#### FORE RIVER SHIPBUILDING CO. v. THE UNITED STATES

[No. 30225.

Decided June 1, 1926]

*On the Proofs*

*Contract; changes in plans; delays; decisions of Secretary; damage.*See *Moran Bros. Co.*v. *United States,*61 O. Ols. 73.

*Same; completion by new contractor.*See *Fore River Shipbuilding Co.*v. *United States, ante,*p. 307.

*The Reporter’s*statement of the case:

*Mr. Jesse G. Adkins*for the plaintiff. *Messrs. Robert*O. *Hayden*and *George W. DalzeTl*were on the briefs.

*Messrs. J. Robert Anderson*and *Charles F. Jones,*with whom was *Mr. Assistant Attorney General Herman J. Galloway,*for the defendant.

The court made special findings of fact, as follows:

I. The plaintiff is a corporation and was incorporated and organized under the laws of the State of Massachusetts on. *320September 6, 1904, for the purpose of constructing docks, wharves, vessels, and for other purposes. On September 7, 1904, the plaintiff purchased from Henry Endicott, jr., all the property which he had bought at a foreclosure sale, covered by a mortgage from the Fore River Ship & Engine Co., hereinafter referred to as the Engine company, to the Adams Trust Co. as trustee, which included, among other things, the manufacturing plant of the Engine company and property and rights appertaining thereto, and numerous construction contracts, among them a contract dated February 15, 1901, hereinafter referred to as the contract of 1901, with the United States Government for the construction of the battleship *New Jersey.*The said Endicott having by deed conveyed to the plaintiff the property so acquired by him, the Engine company, on the same date, September 7, 1904, executed and delivered a like deed to the plaintiff, confirmatory of the deed from Endicott and selling, assigning, and transferring to the plaintiff the aforesaid contracts, including that for the construction of the *New Jersey.*

II. A copy of the contract of 1901 between the United States (designated therein as party of the second part) and the Engine company (party of the first part) is appended to the amended petition filed July 21, 1915, as Exhibit B, and by reference thereto is made a part of this finding. The contract provided that the Engine company should construct, according to the acts of Congress and certain drawings, plans, and specifications, one unsheathed seagoing battleship of about 14,600 tons trial displacement, to be completed and ready for delivery within 36 months from February 15,1901.

The price to be paid for the vessel was agi-eed to be $3,-405,000, payable in 30 equal installments as the work progressed, with a reservation of 10 per cent from each installment. Payment of the last three installments and of the reservations was to be made upon preliminary acceptance of the vessel, after trial, subject to a special reserve of $70,000 from the reservations until final acceptance of the vessel, the withholding of the last three installments and the reservation of the 10 per cent being applicable to the satisfaction of *321deductions on account of failure to meet speed requirements,, and the special reserve of $70,000 being applicable to the satisfaction of any reductions in price under the provisions of the contract.

III. On the 13th of September, 1904, the plaintiff entered into a contract with the United States, hereinafter referred to as the contract in suit, which after reciting the sale under foreclosure of the property of the Engine company, and the purchase, by the plaintiff, of all contracts entered into by the Engine company and existing on Sepember 7, 1904, including the contract of 1901 for the construction of the *New J*ersey, provided as follows:

“ Now, therefore, in consideration of the premises and of the agreement of the Secretary of the Navy, as shown by his signature to this indenture, to pay to the Fore River Shipbuilding Company, the payments becoming due subsequent to September 7, 1904, on the construction of the battleship *New J ersey*and under the terms of the contract for the same, the Fore River Shipbuilding Company do hereby contract and agree, for itself, its successors, and assigns, to proceed with the construction of the battleship *New Jersey*and complete the same in all respects in accordance with the terms of the contract, plans, and specifications as entered into between the Fore River Ship & Engine Company and the Navy Department under date of February 15, 1901.”

A copy of the contract in suit is appended as Exhibit A to amended petition filed July 21, 1915, and by reference is made a part of this finding.

IY. On September 13, 1904, the battleship *New Jersey*was about 67 per cent completed, based on money value of material worked into the vessel. The plaintiff proceeded with the construction of the ship, launched it on November 10,1904, and delivered it completed to the Navy Department May 12,1906.

Y. Theretofore, on December 23,1903, the Engine company having requested an extension of time, the Secretary of the Navy granted it an extension of 14 months and 12 days (or to April 27, 1905) in which to complete the vessel, for the reason, as stated by him, “ that the progress of the vessel’s construction has been hindered by circumstances beyond your *322control, consisting principally of delays on the part of the Government in furnishing you with plans and subsequent changes in such plans.”

Further extensions of time — the Engine company having requested extensions — were granted by the Secretary of the Navy to the Engine company on account of strikes occurring in January, February, April, and May, 1904, and the extensions therefor were as follows: to May 11, 1905, and to July 4, 1905.

On June 23, 1905, the plaintiff, upon its request, was granted an extension of time from July 4, 1905, to April 4, 1906, for completion of the vessel, the Secretary of the Navy stating to the plaintiff as the reason therefor “that the work on the New> *Jersey*has been hindered by circumstances beyond your control within the meaning of the contract provision relating to extensions.”

The extension of time from July 4, 1905, to April 4, 1906, was granted upon the recommendation of the superintending constructor for the United States Navy at plaintiff’s shipyard, his reason therefor being that the changes in the turrets and work thereby occasioned were so extensive as to entitle the contractor to the extension asked for, and for the further reason that the Government was in part responsible, as set forth in a communication of the superintending constructor, United States Navy, to the Secretary of the Navy, November 23, 1903, “ because of ‘ inadequate plans ’ and of *‘*changes in the disposition of armor and armament and in the details of the designs after the award of the contract ’; and further, because the Government awarded the contract before the contractor had either *1*adequate facilities ’ or £ sufficient ability in his technical staff ’; that the delays have been partly due to ‘ an inadequate supply of skilled workmen ’; which cause has been beyond the contractor’s control; and that as no battleship for the United States Navy has ever been constructed within the contract time, and as no penalties for failure to complete said vessels have ever been exacted, the superintending constructor believes the Fore River Ship & Engine Company entitled to similar treatment.”

On May 9, 1906, the Navy Department preliminarily accepted the vessel, effective as of May 12, 1906, and finally *323extended the time for completion to May 12, 1906. The reason for making this final extension does not appear, nor was any assigned by the Navy Department.

VI. The drawings, plans, and specifications annexed to and made a part of the contract of 1901 did not contain all the information necessary to the completion of the vessel. It was the custom in naval shipbuilding, and followed in the instant case, for the Government first to furnish so-called type or guidance plans, and these were then used by the contractor as a basis for the preparation by it from time to time of further and detailed working plans, which were approved or disapproved by defendant’s authorized officer.

Numerous changes in the drawings, plans, and specifications were made by the defendant from time to time, and were referred to a board of naval officers appointed by the Secretary of the Navy, known as the “ board on changes,” as provided in article 2 of the contract of 1901, for ascertainment and determination of the cost of such changes, and the damage, if any, caused thereby. The said board there-upoh ascertained and determined the cost of such changes and the damage caused thereby, and in accordance with rulings of the Navy Department did not allow the plaintiff damages for delays in its work arising from such changes, made before or after the contract in suit was entered into. The amounts so ascertained and determined by the board on changes, payment of which became due subsequent to September 7, 1904, were in due course paid to the plaintiff, and plaintiff accepted them.

Before the various awards were made hy the board on changes the plaintiff submitted to it estimates covering the changes, and did not include therein damages for delays caused by such changes. It was not possible at that time for the plaintiff to ascertain such damages.

VII. On September 13, 1904, the construction of the *New Jersey*was approximately 658 days behind the time it would have been in a like state of completion if progress had been maintained at a rate determined by the original contract period of 36 months. Prior thereto and for causes theretofore originating, the Engine company had been granted extensions aggregating 499 days, leaving 159 days’ delay *324on September 13, 1904, for which the defendant had at that time granted no extension. The extensions granted subsequent thereto amounted to 308 days, which were for causes originating both before and after September 13, 1904.

VIII. The defendant did not deliver the upper casemate armor *“*within the time and in the order required to carry on the work properly,” as provided in article 3 of the contract of 1901. Detailed plans for the said armor had been furnished by the Engine company June 6, 1903. The upper casemate armor for the *New Jersey*was delivered to the contractor, one plate in February, 1905, 29 plates in June, 1905, and 8 plates the following July.

IX. It appears that delay in the installation of the armor for the 8-inch broadside turrets was experienced by the plaintiff, due to the failure of the defendant to deliver the armor within the agreed time and order. In November, 1902, the Engine company had furnished the defendant final plans for said armor. It was delivered in December, 1905.

X. Detailed plans of the key or shutter plates for the main belt armor were furnished by the Engine company in December, 1902. Thereafter, from time to time, modifications thereof were made by the contractor at the instance and request of the defendant. The number of shutter plates was finally reduced by the Engine company to four, and final plans therefor, taken from templates, were submitted .by the contractor to the superintending constructor at various times ending May 18,1905. Deliveries of the said remaining shutter plates were made to the plaintiff, one on May 3, 1905, two on June 13, 1905, and one on July 10, 1905.

The plaintiff was delayed in the installation of the main belt armor owing to the circumstances recited.

XI. On March 3, 1905, the plaintiff requested of the defendant delivery on May 1, 1905, of the 8-inch guns for the broadside turrets, and in the latter part of September, 1905, it was ready to begin installing them. *On*October 7, 1905, the plaintiff notified the inspector of ordnance, United States Navy, of its intention to file claim on account of delay in delivery of the said guns when the amount of delay should be ascertained. The said guns were delivered December 1 and 4. 1905.

*325A request was made March 3, 1905, for delivery of the 8-inch guns for the superposed turrets June 1, 1905. It does not appear that the plaintiff was ready to begin installing them until about December 1, 1905. They were delivered to the plaintiff, two on February 3, 1906, and the remaining two on March 2, 1906.

XII. In some instances type plans furnished by the defendant to the contractor were recalled and different plans substituted, rendering void much of the work done by the contractor under and on detailed designs made by it in accordance with the type plans so recalled. In other instances the defendant failed to furnish the contractor necessary type or guidance plans in the first instance within the time required to enable the contractor to proceed promptly with the work depending upon said plans. The contractor was delayed in the preparation of its detailed working plans by reason of the fact that many of the specifications of the *New Jersey*used by the defendant were qualified by the phrase “ as directed,” and this compelled the contractor to wait for further information from the defendant.

The contractor was delayed in installation of the turrets in part because of the failure of the defendant to furnish it the plans for the ordnance material which was to equip the turrets; and ■ in part because the defendant, during the progress of the work, changed important plans for said ordnance material.

These conditions prevailed to a greater or less extent throughout the entire period of construction, and delayed construction of the vessel.

XIII. The plaintiff did not at all times employ on the vessel a force adequate in numbers, skill, and efficiency to carry on the work at the rate required by the contract. There, was also a lack of machine-shop facilities. There existed at the time of construction, on and after September 13,1904, a shortage of labor.

As the work progressed the superintending constructor made monthly reports to the Chief of the Bureau of Construction and Repair, Navy Department, showing the increase or decrease in the accumulated delay, and the reasons *326therefor, beginning on or about September 13, 1904, and which are expressed in days as follows:

The plaintiff, at the time said reports were made, was furnished the amount of said increases, with the alleged reasons therefor, for such comment as it might desire to make. The plaintiff did not comment thereon until on June 13, 1905, it filed a request for extension of time, and therein attributed the delay mainly to changes in the turrets, and in part to nondelivery of armor.

XIV. On or about June 1, 1901, the plaintiff submitted to the Secretary of the Navy a claim for $333,652.92, additional compensation on account of changes made by the Navy Department in the construction of the *New Jersey,*based, as it was therein alleged, “ on the damage to us caused by the actual delay in the construction of the *New Jersey*for which the Government is responsible, amounting to 622 working days, or 149 calendars, about two months of which was caused by the changes from the preliminary plans and the consequent late delivery of the contract plans and the balance due to the other extensive changes in the ship ordered by the department.”

The superintending constructor reported to the Chief of the Bureau of Construction and Repair, Navy Department, *327adversely thereon, and the Chief of the Bureau of Construction and Repair in turn, on July 29, 1907, reported to the Secretary of the Navy that the plaintiff’s claim was without merit. On June 17, 1908, the acting Secretary of the Navy denied the plaintiff’s said application for additional compensation.

XV. On September 5,1911, the plaintiff executed a release in connection with the contract in suit and the construction of the *New J*ersey, discharging “ the United States of and from all and all manner of debts, dues, sum or sums of money, accounts, reckonings, claims, and demands whatsoever, in law and in equity, for or by reason of or on account of the construction of said vessel under the contract aforesaid, excepting certain suits arising under the contract aforesaid now pending in the Court of Claims.”

XVI. The number of days’ delay in the completion of the *New J ersey*caused after September 13, 1904, by the Government’s failure to deliver to the plaintiff armor and armament within the agreed time was 132 days.

The additional cost to the plaintiff by reason of the said delay was as follows:

Rent of plant_$13,453. 62

Overhead expenses_ 39,316.51

Protection and preservation of vessel_ 6,396.19

59,166. 32

The court decided that plaintiff was entitled to recover, in part.

GRAham, Judge,

delivered the opinion of the court:

This is a suit to recover damages claimed in connection with a contract for the construction of the battleship *New Jersey.*The facts in connection with the construction of this battleship and the principles of law which should control the decision of the case are the same as in the case of *Fore River Shipbuilding Go.*v. *United*States, No. 30224, this day decided, ante, p. 307. It is only necessary to deal with the matter of the amount of damages which the plaintiff is entitled to recover on account of failure of the Government to deliver armor and ordnance in proper time. The *328court has found (Finding XYI) the amount of damages to be $59,166.32, and judgment should be entered for this amount in favor of the plaintiff. It is so ordered.

Hay, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.