Friday, November 10, 2017

Calendar Days vs Work Days

Family Entertainment Services (FEI) was awarded a grounds maintenance contract for nearly 4,000 acres at Fort Campbell, Kentucky. One of the contract line items required the contractor to mow grass on a 21 day schedule. From the beginning of the contract, FEI fell behind in the mowing schedule and despite several cure notices from the Army, was unable to catch up. Ultimately, the Army deducted $82 thousand from the contract price because FEI did not meet the terms of the contract.

FEI appealed to the ASBCA on the basis that the term "day" should be defined as a work day instead, as the Army contends, a calendar day. On this basis, a 21 day schedule would equate to approximately 27 to 29 calendar days (depending upon how weekends fell) which means the Army withheld too much money. FEI asked the ASBCA to clear up the contract ambiguity.

The ASBCA has published guidance regarding ambiguities in a contract.
In resolving disputes involving contract interpretation, we begin by examining the plain language of the contract. We construe a contract "to effectuate its spirit and purpose giving reasonable meaning to all parts of the contract. the threshold question here is whether the plain language of the contract "supports only one reading or supports more than one reading and is ambiguous, as held by the Board. Ambiguity exists when contract language can reasonably be interpreted in more than one way.
Parties having a differing opinion of contract terms in not enough to show ambiguity. Rather, both interpretations must fall within a 'zone of reasonableness.
In this case, the ASBCA found that there is only one reasonable way to interpret the contract. FEI's opinion that "day" should mean "work day" is not a reasonable interpretation of the contract. The contract incorporates FAR 2.101 which defines "day" as a calendar day (unless otherwise specified in the contract). The Board found no exceptions in the contract that would lend credence to a different interpretation so denied the appeal.

The full decision can be found here.

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