Case ID: us-ct-cl_130/html/0520-01.html
Source: Caselaw Access Project
Author: {"author": "Laramore, Judge, Whitaker, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GENERAL CASUALTY COMPANY OF AMERICA, CENTRAL SURETY AND INSURANCE CORPORATION, WACKER CORPORATION, AND N. E. DAUGHERTY, d/b/a N. E. DAUGHERTY CONSTRUCTION COMPANY v. THE UNITED STATES
    [No. 47331.
    Decided January 11, 1955.
    Opinion amended February 16, 1955]
    
    
      
      Mr. Ernest Hubbell and Mr. Clifford B. Kimberly for the plaintiffs.
    
      Mr. Carl Eardley, with whom was Mr. Assistant Attorney General Warren E. Burger, for the defendant.
    
      
       Defendant’s petition for writ of certiorari denied by the Supreme Court May 23,1955.
    
   Laramore, Judge,

delivered the opinion of the court:

The suit arises out of a contract to construct an airport at Zanesville, Ohio, and the petition is stated in two counts. Count one of the petition, a Lucas Act claim, was dismissed by this court on January 8,1952. [121 C. Cls. 200.] Count two is a contract claim for equipment rental and expense, ditch rock excavation, gravel processing plant, overtime wages, delay damages, unpaid balance of contract price, shale excavation and rock excavation.

Plaintiff Daugherty entered into a contract with defendant, acting by and through the Civil Aeronautics Administration, for the construction of an airport at Zanesville, Ohio. The contract price was estimated to be $1,047,328. The accepted bid price included a unit price of 25 cents per cubic yard for grading and $1.35 per cubic yard for rock excavation.

On May 18, 1943, plaintiff Daugherty executed and delivered to the defendant payment and performance bonds both executed by plaintiffs, General Casualty Company and Central Surety & Insurance Corporation, in the sum of $418,931.20 each.

Plaintiff Daugherty received notice to proceed effective June 10,1943. The project was to be completed within 150 calendar days thereafter. Daugherty began operations on June 17,1943. The facts are sufficiently set out in the opinion below.

The plaintiffs’ first cause of action is based upon the allegation that the Government coerced plaintiffs into equipping the job for full scale operations, after the cosureties had taken over the work, before a resumption date was apparent or determined.

Plaintiffs say that after the cosureties had taken over the work and near the end of the winter shutdown under a stop order issued by defendant, the cosureties were required to equip the job with the large amount of heavy construction machinery which would be required for full scale operations, long before a possible resumption date was apparent or determined.

Plaintiffs further say that the cosureties upon demand of defendant furnished evidence that they would be ready to perform when work could be resumed and for the purpose had sufficient equipment on the job to begin full scale operations by April 1,1944. But defendant required the cosureties to comply with its demands that equipment be placed on the job forthwith and threatened that if they did not comply large payments due plaintiffs for work done would be withheld and made the further threat to default the cosureties on the contract. The cosureties say that such action on the part of the defendant was coercion and that in the period when they were required to equip the job from April 1 to May 10, 1944, they performed no pay item work and by having furnished the equipment demanded incurred thereby an unnecessary expense of $13,283.97.

The contract specifications provided, as to equipment, in part as follows:

2.1 General. The Contractor shall maintain on the job sufficient equipment of the types needed to complete all the work in accordance with the requirements of this specification within the contract time. He may use any type of earth-moving equipment capable of accomplishing the specified and required results. * * *

Daugherty made strong but unsuccessful efforts to get sufficient equipment which was in working order. He fell behind in rental payments on some equipment which was then withdrawn from the job by the equipment owners. After numerous warnings, it was finally necessary to terminate the right of Daugherty to proceed effective as of November 24, 1943.

An examination of the evidence indicates that defendant made two demands: (1) that plaintiffs furnish information concerning equipment availability by March 10; (2) that plaintiffs bring their equipment to the site by April 15, or sooner, if weather conditions permitted.

Since the damage about which plaintiffs complain concerns the loss of rental on equipment brought to the site in April, it is apparent that the alleged breach of contract concerns demand number two.

On January 28,1944, the contracting officer advised plaintiffs that 52 calendar days remained for the completion of the work; that to complete in the contract time plaintiffs “must have sufficient equipment on the job by April 15; 1944, or sooner, if weather conditions permit, to operate on a full scale basis.”

Normal grading operations commence in the Zanesville area about March 15, but due to unseasonable weather plaintiffs were not able to commence work until May 1 and notice to proceed was not issued until May 10. In January the reasonable expectation was that grading operations would commence about March 15. At that time, January, such a demand could not be called unreasonable. Thus, if the demand was not a breach of contract in January, it was not a breach of contract in April, for the plaintiff’s loss resulted not from compliance with the order but from the unseasonable weather which prevented the issuance of the notice to proceed at the expected time. It has been held that the Government is not responsible for the vagaries of the weather. Warren Brothers Roads Co. v. United States, 123 C. Cls. 48, 79.

Inasmuch as grading operations would normally commence about March 15, any prudent contractor would have been prepared to proceed shortly thereafter. Hence plaintiffs’ movement of equipment to tbe site in April was a normal action and one which would have taken place regardless of any demand by the defendant.

Therefore, it must be concluded that plaintiffs brought the grading equipment to the site in April not because of threats, but because it was what any prudent contractor would have done. It was not a breach of the contract by the Government and the plaintiffs could not recover on this claim.

The plaintiffs’ second claim is for recovery of the alleged cost of ditch rock excavation. Plaintiff Daugherty subcontracted the drainage work to the Weikel Construction Company.

The profile drawings of the drainage structures showed them to be located in an area and in a strata of soil classified on the boring log as “Horizon C” material defined as “hard, impervious, silty clay” which was “relatively hard and impervious.”

In digging the trenches rock was encountered which had to be blasted and the subcontractor was paid therefor at the rate of $5 per cubic yard.

The fact that plaintiff Daugherty anticipated rock is evidenced by the terms of the subcontract. The uncontested evidence is that the subcontract carried a provision, the purport of which was to protect the subcontractor against rock should it be encountered. It also appears from the evidence that rock was anticipated below grade on this part of the job. The evidence further shows that blasting is ordinarily necessary because of the confined nature of this type of excavation.

Thus plaintiffs’ contention that they are entitled to recover an additional amount because of an alleged changed condition is without foundation. Furthermore, there is nothing, in the evidence to disclose that plaintiffs ever called the attention of the contracting officer to an alleged changed condition in connection with this portion of the work.

Either failure to show a changed condition or failure to give notice of a changed condition would prevent recovery of plaintiffs on this claim. Having failed to show a changed condition, this item of plaintiffs’ claim is denied.

The third claim of plaintiffs is for the unpaid balance of contract price withheld from plaintiffs’ cosureties and applied to payment of taxes owed by plaintiff Daugherty.

At the time Daugherty’s contract was terminated defendant was indebted to him in the amount of $56,783.56 for work performed.

Defendant accepted the offer of the cosureties to complete the contract but stated that claim to all sums due under the contract at time of termination could not then be allowed since there was at the time of termination a valid assignment of money due under the contract in favor of the LaSalle Industrial Finance Corporation. This was satisfactory to the cosureties who then did go ahead with the work without a supplemental contract. On January 3,1944, the Comptroller General certified as due the LaSalle Corporation, as assignee of Daugherty, the sum of $56,783.56. Before a check was issued, a tax levy was filed against the contractor in the amount of $45,366, in connection with the Zanesville contract and $12,863.10 assessed in connection with other work. The defendant thereupon refused the demand of the cosureties for payment of the amount earned by Daugherty prior to the termination of his right to proceed and by appropriate bookkeeping entries defendants set off the sum due Daugherty against his tax indebtedness.

Plaintiffs contend the surety companies had a prior lien to the amount in dispute and are entitled in this claim to recover said amount. The law is to the contrary. It has been settled that the Government which has funds in its possession may apply said funds against amounts owed to the Government by a prime contractor. United States v. Munsey Trust Company, 332 U. S. 234; Standard Accident Insurance Company v. United States, 119 C. Cls. 749.

The contractor could not, by assignment, transfer greater rights than he had himself and as a matter of law the Government had the right to set off the sums due under the contract against the amount of taxes due and owing by plaintiff Daugherty. Thus, plaintiffs are not entitled to recover on this claim.

The plaintiffs’ third cause of action is for rock and shale excavation.

The issues presented in this claim are (1) whether defendant misrepresented the materials; (2) whether the shale constituted a changed condition; (3) if so, whether Daugherty gave notice as required by article 4; (4) whether decision of a contracting officer, affirmed by the head of the department, that (a) there was no rock, (b) there was no notice of a changed condition, (c) there was no changed condition, are final and conclusive; (5) the extent of plaintiffs’ recoverable damages, if any.

The site of the proposed airport was a rugged hilly country cut by deep ravines with ground elevations varying from elevation 870 to 917. It was estimated that approximately two million cubic yards of material would have to be moved in order to flatten out the site for airport purposes. To assist bidders the defendant made borings at intervals of 500 feet along the center lines of the runways and notified the bidders that hand augers were used for this purpose. Such augers bring up earth in granular form. At stages 33 on the E/W runway and 38 on the NVV/SE runway, intermediate borings were made between the regular intervals mentioned. All borings, 35 in number, were represented by defendant on the contract drawings. The defendant’s engineer making the hand auger borings, found the soil to lie generally in three horizons, as follows.

A. Brown topsoil, from zero to six inches in depth.
B. Yellow tan silty clay, six inches to nine feet in depth.
C. Light tan silty clay and blue clay relatively impervious and hard from nine feet in depth to grade.

The engineer reported also some evidence of shale and loose rock below grade, but the charts and borings did not show that plaintiffs would encounter hard shale as found in later excavation. The borings were not all examined scientifically, but only four samples thereof were submitted to the Flood Soils Laboratory for analysis, and the table of soils characteristics in the contract drawings was apparently based upon the laboratory report. This fact was unknown to plaintiffs. The defendant did not deliberately misrepresent the materials it thought would be encountered or hold back any information it had from plaintiffs.

There was a duty on the part of defendant, if it made bor-ings, to fully disclose such facts as were found. Ranieri v. United States, 96 C. Cls. 494, 506. This it did, and we can find no reason to hold that the defendant misrepresented the facts to such an extent as to cause a breach of contract on its part.

The second, third, and fourth issues presented by this claim are for the purposes of this opinion grouped.

The borings and data made and furnished by defendant were inadequate, and plaintiffs encountered shale in locations and amounts seriously in excess of those indicated by the drawings. In these respects the contract drawings were not approximately correct. Plaintiff Daugherty’s reasonably careful inspection of the site gave no indication to him that he would encounter materials any different from those represented on the contract drawings.

The total quantity of excavated materials moved was 2,056,262 cubic yards.

In July 1943 plaintiff Daugherty encountered hard shale and concluded that it could best be removed by breaking it up with a rooter. A rooter is a heavy blade which projects into the ground and operates on the principle of a plow. Daugherty’s rooter had three teeth, but after experimentation it was found that in some areas the hard shale could more easily be rooted by removing two of the teeth, thus giving increased power to the operation. The rooter was powered by a crawler-type tractor having 110 drawbar horsepower. The hard shale could not have been removed by pans used in taking out clay without first rooting it. Considerable quantities of soft shale were also encountered. This was “grading” and was handled with the same equipment, pans, and tractors as used on dirt.

The defendant classified the material, now claimed by the plaintiffs to have been hard shale and rock, as “grading” in each of the 1943 monthly estimates, and plaintiff Daugherty was paid upon that basis. Daugherty did, however, protest orally in September 1943 to the resident engineer about such payment. The following month in a letter to the engineer in charge of design and construction, he stated that 200,000 cubic yards of hard shale had been encountered slowing operations but did not claim a changed condition for purposes of reclassification or payment. Previously Daugherty’s engineer and two successive superintendents made strong oral representations about a changed condition to defendant’s resident engineer and his assistants and asked that payment be made for rock. This was refused upon the basis that it was being rooted and therefore was grading within the contract classifications. Plaintiffs’ engineer also told the resident engineer that he was going to cross section the hard materials and make claims for additional compensation therefor. The resident engineer was requested to cross section the materials but declined to do so. Plaintiffs requested the resident engineer to have representatives present while plaintiffs took elevations, but he did not do so. The resident engineer did not report to the contracting officer the representations made by plaintiff Daugherty about the changed conditions encountered until March 30, 1944. The first such claim was made by the contractor in writing on February 4, 1944, after counsel had been retained and was for 193,000 cubic yards of rock alleged to have been excavated in 1943. This claim was denied February 10, 1944.

Plaintiff Daugherty had not excavated a shale bank near the runway intersection and when the work was resumed in 1944 the cosureties contended that this shale constituted rock, within the contract definition. The pertinent specifications provided as follows:

3.1 General. * * *
All material encountered shall be considered as unclassified excavation unless otherwise specified. The Contractor shall inform and satisfy himself as to the character, quantity and distribution of all material to be excavated. No payment will be made for any excavated material which is used for purposes other than those designated. * * *
* * * * *
3.3-b Glassification of_ Excavation. All excavated material will be classified as “Grading,” or “Kock Excavation.”
(1) Grading shall consist of the removal and satisfactory disposal of all loam, sand, clay, gravel, soft shale, soft slate, old gravel, broken stone or bituminous macadam pavements, loose or decomposed rock, boulders of less than one-half (y2) cubic yard in volume and all other materials not otherwise classified under these specifications.
(2) Rock Excavation. Eock excavation shall include all solid rock and boulders having a volume of one-half (%) cubic yard or more, and all shale or ledge rock which cannot be removed with an extra heavy duty rooter powered with a crawler-type tractor having 110 drawbar horsepower in good condition and on firm footing, or a modem power shovel of three-fourths (%) cubic yard capacity in good condition, without continuous drilling or blasting; although blasting may be resorted to, to facilitate the work. * * *
*****

The special proposal conditions provided in part as follows :

10. Local Conditions: Bidders or their authorized agents are expected to inspect the site of the work or to otherwise thoroughly acquaint themselves with local conditions as may affect performance of the contract and to reasonably anticipate the difficulties to be encountered therein.
11. Borings: Borings where shown were made by means of a hand auger. Borings were made at the approximate locations shown on the drawings, and the character and depth of materials found are believed to be approximately correct.
*****

The contract provided in part as follows:

Article 3. Changes. — The contracting officer may at any time, by a written order, and without notice to the sureties, make changes in the drawings and/or specifications of this contract and within the general scope thereof. If such changes cause an increase or decrease in the amout due under this contract ,or in the time required for its performance, an equitable adjustment shall be made and the contract shall be modified in writing accordingly. Any claim for adjustment under this article must be asserted within 10 days from the date the change is ordered: Provided, however, That the contracting officer, if he determines that the facts justify such action, may receive and consider, and with the approval of the head of the department or his duly authorized representative, adjust any such claim asserted at any time prior to the date of final settlement of the contract. If the parties fail to agree upon the adjustment to be made the dispute shall be determined as provided in article 15 hereof. But nothing provided in this article shall excuse the contractor from proceeding with the prosecution of the work so changed.
Article 4. Changed conditions. — Should the contractor encounter, or the Government discover, during the progress of the work subsurface and/or latent conditions at the site materially differing from those shown on the drawings or indicated in the specifications, or unknown conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the plans and specifications, the attention of the contracting officer shall be called immediately to such conditions before they are disturbed. The contracting officer shall thereupon promptly investigate the conditions, and if he finds that they do so materially differ the contract shall, with the written approval of the head of the department or his duly authorized representative, be modified to provide for any increase or decrease of cost and/or difference in time resulting from such conditions.
* * * * *
Article 15. Disputes. — Except as otherwise specifically provided in this contract, all disputes concerning questions of fact arising under this contract shall be decided by the contractor within 30 days to the head of the department concerned or his duly authorized representative, whose decision shall be final and conclusive upon the parties thereto. In the meantime the contractor shall diligently proceed with the work as directed.

It was agreed that a test would be made to see if the material could be handled by a three-quarter cubic yard shovel without continuous drilling or blasting. The test was made in May 1944. The shovel handled the materials with difficulty, but was able to do so without drilling or blasting. The shovel did stick sometimes and it required several passes with the bucket to get a load, whereas in gravel, dirt, or clay this would not have been necessary. As a consequence of the test, defendant declined to pay for “rock.” The plaintiffs’ cosureties then completed the contract and were paid for “grading.” The plaintiffs did not rely solely on the three-quarter cubic yard shover but also used a one-yard shovel which had more power, approximately twice the weight of the smaller shovel, and was more efficient. The material could have been moved with the smaller shovel alone without blasting, but this would have required much additional time which was not available. Even with the larger shovel the teeth would break off in the hard shale and both machines required considerable repair in this regard. This shale not only was hard to excavate and required more time than clay, but also did not compact well and required more loads to the fills, increasing costs.

It will be noted that article 4 of the contract provided “should the contractor encounter, * * * during the progress of the work subsurface and/or latent conditions at the site materially differing from those shown on the drawings or indicated in the specifications * *

This case in principle is much like the case of W. C. Shepherd v. United States, 125 C. Cls. 724, 737, where the court said:

We do not think there can be any question but that the wet material was unforeseen by both plaintiff and defendant. It was an unknown, subsurface condition differing materially from that shown by the drawings, . specifications and borings, and one which could not have reasonably been anticipated from a study of the drawings, borings and samples, or by an examination of the site. * * * Plaintiff is therefore entitled under article 4 of the contract to recover the full excess costs of excavating, hauling, and placing the wet material on the fill, unless limited in his recovery by a matter hereinafter discussed.

In the instant case we do not think there can be any question but that there was an unknown subsurface condition differing materially from that shown by the drawings, specifications and borings, and one which could not have reasonably been anticipated from a study of the drawings, specifications and borings, or by an examination of the site.

Plaintiffs are therefore entitled, under article 4, of the contract, to recover the cost of excavating materials different from those shown on the drawings, specifications and borings, if notice was given as required by article 4.

Having found a changed condition under article 4, it then becomes necessary to determine whether Daugherty gave notice as required by article 4.

This question is also settled by the decision of this court in the Shepherd case, supra, wherein the court ruled that calling the attention of the resident engineer to conditions constituted compliance with article 4 of the contract.

Article 21 (b) of the contract provided that “The term ‘contracting officer’ as used herein shall include his duly appointed successor or his authorized representative.”

In both the Shepherd case and in the instant case the resident engineer was clothed by the contracting officer with authority to be on the job and see that the work was performed. In the Shepherd case the court held that the resident engineer was the authorized representative of the contracting officer, that the resident engineer had the duty to communicate to the contracting officer matters which were brought to his attention regarding conditions encountered in the excavation, and that notice to the resident engineer constituted compliance with the contract. In the instant case Daugherty protested orally to the resident engineer in September 1943 and a month later in a letter to the engineer called his attention to the fact that hard shale had been encountered. Previously Daugherty’s engineer and two successive superintendents made strong oral representations about a changed condition to defendant’s resident engineer and his assistants and asked that payment be for rock.

It would be inane indeed to suppose that the resident engineer was at the site for no purpose. We believe as in the Shepherd case, supra, that the resident engineer was the authorized representative of the contracting officer.

Plaintiff Daugherty’s responsibility ended when notice was given to the authorized representative of the contracting officer. If the resident engineer did nothing, certainly it was no fault of the plaintiff Daugherty. He did all that was required of him under the contract.

That plaintiffs’ cosureties made claim of a changed condition in 1944 there can be no doubt. On March 30, 1944, the resident engineer acknowledged to his superior the fact that plaintiffs were claiming rock. The claim was made in writing under date of February 4, 1944, and was denied February 10,1944.

When the contracting officer and the head of the department denied and failed to recognize a changed condition where plaintiff encountered 216,755 cubic yards of hard shale which was not indicated in the borings and contract drawings and which was more difficult of removal than grading, and when said officers failed to make an equitable adjustment for removal thereof, the determination was arbitrary and was not supported by substantial evidence.

Thus, the decision of the contracting officer, affirmed by the head of the department, is not final and conclusive and not binding on the parties hereto.

Therefore, we find that notice of a changed condition under article 4 was given the contracting officer and plaintiffs are entitled to recover because of such changed condition. Great Lakes Dredge & Dock Company v. United States, 116 C. Cls. 679, cert. den. 342 U. S. 953; Loftis v. United States, 110 C. Cls. 551.

We then approach the question of the extent of plaintiffs’ recoverable damages.

The following are the sums allowed and paid by the defendant on the disputed materials at 25 cents per cubic yard, the quantities and character of excavation claimed by plaintiffs, and the sums claimed therefor:

The 418.851 cubic yards of material plaintiffs claim was hard shale and which had to be rooted was not hard shale and was removed in part with the equipment plaintiffs admit using thereon; viz, a rooter with three teeth powered by a crawler-type tractor having 110 drawbar horsepower, after which pans were used. There was no blasting. We believe that the material, while difficult of removal, was grading within the terms of the specifications, for which plaintiffs have been fully paid at the contract price for grading of 25 cents per cubic yard.

The 216,755 cubic yards was hard laminated shale of a type not shown on the contract drawings nor by the defendant’s original borings.

In May 1944 when the work was almost completed the defendant caused borings to be made by the H. C. Nutting Company, a firm of soil experts. Out of some 17 borings, three were made within the area where the plaintiffs contended they encountered shale and rock in excavation, and the borings showed shale of various characteristics, together with some conglomerate limestone. On two of the three holes the material was hard enough to get core samples with a rotary core drill with diamond tools for cutting. On the other holes a sample tube was driven in with a No. 225 hammer using a three inch stroke.

To excavate this material required shovels and sometimes a rooter with one tooth powered by two tractors, one pushing and one pulling. The 216,755 cubic yards could not for the most part have been removed in any efficient manner without a one-yard shovel supplementing the three-quarter yard shovel and by being loosened in some areas with a single tooth rooter powered by two tractors. The job could have been completed with a rooter powered by one tractor and with the use of a three-quarter cubic yard shovel, but it would have taken “forever and a day.” Plaintiffs did not have and were unable to obtain equipment and supplies required for extensive drilling and blasting.

In the completion of the project the cosureties expended the sum of $1,584,942.27 of which $487,882.90 was a loss. The cosureties have paid up to December 31, 1951, a total of $493,991.64 which is the sum claimed by them of any judgment rendered herein.

Plaintiffs filed a claim for rock and shale excavation on February 17,1945. The contracting officer denied the claim on June 4,1945.

In addition, as we have heretofore noted, it was necessary to use a one-yard shovel, approximately twice the weight of the smaller shovel, and even then the teeth would break off in the hard shale causing considerable repairs and delays. This shale was not only hard to excavate and required more time, but did not compact well and required more loads to the fills, increasing costs.

It is apparent from the evidence that the 216,755 cubic yards of excavation was not rock nor was it grading within thé terms of the contract for which the plaintiffs were paid at the contract price of 25 cents per cubic yard. A fair and reasonable price for excavation of hard shale would be approximately 65 cents per cubic yard.

Plaintiffs have been paid $54,188.75 at the contract price for grading.

Therefore, we find because of a changed condition under article 4 of the contract plaintiffs are entitled to judgment in the sum of $86,702, which is based upon excavation of 216,755 cubic yards at 65 cents per cubic yard, less the sum of $54,-188.75 paid plaintiffs at the rate of 25 cents per cubic yard.

The final item of plaintiffs’ claim is for $4,337.91, the amount withheld by defendant at the termination of plaintiffs’ contract for delay under article 9 of the contract. Article 9 of the contract reads as follows:

Article 9. Delays — Damages.—If the contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in article 1, or any extension thereof, or fails to complete said work within such time, the Government may, by written notice to the contractor, terminate his right to proceed with the work or such part of the work as to which there has been delay. In such event the Government may take over the work and prosecute the same to completion, by contract or otherwise, and the contractor and his sureties shall be liable to the Government for any excess cost occasioned the Government thereby. If the contractor’s right to proceed is so terminated, the Government may take possession of and utilize in completing the work such materials, appliances, and plant as may be on the site of the work and necessary therefor. If the Government does not terminate the right of the contractor to proceed, the contractor shall continue the work, in which event the actual damages for the delay will be impossible to determine and in lieu thereof the contractor shall pay to the Government as fixed, agreed, and liquidated damages for each calendar day of delay until the work is completed or accepted the amount as set forth in the specifications or accompanying papers and the contractor and his sureties shall be liable for the amount thereof: Provided, That the right of the contractor to proceed shall not be terminated or the contractor charged with liquidated damages because of any delays in the completion of the work due to unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God, or of the public enemy, acts of the Government, acts of another contractor in the performance of a contract with the Government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather or delays of subcontractors due to such causes, if the contractor shall within 10 days from the beginning of any such delay (unless the contracting officer, with the approval of the head of the department or his duly authorized representative, shall grant a further period of time prior to the date of final settlement of the contract) notify the contracting officer in writing of the causes of delay, who shall ascertain the facts and the extent of the delay and extend the time for completing the work when in his judgment the findings of fact justify such an extension, and his findings of fact thereon shall be final and conclusive on the parties hereto, subject only to appeal, within 30 days, by the contractor to the head of the department concerned, whose decision on such. appeal as to the facts of delay and the extension of time for completing the work shall be final and conclusive on the parties hereto.

As we have previously stated, the delay in completing the job was due to unforeseen conditions encountered. Furthermore, the contractor did not refuse or fail to prosecute the work, or any separable part thereof, with such diligence as would insure its completion within the time specified in article 1, or any extension thereof.

In the light of the above and our decision as to changed conditions encountered, we believe the defendant had no right to withhold said sum as damages for delay. Plaintiff is entitled to judgment on this claim in the sum of $4,337.91.

Plaintiff Daugherty rented equipment and received property from the Maxon Construction Company, becoming indebted thereby in the sum of $875.32. The Maxon Construction Company assigned its claim to defendant. Daugherty is indebted to defendant in the sum of $875.32, and defendant is entitled to recover this amount from plaintiffs on its counterclaim.

MaddeN, Judge; Littleton, Judge; and Jones, Chief Judge, concur.

Whitaker, Judge,

dissenting:

The court says the refusal of the contracting officer to make an equitable adjustment when conditions were encountered differing from those shown on the contract documents was arbitrary and not supported by substantial evidence. I do not believe the record justifies this.

The specifications in section 3.3-b (1) defined grading to include soft shale, and in paragraph (2) defined rock excavation as follows:

Nock excavation shall include all solid rock and boulders having a volume of one-half (%) cubic yard or more, and all shale or ledge rock which cannot be removed with an extra heavy duty rooter powered with a crawler-type tractor having 110 drawbar horsepower in good condition and on firm footing, or a modern power shovel of three-fourths (%) cubic yard capacity in good condition, without continuous drilling or blasting * * *

The opinion of the majority shows that the parties agreed on a test to see if the material could be handled by a three-fourths (%) cubic yard shovel without continuous drilling or blasting. The opinion stated the result of the test as follows:

* * * The shovel handled the materials with difficulty, but was able to do so without drilling or blasting. The shovel did stick sometimes and it required several passes with the bucket to get a load, whereas in gravel, dirt, or clay this would not have been necessary. * * * The plaintiffs did not rely solely on the three-quarter cubic yard shovel but also used a one-yard shovel which had more power, approximately twice the weight of the smaller shovel, and was more efficient. The material could have been moved with the smaller shovel alone without blasting, but this would have required much additional time which was not available. Even with the larger shovel the teeth would break off in the hard shale and both machines required considerable repair in this regard. * * *

As a consequence of the test made, defendant declined to pay for rock and insisted that the plaintiff was entitled to be paid only for “grading.”

Had I been the contracting officer I might have come to a contrary conclusion, but I cannot say that his conclusion was arbitrary or not supported by substantial evidence, because of the provisions of section 3.3-b of the specifications. This section shows that it was contemplated that shale might be encountered. If it was soft shale it came within the scope of “grading” as defined in subparagraph (1). If it was hard shale, it was to be classified as “rock excavation” as defined in subparagraph (2). Shale was to be included within rock excavation only when it “cannot be removed with an extra heavy duty rooter powered with a crawler-type tractor having 110 drawbar horsepower in good condition and on firm footing, or a modern power shovel of three-fourths (%) cubic yard capacity.” The test showed that this shale could be removed with a power shovel of three-fourths cubic-yard capacity. It is true it was difficult to so remove it, but it was not impossible and, hence, there was a basis for the contracting officer’s determination that the material did not come within the definition of “rock excavation,” but within the definition of “grading.” There were but two classifications of excavation provided for in the contract, to wit, “grading” and “rock excavation.” There was no intermediate classification.

I see no justification for making an equitable adjustment in the contract price. It is true the borings made by defendant did not show shale, but the specifications show that it was expected that shale might be encountered, and they provided payment for its excavation — as “grading” if it was soft, and as “rock” if it was hard. Under the specifications it had to be classified as one or the other; there was no intermediate classification.

There was a substantial basis for the contracting officer’s determination that this was not rock excavation and, hence, it must be classified as “grading.” Since there was substantial evidence to support the contracting officer’s decision, it is binding on us.

I must, therefore, respectfully dissent.

FINDINGS OF FACT

The court, having considered the evidence, the report of Commissioner Marion T. Bennett, and the briefs and argument of counsel, makes findings of fact as follows:

1. Plaintiff, General Casualty Company of America, is a corporation duly organized and existing under the laws of the State of Washington with principal offices in Seattle, and engaged in the business of undertaking contracts of surety-ship.

Plaintiff, Central Surety and Insurance Corporation, is a Missouri corporation with its principal office in Kansas City, Missouri, and likewise engaged in the general surety business.

Plaintiff, Wacker Corporation, is duly organized and existing under the laws of the State of Illinois with its principal office in Chicago and is the legal successor in interest of the LaSalle Industrial Finance Corporation to all matters stated herein. The Wacker Corporation is a nominal party plaintiff and waives any claim to any part of the proceeds of the claim asserted in this suit.

N. E. Daugherty is an individual residing in Indianapolis, Indiana, and at all times stated herein did business under the firm name of N. E. Daugherty Construction Company.

2. On April 14, 1943, defendant, acting through the Department of Commerce, Civil Aeronautics Administration, advertised for proposals for furnishing the materials and performing work required for the construction of grading, draining, paving and fencing of an airport at Zanesville, Ohio. The plaintiff, N. E. Daugherty, submitted a bid which was accepted on May 12, 1943, and on May 18, 1943, a contract, No. C3ca-2323, was entered into between Daugherty and the defendant, acting through O. J. Starr, Civil Aeronautics Administration Administrative Officer. The contract price was estimated to be $1,047,328.00. The accepted bid price included a unit price of 25 cents per cubic yard for grading and $1.35 per cubic yard for rock excavation.

3. On May 18, 1948, plaintiff Daugherty executed and delivered to the defendant payment and performance bonds both executed by plaintiffs, General Casualty Company and Central Surety & Insurance Corporation, hereinafter referred to as the co-sureties, in the sum of $418,931.20 each, guaranteeing the satisfactory performance and completion of the contract.

4. Plaintiff Daugherty received notice from the defendant on May 27,1943, to proceed with construction effective June 10, 1943. The project was to be completed within 150 calendar days thereafter. Daugherty began operations on June 17, 1943. On June 19, 1943, Daugherty assigned to LaSalle Industrial Finance Corporation all moneys due or to become due under the contract, as provided in the Assignment of Claims Act.

5. This suit arises out of the aforesaid contract and the petition is stated in two counts. Count One of the petition, a Lucas Act claim, was dismissed by the Court on January 8, 1952. Count Two is a contract claim covering the following items with adjusted sums sought:

Equipment rentals and expense- $13,283.97
Additional excavation_ . 00
Ditch rock excavation_ 13,395. 00
Gravel processing plant__ 6,125. 00
Overtime wages- 2,959. 83
Delay damages- 4,337.91
Unpaid balance of contract price_ 57, 813.37
Shale excavation- 167, 540.40
Bock excavation- 238,430.50
503,886. 00

With exception of the item for additional excavation, which has been abandoned by the plaintiffs, the items above will be treated in the order listed.

EQUIPMENT RENTAL CLAIM

6.The proposal conditions stated in part, “The satisfactory completion of the proposed contract depends to a major extent upon the availability of proper equipment for construction purposes * * The specifications provided, as to equipment, in part as follows:

2.1' General.- The Contractor shall maintain on the job sufficient equipment of the types needed to complete all the work in accordance with the requirements of this specification within the contract time. He may use any type of earth-moving equipment capable of accomplishing the specified and required results. * * *

Daugherty made strong but unsuccessful efforts to get sufficient equipment which was in working order. He fell behind in rental payments on some equipment which was then withdrawn from the job by the equipment owners. After numerous warnings that the contract would be terminated unless progress increased, it was finally necessary to terminate the right of Daugherty to proceed effective as of November 24, 1943.

7. The defendant, through the Civil Aeronautics Administration, accepted an offer of the cosureties to undertake completion of the project by a letter of intent on November 29,1943, reading, in part, as follows:

This acceptance is contingent upon your proceeding with the construction with such diligence as will insure its completion within the time remaining under the contract. It is to be understood that any excess costs occasioned the Government because of delays in completing this project will be chargeable to the N. E. Daugherty Construction Company, as principal on the original contract, and to you as cosurety up to the limit of your bonded obligation.

On December 6, 1943, the cosureties were given a notice to proceed in accordance with the letter of intent on all work remaining to be completed, the notice effective on December 7,1943. Another notice, effective the same date, stopped all work except clearing, drainage, and fencing, until such time as a new notice to proceed should issue. Weather did not permit construction to proceed again until May 10, 1944, as hereafter noted.

8. In a letter on January 28, 1944, the contracting officer told the cosureties that 52 calendar days remained to complete all work under the contract and that in order to accomplish the job it would be necessary for them to have suffi cient equipment on the site by April 15, 1944, or sooner if weather conditions permitted, to operate on a full-scale basis. The cosureties were requested to advise tlie defendant not later than March 1 what arrangements had been made to procure the necessary equipment and were instructed to list it. The threat was made that the last payment estimate covering work performed by Daugherty would not be released until this was done and, further, that unless the defendant was satisfied with the answer of the cosureties, their right to proceed would be terminated and the work given to others.

In a letter on February 26, 1944, the contracting officer stated no concrete evidence had yet been received that suitable arrangements had been or were being made by the cosureties, but extended to March 15,1944, the deadline for submission of the data requested in the latter of January 28. Thereafter, by telegram, the cosureties were advised that the deadline had been moved back to March 10 and that, weather permitting, a proceed order might be issued effective March 15. A meeting with representatives of the cosureties was set for March 11 in Chicago.

9. In the meantime, on March 7, 1944, the cosureties furnished the defendant with the requested information, pointing out they had already invested almost half a million dollars in the enterprise and had every intention of completing the contract. They insisted the organization, finances, and equipment necessary for this purpose were available. At the conference in Chicago the defendant expressed further dissatisfaction, however, and informed the cosureties that the commitments received for equipment did not appear to be either firm or adequate in amount. The cosureties thereupon promised to get further equipment, made a prompt effort to do so and by March 21 had made substantial progress in that direction.

The cosureties were moving equipment onto the site by the middle of March and had sufficient equipment there to resume full operations by April 1944. Normally, grading and excavation work could have started by about March 15 in that area but there was an abnormal amount of rain and freezing weather in March and April 1944 which made it necessary to postpone operations until May. The cosureties were permitted to begin work on May 1 and the resume order was issued May 10, no time being charged against the cosureties in the interval.

10. On February 17, 1945, the plaintiffs presented a claim to the contracting officer for $14,387.19 for machinery rentals incurred prior to May 10, 1944. In the pending suit this sum is reduced to $13,283.97 because nothing is now claimed for the month of March, the rental expenditures being for the month of April and up to May 10, the date of the resume order. It is found that the sum claimed was spent and that it does not include any rental on equipment owned by Daugherty. The plaintiffs contend that they should have been permitted to secure the necessary equipment within a reasonable time after which a possible resumption date was apparent or determined. The plaintiffs, however, had no choice due to the fact defendant withheld a payment, threatened to cancel the right to proceed and in view of the further facts that plaintiffs had already spent several hundred thousand dollars in winter work and in cleaning up the Daugherty obligations.

11. The contracting officer denied the claim on June 4, 1945, stating:

The lack of proper and sufficient equipment particularly during the latter stages of the construction influenced greatly our decision to terminate the prime contractor’s right to proceed. Since the co-sureties had indicated that they intended to utilize the prime contractor’s organization in the completion of the contract, we were concerned about the adequacy of the equipment to be furnished for this work. For this reason we corresponded and conferred with representatives of the sureties to insure that the completion of this project vital to the Armed services would not be delayed. Our primary purpose in these dealings was to ascertain that necessary equipment would be delivered to the site in time to permit the opening of construction as soon as weather conditions were favorable.
Although weather conditions did not permit further construction until May 10,1944, it is held that the Government is no more liable for the cost of the rental on equipment during this stand-by period than it is for rental costs on equipment held inactive by reason of unfavorable weather during the construction season. Your claim in the amount of $14,387.19 is, therefore, disallowed.

On June 16,1945, plaintiffs appealed to the Administrator of Civil Aeronautics in Washington, D. C., and by letter of August 22,1945, the Administrator ruled as follows:

* * * At the time the sureties took over there was no showing that they were in a position to resume operations with adequate equipment. The co-sureties had indicated their intention to utilize the prime contractor’s organization in completing the contract and it is reasonable to assume that the Government would be concerned about the adequacy of the equipment to be furnished by the co-sureties for completing the work. Although weather conditions did not permit resumption of operations until May 10, 1944, it would not have been good business practice for the Government to have waited until that date to satisfy itself that the sureties were ready to begin as soon as weather permitted. The Government could not afford to defer enforcing the requirements of the contract but of necessity had to be certain that the sureties were in a position to resume operations with adequate equipment at the earliest possible date.
DITCH ROCK CLAIM

12. Plaintiff Daugherty subcontracted the drainage work for the airport to the Weikel Construction Company. The specifications in the prime contract provided, in part:

4.1 General. The unit prices bid for all items shall be full compensation for furnishing all labor, materials, equipment, and incidentals necessary to complete work in accordance with the plans and specifications.
4.2 Pifes and Storm Sewer Lines. All pipe lines will be measured and paid for per lineal foot in place. Unit price shall include trench excavation, disposal of excavation material, and backfill, except granular backfill which will be paid for separately.

The profile drawings of the drainage structures showed them to be located in an area and in a strata of soil classified on the boring log as “Horizon C” material defined as “hard, impervious, silty clay” which was “relatively hard and impervious.” In digging the trenches, rock was encountered which had to be blasted. It amounted to 2,679 cubic yards of sandstone and conglomerate. The subcontractor demanded payment for removal of rock at the rate of $8.00 per cubic yard. The cosureties settled the claim for $13,-■395.00 which was computed at the rate of $5.00 per cubic yard. This was a fair and reasonable settlement. The prime contract had fixed a price of $1.50 per lineal foot of pipe in place. The uncontested evidence is, however, that the subcontract carried a provision identified by one of plaintiff’s principal witnesses, the purport of which was to protect the subcontractor against rock should it be encountered. The subcontract is not evidence. It appears, however, from the weight of the evidence that rock was anticipated below grade on this part of the job. Blasting is ordinarily necessary because of the confined nature of this type of excavation, where hard materials are encountered and ditch digging equipment will not suffice. There is nothing in the evidence to disclose that plaintiff ever called the attention of the contracting officer to an alleged changed condition in connection with this portion of the work.

13. Plaintiffs filed a claim for recovery of the alleged cost of excavating this material on February 1Y, 1945. The contracting officer denied the claim on June 4, 1945, stating in part as follows:

* * * While you found it necessary to blast to remove some of the material in drainage ditches, it is considered that from the information shown on the plans, such a contingency should have been anticipated and provided for. You will note that the borings shown on the log were all made down the center-line of the runways. Even at this point, considerably removed from the location of the underdrains, shale was shown to exist in some areas at the level of the drainage trenches. The profile drawings of the drainage structures showed them to be located over the majority of the airport area in the strata of soil classified on the boring log as “Horizon C” material and defined as “relatively hard and impervious”. A reasonable interpretation of this definition should have put the bidder on notice that the material to be encountered was of such hardness as to require removal, in the confines of a narrow drainage ditch, by special methods other than with ordinary trenching machinery. The fact that blasting was resorted to does not justify a further allowance for the removal of this strata of impervious material since the price quoted per lineal foot for placing of the sewer pipes was to include all expenses incident thereto.

Plaintiffs appealed to the head of the Department who affirmed the decision of the contracting officer.

GRAVEL-PROCESSING PLANT CLAIM

14. The specifications provided for the uniform mix of base course materials in accordance with specification CAA 3SA-83a, which stated in part:

3.3 Equipment, General. The base course material shall be mixed by a travelling mixing machine or by a central mixing machine. The use of road mix will only be permitted when so provided in the proposal. All equipment must be in good working condition and approved by the Engineer. Whatever type of equipment is used must produce a uniform and. well-pulverized mix. * * *

On April 24,1943, a supplement to the above specification was issued modifying the provisions on road mixing. This supplement permitted such mixing of base course material, provided pulverizing-mixing methods and machines were used. A power-driven, rotary-type pulverizing machine that would be satisfactory was specified. However, the supplement went on to say—

If the base course material is delivered to the runway in such uniform, mixed and pulverized state that.no admixture will be required to meet the specified requirements, ordinary road mixing methods will be permitted for mixing in the water without the use of pulverizing-mixing machines.

15. Production of base course materials was started in the fall of 1943. Plaintiff Daugherty did not have any of the mixing plants listed in the specifications but was using a crushing plant at his gravel pit. The defendant tested the materials and on or about September 27, 1943, advised Daugherty that his method was not producing satisfactory results and would not meet specifications unless a central stabilizing plant was used. The fact is that some of the materials were satisfactory and were placed with defendant’s permission to speed up the job although defendant felt that properly specified methods were not being used. Uniformity of mixture was achieved largely by road mixing, but without the specified pulverizing-mixing machine. Not enough satisfactory materials were being produced, however, without equipment listed in the specifications.

16. Plaintiff Daugherty brought a pug mill (usable as a central mixing plant) to the site in September but it was never placed in operation. When it became apparent the job would have to be finished the following spring, the plaintiff with defendant’s consent and at its suggestion, commenced to stockpile base course materials after bad weather set in about October 28, although base course was placed occasionally thereafter. The effect of the stockpiling operation was to mix the materials and, assisted by winter snows and rains and by moving them a second time in the spring, a uniformity required by the specifications was achieved. As a consequence, the pug mill was never used. Stockpiling was not at the time contemplated by plaintiff as a substitute for methods listed in the specifications because it would have required double handling and it became an expedient method only because the construction season turned unfavorable before the work was finished. Such a method was not provided for in the contract. Piad it not been used, however, plaintiff would have had to employ one of the methods contemplated by the specifications, demanded by defendant, and utilizing authorized machines.

17. On February 17, 1945, the plaintiffs filed a claim for the sum of $9,996.79, also named in their petition, contending that the pug mill was installed at defendant’s insistence but was never necessary and that the said sum represented the cost thereof from which the contractor received no use or value. The contracting officer on June 4, 1945, denied the claim. The plaintiffs appealed to the head of the Department who, on August 22, 1945, affirmed the decision of the contracting officer, stating in part:

It must be held that the installation of this plant was at the election of the contractor since the contract permitted the use of any one of several methods. It must be held that the contractor installed the central mixing plant in order that he might meet the requirements of the specifications. In any event, in the absence of a protest, which the contractor had a right to make under the contract provisions, it does not appear that there is any basis for a contention that the Government should bear the expense of such installation.

18. Plaintiff Daugherty owned the pug mill erected as heretofore noted and in this suit plaintiffs seek payment for its having been set up and dismantled under the circumstances described above. The evidence on plaintiffs’ costs regarding this item is meagre but not incredible. It is found that the reasonable cost to plaintiffs was $6,125.00.

CLAIM EOR OVERTIME WAGES

19. The special proposal conditions which were made a part of the contract provided in part as follows:

26. Regulations Relating to Overtime Wage Compensations Executive Order 9240: (a) On and after October 1, 1942, all of the requirements of Executive Order 9240, dated September 9, 1942, relating to Overtime Wage Compensation shall be observed by the contractor, during the war, in the performance of this contract, except insofar as it may be determined by the Secretary of Labor, pursuant to Executive Order 9248, that the provisions of Executive Order 9240 do not apply. The requirements of Executive Order 9240 are as follows:
(1) No premius wage of extra compensation shall be paid to any employee in the United States, its territories or possessions for work on Saturday or Sunday except where such work is performed by the employee on the sixth or seventh day worked in his regularly scheduled workweek and as hereinafter provided.
a. Where because of emergency conditions an employee is required to work for seven consecutive days in any regularly scheduled workweek a premium wage of double time compensation shall be paid for work on the seventh day.

20. On December 9,1943, the project engineer called attention of the plaintiffs to the requirement of Executive Order 9240 as to payment of double time on the seventh day and of the heavy penalty for not doing so. A list of the names of 531 of those who should be so paid, in defendant’s opinion, was provided plaintiffs.

On January 20, 1944, plaintiff Daugherty replied to the notice of December 9, 1943, stating that by agreement with the union the workers did not expect to be paid double time but that by paying time and a half for Saturdays and Sundays this amounted to straight time for Saturday and double time for Sunday. Defendant was asked to withdraw its demand that double time be paid for Sunday and assurance was given that while the arrangement made by plaintiffs “perhaps stretched some” the exacting letter of the contract, there was no intention to violate it, but only to expedite completion of the job in harmony with all concerned. The upshot of it was, however, that plaintiffs did pay $2,959.85 to satisfy demands of defendant that the Executive Order be complied with and this sum was over and above sums already paid.

21. On February 5, 1944, the contracting officer advised plaintiffs as follows:

The Department of Labor has recently ruled in response to an application from this Administration, that the Wage Stabilization Agreement for the Building and Construction Trades Industry applies to all defense construction carried on by the CAA. Consequently, Executive Order No. 9240 is not applicable and we will not be required to insist on the observance of the provision regarding double-time compensation.

As a consequence of this exemption, plaintiffs, thereafter, were not required to pay double time.

22. On or about December 1,1944, plaintiffs claimed reimbursement of the double-time compensation paid for work performed on the seventh day. The claim was rejected by the contracting officer and plaintiffs were notified on December 29, 1944, that this was so because the provisions of Executive Order 9240 were a part of the invitation for bids which resulted in the contract and that it must be assumed that the cost of compliance therewith was taken into account by Daugherty in preparation of his bid since no exception was taken to those provisions. It was pointed out that the order did not require payment for time and a half on Saturdays and defendant stated that the increased cost of plaintiffs was not due to the. order but caused by .the labor union’s insistence that time and a half be paid for Saturday work.

23. An appeal was taken on January 25,1945, to the head of the Department, as provided by the contract. On February 17, 1945, and again on June 4, 1945, the claim was the subject of further correspondence between plaintiffs and the contracting officer. On June 16, 1945, the appeal to the head of the Department was outlined in further detail and the argument made that the labor union at no time claimed double pay and was not responsible for these increased costs, otherwise the workers would not have accepted time and a half payment for the seventh day. On August 22, 1945, the head of the Department affirmed the decision of the contracting officer for the same reasons given by the latter on December 29,1944.

CLAIM EOR 0ELAY DAMAGES

24. Plaintiff Daugherty and defendant executed the standard Government construction contract containing Article 9 as follows:

Article 9. Delays — Damages.—If the contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in article 1, or any extension thereof, or fails to complete said work within such time, the Government may, by written notice to the contractor, terminate his right to proceed with the the work or such part of the work as to which there has been delay. In such event the Government may take over the work and prosecute the same to completion, by contract or otherwise, and the contractor and his sureties shall be liable to the Government for any excess cost occasioned the Government thereby. If the contractor’s right to proceed is so terminated, the Government may take possession of and utilize in completing the work such materials, appliances, and plan as may be on the site of the work and necessary therefor. If the Government does not terminate the right of the contractor to proceed, the contractor shall continue the work, in which event the actual damages for the delay' will be impossible to determine and in lieu thereof the contractor shall pay to the Government as fixed, agreed, and liquidated damages for each calendar day of delay until the work is completed or accepted the amount as set forth in the specifications or accompanying papers and the contractor and his sureties shall be liable for the amount thereof: Provided, That the right of the contractor to proceed shall not be terminated or the contractor charged with liquidated damages because of any delays in the completion of the work due to unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God, or of the public enemy, acts of the Government, acts of another contractor in the performance of a contract with the Government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather or delays of subcontractors due to such causes, if the contractor shall within 10 days from the beginning of any such delay (unless the contracting officer, with the approval of the head of the department or his duly authorized representative, shall grant a further period of time prior to the date of final settlement of the contract) notify the contracting officer in writing of the causes of delay, who shall ascertain the facts and the extent of the delay and_ extend the time for completing the work when in his judgment the findings of fact justify such an extension, and his findings of fact thereon shall be final and conclusive on the parties hereto, subject only to appeal, within 30 days, by the contractor to the head or the department concerned, whose decision on such appeal as to the facts of delay and the extension of time for completing the work shall be final and conclusive on the parties hereto.

25. As noted in finding 3, the contract entered into by plaintiff Daugherty was secured by substantial payment and performance bonds executed by plaintiff cosureties. Upon termination of the right of Daugherty to proceed on November 24, 1943, the cosureties assumed the burden of completing the contract, as noted in findings 6 and 7. No supplemental contract was made. It was thoroughly understood by the cosureties and the defendant that the former would undertake to complete the job within the terms and provisions of the contract. However, Equalization Order No. 3-150 was issued giving the cosureties 53 days from the date of the proceed order to complete the contract work.

26. Notice to proceed was issued May 10,1944, and giving consideration to subsequent stop orders, the agreed period of completion was July 29, 1944. The cosureties completed the work 33 days later, on August 31,1944. As a consequence of this delay, defendant deducted $4,337.91 from money due on the final pay estimate pursuant to Article 9 of the contract.

27. On September 13, 1945, the cosureties protested the deduction to the contracting officer upon the grounds that a large proportion of the excavated material was different from that shown by the plans and that this caused more time and expense to be required to move it. It was also alleged that defendant had made certain errors in staking the job and that there were substantial changes in the quantities of material and work to be done for which insufficient credit was given for additional time. The Comptroller General advised plaintiffs on August 28, 1946, that no action was being taken on the protest other than to file the same. Plaintiffs filed their claim in this Court on September 9, 1946. The grounds raised in plaintiffs’ protest and covered by the evidence are treated in subsequent findings, numbers 29 to 41, inclusive. Findings 6 to 11, inclusive, are also pertinent to this claim.

CLAIM EOR UNPAID BALANCE

28. On November 26, 1943, plaintiff Central Surety and Insurance Corporation sent the defendant a telegram stating that it was willing and, with defendant’s permission, would jointly with General Casualty Company enter into a supplemental contract with the defendant for the completion of Contract C3ca-2323 in discharge of its bond obligation. On the same date the cosurety General Casualty Company also sent the defendant a telegram stating that on condition the right of Daugherty to proceed had been terminated and on the further condition that all estimates, retainages, extras, and other sums due would be paid direct to the cosureties, the sender of the wire would undertake to discharge its bond obligation by completing the contract. The defendant replied to this wire on November 29, 1943, accepting the offer to. go ahead but stating that claim to all estimates, retainages, extras, and other sums due under the contract at the time of termination could not then be allowed since there was, at the time of termination, a valid assignment of money due under the contract in favor of the LaSalle Industrial Finance Corporation. This was satisfactory to. the cosureties who then did go ahead without a supplemental contract. On January 28, 1944, the defendant advised them that when it was satisfactorily supplied certain information requested about equipment plaintiffs were lining up- to do the job, the last payment estimate in question would be released. On July 8, 1944, under certificate No. 0838059 the Comptroller General certified as due the LaSalle Corporation, as assignee of Daugherty, the sum of $56,783.56, representing the sixth progress payment in controversy.

Before a check was issued, however, a tax levy was filed against the contractor. Plaintiff Daugherty owed withholding, victory and unemployment taxes assessed in the performance of the Zanesville contract in the sum of $45,366.00 and in the sum of $12,863.10 assessed in connection with other work. The defendant, thereupon, refused the demands of the cosureties for payment of the amount earned by Daugherty prior to termination of the latter’s right to proceed. On August 7, 1944, the certificate of July 3, 1944, was rewritten in favor of the Treasurer of the United States. By appropriate bookkeeping entries defendant set off the sum due Daugherty against Daugherty’s tax indebtedness of $45,366.00, liquidating it entirely,, and also by set-off reduced Daugherty’s indebtedness of $12,863.10 by the sum of $11,417.56. Defendant took the position that by virtue of assignment the LaSalle Corporation, and subsequently the cosureties, acquired by assignment whatever rights the contractor Daugherty had in moneys due or to become due under the contract but that the contractor could not transfer greater rights than he had himself and that as a matter of law all defenses and set-offs available to the Government, as debtor, against the contractor-assignor are available against the assignees. The defendant held that sums earned prior to termination were owed only to the contractor and that as these moneys were not earned by the completing sureties they could not claim the same for lack of consideration. Plaintiffs here seek the sum of $57,813.37 as representing earnings on account of performance of the contract. As between the sum claimed and that certified, the latter in the amount of $56,783.56 appears from the evidence to be correct.

CLAIM FOR SHALE AND ROCK

29. The specifications provided in part as follows:

3.1 General. * * *
All material encountered shall be considered as unclassified excavation unless otherwise specified. The Contractor shall inform and satisfy himself as to the character, quantity and distribution of all material to be excavated. No payment will be made for any excavated material which is used for purposes other than those designated. * * *

The specifications provided further:

3.3-b Glassification of Excavation. All excavated material will be classified as “Grading,” or “Rock Excavation.”
(1) Grading shall consist of the removal and satisfactory disposal of all loam, sand, clay, gravel, soft shale, soft slate, old gravel, broken stone or bituminous macadam pavements, loose or decomposed rock, boulders of less than one-half (y2) cubic yard in volume and all other materials not otherwise classified under these specifications.
(2) Boole, Excavation. Rock excavation shall include all solid rock and boulders having a volume of one-half (14) cubic yard or more, and all shale or ledge rock which cannot be removed with an extra heavy duty rooter powered with a crawler-type tractor having 110 drawbar horsepower in good condition and on firm footing, or a modern power shovel of three-fourths ('%) cubic yard capacity in good condition, without continuous drilling or blasting; although blasting may be resorted to, to facilitate the work. * * *

It is noted that in the contract, Item 1.21 of the Schedule of Items states the plaintiffs accepted unit bid price of 25 cents per cubic yard for grading and Item 1.22 gives the unit price of $1.35 per cubic yard for rock excavation.

The special proposal conditions provided in part as follows:

10. Local Conditions: Bidders or their authorized agents are expected to inspect the site of the work or to otherwise thoroughly acquaint themselves with local conditions as may affect performance of the contract and to reasonably anticipate the difficulties to be encountered therein.
11. Borings: Borings where shown were made by means of a hand auger. Borings were made at the approximate locations shown on the drawings, and the character and depth of materials found are believed to be approximately correct.

30. The contract provided in part as follows:

Article 3. Changes. — The contracting officer may at any time, by a written order, and without notice to the sureties, make changes in the drawings and/or specifications of this contract and within the general scope thereof. If such changes cause an increase or decrease in the amount due under this contract, or in the time required for its performance, an equitable adjustment shall be made and the contract shall be modified in writing accordingly. Any claim for adjustment under this article must be asserted within 10 days from the date the change is ordered: Provided, however, That the contracting officer, if he determines that the facts justify such action, may receive and consider, and with the approval of the head of the department or his duly authorized representative, adjust any such claim asserted at any time prior to the date of final settlement of the contract. If the parties fail to agree upon the adjustment to be made the dispute shall be determined as provided in article 15 hereof. But nothing provided m this article shall excuse the contractor from proceeding with the prosecution of the work so changed.
Article 4. Changed conditions. — Should the contractor encounter, or the Government discover, during the progress of the work subsurface and/or latent conditions at the site materially differing from those shown on the drawings or indicated in the specifications, or unknown conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the plans and specifications, the attention of the contracting officer shall be called immediately to such conditions before they are disturbed. The contracting officer shall thereupon promptly investigate the conditions, and if he finds that they do so materially differ the contract shall, with the written approval of the head of the department or his duly authorized representative, be modified to provide for any increase or decrease of cost and/or difference in time resulting from such conditions.
* * •-!: #
Article 15. Disputes. — Except as otherwise specifically provided in this contract, all disputes concerning questions of fact arising under this contract shall be decided by the contracting officer subject to written appeal by the contractor within 30 days to the head of the department concerned or his duly authorized representative, whose decision shall be final and conclusive upon the parties thereto. In the meantime the contractor shall diligently proceed with the work as directed.

31. The site of the proposed airport was a rugged hilly country cut by deep ravines with ground elevations varying from elevation 870 to 917. In order to flatten out the site for airport purposes it was estimated that approximately 2,000,000 cubic yards of material would have to be moved. To assist bidders, the defendant made borings at intervals of 500 feet along the center line of the runways and notified the bidders that hand augers were used for this purpose. Such augers bring up the earth in granular form. At stations 33 on the E-W runway and 38 on the NW-SE runway, intermediate borings were made between the regular intervals mentioned. All borings, 35 in number, were represented by defendant on sheets 12 and 13 of the contract drawings. The sections showing borings made on each runway are connected with horizon lines designated A, B, and C. The defendant’s engineer making these hand auger borings found the soil to lie generally in three horizons as follows:

A. Brown topsoil, from zero to 6 inches in depth.

B. Yellow tan silty clay, 6 inches to 9 feet in depth.

C. Light tan silty clay and blue clay relatively impervious and hard from 9 feet in depth to grade.

The engineer reported, also, some evidence of shale and loose rock below grade. He connected the borings as shown on the drawings with lines he did not explain. The plaintiffs contend that these lines show that soil between the bor-ings was identical with soil removed at the boring locations. The defendant did not adduce explanatory evidence from the author of the lines but denies the contention. Be that as it may, the charts and the borings did not show that plaintiffs would encounter hard shale as found in later excavation. Further, the borings made were apparently not all examined scientifically but only four samples thereof were submitted to the Flood Soils Laboratory for analysis. This fact was unknown to plaintiffs. The table of soils characteristics in the contract drawings was apparently based upon the laboratory report. Some soils described in the boring charts were found in the three horizons. It is found that the defendant did not deliberately misrepresent the materials it thought would be encountered or hold back any information it had from plaintiffs. It is found further, however, that its bor-ings and data were inadequate and that plaintiffs encountered shale in locations and amounts seriously in excess of those indicated by the defendant’s drawings. Also, hard shale not shown on the drawings was encountered. In these respects the contract drawings were not approximately correct. Plaintiff Daugherty’s reasonably careful inspection of the site gave no indication to him that he would encounter materials any different from those represented on the contract drawings.

32. The plaintiffs and defendant are in agreement on the total quantity of excavation performed but not on what was excavated. The total quantity of excavated materials moved was 2,056,262 cubic yards. Sometime in July 1943 plaintiff Daugherty encountered hard shale. He concluded that it could best be removed by first breaking it up with a rooter. A rooter is a heavy blade which projects into the ground and operates on the principle of a plow. Daugherty’s rooter had three teeth but after experimentation during the course of the contract it was found that in some areas the hard shale could more easily be rooted by removing two of the teeth, thus giving increased power to the operation. Thereafter, and until the winter layover, he used the rooter as occasion demanded. The rooter was powered by a crawler-type tractor having 110 drawbar horsepower. The hard shale could not have been removed by pans used in taking out clay without first rooting it. Considerable quantities of soft shale were also encountered. This was “grading” and was handled with the same equipment, pans and tractors as used on dirt.

33. The defendant classified the material, now claimed by the plaintiffs to have been hard shale and rock, as “grading” in each of the 1943 monthly estimates and plaintiff Daugherty was paid upon that basis. Daugherty, however, did protest orally in September 1943 to the resident engineer about such payment. The following month, in a letter to the engineer in charge of design and construction, he stated that 200,000 yards of hard shale had been encountered, slowing operations, but did not claim a changed condition for purposes of reclassification or payment. Previously, Daugherty’s engineer and two successive superintendents made strong oral representations about a changed condition to defendant’s resident engineer and his assistants and asked that payment be made for rock. This was refused upon the basis that it was being rooted and, therefore, was grading within the contract classifications. Plaintiff’s engineer also told the resident engineer that he was going to cross section the hard materials and make claims for additional compensation therefor. The resident engineer was requested to cross section the materials also but declined to do so. Plaintiff asked the resident engineer to have representatives present while plaintiff took elevations but he did not do so. The resident engineer did not report to the contracting officer the representations made by plaintiff Daugherty about the changed conditions encountered. On March 30, 1944, the resident engineer finally acknowledged to his superiors the fact that plaintiff was claiming rock. The first such claim was made by the contractor, in writing, on February 4,1944. The claim under the latter date was after plaintiff retained counsel and was for 193,000 yards of rock alleged to have been excavated in 1943. The claim was denied February 10,1944.

34. Plaintiff Daugherty had not excavated a shale bank near the runway intersection and when the work was resumed in 1944 the co-sureties contended that this shale constituted rock within the contract definition. The defendant’s representatives suggested a rooter test with a crawler-type tractor having a drawbar pull of 110 horsepower or less but plaintiff co-sureties declined to make such a test. The rooter had been in operation and they took the position that the results of its operation were established.

It was agreed that a test would be made to see if the material could be handled by a three-quarter cubic yard shovel without continuous drilling or blasting. The test was made in May 1944. The shovel handled the materials with difficulty but was able to do so without drilling or blasting. The shovel did stick sometimes and it required several passes with the bucket to get a load, whereas in gravel, dirt, or clay this would not have been necessary. As a consequence of the test, defendant declined to pay for “rock.” The plaintiff co-sureties then completed the contract and were paid for “grading.” It is to be noted that plaintiffs did not rely solely on the three-quarter cubic yard shovel but also used a one-yard shovel which had more power, approximately twice the weight of the smaller shovel, and was more efficient. The material could have been moved with the smaller shovel alone without blasting, but this would have required much additional time which was not available. Even with the larger shovel the teeth would break off in the hard shale and both machines required considerable repair in this regard. This shale not only was hard to excavate and required more time than clay but did not compact well and required more loads to the fills, increasing costs.

35. In finding 83 reference was made to the efforts of plaintiff to take cross sections as the excavation proceeded, showing the classifications and quantities of materials encountered. The information so gathered was used in preparing plaintiffs’ exhibits 6 and 31 in evidence. These exhibits are colored and purport to show hard shale in green and ledge rock in red. The locations where shale and rock were claimed to have been encountered are further explained in plaintiffs’ exhibit 7 in evidence. Plaintiffs also introduced into evidence samples of hard shale, what they called ledge rock, and numerous photographs taken during excavation and explained in relation to the cross sections. Following are the sums allowed and paid by the defendant on the disputed materials at 25 cents per cubic yard, the quantities and character of excavation claimed by plaintiffs and the sums claimed therefor:

If, as a matter of law, and as defendant insists, there can properly be no intermediate classification for shale between the price for grading at 25 cents per cubic yard and the contract price for rock at $1.35 per cubic yard, then the plaintiffs claim a total of 635,606 cubic yards at $1.35 per cubic yard, which would total $858,068.10. The defendant has allowed and paid as grading at 25 cents per cubic yard the sum of $158,901.50, leaving a balance claimed by plaintiffs of $699,166.60.

36. The 418,851 cubic yards of alleged hard shale are said by plaintiffs to have been removed by means of a rooter using three teeth, powered with a crawler-type tractor having 110 drawbar horsepower, after which pans were used. A fair and reasonable price for excavation of hard shale would be approximately 65 cents per cubic yard. The 216,755 cubic yards of ledge rock claimed to have been encountered by plaintiffs could not be removed, the plaintiffs contend, by the rooter identified above and by the specifications nor by a modern power shovel with a three-quarter cubic yard capacity without continuous drilling or blasting. In order to accomplish removal of this material plaintiffs contend they found it necessary to use an extra heavy-duty rooter with only one tooth for greater rooting force. This rooter was powered by two D8, crawler-type, tractors having 110 draw-bar horsepower, using one as a puller and the other as a pusher. Plaintiffs contend that such equipment went beyond the contract and specifications and was substituted for blasting of material that likewise was different from that defendant represented they would encounter. For this the plaintiffs here claim the contract rock price of $1.35 per cubic yard, a fair and reasonable price for rock excavation. Most of the alleged rock for which plaintiffs have not been paid the rock price, 185,804 cubic yards, was excavated in 1943 and only about 30,951 cubic yards in 1944. The quantity removed in 1944 was largely with the use of shovels heretofore noted. To the extent that pans were used this material had to be rooted. In addition to the 216,755 cubic yards of rock here claimed, plaintiffs encountered and removed 689 cubic yards of rock for which they were paid the bid price of $1.35. This small quantity of rock was found in a channel change and was loosened by blasting.

37. It is found tlrat the 418,851 cubic yards of material plaintiffs claim was hard shale and which had to be rooted was not hard shale and that it was removed in part with the equipment plaintiffs admit using thereon, namely, a rooter with three teeth, powered by a crawler-type tractor having 110 drawbar horsepower, after which pans were used. There was no blasting. This material, while difficult of removal, was grading within the terms of the specifications, for which plaintiffs have been fully paid at the contract price for grading of 25 cents per cubic yard.

38. It is found that the 216,755 cubic yards of so-called ledge rock was in reality hard laminated shale of a type not shown on the contract drawings nor by the defendant’s original borings.

In May 1944 when the work was almost completed, the defendant caused borings to be made by the H. C. Nutting Company, a firm of soils experts. Out of some 17 borings three were made within the area where the plaintiffs contend they encountered shale and rock in excavation. On two of the three holes the material was hard enough to get core samples with a rotary core drill with diamond tools for cutting. On the other holes where the material was not hard enough to core, a sample tube was driven in with a No. 225 hammer using a three-inch stroke. In the three pertinent borings shale of various characteristics was encountered together with some conglomerate limestone.

If, as a matter of law, plaintiffs can be paid for 216,755 cubic yards of hard shale at 65 cents per cubic yard instead of $1.35 per cubic yard for rock, or 25 cents per cubic yard for grading, they would be entitled to $140,890.75 less the sum of $54,188.75 allowed by defendant, or a net of $86,-702.00. Of this net amount the sum of $12,380.40 would represent the excavation of hard shale in 1944.

To excavate this material inquired the shovels heretofore discussed and sometimes a rooter with one tooth powered by two tractors, one pushing and one pulling. The evidence is conflicting on the exact extent to which two tractors were used on the rooter. The defendant’s records on hours the rooter was used show only 67 hours of use in 1943. It is found that these records are not complete and that while two tractors were not used continuously and the rooter or rooters were employed intermittently as required, the hard shale in the quantity of 216,755 cubic yards could not, for the most part, have been removed in any efficient manner without a one-yard shovel supplementing the three-quarter yard shovel and by being loosened in some areas with a single-tooth rooter powered by two tractors. As with the case of the three-quarter cubic yard shovel, the job could have been completed with a rooter powered by only one tractor such as specified but it would have taken “forever and a day.” Under the specifications the plaintiffs were entitled to use any excavating equipment they desired to use, and were required to have such equipment as necessary to complete the contract in time, as noted in finding 6. In using two tractors to power a one-tooth rooter the plaintiffs did so in lieu of blasting. Plaintiffs did not have and were unable to obtain equipment and supplies required for extensive drilling and blasting.

. 39. Plaintiffs’ records are not sufficiently complete to make possible an accurate audit of actual costs. Nevertheless, the defendant attempted a calculation involving both audits of records and estimates, concerning costs for excavation which, for the total quantity excavated, resulted in a unit cost of 38.9 cents per cubic yard. If certain items which the defendant disallowed and which are claimed in this suit are included, the unit cost would appear to be about 44.56 cents per cubic yard for excavation. Approximate over-all cost at the rate of 39 cents per cubic yard was in no small measure due to plaintiffs’ slack production, heretofore referred to and which eventuated in the termination of his contract rights.

In the completion of the project, the co-sureties expended the sum of $1,584,942.27, of which $487,882.90 was a loss. The cosureties have paid up to December 31, 1951, a total Of $493,991.64, which is the sum claimed by them of any judgment rendered herein.

40. Plaintiffs filed a claim for rock and shale excavation on February 17, 1945. The contracting officer denied the claim on June 4, 1945, stating, in part, as follows:

In comparing the areas in which yon claim to have encountered rock with the information shown on the monthly progress reports, it is found that considerable areas in which this more difficult excavation is claimed to have been performed were excavated during the 1943 season. There is not sufficient evidence to give consideration to any part of the claim bearing on the work in 1943. From a daily inspection of the performance, the Government did not at any time consider that the conditions being encountered differed materially from those shown on the plan. The evidence on file does not indicate that the contractor was of the different opinion as to the class of the material being excavated. While on several occasions letters were directed to the Government’s project engineer concerning a controversy in the interpretation of the specifications, in no instance did the contractor take exception to the soil classifications as indicated by the plans and specifications. It was not until February 4, 1944, several months after his right to proceed had been terminated, that the prime contractor came forth with a claim for the excavation of rock. In view of his prior tacit acceptance of the terms of the contract, the accuracy of the claimed difficulties could not at this late date be determined. If the contractor intended to claim additional compensation, these alleged changed conditions should have been made a matter of record before these conditions were disturbed as contemplated by the contract so that an investigation could then and there have been made.
The fact that the contracting officer was deprived of his prerogative of examining the conditions prevents the acceptance of your argument that the character of the soil was entirely different from that represented by the plans. After the receipt of the letter of February 4, 1944, and after work was resumed in 1944, an investigation of the soil conditions was instituted so that it could be determined whether, in the areas remaining to be excavated during the 1944 season, the completing sureties would encounter material falling within the classification for rock in the specifications. As you are aware, representatives of this office were present on May 19 and 20, 1944, for an on-the-job demonstration of the difficulties attendant to the prosecution of this work. The primary purpose of this demonstration was to determine whether the soil remaining to be excavated would fall under the classification for grading or rock excavation. * * *
For the purpose of this demonstration, you provided a three-fourths cubic yard power shovel and performed some excavation in the face of a bank of shale which had not previously been disturbed. The results of this showing did not prove that the material encountered met the provisions of the specifications with respect to rock excavation since it was possible to remove the materials without undue difficulty. Insofar as is known to this office all of the material for which payment has been made under item 1.21 of the contract was removed with equipment which is generally used for unclassified excavation, and with the exception of 689 cubic yards of rock removed from a channel 380 feet left of the centerline at station 10+00 on the NW.-SE. runway, blasting was not resorted to in any of the grading operations. Your claim for compensation for the excavation of rock over and above the quantity of 689 cubic yards for which payment has been made is, therefore, denied.
The statements made concerning your claims for rock excavation in the areas graded during 1943 apply as well to your claim of 65 cents per cubic yard for excavating 423,168 cubic yards of shale. Apparently the bulk of the material you claim as shale encountered during 1944 construction was classified on drawings Nos. 3-X-1276-9A and 3-X-1276-9B as hard impervious silty clay and occurred above the elevations where shale was shown. This material, to the knowledge of this office was all excavated with ordinary grading equipment without greater difficulty than should have been anticipated from an analysis of the specifications and an investigation of local conditions. The conditions encountered were peculiar to the locality and were not so materially different from those shown on the plans as to justify a further allowance for excavation.

41. Plaintiffs appealed to the head of the department who, on August 22,1945, reviewed the decision of the contracting officer and denied the claim stating, in part, as follows:

On the basis of the evidence developed and after careful consideration of the statements contained in your appeal, I find that the decisions rendered by the contracting officer in this case were proper and must therefore be sustained. Accordingly, it is hereby determined that there is no basis for the payment of any additional compensation in connection with any item of your claim.
Item 1 of your claim deals with the excavation of rock and shale and is based on your contention that the plans and drawings forming a part of the contract did not accurately describe the conditions actually encountered. Notwithstanding the merit of your argument, I do not believe that such contention has any bearing on the matter at issue. * * *
* * * the contract provides for two types of excavation — unclassified excavation at 25 cents per cubic yard, and rock excavation at $1.35 per cubic yard. It is mutually agreed that no drilling or blasting was resorted to in performing the excavation with the exception of 689 cubic yards for which you have been or will be paid at the contract price of $1.35 per cubic yard.
In effect, your argument with respect to this item of the claim attempts to set forth a third classification for excavation to provide for an intermediate price between that provided for unclassified excavation and that provided for rock excavation to take care of the material which you claim was removed under great difficulty both in time and expense and delay in progress, although such material did not require drilling or blasting.
I can see no basis for such a revision of the contract. The contract is clear and specific with respect to the two types of excavation and inasmuch as the material removed did not fall within the definition of “Bock Excavation” as set forth by the contract, there is no authority for classifying such material as rock or for paying for its removal at any price in excess of the 25 cents per cubic yard specified by the contract for unclassified excavation.

42. When the contracting officer and the head of the department denied and failed to recognize a changed condition as described in these findings where plaintiff encountered 216,755 cubic yards of hard shale which was not indicated in the borings and contract drawings, and which was more difficult of removal than grading, and when said officers failed to make any equitable adjustment for removal thereof, the determination was arbitrary and was not supported by substantial evidence.

DEFENDANT’S COUNTERCLAIM

43. Daugherty rented equipment and received property from the Maxon Construction Company, becoming indebted thereby in the sum of $875.32. The Maxon Construction Company assigned its claim to defendant. Daugherty is indebted to defendant in the sum of $875.32.

CONCLUSION OF LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law plaintiffs General Casualty Company of America and Central Surety and Insurance Corporation are entitled to recover, and it is therefore adjudged and ordered that they recover of and from the United States as reimbursement for sums expended for and in behalf of N. E. Daugherty, d/b/a N. E. Daugherty Construction Company, the sum of $91,039.91 less $875.32, representing defendant’s counterclaim, making a total of ninety thousand one hundred sixty-four dollars and fifty-nine cents ($90,164.59). [As amended February 16, 1955.] 
      
       No mention is made in plaintiffs’ briefs as to processing plant claim or the claim for overtime wages. We assume and will treat them as having been abandoned. In any event the processing plant was installed at the election of the contractor, since the contract permited the use of any one of several methods.