Korte Construction Co. v. Secretary of the Army

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
KORTE CONSTRUCTION CO.,
Appellant
v.
SECRETARY OF THE ARMY,
Appellee
______________________
2024-2232
______________________
Appeal from the Armed Services Board of Contract Ap-
peals in No. 63148, Administrative Judge Michael N.
O’Connell, Administrative Judge Owen C. Wilson.
______________________
Decided: April 9, 2026
______________________
MICHAEL WILSON, UB Greensfelder, LLP, Saint Louis,
MO, argued for appellant.
PATRICIA M. MCCARTHY, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for appellee. Also repre-
sented by CORINNE ANNE NIOSI, BRETT SHUMATE.
______________________
Case: 24-2232 Document: 52 Page: 1 Filed: 04/09/2026

-- 1 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 2
Before HUGHES, LINN, and STOLL, Circuit Judges.
LINN, Circuit Judge.
Korte Construction (“Korte”) appeals the decision of
the Armed Services Board of Contract Appeals (“Board”),
granting summary judgment in favor of the Secretary of
the Army (“Army”) and awarding a refund to the Army for
the cost of chilled water improvements at Tinker Air Force
Base that the Board held were required by the contract
(“RFP”) as awarded but were later unilaterally deleted by
the Army. In re Korte Constr. Co., ASBCA No. 63148, 2023
WL 7476103 (Oct. 26, 2023), on reconsideration, In re Korte
Constr. Co., 2024 WL 2698015 (May 6, 2024). For the fol-
lowing reasons, we affirm.
BACKGROUND
Beginning with Phase 2 of the RFP and in all subse-
quent versions, the RFP included the following provision:
Extend the base wide chilled water, hot
water, and compressed air piping to the
slab edge of the hangar. Provide connec-
tion location for future projects.
J.App’x 1202 (emphasis added). As stipulated by the par-
ties, the government added the requirement to “[p]rovide
connection location for future projects” as an amendment.
J.App’x 183 (¶ 26). There is no dispute that there was no
pre-existing base wide chilled water system to extend at
Tinker Air Force Base. J.App’x 195 (¶ 70).
Korte submitted its final Phase 2 proposal on May 31,
2019, which included a confirmation that it was “not pro-
posing any deviations, exceptions or assumptions to the
terms or conditions of the Solicitation.” J.App’x 7423;
J.App’x 185 (¶ 33). Korte’s submission included schematic
drawings showing the “CW” lines as in the Solicitation.
J.App’x 7244, J.App’x 7251. In September 2019, Korte was
Case: 24-2232 Document: 52 Page: 2 Filed: 04/09/2026

-- 2 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 3
awarded the contract for a total of approximately $72.8 mil-
lion. J. App’x 185 (¶ 37).
Between September 2020 and February 2021, the
Army sought revisions to the contract, initially to install
“new utilities valve vault for 14[-inch] chilled water supply
and 14[-inch] chilled water return, and changing from
three contractually required chilled water lines to two
14[-inch] underground chilled water mains,” J.App’x 7962,
a modification from its reading of the RFP requiring three
12-inch chilled water lines and a valve vault, and later
sought to delete the chilled water lines and valve vault en-
tirely. The Army sought a credit for the value of the work
Korte would no longer need to perform. Korte refused to
award a credit, asserting that the RFP as awarded did not
require such improvements. In April 2021, the Army is-
sued a unilateral modification that deleted the chilled wa-
ter lines and valve vault and credited the Army with
$493,639.43. J.App’x 194; J.App’x 7265. Korte thereafter
submitted a claim to the contracting officer seeking to re-
scind the modification. The contracting officer denied
Korte’s claim. He held that the RFP required Korte to
build the chilled water improvements, and that if Korte be-
lieved that the chilled water improvements were mistak-
enly included, it had a duty to point out the ambiguity
before bidding. J.App’x 7966.
Korte appealed. The Board affirmed the contracting
officer’s decision at summary judgment on two grounds.
First, that it was not reasonable for Korte to simply ignore
the requirements in the specification that it knew were am-
biguous. J.App’x 25–30. Second, because Korte knew
about the ambiguity in the contract prior to bidding, it had
a duty to inquire, which it did not satisfy, and thus bore the
risk of the Army adopting a contrary interpretation.
J.App’x 30–32. On reconsideration, the Board maintained
its disposition awarding a refund to the Army.
Korte appeals.
Case: 24-2232 Document: 52 Page: 3 Filed: 04/09/2026

-- 3 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 4
DISCUSSION
I
Despite the somewhat unusual posture of this case, our
decision turns entirely on a contract interpretation ques-
tion: whether the RFP required Korte to install the chilled
water improvements, a legal question we review de novo.
Hahnenkamm, LLC v. United States, 104 F.4th 1333, 1341
(Fed. Cir. 2024); K-Con, Inc. v. Sec’y of Army, 908 F.3d 719,
722–23 (Fed. Cir. 2018) (stating that whether an RFP is
ambiguous and whether the ambiguity is latent or patent
are reviewed de novo). We give the Board’s contract inter-
pretation “careful consideration in view of the Board’s con-
siderable experience in construing government contracts.”
Elec. Boat Corp. v. Sec’y of Navy, 958 F.3d 1372, 1375 (Fed.
Cir. 2020).
Because the Army is seeking a refund for a revision af-
ter the contract award, it carries the burden to show that
the chilled water improvements were required by the RFP.
Nager Elec. Co. v. United States, 442 F.2d 936, 946 (Ct. Cl.
1971). We interpret a contract from the perspective of “a
reasonable and prudent contractor.” Int’l Tech. Corp. v.
Winter, 523 F.3d 1341, 1349 (Fed. Cir. 2008) (quoting H.B.
Mac, Inc. v. United States, 153 F.3d 1338, 1345 (Fed. Cir.
1998)).
II
Korte argues that it was impossible to extend a base
wide chilled water system that did not exist, and therefore
any reading requiring satisfaction of that term is unrea-
sonable. See Seaboard Lumber Co. v. United States, 308
F.3d 1283, 1294 (Fed. Cir. 2002) (explaining that impossi-
bility of performance may excuse contractor performance).
Korte argues that the lack of essential information about
the specifications for the pipes and vault confirms that
building these improvements was not part of the RFP.
Korte also argues that the schematic drawings CU101 and
Case: 24-2232 Document: 52 Page: 4 Filed: 04/09/2026

-- 4 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 5
CG101, which show three small lines labeled “CW” running
parallel to the hangar and terminating in unlabeled boxes
at either end, cannot require the installation of three 12-
inch chilled water lines and a valve vault because the draw-
ings do not show keynotes associated with these compo-
nents, do not define “CW” in the referenced legends at C-
0001 and C-0002 or on the schematic drawings, and show
the lines running parallel to the hangar rather than “to the
slab edge of the hangar” as required by the written specifi-
cation. Korte further contends the impossible-to-perform
text in the specification takes precedence over the draw-
ings under FAR § 52.236-21(a) (“In case of difference be-
tween drawings and specifications, the specifications shall
govern.”).
The Army responds that the only reasonable interpre-
tation of the RFP, when reading the drawings and specifi-
cation together, requires the installation of chilled water
improvements, per the written specification, in the loca-
tions shown by the CW lines and valve vault box in the
schematic drawings. A reasonably prudent contractor, the
Army argues, would have recognized that the CW lines rep-
resented chilled water pipes because the schematic draw-
ings refer the contractor to the legends on C-001 and C-002
for definitions of items on the drawings. For example, C-
001 defines “—12” CWS1—” and “—12” CWR1—” as
“CHILLED WATER SUPPLY” and “CHILLED WATER
RETURN,” respectively, and C-002 identifies item “—w—
w—w—w—” as “water line.”
We agree with the Army and the Board that Korte’s
reading of the RFP not to require an installation of the
chilled water improvements is unreasonable and that the
proper construction requires the installation. Most im-
portantly, Korte’s construction fails to give any meaning to
the specification’s express call for chilled water piping and,
thus, fails to “interpret the contract in a manner that gives
meaning to all of its provisions and makes sense.” McAbee
Case: 24-2232 Document: 52 Page: 5 Filed: 04/09/2026

-- 5 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 6
Constr., Inc. v. United States, 97 F.3d 1431, 1435 (Fed. Cir.
1996). The specification unambiguously requires chilled
water piping to the slab edge of the hangar and connection
locations for future projects.
As the Board correctly held, that the specification calls
for that piping to be an extension of a non-existent chilled
water system does not excuse Korte’s commitment to sat-
isfy the express provisions in the specification due to im-
possibility. Impossibility discharges a party’s obligation to
perform “where, after a contract is made, a party’s perfor-
mance is made impracticable without his fault by the oc-
currence of an event the non-occurrence of which was a
basic assumption on which the contract was made.” Sea-
board Lumber, 308 F.3d at 1294 (emphasis added) (quoting
United States v. Winstar Corp., 518 U.S. 839, 904 (1996)).
Here, there was no occurrence after the contract was made.
Instead, under Korte’s theory, it was the contract language
itself that rendered its performance impossible. Impossi-
bility does not, therefore, excuse Korte’s decision to ignore
the demand in the specification and the drawings.
Reading the specification and the drawings together,
as we must, Coast Federal Bank, FSB v. United States, 323
F.3d 1035, 1038 (Fed. Cir. 2003) (“The Agreement must be
considered as a whole and interpreted so as to harmonize
and give reasonable meaning to all of its parts.”), we agree
with the Army that the only reasonable reading of the RFP
is to require the chilled water improvements. Korte’s at-
tempts to decouple these drawings from the specification
therefore must fail. The schematic drawings confirm the
requirement for chilled water piping in the specification.
The schematics show three lines labeled “—CW—,” and we
agree with the Army that a reasonably prudent contractor
would understand those lines to refer to chilled water pip-
ing in light of the definition of the related terms “—12”
CWS1—”, “—12” CWR1—”, and “—w—w—w—w—” in the
legends in C-001 and C-002. J.App’x 252–53. These lines
Case: 24-2232 Document: 52 Page: 6 Filed: 04/09/2026

-- 6 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 7
represent the chilled water lines at the edge of the slab
called for in the specification. Similarly, a reasonably pru-
dent contractor would recognize that the chilled water lines
terminate in a valve vault, shown as a bold square on
CG101 and CU101, in light of the General Sheet Notes re-
quiring “all utility infrastructure to extend past new apron
and be capped and/or valved appropriately for future con-
nections,” J.App’x 254–55 (capitalization normalized), and
the C-001 legend’s identification of a similar square as a
valve vault, J.App’x 252. To the extent the drawings are
not perfectly clear, the specification also serves to inform
the meaning of both the drawings and the legend, which
together unambiguously require the installation of the
chilled water improvements.
The lack of a keynote in the drawings specifically point-
ing to the pipes and valve vault is not fatal to the Army’s
construction. Korte does not identify any rule or law
providing that the contractor may choose not to perform
tasks described in the specification and shown on drawings
that are not also identified by a keynote.
Korte’s multiple other objections to the lack of clarity
in the drawings—the absence of an identification of CW
lines in the legend, the use of a small font to identify the
CW lines, the listing of the CWS1 and CWR1 labels in a
legend entitled “existing conditions,” and the particular
symbol showing the valve vault—similarly fail to read the
specification and the drawings together to inform the
meaning of the RFP as a whole.
We thus agree with the Board that Korte’s reading of
the specification was not reasonable. See J.App’x 29 (rec-
ognizing that this is not a “situation where both the gov-
ernment and the contractor proffer reasonable
interpretations of a contract”). That interpretation there-
fore cannot control.
Case: 24-2232 Document: 52 Page: 7 Filed: 04/09/2026

-- 7 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 8
III
To the extent there remains any ambiguity about
Korte’s duty to build the chilled water improvements in the
RFP and the particular specifications of the pipes and
vault, the parties dispute whether Korte had a duty to in-
quire about such ambiguities.
Korte argues that the drawings are, at most, latently
ambiguous because of the lack of keynote lines, the subtle
labeling on the drawings, and the inconsistency between
the specification—directing extension of the piping “to the
slab edge”—and the drawings, which show CW lines paral-
lel to the slab. See J.App’x 133–34 (sub-contractor Jarrell
testifying that the lines did not stand out to him as depict-
ing CW improvements). According to Korte, none of these
features demonstrate the “obvious, gross, [or] glaring” am-
biguity required to trigger a contractor’s duty to inquire
about a patent ambiguity. See NVT Techs., Inc. v. United
States, 370 F.3d 1153, 1162 (Fed. Cir. 2004) (alteration in
original) (quoting H&M Moving, Inc. v. United States, 499
F.2d 660, 671 (Ct. Cl. 1974)). Korte’s only argument with
respect to the written specification itself is that it should
be disregarded because of impossibility, as discussed
above. Because the RFP is, at most, latently ambiguous,
Korte argues that the RFP should be interpreted against
the government under contra proferentem. See HPI/GSA–
3C, LLC v. Perry, 364 F.3d 1327, 1334 (Fed. Cir. 2004) (ex-
plaining “general rule is contra proferentem, which re-
quires ambiguities in a document to be resolved against the
drafter”). Korte also argues that it did not recognize any
ambiguity in the RFP prior to award but only recognized
that the RFP did not require the chilled water improve-
ments.
The Army responds that Korte repeatedly admitted
that it knew about the ambiguity before bidding and, there-
fore, had a duty to inquire regardless of whether the
Case: 24-2232 Document: 52 Page: 8 Filed: 04/09/2026

-- 8 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 9
ambiguity was latent or patent. See P.R. Burke Corp. v.
United States, 277 F.3d 1346, 1356 n.3 (Fed. Cir. 2002) (“In
order for a contractor to recover based on an ambiguous
contract provision, the contractor must have relied on its
interpretation of that provision when preparing its bid.”);
Edward R. Marden Corp. v. United States, 803 F.2d 701,
705 (Fed. Cir. 1986) (same); James A. Mann, Inc. v. United
States, 535 F.2d 51, 61 (Ct. Cl. 1976) (“The question of
whether an ambiguity is patent is only relevant where the
contractor was not aware of it, and the court is called upon,
in retrospect, to decide whether or not he should have been
aware of it.”). The Army points to several admissions by
Korte. First, in its request for a final written decision from
the Contracting Officer, Korte said that the requirement to
extend the chilled water piping was “obviously the product
of a scrivener’s mistake—one which was recognized during
the development of Korte’s pricing,” “since there is no base
wide chilled water system.” J.App’x 7953. Second, Jarrell
provided testimony that the RFP provision was “unbid-
dable and very poorly worded,” J.App’x 129–30.
We agree with the Army that Korte had a duty to in-
quire about ambiguities in the contract both because they
were patent and because it knew that its interpretation of
the RFP required disregarding the specification and draw-
ings—a paradigmatic patent ambiguity. “A patent ambi-
guity is present when the contract contains facially
inconsistent provisions that would place a reasonable con-
tractor on notice and prompt the contractor to rectify the
inconsistency by inquiring of the appropriate parties.”
Stratos Mobile Networks USA, LLC v. United States, 213
F.3d 1375, 1381 (Fed. Cir. 2000). An ambiguity that is “nei-
ther glaring nor substantial nor patently obvious” is latent,
and the contractor would receive the benefit of its interpre-
tation under contra proferentem. K-Con, 908 F.3d at 722
(citation omitted). On appeal, Korte does not argue that it
satisfied any extant duty to inquire.
Case: 24-2232 Document: 52 Page: 9 Filed: 04/09/2026

-- 9 of 10 --

KORTE CONSTRUCTION CO. v. SECRETARY OF THE ARMY 10
The Army is correct that Korte’s interpretation of the
RFP creates a patent ambiguity because, as discussed
above, it requires wholly disregarding an express provision
of the RFP and several items in the drawings. But a con-
tractor must satisfy all the provisions in an RFP; it cannot
simply ignore a specification by unilaterally making an ad-
justment based on an understanding that the provision is
impossible of performance. See FAR 52.236-21(a) (“Any ad-
justment by the Contractor without such a determination”
of a discrepancy in the figures, in the drawings, or in the
specifications, “shall be at [the contractor’s] own risk and
expense.”).
Moreover, we agree that Korte admitted that it knew,
prior to bidding, that its interpretation would require dis-
regarding the specification and the CW pipes in the draw-
ings. See J.App’x 7953; J.App’x 129–30. Korte attempts to
argue that it did not know of an ambiguity but merely knew
that the RFP did not require the chilled water improve-
ments. Korte Opening Br. at 54 (“What Michael Jarrell did
recognize was that the concept drawings did not call for the
installation of chilled water improvements . . . because
they were not labelled with a legend installation.”). This,
however, is a distinction without a difference because such
an interpretation fails to give meaning to an express provi-
sion in the specification and items in the drawings.
CONCLUSION
We have considered the parties’ other arguments but
do not find them persuasive. We conclude that the RFP
required the chilled water improvements, and therefore the
Army has satisfied its burden to show that it was entitled
to a refund for the work thereafter deleted from the RFP.
Korte has not challenged the amount of the refund award.
For the foregoing reasons, we affirm.
AFFIRMED
Case: 24-2232 Document: 52 Page: 10 Filed: 04/09/2026

-- 10 of 10 --