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State Highway Administration v. David A. Bramble, Inc., No. 8, September Term, 1998

[Contracts - Interpretation - Building of overpass interchange for intersecting state highways. Held: State Board of Contract Appeals made no error of law in determining the unit price bid item applicable to constructing temporary roads.]

Circuit Court for Kent County Case #3325-L

IN THE COURT OF APPEALS OF MARYLAND No. 8 September Term, 1998 _________________________________________

STATE HIGHWAY ADMINISTRATION

v.

DAVID A. BRAMBLE, INC.

_________________________________________ Bell, C.J. Eldridge Rodowsky Chasanow Raker Wilner Cathell, JJ. _________________________________________ Opinion by Rodowsky, J. _________________________________________ Filed: September 17, 1998

This case is a contract interpretation dispute between the Maryland State Highway Administration (SHA) and David A. Bramble, Inc. (Bramble). Under Contract No. Q627501-270 (the Contract), Bramble was to construct an interchange at the then on-grade junction of U.S. Route 301 and Maryland Route 213 in Kent County so that the latter road would overpass the former. At issue is the price that SHA must pay Bramble for the bituminous concrete, i.e., asphalt, the latter used to pave temporary public roads for use during the period of construction. approximately $203,000. After SHA rejected Bramble's interpretation, the latter filed an appeal to the Maryland State Board of Contract Appeals (the Board). The Board decided in SHA's favor, for two reasons. First, it concluded that Bramble's interpretation of the Contract was unreasonable and that the Contract unambiguously supported SHA's position. Second, the Board determined that, even if the Contract were ambiguous, the "patent ambiguity rule" precluded Bramble's remedy.1 On judicial review the Circuit Court for Kent County reversed, and SHA appealed to the Court of Special Appeals. In an unreported opinion, that court affirmed, determining that The swing between the two interpretations is

In its opinion in the instant matter the Board described the patent ambiguity rule to be that, when a contractor is presented with an obvious contradiction or discrepancy in the contract documents, the contractor "is required to inquire about the discrepancy prior to bid or risk being awarded the contract and held to the State's interpretation." Citing a number of its own decisions, as well as Avedon Corp. v. United States, 15 Cl. Ct. 771 (1988), the Board said that "[i]f the contractor either knew or should have known of a patent ambiguity, a failure to seek clarification prior to bidding bars recovery."

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the Contract was ambiguous and that the patent ambiguity rule described by the Board was inapplicable. SHA petitioned for certiorari which we granted. The petition raises two questions: "(1) Did [the Board] correctly decide that the Contract unambiguously requires payment for the materials for construction of the temporary roadways at the prices prescribed for the same materials used to construct the permanent roadways? "(2) Did [the Board] correctly decide that the patent ambiguity doctrine precludes Bramble from taking advantage of its interpretation of the Contract ...?" For the reasons set forth herein, we shall reverse the Court of Special Appeals on the first issue and direct affirmance of the Board's decision.2 Bids were solicited for the Contract in 1992. Bramble was awarded the Contract after submitting the lowest bid of $4,889,479.92. The scope of the work included construction of both temporary and permanent roads. Temporary and detour roads were to carry intersection traffic until the new interchange was completed. The Contract consists of 133 drawings or plans, SHA's "Standard Specifications for Construction & Materials" (Jan. 1982), colloquially known as the "Red Book," (Std. Specs), and the completed, executed invitation for bids (the Proposal). The Proposal, comprised of nearly 500 pages, includes special provisions (Spl. Provs.), and a bid schedule that lists 221 separate items of work, of materials, or of both.

Because of our resolution of the first issue, it is unnecessary for us to address the second issue presented by SHA, and we express no opinion on it.

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For the purpose of obtaining bids, the Proposal identifies each of the items by a number, a brief description of the item, and whether the method of payment for an item will be a lump sum or based upon a quantity actually used. The Contract's Proposal furnished to the bidders contained SHA's estimates of the quantities to be used in performing the Contract for those items that were not to be bid at a lump sum. These SHA estimates of quantity are not a limitation on payment after the work has been done.3 In submitting its bid a contractor inserts in the prepared bid schedule a lump sum or unit price, as requested, and extends the unit prices by the estimated quantities.4 In the instant matter Bramble contends that SHA has agreed to pay for bituminous concrete used in furnishing temporary roads and detours at $100 per ton, pursuant to bid item 1005, whereas SHA contends, and the Board held, that the unit price for bituminous concrete used in the base of temporary roads is $27.70 per ton, per bid item 5004, and the price for bituminous concrete used for the final surface of a temporary road is $32.75 per ton, per bid

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Standard Specs GP-2.03, "Interpretation of Quantities in Bid Schedule," reads: "The quantities appearing in the prepared bid schedule are approximate only and are prepared for the canvassing of bids. Payment to the Contractor will be made only for the actual quantities of work performed or materials furnished in accordance with the contract. It is understood that the scheduled quantities of work to be done and materials to be furnished may each be increased, diminished, or omitted without in any way invalidating prices bid, except as hereinafter provided."

Bramble points out that, once the Contract is awarded, the items commonly referred to as "bid items" should be more properly referred to as "Contract pay items." We shall use the terminology, "bid items," which is employed by both parties in their briefs.

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item 5003. In the bid schedule as completed by Bramble and accepted by SHA, the bid items involved immediately in the dispute, and associated items, appear as set forth below. Item Approximate Number Quantity 1003 1004 Lump Sum 50 Unit Price

Description of Item Maintenance of Traffic Tons of Graded Aggregate For Subbase For Maintenance of Traffic Tons of Bituminous Concrete For Maintenance of Traffic

Amounts $75,000

$15

$750

1005

50

$100

$ 5,000

**** 5001 44,800 Square Yards of 6 Inch Base Course Using Graded Aggregate $ 5.50 $246,400

**** 5003 5004 3,600 12,100 Tons of Bituminous Concrete Surface, SC Final Tons of Bituminous Concrete Base $32.75 $27.70 $117,900 $335,170

Applying the ordinary rules of contract interpretation, we must construe this voluminous Contract as a whole. Gordon v. Gordon, 342 Md. 294, 313, 675 A.2d 540, 550 (1996). As we "walk" through the Contract we shall present the specific contentions of the parties concerning various provisions. Initially, we note from the face of the bid schedule that SHA has not expressly stated that bid items 5003 and 5004 apply to both permanent and temporary roads. On the other hand, Bramble's reliance on bid item 1005 means that he seeks to be paid at the same $100

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per ton price both for paving base and paving surface on temporary roads, whereas he agrees that on permanent roads the unit prices are both considerably lower than $100/ton and differ from one another. "Maintenance of Traffic" is addressed in

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Maryland Law