_____________________________ GRANTED: March 1, 1994 _____________________________ GSBCA 12386 J. S. ALBERICI CONSTRUCTION CO., INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Edward L. Calcaterra, President of J. S. Alberici Construction Co., Inc., St. Louis, MO, appearing for Appellant. Michael T. Brincks, Office of Regional Counsel, General Services Administration, Kansas City, MO, counsel for Respondent. Before Board Judges DEVINE, HYATT, and WILLIAMS. DEVINE, Board Judge. The J. S. Alberici Construction Co., Inc. (Alberici), contracted to perform certain construction work for the General Services Administration (GSA). Alberici subcontracted that part of the work dealing with fire protection to Engineered Fire Protection, Inc. (EFP). After much of the contract work had been completed, EFP requested additional compensation from Alberici for the installation of a number of sprinkler heads which it said were beyond the requirements of the contract. The parties are in agreement that EFP installed 278 more sprinkler heads than are depicted on the contract drawings. The contract specifications do not list a specific number of sprinkler heads but do direct the contractor to install the sprinklers in accordance with the national code. The requirements of the national code determined the number of sprinkler heads finally installed. Alberici argues that the 278 sprinklers represent extra work outside the scope of the original contract; therefore EFP is entitled to additional compensation. GSA maintains that, under the contract as written, the sprinklers were required; consequently, no additional money is due. Findings of Fact On May 18, 1987, GSA issued an invitation for bids to increase the size of the Federal Records Center in Overland, MO. Appeal File, Exhibit 1, Vol. VI, Form 1442. Offers were to be in the form of a lump-sum bid and were due June 30, 1987. Id. Amendment 1, with an effective date of June 12, 1987, made numerous changes and extended the bid due date to July 9, 1987. Id., Form 30 at 1. Appellant's subcontractor, EFP, ordered a set of the project plans on May 27, 1987. Id., Exhibit 2. The contract specifications contain the following provisions: 1. NFPA COMPLIANCE: Install fire protection systems in accordance with NFPA 13 "Standard for the Installation of Sprinkler Systems", and NFPA 14 "Standard for the Installation of Standpipe and Hose Systems".[foot #] 1 Appeal File, Exhibit 1, Vol. IV. The contract also states, "Provide automatic sprinklers of the type indicated on Drawings . . . ." Id. The contract further provides: A. General Applicability Of Standards: Except to the extent that more explicit or more stringent requirements are written directly into the contract documents, applicable standards of construction industry have same force and effect (and are made part of contract documents by reference) as if copied directly into contract documents, or as if published copies were bound herewith, subject to the order of precedence previously stated. Appeal File, Exhibit 1, Vol. I, General Requirements. The written specifications do not state the number of sprinklers to be installed. Id. The Order of Precedence Clause referred to above states, in part: (d) In case of difference between Standard Details or Specification Drawings and the specifications, the specifications will govern. Id. ----------- FOOTNOTE BEGINS --------- [foot #] 1 NFPA is the acronym for National Fire Protection Association. Appeal File, Exhibit 1, Vol. I (General Requirements). ----------- FOOTNOTE ENDS ----------- Accompanying the specifications were drawings prepared for the Government by its design engineer. Appeal File, Exhibit 1, Vol. I. According to the appellant's subcontractor (and unrefuted by the respondent), a "design engineer has the responsibility to lay out the system properly . . . . The contractor has the responsibility to follow the drawings and to provide the materials and installation required by the specifications." Alberici letter to the Board, dated August 9, 1993, at enclosure, page 2. The NFPA standards were undoubtedly reflected in the design engineer's drawings but the drawings themselves are not in evidence. The appellant's subcontractor maintains that the inclusion of the "requirement to meet NFPA standards is a standard phrase that is indicated in every bid document because the NFPA standards address all the materials, installation methods, and engineering design requirements." Id. A part of Amendment 1, issued prior to bid closing, changed the legend on the schematic sprinkler detail drawing to read: "CONTRACTOR SHALL INSTALL PROPER NUMBER OF SPRINKLER HEADS AS INSTRUCTED BY THE N.F.P.A. CODE." Appeal File, Exhibit 1, Vol. I. This language was highlighted. Id. This is the sole drawing in the record, but it does show that the work to be done encompassed seven levels: two basement levels and five floors. Id. The design engineer's drawings called for 2,672 flush sprinkler heads and 448 upright sprinkler heads. Appeal File, Exhibit 14. The final count of sprinklers installed was 2,946 flush and 452 upright. Id. On September 25, 1989, EFP presented Alberici with a "claim for additional compensation." Appeal File, Exhibit 8. EFP stated that, after "reviewing the costs and finalized drawings" for the completed fire protection work, it had "installed 317 additional sprinklers in order to meet the nationally recognized standard for the installation of sprinkler systems, NFPA 13." Id. According to EFP, its final drawings showed that EFP had fabricated and installed more sprinklers than were depicted on the plans. Id. EFP had proceeded to install the allegedly extra sprinklers without any prior or written authorization. Id., Exhibit 11. Alberici presented EFP's "claim" to GSA representatives who agreed that the work was beyond that required by the contract and proposed a modification to the contract. Appeal File, Exhibit 9. Although there was no problem determining a fair and reasonable price for each additional sprinkler, the parties had some difficulty deciding on the correct number of additional sprinklers installed. Id., Exhibits 10 and 15. Eventually, a third party was hired by the respondent to settle the disputed number. Id., Exhibit 23 at 3. The parties finally agreed the correct number was 278. After change order negotiations, the contracting officer's representative recommended a settlement of the claim. Id., Exhibit 15. A Modification of Contract, Standard Form 30, was prepared and signed by the contractor. Id., Exhibit 9. According to the appellant, and unrefuted by the respondent, the contracting officer negotiated and reached mutual agreement with the appellant and its subcontractor on the claim. Alberici letter to the Board, dated August 9, 1993. When the proposal was presented to the GSA Project Director for payment, he refused to fund it and Alberici was informed that the proposal was being withdrawn. Appeal File, Exhibit 16. The Project Director's position was that "the number of [sprinklers] installed by . . . EFP is the proper number required by the contract and no additional compensation is entitled." Id. The specifications specifically designate the contracting officer as the only person with "the power to bind the Government and to exercise the rights, responsibilities, authorities and functions vested in him by the contract documents . . . ." Appeal File, Exhibit 1, Vol. I (General Requirements), Form 3506. The same section defines "Contracting Officer" as a "person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings." Id. Under the definition of "Approve" in section 01090, the contract warns, "Only the Contracting Officer . . . can approve or disapprove contract actions." Id. Under the Adjustments section of the contract, it is stated, "The Contracting Officer may, at any time, without notice to the sureties, if any, by written order designated or indicated to be a change order, make changes in the work within the general scope of the contract . . . ." Appeal File, Exhibit 1, Vol. I (General Requirements), Form 3506. The contracting officer issued a final decision on February 11, 1993, denying the claim. Appeal File, Exhibit 23. Only the issue of entitlement is before the Board. Discussion Under a fixed-price contract, such as the one before us, the contractor normally bears the risk of an increase in the cost of performance. See Sea-Land Service, Inc. v. United States, 553 F.2d 651 (Ct. Cl. 1977); Daniel Hamm Co., GSBCA 685, 1962 WL 760 (October 18, 1962). Appellant advances two arguments in its attempt to pass the cost of what it regards as additional sprinkler heads onto the respondent. The first is that the Government furnished defective drawings which appellant's subcontractor, EFP, reasonably relied on to determine its work obligations. The second is that an agreement had been reached between the parties, and the Government should be bound to honor it. The Government may be held liable if it is shown that the Government breached its duty to provide "clear, complete and accurate documents." Worsham Construction Co., Inc., GSBCA 5469, 80-2 BCA 14,516, at 71,541. However, such a duty exists only when the Government provides design specifications, not specifications that delineate only a desired performance criterion. This Board has acknowledged "that contractors often bid in haste, and that they often rely on prospective subcontractors to help them interpret contract documents." Zinco General Contractors, GSBCA 5652, 80-2 BCA 14,785, at 72,971. Nevertheless, the Government contracted with appellant, not EFP, and it was appellant's "minimum obligation to scrutinize the contract documents [and] interpret them reasonably." Id. While there is no disagreement that the design drawing showed a lesser number of sprinklers than required by the national standard cited in the specifications, the written specifications clearly directed the contractor to comply with the NFPA standard. The contract also explicitly stated that the specifications took precedence over any conflict with the drawings. Further, the amended detail drawing highlighted the requirement that the number of sprinklers required was to be determined in accordance with the NFPA. Conversely, the contract required explicit provisions to be given effect over industry standards. The issue, therefore, is whether or not the contractor reasonably relied on the design drawings in formulating its bid. Contracts are to be interpreted as a whole, with each part given effect. CRC Systems Inc. v. General Services Administration, GSBCA 11173, 93-2 BCA 25,842, at 128,604; J. S. Alberici Construction Co., Inc., GSBCA 10347, 92-1 BCA 24,596, at 122,717 (1991). The same may be said in reference to a prospective bidder's scrutiny of bid documents. Appellant maintains that the drawings were defective because they did not show the number of sprinkler heads that EFP eventually installed. The amended design detail drawing did direct EFP to determine the proper number by reference to the NFPA code. If there was any doubt about the matter, the written specifications said the same thing. Conversely, the design drawings showed a specific number of sprinklers to be installed, and these drawings apparently did not reference the code.[foot #] 2 The Government would have us either ignore the axiom that contracts are to be interpreted as a whole or only hold a contractor responsible for giving effect to all contract documents. This is because the Government argues that the Board should give no effect to the bid drawings that mandated a fewer ----------- FOOTNOTE BEGINS --------- [foot #] 2 Since the amended drawing is the only one in the record, it is impossible to be certain whether or not the NFPA code requirement was noted on the original or any other drawings. However, since it was highlighted as a change on the amended drawing, we may infer that it did not appear on other drawings. Further, it is not possible to determine why the Government felt it necessary to highlight it on the amended drawing. One plausible explanation is that the Government realized that the drawings were deficient in relation to the NFPA criterion. ----------- FOOTNOTE ENDS ----------- number of sprinkler heads. Alternatively, the Government argues that it should only be the contractor who bears the responsibility for recognizing a difference between the directions in the drawings and the specifications. A prospective bidder would have to do a complete point-by-point comparison of the premises with the bid drawings. Otherwise it would have been virtually impossible to recognize any discrepancy between the drawings and the specification directions to comply with the code. That would have entailed an exhaustive study over seven levels of the building extension. Under the original schedule, the appellant and its subcontractor had just over four weeks to review the documents, and prepare and submit a bid. The Government would have the Board ignore another maxim of common law contract interpretation: Specific terms are preferred over more general ones. Restatement (Second) of Contracts 203(c)(1979). The written specifications directed that explicit requirements took precedence over industry standards. To give preference to the general requirement to comply with the NFPA code over the specific enumeration in the drawings would subvert such a rule and contravene the parties' agreement. We believe that the better view is that appellant reasonably relied on the bid drawings in formulating its bid. Contractors are not required to expend great effort, expense, and time in order to verify the accuracy and suitability of Government- provided specifications and drawings. Ithaca Gun Co. v. United States, 176 Ct. Cl. 437 (1966). This is especially true where the Government, besides stating a performance specification, provides a detailed design. It is all the more reasonable for a bidder to rely on the bid drawings when Government-hired design engineers prepare them. Only after performance had been essentially completed was it apparent that the drawings were deficient. For this the respondent must accept the risk. It avails not the respondent to argue that the general reference requiring compliance with the code should overrule the specific number required by the drawings. It would be inherently unfair to allow the Government to write a contract with a plethora of conflicting terms and then, after a dispute arises, allow it to pick and choose which should apply. Appellant also places a great deal of emphasis on the fact that the Government's representatives agreed to issue a contract modification to cover the expense of the "extra" sprinklers. There is no disagreement that all parties' representatives, other than the GSA Project Director, agreed that the work at issue was extra and that the appellant should be compensated. At one point, the contracting officer's representative completed a memorandum on the change order negotiations. It clearly shows that the proposal was bilaterally negotiated in all essential details. The Government went to the trouble of hiring a third party to resolve the final issue -- the number of extra sprinkler heads. It was only after a contract modification was signed by the contractor that the project director refused to fund the work. From all indications, this occurred after the contracting officer had orally reached an accord with appellant. It is worth noting that, although the contracting officer "concurred" in the project director's decision, only the contracting officer, under the contract terms, had the authority to bind the Government and enter into contracts "and make related determinations and findings." Another board dealt with a similar situation in Essex Electro Engineers, Inc., ASBCA 30118 et al., 88-1 BCA 20,440 (1987). There, the parties also had reached an oral agreement that, despite statutory requirements, had never been reduced to writing. Id. at 103,366. Price negotiation memoranda had been written which reflected "complete consideration of all issues and reflect[ed] the contractor's proposal, the Government's negotiation objective" and the amount agreed upon. Id. at 103,364. Both parties at that point viewed the formal writing as a mere formality and not as a contingency. Id. at 103,364-65. In upholding the contractor's claim, the board stated that "failure to reduce the agreement to writing on the SF 30 form [sic] is not per se fatal to the enforceability of the agreement." Id. at 103,368. In the particular circumstances here, we agree that the better view is that the completion of the SF 30 was not a condition precedent to the appellant's entitlement to compensation. The parties agreed that the work was beyond that required by the contract. They agreed on a fair and reasonable price. Finally, they agreed on the number of extra sprinkler heads installed. Only the memorialization of their agreement remained to be completed. Decision For the foregoing reasons, the appeal is GRANTED. ______________________________ DONALD W. DEVINE Board Judge We concur: _____________________________ ______________________________ CATHERINE B. HYATT MARY ELLEN COSTER WILLIAMS Board Judge Board Judge