Case Name: C. J. MONTAG & SONS, INC., A WASHINGTON CORPORATION; CARL M. HALVORSON, INC., AN OREGON CORPORATION; AUSTIN CONSTRUCTION CO., A WASHINGTON CORPORATION; BABLER BROS., INC., AN OREGON CORPORATION; AND McLAUGHLIN, INC., A MONTANA CORPORATION (POST OFFICE ADDRESS: BOX 666, PASCO, WASHINGTON) v. THE UNITED STATES
Court: United States Claims Court
Jurisdiction: United States
Decision Date: 1965-07-16
Citations: 172 Ct. Cl. 501
Docket Number: No. 470-61
Parties: C. J. MONTAG & SONS, INC., A WASHINGTON CORPORATION; CARL M. HALVORSON, INC., AN OREGON CORPORATION; AUSTIN CONSTRUCTION CO., A WASHINGTON CORPORATION; BABLER BROS., INC., AN OREGON CORPORATION; AND McLAUGHLIN, INC., A MONTANA CORPORATION (POST OFFICE ADDRESS: BOX 666, PASCO, WASHINGTON) v. THE UNITED STATES.
Judges: Before Cowen, Chief Judge, Laramore, Dureee, Davis and Collins, Judges.
Reporter: United States Court of Claims Reports
Volume: 172
Pages: 501–525

Head Matter:
(348 F. 2d 954)
C. J. MONTAG & SONS, INC., A WASHINGTON CORPORATION; CARL M. HALVORSON, INC., AN OREGON CORPORATION; AUSTIN CONSTRUCTION CO., A WASHINGTON CORPORATION; BABLER BROS., INC., AN OREGON CORPORATION; AND McLAUGHLIN, INC., A MONTANA CORPORATION (POST OFFICE ADDRESS: BOX 666, PASCO, WASHINGTON) v. THE UNITED STATES.
[No. 470-61.
Decided July 16, 1965]
William B. Morse, attorney of record, for plaintiff,
Mary J. Turner, with whom was Assistant Attorney Gen•eral John W. Douglas, for defendant. Edwin J. Reis of counsel.
Before Cowen, Chief Judge, Laramore, Dureee, Davis and Collins, Judges.

Opinion:
Per Curiam
: This contract case was referred, pursuant to Rule 57(a) (former Rule 45(a)), to Trial Commissioner Mastín G. White with directions to make findings of fact and recommendations for a conclusion of law. Commissioner White has done so in an opinion and report filed on April 28, 1964, recommending that judgment be entered for plaintiff for $69,369.72. The defendant has excepted to the recommendation, the opinion, and certain of the findings; the parties have filed briefs; and oral argument before the court has been had. The court agrees with the opinion, findings and recommendation of the trial commissioner. Accordingly, it adopts them, as supplemented by the remainder of this opinion, as the basis for its judgment in this case.
Defendant urges that plaintiff knew, before it bid, of the alleged "discrepancy" in subparagraph g of paragraph 8-19 of the contract's technical provisions, and therefore should, under Beacon Constr. Co. v. United States, 161 Ct. Cl. 1, 314 F. 2d 501 (1963), have taken the matter up with the contracting officer. 'But in this case there was not "a patent and glaring discrepancy" or an "obvious omission, inconsistency, or discrepancy of significance," as in Beacon Construction Company. Here there was simply a possible latent ambiguity which plaintiff reasonably read, as it could, as allowing it payment for all steel bars used for bracing. This was not the type of gross discrepancy which the contractor was required to put up to the contracting officer before bidding. See Blount Bros. Constr. Co. v. United States, 171 Ct. Cl. 478, 346 F. 2d 962 (1965); Wingate Constr. Co. v. United States, 164 Ct. Cl. 131 (1964); WPC Enterprises, Inc. v. United States, 163 Ct. Cl. 1, 323 F. 2d 874 (1963).
OPINION OP COMMISSIONER
This case involves the interpretation of a sentence in a 1957 contract covering the construction by the plaintiffs, a joint venture, of the south shore portion of the Ice Harbor Dam, which was built across the Snake River at a point approximately 12 miles southeast of Pasco, Washington. The crucial sentence stated that:
Bars used for bracing will be paid for at the contract unit price for Item No. 55, "Steel reinforcement, structural grade."
The problem is whether the quoted sentence, as properly interpreted, referred to all "Bars used for bracing," or only to certain "Bars used for bracing." For an adequate understanding of this problem, it is necessary to outline in some detail the nature of the construction that was contemplated when the defendant drafted, and the plaintiffs bid on, the instrument which ultimately was to become the contract between the parties.
The Ice Harbor Dam was to be constructed of concrete, reinforced with steel bars. The steel bars to be used for reinforcing the concrete were shown on the drawings that formed part of the proposed contract, and they were to constitute a major portion of the total project.
The ordinary method of installing steel reinforcing bars on such a project involves the fabrication of gridworks of bars, horizontally and vertically. Such gridworks are made rigid and held in place by means of supports, ties, and braces.
Bracing is of two kinds, temporary and permanent. Temporary bracing provides a temporary skeleton for the reinforcing steel that is to be used in a particular pour of concrete; and it is arranged so that, after the concrete is poured, the temporary bracing can be removed. Permanent bracing holds the reinforcing steel in place during a pour of concrete. Such bracing remains permanently connected to the reinforcing steel, arid, therefore, becomes a permanent part of the structure after the concrete is poured. Steel bars, similar to those used in reinforcing the concrete, are frequently used as permanent braces for the steel reinforceinent.
The Ice Harbor Dam was ultimately to include six powerhouse units, but only three of these units were to be completed under the proposed contract. The substructure for the other three units, referred to as skeleton bays, was to be constructed under the proposed contract, but it was anticipated that these powerhouse units would be completed under another contract sometime in future years. In the meantime, after the construction of the substructure for the three skeleton bays under the proposed contract, and pending the ultimate completion of the skeleton bays under a future contract, these bays were to be used for the diversion of the river.
In anticipation that the substructure in the three skeleton bays would at some future time provide the base for additional portions of the dam, which would similarly be constructed of concrete reinforced with steel bars, the contract drawings relative to the substructure in the skeleton bays indicated that the ends of the steel reinforcing bars which were to comprise the vertical parts of the steel gridworks there would protrude above the concrete. The purpose of this was to make it possible for the protruding ends of the steel reinforcing bars to be welded or bonded in the future to the steel bars that would provide the reinforcement for the concrete in the additional portions of the dam, whenever the skeleton bays might be completed.
In the area of the skeleton bays where it was expected that the protruding ends of the vertical steel reinforcing bars would be subjected to a high degree of turbulence from the water of the diverted river, the contract drawings indicated that such bars were to protrude above the concrete for only a few inches, and that such protruding ends were to consist of structural grade steel. However, in the area of the skeleton bays where it was anticipated that the turbulence from the water of the diverted river would not be severe, the contract drawings indicated that the vertical steel reinforcing bars were to protrude above the concrete for the full bond distance, that such bars were to be of intermediate grade steel, and that the protruding ends were to be permanently braced above the concrete with other bars of intermediate grade steel. The amount of the permanent bracing shown on the contract drawings as supporting the protruding ends of the steel reinforcing bars in the skeleton bays was relatively small.
The reinforcing bars of-structural grade steel referred to in the first sentence of the preceding paragraph as protruding above the concrete in the skeleton bays for a few inches constituted the only steel reinforcement of structural grade shown on the contract drawings. It was estimated by the defendant — and the proposed contract so indicated — that the steel reinforcement of structural grade would total 42,000 pounds of structural grade steel. All the other steel reinforcement provided for in the contract drawings was shown to be of intermediate grade steel; and it was estimated that a total of 84,930,000 pounds of intermediate grade steel would be required for this purpose.
The permanent bracing above the concrete in the skeleton bays was the only bracing shown on the contract drawings. Hence, with respect to all the bracing that Avas to be imbedded in the concrete, it was clear from the provisions of the proposed contract that the person performing the contract could determine the type, placement, and quantity of the bracing to be used, subject to the authority of the defendant's inspectors on the job to refuse to approve a pour of concrete if they should determine that the bracing used by the contractor was inadequate.
Perhaps it should be mentioned at this point that, generally, in the concrete construction industry bracing for steel reinforcement is not shown on contract drawings and is not included in such contracts as a pay item separate and apart from the steel reinforcement. Consequently, it is the customary practice in the industry for bidders to include the anticipated cost of the bracing in figuring their bids on the steel reinforcement.
Although no bracing was shown on the contract drawings in the present case (except for the relatively small quantity of bracing that was shown as being above the concrete in the skeleton bays), it was obvious to persons of experience in the industry — such as the plaintiffs — that several hundred thousand pounds of permanent bracing would be required on a job of such magnitude as the south shore portion of the Ice Harbor Dam.
The unit price schedule in the proposed contract for the construction of the south shore portion of the Ice Harbor Dam contained two items, Nos. 54 and 55, that are of special importance in connection with the present litigation. The references to these items in the proposed contract were as follows:
The matter of supporting the steel reinforcement was dealt with in subparagraph g of paragraph 8-19 of the technical provisions of the proposed contract. That paragraph stated as follows:
g. Supports. — All reinforcement shall be secured in place by use of metal or concrete supports, spacers or ties, as approved. Such supports shall be of sufficient strength to maintain the reinforcement in place throughout the concreting operation. The supports shall be used in such manner that they will not be exposed or contribute in any way to the discoloration or deterioration of the concrete. Where called for on the drawings, reinforcing bars left projecting from concrete surfaces for bonding to future work shall be braced with, and welded to, other bars. Bars used for braoing will be paid, for at the contract unit price for Item No. 55, "Steel reinforcement, structural grade." No separate payment will be made for welding, but all costs in connection therewith shall be considered incident to and included in the cost of furnishing and placing the reinforcement. [Emphasis supplied.]
The evidence shows that when the defendant included the italicized sentence in subparagraph g, the defendant intended to refer only to the bracing mentioned in the preceding sentence of the subparagraph (i.e., the bracing shown on the contract drawings as being above the concrete in the skeleton bays). On the other hand, the evidence also shows that when the plaintiffs were considering the submission of a bid on the proposed contract and were determining the amount of their bid, the plaintiffs understood the italicized sentence in subparagraph g as meaning that the defendant, contrary to the customary practice, would pay for all steel bars used as permanent bracing, and that the unit price for such bracing would be the price agreed upon for Item No. 55. Because of their understanding, the plaintiffs did not include the cost of the steel bars to be used as permanent bracing in calculating their bids on the steel reinforcement under Items Nos. 54 and 55 of the proposed contract. The plaintiffs' unit-price bid on Item No. 54 of the proposed contract was 14 cents per pound, and the plaintiffs' unit-price bid on Item No. 55 was also 14 cents per pound.
The plaintiffs' bid on the proposed contract was accepted by the defendant; and on January 4,1957, the plaintiffs entered into a written contract with the defendant for the construction of the south shore portion of the Ice Harbor Dam. The original estimated amount of the entire contract was $29,475,396.90. In the formal contract, the figure ".14" was inserted as the unit price for Item No. 54; and the figure "$4,890,200.00" was inserted as the estimated amount of this item. Similarly, the figure ".14" was inserted in the contract as the unit price for Item No. 55; and the figure "$5,880.00" was inserted as the estimated amount of this item.
At the time when the parties entered into the contract, they had different understandings with respect to the meaning and scope of the sentence in subparagraph g of paragraph 8-19 of the technical provisions of the contract which stated that "Bars used for bracing will be paid for at the contract unit price for Item No. 55 It was the understanding of the plaintiffs that the quoted sentence applied to all steel bars used as permanent bracing. On the other hand, it was the defendant's understanding that the quoted sentence applied only to certain steel bars used as permanent bracing (i.e., the steel bars used as permanent bracing above the concrete in the skeleton bays, as shown on the contract drawings).
Early in the performance of the work under the contract, a controversy arose between the parties as to whether all steel bars used as permanent bracing in connection with the steel reinforcement were to be paid for by the defendant. The plaintiffs asserted that the defendant was required to pay for all such bracing pursuant to the sentence in subparagraph g of paragraph 8-19 of the technical provisions of the contract which stated that "Bars used for bracing will be paid for at the contract unit price for Item No. 55 On the other hand, the defendant's representative in charge of making payments under the contract expressed the opinion that the quoted sentence referred only to the steel bars mentioned in the preceding sentence of subparagraph g (i.e., the steel bars used as bracing above the concrete in the skeleton bays, as shown on the contract drawings).
The view of the defendant's representative, as outlined in the preceding paragraph, was upheld by higher authority in the administrative agency. Consequently, at the time of the completion of the contract, the plaintiffs were demanding payment — and the defendant was refusing to pay — for 495,-498 pounds of steel bars used as permanent bracing for the steel reinforcement in the concrete. The plaintiffs' claim in the amount of $69,369.72 (495,498 pounds of steel bracing at 14 cents per pound) is now before the court for determination.
The defendant has paid the plaintiffs for the steel bars that were used as permanent bracing above the concrete in the skeleton bays, as shown on the contract drawings.
Was it unreasonable for the plaintiffs, when they submitted their bid and entered into the contract, to believe that the sentence, "Bars used for bracing will be paid for at the contract unit price for Item No. 55 was meant to cover all steel bars used as permanent bracing? It seems to me that the quoted sentence was reasonably susceptible of such an interpretation.
Since the defendant, in drafting the crucial sentence, did not employ any word or phrase of limitation in connection with .the word "Bars" other than the phrase "used for bracing," the plaintiffs were not necessarily required, in my opinion, to restrict the scope of the sentence themselves by reading an additional limitation into the reference to "Bars used for bracing." I believe, therefore, that there was a reasonable basis for the plaintiffs' conclusion that the quoted sentence referred to all steel bars used as permanent bracing. The plaintiffs' understanding in this respect drew some support from the circumstance that subparagraph y, in which the crucial sentence appeared, specifically stated at the end that "No separate payment will be made for welding," but did not similarly negative in express terms the making of separate payments for steel bars used as permanent bracing.
This is not to say that the plaintiffs' interpretation was the only reasonable one. On the contrary, when the crucial sentence was read in context as part of the entire subpara-graph y, it could very well have been understood that the reference in the crucial sentence to "Bars used for bracing" was intended to refer only to the bars, mentioned in the preceding sentence of subparagraph y (i.e., the bars shown on the contract drawings as bi*acing above the concrete in the skeleton bays).
It will be noted that subparagraph y first discussed the subject of supports generally, and then turned to the matter of bracing. The term "support" is broader than the term "brace," a brace being a special type of support. When sub-paragraph y turned from the broad subject of supports to the more limited; matter of bracing, it first stated that "Where called for on the drawings, reinforcing bars left projecting from concrete surfaces for bonding bo future work shall be braced with, and welded to, other bars." The next sentence in subparagraph y then stated that "Bars used for bracing will be paid for at the contract unit price for Item No. 55 Since these two sentences constituted the only express references to bracing in subparagraph y, it would have been logical for a perceptive person to regard the two sentences as being related to each other, and to understand the phrase "Bars used for bracing" in the second quoted sentence as referring specifically to the bars mentioned in the first quoted sentence as being used in ac cordance with the contract drawings to brace the reinforcing bars left projecting from concrete surfaces for bonding to future work. Furthermore, such an understanding would have been consistent with the custom in the concrete construction industry whereby bracing generally is not shown on contract drawings and is not paid for separate and apart from the steel reinforcement.
Thus, we are dealing with a contract provision which was susceptible, of being interpreted — and which the parties to the contract actually interpreted — in two different ways, one favorable to the plaintiffs and the other favorable to the defendant. In this situation, it appears that the proper rule to follow was stated by the court in the case of Peter Kiewit Sons' Co. v. United States, 109 Ct. Cl. 390, 418 (1947):
Where one of the parties to a contract draws the document and uses therein language which is susceptible of more than one meaning, and the intention of the parties does not otherwise appear, that meaning will be given the document which is more favorable to the party who did not draw it. This rule is especially applicable to Government contracts where the contractor has nothing to say as to its provisions.
A textbook statement of this rule is found in 3 Williston On Contraéis (rev. ed.) § 621, p. 1788:
Since one who speaks or writes, can by exactness of expression more easily prevent mistakes in meaning, than one with whom he is dealing, doubts arising from ambiguity of language are resolved in favor of the latter .
As the contract provision involved in the present litigation was drafted by the defendant and not by the plaintiffs, the interpretation favorable to the plaintiffs is the one that should be adopted. On that basis, it appears that the statement in the contract to the effect that "Bars used for bracing will be paid for at the contract unit price for Item No. 55 " should be regarded as referring to all steel bars used as permanent bracing (the plaintiffs' interpretation), rather than as applying only to certain steel bars used as permanent bracing (the defendant's interpretation).
It is my recommendation, therefore, that the court enter a judgment for the plaintiffs in the sum of $69,369.72.
FINDINGS OF FACT
1. (a) C. J. Montag & Sons, Inc., is a corporation organized under the laws of the State of Washington, with its principal place of business at Seattle, Washington.
(b) Carl M. Halvorson, Inc., is a corporation organized under the laws of the State of Oregon, with its principal place of business at Portland, Oregon.
(c) Austin Construction Co. is a corporation organized under the laws of the State of Washington, with its principal place of business at Seattle, Washington.
(d) Babler Bros., Inc., is a corporation organized under the laws of the State of Oregon, with its principal place of business at Portland, Oregon.
(e) McLaughlin, Inc., is a corporation organized under the laws of the State of Montana, with its principal place of business at Great Falls, Montana.
(f) In connection with the events that are involved in the present litigation, the corporations mentioned in the preceding paragraphs of this finding were acting as members of a joint venture under the name of Montag-Halvorson-Austin & Associates. (For the sake of convenience, these corporations will usually be referred to collectively in subsequent findings as "the plaintiffs.")
2. (a) Under the date of October 30,1956, the defendant (acting through the Walla Walla District of the Corps of Engineers, U.S. Army) issued an invitation for bids on a proposed construction contract that was designated as "South Shore Construction, Ice Harbor Lock and Dam, Walla Walla and Franklin Counties, Washington." The Ice Harbor Dam was to be constructed across the Snake Biver, at a point approximately 12 miles southeast of Pasco, Washington.
(b) The invitation for bids referred to in paragraph (a) of this finding contained a paragraph (among others) reading as follows:
8. Pre-Bid Conference. — A pre-bid conference will be held in Building 710, Conference Boom of this office on 27 November 1956, at 1:30 p.m. Prospective bid-demand subcontractors are invited to be present for discussion of problems concerning submission of bids, contract formalities, and performance of work. Inter ested parties are invited to submit written questions prior to, and for discussion at the conference. Wherever possible, specific references to applicable paragraphs to the specifications should be made. Questions should be addressed to Corps of Engineers, XJ.S. Army, Walla Walla District, Building 602, City-County Airport, Walla Walla, Washington.
(c) The plaintiffs, as prospective bidders, received a copy of the invitation for bids referred to in this finding and a copy of the proposed contract.
3. (a) The Ice Harbor Dam was to be constructed of concrete, reinforced with steel bars. The steel bars to be used for reinforcing the concrete were shown on the drawings that formed part of the proposed contract mentioned in finding 2. Such bars were to constitute a major portion of the total project.
(b) The ordinary method of installing steel reinforcing bars on such a project involves the fabrication of gridworks of bars, horizontally and vertically. Such gridworks are made rigid and held in place by means of supports, ties, and braces. Various materials, including steel bars, are commonly used as braces.
(c) The term "support" is broader than the term "brace." A brace is a special type of support (i.e., a brace is a support, but a support is not necessarily a brace).
(d) Bracing is of two kinds, temporary and permanent. Temporary bracing provides a temporary skeleton for the reinforcing steel that is to be used in a particular pour of concrete; and it is arranged so that, after the pour, the temporary bracing can be removed. Permanent bracing holds the reinforcing steel in place during a pour of concrete. Such bracing remains permanently connected to the reinforcing steel, and, therefore, becomes a permanent part of the structure after the concrete is poured.
A (a) The Ice Harbor Dam was ultimately to include six powerhouse units, but only three of these units were to be completed under the proposed contract mentioned in finding 2. The substructure for the other three units, referred to as skeleton bays, was to be constructed under the proposed contract, but it was anticipated that these three powerhouse units would be completed under another contract sometime in future years. In the meantime, after the construction of the substructure for the skeleton bays under the proposed contract, and pending the ultimate completion of the three skeleton bays under a future contract, these bays were to be used for the diversion of the river.
(b) In anticipation that the substructure in the three skeleton bays would at some future time provide the base for additional portions of the dam, which would similarly be constructed of concrete reinforced with steel bars, the contract drawings relative to the substructure in the skeleton bays indicated that the ends of the steel reinforcing'bars which were to comprise the vertical parts of the steel grid-works there would protrude above the concrete. The purpose of this was to make it possible for the protruding ends of the steel reinforcing bars to be welded or bonded in the future to the steel bars that would provide the reinforcing for the concrete in the additional portions of the dam, whenever the skeleton bays might be completed.
(c) In the area of the skeleton bays where it was expected that the protruding ends of the vertical steel reinforcing bars would be subjected to a high degree of turbulence from the water of the diverted river, the contract drawings indicated that such bars were to protrude above the concrete for only a few inches, and that such protruding ends were to consist of structural grade steel.
(d) In the area of the skeleton bays where it was anticipated that the turbulence from the water of the diverted river would not be severe, the contract drawings indicated that the vertical steel reinforcing bars were to protrude above the concrete for the full bond distance, that such bars were to be of intermediate grade steel, and that they were to be permanently braced above the concrete with other bars of intermediate grade steel. The bracing thus shown on the contract drawings as being above the concrete in the skeleton bays involved a relatively small quantity of intermediate grade steel bars.
(e) The reinforcing bars of structural grade steel referred to in paragraph (c) of this finding as protruding above the concrete for a few inches constituted the only steel reinforcement of structural grade shown on the contract drawings. All the other steel reinforcement provided for in the contract drawings was shown to be of intermediate grade steel.
(f) The bracing referred to in paragraph (d) of this finding was the only bracing shown on the contract drawings. Hence, the person performing the contract could determine the type, placement, and quantity of the bracing to be used (except for the bracing mentioned in paragraph (d) of this finding), subject to the authority of the defendant's inspectors on the job to require the installation of additional bracing prior to a pour of concrete if they should determine that the bracing used by the contractor was inadequate.
(g) It was estimated by the defendant — and the proposed contract so indicated — that the steel reinforcing bars of structural grade referred to in paragraph (c) of this finding as protruding above the concrete for a few inches would total 42,000 pounds of structural grade steel. It was estimated that the remainder of the steel reinforcing bars called for in the contract drawings would total 34,980,000 pounds of intermediate grade steel.
5. Although the bracing was not shown on. the contract drawings (except as indicated in finding 4(d)), the plaintiffs — and other persons experienced in the concrete construction industry who considered the proposed contract — were aware that a total quantity of several hundred thousand pounds of permanent bracing would be required in connection with the steel reinforcement called for in the contract drawings.
6. Generally, in the concrete construction industry, bracing for steel reinforcement is not shown on contract drawings, and bracing is not included as a pay item separate and apart from' the steel reinforcement. Consequently, it is the customary practice in the industry for bidders to include the anticipated cost of bracing in figuring their bids on the steel reinforcement.
7. The proposed contract referred to in finding 2 contained the following provisions (among others) :
GENERAL PROVISIONS
3. CHANGES
The Contracting Officer may at any time, by a written order, and without notice to the sureties, make changes in the drawings and/or specifications of this contract and within the general-scope thereof. If such changes cause an increase or decrease in the amount due under this contract, or in the time required for its performance, an equitable adjustment shall be made and the contract shall be modified in writing accordingly. Any claim of the Contractor for adjustment under this clause must be asserted in writing within 30 days from the date of receipt by the Contractor of the notification of change: Provided, however, That the Contracting Officer, if he determines that the facts justify such action, may receive and consider, and adjust any such claim asserted at any time prior to the date of final settlement of the contract. If the parties fail to agree upon the adjustment to be made the dispute shall be determined as provided in Clause 6 hereof.
6. DISPUTES. — Except as otherwise provided in this contract, any dispute concerning a question óf fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. Within 30 days from the date of receipt of such copy, the Contractor may appeal by mailing or otherwise furnishing to the Contracting Officer a written appeal addressed to the Secretary [of the Army] 5 and the decision of the Secretary or his duly authorized representative for the hearing of such appeals shall, unless determined by a court of competent jurisdiction to have been fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence, be final and conclusive; Provided that, if no such appeal is taken, the decision of the Contracting Officer shall be final and conclusive.
‡ ❖ sfc #
Unit Price Schedule No. DA-45-164-CIVENG-57-62
SPECIAL CONDITIONS *
SC-3. VARIATIONS IN ESTIMATED QUANTITIES. — a. Quantity Items No. 52 to 56 inclusive, are of sucb a nature that they may vary from the estimated quantities shown in the contract. Should the actual quantity of work performed under any of these items vary from the estimated quantity by more than 15 percent, a contract modification will be issued adjusting the estimated quantity and the estimated contract price, and an adjustment in the unit price for that item may be made on the following basis:
Where the actual quantities of work for an item exceed by more than 15 percent the estimated quantities stated in this contract for such item either party to this contract may make a demand for negotiation for a new unit price for the actual quantity of work that is in excess of the estimated quantity plus 15 percent thereof. Where the actual final quantity of work for an item is less than the estimated quantity stated in the contract by more than 15 percent the Contractor will be paid at the contract unit price for that item for the actual quantities of work performed and, in addition, may request compensation in an amount sufficient to provide a reasonable allowance for the loss of indirect costs on the quantity of work represented by the difference between the actual quantity and the estimated quantity of work less 15 percent thereof. In the event of a dispute as to the amount of any adjustment under this paragraph the matter shall be treated as a question of fact to be determined in accordance with the "Disputes" article of this contract.
# % # :f: #
TECHNICAL PROVISIONS $ $ $ $ #
8-19. FURNISHING AND PLACING STEEL REINFORCEMENTS. — a. General. — The Contractor shall furnish, cut, bend, and place all steel reinforcement, including rods, fabric, and structural shapes as indicated on the drawings or otherwise required. All reinforcement shall be, when surrounding concrete is placed, free from loose, flaky rust, and scale, and free from oil, grease or other coating which might destroy or reduce its bond with the concrete. All placing shaH be in accordance with drawings furnished or approved. No reinforcing steel shall be placed until cutting and bending diagrams and placing drawings have been approved.
*
d. Spacing of Bars. — The spacing of bars shall be as shown on the contract drawings or as directed by the Contracting Officer.
e. Relation of Bars to Concrete Surfaces. — The minimum cover for all main reinforcement shall conform to the dimensions shown on the drawings. The dimensions, as shown on the drawings, indicate the clear distance from the edge of the main reinforcement to the concrete surface. The concrete covering of stirrups, spacer bars, and similar secondary reinforcement may be reduced by the diameter of such bars.
* g. Supports. — All reinforcement shall - be secured in place by use of metal or concrete supports, spacers or ties, as approved. Such supports shall be of sufficient strength to maintain the reinforcement in place throughout the concreting operation. The supports shall be used in such maimer that they will not be exposed or contribute in any way to the discoloration or deterioration of the concrete. Where called for on the drawings, reinforcing bars left projecting from concrete surfaces for bonding to future work Shall be braced with, and welded to, other bars. Bars used for bracing will be paid for at the contract unit price for Item No. 55, "Steel reinforcement, structural grade." No separate payment will be made for welding, but all costs in connection therewith shall be considered incident to and included in the cost of furnishing and placing the reinforcement.
*
8-31. MEASUREMENT AND PAYMENT. *
c. Reinforcement Bars. — Measurement of reinforcing bars will 'be made on the basis of the lengths of bars placed in accordance with the approved drawings or b'ar schedules or as directed by the Contracting Officer. The measured lengths will be converted to weights for the size of bars listed by the use of the unit weights per lineal foot contained in A.S.T.M. A 305, except that round bars equivalent to 1% and 2 inches square shall be measured for payment on the basis of weighed samples. Steel in laps indicated on the drawings or required by the Contracting Officer will be paid for at the contract unit price. No payment will be made for the additional steel in laps which are authorized for the convenience of the Contractor. Furnishing and placing reinforcement bars will be paid for at the contract unit price per pound for Item No. 54, "Steel reinforcement, intermediate grade," and Item No. 55, "Steel reinforcement, structural grade."
8. When it included the sentence, "Bars used for bracing will be paid for at the contract unit price for Item No. 55, 'Steel reinforcement, structural grade,' " in subparagraph g of paragraph 8-19 of the technical provisions of the proposed contract, the defendant intended to refer only to the bracing mentioned in the preceding sentence of that subparagraph.
9. The plaintiffs decided to submit a bid on the proposed contract. In connection with the determination of the amount of the bid, the plaintiffs considered (among other things) subparagraph g of paragraph 8-19 of the technical provisions of the proposed contract, including the sentence stating that "Bars used for bracing will be paid for at the contract unit price for Item No. 55, 'Steel reinforcement, structural grade.' " The plaintiffs concluded that, because of the inclusion of the quoted sentence in the proposed contract, the defendant intended that all steel bars used as pei'-manent bracing would be paid for at the same unit price as that fixed for Item No. 55, and that such payments would be in addition to the payments made for steel reinforcement under Items Nos. 54 and 55. Consequently, the plaintiffs did not include the cost of steel bars to be used as permanent bracing in calculating their bids on the steel reinforcement under Items Nos. 54 and 55 of the proposed contract.
10. A representative of the plaintiffs attended the pre-bid conference on November 27, 1956 (see finding 2(b)). The evidence indicates that no question- was raised at the conference concerning a possible ambiguity in subparagraph g of paragraph 8-19 of the technical provisions of the proposed contract with respect to whether all steel bars used as permanent bracing would be paid for by the defendant under the proposed contract, or whether only certain of the steel bars used as permanent bracing would be paid for by the defendant.
11. The plaintiffs submitted a bid on the proposed contract referred to in previous findings. The plaintiffs' unitr price bid on Item No. 54 .of the proposed contract was 14 cents per pound, and the plaintiffs' unit-price bid on Item No. 55 was also 14 cents per pound.
12.' (a) The plaintiffs'bid was accepted by the defendant; and on January 4,1957, the plaintiffs entered into a written contract (No. DA-45-164-CIVENG-57-62) with the defendant (represented by a contracting officer of the Corps of Engineers) for the construction of the south shore portion of the Ice Harbor Dam. The original estimated amount of the contract was $29,475,896.90. (This contract will usually be referred to hereafter in the findings as "the contract.")
(b) The contract contained the provisions that are set out in finding 7.
(c) The figure ".14" was inserted in the contract as the unit price for Item No. 54; and the figure "$4,890,200.00" was inserted as the estimated amount of this item.
(d) The figure ".14" was inserted in the contract as the unit price for Item No. 55; and the figure "$5,880.00" was inserted as the estimated amount of this item.
(e) The parties, when they entered into the contract, retained the different understandings mentioned in findings 8 and 9 with respect to the meaning of the sentence, "Bars used for bracing will be paid for at the contract unit price for Item No. 55, 'Steel reinforcement, structural grade.' "
13. Under the date of January 25, 1957, the District Engineer at Walla Walla, Washington, issued to the plaintiffs a notice to proceed with the work covered by the contract. This notice was received by the plaintiffs on January 28,1957.
14. The plaintiffs entered into a subcontract with the Holman Erection Company, a Minnesota corporation, of Minneapolis, Minnesota (which will usually be referred to hereafter in the findings as "the subcontractor"), under which the subcontractor was to install the steel reinforcement, together with the necessary bracing, under the contract. The subcontract covered only the labor involved in the installation of the steel reinforcement and bracing, and it was the plaintiffs' responsibility to procure these materials.
.15. The placement of steel reinforcement, together with the necessary bracing, was begun by the subcontractor in May 1957.
16. Most of the permanent bracing that was procured by the plaintiffs and installed by the subcontractor in connection with the steel reinforcement consisted of bars of intermediate grade steel that were similar to the reinforcing bars of intermediate grade steel called for in the contract drawings.
17. Early in the performance of the work under the contract, a controversy arose between the parties as to whether all steel bars used as permanent bracing in connection with the steel reinforcement were to be paid for by the defendant under the contract. The matter was discussed on several occasions. The plaintiffs asserted that the defendant was required to pay for all such bracing pursuant to the sentence in subparagraph g of paragraph 8-19 of the technical provisions of the contract which stated that "Bars used for bracing will be paid for at the contract unit price for Item No. 55, 'Steel reinforcement, structural grade.' " On the other hand, the defendant's representative in charge of making payments under the contract expressed the opinion that the quoted sentence referred only to the steel bars mentioned in the preceding sentence of subparagraph g as being used for bracing above the concrete in the skeleton bays pursuant to the contract drawings. No agreement on the point in controversy was reached during the discussions referred to in this finding; and the defendant's representative referred the question to the Office of the District Engineer for consideration.
18. During the progress of the work, the plaintiffs submitted periodic pay estimate sheets to the defendant. In so far as such sheets requested partial payments with respect to steel bars, they indicated the number, size, length,-and weight of the bars used during the several periods, and they requested payment at the rate of 14 cents per pound. The plaintiffs customarily included in the pay estimate sheets not only the steel bars that were used for reinforcement, but also the steel bars that were used as permanent bracing.
19. During the period beginning with May 1957 and ending in late October 1957, the defendant paid the full amounts requested by the plaintiffs on the periodic pay estimate sheets relative to steel bars, including the steel bars that were used as permanent bracing. However, the evidence indicates that such partial payments relative to steel bars used as bracing did not represent conscious acquiescence by any responsible official of the defendant in the plaintiffs' contention that the defendant was obligated to pay for all steel bars used as permanent bracing under the sentence in subparagraph g of paragraph 8-19 of the technical provisions of the contract quoted in finding 17.
20. (a) Beginning in late October 1957 and continuing through the remainder of the performance of the contract, the defendant did not make any further payments in connection with steel bars used as permanent bracing (other than the bracing above the concrete in the skeleton bays, referred to in finding 4(d)). The plaintiffs continued to include on the periodic pay estimate sheets the quantity of steel bars used as permanent bracing, but such items were marked "no pay" by the defendant (except for the bracing mentioned in finding 4(d)).
(b) As of the time when the defendant stopped paying for steel bars used as permanent bracing (other than the bracing mentioned in finding 4(d)), the defendant had previously paid the plaintiffs for such bracing in the quantity of 99,205 pounds.
21. Under the date of July 19, 1957, the plaintiffs sent a letter to the ^Resident Engineer of the Corps of Engineers at Pasco, Washington, stating as follows:
This will confirm a recent telephone conversation between myself and Mr. Estey regarding an inquiry as to the possibility of changing the requirements for Bid Item 55 from structural grade to intermediate grade.
_Mr. Skoubye, of Gilmore-Skoubye, our suppliers for reinforcement, informs me that structural grade reinforcement is obtainable only by special order. In view of the small amount of the structural grade reinforcement required on this job, he asked that I request your approval for substituting the intermediate grade steel for the structural. Mr. Skoubye assured me that the intermediate grade steel meets all specifications requirements of the structural grade. .
Your prompt decision on this matter will be greatly appreciated.
22. Under the date of August 9,1957, the Resident Engineer of the Corps of Engineers responded to the letter of July 19, 1957, from the plaintiffs, and stated in part as follows:
The substitution is authorized subject to the following conditions:
1. Where structural grade bars are used purely as dowels and not as an extension of an intermediate grade bar, the intermediate grade steel shall be substituted..
2. Where structural grade bars are used to provide an extension of an intermediate grade bar, such bars shall be deleted and the intermediate grade extended sufficiently to furnish a welding stub.
The foregoing changes will reduce the total amount of reinforcing steel required. Upon receipt of your concurrence of the above conditions and drawings showing changes and amount of additional intermediate grade steel required, a change order will be issued deleting the estimated quantity of 42,000 lbs. under Item No. 55 and increasing Item No. 54 by the required amount of intermediate grade steel.
23. (a) After further correspondence between the parties, the contracting officer on January 23, 1958, issued a change order (Modification No. 54) that provided in part as follows:
It has been determined that the use of intermediate grade reinforcement steel, in lieu of the less available structural grade originally specified, will adequately serve the purpose intended and will result in a. savings to the Government; therefore, it is necessary and in the best interest of the Government to modify said contract in certain particulars as follows:
Case No. 70. — In confirmation of authorization given you , you are to substitute intermediate grade in lieu of structural grade steel reinforcement subject to the following conditions:
1. WThere structural grade bars are used purely as dowels and not as an extension of an intermediate grade bar, the intermediate grade steel shall be substituted.
2. Where structural grade bars are used to provide an extension of an intermediate grade bar, such bar shall be deleted and the intermediate grade extended sufficiently to furnish a welding stub.
Hi ‡ H: H*
Accordingly, Unit Price Schedule No. DA-45-164CIVENG — 57-62, attached to and made a part of the contract, is hereby revised as follows:
(b) The change order referred to in paragraph (a) of this finding was accepted by the plaintiffs.
24. As of the time when the change order mentioned in finding 23 was issued, no steel reinforcement of structural grade had been installed by the plaintiffs under the contract. Consequently, no steel reinforcement of structural grade was ever installed under the contract; and all payments for steel reinforcement were made pursuant to Item No. 54 of the contract.
25. (a) Under the date of May 20, 1958, the plaintiffs submitted to the Resident Engineer of the Corps of Engineers a request for payment in connection with 290,443 pounds of steel bars which had been used as of that time for permanent bracing in connection with steel reinforcement .and for which the defendant had refused to make payment. The plaintiffs' letter stated in part as follows:
TP 8-19g of the Contract Specifications provides payment for reinforcing bars used for bracing as follows:
"Bars used for bracing will be paid for at the contract unit price for Bid Item 55, 'Steel Beinforcement, Structural Grade'."
Our bid price for furnishing and placing steel reinforcement was put together on the assumption that this specification quite clearly provides payment for this type of bracing and that the supports would thus be paid for at the contract unit price per pound. Evidently, your office was for many months of the same opinion as payment for this type of bracing was in- eluded with Estimate No. 1, approximately one (1) year ago, through Estimate No. 18, which covered the period ending October 26, 1957. Since that time, we have received no notification whatsoever as to the reasoning which prompted you to discontinue these payments.
(b) -The request for payment mentioned in paragraph (a) of this finding was denied by the Resident Engineer in a letter dated June 4,1958. In this letter, the Resident Engineer stated (among other things) that the payments previously made by the defendant for 99,205 pounds of steel bars used as bracing "was made in error."
26. The defendant later recouped the payments that had been made for the 99,205 pounds of steel bars used as permanent bracing and mentioned in findings 20(b) and 25(b). The recoupment was effected by making deductions from amounts otherwise due the plaintiffs under the contract.
27. In a letter dated July 26, 1958, and addressed to the the Resident Engineer, the plaintiffs requested that the contracting officer render a decision on the controversy as to whether all steel bars used as. permanent 'bracing should be paid for under subparagraph g of paragraph 8-19 of the technical provisions of the contract. The plaintiffs asked for such a decision "at the earliest possible date so that we may process the case with all possible haste."
28. A further letter from the plaintiffs to the Resident Engineer, dated November 21,1958, stated in part as follows
At this túne we formally request your official decision in this matter and ask that it be rendered with all possible dispatch. It is our intention to process this Claim through the usual channels and we will appreciate it if your office will expedite.
A total amount of 495,498 pounds remains yet to be-paid, hence the sum of $69,369.72 is claimed herein.
29. (a) In a decision dated December 9,1958, the contracting officer denied the plaintiff's claim.
(b) A copy of the contracting officer's decision was furnished to the plaintiffs on or about December 15, 1958.
(c) A notice of appeal from the contracting officer's decision was transmitted by the plaintiffs to the Chief of. Engineers, through the contracting officer, on January 5, 1959.
30. (a) A hearing on the plaintiffs' appeal was held in Portland, Oregon, before the Corps of Engineers Contract Appeals Board on March 10,1960.
(b) In a decision dated October 31, 1960, and designated as Eng BCA No. 1191, the Corps of Engineers Board of Contract Appeals denied the plaintiffs' appeal, stating that "we find no grounds for granting relief to the appellant [plaintiffs]."
(c) The plaintiffs filed a motion for reconsideration; and this motion was denied by the Corps of Engineers Board of Contract Appeals on January 19,1961.
31. No charge was made by the plaintiffs against the defendant for the temporary bracing that was removed after the various pours of concrete were made. Therefore, steel bars that were used as temporary bracing are not involved in the present litigation.
32. The plaintiffs did not use an excessive amount of permanent bracing in performing the contract.
33. The steel bars which the plaintiffs used as permanent bracing for the steel reinforcement, and for which the defendant has refused to make payment, totaled 495,498 pounds. Therefore, if the defendant was obligated to pay for such bracing under subparagraph g of paragraph 8-19 of the technical provisions of the contract, the plaintiffs are entitled to a judgment in the amount of $69,369.72 (495,498 pounds at 14 cents per pound).
CONCLUSION 03? LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiffs are entitled to recover, and it is therefore adjudged and ordered that the plaintiffs recover of and from the United States the sum of sixty-nine thousand three hundred sixty-nine dollars and seventy-two cents ($69,369.72).
Since neither parly has preserved an exception to the introduction of de novo evidence at the trial in this court, the court is free to consider all the evidence in the record. Stein Bros. Mfg. Co. v. United States, 162 Ct. Cl. 802, 337 F. 2d 861 (1963), and later decisions to the same effect.
During the course of the performance of the contract, the defendant, at the request of the plaintiffs, relieved the plaintiffs of the requirement that certain of the steel reinforcement should be of structural grade steel. As a result of this change, all the steel reinforcement used in the performance ot the contract was of intermediate grade steel, Item No. 55 was deleted from the contract, and Item No. 54 was adjusted upward, as to estimated quantity and estimated amount. The price per pound was unaffected by the change.
With the deletion of Item No. 55 from the contract, as indicated In footnote 1, Item No. 54 was regarded as fixing the unit price for these steel bars used as permanent bracing above the concrete in the skeleton bays. No charge was made by the plaintiffs for temporary bracing.