Ambiguities: Latent and Patent Hal Moeller, Contract Administrator - - PowerPoint PPT Presentation

Ambiguities: Latent and Patent

Hal Moeller, Contract Administrator – UMDNJ

TPAC – May 18, 2011

Ambiguities

• Discrepancies in specifications
• Omissions
• Significant conflicts within the

specifications

Ambiguities = Unexpected Costs

• Resolution of ambiguities adds costs to

the performance of the contract.

• Correcting the discrepancy adds to the

cost of the contract.

States Roofing v. Navy

• Ambiguity involved language in the

specifications for roof repair on a large warehouse on a Navy base.

• Firm fixed price contract awarded in a

competitive process following an on-site pre-bid conference

Roof Repair

• Repair work involved eleven cells, each

with a penthouse on top of the main roof of the building.

• Each penthouse has a vertical element

called parapet walls.

Roof Repair

• Contract called for each parapet wall to be

waterproofed.

• Dispute centered around the material used

for the waterproofing.

Contract Specifications

• Waterproofing on the parapet walls was to

include 3 coats, layers or plies of waterproofing material.

• States developed its bid and interpreted the

contract to permit applying waterproofing paint.

• The Navy, once the contract was underway,

interpreted and required use of 3-ply felt flashing.

Contract Performance

• States complied with Navy’s request and

finished the contract using flashing, not paint, and sought an equitable adjustment afterwards

Patent Ambiguity

• Navy argued the ambiguity was patent and

States had a duty to inquire whether its intended use of waterproofing paint was acceptable.

• Patent ambiguity is one that is gross,
• bvious, glaring so that contractor has a

duty to inquire about it upon learning of the uncertainty.

Latent Ambiguity

• An ambiguity not so glaring as to be patent

is considered latent.

• The rule of contra proferentem applies –

Ambiguity in contracts drafted by the government will be construed against the drafter.

Ethical Imperative

WPC Enterprises v U.S. Ct. Cl. 1963

If some substantive provision of a government drawn contract is fairly susceptible of a certain construction and the contractor actually and reasonably so construes it, that is the interpretation which will be adopted, unless the parties’ intention is otherwise affirmatively

• revealed. If the government chafes under the

continued application of this check, it can obtain a looser rein by a more meticulous writing of its contracts and especially of the specifications.

Ethical Imperative

• Bidders must not be encouraged to submit low

bids for work that they know to be ambiguous in the expectation that they will seek change orders and be granted increases - - to be rewarded for their duplicity.

• If the ambiguity is patently obvious to the bidder,

the bidder has a duty to inquire and if it does not inquire, the contractor is left with the result.