Premier Office Complex of Parma, LLC v. United States

United States Court of Appeals
for the Federal Circuit
______________________
PREMIER OFFICE COMPLEX OF PARMA, LLC,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2018-1231
______________________
Appeal from the United States Court of Federal Claims
in No. 1:14-cv-01223-EJD, Senior Judge Edward J.
Damich.
______________________
Decided: February 19, 2019
______________________
PETER J. GEORGITON, Dinsmore & Shohl, LLP, Colum-
bus, OH, argued for plaintiff-appellant. Also represented
by PETER W. HAHN.
ANNA BONDURANT ELEY, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for defendant-appellee. Also
represented by KENNETH DINTZER, ROBERT EDWARD
KIRSCHMAN, JR., JOSEPH H. HUNT.
______________________
2 PREMIER OFFICE COMPLEX v. UNITED STATES
Before NEWMAN, WALLACH, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
Premier Office Complex of Parma, LLC (“Premier”) ap-
peals the decision of the United States Court of Federal
Claims granting the government’s motion for summary
judgment and denying Premier’s cross-motion for sum-
mary judgment of liability. The contract between Premier
and the government unambiguously requires Premier to
provide a facility conforming to Level II security require-
ments as set forth under Interagency Security Committee
(“ISC”) standards. Premier’s work in constructing such a
facility thus falls within the scope of work of the contract.
We affirm.
BACKGROUND
In 2007, the Department of Veterans Affairs (“VA”)
sought to lease space in Parma, Ohio for use as a VA out-
patient clinic (“Parma Clinic”). It issued a pre-solicitation
Expressions of Interest memorandum, which stated that
the lease would be for approximately 62,000–74,000 square
feet of space and that “[t]he selected building must comply
with the Interagency Security Committee Security Design
Criteria for New Federal Office Buildings and Major Mod-
ernization Projects as well as other security guidelines,
which will be provided during the solicitation for offers pro-
cess.” J.A. 41.
The VA subsequently issued Solicitation for Offers No.
VA-101-08-RP-0034 (“SFO”) detailing the lease require-
ments for the Parma Clinic. Section 4.2.7 of the SFO dis-
cusses the physical security requirements of the space and
is reproduced below:
4.2.7 Physical Security Requirements
Lessor shall provide the following physical security
measures or features for the spaces or areas as
listed below:
PREMIER OFFICE COMPLEX v. UNITED STATES 3
1. The Government will determine security stand-
ards for facilities and agency space requirements.
Security standards will be assessed based upon ten-
ant agency mix, size of space requirement, number
of employees, use of the space, location of the facil-
ity, configuration of the site and lot, and public ac-
cess into and around the facility. The Government
will designate a security level from Level I to Level
IV for each space requirement. The Contracting Of-
ficer (or the Contracting Officer’s designated repre-
sentative) will provide the security level
designation as part of the space requirement. A
copy of the Government’s security standards is
available at www.oca.gsa.gov. A single use building
over 70,000 square feet will be a Level III Security
Requirement.
J.A. 92–93 (emphasis added). Section 4.2.7 also contains a
Physical Security Table, which labels seven spaces within
the building with their own applicable security require-
ments. J.A. 93.
During a pre-bid meeting, a bidder asked for clarifica-
tion on whether the SFO’s Level III security requirement
was actually a Level II requirement. On June 3, 2008, the
VA issued Amendment #1 to the SFO to clarify this issue
and others. Amendment #1 states in part:
4. Security Level – Clarify whether the project
requires Level 2 or 3 security.
Based upon ISC Standards, the project would be a
Level 2, based on 11–150 personnel and a size of
2,500 to 80,000 rentable square feet.
J.A. 192. Amendment #1 did not define “ISC Standards” or
reference any documents containing the ISC standards.
On June 10, 2008, Premier signed an acknowledgement of
receipt of Amendment #1. J.A. 193.
4 PREMIER OFFICE COMPLEX v. UNITED STATES
In response to the SFO as amended, Premier submitted
a proposed design narrative for the Parma Clinic. The de-
sign narrative described the site development, building,
and building systems proposed by Premier, and also con-
sidered “at a conceptual level,” issues such as configura-
tion, structural systems, and interior design. J.A. 198. The
design narrative did not address the physical security re-
quirements described in Amendment #1. See generally
J.A. 198–209.
On November 12, 2008, Premier and the VA entered
into Lease No. VA-101-08-RP-0034 (the “Lease”), under
which Premier was to provide “[a] fully built out space as
described, all services, maintenance, operations, altera-
tions and other considerations as set forth in Solicitation
for Offers No. VA-101-08-RP-0034 and all amendments.”
J.A. 46 (emphasis added). The Lease incorporated and at-
tached the SFO, Amendments #1–3 to the SFO, Premier’s
response to the SFO and Amendments #1–3, and Premier’s
proposed building plan. J.A. 47.
On March 3, 2010—nearly one and a half years after
execution of the Lease—the VA wrote a memorandum to
Premier inquiring about “several areas of concern” that the
VA had regarding Premier’s first design submittal. J.A.
359. The memorandum asked “[h]ow will the Interagency
Security Committee (ISC) Security Design Criteria be ad-
dressed such as progressive collapse? Refer to SFO sec-
tion 4.2.7 and amendment #1.” J.A. 360. In a separate
communication, the VA advised Premier to obtain access to
the ISC standards and explained that “the project needs to
be designed according to the ISC.” J.A. 362.
On March 9, 2010, Premier wrote to ISC to request ac-
cess to the standards. The ISC denied Premier’s request
the following day and informed Premier that release of ISC
documents “may only be made to Federal, state, or local
government entities,” and that the documents had to be re-
quested by a federal contracting officer who has a “need to
PREMIER OFFICE COMPLEX v. UNITED STATES 5
know” the information. J.A. 363. The VA obtained copies
of three ISC documents and, on March 16, 2010, electroni-
cally sent them to Premier, noting that the documents are
what Premier “will need for the VA security issues.” J.A.
217. The three ISC documents were: (1) ISC Security De-
sign Criteria for New Federal Office Buildings and Major
Modernization Projects; (2) ISC Security Standards for
Leased Space; and (3) Facility Security Level Determina-
tions for Federal Facilities, An ISC Standard. J.A. 217,
219, 321, 338.
Shortly after the VA sent the ISC documents to Prem-
ier, some confusion ensued as to which security standard
applied to the Parma Clinic facility. Reversing course on
previous communications, the VA instructed Premier to
disregard the ISC requirements in the SFO and to incorpo-
rate only the requirements as indicated in the latest VA
Physical Security Guide. See J.A. 365–66. On March 26,
2010, the VA electronically sent to Premier a copy of the
VA Life-Safety Protected Design Guide, which it noted “is
more straight forward than the ISC and should have been
included in the SFO.” J.A. 367. On April 2, 2010, the VA
reiterated in a memorandum that the facility should be de-
signed “according to the VA Life-Safety Protected Design
Manual.” J.A. 370. Several months later, however, the VA
again changed its position. Specifically, on July 26, 2010,
the VA wrote to Premier advising that “[t]he ISC is the de-
sign standard, and the facility should be designed with that
criteria.” J.A. 372.
On October 26, 2010, Premier sought clarification on
whether the ISC Level II requirements applied to the en-
tire facility. See J.A. 378. Premier’s stated understanding
was that only the individual spaces listed in Section 4.2.7’s
Physical Security Table needed to comply with the ISC.
Premier noted that there would be significant additional
costs associated with applying the ISC standard to spaces
beyond those listed in the Physical Security Table and
asked if the VA intended to pay for the additional costs.
6 PREMIER OFFICE COMPLEX v. UNITED STATES
See J.A. 378. The VA responded on October 29, 2010, in-
structing Premier that the project “must conform to the
ISC Level II Security Requirement at no additional cost to
the government.” J.A. 379. It noted that the ISC standard
was “available upon request prior to bid,” and that “it per-
tains to an entire building not individual rooms.” J.A. 379.
Although Premier disagreed with this position, it eventu-
ally designed and constructed the building in accordance
with the ISC standards. See Premier Office Complex of
Parma, LLC v. United States, 134 Fed. Cl. 83, 86 (2017)
(“Decision”) (citing Complaint ¶ 18, Premier Office Com-
plex of Parma, LLC v. United States, 134 Fed. Cl. 83 (2017)
(No. 14-1223C) (“Complaint”)).
On February 14, 2011, Premier wrote to the VA asking
for a determination regarding the Parma Clinic’s physical
security requirements. On November 1, 2011, Premier’s
counsel sent a letter to the VA requesting $964,356.40 for
additional costs incurred by Premier as a result of the VA’s
alleged changes to the lease. See J.A. 382. According to
Premier, the VA’s addition of the ISC security require-
ments “substantially increased” Premier’s costs to design
and construct the Parma Clinic. J.A. 382. On December 5,
2011, the VA issued a final determination and denied
Premier’s request for payment. It explained that “the
building security requirements were clearly spelled out
within the SFO in section 4.2.7 and then clearly confirmed
in Amendment #1 prior to the Lessor providing a bid and
receiving the award.” J.A. 395. On February 11, 2014,
Premier’s counsel submitted a certified claim for payment
to which the VA did not respond. On December 22, 2014,
Premier filed the current lawsuit in the Court of Federal
Claims, alleging that the VA breached the Lease by direct-
ing Premier to perform work outside the scope of the con-
tract and refusing to compensate Premier for the extra
costs. See Complaint ¶¶ 5–7.
On cross motions for summary judgment, the Court of
Federal Claims ruled that the Lease as a whole “provided
PREMIER OFFICE COMPLEX v. UNITED STATES 7
that ISC Standard Level II applied to the entire facility.”
Decision, 134 Fed. Cl. at 90. It determined that while Sec-
tion 4.2.7 itself was latently ambiguous, Amendment #1 re-
solved the ambiguity as it “clearly requires ISC Level II
security for the whole ‘project.’” Id. at 89–90. The Court of
Federal Claims rejected Premier’s argument that the ISC
standards applied only to the spaces listed in Section
4.2.7’s Physical Security Table, explaining that the plain
meaning of “project” compels the conclusion that the stand-
ards applied to the entire facility. See id. at 90. It further
noted that “had Premier consulted the ISC Standards in a
timely manner, it would have seen this discrepancy and not
fallen into the misconception that the ISC Standards only
applied to the spaces and areas listed on the table.” Id. at
89–90. Accordingly, the Court of Federal Claims granted
the government’s motion for summary judgment and de-
nied Premier’s cross motion for summary judgment of lia-
bility. Id. Premier appeals. We have jurisdiction under
28 U.S.C. § 1295(a)(3).
DISCUSSION
I
“We review ‘the summary judgment of the Court of
Federal Claims, as well as its interpretation and applica-
tion of the governing law, de novo.’” Hartman v. United
States, 694 F.3d 96, 101 (Fed. Cir. 2012) (quoting Gump v.
United States, 86 F.3d 1126, 1127 (Fed. Cir. 1996)). The
Rules of the Court of Federal Claims (“RCFC”) provide that
summary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
RCFC 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986). “Contract interpretation is a question of law
generally amenable to summary judgment.” Varilease
Tech. Grp., Inc. v. United States, 289 F.3d 795, 798 (Fed.
Cir. 2002). “Whether a contract provision is ambiguous is
also a question of law.” NVT Techs., Inc. v. United States,
8 PREMIER OFFICE COMPLEX v. UNITED STATES
370 F.3d 1153, 1159 (Fed. Cir. 2004) (citing Cmty. Heating
& Plumbing Co. v. Kelso, 987 F.2d 1575, 1579 (Fed. Cir.
1993)).
II
The issue before us is whether the Lease requires that
the entire Parma Clinic facility conform to ISC Level II.
We hold that it does. Amendment #1 was issued prior to
execution of the Lease and was expressly incorporated into
the Lease; it is part of the contract. See J.A. 46–47, 191–
93. Any ambiguity that may have existed in Section 4.2.7
was resolved by Amendment #1, which is unambiguous
and requires ISC Level II for the “project.” The plain mean-
ing of “project” leads us to conclude that the Lease requires
ISC Level II for the entire Parma Clinic facility. Premier’s
work in designing and constructing such a facility is thus
within the scope of work of the Lease.
When interpreting a disputed contract provision, we
first determine whether the provision is unambiguous, or
if it is susceptible to more than one reasonable interpreta-
tion. See McAbee Const., Inc. v. United States, 97 F.3d
1431, 1434–35 (Fed. Cir. 1996). Our analysis begins with
the language of the written agreement. See NVT Techs.,
370 F.3d at 1159. “When interpreting the contract, the doc-
ument must be considered as a whole and interpreted so as
to harmonize and give reasonable meaning to all of its
parts.” Id. (citing McAbee, 97 F.3d at 1434–35). If a con-
tract provision is clear and unambiguous, the court may
not resort to extrinsic evidence to interpret it. McAbee,
97 F.3d at 1435. “A contract term is unambiguous if there
is only one reasonable interpretation.” C. Sanchez & Son,
Inc. v. United States, 6 F.3d 1539, 1544 (Fed. Cir. 1993).
“To show an ambiguity it is not enough that the parties dif-
fer in their respective interpretations of a contract term,”
rather, both interpretations must be reasonable. Metric
Constructors, Inc. v. Nat’l Aeronautics & Space Admin.,
169 F.3d 747, 751 (Fed. Cir. 1999) (citing Cmty. Heating,
PREMIER OFFICE COMPLEX v. UNITED STATES 9
987 F.2d at 1578). “When the contractual language is un-
ambiguous on its face, our inquiry ends and the plain lan-
guage of the Agreement controls.” Coast Fed. Bank, FSB
v. United States, 323 F.3d 1035, 1040–41 (Fed. Cir. 2003).
Section 4.2.7 of the SFO addresses the Parma Clinic’s
physical security requirements. The language in this sec-
tion suggests some ambiguity, as it refers to physical secu-
rity requirements in terms of spaces, facilities, and
buildings. It states that “[l]essor shall provide the follow-
ing physical security measures or features for the spaces or
areas as listed below.” J.A. 92 (emphasis added). It then
states that “[t]he Government will determine security
standards for facilities and agency space requirements. Se-
curity standards will be assessed based upon . . . location
of the facility, configuration of the site and lot, and public
access into and around the facility.” J.A. 93 (emphases
added). The section continues: “[t]he Government will des-
ignate a security level from Level I to Level IV for each
space requirement . . . . A single use building over 70,000
square feet will be a Level III security requirement.” Id.(emphases added). Section 4.2.7 then shows a Physical Se-
curity Table, which labels seven spaces within the building
with their own applicable security requirements. Id.Amendment #1 was issued in part to clarify Sec-
tion 4.2.7, specifically, to “[c]larify whether the project re-
quires Level 2 or 3 security.” J.A. 192 (emphasis added).
Amendment #1 explains that “[b]ased upon the ISC Stand-
ards, the project would be a Level II.” Id. Premier argues
that Amendment #1 “is itself ambiguous” and that it ap-
plies only to the seven specific areas identified in Section
4.2.7’s Physical Security Table. Appellant Br. 21–22. Ac-
cording to Premier, Section 4.2.7 requires physical security
enhancements for only seven areas, so Amendment #1,
which clarified Section 4.2.7, should also apply only to
those areas. Id. at 19, 21–23. The government’s position
is that Amendment #1 is unambiguous and requires the
10 PREMIER OFFICE COMPLEX v. UNITED STATES
entire facility to conform to ISC Level II. Appellee Br. 9–
12. We agree with the government.
Amendment #1 clearly requires ISC Level II for the
“project.” The only reasonable interpretation of this lan-
guage is that “project” refers to the entire Parma Clinic fa-
cility. Because Amendment #1 was issued to clarify the
seemingly ambiguous Section 4.2.7, it is reasonable to in-
terpret Amendment #1 as applying to the entire facility.
This reading clarifies all of Section 4.2.7—the facility,
spaces, and building must all conform to ISC Level II. This
interpretation is consistent with the plain meaning of the
term “project,” which is defined as “[a]n individual or col-
laborative enterprise that is carefully planned to achieve a
particular aim.” OED, Project, English Oxford Living Dic-
tionaries (Dec. 13, 2018, 12:01 PM), https://en.oxforddic-
tionaries.com/definition/project. We agree with the Court
of Federal Claims that the aim of the collaborative enter-
prise here is the construction and lease of the Parma Clinic
facility. See Decision, 134 Fed. Cl. at 90. To interpret
Amendment #1 as Premier proposes would mean that “pro-
ject” refers to only a subset of spaces within the collabora-
tive enterprise. This is an unreasonable reading. We
conclude that Amendment #1 unambiguously requires the
entire Parma Clinic facility to conform to ISC Level II.
Premier was on notice prior to the signing of the Lease
that the ISC standards would be required. Amendment #1
issued on June 3, 2008, Premier signed an acknowledge-
ment of receipt of Amendment #1 on June 10, 2008, and the
parties signed the Lease, which expressly incorporated
Amendment #1, on November 12, 2008. See J.A. 47, 191–
193. There is no evidence in the record that Premier ever
inquired about the scope and applicability of the ISC stand-
ards before it signed the Lease. It was not until
March 2010—nearly one-and-a-half years after the Lease
was signed—that Premier attempted to access the ISC
standards for the first time. It took the VA only six days to
PREMIER OFFICE COMPLEX v. UNITED STATES 11
deliver the standards to Premier after Premier’s initial re-
quest was denied. See J.A. 217, 363–64.
Had Premier requested the standards earlier—ideally
before it even signed the Lease—it would have discovered
that ISC security levels are determined based on charac-
teristics of the facility, and not individual spaces. One of
the ISC documents that the VA sent to Premier instructs
that “[a] Level II facility has between 11 and 150 federal
employees. In addition, the facility likely has: From 2,500
to 80,000 square feet.” J.A. 332 (emphases added). An-
other ISC document sent to Premier contains a chart ex-
plaining how “ISC Facility Security Level[s]” are
determined. See J.A. 347 (emphasis added). It shows that
“Facility Population” and “Facility Size” are among the rel-
evant factors that are used to determine the applicable “Fa-
cility Security Level” ranging from I to IV. See J.A. 347.
We recognize that after the Lease was signed, the VA
made inconsistent statements about whether the ISC
standards applied. These statements do not change our
conclusion that there is only one reasonable way to inter-
pret the Lease. In the end, the VA did communicate to
Premier that the ISC standards applied to the Parma
Clinic. See J.A. 372.
Because the Lease as a whole requires ISC Level II for
the entire Parma Clinic facility, we hold that the Court of
Federal Claims properly determined that Premier’s work
in providing such a facility is within the scope of work of
the Lease.
CONCLUSION
We have considered Premier’s remaining arguments
and find them unpersuasive. We affirm the judgment of
the Court of Federal Claims granting the government’s mo-
tion for summary judgment and denying Premier’s cross
motion for summary judgment of liability.
AFFIRMED
12 PREMIER OFFICE COMPLEX v. UNITED STATES
COSTS
No costs.