______________________________________________ GRANTED: September 26, 1995 _____________________________________________ GSBCA 12151 P.J. DICK INCORPORATED, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. John T. Flynn and Thomas J. Kelleher, Jr., of Smith, Currie & Hancock, Atlanta, GA, counsel for Appellant. Sharon A. Roach, Gerald L. Schrader, Martin A. Hom, Robert C. Smith, and M. Leah Wright, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), BORWICK, and NEILL. BORWICK, Board Judge. This appeal involves a contract for the renovation of certain floors of the United States Courthouse and Post Office, Pittsburgh, Pennsylvania, a thirteen-story building. The contractor and appellant is P.J. Dick Incorporated (P.J. Dick). The respondent is the General Services Administration (GSA). GSA has made a claim for the cost of electricity GSA had paid for, and which P.J. Dick allegedly consumed, during the two and one- half years P.J. Dick was on the job site. P.J. Dick argues that the contract required GSA to bear its electricity expense, and that any ambiguity in that regard was clarified at a pre-bid conference and in a pre-bid telephone call between the contracting officer and a P.J. Dick employee. P.J. Dick also maintains that GSA's conduct for two and one-half years of paying for P.J. Dick's electricity consumption is Government conduct which is determinative in construing the obligations under the contract. We agree with P.J. Dick and grant the appeal. Findings of Fact The contract contained the standard clause FAR 52.236-14, AVAILABILITY AND USE OF UTILITY SERVICES (APRIL 1984): (a) The Government shall make all reasonably required amounts of utilities available to the Contractor from existing outlets and supplies, as specified in the contract. Unless otherwise provided in the contract, the amount of each utility service consumed shall be charged to or paid for by the Contractor at prevailing rates charged to the Government or, where the utility is produced by the Government, at reasonable rates determined by the Contracting Officer. The contractor shall carefully conserve any utilities furnished without charge. (b) The Contractor, at its expense and in a workmanlike manner satisfactory to the Contracting Officer, shall install and maintain all necessary temporary connections and distribution lines, and all meters required to measure the amount of each utility used for the purpose of determining charges. Before final acceptance of the work by the Government, the Contractor shall remove all the temporary connections, distribution lines, meters and associated paraphernalia. Appeal File, GSBCA 11676, Exhibit 1, Construction Contract Clauses (Fixed Price) at 14, 33. The contract provided in Section 01505, Temporary Facilities: 2.01 TEMPORARY UTILITY SERVICES A. The types of services required include, but not by way of limitation water, sewerage, electrical power and telephones. . . . B. Water: Premises are supplied with water and electrical services which may be used in this work, subject to regulations of the government agency control [sic]. Contractor shall make his own arrangements for such services. Where non-potable water is used, mark each outlet with health hazard warning signs. . . . . 2.02 TEMPORARY CONSTRUCTION FACILITIES: . . . . D. Electrical Facilities: Furnish and install all temporary electrical facilities, including lamps, required for construction and safety opera- tions. . . . All costs for materials installation for temporary electrical facilities shall be at the expense of the Contractor. Appeal File, GSBCA 11676, Exhibit 1 at 01505-2 to 3. The contract further provided in section 16010, Electrical Basic Requirements: 1.2.7 Furnish and install all temporary electrical facilities including lamps, required for construction and safety operations. . . . All cost for materials and installation for temporary electrical facilities and energy for their operation shall be at the expense of the Contractor. Appeal File, GSBCA 11676, Exhibit 1 at 16010-3. The contract contained the following provision regarding oral statements at pre-bid conferences: No oral statement made by a Government representative during the pre-bid conference, nor any written record of such oral statements as may be made and subsequently furnished to the bidder, will be deemed to have the effect of adding to, modifying, or otherwise varying from the written provisions of the invitation for bids. . . . In the event the discussion or questions raised during the pre-bid conference indicate a need to modify the invitation for bids, an amendment to the solicitation will be issued in writing[.] Appeal File, GSBCA 11676, Exhibit 1, 00120 - SUPPLEMENTARY INSTRUCTIONS TO BIDDERS, at 4 (unnumbered page), 4.01(C.) The contract required P.J. Dick to designate an energy conservation officer, who was responsible for developing a program for minimizing energy use on the site. Appeal File, GSBCA 11676, Exhibit 1 at 01205-3, 1.03(C). Upon reviewing these provisions in preparing P.J. Dick's bid for the project, P.J. Dick's bid estimator reached two different conclusions. From the standard form clause, he concluded that unless the contract stated otherwise, P.J. Dick was responsible for the cost of utilities consumed in performing the contract. Transcript at 1227-28.[foot #] 1 P.J. Dick's bid estimator then reviewed the contract provision requiring P.J. ----------- FOOTNOTE BEGINS --------- [foot #] 1 Transcript citations are to the hearing session of May, 1993. ----------- FOOTNOTE ENDS ----------- Dick to appoint an energy conservation officer, and concluded from that provision that perhaps P.J. Dick would not be responsible for the electrical bill. Id. at 1229. The bid estimator next reviewed paragraph 2.01(B), Section 01505 and interpreted that paragraph as meaning GSA would pay for P.J. Dick's electricity use. Id. at 1230. His interpretation was bolstered by his reading of paragraph 2.02(D) of that section as requiring P.J. Dick to pay for the costs of facilities and installation for temporary electricity, but not services. He saw an inconsistency between that paragraph and paragraph 1.2.7 of Section 16010, which required P.J. Dick to pay for the energy used in the operation of temporary electrical facilities. Id. at 1232-34. GSA held a pre-bid conference, and afterwards prepared and distributed to those who had attended GSA's answers to general questions and comments. Respondent's Hearing Exhibit 9. That document stated: Track level will have areas designated for building manager, A/E firm and contractor offices. GSA supplies utilities except for phones. Id. Before submitting a bid, the P.J. Dick bid estimator requested an employee to clarify with GSA who would pay the costs for the temporary electricity on the project. Transcript at 1238. On or about July 21, 1988, the employee called and reached the contracting officer. Id. at 1256. The employee testified that the contracting officer advised him that GSA would pay the costs of the electricity except telephones. Id. That testimony is supported by a hand-written note of the conversation prepared by P.J. Dick's employee contemporaneously with the telephone call. Appellant's Supplemental Appeal File, GSBCA 12151, Exhibit 3. The note reads: "GSA--All utility fees by GSA - We [P.J. Dick] tap in-only thing we are responsible for is phones." Id. The contracting officer does not recall the details of that phone call. Id. at 917. We find as fact, based on the evidence above, that the contracting officer advised P.J. Dick that GSA would bear the costs of the temporary utilities on the project with the exception of the phones. As a result of that phone call, P.J. Dick reduced its bid by the $33,750 it had estimated for utility costs for the project. Appellant's Supplemental Appeal File, GSBCA 12151, Exhibits 1, 2. For two and one-half years, GSA paid all electricity that P.J. Dick used on a monthly basis. Appellant's Hearing Exhibit 36; Appeal File, GSBCA 11681, Exhibit 400. GSA's Office of Finance in Fort Worth Texas pays the utility bills charged by the power company. That office sends the electrical hour usage to an energy management specialist in Philadelphia who forwards the information on power usage to the building manager, who monitors usage. Transcript at 1091-92. The successor contracting officer testified that the building manager thought GSA was paying for the utility. Id. at 1093. The first contracting officer for this project testified that he did not monitor electricity usage or who was paying for it, thinking that was the responsibility of the building manager. Transcript at 922-23. It was not until May of 1991 that GSA first discussed P.J. Dick's alleged liability for utilities. On October 14, 1992, the successor contracting officer issued his final decision which claimed that P.J. Dick owed the Government for the electricity it consumed on the project. Id. at 1070. The contracting officer wrote: The Government formally establishes its claim . . . in the amount of $395,354.97 for the amount of unpaid utilities under this contract. As required by FAR 52.236-14 AVAILABILITY AND USE OF UTILITY SERVICES (APR 1984), P.J. Dick was to have paid the Government for each utility consumed under the above referenced con- tract. This was not done at any time during the con- tract. A review of GSA's utility bills during the life of this contract reveal [sic] that monies are owed on the electric utilities that were made available to P.J. Dick and its subcontractors. The amount of the claim was calculated by taking an average of the months prior to P.J. Dick beginning physical work at the site, and taking the difference between this average figure and the actual amount paid by GSA for each month that P.J. Dick was on site. Contracting Officer's Decision (Oct. 14, 1992), Board Files. At the hearing, the parties stipulated the amount claimed by GSA; that amount is $286,591.48. Transcript at 1071.[foot #] 2 Discussion Respondent argues that the contract is unambiguous in requiring P.J. Dick to bear the costs of electricity. Respon- dent's Post-Hearing Brief at 9. Respondent also argues that, even assuming the statements to have been made at the pre-bid conference and in the contracting officer's subsequent telephone conversation with P.J. Dick's employee, oral statements cannot vary the terms of a written contract. ----------- FOOTNOTE BEGINS --------- [foot #] 2 In its post-hearing brief, GSA reduced the amount claimed to $182,727.62 Respondent's Post-Hearing Brief at 15-16. ----------- FOOTNOTE ENDS ----------- This appeal presents a pure issue of contract interpretation--did the Government in this contract agree to bear the cost of temporary electricity used by P.J. Dick on the job? We first determine whether the intent can be discerned within the four corners of the contract as written. Hol-Gar Manufacturing Corp. v. United States, 351 F.2d 972, 976 (Cl. Ct. 1965). We conclude that the meaning cannot be determined solely from the language, because the contract is ambiguous as to who pays for the electricity. The standard FAR clause--52.236-14--is of no assistance in determining who pays for the electricity, because the clause reads: "Unless otherwise provided in the contract, the amount of each utility service consumed shall be charged to or paid for by the Contractor at prevailing rates charged to the Government." Under that clause, P.J. Dick's responsibility for utilities is conditional upon the absence of a clause in any other part of the contract making GSA responsible for utilities. Did the contract "otherwise provide" that GSA would bear the cost of utilities? There is ambiguity on that score. Paragraph 2.01B of section 01505 coupled with paragraph 2.02D of that same section suggests that P.J. Dick could use the electricity services, and pay only for the installation of the facilities. Paragraph 1.2.7 of Section 16010, however, provides that P.J. Dick shall be responsible for both the facilities for temporary electricity and the energy used for their operation. In discerning the meaning of an ambiguous contract, we may consider external factors, such as prior negotiations between the parties and the conduct of the parties preceding the advent of the dispute. Alvin Ltd. v. United States Postal Service, 816 F.2d 1562, 1565 (Fed. Cir. 1987); Patrician Equities Corp., GSBCA 8393, 90-2 BCA 22,880, at 114,915. Here, P.J. Dick sought clarification of the ambiguity as to which party was to bear the cost of providing temporary electricity. P.J. Dick was twice advised by GSA, once in writing and once orally, that GSA would bear the cost.[foot #] 3 GSA's position before contract performance was consistent with its conduct for the two and one-half years of contract performance. In construing an ambiguous contract, respondent's actions in paying for supplies or services under a contract is conduct which evidences respondent's assumption of contractual responsibility for furnishing those supplies or services. Equitable Life Assurance Society of the United States, GSBCA ----------- FOOTNOTE BEGINS --------- [foot #] 3 The Government is correct that oral statements by Government officials are insufficient to vary the terms of an unambiguous contract. The Posey Co., ASBCA 40906, 91-1 BCA ______________ 23,552, at 118,092 (1990). The contract here, however, was ambiguous as to who would bear the electricity costs; the Government's statements, both oral and written, merely interpreted the ambiguous language. ----------- FOOTNOTE ENDS ----------- 8909, 90-3 BCA 23,130 at 116,130, (GSA's actions in paying for replacement of rugs evidence that contractor had no contractual responsibility for replacing rugs); John Jennings, Jr., GSBCA 7520, 87-2 BCA 19,824, at 100,303 (lessor not responsible for paying for feedwater chemicals, when GSA had paid for those chemicals during eight years of the lease). In this matter, for the two and one-half years that P.J. Dick was on the job, GSA did not seek to collect costs of electricity from P.J. Dick or otherwise enforce any contractual right to be reimbursed for the costs of electricity that GSA had paid for and that P.J. Dick had consumed. The FAR clause 52.236- 14 contemplates that the Government would bill a contractor for utilities consumed: "the amount of each utility service consumed shall be charged to or paid for by the Contractor at prevailing rates charged to the Government." As in Equitable Life Assurance and John Jennings, Jr., the past conduct is given great weight. See 90-3 BCA at 116,130; 87-2 BCA at 100,303. GSA characterizes as unintentional the contracting officer's failure to collect from P.J. Dick the cost of the electricity it consumed during the two and one-half years that P.J. Dick was on the job site. Respondent's Post-Hearing Brief at 15. That argument is unconvincing given the magnitude of P.J. Dick's electricity consumption and the consistency of GSA's actions in paying for P.J. Dick's electricity with GSA's pre-performance statements that it would bear the costs of that consumption. Decision The appeal is GRANTED. ________________________________ ANTHONY S. BORWICK Board Judge We concur: _____________________________ _________________________________ STEPHEN M. DANIELS EDWIN B. NEILL Board Judge Board Judge