Case ID: us-ct-cl_62/html/0542-01.html
Source: Caselaw Access Project
Author: {"author": "Campbell, Chief Justice,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

INDEPENDENT BRIDGE COMPANY v. THE UNITED STATES
    [No. D-636.
    Decided November 1, 1926]
    
      On the Proofs
    
    
      Contract; delays; responsibility. — A contract makes the findings of a contracting officer approved by the Chief of Engineers final between the parties as to responsibility for delays, and after completion of the work a settlement is made between the plaintiff and the contracting officer, and certain expenses1, caused by said delays are deducted and the balance of the compensation for the work is received by the plaintiff under protest. Subsequently the contracting officer makes findings which are approved by the Chief of Engineers relieving the plaintiff from responsibility for said delays and repays him the amount theretofore deducted. The accounting officers had no authority to deduct said amount from other monies due plaintiff, and the plaintiff is entitled to recover said amount in this court. See Independent Bridge Company v. United States, ante, p. 11.
    
      The Reporter's statement of the case:
    
      Mr. George A. Kmg for the plaintiff. Mr. George R. Shields and King db King were on the briefs.
    
      Mr. James J. Lenihan, with whom was Mr. Assistant Attorney General Kerman J. Galloway, for the defendant. Mr. George D. Brabson was on the briefs.
    The court made special findings of fact, as follows:
    I. The Independent Bridge Company, the plaintiff, is a corporation organized under the laws ox the State of Pennsylvania with its principal office and place of business in Pittsburgh.
    II. On January 8, 1911, plaintiff entered into a contract with the United States, represented by Maj. R. R. Ralston, Corps of Engineers, United States Army, as contracting officer, for the construction and erection of two lock gates at each of Dams Nos. 31 and 35, Ohio River, on the basis of specified unit prices for the materials required. The work was to be completed, including testing, within 60 fair working days after September 1, 1911, with the provision that additional time might be allowed for certain specified causes. A copy of said contract, together with the pertinent specifications forming a part thereof, is attached to plaintiff’s petition-herein marked “ Exhibit A” and is by reference made a part of this finding.
    III. Under date of August 24, 1918, the same parties entered into a supplemental agreement modifying paragraph 20 of the original specifications so as to provide for partial payment of certain manufactured materials. A copy of said supplemental agreement is attached to plaintiff’s petition herein marked “ Exhibit B ” and is by reference made a part of this finding.
    IV. The 60 fair working days from September 1, 1917, expired in December, 1917. The work was not completed at Dam 35 until August 31, 1919, and at Dam 31 until September 30, 1919, the latter date being 656 days later than the time specified for completion.
    Y. Application was made by the contractor to the Secretary of War for relief under the provisions of section 8 of the act of July 18, 1918, and after consideration thereof a second supplemental agreement was entered into under date of July 17, 1919, further modifying the original contract of January 8, 1917, in a manner deemed to be equitable and just.
    It was provided by said supplemental contract that the contractor should be paid “the actual necessary and increased cost to them after July 18, 1918, due to conditions arising out of the war as determined by the district engineer and approved by the Chief of Engineers.”
    
      Paragraph (e) of said supplemental agreement provides:
    “(e) The contractors, the Independent Bridge Co., in consideration of the payment hereby authorize, for themselves, their successors, or assigns, do hereby forever quitclaim, release, and discharge the United States of and from every claim of whatever kind or character except the right to assert a claim under section 10 of the river and harbor act of March 2, 1919, including anticipated profits, and from every demand, action, or right of action now existing or which may hereafter exist, either on their own behalf or on behalf of their successors or assigns, arising under or by reason of the termination of the said contract; this release to become effective upon the final payment under the supplemental contract.”
    YI. About the time of the expiration of the original time limit the contractor made application for extension of the same and the contracting officer with the approval of the Chief of Engineers waived the time limit and permitted the contractor to finish the work within a reasonable time, to be-determined by the contracting officer, subject to any proper charges accruing under the terms of the contract.
    The contracting officer in the settlement in due course, about September 30, 1919, deducted from moneys otherwise due to the contractor during 1918 and 1919, and over its protest, the cost of superintendence and inspection in the sum of $1,234.01, and watchman’s services in the sum of $236.80, which was the cost of said charges for the period the work was delayed, less 12 days’ delay for which the contracting officer found the United States responsible.
    VII. At some time subsequent to the said payment on the contract the contractor made claim for refund of the sum so withheld, claiming that the entire delay had been due either to acts of the United States or to inability to procure labor and materials incident to war conditions, and on this claim the contracting officer on January 22, 1921, reported as follows:
    “ 2. The request of the company for refund of superintendence and inspection costs appears to be reasonable and justified by the facts in the case.
    “ The company has submitted claims for relief under the provisions of sec. 8 of the river and harbor act of July 18, 1918, and has been allowed relief on this contract thereunder. This fact would tend to confirm the contractor’s contention that superintendence and inspection charges may properly be waived under the contract itself. It is believed by the district officer that the contractor used every available means to complete the contract as soon as possible and that the delay in completing was due to causes which would permit the department to waive the costs of superintendence and inspection.”
    The division engineer forwarded the claim with this indorsement:
    “ 2. The division engineer has had occasion to thoroughly investigate the work of this contract in connection with the contractor’s claim for relief under the provisions of section 8 of the river and harbor act of July 18, 1918, and is quite familiar with conditions which the contractor encountered. He believes that the contractor used every possible endeavor to comply with the terms of the contract and that the delay was entirely due to causes which would permit the Chief of Engineers to remit charges for superintendence and inspection. He therefore concurs in the opinion expressed by the district engineer and recommends that no charge for superintendence and inspection be made.”
    The Chief of Engineers under date of February 8, 1921, took the following action:
    “ 1. Consistent with the action of modifying the contract in question to pay increased compensation for all work performed after July 18, 1918, authority is hereby given to remit costs of superintendence and inspection, and also watchman services to the completion of the contract, or a total of $1,410.81.”
    In accordance with this authority the contracting officer paid plaintiff the amount deducted, as already stated.
    VIII. The accounts of the contracting officer were audited by the General Accounting Office and the final payment to the contractor, including payment of said $1,410.81, was passed to the credit of such officer by settlement dated March 30,1922. Subsequently the contractor presented a claim under another contract, which the General Accounting Office denied, and thereupon the settlement previously made was reopened and the contracting officer charged with the sum of $1,410.81 as an erroneous payment, and the amount of such charge was thereafter by settlement dated September 21, 1923, deducted from moneys otherwise due to the contractor under said other contract.
    The court decided that plaintiff was entitled to recover.
   Campbell, Chief Justice,

delivered the opinion of the court:

The plaintiff contracted to construct two lock gates at each of Dams Nos. 31 and 35. The work was to be complete within a definite period after September 1, 1917. The contract was made in January, 1917, and the parties entered into a supplemental contract in August, 1918, modifying the original contract in some of its features. The plaintiff also applied to the Secretary of War for relief under the provisions of section 8 of the act of July 18, 1918, 40 Stat. 912, with the result that a contract was made increasing its compensation. The work was completed in August, 1919, at one of the dams and in September, 1919, at the other dam. In making settlement for the amount or balance due the contracting officer deducted from the same the sum of $1,470.81 made up of the item of $1,234.01 for inspection and superintendence charges and $236.80 for watchman’s services. This deduction was objected to by the plaintiff and it received payment less the deduction under protest. Subsequently plaintiff made application to the contracting officer for the payment of the sum so deducted. That officer made a report of the matter to the division engineer, recommending that the amount of the deduction be paid, and this engineer in turn recommended its payment to the Chief of Engineers, who gave authority “ to remit costs of superintendence and inspection and also watchman services to the completion of the contract, or a total of $1,470.81.” In accordance with this suggestion of the contracting officer, approved by the Chief of Engineers, the amount that had been deducted on account of the items just mentioned was paid to plaintiff by the contracting officer. Subsequently, when the contracting officer’s account was being audited this payment was approved by the accounting officers and thereafter when other accounts of the contracting officer involving payment to the same contractor under other contracts were being audited it was determined in the accounting office that the payment by the contracting officer of the sum of $1,470.81 under the contract in this case was erroneous. This amount was thereupon deducted from other sums due the plaintiff under its other contracts. The suit is because of this last-named deduction, but takes the form of an action to recover as for a deduction from the amount due on the contract for gates at Dams 31 and 35.

Article 5 of the contract for the construction of these gates provides for an extension of time within, which the work could be done in case of its noncompletion within the stipulated time and proceeds:

“ Should the time limit be thus waived all expenses for inspection and superintendence after the date fixed for completion, including all necessary traveling expenses connected therewith, and all other actual losses and damages to the United States due to the delay beyond the time originally set for completion, shall be determined by the contracting officer and deducted from any payments due or to become due the contractor: Provided, however, That no charge for inspection and superintendence shall be made for such period after the date fixed for completion of this contract, as in the judgment of the contracting officer, approved by the Chief of Engineers, shall equal the time which shall have been lost through any cause for which the United States is responsible, either in the beginning or prosecution of the work, or in the performance of extra work ordered by the contracting officer, or on account of unusual freshets, ice, rainfall, or other abnormal force or violence of the elements, or by strikes, epidemics, local or State quarantine restrictions, or other unforeseeable cause of delay arising through no fault of the contractor, and which actually prevented such contractor from delivering the material or commencing or completing the work within the period required by the contract. The findings of the contracting officer, approved by the Chief of Engineers, shall be accepted by the parties hereto as final.”

There can be no question that under this contract the contracting officer, with the approval of the Chief of Engineers, was authorized to remit the charges in question. His findings, approved by the Chief of Engineers, are made conclusive upon the parties and the court should give effect to the contract provisions. The question has been frequently before this court and the Supreme Court of the United States. See Penn B'ridge Company case, 59 C. Cls. 892, 897, where the authorities are collated; National Contract Co., 59 C. Cls. 441; Moran Bros. Co., 61 C. Cls. 73, 99, 111. Nor is there any doubt under the facts that the contracting officer with the approval of the Chief of Engineers remitted the charges. After paying the plaintiff the balance due less the deduction the contracting officer, upon plaintiff’s application to him, considered the same and made a full report, which was considered first by the division engineer and then by the Chief of Engineers, who approved the contracting officer’s recommendation and authorized the payment to the plaintiff of the amount withheld. The only question suggested under these facts is whether the deduction made by the contracting officer was the exercise of his right to pass upon the matter, and he having made the deduction in the first instance whether his authority to act further was thereby destroyed. It was some time after the deduction in question that the contracting officer upon the insistence of the plaintiff made his report and recommendation, concurred in by the Chief of Engineers, which resulted in the payment to plaintiff of the amount of the deductions. This action was authorized by the contract. It was a part of the administrative duty of the contracting officer to determine in the first instance the expenses of inspection and other items as mentioned in article 5, and to deduct the amount of them “ from any payments due or to become due the contractor,” and, manifestly, if the contractor was satisfied with the deductions and accepted the balance without objection the transaction would be closed. But when, as here, the contractor objects to the deductions and by proper protest saves his right to question them, it is plain that in spite of his protest and in spite of his refusal to accept as a full acquittance the amount paid him, he is left without remedy unless the contracting officer can take the matter up with the Chief of Engineers and with the latter’s approval pay the sum withheld. The action of the contracting officer alone is not sufficient, and unless both he and the Chief of Engineers have acted the terms of the proviso in article 5 have not been given full effect. It would seem to be unreasonable to deny the contractor the right to receive the amount admittedly due until the propriety of deducting these smaller items of charges is determined by those whom the contract authorizes to determine it. The delay might work great hardship. We conclude that the acceptance of the amount under protest sufficiently saved the contractor’s rights, and that the contracting officer had the right to make recommendations when he did make them. It follows that the plaintiff is entitled to judgment. And it is so ordered.

Moss, Judge; Graham, Judge; Hay, Judge; and Booth, Judge, concur.