The interpretation of government contracts begins with the plain language of the contract, with meaning assigned to all clauses within the context of the contract as a whole. When contract language is susceptible to more than one interpretation falling within the zone of reasonableness, an ambiguity exists that may be resolved by considering extrinsic evidence. If the ambiguity is still not resolved, the doctrine of contra proferentum is applied for interpretation. Under the doctrine, the ambiguity is resolved in favor of the non-drafting party, which is typically the contractor. However, for contra proferentum to apply, the ambiguity must be latent rather than a patent ambiguity. That is, the ambiguity must not be so glaring or obvious as to place upon the non-drafting party the duty to inquire before contract formation. Under this exception to the contra proferentum doctrine, if the non-drafting party fails to timely inquire about a patent ambiguity, the ambiguity is resolved against it. Furthermore, contractors seeking application of contra proferentum must show that they relied on their reasonable interpretation of the ambiguity in developing their offer.

Government contracts often include first article testing (FAT) requirements to ensure the contractor can supply a product that meets the contract requirements for acceptance. Such contracts incorporate the clause at FAR 52.209-3 (Contractor Testing) or FAR 52.209-4 (Government Testing) to impose FAT requirements on the contractor. Both clauses allow the government to waive the FAT requirements where the contractor has previously furnished supplies of identical or similar items that the government has accepted. An improper waiver of the FAT requirements that is inconsistent with the relevant FAR clause may be grounds for protest. In such protests, it is the procuring agency’s burden to establish that its decision to waive the FAT requirements was reasonable and in accordance with applicable procurement law and regulation. In addition to prior successful performance, if the agency can demonstrate that the contractor in question previously received FAT approval for the same items being procured, the Government Accountability Office (GAO) will typically not sustain the protest challenging the FAT waiver, unless the protester can present countervailing evidence that the item being supplied will not meet material solicitation requirements.

Past performance evaluations play an integral role in determining the capability of competing offerors to perform. Solicitations describe the government’s intended approach for evaluating past performance, and an offeror’s past performance is typically evaluated by reviewing performance histories on individual procurements. As long as the evaluations are consistent with the solicitation and all proposals are evaluated on an equal basis, it is within the procuring agency’s discretion to determine the scope of the offerors’ performance histories to be considered. There are situations where a contractor contests a recently assigned past performance rating by disputing the government’s interpretation of the facts relating to its performance. However, even when a past performance rating is being disputed, a procuring agency may base its evaluation upon a reasonable perception of inadequate past performance. The contractor’s efforts to dispute the past performance rating, or its continued disagreement with the agency that assigned the rating, may be disregarded by the procuring agency when conducting the past performance evaluation.

In B-423103, a bid protest decision issued on January 15, 2025, the Government Accountability Office (GAO) found the procuring agency’s past performance evaluation fair and reasonable despite the protester’s assertion that a past performance rating considered during the evaluation was a matter of an unresolved and ongoing dispute. The Defense Logistics Agency (DLA) issued a request for quotation (RFQ) to acquire 85 commercial piston seals for the Apache and Black Hawk helicopters. The piston seals were deemed critical application items, with the awardee and the protester designated as the only approved sources. The awardee’s quotation was evaluated as acceptable. Meanwhile, the contracting officer (CO) noted the protester’s recent performance under a contract for the same items as having quality issues, following issuance of a stop-work order for supplying non-conforming material. Based on this evaluation, the contract was awarded to the awardee, and the protester filed its protest.

The government has an implied duty to disclose information during the solicitation phase that is vital to the development of pricing or performance under the contract. If the government fails to disclose such vital information, it may be held liable for breach of contract under the superior knowledge doctrine. To be successful in such claims, the contractor must present specific evidence that it: (1) undertook performance without vital knowledge of a fact that affects performance costs or duration; (2) the government was aware that the contractor had no knowledge of and had no reason to obtain such information; (3) any provided specification either misled the contractor or did not put it on notice to inquire; and (4) the government failed to provide the relevant information. If the contractor produces evidence that satisfies these four conditions, the government is deemed to be in breach of contract for nondisclosure of vital information, and the contractor may recover damages for any resulting delays or increased costs of performance.

In Marine Industrial Construction, LLC v. United States, 158 Fed.Cl. 158 (2022), the Court of Federal Claims (COFC) held the government liable for withholding vital information impacting contract performance and costs. The U.S. Army Corps of Engineers (USACE) had awarded the contract in question for hydraulic dredging at the Quillayute River Waterway in La Push, Washington. The agency procured dredging services for the waterway every two to three years, with the 2014 solicitation in question markedly different from previous years. A portion of the waterway known as the boat basin, which had not been fully dredged since 1982, was added to the scope of the 2014 solicitation. Additionally, in an effort to shift from design-based specifications to performance-based specifications and to increase competition, the government removed warnings that the waterway may contain man-made debris, such as sunken boats, fishnets, machinery, and steel trolling wire. The solicitation also specifically stated that the government had no knowledge of any artificial obstructions, wreckage, or other materials that would require additional equipment for economical removal.