      United States Court of Appeals for the Federal Circuit

                                       06-5007

                      TEG-PARADIGM ENVIRONMENTAL, INC.,

                                                     Plaintiff-Appellant,

                                           v.

                                  UNITED STATES,

                                                     Defendant-Appellee.




       Robert C. Haase, Jr., Robins, Kaplan, Miller & Ciresi L.L.P., of Los Angeles,
California, argued for plaintiff-appellant. With him on the brief was Edward D. Lodgen.
Of counsel was David C. Veis.

       Andrew P. Averbach, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for defendant-appellee.
With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, and Donald E. Kinner, Assistant Director.

Appealed from:   United States Court of Federal Claims

Judge Nancy B. Firestone
    United States Court of Appeals for the Federal Circuit


                                        06-5007


                      TEG-PARADIGM ENVIRONMENTAL, INC.,

                                                       Plaintiff-Appellant,

                                            v.


                                   UNITED STATES,

                                                       Defendant-Appellee.



                           ___________________________

                           DECIDED: September 29, 2006
                           ___________________________



Before MICHEL, Chief Judge, RADER, and SCHALL, Circuit Judges.

SCHALL, Circuit Judge.


      TEG-Paradigm Environmental, Inc. (“TEG”) entered into a contract with the

United States Department of Housing and Urban Development (“HUD”). Pursuant to

the contract, TEG agreed to perform asbestos abatement work at the Geneva Towers,

an apartment complex, in San Francisco. After the contract work was completed, TEG

submitted a claim to the contracting officer in which it sought an equitable adjustment in

the contract price. In support of its claim, TEG asserted that it had been required to

perform excessive cleaning and that it had been required to remove excessive
quantities of asbestos. After the contracting officer denied the claim, TEG filed suit in

the United States Court of Federal Claims under the Contract Disputes Act of 1978, 41

U.S.C. §§ 601-613 (2000).

       TEG’s complaint in the Court of Federal Claims contained three counts. In Count

One, TEG alleged breach of contract based upon HUD not permitting TEG to perform

the contract work in accordance with its original work plan. In Count Two, TEG alleged

that HUD breached the contract by requiring what it characterized as extraordinary and

unnecessary cleaning of the surfaces of the buildings. Finally, in Count Three, TEG

alleged that it was entitled to additional compensation under the contract based upon its

removal of excessive quantities of asbestos.      TEG sought a combined breach of

contract and equitable adjustment recovery in the amount of approximately $4 million.

       In due course, the parties filed cross-motions for summary judgment. The court

granted summary judgment for the government on Counts One and Two of the

complaint and for TEG on Count Three of the complaint. TEG-Paradigm Envtl., Inc. v.

United States, No. 00-507C, slip op. at 26 (Fed. Cl. Aug. 30, 2002). TEG now appeals

from the court’s decision granting the government’s motion for summary judgment on its

two claims of breach of contract. Finding no error in the Court of Federal Claims’s

decision, we affirm.1

                                    BACKGROUND

                                           I.

       The Geneva Towers were two high-rise apartment buildings in San Francisco.

HUD acquired the buildings in 1991 and decided to implode them to make way for new

       1
             The government has not cross-appealed the court’s grant of summary
judgment in favor of TEG on Count Three.


06-5007                                    2
development. Id., slip op. at 2. However, the buildings contained asbestos, which had

to be removed before implosion. Id. HUD solicited bids on a contract for asbestos

abatement and TEG was awarded the contract on May 8, 1997, for a fixed price of

$5,153,625.00.    The contract required that the abatement be complete on or by

December 31, 1997, and provided for liquidated damages of $5,000 per day of delay.

After several extensions, the deadline for finishing the abatement was changed to

February 15, 1998. Id., slip op. at 7. However, TEG did not finish the abatement work

until March 31, 1998, causing HUD to assess $220,000 in liquidated damages against

it.   Id., slip op. at 8.   This delay was purportedly caused at least in part by

disagreements between TEG and HUD over contract requirements. Specifically, the

parties disagreed as to (i) whether the contract required TEG to abate asbestos in the

pores and cracks of the Geneva Towers’ surfaces and (ii) whether TEG was required to

comply with the contract specifications rather than TEG’s work plan.

                                           A.

       We begin with the facts relevant to the first point of contention between the

parties, which concerns the level of asbestos abatement required by the contract

(Count Two of the complaint).

       The original contract specifications provided two separate abatement standards,

one for friable and one for non-friable asbestos-containing materials. Friable materials

are capable, when dry, of being crumbled, pulverized, or reduced to powder by hand

pressure. Id., slip op. at 2. The original asbestos abatement standard was set forth at

Section 2080, 4.3C of the contract, which provided as follows:

              Friable materials applied to concrete, masonry, wood and
              nonporous surfaces, including but not limited to, steel



06-5007                                    3
             structural members (decks, beams and columns), pipes and
             tanks, shall be cleaned to a degree that no traces of debris
             or residue are visible. Nonfriable materials applied to
             concrete, masonry, [or] wood shall be cleaned until no
             residue is visible other than that which is embedded in the
             pores, cracks, or other small voids below the surface of the
             material.

Thus, the original specifications established a stringent visibility standard for friable

materials and a less stringent standard, one which allowed the contractor to leave

asbestos in the pores and cracks, for non-friable materials. The original Section 2080,

4.3C likely provided the stringent visibility standard for friable asbestos-containing

materials because they are more likely to become airborne and thus pose a health risk.

      In the course of the bidding process, prospective bidders, including TEG, raised

questions about which standard applied to the concrete on the exterior of the buildings.

During a conference call concerning the prospective contract, TEG’s representative

noted, “It’s a significant difference, because on one it has to be clean to a degree

there’s no trace; on the other, it’s clean to a degree that material can still be embedded

in pores, cracks and voids.”

      In response to the questions raised during the bidding process about the original

asbestos abatement standard, the government modified the standard.           The revised

section 2080, 4.3C set forth a single standard for all asbestos-containing materials and

provided as follows:

             Asbestos-containing materials applied to concrete, masonry,
             wood and nonporous surfaces, including, but not limited to,
             steel structural members (decks, beams and columns), pipes
             and tanks, shall be cleaned to a degree that no traces of
             debris or residue are visible by the Observation Services
             Contractor.




06-5007                                     4
Thus, the revised Section 2080, 4.3C abolished the old standard applicable for non-

friable materials that stated that it was acceptable to leave asbestos-containing

materials in pores and cracks. Instead, a standard requiring that there be no visible

asbestos, similar to the original standard for friable asbestos-containing materials, was

adopted for all asbestos-containing materials.2

         As noted by the Court of Federal Claims, trade practice and custom in the

asbestos abatement field includes presuming that any “debris and residue” contains

asbestos.      Id., slip op. at 13. The court based its finding on the American Society for

Testing Material (“ASTM”) standard for asbestos abatement, which provides, “Any

residue, dust, or debris found during the inspections is assumed to contain asbestos

. . . .” Id.




         2
              In a joint status report, the government provided an explanation for why
the stringent visibility standard was adopted for both friable and non-friable materials.
The government stated that

                asbestos is a carcinogenic substance and is regulated under
                the National Emission Standards for Hazardous Air
                Pollutants (NESHAP), promulgated by the EPA under the
                Clean Air Act at 40 CFR 61.145(c)(1). The NESHAP
                required that all friable [asbestos-containing materials
                (ACM)] be removed prior to demolition of a regulated
                structure. . . . Non-friable ACM may be left in place prior to
                demolition by standard techniques such as a wrecking ball.
                However, allowing non-friable ACM to remain in a building
                prior to an implosion was considered to be a gray area of the
                regulation that may be impermissible due to the possibility
                that the ACM could become friable under such
                circumstances.



06-5007                                       5
                                           B.

      The parties’ second disagreement concerns whether the contract’s specifications

or TEG’s work plan controlled the terms of TEG’s performance (Count One of the

complaint).

      Section C of the contract specifications states that the contractor will provide a

work plan for approval. The relevant portion of Section C provides:

              Contractor[’]s Work Plan: Submit for approval a detailed plan
              of engineering controls and the work procedures to be used
              in the removal, repair, clean-up or encapsulation of materials
              containing Asbestos.
              1. For all projects submit:
                  a. Names of Superintendent, Foremen, Project Manager
                      and other key personnel, and their day time and
                      emergency telephone and pager numbers.
                  b. Detailed description of the method to be employed in
                      order to control pollution, including negative air
                      equipment calculations.
                  c. Personal air monitoring procedures.
                  d. Safety Plan in accordance with Contract Document
                      requirements.
                      (MATERIAL OMITTED)
                  e. Location of Asbestos Work Areas.
                  f. Layout and construction details of Decontamination
                      Enclosure Systems.
                  g. Project schedule including important milestones,
                      critical paths and interface of trades involved in the
                      Work.
                  h. Security Plan including sketches necessary to clearly
                      describe the plan.
                  i. Emergency evacuation plan for injured workers,
                      compressor failure, fire and other emergencies.
                  j. Firewatch Plan including names, telephone and pager
                      numbers, and qualifications of personnel, firewatch
                      duties, sketches necessary to clearly describe the
                      plan and, when applicable, specific requirements of
                      local building/fire department regulations.
                  k. A contingency plan, in the event of a major
                      contamination incident caused by fire (on or off the
                      floor being abated), a large breech in the Work area
                      containment barrier, the opening of stairwell doors,



06-5007                                     6
                     breakage of the buildings[’] exterior windows or
                     sabotage. Such a plan will focus on how to maintain
                     safety and order when the building is occupied by
                     building occupants, the public and other building
                     users.

Pursuant to this provision, HUD requested that TEG submit its work plan on April 21,

1997. On April 25, 1997, TEG submitted a first version of its work plan. In response to

deficiencies pointed out by HUD and ATC Associates, Inc. (“ATC”), HUD’s asbestos

engineer and technical advisor for the contract, TEG revised the work plan several

times in late April and early May of 1997. Two weeks after the initial submittal of the

work plan, TEG was awarded the contract.

      Disputes arose during contract performance as to whether the work plan or the

contract specifications governed performance. TEG pointed out discrepancies between

the two documents in a letter dated June 17, 1997. For example, TEG noted in the

letter that it had not closed vertical pipe cavities, as required by the specifications,

because the work plan required the cavities to remain open in order to complete the

project. The discrepancies between the work plan and the contract specifications led to

the issuance of a Stop Work Order. After over a month of disputes, HUD accepted a

Value Engineering Change Proposal (“VECP”)3 from TEG that made changes to the

contract specifications to bring it more in line with the work plan. Work then continued

under the revised specifications.




      3
              A VECP is a contractor’s proposal to make a cost-reducing change to a
government contract. See 48 C.F.R. §§ 48-201, 52.248-1–.248-3 (2006); see also John
Cibinic, Jr., Ralph C. Nash, Jr. & James F. Nagle, Administration of Government
Contracts 409 (4th ed. 2006).


06-5007                                    7
                                             II.

       The Court of Federal Claims issued an opinion on August 30, 2002, evaluating

the parties’ cross-motions for summary judgment.         The court outlined three issues

before it, corresponding to each of TEG’s three claims: (i) whether the contract required

the removal of asbestos residue in pores and cracks; (ii) whether TEG was required to

follow the contract specifications rather than its work plan; and (iii) whether TEG was

entitled to compensation for removing what it alleged were excessive quantities of

asbestos. Id., slip op. at 10.

       The court began with the issue of the removal of asbestos residue from the pores

and cracks in the surfaces of the Geneva Towers. Id., slip op. at 10-16. The court

noted that the language of the contract required that “[a]sbestos-containing materials

applied to concrete, masonry, wood and nonporous surfaces . . . shall be cleaned to a

degree that no traces of debris or residue are visible.” Id., slip op. at 11. Based on this

language, the court identified two issues to be decided. First, it had to decide if the

contract required the removal of asbestos within pores and cracks. Second, it had to

determine what asbestos-containing “debris or residue” meant.

       Beginning with whether the contract required the cleaning of pores and cracks,

the court found that any asbestos-containing material “applied to” a porous surface

would necessarily enter any pores or cracks. Thus, it found that pores and cracks were

in fact part of the surface of the material. Id., slip op. at 12. Further, the court reasoned

that asbestos-containing material could be visible within pores or cracks. Id. Therefore,

the court concluded, the contract required that the pores and cracks of the porous




06-5007                                      8
surfaces of the Geneva Towers be cleaned of all visible traces of asbestos. Id., slip op.

at 13.

         Turning to the question of what asbestos-containing “debris or residue” meant,

the Court of Federal Claims found that there was no definition in the contract. Industry

standards clarified, however, that any residue, dust, or debris found during an

inspection was assumed to contain asbestos. Id. Thus, the court reasoned, TEG was

required to remove any residue, dust, or debris found. The court concluded that the

contract required that TEG remove all material containing more than 1% asbestos and

that TEG remove all visible traces of asbestos, including materials recessed in pores or

cracks. Accordingly, the court granted summary judgment in favor of the government

on the abatement standard issue. Id., slip op. at 16.

         Addressing the issue of whether TEG’s work plan or the contract specifications

governed TEG’s performance, the Court of Federal Claims noted that the parties agreed

that there were conflicting provisions of the work plan and the contract specifications.

Id., slip op. at 21. Continuing, the court pointed out that one of the reasons for requiring

strict compliance with contract specifications is to prevent low bidders from using

substandard materials.     Id., slip op. at 22.    The court also pointed out that the

government awards contracts to those bidders whose bid “conforms to the

specification.” Id., slip op. at 23. The court found that generally the purpose of contract

work plans is to enable the government to determine whether or not the contractor is

able to perform.    Id., slip op. at 24 (citing John Cibinic, Jr. & Ralph C. Nash, Jr.,

Formation of Government Contracts 405-06 (3d ed. 1995)). Further, the court noted

that when sealed bids are used, as was the case with the Geneva Towers contract, the




06-5007                                      9
contract cannot be modified after bids are received; the only criterion for contract award

other than the bid’s responsiveness to the specifications is bidder responsibility. Id., slip

op. at 24. The Court of Federal Claims reasoned that if, as TEG argued, HUD had

negotiated to replace the conflicting portions of the contract specifications with TEG’s

work plan, then it would have been violating these rules governing contracts made

through the solicitation of sealed bids and the contract would be void. Id., slip op. at 25.

The court concluded that the work plan was not incorporated into the contract. Id., slip

op. at 25-26. The court therefore denied TEG’s motion for summary judgment and

granted the government’s cross-motion on the work plan issue. Id., slip op. at 26.

       Finally, the Court of Federal Claims granted summary judgment in favor of TEG

on its claim, in Count Three of the complaint, that it was entitled to an equitable

adjustment in the contract price by reason of having removed excessive quantities of

asbestos. As seen, the government has not appealed the court’s grant of summary

judgment on the “[e]xcess quantities” claim. TEG appeals the court’s grant of summary

judgment in favor of the government on the breach of contract claims in Counts One

and Two of the complaint. We have jurisdiction over TEG’s appeal pursuant to 28

U.S.C. § 1295(a)(3).

                                       DISCUSSION

                                             I.

       Under Court of Federal Claims Rule 56(c) summary judgment is appropriate

when there is no genuine issue of material fact and the moving party is entitled to

judgment as a matter of law. Castle v. United States, 301 F.3d 1328, 1336 (Fed. Cir.

2002). We review the grant of summary judgment by the Court of Federal Claims de




06-5007                                      10
novo. Barron Bancshares, Inc. v. United States, 366 F.3d 1360, 1368 (Fed. Cir. 2004).

Contract interpretation is a question of law, which we also review de novo. Id.

                                             II.

       On appeal, TEG argues that the Court of Federal Claims erred in holding that

HUD applied the proper cleaning standard for abatement under the contract.             TEG

argues that the contract at Section 2080, 4.3C required that asbestos-containing

materials be cleaned from “surfaces” so that no traces of debris or residue were visible.

TEG contends that “surfaces” are not defined in the contract, but that from common

usage dictionaries it is apparent that that they include only “[t]he outer-face, outside, or

exterior boundary of a thing; outermost or uppermost layer or area.” Appellant’s Br. at

21 (quoting a definition found in Random House Webster’s College Dictionary 1314 (2d

ed. 1999)). TEG argues that the pores and cracks are not part of the “surface” because

they are not on the “outer-face” of the concrete. Industry definitions of “debris” and

“residue” refer to visible particles that have settled in a work area or on an abated

“surface.” Thus, TEG argues, the dust in the pores and cracks of the concrete of the

buildings was not “debris” or “residue” on a “surface” and therefore not required to be

removed.

       TEG supports its argument by pointing to what it says was HUD’s own

interpretation of the contract. First, TEG argues that even HUD recognized that its

Observation Services Contractor, Kellco Environmental Services, Inc. (“Kellco”), which

was responsible for observing the abatement process, enforced the visibility standard of

Section 2080, 4.3C in a “fanatical” way by requiring abatement of asbestos in the pores

and cracks. TEG points to an email authored by a HUD employee in which Kellco is




06-5007                                     11
described as having interpreted “what the contract says on a fanatical mode.” Second,

TEG recites a portion of a letter to HUD from ATC, which purported to clarify the visual

inspection standard set forth in Section 2080, 4.3C.       ATC stated in the letter that

“[r]esidue recessed within the pores and cracks of the concrete substrate is not

expected to be extracted.” Third, TEG draws attention to a letter from HUD stating that

HUD had gone beyond federal standards for asbestos abatement on the Geneva

Towers project as well as deposition testimony to the same effect. In addition, TEG

claims that the court erred by failing to consider several pieces of evidence including the

ATC opinion and an expert opinion rendered by Andrew F. Oberta, the Task Group

Chairman of the ASTM Committee on Asbestos Management, to the effect that it would

be unreasonable to require a contractor to “chisel or grind away concrete to extract . . .

imbedded material even if it was asbestos containing material.” Mr. Oberta further

opined that he did not believe that the contract required abatement beyond industry

standards.

       TEG also argues that the government interfered with its work plan, which was a

part of the contract. In support of its argument, TEG points out that the work plan was

physically attached by HUD to the contract. Further, TEG contends that under Federal

Acquisition Regulation (“FAR”) § 14.201-1(c), see 48 C.F.R. § 14.201-1(c) (2006), the

work plan, which is a representation or a statement of a bidder, was incorporated into

the contract. TEG also contends that it was required to proceed under the work plan

under FAR § 1552.211-74, 48 C.F.R. § 1552.211-74 (2006), and that therefore the work

plan was part of the contract. The Court of Federal Claims erred, TEG argues, in

finding that the work plan merely required that the contractor provide certain information




06-5007                                     12
because the contract itself required that the work plan comprise “a detailed plan for

engineering control and the work procedures to be used.”            The Court of Federal

Claims’s reliance on the Cibinic and Nash government contracts treatise was

misplaced, TEG contends, because the section cited by the court pertained to the

determination of a contractor’s responsibility and not its work plan.

       The government defends the Court of Federal Claims’s interpretation of the

contract’s provisions concerning the level of abatement, arguing that the contract’s plain

language requires abatement of all traces of visible debris and residue. In support of

this interpretation, the government notes that Section 2080, 4.3C was amended to

exclude any distinction between the abatement standard for friable and non-friable

materials. The revised section eliminated provisions that allowed non-friable materials

to remain in pores and cracks and instead applied a visibility standard to all asbestos-

containing materials. The government argues that even if we accept TEG’s arguments

concerning the abatement of asbestos on “surfaces,” the contract requires abatement of

all asbestos that has been applied to surfaces, including asbestos that seeps into pores

and cracks after application to the surfaces.         The evidence presented by TEG

concerning trade usage and custom should be disregarded, the government urges,

because it is not directed to interpreting a particular term, but rather the abatement

standard as a whole. Additionally, the government contends that trade usage cannot

create an ambiguity in an otherwise unambiguous contract.           The government also

argues that the court did not err by not considering the ATC opinion and Mr. Oberta’s

opinion because these sources could not be used to contradict the plain meaning of the

contract.




06-5007                                     13
      The government argues that the Court of Federal Claims correctly found that the

work plan was not incorporated into the contract. The government notes that in order

for a document to be incorporated into a contract, there must be an express reference in

the incorporating document. Although sections J and K of the contract incorporated

certain materials by reference, they did not incorporate the work plan, the government

notes. The work plan, the government argues, was merely a pre-award submittal that

was meant to show that TEG was capable of doing the work. The government claims

that this is demonstrated by the fact that HUD never approved the work plan. Even if

the work plan had been approved, the government contends, that approval would not

have waived compliance with the contract specifications. The government argues that if

we were to hold that the work plan trumped the contract itself, we would be allowing

bidders to underbid competitors and then use non-conforming sub-par materials and

procedures. The government also argues that FAR §§ 14.201-1(c) and 1552.211-74,

which were cited by TEG for the proposition that external documents are incorporated

into government contracts, are not applicable to work plans. See 48 C.F.R. §§ 14.201-

1(c), 1552.211-74. Finally, the government urges that TEG’s efforts to have parts of its

work plan incorporated into the contract through the VECP show that the work plan was

not incorporated into the contract; it would have been unnecessary to have the contract

modified through the VECP if the work plan were already a part of the contract.

                                          III.

      When interpreting a contract, “‘the language of [the] contract must be given that

meaning that would be derived from the contract by a reasonably intelligent person

acquainted with the contemporaneous circumstances.’”       Metric Constructors, Inc. v.




06-5007                                   14
Nat’l Aeronatics & Space Admin., 169 F.3d 747, 752 (Fed. Cir. 1999) (quoting Hol-Gar

Mfg. Corp. v. United States, 351 F.2d 972, 975 (Ct. Cl. 1965)). When deriving this

meaning, we begin with the contract’s language.        Coast Fed. Bank, FSB v. United

States, 323 F.3d 1035, 1038 (Fed. Cir. 2003) (en banc). 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. Id. at 1040; McAbee Constr., 97

F.3d at 1435.     Although extrinsic evidence may not be used to interpret an

unambiguous contract provision, we have looked to it to confirm that the parties

intended for the term to have its plain and ordinary meaning. See Coast Fed. Bank, 323

F.3d at 1040 (looking to contemporaneous evidence of the parties’ understanding and

“not[ing] that much of it is consistent with the [contract’s] plain meaning”). When a

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

ambiguous, Edward R. Marden Corp. v. United States, 803 F.2d 701, 705 (Fed. Cir.

1986), and we may then resort to extrinsic evidence to resolve the ambiguity, see

McAbee, 97 F.3d at 1435.     We utilize extrinsic evidence to derive a construction that

effectuates the parties’ intent at the time they executed the contract. See Dureiko v.

United States, 209 F.3d 1345, 1356 (Fed. Cir. 2000).

      Even when a contract is unambiguous, it may be appropriate to turn to one

common form of extrinsic evidence—evidence of trade practice and custom.           Hunt

Constr. Group, Inc. v. United States, 281 F.3d 1369, 1373 (Fed. Cir. 2002). We have

stated that “evidence of trade practice may be useful in interpreting a contract term

having an accepted industry meaning different from its ordinary meaning—even where

the contract otherwise appears unambiguous—because the ‘parties to a contract . . .




06-5007                                   15
can be their own lexicographers and . . . trade practice may serve that lexicographic

function in some cases.’” Id. (quoting Jowett, Inc. v. United States, 234 F.3d 1365,

1368 (Fed. Cir. 2000)). Trade practice and custom may not be used, however, “to

create an ambiguity where a contract was not reasonably susceptible of differing

interpretations at the time of contracting.” Metric Constructors, 169 F.3d at 752.

      The parol evidence rule provides a further limitation on the use of extrinsic

evidence in interpreting contracts. Under the parol evidence rule, extrinsic evidence

pre-dating a written agreement may not be used “to add to or otherwise modify the

terms of a written agreement in instances where the written agreement has been

adopted by the parties as an expression of their final understanding.”               Barron

Bancshares, 366 F.3d at 1375 (citation and quotation marks omitted).            However,

extrinsic evidence such as prior agreements and documents will be considered part of a

contract when they are incorporated into the contract. See S. Cal. Fed. Sav. & Loan

Ass’n v. United States, 422 F.3d 1319, 1330 (Fed. Cir. 2005). One common way to

incorporate extrinsic evidence is through an integration clause that expressly

incorporates the extrinsic evidence. Id.; McAbee Constr. v. United States, 97 F.3d

1431, 1434 (Fed. Cir. 1996). Although the parol evidence rule bars the use of extrinsic

evidence to supplement or modify a written agreement, the rule does not bar the use of

extrinsic evidence to interpret the terms of a contract when the plain and ordinary

meaning is not clear from the contract itself. See Restatement (Second) Contracts

§ 215 cmt. b (1981); 6-26 Corbin on Contracts § 579 (2006); Cibinic, Nash & Nagle,

supra, at 199. Armed with these rules, we turn to the issues TEG raises on appeal.




06-5007                                     16
                                           IV.

      We consider first TEG’s claim that the Court of Federal Claims erred in holding

that it was required to clean debris and residue from pores and cracks of the Geneva

Towers under the contract’s abatement standard. As seen, the provision of the contract

containing the abatement standard for the Geneva Towers project, Section 2080, 4.3C,

provided:

             Asbestos-containing materials applied to concrete, masonry,
             wood and nonporous surfaces, including, but not limited to,
             steel structural members (decks, beams and columns), pipes
             and tanks, shall be cleaned to a degree that no traces of
             debris or residue are visible by the Observation Services
             Contractor.

The Court of Federal Claims correctly identified two issues raised by the abatement

standard.   First, we must determine whether this standard requires the removal of

asbestos within pores and cracks.       Second, we must determine what asbestos-

containing “debris or residue” means.

      Based upon the plain language of the abatement standard, we conclude that the

Court of Federal Claims did not err in ruling that TEG was required to remove asbestos

within pores and cracks. The plain language of the contract indicates that it requires

abatement to the point that there is no “debris or residue . . . visible.” Thus, to the

extent that “debris or residue” was “visible” within the pores and cracks of concrete or

other porous surfaces, it had to be abated under the contract. However, if the “debris or

residue” was not “visible” within the pores and cracks, it was not required to be abated

under the contract. Accordingly, we find that the plain and ordinary meaning of the

abatement standard required TEG to remove visible asbestos within the pores and

cracks of the towers.



06-5007                                    17
       As we did in Coast Federal Bank, we turn to extrinsic evidence, specifically, the

course of dealing of the parties, to confirm that our interpretation of the plain and

ordinary meaning was, in fact, the parties’ understanding. See Coast Fed. Bank, 323

F.3d at 1040. The original specifications provided for two different abatement standards

for friable and non-friable materials. As far as friable materials were concerned, the

specifications expressly stated that materials must be cleaned “to a degree that no

traces of debris or residue are visible.” In contrast, the specifications provided that non-

friable materials “shall be cleaned until no residue is visible other than that which is

embedded in the pores, cracks, or other small voids below the surface of the material.”

Thus, the original specifications expressly allowed for the contractor to leave non-friable

asbestos in pores and cracks. In a pre-bid conference call, TEG’s representative stated

that it was not clear which standard, friable or non-friable, would apply and that this was

an important difference.     TEG’s representative noted, “It’s a significant difference,

because on one it has to be clean to a degree there’s no trace; on the other, it’s clean to

a degree that material can still be embedded in pores, cracks and voids.” In our view,

the conference call demonstrates that TEG understood the visibility standard, which

was eventually adopted for all asbestos abatement under the contract, to require that no

asbestos remain in the pores and cracks.

       We find unpersuasive TEG’s argument that the Court of Federal Claims erred by

failing to consider other pieces of evidence, including ATC’s letter and Mr. Oberta’s

expert opinion. These documents could be considered evidence of trade practice and

custom, which we have found appropriate to consider in some cases even when a

contract is unambiguous. See Hunt Constr., 281 F.3d at 1373. However, neither of




06-5007                                     18
these documents aids in the interpretation of a term of art in the asbestos abatement

field. Rather each document offers an alternate explanation of the contract’s abatement

standard generally.     Under Hunt Construction, it is not permissible to use these

extrinsic sources to impart ambiguity into an otherwise unambiguous contract—they

may only be used to interpret a term of art. Id. at 1369; see also Metric Constructors,

169 F.3d at 752. Given the clarity of the meaning from the language and the parties’

pre-contractual negotiations, none of the extrinsic evidence cited by TEG carries weight.

      We are also not swayed by TEG’s argument that Section 2080, 4.3C requires

only that “surfaces” be abated and that “surfaces” do not include pores and cracks.

TEG turns to a common usage dictionary that defines a “surface” as “[t]he outer-face,

outside, or exterior boundary of a thing; outermost or uppermost layer or area.”

Appellant’s Br. at 21 (quoting Random House Webster’s College Dictionary 1314 (2d

ed. 1999)). We reject TEG’s argument based on this definition that a “surface,” as used

in section 2080, 4.3C, is only the “outer-face” of the concrete and not the pores and

cracks. The definition upon which TEG relies does not expressly state that “surfaces”

do not include pores and cracks. Further, if we were to accept TEG’s argument we

would have to decide how small a crack or pore had to be in order to be excluded from

“surfaces.”   The Court of Federal Claims correctly noted that we “would be left to

quarreling over the depth of recess needed to differentiate a crack or pore from a

smooth surface” if we adopted TEG’s interpretation. TEG-Paradigm, slip op. at 13. We

also find that TEG’s “surfaces” argument is weak in comparison to the evidence of the

parties’ understanding of the language in the contract as demonstrated by the




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conference call. Thus, we believe that the strict visibility abatement standard is more in

line with the parties’ contemporaneous understanding of Section 2080, 4.3C.

      Turning to the second issue relevant to TEG’s abatement standard claim, the

meaning of “debris or residue,” we see no error in the Court of Federal Claims’s holding

that, under the contract, any dust or powder found on inspection was assumed to be

asbestos-containing “debris or residue” that had to be abated. “Debris” and “residue”

are not defined in the contract. As previously noted, evidence of trade custom may be

used to interpret terms of art such as “debris” and “residue.” See Hunt Constr., 281

F.3d at 1373. The ASTM standard for asbestos abatement provides that debris and

residue is “assumed” to contain asbestos. TEG-Paradigm, slip op. at 13. Therefore, we

agree with the Court of Federal Claims that trade practice and custom demonstrates

that in the asbestos abatement field any “debris and residue” found is assumed to

contain asbestos.   Id.. Thus, we affirm the Court of Federal Claims’s holding that the

contract required TEG to clean all visible powder and dust found on inspection,

including powder and dust in cracks and pores.

                                           V.

      Turning to the work plan issue, we hold that the Court of Federal Claims correctly

determined that the contract specifications, rather than TEG’s work plan, governed the

terms of contract performance. The government required a work plan conforming to the

contract specifications before it accepted TEG’s bid.         Therefore, the work plan

comprises a piece of extrinsic evidence pre-dating the formation of the contract. HUD

required that bidders submit a work plan stating the details of the bidder’s engineering

controls and work procedures. Nowhere does the contract state that the work plan is to




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be integrated into the contract and supersede the contract specifications. In contrast to

the work plan, several sections of the FAR are incorporated by Section F of the

specifications.4 Additionally, Sections I, J, and K to the contract list not only numerous

sections of the FAR that are incorporated by reference, but also several other

documents relating to payment bonds, performance bonds, and wage rates. Further,

we find unpersuasive TEG’s argument that the work plan was incorporated into the

contract merely by virtue of the fact that the plan was physically attached to the

contract. Rumsfeld v. Freedom NY, Inc., 346 F.3d 1359, 1361 (Fed. Cir. 2003) (per

curiam) (“One party to a contract cannot bind the other simply by attaching a document

to a copy of the contract, even if that particular copy is signed. . . .      Rather, the

documents must clearly indicate that the parties intended that they be considered

together as a single contract.”) (internal citations omitted). Although the attachment of

the two documents lends some support to TEG’s argument, we conclude that it is not

enough to incorporate the work plan given the facts of this case, which otherwise show

that the work plan was not incorporated. Given that the contract expressly incorporates

certain extrinsic documents, but does not incorporate the work plan, we find that the

work plan is an extrinsic document that cannot be used to contradict or modify the

contract under the parol evidence rule. See S. Cal. Fed. Sav. & Loan, 422 F.3d at

1330.




        4
             For example, Section F incorporates FAR sections 52.252-2 (“Clauses
Incorporated by Reference”), 52.242-15 (“Stop-Work Order”), 52.242-17 (“Government
Delay of Work”), and 52.211-12 (“Liquidated Damages—Supplies, Services, or
Research and Development”). See 48 C.F.R. §§ 52.252-2, 52.242-15, 52.242-17,
52.211-12.


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       We also find that there is no exception to the parol evidence rule for work plans

in government contracts. The Court of Federal Claims correctly characterized TEG’s

work plan not as part of the contract, but rather as a pre-award submission used to aid

the government in assessing TEG’s ability to perform the contract. TEG-Paradigm, slip

op. at 21. Under FAR 9.103, the government must award contracts to “responsible

prospective contractors only.” 48 C.F.R. § 9.103(a) (2006); see also Cibinic & Nash,

Formation of Government Contracts, supra, at 404-06. Thus, the government requires

pre-award submissions to assess whether the contractor will be able to perform the

contract. Pre-award submissions, such as a work plan, are not part of the contract

unless the contract specifically provides that they are to be incorporated. Examination

of the contract at issue confirms that TEG’s work plan was a pre-award submission that

did not override the contract specifications. Section C of the contract specifications

requires that the contractor submit a “work plan” containing information such as the

names and contact information of the key personnel who would perform the contract, a

detailed description of pollution control methods, and various safety and contingency

plans. Again, nowhere in the contract is it stated that the contract incorporates the work

plan. Thus, the government is correct that TEG’s work plan was not part of the contract,

but rather a piece of information that was used by the government to assess TEG’s

ability to perform in the pre-award stage.

       Contrary to TEG’s arguments, FAR sections 14.201-1 and 1552.22-74 do not

compel us to find that work plans are incorporated into government contracts. FAR

14.201-1 sets forth the uniform contract format that must be used “to the maximum

practicable extent” for certain types of contracts. 48 C.F.R. § 14.201-1 (2006). Section




06-5007                                      22
14.201-1(c) states that acceptance of a bid “incorporates Section K, Representations,

certifications, and other statements of bidders, in the resultant contract even though not

physically attached.” Section K of the contract at issue incorporates several sections of

the FAR that require particular submissions, e.g., taxpayer identification, FAR 52.204-3,

whether or not the business is women-owned, FAR 52.204-5, and the type of business,

FAR 52.214-2, see 48 C.F.R. §§ 52.204-3, 52.204-5, 52.214-2 (2006), respectively.

However, the work plan is contained in Section C of the contract and is therefore not a

Section K representation, certification, or statement. We find TEG’s arguments under

FAR 1552.211-74(c) equally unpersuasive. FAR 1552.211-74(c) sets forth procedures

for stopping work when a work plan is not approved.5 It does not state that work plans

are incorporated into government contracts.



       5
             The contract provision contemplated by FAR 1552.211-74 states as
follows:

                    The Contractor shall acknowledge receipt of each
             work assignment by returning to the Contracting Officer a
             signed copy of the work assignment within __ calendar days
             after its receipt.     The Contractor shall begin work
             immediately upon receipt of a work assignment. Within __
             calendar days after receipt of a work assignment, the
             Contractor shall submit __ copies of a work plan to the
             Project Officer and __ copies to the Contracting Officer. The
             work plan shall include a detailed technical and staffing plan
             and a detailed cost estimate. Within __ calendar days after
             recipt [sic] of the work plan, the Contracting Officer will
             provide written approval or disapproval of it to the
             Contractor. If the Contractor has not received approval on a
             work plan within __ calendar days after its submission, the
             Contractor shall stop work on that work assignment. Also, if
             the Contracting Officer disapproves a work plan, the
             Contractor shall stop work until the problem causing the
             disapproval is resolved. In either case, the Contractor shall
             resume work only when the Contracting Officer finally
             approves the work plan.


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        Finally, our holding that work plans are not incorporated into government

contracts is in accordance with the general principle that the government is entitled to

strict compliance with contract specifications. See Granite Constr. Co. v. United States,

962 F.2d 998, 1006-07 (Fed. Cir. 1992) (“[T]he government generally has the right to

insist on performance in strict compliance with the contract specifications and may

require a contractor to correct nonconforming work.”).          This principle prevents

contractors from submitting low bids and then substituting less-expensive materials for

those required by the specification. Cibinic, Nash & Nagle, supra, at 815.

                                      CONCLUSION

        For the foregoing reasons, we therefore affirm the decision of the Court of

Federal Claims granting summary judgment in favor of the government on TEG’s claims

for breach of contract.

                                         COSTS

        Each party shall bear its own costs.


                                        AFFIRMED




(Cont’d. . . .)

48 C.F.R. 1552.211-74.


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