TEG-Paradigm Environmental, Inc. v. United States

TEG-Paradigm Environmental, Inc. (TEG) (plaintiff) entered into a fixed-price contract with the Department of Housing and Urban Development (HUD) (defendant) to perform asbestos abatement work prior to the demolition of the Geneva Towers housing complex. The contract specifications stated that asbestos-containing materials must be cleaned of all visible debris and residue. The asbestos remediation industry standard was to assume that all debris and residue contained asbestos, including debris and residue found in cracks and pores. During the contract negotiation process, HUD required TEG to submit a work plan demonstrating its ability to perform the contract as specified. After TEG’s work plan was accepted, the work plan was attached to, but not incorporated into, the executed contract. During performance of the contract, a stop-work order was issued following disputes between TEG and HUD regarding whether TEG’s work plan or the contract specifications controlled TEG’s performance standards. Work resumed only after TEG and HUD modified the contract specifications to bring them more in line with TEG’s work plan. After completing all contracted work, TEG submitted a claim for equitable adjustment to HUD’s contracting officer (CO), asserting that it was entitled to additional compensation because HUD forced TEG to conduct excessive cleaning and debris removal. HUD’s CO denied TEG’s claim. TEG then sued HUD under the Contracts Disputes Act in the Court of Federal Claims. HUD moved for summary judgment, which was granted. TEG appealed to the Federal Circuit, arguing that (1) the contract specifications only required that the surface of asbestos-containing materials be cleaned, not the cracks and pores; and (2) TEG’s work plan was integrated into the contract and controlled TEG’s performance requirements.