Contract Interpretation: Contra Proferentum in Government Contracts

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The doctrine of contra proferentum mandates that “[w]here the Government draws specifications which are fairly susceptible of a certain construction and the contractor actually and reasonably so construes them, justice and equity require that that construction be adopted.” Peter Kiewit Sons’ Co. v. United States, 109 Ct.Cl. 390, 418 (1947). This longstanding doctrine is still alive and well in federal contracting law. See MCI Diagnostic Center, LLC v. United States, 147 Fed. Cl. 246 (Fed. Cl. 2020). However, as seen in MCI Diagnostic, the doctrine has taken on several notable caveats.

First, there is an underlying issue in all contra proferentum cases involving the reasonableness of the contractor’s interpretation. The interpretation must be reasonable.  If more than one reasonable interpretation of a contractual provision exists, the contractual provision can rightly be called ambiguous. However, if the contractor adopts an unreasonable interpretation of the provision, he may not rely on contra proferentum.. See HPI/GSA 3C, LLC v. Perry, 364 F.3d 1327, 1334 (Fed. Cir. 2004). Often whether a contractual provision is ambiguous will turn on incredibly fact intensive evidence involving industry norms and trade practices.

Next, courts and the contract boards will also look to whether the ambiguity was patent on the face of the contract. A patent ambiguity is one that is so obvious, gross, and glaring the plaintiff contractor has a duty to inquire about it during the negotiation of the contract. The Court of Appeals for the Federal Circuit has held that where a government solicitation “contains a patent ambiguity, the government contractor has ‘a duty to seek clarification from the government, and its failure to do so precludes acceptance of its interpretation’ in a subsequent action against the government.” Blue and Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed Cir. 2007) (quoting Stratos Mobile Networks USA, LLC v. United States, 213 F.3d at 1381). Again, whether an ambiguity is patent or not is an incredibly fact intensive question involving industry norms and trade practices.

If the contractor’s interpretation is reasonable, and the ambiguity is not patent (i.e. a latent ambiguity), the ambiguous or unclear terms that are subject to more than one reasonable interpretation will be construed against the party who drafted the document. In essence, this means that latent ambiguities will often be resolved in favor of the government contractor.

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