## Facts

- HUD contracted with TEG-Paradigm Environmental, Inc. (TEG) under a fixed-price agreement to perform asbestos abatement at the Geneva Towers complex in San Francisco before demolition.
- The contract specifications required that asbestos-containing materials be cleaned of “all visible debris and residue.”
- During performance, HUD required TEG to remove visible debris and residue found in cracks and pores, not merely on exposed surface areas.
- TEG asserted that this demanded “excessive cleaning” beyond the contract and argued its pre-award “work plan” defined the applicable cleaning method and limits.
- HUD had required submission of the work plan during negotiations to assess TEG’s capability; HUD accepted it and attached it to the executed contract, but the contract did not expressly incorporate the plan as a binding term.
- A stop-work order issued amid the dispute; performance later resumed after modifications intended to align specifications more closely with TEG’s plan.
- After completion, TEG sought an equitable adjustment from the contracting officer and, after denial, sued under the Contract Disputes Act in the Court of Federal Claims asserting breach based on (i) failure to allow performance per the work plan and (ii) requiring unnecessary cleaning.
- The Court of Federal Claims granted summary judgment to the government on the breach counts (Counts I and II); TEG appealed those adverse rulings to the Federal Circuit.

## Issues

1. Whether the contract’s requirement to clean asbestos-containing materials of “all visible debris and residue” included visible debris and residue located in cracks and pores.
2. Whether TEG’s pre-award work plan was incorporated into the contract such that it controlled performance requirements and limited HUD’s demands.

## Decision

- The Federal Circuit affirmed summary judgment for the government on Counts I and II.
- The court held the “all visible debris and residue” specification was unambiguous and required removal of visible debris and residue, including that found within pores and cracks.
- The court held the work plan was not incorporated into the contract absent express incorporation language, even though it was attached to the final contract documents.
- Because HUD demanded compliance with the governing specifications, HUD did not breach the contract by insisting on the disputed level of cleaning.

## Legal Principles

- Clear and unambiguous federal contract specifications are enforced according to their plain language.
- Extrinsic evidence, including industry practice, is not used to narrow obligations where contract text is unambiguous.
- Pre-award submissions (including work plans) do not become binding contract requirements without explicit incorporation language.
- The government does not breach by insisting on compliance with written specifications that define the performance standard.

## Conclusion

The Federal Circuit enforced the contract’s unambiguous “all visible debris and residue” cleaning requirement to include visible residue in cracks and pores and rejected TEG’s argument that its pre-award work plan controlled performance, holding that HUD acted within its contractual rights by demanding compliance with the specifications.


TEG-Paradigm Env't, Inc. v. United States, 465 F.3d 1329 (Fed. Cir. 2006)