Case Name: J. G. WATTS CONSTRUCTION COMPANY v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1966-01-21
Citations: 174 Ct. Cl. 1
Docket Number: No. 148-56
Parties: J. G. WATTS CONSTRUCTION COMPANY v. THE UNITED STATES
Judges: Before CoweN, Chief Judge, Laramoke, Dukeee, Davis, and ColliNS, Judges.
Reporter: United States Court of Claims Reports
Volume: 174
Pages: 1–23

Head Matter:
(355 F. 2d 573)
J. G. WATTS CONSTRUCTION COMPANY v. THE UNITED STATES
[No. 148-56.
Decided January 21, 1966.
Plaintiff’s motion for rehearing denied April 16, 1966]
Lewis K. Seott, for plaintiff; William, F. Lubershy, attorney of record. Koerner, Young, MeGolloeh ds Dezendorf, of counsel.
Mary J. Turner, with whom was Assistant Attorney General John W. Douglas, for defendant. Mary K. Fagan, of counsel.
Before CoweN, Chief Judge, Laramoke, Dukeee, Davis, and ColliNS, Judges.

Opinion:
ColliNS, Judge,
delivered the opinion of the court:
In 1952, the Bureau of Public Hoads, Department of Commerce, awarded to plaintiff a contract for the construction of approximately 4.3 miles of road in the Umpqua National Forest, Oregon. The road was completed by plaintiff and was accepted by the Bureau of Public Roads in December 1953. The basis for tlie present suit is plaintiff's charge that the Government breached certain contractual obligations. .Plaintiff seeks to recover excess costs allegedly incurred as a result of negligence on the part of the Bureau of Public Roads personnel who set the stakes which governed construction of the. road.
The facts may be summarized as follows: The road was built along the North Umpqua River in an area which was rough and mountainous. Plaintiff's work included the removal of soil, blasting .through rock, use of earthmoving equipment to achieve subgrade, and finishing with a layer of "cushion" material. Stakes set by the Bureau of Public Roads provided the guidance for plaintiff's excavation. For example, center-line stakes, which were placed at intervals of no more than 50 feet, indicated the location of the middle of the prospective road. Each such stake contained data regarding the elevation of the subgrade at the particular point. Related functions were served by reference and slope stakes; these are explained in finding 6, infra. Construction at a given location could not begin until the appropriate stakes had been set. Center-line stakes were destroyed during normal construction, but many of the slope and reference stakes remained.
The roadbed was divided into stations at 100-foot intervals. Plaintiff's basic plan was to commence operations at Williams Creek (station 794) and then work eastward. Upon reaching the eastern end of the project (station 875), plaintiff would return to Williams Creek and then proceed to the western terminus (station 654). Construction was started in the Williams Creek area in May 1952.
While performing the earlier stages of the excavation process, plaintiff's crews encountered no unusual problems. However, in certain locations, serious difficulties arose as the rough grading approached the subgrade. For example, during the spring of 1953, there were instances in which undulations appeared as the road surface came near the sub-grade level indicated on the slope and reference stakes. In the latter part of April 1953, plaintiff replaced its job super intendent. However, neither this step nor other changes in personnel succeeded in eliminating the difficulty regarding subgrade fluctuations.
On a number of occasions, the new superintendent called in plaintiff's engineer, Clarence W. Chellquist. Mr. Chell-quist checked the stakes in the specific areas and determined that errors were present. Finally (in May or June of 1953), Mr. Chellquist was relieved of his other duties and was directed to devote all of his time to the checking and correction of stakes. At first, Chellquist worked just ahead of plaintiff's excavating crew. Then, by July 1953, he began a resurvey of all stakes remaining over the entire project. The survey, which indicated numerous substantial errors in the slope and reference stakes, was submitted to the Bureau of Public Boads in the fall of 1953. The Bureau acknowledged that plaintiff's survey was substantially correct. (See finding 8, infra.)
In the meanwhile, the grading operation had been completed. During the remaining months, plaintiff was involved in the process of finishing. As stated above, plaintiff's work was accepted by the Bureau on December 2,1953.'
The contract consisted of a number of different pay items or types of work, the largest of which, unclassified excavation, is the subject of the present suit. Payments to plaintiff were based upon estimated quantities. Thus, for each cubic yard of unclassified excavation, plaintiff was entitled to 90 cents. The final estimate, dated January 31,1957, shows payments to plaintiff of $485,969.47 for all work under the contract. In addition, plaintiff submitted a claim to the contracting officer for an equitable adjustment. The contracting officer made allowances totaling $5,999.09. On January 14, 1959, the Appeals Board for the Department of Commerce held that plaintiff was not entitled to any equitable adjustment beyond that awarded by the contracting officer.
In the present action, plaintiff seeks not an equitable adjustment, but damages for breach of the contract. According to plaintiff, the various staking errors caused increases in plaintiff's costs to the- extent of $130,228. Defendant denies that plaintiff'is entitled to any recovery.
Commissioner Mastín G. White, to- whom this case was referred, accepted the view that plaintiff had been injured as a result of the Bureau's errors in staking. Commissioner White found that plaintiff's damages amounted to $35,985. We are largely in agreement with the report of the commissioner.
Before discussing the question of negligence on the part of the Bureau of Public Hoads, consideration must be given to defendant's assertion regarding finality of the administrative decision. According to defendant, since plaintiff has failed to prove or even allege that the determination of the Department of Commerce Appeals Board was arbitrary or unsupported, plaintiff cannot recover in this action. A sufficient answer to defendant's argument is contained in the opinion of the Appeals Board.
In accord with a request by plaintiff, the Board included in its opinion the following:
the Board hereby states that it is passing only on the administrative claim for equitable adjustments, and is excluding from its consideration questions relating to award of damages for breach of contract.
The Board will limit its consideration to the claims for equitable adjustments under the contract, at the contract rate, for additional work caused the Contractor by the Bureau .
Thus, the Appeals Board expressly recognized the distinction between plaintiff's administrative claims and plaintiff's action for breach of contract. Under these circumstances, the decision of the Appeals Board is not a bar to recovery by plaintiff in this suit. Cf. Ekco Products Co. v. United States, 160 Ct. Cl. 75, 84, 312 F. 2d 768 (1963). Plaintiff has consistently asserted that its claim for unliquidated damages could not be determined administratively. For this reason, there is no basis for applying to plaintiff the doctrine of estoppel which was utilized in H. R. Henderson & Co. v. United States, 169 Ct. Cl. 228, 245 (1965).
There is another argument of defendant which appears to overlook the nature of plaintiff's present claim. Defendant emphasizes that contractual provisions "clearly contemplated that changes, adjustments, and modifications in the alignment, grades, quantities, and slopes would become necessary as conditions developed in the field during layout and construction." Defendant's argument fails to recognize (1) that plaintiff has not challenged the right of the Bureau to effect changes in the plans for the road and (2) that plaintiff is not now seeking compensation for additional quantities of excavation. The theory of the present action is that the excavation which plaintiff accomplished (and for which plaintiff has been paid the-contract rate) was rendered more costly as a result of the improper staking. We share plaintiff's view that the Bureau did not have a contractual right to supply incorrect and misleading stakes.
Excavation PsioR to the Finishing Stage
Commissioner White found that the slope and reference stakes placed by the Government were not within reasonable limits of engineering accuracy. This finding (number 8, infra) is supported by the evidence, specifically by the testimony of plaintiff's expert witnesses. The parties disagree as to the precise standard of accuracy which was applicable to the staking. Defendant contends that a variance of 1 foot (too high or too low) would be reasonable, while plaintiff asserts that the proper limit was no more than three-tenths of a foot. Complete acceptance of plaintiff's assertion is unnecessary, for, even under the standard proposed by defendant, a substantial portion of the stakes (resurveyed by Chellquist) was in error. Furthermore, a tolerance of plus or minus five-tenths of a foot would appear to be reasonable, and, according to the Chellquist survey, 51 percent of the slope and reference stakes exceeded this limit of vertical tolerance. Thus, whatever the precise standard for staking accuracy, an excessive number of errors was committed by' the Bureau of Public Boads. It is important to note that, after the making of various corrections, the Bureau admitted the validity of Chellquist's survey.
The contract imposed upon the Government the obligation to "set construction stakes establishing lines, slopes and continuous profile-grade in road work " and further provided that "[such stakes] shall constitute the field control by and in accordance with which the contractor shall govern and execute the work." In order to satisfy its contractual duty, it was incumbent upon the Government to perforin in a reasonable and workmanlike maimer. Otherwise, the Government would run afoul of the implied condition that neither party hinder the work of the other. Cf. Laburnum Constr. Corp. v. United States, 163 Ct. Cl. 339, 350, 325 F. 2d 451 (1963). As indicated above, the Bureau of Public Roads failed to observe reasonable standards of accuracy.
In order to prevail, plaintiff must show not only that errors were committed, but also that damage resulted. Commissioner White found that the negligent staking had a substantial and adverse effect upon the efficiency of plaintiff's operations. A general description of the consequences of the errors is contained in finding 11. One area in which plaintiff experienced difficulty was that between Williams Creek (station 794) and station 720. Excavation of this region took place in March and April 1953. According to plaintiff's witnesses, numerous interruptions occurred during this period. One such instance occurred just west of Williams Creek. The irregular nature of the grade (which had been based upon the stakes set by the Bureau) necessitated the cessation and then the retracing of operations. As a result, the efficiency of plaintiff's work was reduced. It is this type of injury for which plaintiff seeks compensation.
Defendant contends that plaintiff failed to give the Bureau timely notice of the inaccurate staking and that, therefore, plaintiff's position is that, of a contractor who, with knowledge of discrepancies, seeks to take advantage of them. Defendant cites such cases as Beacon Constr. Co. v. United States, 161 Ct. Cl. 1, 314 F. 2d 501 (1963). There are two flaws in defendant's analysis. First, plaintiff itself was slow to realize that a cause of its difficulties was erroneous staking. Until late April 1953, plaintiff had assumed that the inefficiencies could be remedied by making changes in personnel. By the latter part of April, the process of basic excavation had been completed over much of the road. Secondly, defendant's resident engineer was present at the work site, and plaintiff was reasonably prompt in informing him of the matter of erroneous stakes. In any event, defendant is not correct in asserting that plaintiff began its survey in July 1953 without having apprised the Bureau of the alleged errors. The Government had been told previously of plaintiff's suspicions regarding the staking.
Much of defendant's argument consists of an effort to show, through the recitation of specific occurrences, that plaintiff itself was inefficient or that plaintiff did not actually follow the staked placed by the Bureau. In this manner, defendant seeks to demonstrate that plaintiff is not entitled to recover. Some of the particular points raised by defendant are valid, and it does appear that plaintiff's theory of recovery attributes insufficient weight to factors for which plaintiff must bear responsibility. Nonetheless, the acceptance of certain of defendant's allegations does hot mean that plaintiff's claim must be denied in its entirety. To the contrary, we have adopted the view of Commissioner White that plaintiff is entitled to some recovery. In determining the amount of plaintiff's award, however, ah attempt must be made to give adequate weight to the charges of defendant regarding plaintiff's performance.
Defendant cites Palumbo v. United States, 125 Ct. Cl. 678, 113 F. Supp. 450 (1953), a suit based upon a contract for the grading and conditioning of an airport. There is a limited degree of similarity between claims of Palumbo and the subject of the present suit. For example, Palumbo asserted that, because of erroneous bench marks set by the Government, he was required to regrade a runway area. This claim and the others of Palumbo were denied. 125 Ct. Cl. at 685, 690. As is true of the present case, the primary issues in Palumbo v. United States were factual ones. Palumbo was unable to prove the existence of a valid claim, but, in the present case, the record is such that recovery by plaintiff is warranted.
The Matter oe FINISHING
A major part of plaintiff's claim is based upon alleged "refinishing" caused by the Bureau's staking. Commissioner White made no findings in support of this portion of plaintiff's claim. However,-he did reach'the following conclusion:
The plaintiff alleges that it was required to do a substantial amount of refinishing work because of negligent errors made by personnel of tbe defendant in setting blue tops to guide tbe plaintiff in finishing tbe road. This allegation is not sustained by a preponderance of tbe evidence.
Plaintiff contends that tbe commissioner misstated its position. Plaintiff's current explanation of its argument, as stated on page 73 of Plaintiff's Exceptions to tbe Commissioner's Report, is as follows:
The extensive refinishing work at the final blue-top stage was primarily caused not by errors in tbe blue-tops, but by tbe extensive errors in the previously-set slope stakes and RPs [reference stakes]. The resolution of tbe undulations caused by erratic stakes at the time subgrade was first reached, still did not resolve tbe errors in the slope stakes and RPs where they averaged too high or too low . Nor did it resolve tbe discrepancies resulting from tbe contractor's efforts to "eyeball it through" .
In other words, plaintiff now asserts that tbe need to perform refinishing was largely a consequence of particular types of errors in slope and reference stakes and was not "an independent problem relating solely to bluetops." Plaintiff's Exceptions to tbe Commissioner's Report, p. 76. We cannot accept tbe contention that tbe commissioner misconstrued the position which bad been presented to him by plaintiff.
First, an inspection of Plaintiff's Requested Findings of Fact and Plaintiff's Brief to tbe Commissioner reveals that plaintiff's basic assertions, at that stage, were: (1) tbe Bureau placed two different sets of blue-top stakes, (2) three-fourths of tbe road was finished on tbe basis of the first set, and (3) tbe placing of the second set necessitated extensive reworking. Although plaintiff noted that tbe final set of blue-top stakes did not correspond with the subgrade stakes, greater emphasis was given to the difference between the two sets of blue-top stakes. In any event, plaintiff did not ex pressly state its notion as to the causal relationship between refinishing and areas where slope stakes averaged too low, etc. Thus, we conclude not that the commissioner was guilty of misstatement, but that plaintiff has altered the nature of its argument.
Secondly, we are in substantial agreement with Commissioner White's conclusion that plaintiff has failed to prove its claim regarding refinishing. To establish this claim, plaintiff must show that reworking was accomplished and also that responsibility for the duplication of effort belonged to the Bureau of Public Eoads. Certainly, it is not sufficient for plaintiff to demonstrate that, in certain regions, the slope and reference stakes averaged too high or too low (as opposed to varying sharply). Nor is plaintiff's burden met by showing that, upon occasion, plaintiff's workmen resorted to "eyeballing," i.e.: that they disregarded the Bureau's stakes and proceeded on the basis of visual inspection of the grade.
Witnesses of plaintiff did state that substantial amounts of reworking or refinishing were necessary. However, the Government offered testimony to the contrary. We are not persuaded that, in resolving these factual questions against plaintiff, Commissioner White committed error. With respect to this matter, the following quotation from Davis v. United States, 164 Ct. Cl. 612, 616 (1964), is pertinent:
In this, as in all cases in which a Commissioner has carefully weighed conflicting evidence, the burden of sustaining exceptions to the findings is far from slight. We start with the double directive that due regard must be given to the Commissioner's opportunity to judge the credibility of the witnesses and that his factual findings "will be presumed to be correct." Rule 48 [now Rule 66]. That presumption is dissipated only 'by a strong affirmative showing. Where, as often happens, what appears to be a sound objection to a finding is answered by an equally sound explanation in support of it, the presumption will carry the day. Where the specific testimony of witnesses, believed by the trier-of-f act, is countered only by the advocate's theoretical arguments which may or may not be correct, we must ordinarily accept the trier's evaluation. The same is true where the Commissioner has preferred one witness to an event (or set of witnesses) over another. Stronger assaults must be launched 'before the recommended findings can be overthrown. This is not to abdicate the court's function as the ultimate finder of the facts. In a fallible and busy world, all that can be required for the due administration of justice and the foundation of a judgment is that, when the balance is close, we rely on the appraisal of an unprejudiced trier who has followed a process which will generally bring about a correct determination.
Accord, Commerce Int'l Co. v. United States, 167 Ct. Cl. 529, 537, 338 F. 2d 81 (1964). In the present case, plaintiff's arguments do not warrant a conclusion (contrary to the one reached by the commissioner) that plaintiff performed vast amounts of refinishing for which it is entitled to recover damages.
Implicit in the commissioner's report is the view asserted by defendant that plaintiff's post-July 1953 operations included normal finishing, not refinishing caused by staking errors. This view is supported by the testimony of defendant's witnesses. One persuasive factor is the apparent failure of plaintiff's personnel to register complaints during the period in question. It is reasonable to suppose that, if staking errors had caused substantial refinishing, this problem would have been made known to the Bureau's employees. Yet, with a limited exception, plaintiff has failed to show that any such difficulty was communicated to the Bureau.
There was one area (stations 750-790) regarding which the Government did accept responsibility for excessive difference between the final grade (indicated by blue-top stakes) and the subgrade. The subgrade was approximately 1% feet below final grade, i.e., 6 inches too low. However, plaintiff was required to do only limited corrective work, since the Bureau lowered the final grade in order to make it correspond with the grade as constructed. Thus, although there were staking errors, the adjustment in grade meant that the damage to plaintiff was relatively slight.
With regard to a substantial area west of Williams Creek, the Bureau permitted an alteration which was beneficial to plaintiff. The depth of the cushion placed by plaintiff was less than the 1 foot required by the specifications. In order to compensate for the insufficient cushion and to provide for drainage, it was agreed that plaintiff would drill a ditch which went below the original design. Plaintiff was paid for drilling the ditch, and we agree with defendant that there is no basis for additional recovery by plaintiff.
In another region, 'located east of Williams Creek, it was necessary for plaintiff to rework the subgrade. As defendant points out, this additional work was required because the subgrade had subsided during the winter shutdown. This remedial operation cannot be attributed to staking errors, but it must have affected plaintiff's productivity.
The above examples and others emphasized by defendant help to explain the nature of plaintiff's activities during the period of July to October 1953. In general, defendant's specific illustrations support the conclusion of the commissioner. An exception is the area (stations 750-790) in which the Bureau lowered the grade; as indicated above, plaintiff did sustain some damage there despite the adjustment in grade. With this exception, we find that plaintiff has failed to establish its claim as to refinishing. Therefore, the primary and essentially the sole bases for recovery by plaintiff are the breaches which were shown to have occurred during the pre-finishing stage.
The MeashRe of Recovery
We must first consider the matter of plaintiff's overall expense. Commissioner White determined that plaintiff's total costs for, construction of the road were $527,859.62 and that, of this total, the amount of $449,812.62 was allocable to unclassified excavation. See finding 14. Plaintiff takes exception to this finding. First, according to plaintiff, its equipment costs were greater than the amount utilized by the commissioner. Plaintiff declares that, having adopted the Government's accounting theory, the commissioner then erroneously limited equipment costs to the sum attributable to depreciation. That is, plaintiff charges that the commissioner failed to consider other costs of ownership such as the expenses of operating the main shop, of outside repairs, and of supplies and grease. Plaintiff's assertions are not well taken.
Apparently, plaintiff fails to consider the significance of the indirect expenses included in the commissioner's total. For example, under the category of "FKOG [fuel, repairs, oil, and grease] and other indirect expense relating to equipment," Commissioner White used the amount of $81,196.02. This sum includes many of the "other expenses of ownership" about which plaintiff complains. Obviously, there is no basis for including such items twice, once as a direct and once as an indirect expense. In short, we find that there were no omissions by the commissioner of properly established equipment expenses. All such expenses were included either under direct equipment costs or under one of the categories of indirect expense.
Plaintiff also contends that the commissioner failed to allocate a sufficiently high percentage of the total labor costs to unclassified excavation. Plaintiff states that the allocation rate should be 87.5 percent, not 85 percent. Basically, plaintiff's view is that, because the staking errors caused inefficiencies primarily in unclassified excavation and not in other contract items, a disproportionately large share of labor costs was attributable to unclassified excavation. As indicated previously, we have declined to accept much of plaintiff's argument regarding its inefficiencies. This is one reason for rejecting the view of plaintiff as to allocation. Moreover, considering the payments for and the nature of the construction, the percentage used by the commissioner is reasonable. Thus, we conclude that each of plaintiff's exceptions pertaining to the matter of costs must be rejected.
According to plaintiff, its recovery should amount- to 24 percent of the expense of unclassified excavation. The basis for this contention is a production analysis prepared by plaintiff's engineering consultant, Mr. Arden Morgan. Without explicit reference to the Morgan study, Commis sioner White determined plaintiff's damages to be 8 percent of the costs of unclassified excavation, i.e., $35,985.
Like Commissioner White, we have found that plaintiff failed to establish a substantial part of its claim, the portion pertaining to refinishing. Accordingly, plaintiff's award must be considerably less than the claimed 24 percent. As the commissioner's reliance upon the "jury verdict" approach indicates, precise measurement of plaintiff's damages is not possible. Under, these circumstances, our task is to make a reasonable approximation of the monetary injury resulting from the Government's staking errors. Cf. Dale Constr. Co. v. United States, 168 Ct. Cl. 692, 729 (1964).
Morgan's analysis is intended to show the loss of productivity suffered by plaintiff during performance of the contract. His method was to contrast (for each month of construction) the actual amount of unclassified excavation performed and plaintiff's "net practical production capacity." To illustrate, for the period March 15 to April 15, 1953, Morgan determined that plaintiff's work force was such that its "total production capacity" was 61,200 cubic yards of excavation. Next, after deducting production losses which Morgan considered to be the responsibility of plaintiff (13,400 cubic yards), he reached a "net practical production capacity" of 47,800 cubic yards. Actual production during the period (according to Morgan's figures) amounted to 34,715 cubic yards. Thus, he concluded that actual production was 73 percent of "net practical production," and that plaintiff's loss of efficiency for the month was the difference, or 27 percent. Plaintiff seeks to attribute this and all similar losses of efficiency to the Government. Plaintiff states that each decrease in efficiency meant a corresponding increase in the expense of performing the excavation.
As defendant points out, Morgan's study contains numerous defects (aside from the fact that it purports to substantiate plaintiff's "refinishing" claim). It will suffice to mention a few of them. As the amount of total actual yardage, Morgan used 451,839 cubic yards; this sum is insufficient for a variety of reasons. In fact, plaintiff was paid for 456,295 cubic yards on the basis of Bureau estimates and for an additional 1,753.8 cubic yards as a result of an equitable adjustment made by the contracting officer. Moreover, plaintiff did a substantial amount of actual work for which it was not entitled to be paid. One example of such work was 15,712 cubic yards of overbreakage (regarding which plaintiff's administrative claim was denied). Since Morgan's figure for actual production was too low, his overall conclusion as to plaintiff's efficiency is also too low.
The "net practical production capacity" which Morgan attributed to plaintiff appears to be excessive. For example, it is by no means clear that he gave sufficient weight to such matters as abnormal weather or carelessness on the part of plaintiff's personnel. Failure to attribute adequate significance to factors of this type means that the Government was charged with too large a part of the responsibility for the losses of productivity. Nonetheless, if an appropriate allowance is made for the flaws in the Morgan analysis, one way to test the reasonableness of the judgment recommended by the commissioner is to compare that amount with data used by Morgan. Since, for the most part, we have rejected plaintiff's "refinishing" claim, we shall limit our comparison to the three production periods during which the problem of "erratic stakes" had substantial effects.
In addition to determining percentages of efficiency, Morgan computed corresponding amounts which allegedly represented the increased costs for which the Government was responsible. Plaintiff does not rely on the dollar amounts determined by Morgan. However, since in no event is precision possible, it should be permissible to use Morgan's amounts as the basis for comparison. For the three periods, the increased costs determined by Morgan totaled $37,821. The difference between the latter sum and the amount recommended by the commissioner ($35,985) is $1,836. Thus, it is apparent that the commissioner's amount is roughly comparable to that computed by Morgan.
Because of the many defects in the Morgan analysis, a larger reduction in the dollar amount computed by Morgan (or the amount claimed by plaintiff) might be more proper. However, considering the fact that some recovery is in order for periods other than the three in question (e.g., for the period when the final grade was lowered by the Bureau), we are willing to accept the amount determined by Commissioner White. We conclude, therefore, that plaintiff is entitled to recover $35,985, and judgment is entered for plaintiff in that amount.
FINDINGS on Fact
The court, having considered the evidence, the report of Trial Commissioner Mastín G. White, and the briefs and argument of counsel, malíes findings of fact as follows:
1. The plaintiff, J. G. Watts Construction Company, is a corporation organized and existing under the laws of the State of Washington.
2. On April 24,1952, the plaintiff and the defendant (acting through a representative of the Bureau of Public Roads, Department of Commerce, as contracting officer) entered into a contract under which the plaintiff agreed to "furnish the materials, and perform the work for constructing Project Oregon 47-B5, North Umpqua Highway, Umpqua National Forest, Douglas County, Oregon." The plaintiff was to be compensated on the basis of unit prices for the various items of construction work involved in the contract. The total contract price, on the basis of estimated quantities, was $454,-506. (This contract will usually be referred to in subsequent findings as "the contract.")
3. The work under the contract was begun, in May 1952. It was completed by the plaintiff, and was accepted as satisfactory by the defendant, as of December 2, 1953.
4. (a) Project Oregon 47-B5, covered by the contract, was one of a series of connecting projects that were designed to complete a road up the North Umpqua Eiver, a stream flowing through the Umpqua National Forest in Oregon. This particular project involved the construction of about 4.3 miles of road along the North Umpqua Eiver in an area where the stream ran through a canyon in rough, rocky, mountainous country. Because of the nature of the terrain and the location of the road as close to the river as possible, the work was mostly sidehill work relative to slopes that were as steep as y^-to-l in places and that averaged about 1-to-l in steepness.
(b) No road had previously been built on the site of this particular job, but most of the right-of-way had been cleared of timber under a previous contract in about 1948. Despite the previous clearing that had been done, it was necessary for the plaintiff under the contract to do grubbing (i.e., to remove and dispose of stumps) along the right-of-way, and it was also necessary for the plaintiff to do some additional clearing of timber from the right-of-way.
(c) The principal work under the contract involved the excavation of dirt and rock from the places where the roadway had to be cut down to the proper grade, the placement of excavated material at other places where fills were necessary in order to bring the roadway up to the proper grade, and the placement of cushion material in order to finish the road. Approximately 70 percent of the excavation work was done in solid rock. The remainder involved earth or mixtures of earth and stones up to .5 cubic yard in size.
(d) The contract item relating to, and prescribing a unit price for, unclassified excavation involved the removal of earth and rock material from the cuts and its placement in the fills. The finishing of the road surface and the protection of slopes were incidental to the excavation and were on a non-pay basis, these operations being covered as part of the price for unclassified excavation. The basic unit price for excavation was increased somewhat if it was necessary to haul excavated material a distance of more than 1,000 feet in order to place it, the amount of the increase depending upon whether the haul exceeded or did not exceed % mile.
5. (a) Under Article 1 of the contract, certain specifications, designated as "B.P.R. Specifications FP-41," were made a part of the contract.
(b) Article 5.5 of B.P.R. Specifications FP-41 provided in part as follows:
The engineer will set construction stakes establishing lines, slopes and continuous profile-grade in road work, and center line and bench marks for bridge work, culvert work, protective and accessory structures and appurtenances as he may deem necessary, and will furnish the contractor with all necessary information relating to lines, slopes, and grades. These stakes and marks shall constitute the field control by and in accordance with which the contractor shall govern and execute the work.
(c) The term "engineer" was defined in B.P.R. Specifications FP-41 (Article 1.16) as follows:
The District Engineer of the Public Roads Administration in whose district the proposed project is located, or his duly authorized representative. The District Engineer is hereby designated an authorized representative of the contracting officer.
6. (a) The defendant's obligation to set construction stakes under Article 5.5 of B.P.R. Specifications FP-41 (see finding 5 (b)) involved the setting of center line stakes, slope stakes, reference stakes (commonly referred to as reference points or RP's), and stakes known as blue tops. The purpose of such stakes was to provide guidance for, and to control the operations of, the plaintiff in constructing the road.
(b) Center line stakes were set along the center line of the prospective road, and their purpose was to indicate where the center line of the road was to go and to establish the proper elevations of the subgrade of the road (i.e., the grade prior to final finishing) along the center line. They were placed every 50 feet at least, and in the rougher terrain they were placed every 20 or 25 feet. Each center line stake was supposed to have on it the name of the line, the station number, and data indicating the proper elevation of the sub- grade along the center line of the prospective road at that point. The elevation shown on each stake in the center line was intended to govern the relationship between the elevation of the natural ground at that point and the subgrade to be constructed from the data on the stake.
(c) Slope stakes were set along the shoulder lines of the prospective road. They were similarly placed every 50 feet at least, and closer together in rough terrain. Each slope stake was supposed to have on it the station number, the distance horizontally between the center line and the slope stake, the extent of the cut or fill that was to be made at that point in order to bring the prospective road to the proper subgrade at the shoulder line, and the rate of slope at which the cut or fill was to be made.
(d) [Reference stakes were set on an offset line back of the slope stakes for the purpose of giving the plaintiff data with reference to the slope stakes. Normally, a reference stake was set a distance of 10 or 15 feet from the related slope stake so that the reference stake would be preserved in case the slope stake should be destroyed or otherwise lost in blasting or grading operations. As the reference stake was intended to provide security against the possibility that the slope stake might be lost, the reference stake had on it information similar to that on the slope stake.
(e) Blue tops were stakes the tops of which were colored blue. After the grading operations by the plaintiff had resulted in roughly reaching the subgrade indicated on the center line stakes and the slope stakes, personnel of the defendant then set blue tops every 50 feet along the shoulder lines to indicate the precise grade to which the road was to be finished. The final grade, which was supposed to be a foot above the subgrade, was indicated by the height of the blue-colored tops of the stakes.
7. (a) After personnel of the defendant had placed center line stakes, slope stakes, and reference stakes along a particular segment of the prospective road that was to be constructed by the plaintiff -under the contract, the plaintiff used a combination of caterpillar tractor and bulldozer (commonly called a pioneering cat) to remove the overburden down to the solid rock in the areas that were to be exea- vated, and to construct a temporary trail or roadway over which the other construction equipment could operate. The next step was for the plaintiff to drill and blast the rock at points where cuts were to be made. In these operations, the contractor drilled holes from the top of the rock down to depths that generally ranged from 18 to 24 feet. However, as the depth of the holes in an area of rock depended upon the extent of the particular cut that was to be made at that point, some holes were shallower than 18 feet and others were deeper than 24 feet. The holes for a particular lift (e.g., for an 18-foot lift within an area of rock) were filled with explosives, and the explosives were shot. After the blasting, a shovel and hauling rigs (known as rockers) were moved in. The shovel loaded the blasted material on the rockers, and the latter hauled the material to areas where it was to be deposited in fills. The material thus deposited at the site of a fill was distributed within the fill by a caterpillar tractor, the coarser material or riprap being worked to the outside, adjacent to the river, in order to provide support and minimize erosion. In conducting the operations described in this paragraph, the plaintiff was supposed to be governed by the data on the stakes that had been set by personnel of the defendant.
(b) When the plaintiff, as a result of operations such as those described in paragraph (a) of this finding, considered that a segment of the road was rather close to the prescribed subgrade, it customarily requested personnel of the defendant to set stakes known as rough grade stakes, and such stakes were always furnished by defendant's personnel on request. This involved the setting of a line of stakes showing the cut or fill along the shoulder of the road. The plaintiff would then use a bulldozer, or perhaps a pull scraper, and endeavor to make the roadway uniform with respect to the grade and alignment.
(c) The next regular step in the construction of a segment of road was for personnel of the defendant, at the plaintiff's request, to set blue tops for the purpose of indicating the exact grade to be achieved at the final finishing, and for the plaintiff to finish, the road in accordance with the bine tops, using and distributing cushion material for this purpose.
8. (a) The slope stakes and UP stakes set on this job by personnel of the defendant, and by which the plaintiff was required to govern its work, were not within the reasonable limits of engineering accuracy.
(b) The precise amount of error has been determined for all or nearly all the slope stakes and BP's which were remaining during the last few months of the job when an engineering resurvey was made, and which included approximately 50 percent of the original stakes, the balance having been lost or destroyed in the normal construction operations. This resurvey was originally made by a surveyor employed by the plaintiff. The results were then presented to the Bureau of Public Boads, which made a similar resurvey and concluded that substantially all the errors shown by the plaintiff's resurvey had been made.
(c) The plaintiff's resurvey determined that the following errors as to vertical elevation occurred in the slope stakes and reference point stakes:
(1) 473 stakes out of 658, or 71.8%, were .3 ft. or more in error;
(2) 340 stakes out of 658, or 51%, were .5 ft. or more in error.
9. In addition to the resurvey showing the vertical errors in the elevation of the slope stakes and reference point stakes, the plaintiff was able to measure in some areas of the road the horizontal error of slope stakes and reference point stakes. This survey showed that substantial horizontal errors were also made. The interrelationship of vertical and horizontal measurements causes errors in one dimension to bring errors in the other.
10. The errors in staking mentioned in findings 8 and 9 were attributable to negligence on the part of the defendant's personnel; and they substantially and adversely affected the efficiency of the plaintiff's operations.
11. The adverse effect of the staking errors mentioned in findings 8 and 9 on the plaintiff's work was felt as the rough grading approached the subgrade. In the first place, the errors adversely affected the work of the shovel and related excavating equipment as they approached the bottom of subgrade, as indicated by the slope stakes and KP's. As the grading operations came to subgrade, undulations appeared in the road surface. Until this problem in a particular area could be resolved, the shovel (upon whose operation the rockers and spread cat and related job personnel were dependent) was kept completely idle, or was moved to a different location, or simply "scratched around" in an inefficient effort to keep busy while the problem was studied. Although in many instances the plaintiff's operators were required to "eyeball it through" and thus disregard some of the stakes which appeared most erratic, the operators had no way of determining whether they were rejecting the correct stakes or the incorrect ones. In an effort to keep some production going, it was sometimes necessary to haul material in a different direction from that designed, thereby upsetting the material balance on the job and causing expensive crosshaul. To keep the shovel operating, it was occasionally placed in areas where it was crowding the drills, thereby lessening production. Movement of the shovel was a slow operation, with a maximum speed of 1% miles per hour. The shovel was shifted back and forth throughout the job so much that two sets of travel chains were worn out in a period of 4 months, when such chains will normally last for 2 years. After the erratic grade in a particular area was resolved, the shovel and other grading equipment had to be brought back to rework the area, either raising or lowering the grade to make a uniform roadbed. This reworking operation was also inefficient, since it involved the excavation of extremely small lifts and the placement of very small fills.
12. Although the undulations and reworking and related reduction in efficiency became evident to the plaintiff, the plaintiff at the time did not fully realize the cause of the problem. The plaintiff originally believed that the problem was due to its own personnel and, as a consequence, changed grade foremen several times and finally replaced the job superintendent. The problem nevertheless continued. The plaintiff finally had its own surveyor commence checking the stakes; and it was then that errors in the staking were discovered. At that time, the grading operations had already come from the east end of the job to a point near the westerly end of the job.
13. A major part of plaintiff's claim relates to alleged "refinishing" necessitated by staking errors of defendant's personnel. With the exception of one limited area (which is discussed, supra, in the opinion), plaintiff's claim as to "refinishing" is not sustained by a preponderance of the evidence.
14. The plaintiff's costs allocable to the unclassified excavation covered by .the contract amounted to a total of $449,812.62, computed as follows:
15.Reasonable compensation for the damages incurred by plaintiff as a result of the staking errors attributable to defendant is the sum of $35,985.
Conclusion on 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 plaintiff is entitled to recover. Judgment is, therefore, entered for plaintiff in the sum of thirty-five thousand nine hundred eighty-five dollars ($35,985).
The exact date when Mr. Chellquist related his general suspicion regarding stakes to the Bureau's resident engineer is not clear. However, this appears to have occurred in May or early June of 1953.
The statements quoted aboye were Included In the commissioner's finding 13. This finding has been modified by the court.
The nature of blue-top stakes Is explained in finding 6(e), infra.
Defendant points out that blue-top stakes are set independently of slope and reference stakes. Blue-top stakes indicated the final grade which was to be 1 foot aboye the subgrade. In order to achieve final grade, a layer of cushion material was placed upon the subgrade.
It should be noted that Rule 57(f)(2) (which Is Identical In substance to Rule 45(e) of the 1957 revision of the rules of this court) provides: "unless a party has requested a particular finding of fact, the court may refuse to consider his exception to the commissioner's report for failure of the commissioner to malee such finding." In the present case, we have deemed proper consideration of plaintiff's exceptions, but the policy behind the quoted rule is one factor to be considered in assessing those exceptions.
At the outset, we note that it is not clear that the Bureau did place, over extensive areas, two sets of stakes indicating the final grade. The Bureau's diaries, upon which plaintiff places reliance, appear to have used the terms "bluetops" and "grade stakes" to refer to the same stakes. Thus, plaintiff acknowledges that the first set of stakes (those placed prior to July 1953) may have been grade stakes rather than blue-top stakes as such.
Plaintiff states that Morgan's study is analagous to the theories of recovery used in Houston Ready-Out House Co. v. United States, 119 Ct. Cl. 120, 193, 96 F. Supp. 629 (1951), and Maryland Sanitary Mfg. Corp. v. United States, 119 Ct. Cl. 100, 118 (1951). Prom a theoretical standpoint, there may be some analogy. However, a basic element in Morgan's analysis is the item "net practical production capacity." To some extent, this item is based upon experience in the construction industry, but it also reflects numerous subjective notions of Mr. Morgan. Also, Morgan's study rests partly upon inaccurate data; this is discussed infra.
According to plaintiff, the difficulties with "erratic stakes" occurred during the foUowing periods: October 15 to November 15, 195S; March 15 to April 15, 1953 ; and AprU 15 to May 15, 1953.
The above total was arrived at as follows:
It is .assumed that any necessary grubbing or clearing (see finding 4(b)) was performed at about this time.