State Highway Administration v. David A. Bramble, Inc.

RODOWSKY, Judge. This case is a contract interpretation dispute between the Maryland State Highway Administration (SHA) and David A. Bramble, Inc. (Bramble). Under Contract No. Q627-501-270 (the Contract), Bramble was to construct an interchange at the then on-grade junction of U.S. Route 801 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.

The swing between the two interpretations is 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 ²²⁸ 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 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. ²²⁹ 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 (SpLProvs.), and a bid schedule that lists 221 separate items of work, of materials, or of both.

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 ²³⁰ price for bituminous concrete used for the final surface of a temporary road is $32.75 per ton, per bid 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 Number Approximate Quantity Description of Item Unit Price Amounts 1003 Lump Sum Maintenance of Traffic $ 75,000 1004 50 Tons of Graded Aggregate For Subbase For Maintenance of Traffic $15 $ 750 1005 50 Tons of Bituminous Concrete For Maintenance of Traffic $100 $ 5,000 5001 44,800 Square Yards of 6 Inch Base Course Using Graded Aggregate $ 5.50 $246,400 5003 3,600 Tons of Bituminous Concrete $32.75 $117,900 Surface, SC Final 5004 12,100 Tons of Bituminous Concrete Base $27.70 $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 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 § 814 of the Red Book. 5 “This work pertains to the maintenance of traffic, both ²³¹ vehicular and pedestrian, on any facility affected by the work of the Contract.” Std. Spec. 814.01. Maintenance of Traffic includes the traffic control plan, Std. Spec. 814.02, the traffic manager, Std.

Spec. 814.03, temporary raised pavement markers, Std. Spec. 814.04, temporary concrete barriers, Std. Spec. 814.05, traffic barrier W beam, Std. Spec. 814.06, tubular markers, Std.

Spec. 814.07, arrow boards, Std. Spec. 814.08, traffic control signs through construction areas, Std. Spec. 814.09, temporary impact attenuator (hydrocell), Std. Spec. 814.10, temporary impact attenuators, sand containers, Std.

Spec. 814.11, temporary painted stripe marking, Std. Spec. 814.12, temporary pavement tape marking, Std. Spec. 814.13, and watchperson service, Std. Spec. 814.14.

Common experience informs us that the types of labor and materials addressed in Std. Spec. 814 are not limited to temporary and detour roads. Indeed, whether the described services, materials or devices are employed, at various stages of the traffic control plan, on the old road, on the temporary road, or on the new road seems to be immaterial from a “Maintenance of Traffic” standpoint. The circuit court and the Court of Special Appeals based their decisions on the rule of contract interpretation under which an ambiguous contract is construed against the party who drafted the contract.

In this regard their analysis focused upon, and ended with, Std. Spec. 814.01.05. The context in which that standard specification appears is set forth in the margin. 6 Standard Spec. 814.01.05, in relevant part, reads (paragraph numbering added): ²³² ¶ 1 “All work incident to maintenance of traffic, inclusive of traffic managers and flaggers; the relocating, maintaining and removal of existing traffic signs and other traffic devices; implementation of a Traffic Control Plan will be paid for at the Contract lump sum price for Maintenance of Traffic. This price shall include all materials, tools, labor and work of any kind incident to this item, except when otherwise specifically set up in the Proposal as a Contract pay item. ¶ 2 “If additional items for Maintenance of Traffic are included in the Contract, the basis of payment will be in accordance with the pertinent specification. ¶ 3 “If an item for Maintenance of Traffic does not appear in the Plans and Special Provisions, refer to the section on Maintenance of Work During Construction as outlined in the General Provisions for basis of payment. ¶ 4 “The material necessary in the construction of temporary or detour roads, the surfacing of temporary roadways, turnouts, etc. will not be included in the item Maintenance of Traffic but will be paid for at the respective unit ²³³ price for excavation and the furnishing and placing of such materials as may be necessary for the construction of such temporary roads.

Surfacing and removal of detour roads as shown on the Plans or called for in the Special Provisions will be measured and paid for at the unit price for Class I Excavation.” Bramble’s position is that Maintenance of Traffic is bid item 1003 so that bid item 1005 is an additional item for Maintenance of Traffic. Thus, argues Bramble, a bidder is directed by ¶ 2 of Std. Spec. 814.01.05 to determine the “pertinent specification,” and a bidder need not be concerned with reading ¶¶ 3 and 4. In the next step of its argument Bramble submits that the “pertinent specification” referred to in ¶ 2 is Spl.

Traffic Prov. § 814, which we shall address, infra. The Board gave two reasons for rejecting Bramble’s claim. First, it concluded that Std. Spec. 814.01.05, ¶ 4, was “controlling and is not modified by the preceding second paragraph of that section as advanced by [Bramble].” Second, the Board considered Spl.

Traffic Prov. § 814 and construed it differently than Bramble, as we discuss infra. The purpose of ¶ 4 of Std. Spec. 814.01.05 is to make plain that the paving of temporary roads is not part of “Maintenance of Traffic” and that it will be paid for at the unit prices for the materials necessary for the construction of the temporary roads, which the Board concluded were the prices in bid items 5003 and 5004. The information supplied by ¶ 4 is not only presented in the negative, that is, where the method of payment for paving temporary roads will not be found, but also in the affirmative, that is, where it will be found.

The circuit court and the Court of Special Appeals concluded that the Board erred in that interpretation. By looking only at the negative aspect of the fourth paragraph, the Court of Special Appeals focused on the words, “the item,” preceding “Maintenance of Traffic,” and construed the phrase to refer in this Contract exclusively to bid item 1003, “Maintenance of Traffic.” Reasoning that the Contract thereby was ambiguous as to “whether the price for temporary roads should be ²³⁴ derived from item 1005, [‘tons of bituminous concrete for maintenance of traffic’] or from some other item,” the intermediate appellate court, as did the circuit court, construed the ambiguity against SHA. That terminated their analysis. In this latter aspect, those courts erred.

Assuming that ¶ 4 of Std. Spec. 814.01.05 is not in itself controlling, contrary to the Board’s conclusion, then “additional items for Maintenance of Traffic are included in the Contract,” Std. Spec. 814.01.05, ¶ 2, and one must then determine the “pertinent specification,” per ¶ 2. Bramble contends that Spl.

Traffic Prov. § 814 is the “pertinent specification.” It is found in seventy some pages of the executed Proposal that are headed “Traffic” and that relate to traffic signs, signals, barriers, and lanes during construction. Spl. Traffic Prov. § 814 has two parts. One part is headed as set forth below: “BITUMINOUS CONCRETE FOR MAINTENANCE OF TRAFFIC GRADED AGGREGATE FOR SUBBASE FOR MAINTENANCE OF TRAFFIC.” The other part deals with “CONCRETE BARRIERS.” The bituminous concrete part reads as follows: “Description: “The work covered under this Special Provision shall consist of furnishing and placement of bituminous concrete pavements and graded aggregate for subbase in temporary locations for maintenance of traffic as directed by the Engineer. “Materials: “Construction Requirements: “The Engineer shall indicate the lengths, widths, and depths, and required number of layers of which materials to be used. “Method of Measurement: ²³⁵ “Basis of Payment: “The contract unit price bid per ton for the item ‘Bituminous Concrete for Maintenance of Traffic’ and ‘Graded Aggregate for Subbase for Maintenance of Traffic,’ complete in place, shall include the cost of furnishing, hauling and placing all materials, for all labor, tools, and equipment necessary to complete the item.” The question of interpretation presented by this case involves the description of the work covered by the above.

Bramble contends that furnishing and placing bituminous concrete “in temporary locations for maintenance of traffic as directed by the Engineer” refers to the initial construction of temporary roads. The Board, however, found that “the underlying Contract specification language in dispute ... means that temporary bituminous concrete necessary for patching, pothole repair and miscellaneous repair tie-ins, as directed in the field by the Engineer during the course of