#### INDEPENDENT BRIDGE COMPANY v. THE UNITED STATES

[No. D-637]

*On the Proofs*

*Contracts; delays; authority of contracting officer to reverse Ms findings.*— Where a contract makes the findings of a contracting officer, approved by the Chief of Engineers, final as to the responsibility for delays, and a settlement between the parties is made based on such findings but accepted by the contractor under protest, a change made thereafter by the contracting officer in his decision, not approved by the Chief of Engineers, does not change the finality of the original findings and the contractor is still bound thereby. See *Independent Bridge Company*v. *United States, post,*p. 542.

*The Reporter’s*statement of the case:

*Mr. George R. Shields*for the plaintiff. *King & King*were on the briefs.

*Mr. George D.*Brdbson, with whom was *Mr. Assistant Attorney General Herman J.*Galloway, for the defendant.

Decided March 8, 1926.

Motion for new trial overruled November 1, 1926.

The court made special findings of fact, as follows:

I. The Independent Bridge Company is a corporation organized under the laws of the State of Pennsylvania, with its principal office in Pittsburgh.

II. On November 18,1916, plaintiff entered into a contract with the United States represented by Maj. George R. Spalding, Corps of Engineers, United States Army, as con-*12the terms of which it undertook to furnish materials, fabricate and erect upper and lower lock gates for Lock No. 41, Ohio River, on the basis of specified unit prices for the materials involved. A copy of said contract with the pertinent specifications is attached to plaintiff’s petition herein as Exhibit “A” and is by reference made a part hereof.

III. On November 15,1918, and May 8,1919, respectively, agreements supplemental to the original contract were entered into by and between the same parties so modifying the terms of the original contract as to permit partial payment for fabricated materials in advance of their installation in the work. Copies of such supplemental agreements are annexed to plaintiff’s petition herein as Exhibits “ B ” and “ C,” respectively, and by reference are made a part of this finding.

Each of the supplemental agreements, Exhibits “ B ” and “ C ” above referred to, recited as one of the reasons for the making thereof the following:

“ That the procurement of raw material and labor necessary to the fabrication of lock gates under the contract has been made very difficult by reason of the war in Europe, both before and after the entrance of the United States into that war; so that while about ninety (90) per cent of the material has been obtained, a small part still remains to be delivered.”

IV. Under paragraph 15 of the original contract specifications the work was required to be commenced within thirty days after receipt of notification of approval and be completed by, on, or before June 1, 1918. On May 9, 1918, the contractor requested a waiver of the time limit, which request was approved by the Chief of Engineers, subject to the condition that the contractor bear any expenses properly chargeable to it after expiration of the time limit. The work was not completed until October 81, 1920. From payments made the contractor after June 1, 1918, there was regularly deducted over its protest cost of superintendence and traveling expense of inspectors amounting to $1,611.39.

V. The act of July 18, 1918, entitled, “An act making appropriations for the construction, repair, and preservation of certain public works on rivers and harbors, and for *13other purposes,” made provision for relief of contractors having contracts prior to April 6, 1917, section 8 of such act providing:

“ Sec. 8. That if the Secretary of War. shall determine that any of the contracts for work of river and harbor improvements entered into but not completed prior to April sixth, nineteen hundred and seventeen, the date of the entrance of the United States into the war with Germany, have become inequitable and unjust on account of increased costs of materials and labor and other unforeseen conditions arising out of the war, he is hereby authorized in his discretion and with the consent of the contractors, to modify and readjust the terms of said contracts in such manner as he may deem equitable and just: Provided, That such modifications and readjustments shall apply only to work under said contracts remaining to be done hereafter and shall not include any relief for work performed heretofore under said contracts, and any such sum as may be necessary to provide for the increased cost of the contracts due to said modifications and readjustments, not exceeding the sum of $2,000,000, is hereby appropriated out of any money in the Treasury not otherwise appropriated: *Provided*further, That as a condition of any such contract being so modified, the Secretary of War shall have the right at the end of any fiscal year, until the contract is completed, to make such further modifications as in his judgment shall be advantageous to the United States and just to the contractor.”

The contractor made application to the Secretary of War under the foregoing provision for modification and readjustment of the terms of its contract for work at Lock 41. Such application was duly considered by the Secretary of War and a finding was made by him upon recommendation of the contracting officer and on approval of the Chief of Engineers that said contract had become inequitable and unjust on account of the increased cost of materials and labor and other unforeseen conditions arising out of the war, and thereupon said contract was further revised and readjusted' in a manner deemed by him to be equitable and just, and such modifications and readjustments were embodied in a supplemental agreement bearing date of July 9, 1919,- a copy of which is attached to the petition herein and is by reference *14made a part hereof. As one of the reasons for making such further modification said contract recited:

“ The contractor, in consideration of the payment hereby authorized, for itself, its successor's, or assigns, does 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 its own behalf or on behalf of its successors or assigns, arising under or by reason of the termination of the said contract; this release to become effective upon final payment under this supplemental agreement.”

VI. After the work was completed the contractor made claim for the sum theretofore withheld as covering cost of inspection and superintendence after June 1, 1918, and said claim was referred to the General Accounting Office for settlement with the following report and recommendation by the contracting officer and the Chief of Engineers, respectively :

The contracting officer’s letter of February 16, 1922:

“ It is the judgment of this office that the delay in receiving raw material from the mills and the general shortage of labor due to the World War were sufficient to prevent the completion of the contract within the time fixed for completion.”

The contracting officer’s second indorsement, June 10, 1922:

“ It is the judgment of the district engineer that additional time should be granted the contractor for the time lost due to delay in receiving material from the mills and for other causes for which the war conditions were responsible. The additional time should be for the entire additional time taken by the contractor to complete the contract, or to October 31, 1920, when erection was completed. In effect, this would result in a remission of inspection charges amounting to $1,671.39 and unwatering charges of $1,137.01, as the entire period which the specifications provided the United States would keep the site unwatered without charge during the contract period.”

The Chief of Engineers did not approve the findings of the contracting officer.

*15VII. The plaintiff made a claim for refund of the sum of $1,671.39 withheld by the contracting officer upon final settlement for the cost of superintendence and inspection after June 1, 1918. The claim was disallowed by the General Accounting Office, and the plaintiff was held responsible for the said sum covering the cost of superintendence and inspection during the period of delay.

The court decided that plaintiff was not entitled to recover.

Hay, Judge,

delivered the opinion of the court:

The facts are fully set forth in the findings. The plaintiff is suing for the sum of $1,671.39, the cost of superintendence and inspection. This sum was deducted by the contracting officer from moneys due the plaintiff under the contract.

The contract provided as follows:

> “ If the contractor shall fail to deliver the material or to prosecute the work covered by this contract so as to complete the same within the time agreed upon, then, in lieu of taking the work out of the hands of the contractor as provided in article 4 of this agreement, the contracting officer, with the prior sanction of the Chief of Engineers, may waive the time limit and permit the contractor to finish the work within a reasonable period, to be determined by the contracting officer. 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 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 pre*16vented 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. But such waiver of the time limit and remission of charges shall in no other maner affect the rights or obligations of the parties under this contract, nor be construed to prevent action under article 4 hereof in case the contractor shall fail, in the judgment of the contracting officer, to make reasonable and satisfactory progress after such waiver of the time limit.”

The plaintiff filed a claim with the contracting officer sometime after final settlement,, and the contracting officer, on June 10, 1922, about eighteen months after his first decision that the plaintiff was bound for this cost undertook to reconsider his decision, and held that the amount should be refunded to the plaintiff. The Chief of Engineers did not approve this action of the contracting officer, and therefore the provisions of the contract were not complied with. The court must enforce the provisions of the contract, and it can not avoid the conclusion that the plaintiff has not brought itself within those provisions. The petition must be dismissed.

It is so ordered.

Graham, *Judge;*DowNey, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.