Source: https://www.history.navy.mil/content/history/nhhc/research/library/research-guides/shipbuilding-contracts/contract-for-the-construction-of-indianapolis-light-cruiser-no-35.html
Timestamp: 2019-03-20 19:43:53
Document Index: 173753469

Matched Legal Cases: ['ART. 2', 'ART. 3', 'ART. 4', 'ART. 5', 'ART. 6', 'ART. 7', 'ART. 8', 'ART. 9', 'ART. 10', 'Art. 11', 'ART. 12', 'ART. 13', 'ART. 14', 'ART. 15', 'ART. 16', 'ART. 17', 'ART. 18', 'ART. 19', 'ART. 20', 'ART. 21', 'ART. 22', 'ART. 23', 'ART. 24', 'ART. 25', 'ART. 26']

Weather, Personnel, Pay, Fire, Congress, Epidemics, Units, Event, Reserve, Ordnance, Space, Contracts
Appropriation - “Increase of the Navy.”
All public billing for payment under this contract should include reference to NO. N0d-188
Nos. 33 and 35 of Group 32-36
(ACT OF FEBRUARY 13, 1929)
CONSTRUCTION OF INDIANAPOLIS LIGHT CRUISER
OF NOT EXCEEDING 10,000 TONS STANDARD DISPLACEMENT
The following table, indicating sections of the contract, is added for the benefit of the reader:
[*1] Act of Congress. [*18] Suspension of work. [*35] Auxiliaries. [*52] Final trial.
[*2] Place of delivery. [*19] Board. [*36] Torsion meters. [*53] Guarantee period.
[*3] Omission from plans, etc. [*20] Termination. [*37] Water meters. [*54] Final acceptance.
[*4] Confidential papers. [*21] Completion in event of termination. [*38] Determination of steam conditions. [*55] Contractor to be notified of defects.
[*5] Working drawings. [*22] Surrender of plant, etc. [*39] Oil meters. [*56] Eight-hour law.
[*6] Prompt action on plans. [*23] Account stated. [*40] Revolution counters. [*57] Convict labor.
[*7] Copies of plans. [*24] Launching. [*41] Mean trial displacement. [*58] Covenant against contingent fees.
[*8] Changes. [*25] Interchangeability. [*42] Additional trials. [*59] Officials not to benefit.
[*9] Extras. [*26] Strength. [*43] Post-trial examination. [*60] Disputes.
[*10] Board. [*27] Contract weight defined. [*44] Preliminary acceptance. [*61] Collective liability.
[*11] Inspection. [*28] Trials. [*45] Deductions for excess fuel-oil rates. [*62] Payments.
[*12] Materials and workmanship. [*29] Standardization trial. [*46] Corrections to measured fuel-oil rates. [*63] No liens.
[*13] Insurance. [*30] Full-power trial. [*47] Premiums for improving fuel-oil guarantees. [*64] Final payment.
[*14] Patents. [*31] Endurance trials. [*48] Deductions for excess weight. [*65] Additional security.
[*15] Time of completion. [*32] Consumption trials. [*49] Premiums for saving of weight.
[*16] Liquidated damages. [*33] Backing maneuvering trials. [*50] Preliminary settlement.
[*17] Delays referred to SECNAV. [*34] Anchor windlass tests. [*51] Special reserve.
CONTRACT, of two parts, made and concluded this 15th day of August, A.D. 1929, by and between the New York Shipbuilding Company, a corporation organized under the laws of the State of Delaware and doing business at Camden in the State of New Jersey, represented by the President of said corporation, party of the first part (hereinafter called the contractor), and the United States of America, represented by the Secretary of the Navy, party of the second part (hereinafter called the department).
[*1. Act of Congress.] Whereas the act entitled “An act to authorize the construction of certain naval vessels and for other purposes,” approved February 13, 1929, authorized the President of the United States “to undertake prior to July 1, 1931, the constriction of 15 light cruisers * * * according to the following program: (a) Five light cruisers during each of the fiscal years ending June 30, 1929, 1930, and 1931 * * *: Provided, That if the construction of any vessel * * * authorized to be undertaken in the fiscal year ending June 30, 1929 or 1930, is not undertaken in that fiscal year, such construction may be undertaken in the next succeeding fiscal year”; and
Whereas the said act provides that “In the event of an international agreement, which the President is requested to encourage, for the further limitation of naval armament, to which the United States is signatory, the President is hereby authorized and empowered to suspend in whole or in part any of the naval construction authorized under this act”; and
Whereas after due advertisement the department has accepted the proposal of the contractor for the construction of one of said vessels, complete in all respects, with the exceptions stated in the specifications, which vessel is for the purposes of this contract designated and known as Light Cruiser No. 35; and
Whereas drawings, plans, and specifications of said vessel have been duly provided, adopted and approved:
Now, THEREFORE, THIS CONTRACT WITNESSETH, That in consideration of the premises and of the agreements hereinafter contained the parties hereto hereby mutually agree as follows, that is to say:
ARTICLE 1. The contractor, subject to the provisions hereinafter set forth, will at its own risk and expense construct one light cruiser of not exceeding 10,000 tons standard displacement in accordance with the provisions of the act of Congress above mentioned, and in conformity with the aforesaid drawings, plans, and specifications, including duly authorized changes therein, which said drawings, plans, and specifications are hereto annexed and shall be deemed and taken as forming a part of this contract with the like operation and effect as if the same were incorporated herein.
[*2. Place of delivery.] The vessel shall after completion be delivered at the navy yard, Philadelphia, PA to the commandant of that yard.
[*3. Omission from plans, etc.] ART. 2. No inadvertent omission in the drawings, plans, or specifications of any detail, object, or provision necessary to carry this contract into full and complete effect, in accordance with the object and intent of the plans and specifications relating thereto, shall operate to the disadvantage of the Government, and any such omission shall be satisfactorily supplied, performed, and observed by the contractor, and all claims for extra compensation by reason of, or for, or on account of such extra performance are hereby and in consideration of the premises expressly waived. Similarly, no inadvertent inclusion in the drawings, plans, and specifications of any detail, object, or provision not necessary to carry this contract into full and complete effect shall operate to the disadvantage of the contractor.
[*4. Confidential papers.] The plans and specifications contain information of confidential character that can not be made public without detriment to the Government’s interests, and they are to be treated as confidential by the parties to this contract.
ART. 3. [*5. Working drawings.] The contractor will, at its own expense, prepare such plans or drawings as may be necessary during the progress of the work, and will submit the same to the department for its approval as required by the specifications, before the work covered thereby is begun, and in addition furnish such finished plans as are required by the specifications to be furnished.
[*6. Prompt action on plans.] Time being of the essence of this contract, it is agreed that plans submitted to the department, will be acted on and returned to the contractor as promptly as practicable. In case the contractor considers that a plan has been held by the department an undue length of time and that an actual delay in the prosecution of the work covered by the plan results such as to cause a delay in completion of the vessel, the contractor may, upon receipt of the returned plan, make request for an extension of the contract time, giving reasons therefor and the extent of the resulting delay. Such request shall be acted on as provided in article 11 hereof for action in other cases of delays.
If the plans for light cruisers 33 and 35 are prepared in a central drafting office, the department will have a superintending constructor and an inspector of machinery with necessary assistants and office force located at said central drafting office in addition to the inspecting force that is to be located at the contractor’s works, and the contractor will provide suitable office space and office facilities at the central drafting office in the same manner as is required for the inspecting force at the contractor’s works.
[*7. Copies of plans.] The contractor will furnish to the superintending constructor or the inspector of machinery for transmission to the navy yard that is preparing the plans for light cruisers Nos. 32, 34, and 36, one See-B process tracing of each plan and one copy of each material schedule and order exclusive of prices that is prepared by the contractor for this vessel. The See-B process tracing shall be furnished promptly after approval of the plan and the copy promptly after the preparation of each material schedule or order. If minor alterations are made on an approval plan, of which a See-B process tracing has already been furnished, a blue print of the plan as modified will be satisfactory, but if extensive alterations are made an additional See-B process tracing will be required. If the plans for light cruisers No. 33 and 35 are prepared in one drafting office, but one copy of such plans, material schedules, and orders as are applicable to both vessels will be required.
All such copies of plans and material schedules will be transmitted without guarantee or warranty, expressed or implied, by the contractor, except that they are correct copies of the plans and schedules for the vessel constructed hereunder, and no implied license for the use on light cruisers No. 32, 34, and 36 of any patented article or invention therein shown or listed shall result from the delivery of such copies of plans or material schedules.
ART. 4. [*8. Changes.] The Secretary of the Navy may at any time and without notice to the sureties, make changes in this contract, the drawings and/or specifications of this contract within the general scope thereof. No change shall be made in the contract except on the written order of the Secretary of the Navy and no changes shall be made in the drawings, plans, and specifications unless approved in writing by the Secretary of the Navy or his duly authorized representative.
But nothing provided in this article, or in article 5, shall excuse the contractor from proceeding with the prosecution of the work under this contract.
ART. 5. [*9. Extras.] Except as otherwise herein provided, no charge for extra work or material will be allowed, unless the same is ordered in writing by the Secretary of the Navy or his duly authorized representative.
ART. 6. (a) [*10. Board.] If changes or extras are ordered in accordance with articles 4 and/or 5 the cost thereof, to which shall be added 10 per cent in the case of changes or extras resulting in an increased cost, and the damage, if any, caused thereby, shall be ascertained, estimated, and determined by a board of naval officers appointed by the Secretary of the Navy, but no requests for adjustments hereunder shall be submitted to the board or considered by the Secretary of the Navy unless the contractor shall within 10 days after receipt of the order for such change or extra notify the Secretary of the Navy in writing that the work will be delayed thereby, stating the grounds therefor, the estimated extent of such delay, and the estimated amount of cost involved. The Secretary of the Navy may, however, in his discretion extend such time of submitting requests.
(b) Should any change or extra necessarily delay the general completion of the vessel the continuing of the work beyond the prescribed period shall be treated as a part of the change or extra and the increased cost thereof to the contractor shall also be determined by the board on changes. In no case shall the sum allowed as cost for any day because of delay in completion attributed by the Secretary of the Navy to the Government, by reason of changes or extras, exceed an amount equal to the sum prescribed in article 11 hereof as deduction per day for delay by the contractor for a corresponding period in completing the vessel.
(c) The Parties hereto shall be bound by the determination of said board or a majority thereof as to the amount of increase or reduction in the compensation to be allowed the contractor on account of matters determined by the board as above provided.
ART. 7. (a) [*11. Inspection.] All material and workmanship (if not otherwise provided by the specifications) shall be subject to inspection, examination, and test by Government inspectors at any and all times during manufacture and/or construction, and at any and all places where such manufacture and/or construction are carried on.
(b) The departure shall promptly pass all work and material conforming to the requirements of this contract, and may reject all work and material not conforming to the requirements of this contract. Rejected workmanship shall be satisfactorily corrected and rejected material shall be satisfactorily replaced with proper material without charge therefor, and the contractor shall promptly segregate and remove the rejected material.
(c) The contractor shall furnish promptly, without additional charge, all reasonable facilities, labor, and materials necessary for the safe and convenient inspection and test that may be required by the inspectors. All inspection and tests by the department shall be performed in such manner as not to unnecessarily delay the work. Special, full-size, and performance tests shall be as described in the specifications.
(d) Inspection of material and finished articles to be incorporated in the work at the site shall be made at the place of production, manufacture, or shipment whenever the quantity justifies it, unless otherwise stated in the specifications; and such inspection and acceptance, unless otherwise provided in this contract, shall be final, except as regards latent defects, departures from specific requirements of the contract and the specifications and drawings made a part thereof, and damage or loss in transit. Subject to the requirements contained in the preceding sentence, the inspection of material and workmanship for final acceptance as a whole or in part shall be made at the site.
(e) The provisions of this article are subject to the provisions of the other articles of this contract relative to the trials and the preliminary and the final acceptance of the vessel.
ART. 8. [*12. Materials and workmanship.] Unless otherwise specifically provided for in the specifications, all workmanship, equipment, materials, and articles incorporated in the work covered by this contract are to be of the best grade of their respective kinds for the purpose. Where equipment, materials, or articles are referred to in the specifications as “equal to” any particular standard, the Secretary of the Navy shall decide the question of equality. The contractor shall furnish to the department for its approval the name of the manufacturer of machinery, mechanical and other equipment which he contemplates installing, together with their performance capacities and other pertinent information. When required by the specifications, or when called for by the department, the contractor shall furnish the department for approval full information concerning the materials or articles that it contemplates incorporating in the work. Samples of materials shall be submitted for approval when so directed. Machinery, equipment, materials, and articles installed or used without such approval shall be at the risk of subsequent rejection.
ART. 9. (a) [*13. Insurance.] Said vessel and all materials and appliances provided by either the contractor or the department for and used or to be used in the construction thereof shall, at the expense of the contractor, be kept duly insured in the names of the United States of America and the contractor against the usual fire and marine risks. The insurance shall be written on the builder’s risk insurance certificate, Navy form syndicate. Prekeel-laying insurance shall amount to not less than the aggregate of all applications for payment made by the contractor to and including the date of the laying of the keel. Postkeel-laying insurance shall amount to but not exceed five million ($5,000,000) dollars. The insurance shall be effected with such underwriters as may be approved by the Secretary of the Navy, and loss thereunder shall be payable to the Secretary of the Navy for the use of the United States to the extent of payments made to the contractor plus the amount of loss of and/or damage to material and appliances furnished by the department and for the use of the contractor to the extent of any remaining balance.
(b) In case of loss, damage, and/or expense of the kinds covered by the policies of insurance as hereinbefore provided, the department will make no demand on the contractor for or on account of any value of the vessel, her apparel, tackle, ordnance, furniture, and appurtenances beyond the amount of insurance the contractor is required to carry hereunder. In the event of loss and/or damage to the vessel and/or materials and appliances therefor in excess of the amount required to be covered by insurance, the Secretary of the Navy may, in his discretion, order the contractor to proceed with the work of repair or replacement, the cost thereof, to the extent of the insurance required, to be borne by the contractor and/or the underwriters on payment orders duly indorsed by the Secretary of the Navy, and the cost of said work over and above the amount of insurance required to be borne by the Government and determined in the manner provided in article 6 of this contract for determining the increased cost of changes and paid to the contractor as a change, or order the contractor to discontinue all work on the vessel, on receipt of which order the contractor’s obligation to construct the vessel under this contract shall cease and determine, and the department will be entitled to all sums payable under the insurance required to be placed up to the amount of its loss, and the department will pay to the contractor all sums theretofore earned under this contract and not previously paid and in addition thereto all extra costs and expenses to the contractor, by reason of the ceasing and determination of such obligation, which extra costs and expenses shall include (1) the cost of care of the damaged vessel and/or work and of the disposition thereof as the Secretary of the Navy shall direct; (2) any amounts for which the contractor shall be liable by reason of the cancellation of orders for material or work that may be rendered necessary because of the ceasing and determination of such obligation; (3) reasonable compensation for the use of property of the contractor occupied or required by the damaged vessel or such work until disposition thereof; and (4) any other reasonable expense to the contractor caused by the ceasing and determination of such obligation and by such disposition. The contractor will also be entitled to ten (10) per cent of such extra costs and expenses as profit. The amount of such extra costs and expenses shall be determined in the same manner as in article 6 of this contract is provided for the determination of increased compensation to which the contractor is entitled thereunder.
(c) Where loss and/or damage occurs amounting in value to less than the extent of the insurance required, such loss and/or damage shall be replaced and/or remedied by the contractor, who will be reimbursed therefor by the underwriters on payment orders duly indorsed by the Secretary of the Navy.
ART. 10. [*14. Patents.] The contractor shall hold and save the department, its officers, agents, servants, and employees harmless from liability of any nature or kind including costs and expenses for or on account of the use or manufacture of any patented invention, article, or appliance furnished or used in the performance of this contract: Provided, however, That this requirement shall not be construed to extend to anything supplied by the department.
Art. 11. (a) [*15. Time of completion.] Said vessel shall be completed in accordance with the drawings, plans, and specifications, and duly approved changes therein, and ready for delivery within 36 months from the date hereof. [⋆16. Liquidated damages.] In case the completion of the vessel as aforesaid shall be delayed beyond the period herein fixed therefor, plus any extension thereof approved by the Secretary of the Navy, deductions on account thereof shall be made from the price stipulated in this contract, as for liquidated and ascertained damages for each and every day (except Sundays) during the continuance of such delay, and until the vessel shall be completed as aforesaid and ready for delivery to the department, as follows, viz: $300 a day during the first month next succeeding the expiration of said period as extended as aforesaid, and $600 a day thereafter; such amounts to be provisionally withheld from time to time at the discretion of the Secretary of the Navy, from any payment or payments falling due under this contract after such liquidated damages shall have begun to accrue: Provided, That in the judgment of the Secretary of the Navy such delay shall not have been due to fire or 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, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes and unusually severe weather, and delays of subcontracts due to such causes.
(b) [*17. Delays referred to SECNAV.] In case any question shall arise under the contract concerning delay, such question, with all the facts relating thereto, shall be submitted to the Secretary of the Navy for determination; and for all delays that he shall find to be properly attributable to any cause contemplated by the foregoing provisions of this article, and to have been delays affecting the completion of the vessel, the Secretary of the Navy shall grant the contractor a corresponding extension of the period prescribed for the completion of the vessel: Provided, That no delay in the completion of the vessel, or the alleged cause or causes thereof, shall be considered by the Secretary of the Navy unless the contractor shall, within 10 days from the time of the occurrence thereof, notify the department in writing of the facts and circumstances in each case, and where possible of the extent to which the contractor claims that the completion of the vessel is thereby delayed: And provided further, That the said Secretary may, without prejudice to the rights of the contractor, reserve his decision on any or all requests for extension until such time as he may consider desirable, and if deemed expedient until after the completion of the vessel, the work on her in the meantime, in accordance with the contract, plans, and specifications not to be discontinued or delayed on account thereof.
ART. 12. (a) [*18. Suspension of work.] The construction of the vessel may be suspended by the Secretary of the Navy in pursuance of authority given the President in the act of February 13, 1929, and the contractor on receipt of notice of such suspension shall immediately take steps to stop and shall stop all work in connection with the construction of the vessel, except such work as the Secretary of the Navy may decide is necessary to place the vessel in proper condition for laying up, and shall care for the vessel during the period of the suspension and for all material and equipment on hand for her construction, and the contractor shall immediately furnish to the Secretary of the Navy copies of all outstanding orders for material or work placed with other parties, and shall take such action relative to these orders as may be directed by the Secretary of the Navy. If work is thus suspended, the contractor will be entitled to be reimbursed for all additional expense as determined by the Secretary of the Navy incurred by reason of such suspension; this additional expense to include (1) the cost of any special work directed by the Secretary of the Navy that would not have been necessary had the construction of the vessel not been suspended; (2) the cost of care and preservation of the vessel during the period of suspension; (3) the proportion of fixed overhead charges the vessel would properly have borne during the period of suspension if work thereon had not been suspended; (4) any additional payments for which the contractor is liable by reason of the suspension or cancellation of orders for material or work that may be directed by the Secretary of the Navy; (5) the increased cost, if any, due to the resumption of work after its suspension; (6) any other reasonable expense the contractor shall have incurred on account of the suspension. The contractor will be entitled to ten (10) per cent of such additional expense incurred by reason of such suspension, as profit. The department will allow an increase in the contract period of construction equal to the delay that shall be caused by the suspension, which increase in the contract period of construction will not in any case be less than the period of the suspension.
(b) [*19. Board.] The increased compensation to which the contractor will be entitled by reason of the suspension and the extension of the contract period of construction will be ascertained, estimated and determined by a board of naval officers appointed for the purpose by the Secretary of the Navy. As soon as practicable after the suspension is ordered, the board shall determine the amount to be allowed the contractor and as interim monthly payments, and after the suspension is terminated the board shall determine the amount in addition to the ad interim payments due the contractor on account of the suspension. The amounts so determined, when approved by the Secretary of the Navy, shall be the amounts to which the contractor will be entitled in full settlement of the costs of suspension: Provided, That this contract shall not be construed as obligating the Government to make any payments in excess of the limit of cost fixed by law for the vessel: Provided further, That if and when it shall appear that the amounts to which the contractor will be entitled under this article 12, together with the amounts theretofore paid to the contractor, will equal or exceed the limit of cost fixed by law for the vessel, the department will at its own expense promptly remove the vessel from the premises of the contractor, and the contractor shall thereafter be under no further liability with respect to the vessel.
ART. 13. (a) [*20. Termination.] In case of the failure or omission of the contractor, at any stage of the work prior to its completion, from any cause or causes other than those provided for in article 11 hereof, to go forward with the work and make satisfactory progress toward its completion within the period prescribed, the Secretary of the Navy may by written notice to the contractor terminate its right to proceed with the work. In case the contractor’s right to proceed is so terminated, the department may immediately enter the works and premises of the contractor and take possession of said vessel and the materials for its construction. The Secretary of the Navy shall thereupon cause to be taken and filed a full and complete statement and inventory of all work done or begun in, upon, or about said vessel and of all materials on hand or on order applicable thereto, or intended therefor, by a board consisting of not less than five persons, qualified by knowledge and experience for the discharge of their duties, to be appointed by the Secretary of the Navy, which board shall proceed without unnecessary delay to examine such work and materials, and upon such examination the contractor may attend, by representative and, if it so desires, by counsel, and submit evidence.
(b) [*21. Completion in event of termination.] Upon receipt of the report and inventory of said board and its approval thereof by the Secretary of the Navy, the department may proceed with the completion of said vessel in accordance with this contract, including changes that may be authorized in accordance with the provisions of article 4 hereof, either at the works of the contractor or elsewhere, by contract or otherwise, in its discretion, using for that purpose all suitable materials on hand or on order and included in the inventory aforesaid, and may remove said vessel and materials to such other place or places as may be requisite to the exercise of such discretion, and the contractor on receiving notice of the intention of the department to proceed with the completion of the work, [*22. Surrender of plant, etc.] will surrender said vessel and all materials on hand, together with the use, so far as required, of the yard or plant, and all machinery, tools, and appliances appertaining thereto and theretofore used, or necessarily to be used, in and about the finishing of the work. The completing of the vessel shall be carried on without unnecessary delay, and shall be at the risk and expense of the contractor, who shall be chargeable with any increase in the cost of materials or labor incurred by reason of its failure to perform this contract, and with the cost of making good any improper or defective work discovered in such parts of the vessel as may have been constructed by it, or replacing any defective material furnished by it.
(c) [*23. Account stated.] On the final settlement of the liability of the contractor an account shall be stated substantially as follows:
The contractor shall be charged:
1. With all payments made to it under this contract less such payments, if any, as may have been refunded.
2. With the cost of materials and labor and all other expenses incurred by or on behalf of the department, in finishing the work in accordance with the contract and specifications, and changes duly authorized at the time the contractor’s right to proceed with the work was terminated.
3. Which such deductions for delay in completion, for overweight, and for failure to develop the contract guarantees as the Secretary of the Navy shall deem proper under all the circumstances, giving due consideration to the degree of completion of the vessel at the time of termination as aforesaid.
(d) If the total amount thus charged against the contractor shall exceed the contract price, plus net extras and premiums at the date of termination, the contractor hereby covenants and agrees to pay such excess on demand. Should said amount, however, be less than the price of the vessel, plus the net extras and premiums earned, if any, at the date of termination, the difference shall be paid to and accepted by the contractor in full discharge of all claims under this contract: Provided, however, Said difference shall not exceed the value of the materials delivered and work done by the contractor less previous payments made to it.
ART. 14. [*24. Launching.] The contractor will notify the department 30 days beforehand of the date of launching so that a sponsor for the vessel may be selected, but this stipulation does not impose on either party any obligation to provide entertainment or to incur any similar expense in connection with the launching.
ART. 15. [*25. Interchangeability.] If light cruisers Nos. 33 and 35 are built by the same contractor, they shall be as nearly as practicable identical in all respects. The following articles shall be made from the same plans and templates so as to be interchangeable except for final machining, drilling, and the like, for the five light cruisers Nos. 32 to 36, inclusive, and the contractor undertakes to cooperate with the other builders as may be necessary to accomplish this result and to carry out the final decision of the department in regard to the construction of such articles, viz:
Mine tracks and fittings.
Line, stern tube, and propeller shafting.
ART. 16. [*26. Strength.] Said vessel shall be sufficiently strong to carry safely the personnel and the armament, ammunition (including torpedoes and their appendages), equipment, fuel oil, stores, and machinery prescribed by the department and indicated in the drawings, plans, and specifications, but the contractor is not hereby required to accept responsibility for the general strength of the vessel necessarily involved in the general design; and said vessel shall be accepted only on condition that she shall, after the trials prescribed in article 18 hereof, be found to be strong and well built as defined in this article 16 and in strict conformity with this contract.
ART. 17. (a) [27. Contract weight defined.] The contract weight is defined as the total weight of the vessel complete, fully equipped and ready for sea, less the weight of officers, crew, and their effects, armament, ammunition, provisions, potable water, fuel, reserve feed water, and such items of equipment, stores, and outfit as are furnished by the Government, and less the increased weight of all approved changes that result in an increase in weight, and plus the decreased weight caused by such approved changes involving decreases as may have been proposed by the department or its representatives. No correction will be made for the decreased weight resulting from any changes that may have been proposed by the contractor and approved by the department.
(b) The weight of the vessel complete, fully equipped and ready for sea, is to be determined from actual draft mark readings and the displacement curve, with corrections for density of water, trim, hog, or sag, and with additions to account for those weights that were not on board at the time the drafts were taken, but are required to be on board to bring the vessel to a fully equipped condition ready for sea, and with subtractions to account for those weights that were on board at the time the drafts were taken, but are not required to be on board to bring the vessel to a fully equipped condition ready for sea.
ART. 18. [*28. Trials.] When the vessel is substantially complete, as required by the contract, except minor items of work that may, in the discretion of the Secretary of the Navy, be left unfinished until after the trial trip, and when the contractor shall have made sufficient trials at dock and in free route to be reasonably sure of satisfactory performance under the requirements of this contract, she shall be subjected to trials to test her and her speed; such trials to be prescribed by the Secretary of the Navy and to include the following, viz:
(a) [*29. Standardization trial.] A progressive trial over a measured mile course at Rockland, Me., for standardizing the screws, extending from maximum speed down to a speed of 10 knots; about 32 runs to be made over the course in order to adequately cover the range of speed desired, This progressive trial is to be made with the vessel weighted as specified hereinafter.
Five consecutive runs must be made at the highest speed attainable and the mean speed and revolutions for these runs carefully ascertained, and three consecutive runs must be made at each of nine speeds covering the range of speeds from this highest speed down to abut 10 knots, as required by the trial board; the mean speed revolutions and shaft horsepower for the several groups of runs to be carefully ascertained by the trial board, in order to determine the curve of speed and revolutions and the curve of speed and shaft horsepower; the vessel to be so weighed that the middle run at the maximum speed will take place as nearly as may be at the mean trial displacement specified hereinafter.
In addition [*30. Full-power trial.] to the above required standardization trial there shall be a backing standardization trial with the sternway obtained by the maximum backing power that the machinery develops. This trial shall consist of not less than one run over the mile course in each direction.
(b) A full-power endurance and fuel-oil consumption and water-rate trial of four hours’ duration in the open sea in deep water, with the main engines developing the contract shaft horsepower as defined in the machinery specifications as nearly as may be possible. This 4 hour trial, which is herein designated as trial (b) shall be immediately followed by a 2-hour trial at the highest speed attainable, this 2-hour trial being for the purpose of determining the maximum speed and the maximum shaft horsepower, but not for determining fuel-oil rates. On this 2-hour high-speed trial the contractor will be permitted to determine the maximum horsepower attainable without risk of damage to the new machinery.
The speed attained shall be determined by the average revolutions of the main shafts, according to the official standardization curve, but should the average revolutions on a trial exceed the mean revolutions of the five highest speed runs on the measured mile, the speed that will be considered as attained on the trial shall be only that attained as the mean speed of the five highest speed runs as determined by the progressive measured-mile trial (a), as aforesaid.
(c) [*31. Endurance trials.] An endurance and fuel-oil consumption and water-rate trial of four hours’ duration in the open sea in deep water, with the main engines developing about 62,600 shaft horsepower.
(d) An endurance and fuel-oil consumption and water-rate trial of four hours’ duration in the open sea in deep water, with the main engines developing about 29,560 shaft horsepower.
(e) An endurance and fuel-oil consumption and water-rate trial of four hours’ duration in the open sea in deep water, with the main engines developing about 13,210 shaft horsepower.
(f) An endurance and fuel-oil consumption and water-rate trial of four hours’ duration in the open sea in deep water, with the main engines developing about 5,530 shaft horsepower.
(g) An endurance and fuel-oil consumption and water-rate trial of four hours’ duration in the open sea in deep water, with the main engines developing about 1,462 shaft horsepower.
During trials (e), (f), and (g) the propelling machinery shall be operated under the cruising combination.
(h) [*32. Consumption trials.] A fuel-oil consumption trial of two hours’ duration in the open sea in deep water, with main engines developing power as specified for trial (e), but with main engines connected as for full-power conditions, i.e., the cruising combination shall not be used.
(i) A fuel-oil consumption trial of two hours’ duration in the open sea in deep water, with main engines developing power as specified for trial (f), but with main engines connected as specified for trial (h).
(j) A fuel-oil consumption trial of two hours’ duration in the open sea in deep water, with main engines developing power as specified for trial (g), but with main engines connected as specified for trial (h).
(k) [*33. Backing maneuvering trials.] Trials will be conducted to determine the maximum backing power that the machinery will develop, and the ability of the vessel when going ahead at full speed to back satisfactorily at full backing power. The time to bring the vessel dead in the water from full speed ahead; also the head reach will be determined.
(l) Trials to determine the ability of the vessel to go ahead satisfactorily at full power ahead when under full sternway. The time and stern reach will be observed.
(m) Trials, as necessary, to test the operation of the devices for shifting from high power to the cruising combination of turbines, and vice versa, at speeds up to and including twenty (20) knots.
(n) Such other trials as considered necessary to determine the ability to back promptly when steaming ahead at speeds up to twenty (20) knots when operating under the cruising combination of turbines.
(o) The steering gear shall be tested as required by the detail specifications and by the general specifications, both at full speed ahead and at the required speed astern, to show satisfactory operation, strength and power. The diameter of turning circles and the drift angles will be observed for the trials at full speed ahead.
(p) [*34. Anchor windlass tests.] The anchor gear will be tested with the vessel in water of greater depth than 60 fathoms to determine its ability to meet requirements of the detail specifications and of the general specifications.
The trial board will arrange the above trials to obtain the data specifically required to determine compliance with the contract, and also to obtain, as far as practicable, any useful data desired by the board. Additional runs or tests may be required by the board, if necessary, to determine compliance with the contract.
Trials (h), (i), and (j) are for information purposes only and are not covered by guarantees.
On all of the above trials there shall be observed and recorded, by representatives of the trial board, such data as may be considered by the board to be of professional interest, including the amount of water required to be used for making up feed on trials (b) to (j), both inclusive.
On trials (c), (d), (e), (f), (g), (h), (i), and (j), [*35. Auxiliaries.] the following auxiliaries shall be in operation:
(1) All auxiliary machinery necessary to the main propelling plant in operation during the prescribed trial.
(2) Evaporating plant: One-half of the evaporating plant will be in operation, making fresh water of less than 0.25 grains of chlorine per gallon at not less than the rate of 500 gallons per hour.
(3) Refrigerating plant: At half-rated capacity.
(4) Electric generating plant: Not less than 250 kilowatts.
(5) Heating system shall be in use throughout the vessel. If, on account of weather conditions, the heating system is not used, 250 pounds of fuel oil will be added to that actually used for each hour of the trial during which the heating system is not in use.
On trial (b) the auxiliaries in operation shall be the same as for other trials except that the evaporators shall not be in operation.
[*36. Torsion meters.] The shaft horsepower during the above trials shall be determined by approved torsion meters connected to the shafting abaft the reduction gears.
[*37. Water meters.] The water consumption shall be determined by one or more approved water meters placed in the condensate pump discharge from the main condenser, or by means of calibrated measuring tanks, as may be approved. The meters, if used, shall be calibrated before and after trials, at the naval engineering experiment station, Annapolis, Md. The water meters, if used, shall be furnished and installed by the contractor to the satisfaction of the department. After the trials the meters or tanks shall be removed and permanent piping installed by the contractor and the meters shall become the property of the Government.
During all of the above trials on which water rates of main propelling machinery are to be measured, the main turbine only, of the unit designated for measuring purposes, will exhaust, into the condenser from which the condensate is to be measured. Drains, auxiliary exhaust, make-up feed, etc., will be distributed among the other condensers at the discretion of the operating personnel. The average water rate established from the torsion meter and water measurements on this one designated unit will establish the water rate for all propelling units on the ship, it being assumed that the water rates of the other units are the same under similar conditions. The particular propelling unit to be designed for measuring purposes will be so designated by the department after installation of the main propelling machinery.
The average shaft horsepower as actually measured on the turbine unit under test during each of the various trials will be used in determining the water rate for each condition.
[*38. Determination of steam conditions.] The actual steam conditions shall be determined by means of an accurately calibrated thermometer and an accurately calibrated pressure gauge on the boiler side of the main throttle valve and an absolute pressure gauge at the low –pressure turbine exhaust flange. Readings of these instruments and the revolution counters and water and torsion meters shall be taken at least every half hour during the trials, and the average of readings so taken for the entire four hours shall be considered as the actual measured conditions for the determination of water rates.
[*39. Oil meters.] Fuel-oil meters of approved design shall be furnished and installed by the contractor in the discharge from the fuel-oil service pumps for measuring fuel-oil consumption. These meters shall be calibrated before and after trials at the naval engineering experiment station, Annapolis, Md.: Provided, That the contractor may, if he so desires, install and use temporary measuring tanks for measuring the fuel-oil consumption on the trials. The measuring tanks, if used, will be calibrated before the trials and will be removed after the trials.
[*40. Revolution counters.] The department will supply special revolution counters, and will test the torsion apparatus provided by the contractor at the latter’s works on the shafts before installation, as necessary, for the purpose of determining the accuracy of the torsion apparatus and the shaft horsepower on each trial, but the contractor will furnish the torsion apparatus and all labor and material necessary for the installation of all apparatus furnished by the department and for the tests of the torsion apparatus. The contractor will, as required by the department, provide and install such temporary tanks, piping, connections, and other appliances and apparatus as are necessary to ascertain the horsepower, water rates, fuel oil, and make-up feed consumptions required on each of the trials: Provided, That the fuel oil and lubricating oil used on all trials shall be in accordance with the United States Navy specifications for such oils.
[*41. Mean trial displacement.] The mean trial displacement shall be 11,424 tons plus the excess, if any of the contract weight over 8,130 tons, and less the amount, if any, the contract weight shall fall below 8,130 tons. Should the vessel not be provided at the time of the trials with all the actual parts or objects forming the total weight of the vessel in trial condition as herein defined, the contractor shall put suitable fixed ballast, solid, and confined liquid, as may be necessary to make up the weights to the total amount required to be carried by the vessel as aforesaid; this ballast to be located in such positions as to give the ship on trials approximately the stability and trim of the completed vessel. The weights of all temporary installations for purposes of trial including tanks, piping, etc., for determining the fuel-oil consumption will be considered as part of the ballast weights, Should the displacements of the vessel as prepared for trials, exceed the displacements specified herein for the trials, the contractor will be required to run the trials at such increased displacements.
The mean trial displacement having been defined above, on trials (b), (c), (d), (e), (f), (g), (h), (i), and (j), the displacement at the beginning of each trial shall be the above-defined mean trial displacement, plus one-half of the estimated weight of fuel oil, water, and other consumables necessary for the trial.
[*42. Additional trials.] If, at, and upon said trials there shall be any failure of the vessel to meet fully the requirements of this contract, the contractor shall be entitled to make further trials, sufficient in number to reasonably demonstrate her capabilities: Provided, That the number of trials shall be determined and limited by the Secretary of the Navy and that all the costs of all trials prior to the preliminary acceptance of the vessel, including the subsistence of all persons ordered by the department to proceed on the vessel for the purpose of the trials, shall be at the contractor’s expense.
[*43. Post-trial examination.] After the above-mentioned trials have been completed, the vessel shall be returned to the works of the contractor, and the machinery shall be opened up for such post-trial examination as the trial board may direct. Any defects or deficiencies that appear will be corrected by and at the expense of the contractor, as directed by the department, after which the machinery shall be closed and connected ready for service.
ART. 19. [*44. Preliminary acceptance.] If, at, and upon the trials before mentioned the foregoing requirements and conditions shall be fulfilled, and if the various guarantees of the contract shall be fully met, the vessel shall be preliminary accepted and payments made to the contractor of an amount hereinafter specified. [⋆45. Deductions for excess fuel-oil rates.] If, however, the requirements, conditions, and guarantees of the contract shall be met, except for deficiencies for which money penalties have been provided herein, then and in such case the vessel shall be preliminarily accepted subject to deductions from the contract price of the vessel, as follows:
On trial (b) at the rate of one hundred and fifty dollars ($150) a pound for each pound the corrected fuel oil per knot exceeds 2750 pounds.
On trial (c) at the rate of two hundred dollars ($200) a pound for each pound the corrected fuel oil per knot exceeds 1700 pounds.
On trial (d) at the rate of three hundred and seventy-five dollars ($375) a pound for each pound the corrected fuel oil per knot exceeds 1040 pounds.
On trial (e) at the rate of one thousand dollars ($1,000) a pound for each pound the corrected fuel oil per knot exceeds 660 pounds.
On trial (f) at the rate of two thousand one hundred dollars ($2,100) a pound for each pound the corrected fuel oil per knot exceeds 440 pounds.
[*46. Corrections to measured fuel-oil rates.] The actual fuel oil per knot, as measured on the above trials, will be corrected to a standard of 19,500 B.t.u. per pound of fuel oil and these corrected fuel-oil rates will be used in computing the deductions and premiums for fuel-oil rates.
Provided, however, [*47. Premiums for improving fuel-oil guarantees.] That should the corrected fuel-oil rate under any of the above conditions be less than the corresponding guaranteed fuel-oil rate, premiums shall be paid by the department at exactly the same rates as are specified herein for penalty purposes: Provided, however, that the amount allowed for the sum of all the premiums earned for improving the fuel-oil guarantees less the sum of all the deductions sustained for failure to attain the fuel-oil guarantees shall not be greater than fifty thousand dollars ($50,000).
On trial (b), if the vessel shall fail to develop the contract shaft horsepower as defined in the machinery specifications, there shall be a deduction from the contract price at the rate of twenty thousand dollars ($20,000) for each 1,000 shaft horsepower below said contract shaft horsepower.
[*48. Deductions for excess weight.] If the contract weight of the vessel, as defined herein, shall exceed 8,180 tons, a deduction on account of such excess weight shall be made from the contract price of the vessel at the rate of five hundred dollars ($500) for each ton of such contract weight above 8,180 tons, up to a weight of 8,280 tons; and if the contract weight shall exceed 8,280 tons a further deduction shall be made from the contract price of the vessel at the rate of one thousand dollars ($1,000) for each ton of such contract weight above the weight of 8,280 tons; but such excess weight shall not be considered as cause for rejection of the vessel.
[*49. Premiums for saving of weight.] If the contract weight of the vessel as defined herein, shall fall below 8, 130 tons, a premium shall be paid by the department to the contractor at the rate of five hundred dollars ($500) a ton for each ton the said contract weight shall fall below 8,130 tons: Provided, however, That no premium shall be paid for any portion of the contract weight thus saved below the weight of 8,030 tons: Provided, also, That payment of any weight premium earned shall be made in the manner and at the time prescribed below.
[*50. Preliminary settlement.] On preliminary acceptance of the vessel, payment to the contractor shall be made of an amount that shall be determined as follows: From the amount remaining unpaid of the contract price shall be deducted the estimated cost of uncompleted work under the contract and of defects and deficiencies then known to exist and the cost of changes involving decreased cost (and, if the actual cost of such changes be not then known, the estimated cost of same shall be used pending determination of actual costs); [*51. Special reserve.] also there shall be deducted a special reserve of two hundred and fifty thousand dollars ($250,000): Provided, however, That if the sum of all the premiums earned for weight and trial performances shall exceed the sum of all deductions assessed for liquidated damages for delay and all deductions for the breach of guarantees as to weight and trial performances, then and in that case the excess of such premiums over such deductions shall also be paid to the contractor at the time of preliminary acceptance.
[*52. Final trial.] The special reserve of two hundred and fifty thousand dollars ($250,000) shall be held for a period of six months from date of preliminary acceptance: Provided, That during said period the vessel may be finally tried, after being fully equipped and armed and in all respects complete and ready for sea, under conditions prescribed by the Secretary of the Navy; the expenses of such final trial to be borne by the Government.
[*53. Guarantee period.] If at any time within six months after the preliminary acceptance of said vessel any weakness, deficiency, defect, failure, breaking down, or deterioration in the vessel, other than that due to general design or to fair wear and tear, shall appear, the same shall be corrected and repaired to the satisfaction of the Secretary of the Navy at the expense of the contractor; and the contractor may, if it so desires, have an engineer of its own selection on board said vessel at any time during said period, who shall have full opportunity to observe and inspect the working of the machinery in all its parts, but without any directing or controlling power over the same: Provided, That in computing said period of six months from date of preliminary acceptance the time, if any, but only such time, shall be excluded during which said vessel is not available for cruising service on account of any weakness, deficiency, defect, failure, breaking down, or deterioration of the vessel for which the contractor is responsible.
[*54. Final acceptance.] Upon expiration of the period of six months after preliminary acceptance, determined as specified above, the vessel shall be finally accepted, and the said special reserve, less any deductions from the price of the vessel that are chargeable under the provisions of this contract, shall be paid.
[*55. Contractor to be notified of defects.] The contractor shall be informed of all defects and deficiencies discovered during said period for which it is held responsible, and wherever practicable shall be given an opportunity to inspect the same before the defects and deficiencies are remedied; and the decision of the Secretary of the Navy as to the responsibility of the contractor for such defects and deficiencies shall be final and binding on the parties to this contract. The actual cost of making good all defects and deficiencies for which the contractor is held responsible shall be deducted from the payment to be made in final settlement under this contract: Provided, That in order to expedite such final settlement, if the work of remedying any of the reported defects and deficiencies shall not have been undertaken when final settlement is to be made, the cost of making good such defects and deficiencies shall be ascertained, estimated, and determined as a change under article 6 and deducted in lieu of the actual cost of such items in final settlement.
ART. 20. (a) [*56. Eight-hour law.] No laborer or mechanic doing any part of the work contemplated by this contract, in employ of the contractors or any subcontractor contracting for any part of said work contemplated, shall be required or permitted to work more than eight hours in any one calendar day upon such work at the site thereof. For each violation of the requirements of this article a penalty of $5 shall be imposed upon the contractor for each laborer or mechanic for every calendar day in which such employee is required or permitted to labor more than eight hours upon said work, and all penalties thus imposed shall be withheld for the use and benefit of the Government: Provided, That this stipulation shall be subject in all respects to the exceptions and provisions of the act of June 19, 1912 (37 Stat. 137), relating to hours of labor.
(b) [*57. Convict labor.] The contractor shall not employ any person undergoing sentence of imprisonment at hard labor.
ART. 21. [*58. Covenant against contingent fees.] The contractor warrants that he has not employed any person to solicit or secure this contract upon any agreement for a commission, percentage, brokerage, or contingent fee. Breach of this warranty shall give the department the right to terminate the contract, or, in its discretion, to deduct from the contract price or consideration the amount of such commission, percentage, brokerage, or contingent fees. This warranty shall not apply to commissions payable by contractors upon contracts or sales secured or made through bona fide established commercial or selling agencies maintained by the contractor for the purpose of securing business.
ART. 22. [*59. Officials not to benefit.] No Member of or Delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this contract or to any benefit that may arise therefrom, but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit.
ART. 23. [*60. Disputes.] Except as otherwise specifically provided in this contract, if any doubts or disputes arise concerning any question under this contract or as to anything in the drawings, plans, or specifications, or if any discrepancy appear between said drawings, plans, or specifications and this contract, the matter shall be referred at once to the Secretary of the Navy for determination; and his decision in the premises shall be conclusive and binding upon the parties hereto.
ART. 24. [*61. Collective liability.] The collective liability assessable against the contractor under the terms of this contract shall not be greater than two hundred and fifty thousands dollars ($250,000). The collective liability shall be determined as follows: To the amount to be deducted for liquidated damages for delays in completion of the vessel shall be added the sum of all deductions for the breach of guarantees as to weight and trial performances and all deductions for defects and deficiencies developing during the period of six months after preliminary acceptance but not discovered prior to such acceptance, and from this aggregate amount of deductions shall be subtracted the sum of the weight and performance premiums that shall have been earned under this contract:
Provided, however, That the limit of collective liability that may be assessed against the contractor under the provisions of this article shall not apply in case of termination of the contractor’s right to proceed with the work as provided in article 13 hereof.
ART. 25. (a) [*62. Payments.] The department will pay for the vessel to be constructed and furnished in accordance with this contract, Ten Million Nine Hundred and Three Thousand Two Hundred ($10,903,200.00) dollars.
(b) Payments shall be made by the department in 40 equal installments of the contract price as the work progresses; Provided, That the payments made prior to July 1, 1930, may be limited, in the discretion of the Secretary of the Navy, to a total of $1,000,000, and such limitation of the payments, if made, shall not entitle the contractor to any increase in the contract price nor to any extension of the contract time for delivery.
(c) Payments shall be made from time to time for changes involving increased costs as the work is completed and the costs determined as hereinbefore provided; deductions for changes involving decreased cost shall be made as prescribed in article 19 hereof.
(d) As payments are made hereunder of the contract price and of the cost of changes, the parts of the vessel on account of which payments have been so made shall immediately become the sole property of the United States. As payments are made on account of materials on hand, but not incorporated in the vessel as part thereof, a lien in favor of the United States shall immediately attach to said materials and shall be discharged on the completion and delivery of the vessel as to any materials not then incorporated as a part thereof. Said lien is, pursuant to the provisions of the act of August 22, 1911, paramount.
(e) No payments shall be made except on bills in quadruplicate, certified by the inspectors of hull and machinery of the vessel, in such manner as shall be directed by the Secretary of the Navy, whose final approval of all bills thus certified shall be necessary before payment thereof.
(f) All warrants for payments under this contract shall be made payable to the contractor or its order.
(g) Payment of the last two installments shall not be made except as provided for in article 19 hereof.
(h) [*63. No liens.] When payment is to be made under this contract, as a condition precedent thereto, the Secretary of the Navy may, in his discretion, require evidence satisfactory to him, to be furnished by the contractor, showing what, if any, liens or rights in rem of any kind against said vessel, or her machinery, fittings, or equipment, or the materials on hand for use in the construction thereof, have been or can be acquired for or on account of any work done, or any machinery, fittings, equipment, or material already incorporated as a part of said vessel, or on hand for that purpose; but it is hereby further stipulated, covenanted, and agreed by the contractor, for itself and on its own account and for and on account of all persons, firms, associations, and corporations furnishing labor and material for said vessel, and this contract is upon the express condition that no liens or rights in rem of any kind shall lie or attach upon or against said vessel or her machinery, fittings, or equipment, or the materials therefor, or any part thereof, or of either, for or on account of any work done upon or about said vessel, machinery, fittings, equipment, or materials, or of any materials furnished therefor or in connection therewith, nor for or on account of any other cause or thing or any claims or demands of any kind, except the claims of the department.
(i) [*64. Final payment.] When all the conditions, covenants, and provisions of this contract shall have been performed and fulfilled by and on the part of the contractor it shall be entitled within 10 days after the filing and acceptance of its request therefor to receive the said special reserve, or so much thereof as it may be entitled to, on the execution of a release, in such form and containing such terms and conditions as shall be prescribed by the Secretary of the Navy, of claims against the United States arising under or by virtue of this contract: Provided, however, That the Secretary of the Navy may, in his discretion, make partial payments on account of said special reserve, in advance of final settlement.
ART. 26. [*65. Additional security.] Should any surety upon the bond for the performance of this contract become unacceptable to the department, the contractor must promptly furnish such additional security as may be required from time to time to protect the interests of the department and of persons supplying labor or materials in the prosecution of the work contemplated by the contract.
D. F. SELLERS
As to Charles F. Adams
By C. L. Bardo
I, J. S. Ritchie, certify that I am the secretary of the corporation named as contractor herein; that C. L. Bardo who signed this contract on behalf of the contractor, was then President of said corporation; that said contract was duly signed for and in behalf of said corporation by authority of its governing body, and is within the scope of its corporate powers.
[CORPORATE SEAL] J. S. Ritchie
THE JUDGE ADVOCATE GENERAL OF THE NAVY
Memorandum for Admiral Sellers
Subject Cruiser Contracts- provisions relating to delays and suspension of work
The Contractor is entitled to extension of the contract time for completion of the INDIANAPOLIS based upon the following provisions of the contract for the construction of that vessel:
For failure of the Department to promptly act on plans.
For delays due to changes or extras.
“due to fire or 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, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and usually severe weather, and delays of subcontractors due to such causes.”
For delays resulting from suspension of the work in the event of an international agreement limiting naval armament to which the United States is a signatory.
The Department has the contractual right to order suspension of work under the following conditions:
In case of loss, damage, etc., in excess of the amounts covered by the insurance policies, the Department may discontinue work and reimburse the Contractor on the basis of provided therein.
In case of an international agreement contemplated by the Act of February 13, 1929: the contractor to be reimbursed for the additional work involved.
The Department may terminate the contract under the following conditions:
For failure of the contractor to make satisfactory progress toward the completion of the vessel within the prescribed contract period.
In case of disputes or doubts arising under the contract provision for their final settlement by the Secretary of the Navy is provided as follows:
Except as otherwise specifically provided in this contract, if any doubts or disputes arise concerning any question under this contract or as to anything in the drawings, plans, or specifications, or if any discrepancy appear between said drawings, plans or specifications and this contract, the matter shall be referred at once to the Secretary of the Navy for determination; and his decision in the premises shall be conclusive and binding upon the parties hereto.
In the act authorizing the construction of the INDIANAPOLIS, the Congress expressly authorized the suspension of work in the event of an international agreement for further limitation of naval armament to which the United States is signatory. In pursuance of this authority there was included in the contract for the INDIANAPOLIS a provision expressly providing for such suspension.
The estimates submitted to the Congress for appropriations for the construction of the INDIANAPOLIS have been on the basis of the completion of the vessel within a 36 months period.
It would appear after a careful study of the provisions of the contract for the INDIANAPOLIS that a suspension of work for the reason advanced by the Contractor could not be recognized as a basis for extending the contract time for completion of the vessel.
The Department, however, could acquiesce in the suspension proposed without granting the extension of the contract time for completion suggested by the Contractor. Under Article 11(b) the Secretary of the Navy has the right to reserve decision as to delays occurring within the contract period until after completion of the vessel. As the contract date of completion for the vessel is August 15, 1932, the contractor would probably be able by special effort to reduce the delay resulting from the suspension. In such an event the Department might reasonably find that the delays existing at the completion of the vessel were occasioned by causes of delay entitling the contractor to a full extension of the contract time of completion, i.e. delays occurring between the expiration of the suspension period and date of completion of the vessel.
The clause to which the contractor evidently has reference as authorizing the Secretary of the Navy to grant extensions of the contract time for any causes is the following quoted from the contract for the CHESTER but not contained in the contract for the Cruiser now under consideration namely, the INDIANAPOLIS:
“That in the event the vessel is not completed with the contract time and any extensions thereof, such contract time may be further extended in the discretion of the Secretary of the Navy, notwithstanding that the causes for such extension are not included within this clause for the contract:”
In conclusion it is recommended that if the contractor is permitted in the public interest to suspend work on the vessel without being charged under Article 13 with failure to make satisfactory progress, such suspension be not considered as a basis for delay entitling the contractor to an extension of the contract time for completion at this time, but that the Secretary of the Navy under Article 11 reserve decision until after delivery of the vessel when the Secretary of the Navy may consider all delays occurring within the construction period for the vessel.
[initials illegible]
Published: Thu May 08 12:43:48 EDT 2014