from the United States Court of Federal Claims in No.
1:11-cv-00492-SGB, Chief Judge Susan G. Braden.
L. Panichelli, Cohen Seglias Pallas Greenhall & Furman
PC, Philadelphia, PA, argued for plaintiff-appellant. Also
represented by Michael H. Payne.
Laufgraben, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington, DC, argued
for defendant-appellee. Also represented by Chad A. Readler,
Robert E. Kirschman, Jr., Allison Kidd-Miller; John Francis
Bazan, Sr., United States Army Corps of Engineers, Los
Prost, Chief Judge, Reyna and Wallach, Circuit Judges.
WALLACH, CIRCUIT JUDGE
Engineering Company ("Meridian") appeals two final
decisions of the U.S. Court of Federal Claims determining,
inter alia, that (1) Meridian did not meet standards of proof
to show that the United States ("Government")
breached certain contractual obligations and its duty of good
faith and fair dealing in a dispute under the Contract
Disputes Act, 41 U.S.C. §§ 601-613 (2006)
("CDA") related to the construction of a flood
control project in Nogales, Arizona, see Meridian
Eng'g Co. v. United States (Meridian I), 122 Fed.Cl.
381, 384, 400 n.25, 426 (2015); J.A. 3000-53 (Second Amended
Complaint), and (2) Meridian was owed certain monies for
equitable adjustment and interest on the payments running
from the date Meridian submitted its claim, January 7, 2014,
see Meridian Eng'g Co. v. United States (Meridian
II), 130 Fed.Cl. 147, 172 (2016). We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(3) (2012). We
affirm-in-part, vacate-in-part, reverse-in-part, and remand.
2007, Meridian entered into a contract with the Government to
construct flood control structures, referred to as the Chula
Vista Project. Meridian I, 122 Fed.Cl. at 385-86.
The Project contemplated construction of several concrete
channels, relocation of a sewer line, and dewatering and
water diversion. See J.A. 1044-627 (Contract). After
commencing the Project, Meridian encountered a series of
problems relating primarily to what it deemed
"subsurface organic/unsuitable material, "
specifically, "a layer of dripping saturated dark clay
material under which a clean layer of sand is producing
water" that had "the potential for serious
structural damage." J.A. 1810; see Meridian I,
122 Fed.Cl. at 388 (describing "softer-than-anticipated
soils"), 390-92 (describing modifications pursuant to
discovery of "saturated soils"). Meridian notified
the Government about these problems, and the Government
issued several Contract modifications in response. See
Meridian I, 122 Fed.Cl. at 388-90 (describing
modifications for increase in allotted funds for larger pipe
size, addition of a reinforced concrete access ramp,
investigation of soil properties, remediation of saturated
soils, and additional sheet piling). Eventually, the
Government directed Meridian to suspend work on the Project
in January 2009 following a series of structural failures,
see J.A. 3127-28, and, while minor work continued,
the Government ultimately terminated the Project following a
September 2009 final inspection of the Project site, see
Meridian I, 122 Fed.Cl. at 394-96.
the parties' disagreements over payment owed to Meridian,
Meridian filed suit in the Court of Federal Claims for breach
of contract, breach of the duty of good faith and fair
dealing, and a violation of the CDA. See J.A. 127,
3000-53. The Government conceded liability for costs relating
to three counts of Meridian's Second Amended Complaint
(Counts VII-IX), which were the subject of a separate damages
trial. See J.A. 3032-36 (Count VII (Suspension of
Work), Count VIII (Channel Fill), Count IX (Interim
Protection)). See generally Meridian II, 130 Fed.Cl.
147. Because the Government now concedes the only issue with
respect to Meridian II,  the remainder of this
opinion addresses determinations from Meridian I.
Standard of Review
review the Court of Federal Claims' legal conclusions de
novo and its factual findings for clear error. See John
R. Sand & Gravel Co. v. United States, 457 F.3d
1345, 1353 (Fed. Cir. 2006), aff'd 552 U.S. 130
(2008). "A finding may be held clearly erroneous when
the appellate court is left with a definite and firm
conviction that a mistake has been committed." Ind.
Mich. Power Co. v. United States, 422 F.3d 1369, 1373
(Fed. Cir. 2005) (internal quotation marks, ellipsis, and
asserts that the Court of Federal Claims erred when it
"reasoned that only Meridian's breach of contract
and breach of good faith and fair dealing claims presented a
viable cause of action, " because "Meridian's
CDA claims should have been analyzed under the framework
contemplated by the CDA, and not under the rubric of a
'breach' claim." Appellant's Br. 23, 24
(capitalization modified). However, Meridian does not explain
the alternate CDA framework to which it refers, nor does it
state how analysis under a different hypothetical framework
would result in a finding in its favor. See id. at
22-25 (stating only that the use of the breach of contract
standard "skewed" the Court of Federal Claims'
requirements of the CDA are jurisdictional prerequisites to
any appeal." M. Maropakis Carpentry, Inc. v. United
States, 609 F.3d 1323, 1328 (Fed. Cir. 2010) (citation
omitted); see K-Con Bldg. Sys., Inc. v. United
States, 778 F.3d 1000, 1004 (Fed. Cir. 2015) (reviewing
de novo whether the Court of Federal Claims had jurisdiction
under the CDA). Pursuant to the CDA, a party must submit a
"valid claim, " which is defined by regulation as a
demand seeking "as a matter of right, the payment of
money in a sum certain, the adjustment or interpretation of
contract terms, or other relief arising under or relating to
the contract." M. Maropakis, 609 F.3d at 1327
(quoting 48 C.F.R. § 33.201). Thus, the CDA itself does
not provide a cause of action to which money damages may
accrue; it is the claim asserted pursuant to the CDA that is
the source of potential damages and review by the trier of
fact. See Northrop Grumman Computing Sys., Inc. v. United
States, 709 F.3d 1107, 1112 (Fed. Cir. 2013) (explaining
the prerequisites for a valid claim brought under the CDA,
which is a jurisdictional requirement to obtain relief).
Therefore, the Court of Federal Claims did not err in finding
it had jurisdiction under the CDA to evaluate Meridian's
breach of contract claims.
The Court of Federal Claims Did Not Err in Its Differing Site
Conditions Analysis (Counts II and V)
Court of Federal Claims found that Meridian did not offer
sufficient evidence to satisfy its Type I differing site
condition ("DSC") claim alleging that in the
channel and sewer line areas of the project the unexpected
conditions of "soupy" soil caused delays and
imposed unanticipated costs. Meridian I, 122 Fed.Cl.
at 403; see id. at 408-09. Meridian posits several
errors in the Court of Federal Claims'
analysis. See Appellant's Br. 27-40.
After articulating the applicable legal standard, we address
each argument in turn.
Type I [DSC claim] arises when the conditions encountered
differ from what was indicated in the contract
documents." Renda Marine, Inc. v. United
States, 509 F.3d 1372, 1376 (Fed. Cir. 2007);
see FAR 52.236-2(a)-(b) ("The Contractor shall
promptly . . . give a written notice to the [CO] of (1)
subsurface or latent physical conditions at the site which
differ materially from those indicated in this contract. . .
. The [CO] shall investigate the site conditions promptly
after receiving the notice. If the conditions do materially
so differ and cause an increase or decrease in the
Contractor's cost of, or the time required for,
performing any part of the work under this contract, whether
or not changed as a result of the conditions, an equitable
adjustment shall be made under this clause . . .
."). To prevail on a Type I DSC claim, a
contractor must prove that: (1) "a reasonable contractor
reading the contract documents as a whole would interpret
them as making a representation as to the site
conditions"; (2) "the actual site conditions were
not reasonably foreseeable to the contractor, with the
information available to the particular contractor outside
the contract documents" (i.e., reasonable
foreseeability); (3) "the particular contractor in fact
relied on the contract representation"; and (4)
"the conditions differed materially from those
represented and . . . the contractor suffered damages as a
result." Int'l Tech. Corp. v. Winter, 523
F.3d 1341, 1348-49 (Fed. Cir. 2008). "Determining
whether a contract contained indications of a particular site
condition is a matter of contract interpretation" that
we review de novo. Id. at 1350 (internal quotation
marks and citation omitted).
Meridian Has Not Shown a Type I Differing Site Condition
Court of Federal Claims found in relevant part that
Meridian's interpretation of the Contract was not
reasonable, and that the existence of subsurface saturated
soil conditions was "reasonably foreseeable."
Meridian I, 122 Fed.Cl. at 409; see id. at
408-09. Specifically, the Court of Federal Claims first found
that the specification stated that "[w]ater in varying
quantities may be flowing in natural washes throughout the
length of the project, " and "[t]he work site may
be inundated because of [water] runoff, " id.
(quoting J.A. 1629, 1630), such that "a reasonable
contractor would interpret the Specification as representing
water as a site condition, " id at 409. As for
the second element of reasonable foreseeability, the Court of
Federal Claims found that the original drawings in the
Contract showed saturated soil and that the worksite was
located on a floodplain, and a reasonable contractor would
have conducted a site visit which would have alerted the
contractor to the subsurface saturated soil conditions, such
that "the actual conditions at the site were reasonably
foreseeable." Id. (citing J.A. 1664, 1725-26,
no error in the Court of Federals Claims' findings with
respect to the first two elements of a Type I DSC
claim. As noted by the Court of Federal Claims,
several instances in the Specification and accompanying
drawings indicate the potential presence of water and
saturated soil. See, e.g., J.A. 1664, 1725-26;
see also J.A. 1729, 3274-76, 3286, 3367-68. Boring
logs that accompanied the Contract also recorded sub-surface
conditions near the boring holes that were "silty clay,
with sand, black, wet, medium to high plasticity, [and]
soft." J.A. 1652; see J.A. 1653-63 (recording
similar descriptions in additional boring hole logs).
Further, the boring hole logs stated that "variations
may exist in the subsurface between boring locations, "
J.A. 1736, and that the logs, which recorded boring log data
from nearly two decades prior, "should not be construed
as . . . defining construction conditions, " J.A. 1651;
see, e.g., J.A. 1664 (dating boring excavations to
1989). Therefore, even though the Contract indicated
"hard unyielding material" found at parts of the
site, J.A. 1737, a "reasonable and prudent contractor
would not have understood the [C]ontract documents as
providing an affirmative indication of the subsurface
conditions" to be non-saturated at the site, H.B.
Mac, Inc. v. United States, 153 F.3d 1338, 1347 (Fed.
Cir. 1998); see id. at 1346-47 (finding no
representation as to site conditions where both parties
acknowledged the site contained highly variable subsurface
conditions and finding boring holes taken in proximity to
site but not directly in work zone that indicated certain
conditions could not be representative of entire site);
see also Renda Marine, 509 F.3d at 1378 (similar).
reasonable and prudent contractor would have foreseen the
saturated soil condition, based on the Contract documents and
the fact that the actual conditions at the site indicated
such conditions. See H.B. Mac, 153 F.3d at 1346
("It is well-settled that a contractor is charged with
knowledge of the conditions that a pre-bid site visit would
have revealed." (citation omitted)); Meridian
I, 122 Fed.Cl. at 409 (relying on testimony from the
Government's expert). The Government's expert stated
not only that "[s]oft saturated soils with challenging
groundwater conditions can be, and typically are, encountered
when excavating in an active flood channel, " J.A. 442,
but also that a large presence of saturated soil was located
"100 f[ee]t or so" away from where Meridian worked,
J.A. 583. Meridian's President, Mark Sutton, acknowledged
that he reviewed the boring logs and understood that certain
dewatering efforts would need to take place before
construction began. See, e.g., J.A. 259-62.
Moreover, Meridian presents nothing but unsworn attorney
argument to rebut the Government's testimony that a site
visit would have made a reasonable contractor aware of the
saturated soil conditions, see Reply Br. ...