September 30, 2015. Appeal File, Exhibit 1 at

DOS-PTMO-00982303-04.

2

All exhibits are found in the appeal file, unless otherwise noted.

CBCA 7625

4

Under the heading “Commissioning Activities Description,” Section 019115A

included the requirement that the contractor “prepare a project Basis of Design,” a document

that “records the major thought processes and assumptions behind design decisions made to

meet the Owner’s Project Requirements.” Exhibit 6 at DOS-PTMO-00007795. Section

019115A also included flow charts and matrices showing different tasks and those

responsible for the tasks. Id. at DOS-PTMO-00007776-93. The charts/matrices identified

“the contractor” as responsible for developing a “Basis of Design and Systems Manual

Outline” during the design phase. Id. at DOS-PTMO-00007785. The chart/matrices also

identified “the contractor” as responsible for updating the “Basis of Design” and completing

the “Systems Manual” during the construction phase. Id. at DOS-PTMO-00007786;

see also id. at DOS-PTMO-00007772, -00007779, -00007795-96. At both the developing

and updating stages, the OBO is tasked with reviewing and commenting, while the Project

Director/Contracting Officer’s Representative is required to approve the basis of design.

Id. at DOS-PTMO-00007779, -00007785-86.

The contract’s “Closeout Procedures” contained in Section 017705 also required

the contractor to submit “Final Record Documents,” to include an “Updated Basis of

Design,” a full set of the latest as-built drawings, contract specifications, a full set of

accepted product data submittals, and a full set of shop drawings. Exhibit 8 at

DOS-PTMO-02230066, -02230073-74.

Section 017825, “Operation and Maintenance Data,” which included the contract’s

administrative and procedural requirements for the preparation and submission of operation

and maintenance data, states:

D.

Systems Manual: Required for LEED [Leadership in Energy and

Environmental Design] Enhanced Commissioning Task 4

Develop a systems manual that provides future operating staff the information

needed to understand and optimally operate all commissioned systems. The

Systems Manual shall be provided in addition to the [Operation and

Maintenance] Manuals. The Systems Manual shall generally focus on

operating, rather than maintaining, the equipment. It shall also focus on the

interactions between equipment and systems. Submit an electronic System

Manual prepared in accordance with ASHRAE[3] Guideline 0, containing the

following documentation:

3

ASHRAE stands for the “American Society of Heating, Refrigerating and Air

Conditioning Engineers.” Appellant’s Opening Brief at 4 n.3.

CBCA 7625

1.

5

Final Basis of Design: The Government will provide document to

Contractor.

Exhibit 5 at DOS-PTMO-00992760 (emphasis added).

III.

The Parties’ Dispute

In or around October 2017, Framaco submitted its Baseline Project Execution

Schedule, budgeting $35,918.23 and indicating forty-five (45) days of work for the “updated

basis of design” task. Exhibit 35 at DOS-PTMO-01551208. Subsequently, in August 2019

and June 2020, Framaco included basis of design work on its monthly payment applications,

under the heading “Closeout Procedures, Section 017705.” Exhibits 9 at DOS-PTMO02797132, 12 at DOS-PTMO-02386987. In September 2020, it submitted a document

identifying “Final Record Documents Markes [sic] As Built – Updated Basis of Design” as

80% complete. Exhibit 104. But in response to State’s denial of Framaco’s request for a

certificate of substantial completion, Framaco denied that the contract assigned it

responsibility to update the basis of design. Exhibit 16 at DOSPTMO-03102510 to -11. In

a July 20, 2022, letter, Framaco wrote:

The updated basis of design is stated to be provided by the Government in

various contract sections (including but not limited to) 017825 . . . and

throughout 019115A where it stated: “As a general rule, the A/E assigned for

Title II consulting services shall update the Basis of Design”. Therefore,

Framaco has no required action for the deliverable. Please note that delay

related to this item has implications on the other deliverables such as the

Systems Manual, LEED submission.

Id. at DOS-PTMO-03102511.

On July 23, 2024, State responded:

Framaco disagrees with OBO’s statement that it is Framaco’s responsibility to

update the design team’s final basis of design to reflect as-built conditions per

specification 017705-3.04-C-l. While we still maintain this specification

requirement applies to Framaco’s scope of work, we concur with Framaco’s

explanation that specification 019115A states otherwise. The A/E uploaded

the basis of design to the ProjNet Govt/Contractor exchange folder in 2017 for

CBCA 7625

6

access by Framaco. Please include this basis of design as part of the systems

manual submission per specification 017825-1.03-D.

Exhibit 17 at DOS-PTMO-03101828.

State subsequently issued a modification eliminating the updated basis of design work

from the contract tasks and issued itself a credit of $35,918.23. Exhibit 20. This appeal

followed.

In its briefing in support of its appeal, Framaco argues that the “basis of design” work

was the responsibility of the Government, and, thus, “[t]here was no work to deduct from

Framaco and credit the government.” Appellant’s Opening Brief at 1. Framaco additionally

argues that the deduction was improper because it completed the work required under

specification 019115A; specifically, it completed the systems manual document based on the

updated basis of design provided by the Government and developed the final record

documents (for specification 017705), which included the updated basis of design. Id. at 6-7.

As relief, Framaco asks that the entire credit of $35,918.23 be returned to it.

State relies on specification 017705 to argue that Framaco was contractually required

to submit an updated basis of design as part of the final record documents. Respondent’s

Initial Brief at 1-2. State also points to Framaco’s Baseline Project Execution Schedule in

which Framaco listed the updated basis of design among the other records required by

specification 017705 as deliverables. See Exhibit 35 at DOS-PTMO-01551304. On the

schedule, the updated basis of design work was identified under the heading, “Closeout

Procedures, Section 017705,” with the Activity ID of “DEM1420” and the Activity Name

of “Final Record Documents Markes [sic] As-Built – Updated Basis of Design.” Id. The

“updated basis of design” activity included a start date of August 7, 2019, an end date of

September 20, 2019, and a budgeted cost of $35,918.23. Id. This is the work for which

Framaco sought payment. See, e.g., Exhibit 104.

State asserts that Framaco’s actions “both identifying an updated [basis of design] as

an activity in Framaco’s schedule and then representing to the Government that Activity

DEM1420 was in progress, completely undercut [Framaco’s] . . . argument that Specification

017865 indicated an updated [basis of design] was to be provided solely by the Government

and Framaco had no responsibility.” Respondent’s Initial Brief at 6. State adds that when

the contracting officer “determined it was in the Government’s best interest to remove the

work from the contract, it was entitled to a deductive change credit as outlined in the

Changes Clause, particularly since the Government had already compensated Framaco for

work that was never completed.” Id. at 6-7 (footnote omitted).

CBCA 7625

7

Discussion

I.

Contract Interpretation

Determining which obligations this contract imposes on Framaco “begins with the

plain language of the written agreement.” Hercules Inc. v. United States, 292 F.3d 1378,

1380 (Fed. Cir. 2002). We read the contract as a whole, giving reasonable meaning to all its

parts. Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991). If the plain

language of the contract is unambiguous on its face, the inquiry ends, and the contract’s plain

language controls. Hunt Construction Group, Inc. v. United States, 281 F.3d 1369, 1373

(Fed. Cir. 2002). “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.” NVT Technologies, Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir.

2004). As explained in Metric Constructors, Inc. v. National Aeronautics & Space

Administration, 169 F.3d 747, 751 (Fed. Cir. 1999):

When a contract is susceptible to more than one reasonable interpretation, it

contains an ambiguity. See Hills Materials Co. v. Rice, 982 F.2d 514, 516

(Fed. Cir. 1992). To show an ambiguity it is not enough that the parties differ

in their respective interpretations of a contract term. See Community Heating

& Plumbing Co. v. Kelso, 987 F.2d 1575, 1578 (Fed. Cir. 1993). Rather, both

interpretations must fall within a “zone of reasonableness.” See WPC

[Enterprises], Inc. v. United States, 163 Ct. Cl. 1, 323 F.2d 874, 876 (1963).

If [a tribunal] interprets the contract and detects an ambiguity, it next

determines whether that ambiguity is patent. See Newsom v. United States,

230 Ct. Cl. 301, 676 F.2d 647, 649-50 (1982). The doctrine of patent

ambiguity is an exception to the general rule of contra proferentem which

construes an ambiguity against the drafter. . . . See id.; Sturm v. United States,

190 Ct. Cl. 691, 421 F.2d 723 (1970). An ambiguity is patent if “so glaring as

to raise a duty to inquire[.]” Newsom, 676 F.2d at 650. If an ambiguity is not

patent but latent, this court enforces the general rule. See Fort Vancouver

Plywood Co. v. United States, 860 F.2d 409, 414 (Fed. Cir. 1988).

II.

The Parties’ Arguments

Both parties point to contract provisions to argue that their readings are textually

supported. Framaco points to the “general rule” contained in the preface to Section

019115A, Exhibit 6 at DOS-PTMO-00007772, which states, “As a general rule, the A/E

assigned for Title II consulting services shall update the Basis of Design. Otherwise the

Commissioning Agent or OBO will update the Basis of Design.” Appellant’s Opening Brief

CBCA 7625

8

at 3. It also points to the requirement contained in Section 017825, Exhibit 5 at

DOS-PTMO-00992760, “Operation and Maintenance Data,” that the Government provide

the “Final Basis of Design,” to argue that it was not required by the contract to update the

basis of design. Appellant’s Opening Brief at 3.

State’s argument that Framaco was required to update the basis of design has at least

as clear a textual basis: Section 017705 required Framaco to provide the updated basis of

design as part of its closeout documents. Respondent’s Opening Brief at 1. Additionally,

State points to the requirement in Section 019115A that the construction contractor, Framaco,

was required to update the basis of design and complete the systems manual. Id. at 3.

Not surprisingly, the parties’ interpretations clash as to whether the “final basis of

design,” the term used in Section 017825, is the same as the “updated basis of design,” the

term used in Section 019115A. Framaco asserts that they are the same, which would require

it only to repackage the A/E’s basis of design as part of the systems manual. Appellant’s

Opening Brief at 3-6. State asserts that the final basis of design refers to the design team’s

final basis of design, which incorporates changes made during the solicitation process but not

during the construction process. In this reading, Framaco would be responsible for updating

the final basis of design to include as-built conditions and any post-solicitation changes.

Respondent’s Initial Brief at 3, 5.

At best, Framaco’s position stands on the edge of the zone of reasonableness.

Critically, the general rule contained in the preface to Section 019115A does not eliminate

the specific requirements that follow, which plainly require Framaco to update the basis of

design, not merely to deliver an updated basis of design. See Exhibit 6 at DOS-PTMO007772, -007779, -007785-86, -007795-96. Framaco’s interpretation would unreasonably

use the preface to render the specifics of the section meaningless. See Columbia

Construction Co. v. General Services Administration, CBCA 3258, 15-1 BCA ¶ 35,856, at

175,319. State’s position does not contain similar issues; that is, if the “final” basis of design

that State is required to provide is read to be the final product created by the design

contractor, that reading still leaves room to require the construction contractor, Framaco, to

provide any necessary updates that arise because of changes post-award. See Metric

Constructors, Inc., 169 F.3d at 753 (“Courts prefer . . . an interpretation of a contract that

gives effect to all its terms and leaves no provision meaningless.”).

Even if the Board assumes that Framaco’s position is reasonable, extrinsic evidence

would appear to demonstrate that Framaco relied on State’s offered interpretation and not its

own. See A-Son’s Construction, Inc. v. Department of Housing & Urban Development,

CBCA 3491, 15-1 BCA ¶ 36,089, at 176,208 (“If a contract provision appears ambiguous

on its face, extrinsic evidence may assist in discerning the parties’ intent . . . .”). Framaco’s

CBCA 7625

9

Baseline Project Execution Schedule contains each of the requirements contained in the

closeout procedures, including an updated basis of design. Exhibit 35 at DOSPTMO-01551208. The schedule budgeted this task at a total cost of $35,918.23, and

Framaco estimated the task would take roughly a month and a half; other tasks were listed

for substantially shorter time periods and billed as low as $0. Id. And, well before State

uncovered that Framaco had not actually begun to update the basis of design, Framaco

repeatedly included the basis of design update work in its progress payment applications:

first in August 2019, again in June 2020, and finally in September 2020, when it asserted that

work on updating the basis of design was 80% complete.

Exhibits 9 at

DOS-PTMO02797132, 12 at DOS-PTMO-02386987, 104. Together, Framaco’s actions

prior to the dispute over the meaning of the contract are “especially strong evidence” that

Framaco adhered to State’s interpretation. See Future Forest, LLC v. Department of

Agriculture, CBCA 5764, 19-1 BCA ¶ 37,238, at 181,263 (2018).

In its opening brief, Framaco points to this statement in State’s July 23, 2022, denial

of substantial completion to suggest that the agency acknowledged responsibility for

updating the basis of design: “While we still maintain [specification 017705-3.04-C-l]

applies to Framaco’s scope of work, we concur with Framaco’s explanation that specification

019115A states otherwise.” Appellant’s Opening Brief at 3. Framaco, however, distorts

both the contents and context of the denial letter. The statement that Framaco points to does

not show that State concedes that Section 017705 controls but that State acknowledges a

potential conflict between the provisions. See Exhibit 17 at DOS-PTMO-03101828. In

addition, because State’s direction in that letter to submit the design contractor’s basis of

design without updates follows Framaco’s stated refusal to update the basis of design, it is

not evidence of the parties’ actions prior to the dispute. See Future Forest, 19-1 BCA at

181,263.

Further, any ambiguity in the contract provisions is clearly patent. If an ambiguity is

patent and the contractor fails to inquire, the ambiguity “will be resolved against the

contractor.” Triax Pacific, Inc. v. West, 130 F.3d 1469, 1475 (Fed. Cir. 1997). Here, the

requirement for the construction contractor to update the basis of design is woven throughout

multiple sections of the contract, see Exhibit 6 at DOS-PTMO-00007772, -00007779,

-00007785-86, -00007795-96, and yet, the contract, in sections 019115A and 017825, also

seemingly placed responsibility for that task on the Government. Exhibits 5 at DOSPTMO-00992760, 6 at DOS-PTMO-00007772. The conflict is obvious and reasonably

should have been noticed when the contract was awarded. Because Framaco did not inquire

about the contradictory contract sections, it now must bear the risk of its misinterpretation.

Finally, Framaco does not argue that any ambiguity would be latent. Appellant’s

Opening Brief at 2-3. Instead, Framaco cites to United Pacific Insurance Co. v. United

CBCA 7625

10

States, 497 F.2d 1402, 1407 (Ct. Cl. 1974), to assert that any ambiguity must be resolved

against the Government. Appellant’s Opening Brief at 8. This contention ignores that the

contra proferentum rule only applies to latent ambiguities. See, e.g., NVT Technologies,

Inc., 370 F.3d at 1162. So, even if Framaco’s interpretation does fall “within the zone of

reasonableness,” Framaco has failed to meet its duty to inquire about a patent ambiguity and

has thus waived its right to rely on its interpretation.

III.

State’s Deduction from Contract Amount

State deducted $35,918.23 from the contract amount, relying on Framaco’s Baseline

Project Execution Schedule in which Framaco listed the updated basis of design among the

final record documents required by specification 017705 as a deliverable. See Exhibit 35 at

DOS-PTMO-01551304. Although Framaco might have given the impression when

submitting its pay applications that work was being done on updating the basis of design

(along the lines of the requirement of specification 019115A), Framaco, in fact, did produce

the updated basis of design as a final record document, consistent with the requirement of

specification 017705. Specifically, it asserts, and State does not dispute, that Framaco used

the final basis of design provided by the Government to develop the final record documents

as it was required to do under specification 017705. See Appellant’s Reply Brief at 6-7; see

also Exhibit 17 (discussing uploading of basis of design to the ProjNet Govt/Contractor

exchange folder for access by Framaco). State would have been on firmer ground had it

somehow relied on an amount tied to specification 019115A, which required the contractor

to update the “Basis of Design.”

Further, as also pointed out by Framaco in its reply brief, the contract is a firm-fixedprice contract and includes the section “Detailed Estimate for Progress Payments.”

Appellant’s Reply Brief at 5. That section states:

Before the first progress payment under [the] contract becomes due, the

Contractor shall prepare a Detailed Estimate for Progress Payments itemizing

the Contract Price in the form and in such detail as is required by the Contract

Documents . . . . The values in the Detailed Estimate will be used as a basis

for determining progress payments, but will not be conclusive as to the

amounts due the Contractor or as to the value of changes in the work.

Exhibit 1 at DOS-PTMO-00982346-47 (emphasis added). This contract provision is further

evidence of why the Board should not rely on the $35,918.23 listed in Framaco’s schedule

as a basis for any deduction to which State might be entitled.

CBCA 7625

11

Decision

The appeal is GRANTED.

Beverly M. Russell

BEVERLY M. RUSSELL

Board Judge

We concur:

Erica S. Beardsley

ERICA S. BEARDSLEY

Board Judge

Kathleen J. O’Rourke

KATHLEEN J. O’ROURKE

Board Judge