The COFC denied the contractor’s differing site condition claim. The contractor argued on appeal that the COFC violated the parol evidence rule by considering an internal government memo. But the Federal Circuit affirmed, holding the parol evidence rule did not bar consideration of the memo.
Nova Group/Tutor-Saliba v. United States, Fed. Cir., 2022-1740
- Claim – The contractor said that while installing piles for a new pier, it encountered unexpected soil conditions. The government modified the contract to adjust the price for piles. The modification cited the FAR’s differing site condition clause. But the contractor was not satisfied. The contractor submitted a $10 million claim for differing site conditions. The government denied the claim.
- COFC Proceedings –The contractor filed suit in the COFC. The government sought to admit a memo it prepared as part of the pile modification. The memo stated that while the agency agreed to an adjustment of the piles, it did not believe there was a differing site condition. The memo undermined the contractor’s claim that the government failed to disclose a differing condition. The contractor opposed the admission of the memo. But the COFC admitted the memo and ruled against the contractor. The contractor appealed to the Federal Circuit.
- Parol Evidence Rule – The contractor argued on appeal that admission of the memo violated the parol evidence rule. The court disagreed. The parol evidence rule prohibits the use of external evidence to add or modify the terms of a written agreement. Here, however, the government’s memo did not modify an agreement. The government had agreed to the modification to pay for the piles. Yet the memo did not alter that agreement; it merely explained why the government agreed to the modification. And the memo made clear: the government had agreed to settle because it had specified pile elevations—not because it thought the contractor had encountered a differing condition.
- Differing Site Condition Clause – The contractor argued the modification cited the FAR’s differing site condition clause, which indicated the government had agreed there was a differing site condition. But the court found the references to a differing site condition were “recitals of fact.” They were preliminary statements explaining the background of the transaction, but they did not create promises or obligations that bound the government.
The contractor is represented by G. Scott Walters, Robert O’Neal Fleming, Jr., and Sarah Carpenter of Smith Currie & Hancock LLP. The government is represented by Andrew James Hunter, Brian M. Boynton, Steven John Gillingham, and Patricia M. McCarthy
