Case ID: us-ct-cl_57/html/0581-01.html
Source: Caselaw Access Project
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Date Created: 2024-08-24T03:29:51.129683

NEWPORT CONTRACTING & ENGINEERING COMPANY v. THE UNITED STATES.
    [No. 312-A.
    Decided November 13, 1922.]
    
      On the Proofs.
    
    
      Contract; jurisdiction; items not allowed by special tribunal. — Where-a contract provides that the cost of changes shall be ascertained by a board to be appointed for that purpose, and “ when: approved by the Chief of the Bureau of Yards and Docks " shall be added to or deducted from the contract price, such provision does not deprive the court of jurisdiction of items ascertained by such board, as to which the chief of the bureau does not act on their merits, when the cost of such items are properly proven.
    
      The Reporter's statement of the case :
    
      Mr. George R. Shields for the plaintiff. King & King were on the briefs.
    
      Mr. George E. Foster, with whom was Mr. Assistant Attorney General Robert E. Lovett, for the defendant.
    The following are the facts of the case as found by the court:
    I. By contract dated June 28, 1919, between the plaintiff, Newport Contracting & Engineering Company, a corporation organized under the laws of Virginia, with office and principal place of business at Newport News, in said State, and the United States, represented by the Chief of the Bureau of Yards and Docks, Navy Department, the plaintiff undertook to construct and complete a group of 11 buildings at the naval mine depot, Yorktown, Virginia, on locations and in detail as shown by drawings thereto attached, in consideration of a lump-sum price of $289,331.00 for the work complete. A copy of said contract is annexed to the original petition, pages 6 to 17, marked “ Exhibit A.”
    II. Paragraph. 17 of the general provisions attached to and a part of such contract reserved to the Government the right to make such changes in the contract, plans, and specifications as might be deemed necessary or advisable, and the contractor agreed to proceed with such changes as might be directed by the Chief of the Bureau of Yards and Docks. It was further provided that the cost of such changes should be estimated by the officer in charge and if less than $500 should be “ ascertained by him.” If in excess of $500 as so estimated, the cost was to be “ ascertained by a board of not less than three officers or other representatives of the Government, and such cost as thus ascertained, when approved by the Chief of the Bureau of Yards and Docks, shall be added to or deducted from the contract price, and the contractor agrees and consents that the contract price thus increased or decreased shall be accepted in full satisfaction for all work done under the contract,” with the proviso that the increased cost should be “the estimated actual cost to the contractor at the time of such estimate * * * plus a profit of ten per cent.”
    III. The contractor promptly proceeded with the work, and by November 4,1919, had actually delivered at the site of the work large quantities of the materials necessary in the construction of the buildings, had performed considerable of the required excavation work, and had completed most of the required temporary buildings and some of the permanent construction work, all at the site of the work as shown on the drawings and in accordance with the contract requirements.
    IY. By telegram dated November 3,1919, the Chief of the Bureau of Yards and Docks directed the stoppage of all work on the mess hall, barracks, and scrub-house buildings, and the appointment of a board to determine the value of work done. The suspension of the work was occasioned by a proposed change in the location of the buildings, which change was later directed. Work was stopped on November 4 in accordance with such directions. On December 4, 1919, the contractor was instructed to construct a railroad siding to the site of the new work so as to afford the same facilities for the delivery of materials to the new site as had existed at the original site of the work. On December 4, 1919, the contractor was directed to proceed with the work at the new location, but until the railroad siding was completed on January 6, 1920, the contractor was obliged to transport all materials required on the work at the new location by truck and at a greater cost than would have occurred in delivering the materials to the original site. After January 6, 1920, the work at the new site could proceed with the same facility as at the original location, except that winter weather retarded the progress and added to its cost in a way that would not have occurred had there been no interruption.
    Y. On November 4,1919, a board consisting of Lieutenant Commander C. L. B. Anderson (C. E. C.), U. S. N., Lieutenant B. A. Munden, U S. N., and G. M. Haynes, expert aide, was appointed in accordance with the bureau’s instructions to ascertain the additional cost to the contractor of doing the work at the changed location, and this board by its final report to the Bureau of Yards and Docks dated February 7,1920, gave the ascertained costs of the change, including 10 per cent profit, but not including anything on account of increased cost of bond, as amounting to $56,586.57. The cost as thus ascertained included three items described in the report as follows:
    Loss to contractor on account of steady-time men and stable expenses due to delay_$5,041. 31
    
      (n) Extra cost of delayed construction in winter months_ 2, 800. 00
    
      (to) Extra cost due to disorganization on account of stoppage of work- 900. 00
    Such items, aggregating $8,741.31 with 5 per cent overhead added, amounted to $9,178.37, which was the actual cost to the contractor, as ascertained by the board of the three items mentioned. The other items of cost listed in the board’s report represented actual extra costs on account of rehan-dling of materials, work partially done, etc.
    The three items as above described in the itemized list of costs were further explained in the course of the board’s report as follows:
    “6. In the following schedule (Schedule G) there is set out a tabulation of the method used by the board in determining the amount to be allowed the contractor under item S to cover cost due to lost time of steady-time men and stable expenses caused by the delayed construction of the barracks group of buildings, this group constituting approximately two-thirds of the entire contract.”
    
      SCHEDULE G.
    Loss to contractor on account of steady-time men and stable expenses due to delay (amount of work delayed approximately 67 per cent of entire contract).
    Class. Superintendent. Asst, superintendent... Bookkeeper. Clerk. Blacksmith. Gas engine man. 2 foremen (general). Plumber (foreman). Steam fitter (foreman). Handy man. Materialman. 2 teams and driver. 3 saddle horses. 1 h orse and buggy. 1 stableman. 1 janitor.. Total. Daily rate. $22.50 10.00 8.33 6.80 6.00 6.00 16.68 8.00 8.00 5.00 7.50 18.00 9.00 4.50 3.68 3.68 137.67 Proportion charged to buildings moved— 11/4-11/27 $15.00 6.50 5.50 4.75 4.00 6.00 16.68 6.00 6.00 4.00 5.00 13.50 6.00 2.25 2.75 2.75 106.68 11/27-12/5 $10.00 6.50 5.50 4.75 4.00 6.00 12.00 6.00 6.00 4.00 5.00 13.50 6.00 2.25 2.75 2.75 97.00 12/5-1/6 $5.00 6.50 4.00 4.75 4.00 6.00 8.34 6.00 6.00 4.00 5.00 9.00 3.00 2.25 2.00 2.75 78.59
    21 days, at $106.68.t-- $2,240.28
    7 days, at 897.00. 679.00
    27 days, at $78.59. 2,122.03
    5,041.3
    The second item above described was further explained by the board as follows:
    “ (u) The work at the Rising Sun site was well under way when the contractor was ordered to stop work. If the construction of the buildings at that site had proceeded without interruption, it is reasonable to expect that some of the buildings would have been closed in before the severe winter weather came and that certain inside work could have been done in the winter months. Also the outside concrete and masonry work would have been largely completed before the colder weather. On account of the delay which has ensued and on account of the time necessary to develop the new site, make the necessary excavation, and construct foundations before the actual building work could be begun, it has thrown the building work into the very worst months of the year and the contractor has been caused additional expense for each unit of work on account of the weather conditions pertaining, and will be caused much extra expense up to the time that the weather becomes more favorable. This extra expense arises from two causes: First, the less efficient results obtained from labor in bad weather and the lost time by straight-time men; secondly, the loss of actual work done due to the weather. This is very plain at the present date, as certain excavations and form work have been practically destroyed by the recent bad weather and must be done over. In the original report the board estimated these extra costs to the contractor at $2,800.00, and at that time the contractor agreed to accept that sum as full settlement of the extra costs included under this item. The board has seen fit to continue in this report the original estimate of this item, although the contractor takes exception to this sum as being inadequate to cover the cost, due to winter weather.”
    In explanation of the third item above described, the board report further said:
    “ (w) After the observations made by the board and carefully considering the extra cost included under this item, the board concludes that its original estimate covering this particular extra cost was very much too small and has corrected the same to agree more nearly with what it believes the true conditions to be.”
    The report of the board, dated February 7, 1920, was forwarded to the bureau by the public works officer at the naval mine depot, who recommended approval of the report. The Chief of the Bureau of Yards and Docks approved the report for $47,198.34, this amount being arrived at in the following manner: The three items referred tos totaling $8,741.81 plus 5 per cent which had been added to them for overhead, in all $9,178.37, were eliminated from the net costs as ascertained by the board as items which the Chief of the Bureau of Yards and Docks had no authority to allow and are the items referred to in the paragraph of the supplemental contract quoted in the next following finding. An item of $707.97 as additional cost of bond premium was added by the Bureau of Yards and Docks, with 10 per cent of the approved items for profit.
    VI. The parties thereupon entered into a supplemental contract, dated May 17, 1920, by the terms of which the contractor agreed to do the work at the changed location in accordance with directions previously given, and the United States agreed to pay therefor the amount approved by the chief of the bureau as representing the items of cost he had authority to allow, amounting to $47,198.34, with a provision in said supplemental contract that, “Nothing contained herein shall operate to prejudice the claims of the contractor to obtain additional compensation under this contract on account of ‘ delayed construction in winter months,’ ‘ disorganization,’ and ‘loss of steady-time men, and stable expenses due to delay ’ in connection with the work called for under this agreement.” A copy of the supplemental agreement is annexed to the original petition herein, pages 13 to 17, marked “ Exhibit B.” At the time of the execution of the supplemental agreement the changes ordered had been completed.
    VII. The Newport Contracting and Engineering Company was paid and accepted the full agreed contract price for the work originally contracted to be done, increased by the additional costs occasioned by the change in location as approved by the Chief of the Bureau of Yards and Docks but not increased by the costs of such change as ascertained by the board. The amount paid to and accepted by the contractor on account of the increased cost of work due to change in location was $9,388.23 less than the cost of the change as ascertained by the board.
    VIII. The board appointed November 4,1919, to ascertain the increased costs of the work due to the stoppage and change of location was in position to observe, check, and know at first hand the cost of the work as done by the contractor as compared with the estimated cost of the work as originally planned. There is nothing in the record to question the accuracy of its findings or to show that the board’s findings were not made in entire good faith and upon a fair consideration of all the facts with which the members of the board were personally familiar.
   MEMORANDUM BY THE COURT.

The contract provision that the cost of changes as ascertained shall be added to or deducted from the contract price “ when approved by the Chief of the Bureau of Yards and Docks ” does not preclude a recovery in this court of items ascertained by the board as to which the chief of the bureau does not act on their merits when the same are proven or properly stipulated.

The schedule expenditures on account of steady-time men were actual costs to the contractor within the purview of the contract and 10 per cent of profits is to be added thereto.

Extra cost on account of delayed construction being extended into the winter months can not be recognized as a cost ordinarily recoverable in cases of delay, but the circumstances attending the changes in this particular case together with the contract provisions as to the ascertainment of the estimated actual cost and the report of the board authorized to make such ascertainment justify the recovery of the amount so ascertained.

The third item, extra cost due to disorganization, is too indefinite, so far as appears from the record, to justify recovery.

Judgment for plaintiff in the sum of $8,625.44.