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.

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.

The government provides contractors with a variety of information during the solicitation process before a contract is awarded. Such information may be furnished through pre-award conferences, questions and answers, solicitation attachments, specifications, diagrams, drawings, contract provisions, etc. When the government misstates material facts during the contract formation process, it may later be liable under express provisions of the contract or for breaching an implied warranty that it furnishes correct information. In this regard, when the government provides incorrect representations and directs or expects prospective offerors to base their contract pricing on those misrepresentations, the government is responsible for any losses the contractor suffers as a result of its reliance on that information. In other words, when the government instructs offerors to base their pricing on data it furnishes, it assumes responsibility for ensuring that the data accurately reflects the conditions the contractor will encounter during performance. In such cases, as long as the contractor can demonstrate that the government's information was incorrect, it need not prove the government's intent to deceive or bad faith. Furthermore, the contractor may also not need to prove that the incorrect information was inadequately or negligently prepared.