Case: J. D. HEDIN CONSTRUCTION COMPANY, INC., FOR ITS OWN USE AND FOR THE USE OF FISCHBACH & MOORE, ITS SUB-CONTRACTOR v. THE UNITED STATES
Abbreviation: J. D. Hedin Construction Co. v. United States
Decision Date: 1965-06-11
Docket Number: No. 387-56
Citation: 171 Ct. Cl. 70
Volume: 171
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: J. D. HEDIN CONSTRUCTION COMPANY, INC., FOR ITS OWN USE AND FOR THE USE OF FISCHBACH & MOORE, ITS SUB-CONTRACTOR v. THE UNITED STATES
Judges: Before Cowen, Chief Judge, Laramore, Dureee, Davis and Collins, Judges.
Pages: 70–177

Head Matter:
J. D. HEDIN CONSTRUCTION COMPANY, INC., FOR ITS OWN USE AND FOR THE USE OF FISCHBACH & MOORE, ITS SUB-CONTRACTOR v. THE UNITED STATES
[No. 387-56.
Decided June 11, 1965]
Thomas II. MoGrail for tbe plaintiff. Gallagher dk Thompson of counsel.
Mary J. Turner, with, whom was Assistant Attorney General John W. Douglas, for defendant. Mary K. Fagan on the brief.
Before Cowen, Chief Judge, Laramore, Dureee, Davis and Collins, Judges.

Opinion:
Laramore, Judge,
delivered the opinion of the court:
This action arises out of a contract between plaintiff and defendant's Veterans Administration for the construction of hospital facilities at Ann Arbor, Michigan. The contract was entered into by the parties on August 24,1949, and provided that construction was to be completed within 540 calendar days from the date of receipt of the notice to proceed (September 22, 1949). The project consisted generally of a 500-bed hospital proper and numerous appurtenant buildings and was not completed until July 31, 1953, which was 1,408 days after receipt of the notice to proceed and 868 days after the scheduled completion date. Although the contract provided for assessment of liquidated damages against the plaintiff for each day of delay beyond the original completion date, none were assessed by defendant. Moreover, the time for performance was extended by defendant from 540 days to 1,408 days.
Plaintiff contractor brings this suit on its own behalf and for the use and benefit of its electrical subcontractor, Fisch-bach & Moore, Inc., in which it charges defendant with a series of breaches of contract. The claims being prosecuted here are generally for delay-damages, primarily in the form of additional overhead, incurred as a result of the protracted performance time ensuing from defendant's various alleged breaches of contract, rather than for the cost of extra work. Plaintiff's delay-damages claims, aside from those of its subcontractor, can be generally grouped into three categories: (1) delays occasioned by defendant's faulty specifications and its tardiness in correcting such errors; (2) delays resulting from material shortages, abnormal weather, and strikes, which delays plaintiff claims would not have been encountered but for the original government-caused delays; (3) delays caused by a series of change orders issued during the final stages of the project, which plaintiff contends, taken collectively, were beyond the scope of the contract. Plaintiff also claims that defendant's breaches of contract with respect to the faulty specifications forced plaintiff's operations into periods of higher costs. Plaintiff seeks the increased costs incurred. Plaintiff, on behalf of its electrical subcontractor, asserts that the above enumerated government-caused delays stalled the subcontractor's operations, interrupted its normal sequence of work, and increased its cost of performance. The damages sought in this claim consist of the excess hours of labor caused by the delays, plus excess overhead. In defending on the merits, the government invokes a series of factual and legal propositions which it claims show that either the delays encountered were due to no fault of defendant or that as a matter of law plaintiff is not entitled to recover.
An extensive trial was held and in a complete and well-documented report our trial commissioner has found for plaintiff on most of the factual issues presented. The. net of his report is that a vast majority of the delays encountered during performance of the contract were due to no fault of plaintiff. He has found that (1) the Veterans Administration not only was in error and negligent in preparing the specifications, but also unduly delayed in correcting the faulty design; (2) had it not been for the government-caused delays with respect to the faulty specifications, plaintiff would not have been delayed by material shortages, adverse weather, and labor strikes; (3) that as a result of the delays caused by defendant, plaintiff incurred additional costs described below.
As the case comes to us, defendant has the burden of showing that the commissioner was wrong in his factual conclusions. Such a'task is far from slight since "[w]e 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.' Eule 48 [now Eule 66]. That presumption is dissipated only by a strong affirmative showing." Davis v. United States, 164 Ct. Cl. 612, 616-17 (1964). See also Litchfield Mfg. Corp. v. United States, 167 Ct. Cl. 604, 388 F. 2d 94 (1964).
We have carefully examined defendant's numerous objections to the commissioner's report. There is some color of truth to defendant's contentions that plaintiff's conduct with respect to the project left much to be desired. We think, however, that the genesis of the difficulties which were encountered was defendant's faulty specifications and its undue delay in correcting them. Whatever derelictions of duty plaintiff, as a contractor, might have been guilty of were not significant enough to counterbalance this initial government-caused difficulty. For this reason, we adopt the commissioner's evidentiary findings and factual conclusions with a few minor exceptions.
I. FAULTS' SPECIFICATIONS
Plaintiff's claims involve three separate alleged errors in design with respect to the government-drawn specifications to be used for the concrete piles, spread footings, and sewer system. Plaintiff contends that the defendant's faulty specifications, by themselves, establish a predicate for a breach of contract claim for the delays encountered as a result thereof. Moreover, plaintiff asserts that defendant's undue delay in correcting these errors in design establishes a separate basis for a breach of contract claim.
It is well settled that where the government orders a structure to be built, and in so doing prepares the project's specifications prescribing the character, dimension, and location of the construction work, the government implicitly warrants, nothing else appearing, that if the specifications are complied with, satisfactory performance will result. E.g., United States v. Spearin, 248 U.S. 132 (1918); Laburnum Construction Corp. v. United States, 163 Ct. Cl. 339, 325 F. 2d 451 (1963); Arcole Midwest Corp. v. United States, 125 Ct. Cl. 818 (1953); Stapleton Construction Co. v. United States, 92 Ct. Cl. 551 (1940). This rule rests on the presumed expertise of the government where it sees fit to prescribe detailed specifications. National Presto Industries, Inc. v. United States, 167 Ct. Cl. 749, 758, footnote 6, 338 F. 2d 99, 105 (1964), cert. denied 380 U.S. 962 (1965). "This implied warranty is not overcome by the general clauses requiring the contractor, to examine the site, to check up the plans, and to assume responsibility for the work until completion and acceptance." United States v. Spearin, supra at 137 (Court footnotes omitted). Moreover, this implied warranty is not defeated by a contract clause permitting the prospective bidders to conduct independent subsurface investigations, if such explorations could not reasonably be completed before the bids were to be submitted. Fehlhaber Corp. v. United States, 138 Ct. Cl. 571, 151 F. Supp. 817, cert. denied 355 U.S. 877 (1957). However, an experienced contractor cannot rely on government-prepared specifications where, on the basis of the government furnished data, he knows or should have known that the prepared specifications could not produce the desired result for " he has no right to make a useless thing and charge the customer for it." R. M. Hollingshead Corp. v. United States, 124 Ct. Cl. 681, 683, 111 F. Supp. 285, 286 (1953). Cf., Flippin Materials Co. v. United States, 160 Ct. Cl. 357, 312 F. 2d 408 (1963). If faulty specifications prevent or delay completion of the contract, the contractor is entitled to recover delay damages for defendant's breach of its implied warranty, and this breach cannot be cured by the simple expedient of extending the time of performance. Litchfield Mfg. Corp. v. United States, supra at p. 610, 338 F. 2d at 95. We will treat each of the alleged errors in the specifications separately.
(A) Ooncrete Piles
The plans and specifications for the foundations, and in fact for the entire project, were prepared by the Structural Division of the Veterans Administration. These government-prepared specifications were based on subsurface investigations conducted for the Veterans Administration by the Interstate Engineering Company. These explorations disclosed that the soils at the hospital site were a glacial moraine, consisting of an accumulation of earth, stone, sand, silt, clay and gravel, with occasional boulders, and in some cases nested boulders. The boring logs showed a stratum of compact sand and gravel at varying elevations. They also confirmed the existence of highly resistant materials and boulders. On the basis of this information defendant prepared the specifications for the foundation piles. The specifications required piles to be of the cast-in-place concrete type and were to be formed by one of three specified methods. Each of the three types of piles specified were to be encased within a thin steel shell of approximately 0.05 inch thickness. Piles were called for and used in about 90 percent of the building foundations.
The invitations for bids, specifications and drawings were issued to bidders on June 27, 1949, and provided for receipt of bids and bid openings on August 9, 1949. Drawings included logs of all borings and test pits, the manner in which they had been made, and the number of hammer blows required to penetrate the subsurface materials at various test locations. In short, the information submitted to the bidders contained all pertinent engineering data and information as to the pile-driving conditions that would be encountered at the site.
The plaintiff subcontracted the pile-driving operations to Western Foundation Corporation, an experienced pile-driving firm. The subcontractor arrived at the site on October 17,1949 and promptly prepared its equipment and materials for the actual driving operations. The initial test pile was driven on November 8, 1949. This initial attempt proved unsuccessful. The driving was difficult resulting from the extreme compaction of the dense subsoil. It became apparent that the piles could not be driven "dry" through this extremely compact subsoil and the subcontractor had to resort to "jetting" to loosen the soil so that the pile could be driven.
On November 16,1949, tlie preparations for "jetting" having been accomplished, three piles were driven in a satisfactory manner with the aid of "jetting". On the next day, three additional piles were driven but this caused the three piles driven on the day before to collapse or otherwise become unsatisfactory. On the next day a final pile was driven causing the three piles driven on the prior day to become unsatisfactory. Only the last pile of the seven was satisfactory. The cause of this difficulty was the fact that the thin-shelled piles could not withstand the actual pressures exerted from the driving of subsequent piles. Thus, only the last pile driven would remain satisfactory.
On the basis of these driving results, it became apparent that the thin-shelled piles were inadequate for the job, and defendant's superintendent in charge of construction at the project site so advised the Veterans Administration in Washington on November 18, 1949. Moreover, he informed the Veterans Administration that the pile-driving operations were suspended pending its decision and requested that a representative from Central Office be delegated immediately.
Thereafter, the piling subcontractor attempted to drive the specified thin-shelled piles in other areas to ascertain whether the subsoil conditions encountered in the driving of the first series of piles prevailed throughout the area. Efforts to drive these additional thin-shelled piles also proved unsuccessful.
As of November 30, 1949, defendant had taken no action to correct these difficulties. On that date the piling subcontractor proposed, as a solution to the problem, the use of a heavy steel pipe pile with a one-quarter inch wall, as distinguished from the 0.05 inch wall required in the specifications. On December 6-7, 1949, several of the heavy steel pipe piles were successfully driven and a representative of defendant, who observed the driving, was satisfied that the heavier pile would be satisfactory. It was not until January 17, 1950, that defendant issued Change Authorization No. 3, which authorized plaintiff to proceed with the driving of the heavy steel piles. Thereupon Western Foundation prepared its equipment for the driving of the heavier steel piles, shipped to the construction site the duly authorized pipe pile, and accomplished the necessary preparatory work. Pile-driving operations resumed on February 3, 1950, and were substantially completed by May 16, 1950. Western Foundation took 59 driving days or 102 calendar days to place the heavier piles.
On January 30,1951, defendant unilaterally issued Change Order PP increasing the contract price by $163,046 and extending the contract time by 125 calendar days for installation of the heavy pipe pile in lieu of that originally specified. The price increase of $163,046 provided $151,671 for the subcontractor and allowed seven and one-half percent of that figure, namely $11,375, for plaintiff as the "General Contractor Fee." Plaintiff appealed the change order claiming that it was entitled to recover increased costs incurred as a result of the change in the pile specifications. The appeal was denied. With respect to the pile difficulties, plaintiff not only seeks delay damages in the form of increased overhead, but also claims that it is entitled to recover its increased costs incident to the foundation change.
As stated earlier, plaintiff contends that the defendant's faulty specifications, by themselves, establish a predicate for a breach of contract claim for the delays encountered as a result thereof. Moreover, plaintiff asserts that defendant's undue delay in correcting these errors in design establishes a separate basis for a breach of contract claim.
There is no doubt in our minds that under the originally specified piles satisfactory performance would not have resulted. Defendant's own employees admitted this. However, this by itself does not constitute a breach of the implied warranty. The government first contends that the necessity to revise the specifications for the pile foundations resulted from changed conditions encountered at the site rather than faulty specifications. It then argues that if latent condi tions eventuate, a contractor can recover only under the "Changed Conditions" clause and is prevented from seeking breach of contract damages. The government also argues that plaintiff's failure to conduct an independent subsurface investigation, coupled with the contract provision in which the government does not guarantee the correctness of the explorations, absolves it from the representations made in the specifications. In this connection, defendant also contends that plaintiff's failure to inspect the additional exploration data it had in Washington prevents it from relying on the specifications.
Defendant's first contention that the change in specifications resulted from changed conditions rather than faulty specifications is not supported by the record. Moreover, defendant's argument in this respect appears to be inconsistent with its prior position in this litigation. But more importantly, defendant does not at any place in its brief state just what the changed conditions were. The density of the subsoil and existence of highly resistant materials were known at the time the specifications were drawn. These were the exact conditions which were encountered and prevented the thin-shelled piles from being driven properly. It appears to us that the necessity for the change resulted from defendant's failure to properly evaluate the known subsurface conditions.
The fact that plaintiff did not conduct an independent subsurface investigation is not determinative in this situa-ation. Our commissioner has found that the period of 48 days between invitations to bid and the opening of bids was not sufficient time for bidders to duplicate or make any adequate investigation of subsurface conditions. This factor alone would absolve plaintiff from this duty since we cannot impose an obligation on a contracting party which cannot reasonably be performed. Fehlhaber Corp. v. United States, supra. Moreover, an independent investigation would have disclosed exactly the same conditions which defendant had found. For this reason too, the government's disclaimer as to the results of the explorations has no application here. The difficulties encountered did not stem from unknown subsurface conditions, Hut were directly attributable to defendant's failure to properly evaluate the known subsurface conditions in' designing the specifications for the piles. Here the government chose to exercise its presumed expertise and thus impliedly warranted that satisfactory performance would result. As we said before, the thin-shelled piles originally selected for this project proved to be unsatisfactory since they could not be driven properly. This constitutes an error in the specifications which establishes a predicate for a breach of the government's implied warranty. Morrison-Knudsen Co. v. United States, 170 Ct. Cl. 712, 345 F. 2d 535 (1985).
However, the government can still escape liability for this error in design if it can prove that, based on the information which it made available, plaintiff could have determined that satisfactory performance under the specified piles would not result. R. M. Hollingshead Corp. v. United States, supra. See also Flippin Materials Co. v. United States, supra. In support of this exculpatory rule defendant contends that had plaintiff inspected the materials which were made available to it in defendant's Veterans Administration office in Washington, D.C., this error in design would have been detected. However, defendant not only has failed to prove specifically what materials it had in Washington but, more importantly, we are not told how these materials would have put plaintiff on notice of the errors in design. For these reasons, the exculpatory rule of Hollingshead and Flippin has no application to the instant case and does not present an obstacle to plaintiff's recovery.
There remains the question of causation. The government argues that the delays which resulted were not due to the faulty specifications but were directly attributable to plaintiff's inefficient engineering practices. It is well settled that the government is relieved of liability irrespective of its faulty specifications, where the actual delays were occasioned by factors outside the government's control. United States v. Howard P. Foley No., Inc., 329 U.S. 64 (1946); United States v. Blair, 321 U.S. 730 (1944); United States v. Rice, 317 U.S. 61 (1942). Such a determination is strictly a factual one within the province of our trial com-imissioner, subject to review by the court, based on the standards set out above. In the evidentiary record made in this case, there is much to support the commissioner's determination that the delays encountered resulted from defendant's errors in design and were not caused by plaintiff's alleged inefficient engineering practices. These contentions are merely reiterations of those made to the commissioner. We think that they have been adequately answered by our commissioner in his report, and we accept his conclusion that "[t]he evidence does not support these contentions," and the primary cause of the foundation delays was defendant's faulty specifications.
Under these circumstances, we hold that defendant breached its implied warranty for which plaintiff is entitled to recover delay-damages as a result thereof.
We turn now to a determination of the extent of the government-caused delays. Our commissioner has found that the government-caused delays, with respect to the pile difficulties, amounted to 125 days. Defendant challenges this finding by asserting that the delays encountered primarily resulted from plaintiff's job methods. We start with- the proposition that defendant, by extending the time of performance 125 days, recognized that the overall project was delayed to that extent. The grant of an extension of time by the contracting officer carries with it the administrative determination (admission) that the delays resulted through no fault of the contractor. Cf. Langevin v. United States, 100 Ct. Cl. 15, 30 (1943). However, this does not mean that where "the Government refrains from exercising its right to collect liquidated damages [by extending the time of performance], though that forbearance may tend to raise some question of government-caused delay, it is tantamount to admitting liability for breach of contract Robert E. Lee & Co., Inc. v. United States, 164 Ct. Cl. 365, 369 (1964). It is up to this court to determine the extent of the delay for which defendant is responsible. Schmoll v. United States, 105 Ct. Cl. 415, 458, 63 F. Supp. 753, 759, cert. denied, 329 U.S. 724 (1946). However, "[t]he findings of the contracting officer have been said to constitute a strong presumption (James Stewart & Co., Inc. v. United States, 105 Ct. Cl. 284, 63 F. Supp. 653 (1946); Irwin & Leighton v. United States, 101 Ct. Cl. 455 (1944) or an evidentiary admission (George A. Fuller Co. v. United States, 108 Ct. Cl. 70, 69 F. Supp. 409 (1947)) of the extent of the Government's liability, but always subject to rebuttal." Robert E. Lee & Co., Inc. v. United States, supra, at p. 370. We think that defendant has not rebutted this presumption.
It is clear to us that no productive work was being accomplished from November 8, 1949' (date on which the first pile was unsuccessfully driven) to February 3,1950 (date on which the driving of the heavy pile commenced). During this period plaintiff's efforts were directed at resolving the problems ensuing from the defective plans and specifications. The status of the work was the same on February 3, 1950, as it was on November 8,1949. This amounts to 87 days in delays for which the government is responsible. Moreover, we find that the government caused the additional 38 days covered by the extension of time. The driving of the heavier pile was attended by numerous difficulties which would not have been encountered had the original delay not ensued. By an earlier completion date, plaintiff would have been able to avoid pile driving operations during the spring of 1950 when muddy conditions at the site slowed down performance and made it more difficult. The government is responsible for these delays. An exact amount cannot be determined since some productive work was being done during this time. However, because of these conditions, progress was at a slower rate. Moreover, since pile driving was the first step in the construction of the building, the resulting delays caused an overall project deterioration. We have the contracting officer's determination of 125 days. Defendant has failed to show any action by plaintiff which caused delay. The presumption of the extent of the government's liability has not been rebutted. Therefore, we hold that 125 days was the extent of the government-caused delays with respect to the faulty pile specifications.
As stated earlier, plaintiff seeks not only damages as a result of the delays caused by defendant's faulty pile specifications, but also seeks its increased costs incurred as a result of the change in the specifications. Under Change Order PP, defendant unilaterally allowed increased costs to the pile subcontractor. Plaintiff appealed this decision of the contracting officer claiming that it was entitled to be reimbursed for the increased costs it incurred as a result of the change. The Board upheld the contracting officer's determination. A de novo trial was held on this issue, without any objection by the defendant that a determination of this issue be limited to a review of the administrative proceedings based on the Supreme Court's ruling in United States v. Carlo Bianchi & Co., Inc., 373 U.S. 709 (1963). Whatever might have been defendant's right to limit this issue to a review of the administrative record, had the issue been timely raised, we hold, as we have before, that in this case defendant waived any such right by failing to object. WPC Enterprises InC. v. United States, 163 Ct. Cl. 1, 323 F. 2d 874 (1963); Stein Bros. Mfg. Co. v. United States, 162 Ct. Cl. 802, 337 F. 2d 861 (1963). Plaintiff argues that the damages here sought flow directly from defendant's breach so that recourse to the administrative board on its findings is not necessary. We need not decide this issue since we find that insofar as the decision of the Appeals Board involved factual issues within the "Disputes" clause, the Board's decision is not supported by substantial evidence and is, therefore, overturned.
As a result of the delays ensuing from the pile difficulties, plaintiff incurred costs on the foundation work in excess of those costs it would have sustained had the delays resulting from the changes not occurred. By an earlier completion date of the pile-driving operations plaintiff could have avoided added work which became necessary. During the period the excavations were open, especially after the middle of March 1950, rain, snow, and the freezing and thawing of the ground, caused the banks of the excavation to erode. Some footings had to be re-excavated because of sloughing-in, additional backfill became necessary, more form work and grading was needed, and there were additional costs for labor and pumping of water from the excavations.
We think that plaintiff should be entitled to be reimbursed for this excess cost. Whether they flow directly from the defendant's breach, or are in the form of an equitable adjustment resulting from the change in specifications, is immaterial in this case- — -the amount would be the same. Our commissioner has found that plaintiff incurred excess costs incident to the foundation work in the amount of $86,621.15. We think this amount is reasonable under the circumstances and we accept it.
Defendant challenges the manner in which these costs were computed by arguing that the commissioner's report erroneously accepts the "total cost" theory expressly rejected by us in River Construction Corp. v. United States, 159 Ct. Cl. 254 (1962) and in F. H. McCraw & Co. v. United States, 131 Ct. Cl. 501, 130 F. Supp. 394 (1955). We are aware that we have on a number of occasions expressed our dislike for this method of computing breaches of contract damages, and we do not intend to condone its úse as an universal rule. However, we have used this method under proper safeguards where there is no other alternative, since we recognized that the lack of certainty as to the amount of damages should not preclude recovery. Oliver-Finnie Co. v. United States, 150 Ct. Cl. 189, 279 F. 2d 498 (1960); Mac-Dongald Construction Co. v. United States, 122 Ct. Cl. 210, 110 F. Supp. 449 (1952) ; The Great Lakes Dredge & Dock Co. v. United States, 119 Ct. Cl. 504, 96 F. Supp. 923 (1951), cert. denied 342 U.S. 953 (1952). In all these cases the fact of government responsibility for damages was clearly established; the question was how to compute reasonable damages where no other method was available. River Construction Corp. v. United States, supra, at 271. We think this is such a case. The exact amount of additional work which plaintiff had to perform as a result of the foundation problem is difficult, if not impossible, to determine because of the nature of the corrective work which was being performed. The adverse weather conditions during the extended period in which the excavations remained open caused a myriad of problems. Additional trenching, form construction, and pumping of surface water became necessary. Re-excavation by hand was sometimes required. The extreme muddy conditions caused difficulties and slowed down performance. There is no precise formula by which these additional costs can be computed and segregated from those costs which plaintiff would have incurred if there had been no government-caused difficulties. However, the reasonableness and accuracy of plaintiff's estimate, which was prepared by an experienced engineer whose qualifications have been unchallenged, have been established. Defense counsel stated that the estimate was not challenged. The closeness of the bids gives support to the reasonableness of the estimate. The bidders were three extremely experienced contractors of large construction projects. Plaintiff on prior occasions had successfully constructed a number of large projects for the Veterans Administration. Plaintiff has established the fact that it performed additional work. Moreover, the responsibility of defendant for these damages is clear. The only possible method by which these damages can be computed is by resort to the "total cost" method. Under such circumstances, as stated earlier, we think that the government should not be absolved of liability for damages which it has caused, because the precise amount of added costs cannot be determined.
Defendant contends that a nationwide steel strike would have delayed structural steel delivery to the job until approximately the time when pile driving had been completed and the job was ready for steel. It argues that the steel strike would have caused a job delay irrespective of the pile foundations. It introduced no evidence of the date and length of the strike and relies only on a letter from plaintiff to the contracting officer in which the contractor sought an extension of time for structural steel shortages arising from the strike. The steel strike which defendant refers to started on October 1, 1949, and affected all major steel producers. Settlements Avere made by most all of these companies by November 11,1949. We have said that pile operations with the thin-shelled piles could have been reasonably completed by February 1, 1950. Thus there was a two and one-half month interval before structural steel would have been needed oil tlie job, if on original schedule. Moreover, there is no evidence that there would have been an actual overall job delay as a result of the strike. The strike delay is only theoretical at best, whereas defendant's delays were actual. Under such circumstances, we think the government should not be absolved of liability and the innocent party penalized as a result of a fortuitous circumstance, the effect of which cannot be determined with a reasonable approximation.
(B) Spread Footings
The nature of the soil governs whether piles or spread footings are appropriate for foundations. The Veterans Administration determined in its contract drawings that spread footings were to be used as foundations in two wings of the hospital building. They were also to be used 'as foundations in several other structures.
Spread footings are blocks of concrete of various sizes. They are created by pouring concrete into designed excavations at predetermined elevations. Defendant in the contract drawings specifically set forth the elevations where each of the spread footings was to be placed. Generally the footings were to rest six inches below the gravel strata found in the subsoil at the site. In preparing for the pouring of such footings, the ground is excavated to the top of the gravel strata and then the bed for the footings is dug by hand.
On December 8, 1949, while excavating for the footings, plaintiff did not hit the gravel strata at the elevations indicated on the drawings. Defendant's project superintendent was made aware of this situation and on that date notified, by telegram, Central Office of the Veterans Administration of this discrepancy. On January 1, 1950, having received no response to his telegram, the project superintendent again advised Central Office that the gravel stratum was at a deeper elevation than shown on the drawings and added that a reply was badly needed. During the interim, on December 13,1949, the plaintiff also called this situation to the contracting officer's attention and asked for instructions. Plaintiff received no reply.
Finally, on January 9, 1950, defendant's project superintendent received a memorandum from the Central Office wherein detailed instructions were given with respect to the difficulties arising from the spread footings. The memorandum specified the method for the lowering of those footings which were to be lowered less than two feet, and stated that in respect to footings to be lowered more than two feet, the elevation of the gravel strata should be submitted first before a lowering would be authorized. The memorandum also directed the superintendent to obtain a proposal from the contractor covering the cost involved in lowering the spread footings. This request appeared to be extremely impractical, if not impossible, since in defendant's project superintendent's words, "the number of footings and the amount that each must be lowered is indeterminate until such time as all footings have been installed." Moreover, the requirement that plaintiff excavate down to the gravel level seems extremely impractical. If plaintiff were to do this, then the excavations would be left open awaiting a decision and this would cause, 'as defendant's project superintendent recognized, "excessive caving and re-excavation." Accordingly, a per-foot proposal was suggested by defendant's project superintendent whereby plaintiff would be paid the agreed price times the number of feet that each footing would have to be lowered.
At this juncture it is important to point out that plaintiff could not construct the spread footings in accordance with the plans and specifications. Plaintiff promptly notified defendant of this fact. It was incumbent upon defendant to revise the faulty plans or issue a change order authorizing plaintiff to do the necessary exploratory work to determine the exact elevations of the gravel strata. It was not plaintiff's obligation under the contract to determine the existing conditions and revise the contract drawings. A change order or proceed order which would assure plaintiff compensation is necessary before defendant can impose this obligation on plaintiff. Cf., Fox Valley Engineering Inc. v. United States, 151 Ct. Cl. 228, 241 (1960); MacDougald Construction Co. v. United States, 122 Ct. Cl. 210, 256 (1952). It was up to the defendant to take the next step in correcting the defective plans. The only thing that could be required of plaintiff would be a proposal of the cost of lowering footings on a per-foot basis.
Nevertheless, defendant persisted in requiring plaintiff to provide the elevations where footings were to be lowered more than two feet below the contract elevations, before a change was authorized. Plaintiff was also requested to submit a lump-sum proposal instead of the unit price per additional foot originally suggested by defendant's superintendent. Plaintiff was so advised by letters dated February 13, 1950, and February 28, 1950.
The lump-sum proposal was submitted on March 7, 1950, and on March 17, 1950, plaintiff submitted the elevations. Change Authorization No. 6, accepting plaintiff's proposal of March 7,1950, was not issued,'however, until April 25,1950.
In some areas, the gravel stratum was located so much lower than shown on the contract drawings (in some instances 15 to 20 feet) that spread footings actually could not be used, and it became necessary to redesign for the use of pile f ounda-tions. Defendant's superintendent advised the Central Office of this fact on March 29,1950. Defendant took no action. Again, on May 15, 1950, the defendant's superintendent advised the Central Office that if piles were going to be used in lieu of spread footings, such a determination should be made quickly because pile driving was to be finished the following day and there would be increased costs for moving the driving equipment back to the location when once removed. It was not until June 1, 1950, that defendant authorized the substitution of pile footings for the spread footings.
Plaintiff has been fully recompensed for the actual additional work directly involved in lowering the spread footings and substituting the piles, and only seeks delay-damages measured by the time extensions allowed by the contracting officer on the grounds that defendant breached the contract when it provided faulty specifications with respect to the spread footings.
There is no doubt in our minds that the government-prepared specifications contained errors with respect to the elevations of the gravel strata. That this constitutes faulty specifications and establishes a predicate to a breach of con tract claim is clear. The government defends on the grounds that the job delay was not caused by the faulty specifications but was attributable to plaintiff's failure to promptly determine the actual elevations. The short answer to this, as we have indicated above, is that defendant could not impose on plaintiff such a duty without first authorizing a change order or a proceed order assuring plaintiff compensation for this work which was beyond the scope of the contract. Fox Valley Engineering Inc. v. United States, supra; MacDougald Construction Co. v. United States, supra. Defendant cannot now charge plaintiff with being dilatory with respect to an obligation which it had no right to impose. Moreover, the record indicates that plaintiff was, under the circumstances, reasonably prompt in submitting to defendant the requested information.
We turn now to a determination of the extent of the government-caused delay. As Ave have indicated with respect to the pile difficulties, the grant of an extension of time not only is a determination that the project was delayed to that extent, but also is an administrative admission that the delay wras through no fault of the contractor. There is a failure of proof that the delays were occasioned by factors beyond the control of the government. See Litchfield Mfg. Co. v. United States, supra. Under such circumstances, the presumption as to the extent of the government's liability has not been rebutted. Thus, we hold that the government-caused delays with respect to the spread footings amounted to 45 days.
(C) Sewers
The specifications provided for permanent drainage of the buildings and site by sewers. On the east side of the site, the storm sewers were to run into a 15-inch storm sewer. On the west side the sewers were to drain into a 10-inch trunk line which flowed into an outlet near the southwest corner and thence the discharge was to be through a manhole and off-site culverts. A 30-inch storm sewer approximately 230 feet in length was also to be constructed on the west side of the site.
Plaintiff subcontracted the work for the sewer system. This work was scheduled to be completed during the early stages of tbe project so that fill from the excavations of the buildings could be placed over the sewer lines and the area graded for roads and parking areas. It was also necessary that the 15-inch and 30-inch storm sewers be constructed during the first months of the construction in order that the other utility lines which ran over or across the sewer system could be installed. The soil at the east and west sides of the site where the 15-inch and 30-inch sewer lines were to be constructed was extremely "swampy" thus necessitating up to 15-18 feet of fill. Laying of the 15-inch storm sewer line at the east side of the site began on November 1,1949. The unstableness of the soil in this area caused the subcontractor to experience extreme difficulties in the installation of the sewer lines. It appears that the subsoil in that area could not support the weight of the pipe and fill upon it. Laying of the 15-inch line was completed on November 28,1949, but it still was not stable.
On November 30,1949, plaintiff proposed to the contracting officer, as a solution to this problem, the removal of the unstable soil in the path of the 15-inch sewer line and replacement of it with coarse gravel. Defendant's contracting officer failed to reply to plaintiff's proposed solution.
On January 24, 1950, defendant's superintendent advised plaintiff that, in view of the unstable soil conditions in the vicinity of the 15-inch line, further installation at the east end of the site should be suspended. The letter advised plaintiff that the 15-inch line as laid was not acceptable as it had dropped, heaved, and was out of line due to the unstable soil condition. He further indicated that it would be necessary to remove the line and put it on a firm foundation by a method to be determined by defendant.
Placing of the 30-inch concrete sewer pipe on the west side of the site began on November 2, 1949, and continued until November 8,1949, when defendant's superintendent ordered that any further work on the line be suspended because of a sink hole encountered along 75 feet of the trench. He described the condition as "a bog with a very soft muddy bottom which seems bottomless." He thought it would be necessary to put the pipe on a concrete mat or reroute the line. The condition encountered was at once communicated to the Central Office of the Veterans Administration. On November 9 and 15, 1949, plaintiff advised the contracting officer that in accordance with the directions of defendant's superintendent it had stopped work on the 30-inch line until a decision was made by defendant. Plaintiff also indicated that a decision was needed since this stoppage was holding up work of excavation, fill, grading, and installation of other lines.
On November 14, 1949, defendant's superintendent proposed to plaintiff that the sink hole in the area of the 30-inch sewer line be dug out and filled with coarse gravel. He also submitted a drawing specifying the manner of doing the work and requested from plaintiff a proposal on costs. Plaintiff submitted the requested proposals on December 5 and 27, 1949. No action was taken thereon by defendant's Central Office.
Plaintiff, without waiting for approval of its proposals, dug out the sink hole and replaced the excavated materials with gravel. Backfill two feet deep was placed on top of the pipe to prevent lateral movement. However, this was unsuccessful and defendant's superintendent so advised the plaintiff on January 24, 1950, with instructions to plaintiff not to proceed further with the installation. He also indicated that the matter had been referred to Central Office for a determination of a solution to this problem.
On February 15, 1950, defendant's superintendent requested the plaintiff to submit a proposal covering the amount of corrective work necessary to install the 15- and 30-inch lines and manholes in a stable position. The plaintiff replied on February 23, advising defendant that the proposal would be submitted as soon as the drawings, previously promised, showing where the sewer was to be changed from clay to concrete pipe, were supplied.
On March 9,1950, defendant's superintendent wrote plaintiff providing general information on methods to be used in correcting the sewer problems. The letter requested a proposal for a concrete slab to be placed on the gravel pile already in place beneath the 30-inch sewer line. As to the 15-inch line, alternatives were suggested of either (1) sheeting the tile underdrain, with the sewer line to be of cast-iron pipe, or (2) setting cast-iron sewer pipe or creosoted wooden piles with the pipe itself anchored to a pile cap. On April 8, 1950, plaintiff submitted its proposal in response to defendant's request of March 9,1950. It also advised defendant that all of the cast-iron pipe had to be ordered. No action was taken by defendant on plaintiff's proposals.
In May and June of 1950, plaintiff protested to defendant in writing the indecision and delay by defendant in responding to plaintiff's proposal. The grading and plumbing subcontractors were protesting the delay to plaintiff.
During the months of May, June and July of 1950, defendant's superintendent reported, in his daily report submitted to Central Office, that the failure of the Central Office to arrive at a final decision in regard to the sewer installation was causing the subcontractor additional expense. He observed that if the work had to be carried over until the spring and summer of 1951, it would interfere with roads, walks, grading and drainage work and prolong the entire project.
Finally, on July 25, 1950, defendant issued Change Authorization No. 13 permitting a change, where required in the judgment of defendant's superintendent, from clay or concrete pipe to cast iron for the storm and sanitary sewers. Supporting piles were authorized for the pipe and manholes in the eastern part of the work, and the 30-inch pipe on the western side was to be supported by a concrete slab. The obligation of the government for the changes was limited to $45,000 by the change authorization. By letter of the same date, defendant's superintendent gave to plaintiff his decision on those places where cast-iron sewer pipe should be used.
On August 3, 1950, plaintiff acknowledged receipt of the change authorization of July 25 and advised defendant that during the months intervening between its proposals and the change authorization (April 3 to July 25) the cost of performing the work had materially increased and that delivery of the cast-iron pipe could not be made by the supplier until November 15, 1950. Plaintiff also requested the defendant to advise it as to "what means, what type of pipe you now desire a quotation on inasmuch as cast iron pipe is unavail able." Plaintiff then stated that it protested the change authorization. Defendant did not reply to plaintiff's letter.
Having received no reply or further instructions from defendant, the plaintiff, on August 31,1950, wrote defendant regarding the change authorization of July 25,1950, and requested that it be permitted to proceed with the 30-inch line portion of the sewer, inasmuch as the lack of available cast-iron pipe only affected the 15-inch line. Defendant did not reply to plaintiff's request.
On September 1, 1950, plaintiff again wrote the defendant and submitted correspondence from its sewer subcontractor and suppliers indicating that cast-iron pipe delivery was indefinite. Plaintiff again protested the continued delay and advised defendant that the job was "now in a deplorable condition" requiring construction of temporary roads so work could proceed during the rainy season. Plaintiff then noted his appeal of the change authorization, although expressing the view that a change authorization was not a change order under the contract and that it had never received any orders in respect to the sewer lines. Defendant did not reply to this letter.
Plaintiff wrote again on September 29, 1950, and advised defendant that there were several thousand yards of excavated materials stockpiled which now had to be rehandled for a second time. Plaintiff then requested "immediate action so sewers and water lines [could] be installed without any further delay." Defendant did not reply to plaintiff's urgent requests.
Finally, defendant's contracting officer issued Change Order T on October 23, 1950, and for the first time directed that the corrective sewer work be done at a cost not to exceed $75,000. Plaintiff thereupon attempted to get a definite commitment on delivery of cast-iron pipe but had difficulty in doing so. On December 7, 1950, plaintiff submitted to defendant for approval a description of the pipe it would be able to obtain, and defendant granted approval thereof on December 15, 1950. Delivery of the cast-iron pipe commenced on February 16, 1951 and continued into March of 1951.
Winter weather made ground conditions unfavorable for the laying of the sewer line. Defendant's superintendent recognized that if the sewer system could not be installed before winter' weather set in, the work would have to be carried over until the spring and summer of 1951. The sewer system was finally completed in the fall of 1951.
On September 3,1952, the contracting officer issued Change Order JJJJJ, which cancelled Change Order T, increased the contract price for the sewer work by the amount of $53,465.45, and extended the contract time by 120 calendar days. The price increase represented the extra cost for performing the change work.
Plaintiff seeks delay damages in the form of additional overhead incurred as a result of the protracted performance ensuing from defendant's faulty sewer specifications and the undue delay in correcting the difficulties encountered.
As to plaintiff's first contention, defendant seems to argue that the difficulties encountered with respect to the sewer system resulted from changed conditions rather than faulty specifications and, as such, plaintiff is precluded from seeking delay damages. We need not decide this issue, since we find that the plaintiff is entitled to recover delay damages as a result of defendant's undue delay in correcting the sewer difficulties.
Defendant's Central Office was first apprised of the sewer difficulties early in November of 1949. It was not until March 9, 1950, that defendant proposed a solution for the problem. It was not until July 25,1950, that defendant issued a change authorization. By that time the cast-iron pipe originally proposed was unavailable. Plaintiff so advised defendant in a series of communications dating from August 3 to September 29,1950. It was not until October 23, 1950, that a change order was authorized. This was the first time plaintiff was authorized to do the necessary corrective work, which was almost a year after defendant was made aware of tbe sewer difficulties. Here tbe contractor could not perforin tbe work in accordance with tbe plans and specifications of defendant due to either a changed condition or negligent design. There is no provision in this contract which required plaintiff to independently find a solution to these problems, but rather it was incumbent on the contracting officer to investigate the changed condition or correct the faulty design and issue change orders where appropriate. The law gives him a reasonable time to carry out this contractual obligation. It took the contracting officer almost a year to perform this duty. Under such circumstances, we conclude that defendant breached its ever-present obligation to carry out its contractual duties within a reasonable time. Peter Kiewit Sons' Co., Inc. v. United States, 138 Ct. Cl. 668, 151 F. Supp. 726 (1957); Walsh v. United States, 121 Ct. Cl. 546, 102 F. Supp. 589 (1952). For this failure, the government will have to respond in damages for the resulting additional costs which plaintiff has encountered.
It appears that the project as a whole was seriously affected by the sewer problems. Defendant's own superintendent advised Central Office more than once about the delay effect on the job by reason of inaction on the part of the Veterans Administration. Construction of utility lines, roads, walks, and parking areas, were all dependent upon an early completion of the sewer system. The delay resulting from the sewer system impeded progress on these and other phases of the project. Moreover, normal job sequence was interrupted and coordination of the work of the trades impeded. The contracting officer, by granting a 120-day extension, found an overall job delay to this extent and, moreover, admitted that the delays resulted through no fault of plaintiff. We need not in this case deduct a reasonable time interval for defendant to make revisions in the sewer system, since it took defendant almost a year to issue a change order and the delay recognized amounted only to approximately four months. We think that eight months was more than sufficient to make such a determination. For the foregoing reasons, we find that the government-caused delay with respect to the sewer system amounted to 120 days.
II. Material Shortages, Abnormal Weather, Labor Strilees
With, respect to these claims, plaintiff seeks damages in the form of increased overhead costs for delays resulting from material shortages, abnormal weather, and strikes, which delays plaintiff claims would not have been encountered but for the original government-caused delays with respect to the foundation and sewer difficulties.
It is well settled that where delays are occasioned by factors beyond the control of the contractor or the government, a contractor cannot recover damages from the government for the delays, nor can the government properly assess liquidated damages against the contractor. Carman, et al. v. United States, 143 Ct. Cl. 747 (1958). However, where government-caused delays force the contractor into more costly operations, the government will have to respond in damages for the resulting additional outlays. Abbett Electric Corp. v. United States, 142 Ct. Cl. 609, 614 (1958) ; Langevin v. United States, supra at 37.
(A) Priorities
The Defense Production Act of 1950 was enacted on September 8,1950, to divert certain materials and facilities from civilian to military use and related purposes on account of the Korean war which began in July of that year. Priority controls for certain materials went into effect in January of 1951. Thereafter, material shortages became an acute problem. In those situations where a suitable substitute was available, the contracting officer allowed the substitution without change in the contract price or time for performance. However, an available substitute was not found in every situation, with the result that the progress under the contract was acutely delayed. The contracting officer recognized this fact and granted two extensions of time totaling 269 days. Both extensions of time were based upon the administrative determination by defendant's contracting officer that the delay was due to unforeseeable causes beyond the control and without the fault and negligence of plaintiff. The first extension was for plaintiff's inability to obtain materials be tween March. 1,1951 and March 1,1952, and the other extension covered the period of March 1, 1952 to July 31, 1953. Both extensions were predicated on detailed, written memo-randa by the contracting officer, wherein specific reference was made to each material shortage and the effect thereof on the entire project. Our commissioner has found that these administrative determinations are fully supported by the record. Furthermore, our commissioner has found that had it not been for the earlier government-caused delays with respect to the foundations and sewers, the material shortages would have been substantially avoided.
Defendant seeks to avoid responsibility for these delays by arguing that some of the shortages might have occurred prior to March 1951 (the original completion date). In so doing, defendant points to some correspondence which it claims indicates that plaintiff was experiencing shortages prior to the scheduled completion date. Most of the instances which defendant points out are minor incidents in which plaintiff would request a substitution of one material for another. There is nothing in the record which suggests that there was an actual delay or that plaintiff would have experienced a delay because of these substitutions. Defendant did not introduce any testimony to this effect. However, it now wants us to infer from this unrelated correspondence a period of shortages which would have theoretically affected plaintiff.
Defendant attempts to demonstrate that the Veterans Administration was prompt and plaintiff was dilatory in handling priorities. Defendant argues that plaintiff was delayed by its own negligence in failing to comply with Veterans Administration instructions, by its lack of coordination with its suppliers, and by its failure to submit samples. Defendant has failed to tie-in all these allegations with a showing of an overall job delay attributable to plaintiff. Moreover, these allegations are contrary to the administrative determination that there was an overall job delay due to material shortages and priorities which were beyond the control of plaintiff.
As noted before, the administrative determination which resulted in the extensions of time were based on a thorough study of the record. These extensions of time, as a result of the material shortages, covered periods of performance after the originally scheduled completion date. The evidence in the record does not support defendant's contention that plaintiff would have encountered these shortages prior to March of 1952. More importantly, the priority controls went into effect in January of 1951, and under the originally scheduled completion date the project would have been substantially completed by that time. This all points to the inescapable conclusion that plaintiff would not have encountered these material shortages but for the original government-caused delays with respect to the foundations and sewers. The defendant is responsible for delays resulting from the material shortages to the extent determined by the contracting officer, i.e., 269 days.
(B) Weather
On August 23, 1951, plaintiff applied to defendant for a time extension of 83 calendar days for the period April 1, 1950 to August 1,1951, due to alleged abnormal weather conditions described principally as excessive rainfall. On December 12, 1951, defendant, after evaluating plaintiff's application and the official weather reports, determined that the contract had been delayed 62 calendar days during the period due to unseasonably severe weather, and extended the contract time by 62 calendar days. Work in progress during this period involved foundations, sewers, landscaping, roadways, sidewalks and parking areas. Our commissioner has found that .the weather adversely interfered with work which would have been completed prior to the bad weather beginning in April of 1950, had there not been the delays in the foundations and sewers.
This factual determination by our commissioner is substantiated by the record. The unusually severe weather encountered after April of 1950 seriously impeded the foundation work on the buildings as well as work on outside utility lines, roadways and grading. The record supports the conclusion that this work would have been entirely completed prior to April 1, 1950, had it not been for the prior difficulties with respect to the foundations and sewers. If these difficulties liad not occurred, the abnormal weather subsequent to April 1,1950, would have had little, if any, delaying effect on the items of construction work which would have been in progress after that date. By that date, the foundation work would have been completed and the interior work could have been performed during the inclement weather. For these reasons, we conclude that the defendant is responsible for the 62 days in delays which plaintiff experienced as a result of the inclement weather.
(C) Strike Delays
Plaintiff, during the construction of the project, was subjected to strikes which delayed the overall progress of the job. Defendant's contracting officer granted extensions of time therefor totaling 23 calendar days. Of this total, 17 days occurred subsequent to the original completion date, and plaintiff would not have been subject to these delays if the original government-caused delays had not occurred. "VVe think that the government should respond to plaintiff in delay damages to that extent.
III. INCREASED COSTS RESULTING FROM DEPENDANT'S. BREACHES
Plaintiff claims that defendant's breaches of contract with respect to the foundations and sewers forced plaintiff's operations into periods of higher costs. Plaintiff seeks the increased costs incurred by reason of (1) excess maintenance of temporary road service; (2) additional temporary heating and snow removal; (3) higher wages for labor, exclusive of bricklayers, than would otherwise have been paid; (4) excess costs for performing the lathing and plastering work; and (5) increased wages paid bricklayers.
As we noted before, where government-caused delays resulting in breaches of contract force the contractor into more costly operations, the government will have to respond in damages for the resulting additional outlays. Abbett Electric Corp. v. United States supra (increased labor costs); Langevin v. United States, supra (increased materials costs); Stapleton Construction Co., Inc. v. United States, supra (increased cost in performance of work of defaulting subcontractor).
(A) Temporary Roads
Plaintiff, from about December 1, 1949, constructed and utilized temporary roads throughout the hospital site. Under plaintiff's original schedule, the maintenance of the temporary road service should have terminated prior to July 1, 1950, since the permanent roadways and parking areas would have been constructed by that date. Due to the delays in foundation and sewer work as previously found, the permanent roadways were not completed and in use until September 4, 1951. Consequently, plaintiff was required to undertake excessive maintenance beyond that originally contemplated to the extent of 61 weeks. Our commissioner has found that the excess cost to plaintiff in maintaining the roads was $3,347.44. Defendant contends that the estimate that the permanent roadways and parking facilities would be in use on July 1, 1950, is unrealistic. However, we are not told what a "realistic" completion date would be. Defendant also challenges the amount found by our commissioner. Defendant did not introduce any evidence rebutting plaintiff's computations with regard to the cost for the temporary roads; however, it seeks to undermine the costs allowed by arguing that the amount awarded by the commissioner is more than twice its total costs. The scheduled cost for this item was approximately $2,694. This related to the anticipated 30 weeks of maintenance. Plaintiff was allowed $3,-347.44 for the additional 61 weeks. Inasmuch as the site conditions were much more adverse and the period was double, the amount found by our commissioner seems very conservative. For these reasons, plaintiff is entitled to recover $3,347.44 as damages flowing directly from defendant's breach of contract in this respect.
(B) Temporary Heating and Snow Removal
As a result of the government-caused delays in foundation and sewer work, plaintiff was required to provide additional temporary heating during the construction in the winters of 1951-1952 and 1952-1953. Further, plaintiff incurred labor costs during the 1951-1952 winter necessary to remove heavy amounts of snow so construction could go forward. Our commissioner has found the amounts expended therefor totaled $49,277.30. He bas further found that these sums would not have been incurred but for the original government-caused delays with respect to the foundation and sewer problems. The amount awarded was verified by defendant on audit. However, defendant argues that plaintiff is precluded from recovering these costs (snow removal) because it failed to seek an extension of time. The fact that the contractor did not ask for an extension of time is immaterial to his right of recovery for these additional outlays resulting from defendant's earlier breaches. The snow removal apparently did not delay the project; nevertheless, plaintiff incurred these expenses because of defendant's earlier breaches. Consequently, plaintiff is entitled to recover $49,277.30.
(C) Losses on Labor, Exclusive of Bricklayers
As a result of the government-caused delays heretofore described, the project was shifted into a period of higher wages for laborers, exclusive of bricklayers. Subsequent to March 19,1951 (original completion date), plaintiff paid the sum of $25,386.33 for the increased amount of wages. Tn addition, plaintiff paid certain other increased labor expenses subsequent to March 16,1951, for union welfare dues, retroactive pay increases and travel time, in the stun of $3,818.56. Consequently, plaintiff incurred the sum of $29,204.89 in increased labor costs which it would not have incurred but for the original government-caused delays.
Defendant seeks to disallow these sums on the ground that the increased wages represented a business risk. Defendant is correct in contending that increased wages is a business risk if encountered during the originally scheduled performance time. However, if performance is extended as a result of government-caused delays beyond the original completion date, an increase in wages after this period cannot be considered a risk which the contractor assumed. Such increased costs flow directly from defendant's prior breaches. Abbett Electric Corp. v. United States, supra. Consequently, plaintiff is entitled to recover' $29,204.89.
(D) Losses on Subcontracts
Plaintiff entered into a subcontract with the Wayne Plastering Company for the performance by that company of all lathing and plastering on the hospital project for the amount of $294,000. Subsequent change orders amended this amount to $287,186.02. Plaintiff claims that due bo the delays it was required to take over this work and assume financial responsibility for its completion. Plaintiff's records, which were verified by defendant, reflect expenditures on behalf of this subcontractor totaling $389,949.62, including $40,325.77 in' back charges. This results in an overage of $102,763.30 above the subcontract amount, which overage is claimed by plaintiff.
Our commissioner has found that due to the original delays plaintiff's subcontractor did not perform and plaintiff was forced to take, over the work through completion at an additional cost.
Defendant's basic position is that there is no causal connection between the foundation and sewer difficulties and the plastering work. Our commissioner has found to the contrary. In the evidentiary record made in this case, there is much to support the commissioner's determination. Due to the protracted performance of the initial phases of this project, the Wayne Plastering Company's work was being done under entirely different circumstances as to labor and materials than was contemplated. Because of the increased costs of performance, the subcontractor could not financially continue. It became necessary for the plaintiff to assume responsibility for the purchase of materials and payment of the subcontractor's workmen. Under such circumstances, we think that plaintiff has established the necessary cause and effect.
Defendant refers to two other similar claims which were disallowed by the commissioner. Inasmuch as plaintiff has not excepted, they are no longer in issue. However, defendant argues that these other subcontractors contradicted plaintiff's contentions. This is an issue of credibility, and the commissioner had ample and full opportunity to evaluate the reliability of the witnesses. Under such circumstances, we accept the judgment of the trier of facts.
The commissioner has found that plaintiff expended $62,154.06 in excess of the subcontract price. He has disallowed plaintiff's claim for back charges of approximately $40,000. Defendant argues that the proper measure of damages with respect to this claim is arrived at through the use of the "total cost" theory, since in this instance it would be to the advantages of the government. However, we do not think it proper to use the "total cost" method here, since the exact amount of excess costs which plaintiff incurred as a result of defendant's breach can be precisely computed. Consequently, plaintiff is entitled to recover $62,154.06.
(E) Losses on Labor of Briohlayers
Subsequent to March 16, 1951 (original completion date) plaintiff paid the sum of $13,989.54 over and above what would have been paid if the labor had been performed prior to the scheduled completion date. Defendant is responsible for these increased costs, and plaintiff is entitled to recover $13,989.54.
XV. CHANGES BEYOND THE SCOPE OF THE CONTRACT
Defendant issued 27 miscellaneous change orders for contract extras in the last half of 1952 and the first half of 1953. On November 3, 1953, an extension of 120 days was granted therefor. At the time these orders were issued by defendant the work was not less than 84 percent complete and it was completed in July of 1953. Subsequently, six additional change orders were issued for work which was not included in the original contract plans and specifications. As a result thereof, the contracting officer granted extensions of time totaling 102 days.
Plaintiff contends that the various changes, taken cumulatively, constitute a cardinal alteration of the contract and were, therefore, outside the permissible limits of the "Changes" article.
We have recognized that the point at which a change must be considered to be beyond the scope of the contract and inconsistent with the "Changes" article is a matter of degree varying from one contract to another. Saddler v. United States, 152 Ct. Cl. 557, 287 F. 2d 411 (1961). Moreover, "a determination of the permissive degree of change can only be reached by considering the totality of the change and this requires recourse to its magnitude as well as its quantity." Id. at 561, 287 F. 2d at 413. Neither the number of changes nor the characteristics of the work to be performed is of itself the determinative factor. Aragona Construction Co., Inc. v. United States, 165 Ct. Cl. 382 (1964).
Here we think that the series of changes, even if taken cumulatively, did not result in a fundamental alteration of the contract. Plaintiff recognizes that the miscellaneous changes here did not alter the physical results in the perspective of the overall project. The finished project was substantially the same as originally contracted for. Aragona Construction Co., Inc. v. United States, supra. The number of changes (33) are not unreasonably large in number for a project of this size. However, plaintiff argues that the time expended to perform these changes in relation to their actual cost is unreasonable. This factor has never been used as a criterion in determining whether the changes ordered are beyond the permissible limits of the "Changes" article of the contract. Plaintiff also argues that the fact that they were issued at the end of the project makes them unreasonable. We know of no contract requirement or any obligation imposed by law which restricts the government's power to order changes within a specified period. The "Changes" article in this contract provided that "[t]he contracting officer may at any time, by a written order, make changes in the drawings and/or specifications of this contract and within the general scope thereof." The only restrictive language found in this clause is the phrase "within the general scope thereof." We think this means that the contracting officer can order changes as long as the finished project was substantially the same as originally contracted for. The fact that performance was extended is immaterial, since the contractor is not precluded from recovering overhead in its costs for the added work. As a matter of fact, some overhead was allowed with respect to some of the changes ordered. Plaintiff's failure to appeal the amounts allowed as part of the equitable adjustment precludes it from now seeking them in this court.
Summary of Government-Caused Delays
As a result of the previously discussed breaches of contract, the government is responsible for the delays resulting from:
Extent of Delay
I Faulty Specifications
(a) Piles _ 125
(b) Spread Footings- 46
(c) Sewer _ 120
II Shortages, Weather & Strikes
(a) Material Shortages- 269
(b) Abnormal Weather- 62
(e) Labor Strikes_ 17
Total _ 633
V. KISCIIBACH & MOORE SUBCONTRACT
On November 17,1949, plaintiff entered into an agreement with use-plaintiff Fischbach & Moore, Inc., whereby the latter, as subcontractor, agreed to furnish all labor, materials and equipment necessary for the installation of all electrical work for the Ann Arbor project. The electrical subcontractor had to adapt its work to the general progress of the job since electrical equipment and materials were, generally, to be installed in facilities which first had to be built. The government-caused delays discussed above, and for which plaintiff was not to blame, delayed the work of the electrical subcontractor beyond the originally contemplated completion date, interrupted the normal sequence of its work, and increased its costs of performance. These delays required the subcontractor to perform excess manhours of labor in the amount of 29,759 hours. The cost of this excess labor was $88,362.85 plus $6,454.02 for taxes and insurance. In addition, the subcontractor expended an additional $620 and $11,947.74 for job overhead and home office overhead during the excess period. These total excess costs amounted to $107,384.61 for the 868 days of contract overrun, or at the rate of $123.71 per day. Since we have found that defendant is responsible for 638 days of delay, the plaintiff is entitled to recover on bebalf of its subcontractor $18,926.98.
The government's defense with respect to the subcontractor's claim is that the government is not responsible for the original delays. We have already decided to the contrary, so that any further discussion is unnecessary.
VI. DAMAGES
As in all breach of contract cases, the proper measure of damages for defendant's breaches is the amount of plaintiff's extra costs directly attributable to said breaches. Saddler v. United States, sufra. These take the form of delay damages compensated as increased overhead incurred as a result of the protracted performance. Moreover, the contractor is entitled to recover its additional expenditures directly attributable to the breach. In computing the additional overhead, we have held that a contractor is entitled to recover as damages the amount of overhead on a daily basis allocable to the period of overrun for which the government is responsible. McGraw & Company v. United States, 131 Ct. Cl. 501 (1951); Comb Co. v. United States, 103 Ct. Cl. 174 (1945).
Defendant properly contends that the excess costs claimed must be tied in to defendant's breaches. The commissioner's report which we have adopted attributes each and every item of cost to the various delays and faulty plans. Defendant does not amplify or explain in what way there is a lack of tie-in. We are satisfied that the necessary causal connection has been established.
With respect to the overhead items, defendant contends that it is being required to pay overhead twice. Defendant's audit report submitted in evidence does not reflect this. Defendant did not contend this in its proposed findings, nor did it object to plaintiff's proposed findings on this basis. Moreover, we have carefully gone through all change orders and deducted from plaintiff's overhead recovery all overhead received by it through change orders.
Our commissioner has found that the allocation of home office overhead to this job amounted to $223,576.26, or $158.79 per day oyer the performance period of 1,408 days. The government does not challenge the correctness of this figure. Since we have found government-caused delays to the extent of 638 days, plaintiff is entitled to recover $101,308.02.
For the delay period of 638 calendar days, plaintiff's job overhead applicable to said delay is $95,470.32. By Change Orders QQQ and JJJJJ, defendant granted plaintiff $2,-286.86 hi overhead. Therefore, plaintiff is entitled to recover $93,183.46.
Summary of Damages
Subcontractor's claim_ $78, 926.98
Costs incident to changes in foundation_ 86,621.15
Maintenance of temporary roads_ 3,347.44
Temporary heating and snow removal_ 49, 277.30
Home office overhead_ 101, 308.02
Job overhead_ 93,183.46
Losses on labor, exclusive of bricklayers_ 29,204.89
Losses on subcontracts_ 62,154.06
Losses on labor of bricklayers_ 13, 989.54
$518, 012. 84
Plaintiff claims it is entitled to a profit of ten percent on those excess costs included in (1) costs incident to changes in foundations, (2) maintenance of temporary roads, and (3) temporary heating and snow removal except for the amounts of payroll taxes and insurance included therein. We have held in the past that a contractor is not entitled to profit on the amount of damages arising from a breach of contract. Oliver-Finnie Co. v. United States, supra. We see no reason why we should depart from our prior holding. Therefore, plaintiff is not entitled to recover profits.
For the foregoing reasons, plaintiff is entitled to recover $518,012.84, and judgment is entered to that effect.
EINDINGS OE EAOT
The court, having considered the evidence, the report of Trial Commissioner Marion T. Bennett, and the briefs and argument of counsel, makes findings of fact as follows:
1. Plaintiff, J. D. Hedin Construction Company, Inc., is and was at all times pertinent herein, a corporation under the laws of the State of Delaware with its principal office and place of business in the District of Columbia and engaged in the construction business. Fischbach. & Moore is and was at all times pertinent herein a corporation under the laws of the State of New York with its principal offices in New York City and engaged in the electrical contracting business.
2. Plaintiff contractor brings this suit on its own behalf and for the use and benefit of its electrical subcontractor to recover losses and excessive costs, as shown by plaintiff's schedules, alleged to aggregate $1,108,633.37 and to have arisen from construction of a hospital facility for the defendant's Veterans Administration at Ann Arbor, Michigan. The project, which was under construction during the years 1949-1953, inclusive, consisted generally of a 500-bed hospital proper and numerous appurtenant buildings, equipment, utilities, parking facilities, roadways, grading and landscaping. The buildings are more particularly identified in finding 9.
3. Plaintiff was the lowest of three bidders. A contract, No. V 1001 0-72, was entered into by plaintiff and the Veterans Administration on August 24, 1949, whereby plaintiff agreed to construct the aforementioned hospital and facilities in accordance with plans and specifications for the consideration of $7,152,000, subsequently increased by changes to $7,565,715.08. The contract documents consisted of a duly executed standard contract form, the specifications including the invitation for bids, schedules, and drawings dated June 20, 1949, together with two addenda and a letter of acceptance dated August 24, 1949.
4. The contract provided that construction was to be completed within 540 calendar days from the day of receipt of the notice to proceed (September 22,1949), viz., on or before March 16, 1951. The project was not accepted as substantially completed, however, until July 31, 1953, which was 1,408 days after receipt of the notice to proceed and 868 days after the scheduled performance time. The contract provided also for assessment of liquidated damages in the sum of $250 per day for each day of delay by plaintiff in its performance and, further, that the time of performance was to be an essence of tbe contract. No liquidated damages were assessed by defendant and tbe time for performance was extended by defendant from 540 to 1,408 days.
5. Tbe contract contained tbe following pertinent provisions:
article 3. Changes. — Tbe contracting officer may at any time, by a written order, and without notice to tbe sureties, make changes in tbe drawings 'and/or specifications ox this contract and within tbe general scope thereof. If such changes cause an increase or decrease in tbe amount due under this contract, or in tbe time required for its performance, an equitable adjustment shall be made and tbe contract shall be modified in writing accordingly. No change involving an estimated increase or decrease of more than Five Hundred Dollars shall be ordered unless approved in writing by tbe bead of tbe department or his duly authorized representative. Any claim for adjustment under this article must be asserted within' 10 days from tbe date the change is ordered: Provided, however, That the contracting officer, if he determines that the facts justify such action, may receive and consider, and with the approval of the head of the department or his duly authorized representative, 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 article 15 hereof. But nothing provided in this article shall excuse the contractor from proceeding with the prosecution of the work so changed.
article 4. Changed conditions. — Should the contractor encounter, or the Government discover, during the progress of the work subsurface and/or latent conditions at the site materially differing from those shown on the drawings or indicated in the specifications, or unknown conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the plans and specifications, the attention of the contracting officer shall be called immediately to such conditions before they are disturbed. The contracting officer shall thereupon promptly investigate the conditions, and if he finds that they do so materially differ the contract shall, with the written approval of the head of the department or his duly authorized representative, be modified to provide for any increase or decrease of cost and/or difference in time resulting from such conditions.
*
article is. Disputes. — Except as otherwise specifically provided in this contract, all disputes concerning questions of fact arising under this contract shall be decided by the contracting officer subject to written appeal by the contractor within BO days to the head of the department concerned or his duly authorized representative, whose decision shall be final and conclusive upon the parties thereto. In the meantime the contractor shall diligently proceed with the work as directed.
Pertinent provisions of the specifications are hereafter included in substance or in text in findings relating thereto.
6. In summary, plaintiff asserts that defendant breached the contract by (a) changes necessitated by defendant's faulty designs, (b) unreasonable slowness of defendant in making necessary changes and taking other actions, (c) changes resulting from changed conditions for which plaintiff was not given additional costs to which it was entitled, (d) changes beyond the scope of the contract, (e) failure of defendant either to make an equitable adjustment for changes as required by the contract or the making of an adjustment so inadequate as to be arbitrary and capricious, and (f) delays and changes by defendant which unduly protracted the performance which had to be done under adverse conditions.
Plaintiff especially objects, as will be shown later in more detail, to the substitution alleged to have been made necessary in the type of pile on account of faulty initial design, unsuited to known subsurface conditions or constituting a change beyond the scope of the contract, to defendant's alleged unreasonable delays in a decision to direct changes in the area where difficulties were encountered with spread footings for the hospital building on account of the bearing stratum of soil being lower than anticipated, and to defendant's delays in making changes appropriate to subsoil conditions in two locations during installation of outside storm and sanitary sewers. According to plaintiff, these delays, in breach of the contract, prevented plaintiff from adhering to its original plan of construction and shifted it into the period of the Korean War when it had to endure increased labor and material costs, shortages, labor troubles and bad weather. Although there was a change order (pp) allowing an upward adjustment of the contract price as a result of the change in the type of piles, plaintiff alleges that this only reimbursed the piling subcontractor, and plaintiff reserved the right to assert its own increased costs allegedly incurred.
i7. In summary, defendant's position on plaintiff's claims, as will hereafter be shown in detailed findings, is:
(a) That the types of piles originally specified could have been used successfully by a prudent and competent contractor and that the change therein was not the result of faulty design nor was it instituted in a dilatory manner so as to delay the job. Defendant says that the change was made because it would require of plaintiff a lesser degree of engineering competence and would avoid substantial delay to the project. Further, defendant states that plaintiff has been awarded an equitable adjustment therefor which is final and conclusive.
(b) That the alleged plan or schedule of construction on which plaintiff predicates its claim was not that which in fact was used.
(c) That a nationwide steel strike in the fall of 1949 together with extensive corrective work on structural steel, which had been improperly milled, kept plaintiff from adhering to its alleged original plan, thus shifting a substantial part of the work into the difficult period of which plaintiff now complains.
(d) That weather and labor and material shortages were not defendant's fault, that delays were attributable in part to change orders for which plaintiff was compensated by time extensions and price adjustments accepted without reservation, with one exception noted in finding 6.
(e) That delays were due to such things as plaintiff's alleged failure to submit samples for approval and enter material orders in timely and proper manner, failure to coordinate the work efficiently, and the installation of numerous items of work in an unworkmanlike manner requiring corrective steps to comply with specifications.
(f) That plaintiff has failed to establish any reasonable relationship between its alleged excess costs and the delays it complains of and has failed to provide proper accounting evidence to support its claims.
8. The site of the project is located about 1 mile north and across the Huron Eiver from the city of Ami Arbor and consists of approximately 18 acres of relatively high ground shaped roughly as a right triangle. Eoads existed along all three boundaries. The main hospital building was to be centered on the site facing south and located at the top of a hill. The land sloped sharply away from this building to the east, south and west and with a more gentle slope to the north. The auxiliary buildings were in two groups, one being to the west of the hospital building and the other to the east of it. All buildings were on sidehill locations.
9. Each of the 13 structures to be erected under the contract was designated as one "building" in a numerical series 1 through 19. An already existing manager's quarters was designated as building No. 2 and an existing manager's garage as building No. 16. Numbers 7,10,11 and 13 in the series were not used as building designations. The principal structures consisted of the following:
Building 1. The main building or hospital, a 10-story penthouse structure of structural steel, concrete and brick with limestone facing. This building was designed to be supported by a combination of pile and spread footing foundations. It constituted approximately 90 percent of the total volume of work to be performed on the basis of cost. It was approximately 4,576,000 cubic feet in size and amounted to 91.25 percent of the total building space constructed under the contract.
The hospital building was divided by expansion joints into four sections which were referred to during the period of construction and throughout the trial of this case as Unit A, Unit B, the recreation wing and the laundry wing. Unit A was the frontal section of the building facing southward. Unit B extended to the north. The recreation and laundry wings were projections from Unit B of the main structure.
Building 3. The staff apartment building, a two-story structure of brick and concrete construction supported by concrete foundations.
Buildmg If. The nurses' quarters, a two-story brick and concrete structure resting on concrete foundations.
Building 5. The attendants' quarters, a one-story brick and wood structure resting on concrete foundations.
Building 6. The garage, a one-story brick and concrete structure which was designed to be supported on pile foundations.
Building 8. The boiler house, a two-story structure of structural steel, brick and concrete construction which was designed to be supported on pile foundations.
Building 12. The incinerator, a one-story 'brick and concrete structure which was originally designed to rest on concrete foundations for which piles were later substituted by change order.
In addition to the foregoing the following were to be constructed under the contract:
Building 9. Eadial brick chimney.
Steel flagpole. Building Ilf..
Water pumping station. Building 15.
Underground soft water reservoir. Building 17.
Underground wet salt storage basins. Building 18.
Underground hard water reservoir. Budding 19.
10. Plaintiff had a general plan of construction, as follows:
(a) Clearing the site and removing topsoil, staking out the buildings and storm and sewer lines, excavating for the hospital building and commencing installation of sewers and outside utilities.
(b) Priority for the hospital building with work starting first on Unit A, then Unit B, the laundry wing and recreation wing in that order. Eemaining buildings and structures were to be built concurrently as fill-in or supplemental work for all trades.
(c) Upon completion of the excavation of one unit of the hospital building, the driving of piles would begin, followed by the pouring of concrete for piles and pile caps and the foundation.
(d) Structural steel erection would begin when foundations had been installed in the first section of the hospital building. Concurrently, permanent roads and parking facilities would be constructed.
(e) Next, concrete floors and fireproofing the structural steel would be accomplished in the hospital building in the same sectional sequence, while the superstructure of the other buildings and structures would be put up as supplé-mental work.
(f) Upon completion of the superstructure of the hospital building, exterior walls were to be placed with interior masonry, walls being done concurrently during bad weather. Upon enclosing-of buildings, the roofs would be constructed.
(g) After enclosing the buildings, the plastering would start on the top floors and proceed down. Concurrently, installation of marble, terrazzo, ceramic tile and built-in cabinets was to be accomplished.
11. Plaintiff's superintendent arrived at the site on September 20, 1949,- and plaintiff promptly began performance of the contract upon receipt of the notice to proceed on September 22,1949. Throughout October there was delivery of materials and supplies and the customary preliminary steps in a large construction project of this kind. Plaintiff was an experienced contractor and had built 13 Veterans Administration hospitals for defendant, aggregating approximately $30,000,000 .worth of work. On the-contract in issue, plaintiff, with its own forces, performed about one-third of the work and the rest was done by some 30 subcontractors.
THE CONCRETE PILES
12. Foundation plans and specifications were prepared by the Structural Division of the Veterans Administration and .were based on subsoil investigation directed or performed by the Veterans Administration. 'Seventeen subsurface explorations were made in the area occupied by the hospital or adjacent thereto. Piles were called for and used in about 90 percent of the building foundations. The contract drawings estimated the driving of 1,480 piles for Unit A of the hospital building, 58 for the garage, 46 for the boiler house, 80 for the laundry wing, and 32 for tlie- chimney, or a total of 1,696 piles. Changes added 23 to the hospital in the recreation wing, and 11 piles were included in the foundation of the incinerator in lieu of spread footings, bringing the total piles to 1,735, of which 1,588, or approximately 91.5 percent, were used in the foundation of the hospital building.
13. The invitation for bids, specifications and drawings were issued to bidders on June 27, 1949, and provided for receipt of bids and bid openings on August 9,1949. Drawings included logs of all borings and test pits, the manner in which they had been made and the number of hammer blows required to penetrate the subsurface materials' at various test locations. Bidders were advised that original boring logs, soil samples, cores, test data and pertinent information as to soil conditions were available for inspection at the Veterans Administration office in Washington, D. C., and that they were expected to examine the data available, visit the site, and make bids after deciding for themselves the character of the materials. Upon application they were advised that they would be given permission to make subsurface explorations of their own at the site. The specifications said, in part:
4. SUB-SURFACE INVESTIGATION:
The Government does not guarantee that other materials will not be encountered nor that the proportions, conditions, or character of the several materials will not vary from those indicated by the explorations.
None of the bidders on: this-contract made any separate Or independent soil investigations. The period of 43 days between invitations to bid and the opening of bids was not sufficient time for bidders to duplicate or make any adequate investigation of subsurf ace conditions.
All pertinent engineering data and interpretation thereof was set forth in the boring logs, the preliminary drawings, and finally the contract drawings which were made available to the bidders. Defendants has failed to show how the additional information which it had in its files in Washington, D.C. would have put plaintiff on notice that the piles called for in the specifications would, as later discovered, prove to be inadequate.
14. Soils at the hospital site were a glacial moraine, an accumulation of earth, stone, sand, silt, clay, and gravel with occasional boulders. A stratum of compact sand and gravel is shown by the boring logs to vary from the highest elevation of 809 to the lowest of 772. The buildings were gener ally designed to rest on this stratum. With some exceptions the contract drawings of subsurface data which defendant made available to the bidders, did not show existence of boulders at or above the stratum upon which the buildings were to rest. Defendant's investigation of the soil conditions at Ann Arbor was done for it by contract made in January 1949 with Interstate Engineering Company. This company encountered boulders in its borings and was delayed in its investigation for about 2 months. Defendant then made arrangements with the University of Michigan to assist with the field and laboratory tests to get the data needed for foundation design. The assistance of the Raymond Concrete Pile Company was also obtained. They confirmed existence of highly resistant materials and boulders.
Defendant did not drive any test piles as a part of its investigation of subsurface conditions. This idea was rejected because of the cost involved. It would have cost about $10,000 or about four times the amount defendant spent on its soil subsurface investigation. Failure of defendant to evaluate subsurface conditions properly in specifying the types of acceptable piles increased the difficulties and costs in constructing foundations and resulted in delays as hereafter shown.
'15. The specifications provided that foundation piles were to be "of the cast-in-place concrete type cased with a steel shell," and cylindrical or step-tapered. It was provided that piles should be formed by one of the following methods:
2-6 (a) By driving a shell supported by an internal core or mandrel to the required penetration and bearing, removing core and filling shell with concrete.
2-6 _ (b) By driving a casing and removable core to the required penetration and bearing, removing core, placing at least 4y2 cubic feet of concrete in the casing, replacing the core, and driving the apparatus into the concrete to form a base, removing the core and inserting a shell which shall rest upon and be sealed by the concrete at the lower end, removing casing and filling shell with concrete.
2-6 (c) By driving a casing fitted with a precast concrete point which has a greater maximum diameter than the casing, to the required penetration and bearing, inserting. a shell inside casing and attaching shell to precast point; removing the casing leaving precast point and shell permanently in place, and filling shell with concrete. 2-6 (d) The steel shell in place for each type shall be water tight and shall have sufficient strength to withstand driving and/or the pressure from surrounding materials and the driving of adjacent piles without distortion or damage. They shall be not less than No. 18 U.S. Standard gauge. Positive means shall be provided of preventing mud and water from entering the shell during the driving and forming of piles.
The pile formed by the method described in (a) is known as the Raymond step-tapered pile, (b) is known as the MacArthur pile, and (c) is the button-bottom pile. The latter has a precast concrete button at the bottom of the shell. All three piles are thin-shell piles because the metal shells which remain in the ground as the form for the concrete are made of thin metal of approximately .05-inch thickness.
16. Plaintiff through its pile subcontractor, Western Foundation Corporation, an experienced pile-driving firm, proposed the use of the so-called button-bottom method of forming the concrete foundation piles. Data describing this method was submitted to the Veterans Administration on October 19,1949, and on November 2,1949, it was formally approved by defendant, subject to the contract requirements.
On September 13,1949, Western advised plaintiff that it planned to start operations on or about October 20, 1949. The subcontract provided that Western would complete its work "in the shortest possible time using two pile drivers, single shift." The subcontract did not provide dates for commencement or completion but Western contemplated that the work would require 65 full working days and so advised plaintiff. The subcontract provided that the plaintiff prime contractor would keep the area free of water, that jetting water would be furnished free of charge and that the consideration of the subcontract was stated to be $111,200.
\17. The specifications, paragraph. 2-7, provided as follows:
2-7. Opring: Pre-excavation or coring shall be performed as necessary to penetrate materials overlying the sand and gravel stratum.' Jetting will be permitted provided it is performed in a manner satisfactory to the Superintendent, and provided materials surrounding completed piles are not damaged to an extent that would reduce the lateral stability from that of a pile surrounded by undisturbed soil. After jetting, piles shall be driven to the required bearing, driving being started immediately after jetting is finished. Any annular space remaining around the pile, shell after completion of its installation shall be backfilled and packed with clean fine sand or 1 to 8 cement grout, in a manner which will produce full lateral support.
18. Coring was not attempted nor suggested as practical by anybody on this particular job. Coring would not have gone down 15 or 20 feet below the surface, where trouble was encountered here. However, jetting was resorted to as hereafter described. Jetting is a method sometimes used when the driving of a pile "dry" is not possible because of factors such as extreme compaction of the soil. In such a situation jetting of a thin stream of water under very high pressure will drive a hole of smaller diameter than the pile and loosen the soil so that the pile can be driven. This procedure is a troublesome one because of the conditions created by the water. It is not effective against 'boulders or heavy clay. This procedure is a sort of last resort when no other alternative exists.
19. Western Foundation Corporation began operations at the construction site on October 17, 1949, and through the first week'of November was engaged in setting up to do the actual piló driving. The set-up time included the casting of concrete buttons to serve as pile heads, testing equipment, erecting a driving rig, receiving supplies and equipment and setting up temporary offices and shops. The set-up time used by Western was not unreasonable.
20. On November 8, 1949, Western Foundation Corporation drove -a test pile to ascertain the driving characteristics of the soil and whether' jetting was indicated. The driving was difficult and the casing stuck in the ground and could not be withdrawn because of the pressure against it resulting from the compaction of the subsoil. The casing had to be jetted loose.' The results suggested that the specified piles could not be driven without the aid of j etting.
Western advised plaintiff that it was equipped with jetting equipment but unable to jet because plaintiff had not provided a water supply. Plaintiff knew the subcontract provided that plaintiff should furnish water for jetting but, being unsure that it would be necessary, awaited the test. Thereafter, from November 9 through November 16, plaintiff arranged for piping the water from the Huron River. In the latter interim Western made repairs to the pile driving rig damaged by the driving of November 8 and worked on its other equipment. On November 14 the second pile driving rig arrived at the jobsite. It was assembled and erected on November 21-22.
21. On November 16, 1949, three of the shells in group T-6 were driven satisfactorily with the aid of jetting. On the next day three additional piles were driven but this resulted in the dog-legging of two and collapse of the third of the three piles driven on the prior day. -On November 18, 1949, the last of the seven piles in this cluster was driven and this caused a collapse of one driven the prior day and all six became either out of plumb or eccentric beyond allowable limits. Only one of the piles was satisfactory, No. 3, the last one driven. Jetting damaged the lateral stability of the piles, the sand and silt became "quick" and the entire area around the piles became unstable. The thin shells of the piles would not withstand the lateral pressures.
22. On November 18, 1949, defendant's superintendent of construction on the job wrote to the Director' of Construction, Veterans Administration, in pertinent part as follows:
9. We believe that the type of pile selected for this project is unsatisfactory. From the. results obtained from driving the piles of footing No. 6T, it appears that the use of No. 18 TJ. S. Standard gauge steel for shells, at least in parts of the building where long piles are needed, is not practical. It appears that piling for these areas will have to be of much heavier steel, capable of withstanding the tremendous pressure at the 20 to 30 foot level. It also appears that jetting, no matter what type of piles is used, will result in shoving and drifting of adjacent piles, making it impossible for the contractor to drive within our allowable limits of plumb and eccentricity.
10. We are enclosing herewith, driving data on these piles, taken on the job during operations, and independently by the contractor and this office.
11. In view of the difficulties which have developed from driving these test piles, it is requested that a representative of Central Office be delegated to this project not later than November 23, 1949, to aid us in arriving at a suitable solution to the problem. In the meantime, all pile driving operations have been suspended, pending your decision.
Defendant's superintendent noted, also, that driving the piles dry was "extremely difficult." Driving required 24 blows per inch for the last 5 feet and then reached 27 to 30 blows per inch to refusal. Paragraph 2-8 of the specifications required only 12 blows for the last inch of driving.
23. Before driving of the hundreds of piles required here could actually begin, it was necessary that a satisfactory load test be conducted. Paragraphs 2-11 and 2-13 of the specifications required that not less than six piles should be driven and filled with high-early-strength portland cement concrete. One of the piles selected by the superintendent of construction was then to be tested and the results submitted to the Veterans Administration for approval before any further piles were driven. A load of 80 tons was to be placed on the pile tested, according to specified procedures, and settlement readings were required to fall within certain limitations to be acceptable. This load test was not to determine whether a pile could be driven but rather how much driving thereof, was needed and what it would support in the soil where it was placed. The bearing capacity of the soil could thus be ascertained.
24. On November 18, 1949, Western, with the concurrence of plaintiff, requested permission to pour concrete in pile No. 3, which had been acceptably driven, and into one or two others in group T-6 for the purpose of testing load- bearing capacity. Defendant granted permission to do so on November 23, 1949, on the following basis:
THIS OFFICE INTERPOSES NO OBJECTION TO PROCEDURE INDICATED WITH UNDERSTANDING THAT TEST ON PILING NO. 3 MAT BE ACCEPTED IF SATISEACTORT AS THE TEST SPECIFIED PARAGRAPH 2-11, PAGE 2-3 OP SPECIFICATION AND PROVIDED THAT ANY ADDITIONAL TESTS THAT ARE PERFORMED ON THE OTHER PILES THAT HAVE BEEN DRIVEN IN TUTS GROUP ARE TO BE PERFORMED BY THE CONTRACTOR AT UTS OWN EXPENSE AND ARE NOT TO BE INCLUDED IN THE ADDITIONAL TESTS SPECIFIED PARAGRAPH 2-12 OF THE SPECIFICATION. THIS PERMISSION IS GRANTED WITH THE FURTHER UNDERSTANDING THAT THIS OFFICE DOES NOT ASSUME RESPONSIBILITY FOR ACCEPTANCE OF ANY PILES WHICH DO NOT COMPLY WITH THE SPECIFICATION REQUIREMENTS.
25. The permission granted, as stated above, was communicated to plaintiff, and promptly on November 28, 1949, Western proceeded with the load test. Western first conducted a load test on pile No. 1 of footing T-6 on November 28-30,1949. The test on pile No. 3 of footing T-6 was started on November 30 and completed on December 6,1949.
26. On December 16,1949, plaintiff submitted to defendant the load test results and a report of settlement readings and calculations thereon, pursuant to section 2, paragraph 2-13, of the specifications. The data submitted pertained to piles Nos. 2 and 3, pier No. T-6. Forwarded through defendant's site superintendent of construction the data was received by the Veterans Administration's Director of Construction in Washington, D. C., on December 21. In the meantime, on December 19, 1949, the defendant's superintendent of construction advised plaintiff as follows:
we inform you that since neither of these piles met the contract specifications during the load test, both have been rejected, and therefore payment for them is not in order under the terms of the contract.
27. While the load tests were being conducted Western Foundation, with the knowledge of defendant, drove many additional button-bottom piles to ascertain whether the pile problem involved the entire site or whether there were areas in which the piles might be used. Efforts to drive these piles were unsuccessful in that they did not meet the speci fications as to plumbness and eccentricity. On December 14, 1949, tbe Veterans Administration directed that all pile driving be stopped until further notice.
28. On November 30,1949, Western Foundation requested permission from defendant to drive a heavier pipe, a 10-inch pipe with 14-inch wall, in an experimental attempt to solve the difficult pile-driving problem. On December 6, 1949, defendant granted the requested permission in a letter to plaintiff, stating in pertinent part:
THIS OFFICE INTERPOSES NO OBJECTION TO THE PROCEDURE INDICATED WITH THE UNDERSTANDING THAT THE SUBCONTRACTOR PROCEEDS AT HIS OWN RESPONSIBILITY AND WITH CONCURRENCE OP THE GENERAL CONTRACTOR. ALSO THE RESULTS OP ANY LOAD TESTS MADE ON ANY OP THE PILES DRIVEN WILL NOT BE CONSIDERED AS LOAD TESTS OP PILES REQUIRED BY THE SPECIFICATIONS AND THAT ANY LOAD TEST MADE SHALL BE AT THE EXPENSE AND RESPONSIBILITY OP THE CONTRACTOR. FURTHER THAT THIS OFFICE DOES NOT ASSUME RESPONSIBILITY FOR ACCEPTANCE OP ANY PILES WHICH DO NOT COMPLY WITH THE SPECIFICATION REQUIREMENTS.
29. On December 6-7, 1949, the heavier pipe piles with closed ends were driven in pile groups S-6 and S-8 in Unit A of the hospital building. The driving was observed by a representative of defendant who was satisfied that the heavier pipe pile would be satisfactory and gave every evidence of lateral stability. Thereafter, from December 15, 1949 to January 7,1950, load tests were performed.
30. On December 29, 1949, the Veterans Administration requested by letter that plaintiff submit two proposals for a change in the contract to use heavy pipe piles in lieu of those with thinner shells as originally specified. The request stated that "proposal A" should be for use of a 10%-inch diameter steel pipe pile with .279-inch thick wall and closed with a steel plate welded to the bottom. "Proposal B" was for the same pipe with an open end requiring load tests. Proposal A further provided that the pipe should be driven to refusal in sand and gravel stratum and filled with concrete. Refusal would be indicated when the penetration under the last 25 hammer blows delivering 15,000 foot-pounds of energy was not more than 1 inch. It was further required that the piles under either proposal not be out of plumb more than 1.5 percent of their length. All contract requirements not specifically modified were to remain in force. Proposal B will not be further described here as it was not accepted and is not in issue.
31. On January 5,1950, plaintiff submitted proposals pursuant to defendant's request of December 29, 1949. Proposal A was for an increase in contract time of 115 calendar days and an increase in the contract price of $139,373.75, consisting of $129,650 for the subcontractor and $9,723.75 representing the plaintiff prime contractor's commission of 7% percent. A price for extra lineal footage was quoted at $6 per foot with a credit of $2.50 per foot for any omitted footage. Proposal B was for an increase in the contract price of $220,355.65, representing $204,982 for the subcontractor and a 714-percent commission of $15,373.65 for the prime. Proposal B included an extension of contract time of 146 calendar days, $8 per extra lineal footage and a credit for omitted footage of $2.50 per lineal foot.
32. As indicated in finding 12, the Structural Division of the Technical Service of the Veterans Administration was responsible for developing the structural design of the hospital at Ami Arbor, including foundation design. On January 10, 1950, the chief of the Structural Division submitted the following memorandum to the director of the Technical Service recommending that the necessary action be taken to effect the change from the specified pile to the heavier pipe pile in accordance with plaintiff's proposal A:
1. Due to soil conditions at the site which prevent satisfactory installation of piles specified, it is recommended that necessary action be taken to substitute the proposed steel pipe piles for those specified.
2. The necessity for this change arises from the following circumstances:
At the site there is a stratum of very unusual soil which overlies the bearing stratum of compact sand and gravel (referred to hereinafter as gravel). This overlying stratum consists of varying mixtures of very fine sand, silt, and clay (called silt hereinafter) ; it is saturated by a perched water table, and it varies in thickness from 5' to 30' as the gravel dips to the southeast.
This silt stratum was encountered in all pits and borings at the Main Building during preliminary sub-surface investigations; early cognizance was taken of its erratic behavior and unusual precautions were taken to determine its true character. One thousand dollars were spent for tests and analyses at the University of Michigan and a large amount was spent on field tests. In response to invitations, the open pits, borings, and test data were examined by three engineers from the Soils Mechanics Department of the University of Michigan, including Professor W. S. Housel, international authority on soils; by three engineers from the Detroit Office of the Raymond Concrete Pile Company; and by local excavating and construction contractors.
From these data and opinions, it was concluded that foundations should penetrate the silt and bear on gravel, using spread footings where depth to gravel permitted and piles where gravel was deeper. Informed opinions held that it would be very difficult to drive piles through the silt except by the aid of pre-excavation or jetting; some difficulty was predicted in jetting through indicated clay layers but consensus was that piles could be installed by jetting and hard driving. Additional information on pile driving difficulties could have been gained by driving one or more test pile groups under conditions closely simulating those of actual construction. This would have cost $10,000 or more and several weeks' time which, based on all facts, did not seem justified. None of the above authorities anticipated serious damage from jetting and none believed there was any necessity for more costly types of piles such as steel pipe or steel H piles. Consequently, conventional cast-in-place concrete piles with thin steel shells were specified. On the evidence, more costly piles could not be justified. Jetting was permitted under restrictions as to damage to lateral support for piles.
Actual construction operations disclosed that pre-excavation was impractical; jetting caused excessive damage to the silt, destroying the lateral support for piles; and driving without jetting damaged the thin shells of previously driven adjacent piles and would not penetrate the strata overlying the gravel. The foundation designs (namely, piles in some portions of the building and spread footings in others) have proved to be basically sound and accurate, i.e., no question has been raised as to the types of foundations used, the unit bearing values used, or position of bearing stratum as indicated by soil data. However, actual pile driving operations with specified piles disclosed difficulties which produce unacceptable results. Driving of a test group, by the contractor, indicates that the proposed steel pipe piles can be driven without jetting and without undue damage to piles or surrounding soil. Therefore, the substitution of pipe piles for the specified piles is recommended as being necessary.
33. On January 13, 1950, defendant's contracting officer and Director of Construction for Veterans Administration hospitals made a written report to the Assistant Administrator for Construction, Supply and Beal Estate, recommending acceptance of plaintiff's proposal A because:
4. During the driving and load testing of the first cluster of piling, subsurface conditions were en-coimtered which prevented the successful driving of the type of piling selected and which indicated that none of the three types of pilings specified could be successfully installed.
The contracting officer also pointed out that a heavier steel pipe pile "having a thick wall of sufficient strength to withstand driving conditions" had been tried out successfully and should be used.
34. On January 17,1950, plaintiff received a telegram from defendant entitled "Change Authorization No. 3." This communication authorized plaintiff to proceed with the driving of the steel pipe piles, closed end, in accordance with proposal A submitted by plaintiff, "the exact amount of increase in contract price and extension of contract time to be determined later in accordance [with the] terms of contract after reasonableness of [the] proposal has been determined," and a certain amount of work had actually been completed. The payment and time allowances ultimately made under this change authorization ($163,046 and 125 days) by change order pp, together with negotiations and appeal proceedings thereon, are set forth in later findings.
35. Upon receipt of this change authorization, Western Foundation prepared to drive the heavier piles by adapting its driving equipment thereto, loading and shipping from the site the thin-shelled pipe and concrete buttons, filling-abandoned piles with cement, locating and shipping to the construction site the newly authorized pipe pile and accomplishing other necessary preparatory work. The pile driving operations were resumed on February 3,1950. On May 16, 1950, pile driving was completed for all piles initially specified under the contract, plus 11 added to the incinerator by change order. Twenty-three piles substituted for spread footings in the recreation wing by change order were driven in June. Western took 59 driving days over 102 calendar days to place the heavier piles.
,36. Paragraph 2-6 of the specifications which provided for the type of piles to be used in the project was faulty in that the three types of thin-shell piles specified could not be acceptably placed because of the extreme density of the subsoil and the existence of boulders, causing the piles to be torn when driven and to collapse when adjacent piles were driven. Jetting was not a practical method to assist in the driving. When the specified button-bottom piles were driven on November 8,16,17 and 18,1949, and results were unsatisfactory, defendant knew that a change in the pile specifications would be necessary and that none of the three specified types would be adequate. When defendant's representative observed the experimental driving of heavier piles on December 6 and 1, 1949, at the building site, the practicality and necessity of a change in the specifications to such heavier piles were conclusively established. The specifications were finally changed on January 11, 1950, as previously noted. Had defendant acted expeditiously to change the specifications it should have taken about 2 weeks. As defendant did not order the necessary change until January 17,1950, there was unnecessary delay.
37. The contract specifications provided that the contractor submit daily to defendant's project superintendent a plat or record of all piles driven. Should such plat show that any pile did not meet specifications, it could not be filled with concrete, nor could any piles in the group of which it was a part, until the superintendent had approved the necessary corrections. This might sometimes require that a substitute pile be driven, a procedure known as a "redrive." Defendant's superintendent of construction, or senior resident engineer, noted in his daily log of February 6, 1950, that he was requiring sketches of all pile groups driven out of eccentricity and plumb beyond allowable limits, together with sketches of how the contractor proposed to make corrections, and said further:
These sketches and calculations will be reviewed by tills office and if found to be satisfactory the pile groups will be accepted. If there is any doubt in our minds in regard to the methods of correction, the entire problem will be submitted to Central Office for final approval.
38. The evidence shows that approvals of sketches and re-drives by defendant's superintendent were prompt and made within 3 to 7 days. On or about March 7, 1950, however, the evidence shows that approvals were required by the central Veterans Administration office in Washington. This approval was a much slower process and took, in some cases, from 3 weeks to 2 months between submission of the required pile reports, sketches or plats and approval thereof or the pouring of cement in the piles.
Altogether 16 pile caps were redesigned and approved. There were 70 redrives, of which 47 were replacements of the button-bottom piles and 23 were actual redrives on the heavy pipe pile. Western Foundation was compensated in a change order for all 70 redrives. Comparatively speaking, since there were over 1,700 piles, not a great many pile groups had to be redesigned and redrives made. However, delay in securing approval thereof was reflected in interruption of the sequence of completing the piles and in moving the pile rigs. Defendant's superintendent reported in his daily logs for April 24 and August 23, 1951, that the Veterans Administration's failure to give prompt approvals contributed to the general delay of work on the project which was equivalent to 57 calendar days.
39. Work at the site of the project came practically to a standstill awaiting instructions regarding the type of piling to be installed. This period spanned the time from November 8,1949 until February 3,1950, which is 87 calendar days. During this period, as indicated by the above findings, plaintiff's efforts were directed toward solving the problems ensuing from the defective plans and specifications. However, there was no productive work being done, since the status of the work was the same on February 3, 1950, as it was on November 8,1949.
40. When pile driving was resumed after the delay (November 8, 1949-February 3, 1950) which was not plaintiff's fault, the foundation subcontractor, Western, drove the piles in 102 calendar or 59 driving days, completing the same on May 16,1950. Plaintiff had hoped to finish pile driving by late December 1949. This hope was unrealistic, considering the time reasonably required for necessary load testing and approval thereof before pile driving proper could begin. Western could not have begun pile driving proper under the specifications until the load tests were made and approved, which at the earliest would have been on or about the end of November 1949, if the pile-driving difficulties had not been encountered. An exact determination cannot be made as to the period of time which would have been required to conduct the actual driving operations of the thin-shelled piles. The heavier piles took 102 calendar days or 59 driving days. However, these operations, as indicated in subsequent findings, were conducted under extremely adverse weather conditions which would not have been encountered during the months of December and January. A hypothetical completion date of February 1, 1950, would be reasonable under the circumstances.
41. In change order pp, referred to in subsequent findings, defendant admitted 125 calendar days of delay on account of the change it required in the type of piling. This admission indicates that the overall project was delayed 125 days through no fault of plaintiff. The record discloses that the entire delay was either directly attributable to defendant's faulty specifications, or resulted from adverse weather conditions which considerably slowed the pile-driving operations and which would not have been encountered but for the original government-caused delay.
42. The pile driving on this project was attended by difficulties in addition to delays for which plaintiff charges defendant. For instance, the daily logs of defendant's project superintendent show a notation on February 14, 1950, indicating that plaintiff had obtained the services of a competent engineer to take charge of pile-driving operations. On February 16, 1950, he noted that the pile driving was then proceeding in a satisfactory manner. The superintendent had noted, however, on February 2 and 6, 1950, a lack of competent engineering and on February 7 recorded the following observation in his log:
Since the beginning of pile driving operations on this job on Nov. 16, 1949, the general contractor has failed to provide adequate and competent engineering supervision of this work. We have taken this matter up with the general contractor repeatedly and verbally but without success. Attempts have been made by the general contractor to find someone capable of handling the work but he has been unable to engage anyone to date within the limits of the. amount of salary he proposes to pay. The contractor is now working two men on the job whom he lists on the payroll as engineers; one, a young man who has just graduated from the University of Michigan and has had no previous training in this type of work. The other has had some training and experience in building layout work but it is believed that this is his first pile job. Since we have been unsuccessful in getting proper supervision for pile layout work to date and it appears that the contractor does not intend to furnish any better supervision, we have this date issued him a stop order in the form of a letter to withhold further pile driving operations until this has been accomplished.
Plaintiff ignored the stop order. Within a week thereafter the situation was corrected as noted above. Despite resolution of the controversy between the parties over the engineering, the defendant's daily logs continued to note unsatisfactory over-all job progress during the pile driving due to other problems, some of which are referred to hereafter. It was the improperly specified piles for subsurface conditions encountered and not plaintiff's initial lack of engineering supervision of pile driving that delayed the driving.
43. The contract specifications put upon the plaintiff contractor the responsibility to keep the excavations free from water at all times until permanent work therein was inspected and approved. The plaintiff was also required to provide, maintain and operate necessary pumping equipment. Plaintiff did install 10 or 12 pumps on or after January 1, 1950. Because work was done in winter weather in 1950 and Michigan winters are severe, rain and snow created muddy conditions in the open excavations. The pumps were largely of value to drain water from the deeper excavations. They would not remove mud. Plaintiff had dug drainage ditches and installed an 18-inch temporary dram line as part of its responsibility to keep the excavations free from water. This drainage system filled with mud during the winter months of 1950 and became inoperative.
44. During the period the excavations were open, especially after the middle of March 1950, the rain and snow and the freezing and thawing of the ground caused the banks of the excavations to erode. Soil on top of the banks sloughed into the excavations. Deep mud was formed on the floors of the excavations. There is a dispute in the record as to whether subsurface or "ground water" from a natural water table or pockets of water, which plaintiff should have anticipated from the drawings, was also a contributing, if not the main, factor in this situation. The daily logs of the parties do not show- it to have been.' Ground water was encountered in the lower excavations such as the elevator pit and service room. This was anticipated and provisions were made for it. The site itself also afforded a natural drainage. The water and mud problem here was largely the result of rain and snow in open excavations.
45. Plaintiff asserts that the water, mud and erosion of earth impeded the efficiency and progress of all construction work and increased the amount and cost of work necessary for the installation of foundations over and above the additional work of driving the heavy pipe piles in lieu of the specified piles. Plaintiff did find the working conditions difficult. For instance, pile-driving rigs had to be set on wooden mats to keep them from sinking in the mud. Some footings had to be re-excavated because of sloughing in, additional backfill became necessary, more form work and grading were necessary and there were additional costs for labor and pumping of water from the excavations.
46. Plaintiff sought extensions of time on account of alleged weather conditions. However, this was in reality an effort of plaintiff to protect itself in event it did not get a time extension because of foundation difficulties. The muddy conditions became a severe problem in the latter part of the pile driving. In his daily report on March 22,1950, defendant's project superintendent said:
To date, about 80% of the piles for this project have been driven. Most of these were driven in freezing weather when conditions in the excavated area of Bldg. #1 were such that it was possible to move men, materials and equipment around without too much handicap and pile driving advanced at a fairly rapid pace. Temperatures have now been above freezing for more than a week. The ground is thawed out and an extremely muddy condition exists in the excavated area of Bldg. #1 as well as throughout the project in general. The condition became so bad that one of the workmen became mired in this near-quicksand and had to be removed with the pile line of one of the rigs. It is becoming almost impossible to walk around in' the excavated area of Bldg. #1, and moving of the heavy equipment presents difficult and hazardous problems. It is therefore anticipated that at least another 30 days will be consumed in driving of the remaining piles.
47. Defendant contends that if no change had been instituted in the type of pile foundation and if the button-bottom pile originally specified had been driven, the combined delays of plaintiff and Western Foundation in fulfilling man datory requirements precedent to tbe start of full driving operations would have deferred commencement thereof until late December 1949 and would have precluded their completion before April 1, 1950. In addition to load testing and dewatering, etc., defendant submits that one of these requirements was in regard to concrete. . The specifications, section 4, detail the concrete requirements both for manufacture of concrete by the contractor or purchase and use by the contractor of ready-mix concrete which was authorized. The evidence establishes no delay in fact on any item of work by reason of obtaining approval of concrete submissions.
Plaintiff used ready-mix concrete until the foundations had been completed. As of October 20, 1949, plaintiff had designed the mix, selected a ready-mix company and secured the services of the Pittsburgh Testing Laboratory. Plaintiff expected to begin pouring concrete on October 24,1949, the date on which defendant approved the laboratory. The evidence establishes no job delay by plaintiff's submissions as to concrete requirements, even assuming that the job had otherwise been on schedule. Defendant approved plaintiff's design submissions on November 17 and test results on December 12. The concrete met specifications. No concrete work had to be done over.
48. Defendant asserts that the change in pile specifications was not the principal cause of the delay damages which plaintiff asserts but rather that plaintiff's job methods and lack of coordination were primarily responsible therefor and, specifically, refers to plaintiff's driving of piles from the bottom of pile caps; its steep excavations without shoring in some cases, which are said to have contributed to cave-ins; storage of excavated materials where they would fall into the excavations, and general ignoring by plaintiff of the soil and water conditions depicted on the contract documents. The evidence does not support these contentions. While difficulties were encountered, for instance, with banks and excavated materials sloughing into the excavations, this came about primarily as a result of the weather in the winter of 1950. Had delay not ensued because of defendant's in correct specifications on the piles, many, if not most, of tlie conditions wbicb contributed to the delay here would have been avoided by earlier completion of pile driving. This is the threshhold problem to which these others are found to be subordinate and for which plaintiff was not to blame.
49. On August 25 and November 17, 1950, plaintiff submitted claims to defendant in the respective amounts of $315,881.15 and $323,474.83 representing alleged additional costs incurred by plaintiff and its subcontractor, Western Foundation. Of these sums, $154,057 was claimed for the subcontractor. The items alleged to represent additional costs for the alleged delays and adverse working conditions encountered in performing the change in the piling included increased wages, re-excavation, overhead, workmen's compensation insurance, engineering layout, pile records and test data, temporary water and pumping, pile cap forms and concrete grade beam forms and concrete, backfill, maintenance of temporary roads and night lighting, and profit. A conference of the parties in January 1951 failed to produce any agreement on plaintiff's claims.
50. On January 30, 1951, defendant unilaterally issued change order pp increasing the contract price by $163,046 and the contract time by 125 calendar days for installation of the heavy pipe pile in lieu of that originally specified. This change order read:
With reference to your contract dated August 24, 1949 for construction of Buildings and Utilities at Veterans Administration Hospital, Ann Arbor, Michigan, your proposals dated January 5, 1950 and November 17,1950 and Change Authorization No. 3 dated January 17,1950, directing you to proceed with the following mentioned change in the work thereunder:
Making change in type of piling required under your contract using closed-end thick wall steel pipe piling and installing same as described in your proposal "A" dated January 5,1950, in lieu of furnishing type of piling and installation of same as specified,
I have decided, in accordance with Article 3 of the contract, that an equitable adjustment for performance of Ibis work is $163,046.00 with 125 additional calendar days on the following basis:
Materials
Labor Mise. Total
A. Plant installation & removal- $3, 000 $3,000 $6, 000
B. Equipment rentals- - 9,180 9,180
C. Driving Costs_ 23, 547 13,275 36, 822
D. General labor cost_ 8, 780 _ 8,780
E. General expense_ 7,560 2, 040 9, 600
E. Materials_ 105,660 105,660
G. Other work- - 6,000 6, 000
H. Special plant_ 250 250
I. Insurance 14%_ _ _ _
182 292
Overhead 10%_ 18,229
Profit 10%_ 20, 052
Insurance 12.564%_ 5, 388
225,961
Add 70 piles for plumb. & position- 9,100
Add 70 C.Y. cap concrete- 2, 800
Remove shells from site_ 5,124
Casting & disposing of cone, buttons_ 2, 595
Exploratory tests_ 16,431
Pump Engineer_ _
262, 011
Deduct Orig. Proposal Corrected & Adjusted- 110, 340
151,671
General Contractor Pee 7% %- 11,375
163,046
Accordingly the contract price is hereby increased by the sum of One Hundred Sixty-Three Thousand Forty-Six Dollars ($163,046.00). On account of this change, additional time of One Hundred Twenty-Five (125) Calendar Days is hereby granted.
Payments hereunder will be made as the work progresses, as provided by Article 16 of the contract.
THIS CHANGE ORDER SUPERSEDES AND CANCELS CHANGE AUTHORIZATION NO. 3, DATED JANUARY 17,1950.
51. On February 1, 1951, plaintiff conditionally accepted change order pp reserving the right to make further claim for increased costs alleged not to have been included therein. On May 21, 1951, plaintiff appealed the change order and claimed $160,428.83 in addition to the $163,046 allowed under the change order. The Veterans Administration Construction, Supply and Peal Estate Contract Appeals Board was convened and gave plaintiff a hearing at which it was repre sented by counsel. The claim was rejected on July 20,1951. On August 3, 1951, plaintiff asked -that denial of its appeal be reconsidered. Conferences with defendant followed at which the claim was reviewed, the report of defendant's board was read and plaintiff was given opportunity.to justify its contentions. • . -
,52. On September 18,1951, plaintiff presented yet another revised proposal in the sum of $161,587 alleged to represent extra costs and delay damages incurred by plaintiff resulting from the change in piles. Of this sum, $121,871 was 'for extra costs and $39,716 for damages due to delay. As the subcontractor had not objected to- the amount he received under change order pp, plaintiff asserted no appeal or further claim with respect to this amount.. Plaintiff claimed within the sum of $121,871 the amount of -$88,186 for exploratory . work to determine the type of piling and footings to be used, $4,504 for labor and materials for night lighting after January 17, 1950, said to have been ordered by defendant, and $29,181 for costs of excavation after that date and said to have been made necessary by the change in specifications.'
53. On March 19, 1952, plaintiff- submitted to defendant another claim in the total amount of $88,302.94, covering itemized alleged costs for plant, equipment, rental, driving costs, general labor, costs, general expense, materials, other work and insurance. Plaintiff stated: :
In reviewing the facts in connection with allowances under .Change Order "pp", we find only actual costs of subcontractor were taken into consideration although the authorization of January 17,1950, was to us. All actual construction costs of ours were omitted from itemization in change order. We think this omission was through error or improper presentation.
The July 20, 1951, decision of defendant was affirmed on appeal on April 29,1952.
SPREAD FOOTINGS
54. The nature of the soil governs whether, piles or spread footings-are appropriate for foundations. . Spread footings are blocks of concrete of various sizes. They are created by pouring concrete into designed excavations at predetermined elevations. On these footings are placed the building walls or columns. The footings serve to spread the building load carried by walls and columns over a large area of bearing strata. In the contract drawings for this project the elevations were shown where each of the spread footings was to be placed and they were to be put 6 inches below the top of the gravel strata. In preparing for the pouring of such footings, the ground was excavated to the top of the gravel strata and then the bed for the footings was dug by hand. Piles, as heretofore found, were used for most of this project but spread footings were indicated by contract drawings to be used for the west wing of Unit A of the hospital building and the northwest section of Unit B of the recreation wing. They were also to be used as foundations in buildings 5 and 12 and several other small structures.
55. During excavation on December 8, 1949, plaintiff did not hit gravel at the elevation shown on the drawings for footings A-4, -5 and -6. Defendant's project superintendent was made aware of this situation and on that date notified the central office of the Veterans Administration thereof. The entry in his daily log of January 1,1950, states:
We are finding that the elevations of the bottoms of spread footings in the S.W. wing, Unit A, bldg. No. 1, as shown on the plans, in most instances are still in the sand-silt strata, and that these footings have to be excavated deeper than shown in order to get into the gravel strata. We reported this to Central Office by telegram on December 8,1949, suggesting that all such footings be extended to gravel by placement of additional cone. We asked for C.O. advice on this and have never received any reply. This reply is badly needed.
On December 13, 1949, plaintiff called this situation to the attention of the contracting officer in writing and asked for instructions. Plaintiff received no reply.
56. On December 14, 1949, plaintiff advised defendant as follows:
Reference is made to Article IV of the Contract for above captioned project which provides that the contract price and time for completion shall be modified in the event of changed conditions.
It bas been discovered that latent conditions at the site differ materially from that shown or indicated by drawings or specifications and in accordance with provisions above referred to, we await your instructions.
57. On January 9, 1950, defendant's superintendent of construction received a memorandum from the central office of the Veterans Administration, dated January 4, 1950, referring to the telegram of December 8, 1949, and stating:
2. The lowering of spread footings when considered necessary is to be accomplished as follows:
a. When it is necessary to lower any of the footings in Unit "A" and Unit "B", except in the area between Columns 1-22, L-22,19-1 and 19-L, not more than two feet below contract elevation in order that footings will rest on gravel strata, pour a concrete pedestal 12" wider than concrete pier above, on top of footing. Pour pedestal and footing monolith-ically and raise the footing dowels the required height into the pedestal. Contractor should submit to this office the elevation of the gravel strata where footings will be lowered more than two feet below contract elevation for approval, before any concrete is poured.
b. Before any concrete is poured in footings in the area between Columns 1-22, L-22, 19-1. and 19-L, the contractor shall submit the elevation of the gravel strata upon which the footing will rest for approval.
c. Between Columns 14-1 and 15-1 to 14-N and 15-N, form a foundation strut, Type S-3, as scheduled on contract drawing 1-87. Place-top of strut at elevation 809.5 with the 24" dimension placed horizontally.
3. A proposal is to be obtained from the contractor covering the cost involved in lowering footings where considered necessary and be submitted to this office, immediately, for necessary action.
58. On January 9,1950, defendant's project superintendent of construction transmitted to plaintiff the instructions set forth in the finding above. In part he said:
You will note that our Central Office has requested that you submit a proposal immediately, covering the changes as outlined in their letter. It is appreciated that it is extremely difficult if not impossible for you to do that at this time, since the number of footings, and tbe amount that each one must be lowered is indeterminate until such time as all -footings have been installed. The nature of the soil at this location is such that all footings cannot be excavated and left to stand open without causing excessive caving and re-excavation a number of times before the work is completed.
In connection with paragraph (a). of the enclosed letter, we do, however, believe that it is possible for you to submit an estimate of the total cost per additional foot of depth of footing, or fraction thereof, for the 1st; 2nd; 3d. foot, etc;
59. Plaintiff's president on January 13, 1950, acknowledged receipt of the communications referred to in the finding above but stated that it would be impossible to furnish the proposal requested without first visiting the site and determining the actual conditions, which, he said, would be impossible to do before-later in the month.
60. Oh February 13, 1950, defendant's superintendent advised plaintiff that the central office of the Veterans Administration had determined that a standard detail showing the new elevation was not possible and that it would be necessary for plaintiff, in cases where footings must be lowered more than 2 feet below contract elevations, to advise defendant of the actual elevations at the bottom of these footings either by telephone or telegraph.
61. On February 23, 1950, plaintiff submitted a per foot proposal for lowering footings as suggested by defendant's superintendent in his letter of January 9. On February 28 the plaintiff's proposal was returned with the advice that the Veterans Administration central office had determined that a unit price per additional foot would not be a satisfactory manner of handling the additional work and that plaintiff should propose a lump-sum price as defendant's central office had proposed on January 4.
62. On March 1,1950, defendant's superintendent advised plaintiff in connection with excavation work for spread footings in Unit B of the main building that it had received instructions from the central office which were quoted. It was then, said:
We interpret this to mean that no concrete is-to be poured in any of the footings bounded by Cols. 1-22, L-22, 1-19 and L-19, whether or not it is necessary .to lower such footings in order that they may rest in the foundation gravel strata, until the elevations of the top and bottom of such footings and the elevation of the gravel strata at the respective footings is reported to the Veterans Administration Central Office and they have advised in regard to the procedure to be followed.
63. On March 7, 1950, plaintiff submitted, in accordance with defendant's letter of February 28, 1950, a proposal in the lump sum of $37,000 with an extension of contract time to be determined when the actual number of days of delay could be known for lowering all spread footings in the main building below the contract plan elevations, where necessary, in order that they might rest on the foundation gravel' strata^ as required by the Veterans Administration central office letter of January 4, 1950, transmitted to plaintiff on January 9. The proposal included, also, the requirements in paragraph "c" of the January 4 letter, as stated in finding 57.
64. On March 17, 1950, plaintiff submitted to defendant by letter the elevations of gravel strata first requested on January 4, 1950. Defendant received this letter on March 20. On March 24 plaintiff addressed another letter to defendant advising that excavation had been made of the spread footings to determine the gravel strata elevation and stating that as it had required defendant "considerable time for your Structural Division to determine the elevation of the footings, during which time we had heavy rains, frost and thaws, which caused the excavation to cave in, it was necessary to re-excavate. We will include this additional excavation in our proposal." On April 4 plaintiff was advised by defendant's central office of its approval for plaintiff to proceed with the footings of the four columns in question at the elevations submitted by plaintiff in its letter of March 17. Change authorization No. 6, accepting plaintiff's proposal of March 7, 1950, was not issued, however, until April 25, 1950.
65. The recreation wing of the main hospital building was to have both piles and spread footings in its foundation. During the pile driving it was discovered that the gravel strata upon which the spread footings was to rest" was 15 to 20 feet lower than shown in the contract drawings. De fendant's superintendent advised the central office of this fact on March. 29, 1950. On May 15, 1950, the defendant's superintendent advised the central office that if piles were going to have to be used in lieu of spread footings, such a determination should be made quickly because pile driving was to be finished the following day and there would be increased costs for moving the driving equipment back to the location when once removed. However, plaintiff, at the superintendent's request, did keep the driving equipment on this part of the building site. Defendant was made aware of this fact by plaintiff's notification that defendant would be charged therefor. On June 1,1950, the contracting officer issued an amendment to change authorization No. 6 directing that in specified areas of the recreation wing pile footings would be installed in lieu of originally designated spread footings. Cost and a time extension resulting from the change were to be determined later. A total of 23 piles were driven in the recreation wing on June 12, 13 and 14, 1950. The recreation wing foundations were all completed on June 26,1950.
66. The daily log of defendant's superintendent noted on June 2, 1950:
We have received Change Authorization directing the contractor to proceed with the installation of piles in the West end of the Recreation Building in lieu of spread footings as was originally designed and called for on the contract plans. Since completion of the basic pile driving operations on this project, the contractor has been held up from completing the rest of the work in the West end of the Recreation Building due to a delay by Central Office in authorizing this change. However, since this authorization has now been issued, as of this date any further delay will be the responsibility of the contractor.
67. The change from spread footings to concrete pile foundations in parts of the recreation wing was required because the foundation plans and specifications furnished to plaintiff and on which its bid was based were faulty in that they indicated the wrong elevations for the bottoms of the spread footings. These elevations had been determined by defendant. The failure of the Veterans Administration to issue directions to plaintiff prior to May 16, 1950, wlien contract pile operations were completed, or prior to June 1,1950, although it knew of the discrepancies between the drawings and the actual gravel strata under the recreation hall as early as March 29, 1950, was delay for which plaintiff was not responsible.
68. On September 28,1951, defendant issued change order qqq pertaining to the additional cost and time involved in lowering the spread footings in Unit A and Unit B and in changing spread footings to piles in the recreation wing, construction type S-3 foundation struts between columns 14-1 and 15-1 and 14 — N and 15-N in accordance with plaintiff's proposals of July 31,1951, and August 25,1950. Thereunder the contract price was increased by the sum of $27,000 and additional time of 45 calendar days was granted. This change order superseded and canceled change authorization No. 6 of April 25, 1950, as amended June 1, 1950.
69. Only five footings were lowered over 2 feet in Units A and B of the hospital building proper and five in the recreation room. Plaintiff does not here challenge adequacy of time extensions nor the amount of reimbursement via change orders for actual additional work directly involved in lowering spread footings and substituting piles in the recreation wing. Plaintiff claims damages measured by time extensions allowed and alleged to have arisen from defendant's breach of contract as exemplified by delays caused by mistakes in contract drawings and failure of defendant to take prompt action respecting the same where required upon discovery thereof. It is not possible from the evidence to determine exactly to what extent the project as a whole was delayed by the spread footing difficulties. The contracting officer granted a 45-day time extension. It appears that the project was delayed to that extent. Defendant has failed to show any outside factors which contributed to this delay.
70. Building No. 12, the incinerator, was designed to be supported by spread footings at specified elevations. Excavation therefor was started on January 20, 1950. On February 2, 1950, defendant's superintendent of construction at the building site instructed plaintiff by letter as follows:
we wish to inform you that an inspection of excavation work already accomplished in connection with the construction of the incinerator building #12 indicates that the foundation slab of this building will rest on soil which is very unstable and which appears to be unsuitable for foundation bearing. It also appears that this soil is unsuitable for the installation of cast iron drain lines which must go in beneath this foundation slab.
This matter has been taken up with the Veterans Administration Central Office and you are requested to withhold further operations on this building until such time as a decision has been reached by our Central Office in regard to foundation construction for this unit.
71. Plaintiff advised defendant's superintendent on February 23, 1950, that as soon as plaintiff received from defendant the exact method on which to obtain a suitable foundation for building No. 12 a proposal thereon would be submitted. Defendant submitted revised drawings to plaintiff on March 23 and asked for a proposal of cost for substituting pile foundations in lieu of spread footings. , On March 30 plaintiff complained to defendant that heavy rains since the stop order had been issued had caused some excavation cave-ins and additional excavation. Plaintiff's proposals were made on April 4 and 7, 1950, asking for 4 days of additional time and additional compensation of $3,048.04 for making the change. Authorization No. 7 to proceed on this basis was issued to plaintiff on May 5,1950.
72. On August 8,1950, defendant advised plaintiff that its proposal was considered excessive and requested that it be resubmitted more in line with actual labor and material costs. Plaintiff submitted a new proposal on August 22 in the sum of $2,014.74. Thereafter, on December 19, 1950, change order hh, canceling change authorization No. 7,.was issued accepting the latter figure and granting no change in time for completion.
73. Plaintiff makes no claim for damages respecting change order hh. The delay of the Veterans Administration central office in not issuing instructions between February 2, 1950, and March 23 and its delay of a month in issuing proceed order No. 7, after receiving plaintiff's requested proposal, was dilatory. It is found that this caused no over-all job. delay but illustrates the problem of delay generally by the Veterans Administration and the inadequacy of its foundation plans and specifications. . ,'
74. Building No. 5, the attendants' quarters, .was. also designed to stand on spread footings. On May 24, 1950, excavation therefor started. On that date defendant's superintendent noted that the soil where the load bearing gravel strata was supposed to be was actually.an unstable clay silt unsuitable for foundations, that it was water saturated and that in his opinion piling would have to .be substituted for the spread footings under this structure. He so advised the central, office immediately. On May 29 the plaintiff advised the central office by. telegram that its pile-driving equipment and crew would be held at the .site pending a decision as to. the type of foundations for building No. 5. On four successive dates thereafter plaintiff and defendant's superintendent advised the central office that a decision thereon was urgently needed*
75. A representative of the Veterans Administration .central. office conducted soil tests at the site between June 13 and 16, 1950. On June 19,1950, plaintiff was advised that defendant had determined, after draining water from the site and making soil tests, that the soil was fully capable of sustaining the unit load assigned to it- for building No. 5. The plaintiff was reminded of its contract requirement to keep the site drained. Plaintiff was directed to proceed without further delay in construction of this building in accordance with the contract plans and specifications. Plaintiff did so. Change order lll issued July 2, 1951, extending the contract time by 2 calendar days and'- increasing the contract price by $1,031.18, fully compensated plaintiff for the delay effect on the entire project by interruption of construction work on building No. 5 between May 24, 1950 and June -21, 1951.
STRUCTOTIAL STEEL
76..Plaintiff subcontracted the structural steel for this project to Whitehead and Kales by agreement dated October 4, 1949. Most of the structural steel was to be specially fabricated. The subcontract provided that structural steel erection would start within 116 days and be completed within 66 "fair working days additional" from the date of the subcontract, subject to delays such as strikes, weather and other enumerated causes beyond the subcontractor's control. Based upon the October 4 date, time for commencement was not later than January 28,1950. The subcontractor hoped to start erecting steel on January 15,1950. Based upon 22 working days per month the 66 "fair working days" for erection would place the time for completion not later than May 1, 1950. This completion date is what plaintiff contemplated in planning the job.
77. On October 14,1949, plaintiff advised defendant that it was requesting an extension in contract time for the days the project was delayed due to a strike of carpenters and a steel strike. On October 20, 1949, plaintiff submitted to defendant the following letter it had received from its steel subcontractor and again asked for a time extension. The subcontractor stated to plaintiff under date of October 14, 1949:
The steel strike called by the President of the C.I.O. United Steel Workers on October 1st, and which has closed our suppliers, will require an extension of time for the delivery of the Structural Steel work, which we have under contract for the above project.
After the strike is settled we will secure from the rolling mills the date for rolling material on order for your job.
When these new rolling dates are secured we will arrange our shop production schedule and advise you at the earliest date possible when shipment will be made.
78. On April 25,1950, plaintiff advised defendant that its steel subcontractor had been delayed in receipt of steel from its supplier from November 1949 to February 1950, a total of 91 calendar days which in turn would delay the fabrication and delivery to the job from January 15 to May 1, 1950, a total delay of 106 calendar days for which a contract time extension was requested. The subcontractor had an agreement with the Camegie-Illinois Steel Company, a producer, to complete shipment of the steel to it for fabrication by November 30, 1949. The subcontractor also requested that plaintiff, on account of the delay from the strike described above, extend its time for commencement of erection of the steel from January 15 to May 1,1950. There is no evidence that defendant granted the requested time extension but steel erection in fact did not begin until May 9, 1950. As heretofore found, the subcontract contemplated, and plaintiff planned, that steel erection would be finished by May 1, 1950.
79. After erection of structural steel commenced on or about May 9, 1950, difficulties were encountered which disrupted to varying extents the orderly progress of the work on the hospital buildings. One of these difficulties was that steel deliveries to the jobsite were not always made in proper sequence. Occasional columns and beams were omitted. This caused partial delays over a period of at least 30 days. Another difficulty encountered in erecting steel was that rivet holes at connecting points often did not match. This required a considerable amount of corrective work on the steel to allow for passage of the rivets. No over-all job delay is. established by the evidence on account of these problems. No liquidated damages were assessed under article 9 of the contract because of such interferences.
80. The steel columns used on this project had milled ends. One column stood upon another. When milled ends are square, smooth and true, the compressive strength and weight load is equally distributed from the column above to the one beneath. Design and strength of the structure were thus dependent upon a full or true column bearing. Splice plates at the column connections served primarily to hold the columns in alignment.
81. Of 1,550 column connections, 1,350, or 90 percent, in the main hospital building did not have square and true milled ends. This meant that the stress was transferred from one column to another by the splices and rivets thereon at the column connections. As designed, they were inadequate for this purpose. On June 20,1950, defendant directed plaintiff to withhold riveting any of these splice plates and to withhold wrapping the columns with wire mesh or placing concrete fireproofing about the same until every splice had been examined and approved by defendant's superintendent of construction. Neither plaintiff nor the steel subcontractor denied the conditions described. The subcontractor sought approval to correct the condition by insertion of steel shims between the uneven surfaces.
82.The defendant approved correction of the deficiencies arising from imperfectly milled ends by permitting the use of steel shims welded in place at connections where gaps did not exceed specified degrees, provided full bearing was thus obtained. Heavier splicing was authorized for connections where the gap exceeded the amount which could be safely corrected by shimming. The contractor was advised thereof on August 4, 1950. These methods complied with acceptable design standards.
83. Corrective shimming, welding, splicing and riveting went forward concurrently with erection of structural steel. All structural steel was erected and bolted in place by about September 8,1950. Corrective work as described continued through January 18,1951, when the subcontractor acceptably finished its work and moved its equipment from the site. No over-all job delay for corrective measures here described relating to the steel is established by the evidence.
84. Steel erection was not delayed by foundation changes for steel was not available, on account of the steel strike, until May 1950 when the foundations were finished and ready for it. Steel erection would have been delayed by the steel strike had the foundations been ready earlier, as they would have been but for the faulty specifications regarding piles. No act or failure to act on defendant's part caused or contributed to delays in final completion of the steel work. No over-all job delay is established by such delays.
SEWERS
85. The specifications provided for permanent drainage of the buildings and site by sewers. On the east side the storm sewers were to run into a 15-inch storm sewer which would drain into an outlet near the southeast comer of the site and thence drainage was into an open off-site ditch. On the west side the sewers were to drain into a 10-inch trunkline which flowed into an outlet near the southwest corner and thence the discharge was to be through a manhole and off-site culverts. A 30-inch storm sewer approximately 230 feet in length was also to be constructed at the west side of the site. Sanitary sewage flowed to the southwest corner for discharge into a city sewerage system. The sewer lines were adjacent to or near the areas of principal building construction. -, .
86. On September 16, 1949, plaintiff entered into a subcontract with Frank M. Dorsey & Sons, Inc., under which for a consideration of $1,228,000 the subcontractor agreed to furnish all material and to perform all work installing plumbing, heating, and ventilation. Dorsey also was the sewer subcontractor. The subcontractor did not give a starting and completion date on sewers but plaintiff planned to get these lines in early because the plans called for utility lines, roads and parking lots above them. Also, excavation from the site .for buildings was to be used as fill in the area of the sewers. The east and west sides of the tract in question- were low and described by plaintiff's president and by defendant's resident engineer as "swamp." The areas were to require up to 15 to 18 feet of fill.
87. Laying of the 15-inch storm sewer line at the east side of the site began on November 1,1949. It was to reach a distance of about 282 feet between manholes 23 and 24. The soil under the line was not stable. Difficulties were encountered and sections of the line had to be removed and replaced. Laying of the line was completed on November 28, 1949, but it still was not stable. Defendant's superintendent reported the difficulty encountered to the Veterans Administration central office on November 30,1949, as follows:
Attempted installation of storm sewer sanitary sewer and water lines areas compiling tile southeast end of the res. indicated that this entire section for a distance of about 2 hundred feet northwest from Oak Way is swampy. The contractor is experiencing extreme difficulty in the installation of storm sanitary sewer lines and water lilies in this aréa. A mucky condition is found at the elevation of the pile inverts, which will not support the weight of pipe and fill upon it. Neither will this muck support manholes to be constructed .throughout the area.
88. Plaintiff submitted a proposal on November 30, 1949, to the contracting officer for removal of the unstable soil in the path of the 15-inch sewer line and replacement of it with coarse gravel as recommended by defendant's superintendent. Plaintiff's proposal read:
During the attempted installation of storm and sanitary sewer lines and water lines in the southeast part of the reservation, we have found that this entire area bound by Geddes Road and Glacier Way, and for a distance of approximately 200' northwest of Oak Way, is one big sink hole.. It appears that the deepest part of the sink hole lies between 75 and 150 feet from Oak Way, and is making installation of storm and sanitary sewers and water lines in this entire section extremely difficult if not impossible. We have found sub-surface conditions such that it is impossible for us to lay pipe and hold inverts of same and manholes as shown on the plan. Pipes are shoved out of line and settle below specified inverts ahnost as fast as they are placed. It is only with extreme difficulty that the 15" storm sewer line between manholes 23 and 24 was laid, and it is not stable. We have started laying the 8" storm sewer line between manholes 22 and 23, and have encountered conditions that will not permit us to proceed further with the work and for that reason it has been terminated. At this point we have found that the soil at the invert of this pipe is very mucky and fluid, and soundings here have indicated that a fairly firm bottom is as much as 6 to 8 feet below the elevation of the inverts. Inasmuch as this entire area was a swamp it is believed that this condition exists throughout the entire section as described above.
We hereby submit our proposal in the lump sum of $28,840.00 and extension of contract time to be determined by the actual number of days the project is delayed, to remove the muck and unsuitable earth, replace same with coarse gravel so as to stabilize the bottom of the trench in order that a suitable base will be provided for pipes and manholes in the entire area bounded by Geddes Road and Glacier Way and in a northwesterly direction from Oak Way, as far as is necessary.
There is no evidence of a reply from the contracting officer to the foregoing letter.
89. On January 24, 1950, defendant's superintendent advised plaintiff that, in view of unstable soil conditions in the vicinity of the 15-inch line, further installation at the east end of the site should be suspended. The letter advised plaintiff that the 15-inch line as laid was not acceptable as it had dropped, heaved, and was out of line laterally due to the soil condition upon which the line was placed. Defendant said that it would be necessary to remove the line and put it on a firm foundation by a method to be determined by defendant.
90. Placing of the 30-inch concrete sewer pipe began on November 2, 1949, and continued until November 8, 1949, when stopped by defendant's superintendent because a bog or sink hole was encountered under about 75 feet of the trench. Defendant's superintendent described the condition as "a bog with a very soft muddy bottom which seems bottomless." He thought it would be necessary to put the pipe on a concrete mat or reroute the line. The condition encountered was at once communicated to the Veterans Administration central office. Defendant's superintendent noted in his log that the condition materially differed from that shown on the plans and in his opinion should be treated as an addition to the contract. In preparation of the drawings of the areas for the storm sewers, defendant had made no test borings and supplied no information to bidders regarding soil there.
91. On November 9 and 15,1949, plaintiff advised the contracting officer that, in accordance with the directions of defendant's superintendent of construction, it had stopped work on the 30-inch storm sewer until a decision was made by defendant on what should be done about the soil conditions encountered. It was also indicated to defendant that this stoppage was holding up work of excavation, fill, grading and installation of other lines and that the job as a whole would be delayed until plaintiff was again permitted to proceed and that a request for a time extension would have to be made when the extent of the delay was definitely determined.
92. On November 16, 1949, defendant's superintendent proposed to plaintiff, in accordance with instructions from defendant's central office, that the sink hole be dug out and filled with coarse gravel to form a firm bed for the pipe, and on November 21 defendant's superintendent submitted to plaintiff a drawing specifying the manner of doing the work. A proposal was requested from plaintiff on costs. Plaintiff submitted proposals on December 5 for $2,960 and 12 days' extension-and on December 27, 1949, for $1,817:22 and 15 days' time extension. No action was taken thereon by defendant.
93. In December 1949, without waiting for approval of its proposals of December 5 and 27, plaintiff dug out the sink hole in the path of the 30-inch line and replaced the excavated'materials with 125 cubic yards of gravel and the line was placed thereon. Backfill 2 feet deep was placed on top of the pipe to prevent lateral movement. Defendant's superintendent examined the work on or about January 16, 1950, and it was found that where the pipe line crossed the area of the sink that it had settled 14 inches at its lowest point. Plaintiff was advised by letter from defendant on January 24, 1950, that the line could not be accepted. Tim letter concluded:
We wish to advise you not to proceed with the installation' of the remaining fill above this line to grade as shown on the plans, inasmuch as the line where it crosses the sink hole will have to be removed and replaced in a manner that will insure its stability. Just what method will be used is as yet indeterminate. The matter has been referred to the Veteran's Administration Central Office and you will be advised at a later date in regard to the manner of your procedure.
94. On February 15, 1950, defendant's superintendent, by letter pertaining to both the 15-inch and 30-inch sewer lines, requested that plaintiff submit a proposal covering the amount of corrective work which would be necessary to install lines and manholes in stable positions. Plaintiff's proposal was requested by February 23, 1950, in order that permission could be given not later than March 1, 1950, for plaintiff to proceed with the work. Plaintiff did not submit a proposal on or before February 23, but replied to defendant's letter on that date, making reference to the need for a contract drawing showing where the sewer would be changed from clay to concrete pipe and stating that, as soon as such previously promised drawing was received, the proposal would be submitted as requested.
95. On March 9, 1950, defendant's superintendent instructed plaintiff to submit proposals for the performance of the additional work necessary for installation of the 15-inch and 30-inch storm sewer lines. The letter requested a proposal for a concrete slab to be placed on the gravel fill already in place beneath the 30-inch sewer line. As to the 15-inch line alternatives were suggested of either (a) sheeting the tile underdrain, with the sewer line to be of cast-iron pipe or (b) setting cast-iron sewer pipe on creosoted wooden piles with the pipe itself anchored to pile caps. Because of the request for this proposal and defendant's stated determination that excavation and filling of the trenches with gravel was not workable, no action was taken by defendant on plaintiff's proposals referred to in findings 88 and 92.
96. On April 3, 1950, plaintiff submitted its proposal in response to defendant's request of March 9,1950. Plaintiff's proposal A was for installing the sewers by the sheeting method with gravel and drain tile for the amount of $149,488.51. Proposal B was for using the creosoted pile and cap method for the amount of $90,523.18. Proposal C for installing the 30-inch sewer on a concrete slab was in the amount of $3,929.17. Plaintiff requested a time extension of 86 calendar days and advised that upon "acceptance of the above proposal all of the cast-iron pipe must be ordered."
97. Indecisión and delay by defendant in responding to plaintiff's proposal were protested by plaintiff in May and June 1950. The grading and plumbing subcontractors were protesting the delays to plaintiff,- threatening to remove men and equipment from the job, and plaintiff claimed various additional costs were being incurred and more time would be required. Plaintiff also insisted upon a decision on its proposal of December 27, 1949, which, however, defendant had advised on March 9 would not be considered because the method therein proposed had been determined to be unsatisfactory. In the meantime, while plaintiff was stopped from working on the 15- and 30-inch sewers at the extreme eastern and western ends of the site, respectively, it was able to complete installation of almost all of the water lines and about half of the other sewer lines.
The fact of defendant's delay is corroborated in the evidence by defendant's superintendent who made entries in his daily log in May, June and July 1950, noting that failure of the central office to arrive at a final decision in regard to the sewer installations was causing the contractor additional expense. He observed that if the work had to be carried over until the spring and summer of 1951, it would interfere with roads, walks, grading and drainage work and prolong the entire project.
98. On July 25, 1950, plaintiff received via wire from the defendant change authorization No. 13 permitting a change, where required in the judgment of defendant's superintendent, from clay or concrete pipe to cast iron for the storm and sanitary sewers. Supporting piles-were authorized for the pipe and manholes in the eastern part of the work and the 30-inch pipe on the western side was to be supported with a concrete slab, all as shown on sketch A of February 20,1950. The obligation of the Government for the changes was limited to $45,000 by the change authorization. By letter of the same date, defendant's superintendent gave to plaintiff his decision on those places where cast-iron sewer pipe should be used. The superintendent emphasized the need for immediate action in starting installation and completion thereof during the summer and fall months of 1950 in order that roads, walks, grading and drainage work could be completed thereafter within the contract time.
99. On August 3, 1950, plaintiff acknowledged receipt of the change authorization of July 25 and stated that, during the months intervening between its proposal and the change authorization, the cost of performing the work had materially increased and that delivery of the pipe now could not be made by the supplier until November 15, 1950. Plaintiff protested and rejected the authorization and stated that it wished its protest to be considered as an appeal therefrom. The plaintiff stated further:
we have diligently made all test borings, excavations, to determine the nature of the soil as requested and suggested by you. We have had several almost weekly conferences by telephone, in your office by personal visits, we have vistee! the job together with your representative to determine ways and means of constructing the sewers, with your representatives we have con ferred with men from the University of Michigan, we have contacted sewer contractors in Detroit and Dear-born, and in every way have cooperated with you to determine the most feasible way to install these sewers.
All of this information was given to you immediately upon our receipt of same, all to no avail.
Accordingly, an extension in contract time to compensate for the delay because of additional work for the length of time the project is delayed, and the inconvenience, overhead, will all be made part of our revised proposal.
Further, will you kindly advise us what means, what type of pipe you now desire a quotation on inasmuch as cast iron pipe is unavailable.
Defendant made no response to plaintiff's letter of protest.
100. (a) On August 31,1950, plaintiff wrote to defendant regarding the change authorization of July 25, 1950, and requested that it be permitted to proceed with the 30-inch line portion of the sewer, asserting that the iron pipe problem referred to in plaintiff's letter of protest of August 3 related only to work to be done at the eastern side of the site.
(b) On September 1, 1950, plaintiff addressed another letter to defendant referring to change authorization No. 13. In this communication plaintiff submitted correspondence from its sewer subcontractor and suppliers indicating that the cast-iron pipe delivery was indefinite. Plaintiff referred to the contract articles No. 3 (Changes) and No. 4 (Changed Conditions). Plaintiff referred also to its notice of November 15,1949, that changed conditions had been encountered, which had delayed the job and increased the cost, and reviewed its proposals and actions as outlined in findings above. The continued delay was again protested, and the job was described as "now in a deplorable condition" requiring construction of temporary roads so work could go ahead in the rainy season. Plaintiff again appealed change authorization No. 13, although expressing the view that a change authorization was not a change order under the contract and that no such order had yet been properly issued.
(c) Plaintiff supplemented its letter of September 1 with another one on September 29, 1950, providing photographs to defendant of site conditions on August 14, 1950, and concluding:
There are several thousand yards of excavated material stock-piled which must now be rehandled the second time as all of the stock-piles of earth must be used for fill as required by contract drawings after sewer and water lines are installed.
We again request your immediate action so sewers and water lines can be installed without any further delay.
The described conditions were asserted to be due to defendant's indecision on sewer installation work which had been stopped on defendant's orders.
The evidence shows no response by defendant to any of the three foregoing communications.
101. Defendant's contracting officer issued change order t on October 23,1950. The order referred to change authorization No. 13 of July 25,1950, and required identical corrective work but, in addition to now ordering that it be done, provided that it be done at a cost not to exceed $75,000, subject to later equitable adjustment as provided by the contract and subject, also, to such time extension as later found warranted by this change ordered in the work.
102. Plaintiff attempted to get a definite commitment on delivery of cast-iron pipe after issuance of change order t but had difficulty in doing so. On December 7,1950, plaintiff submitted to defendant for approval a description of the pipe it would be able to obtain and defendant granted approval thereof on December 15,1950. Cast-iron pipe was thereafter delivered to the jobsite commencing February 16, 1951.
,103. Deliveries of pipe continued into March 1951. Winter weather made the ground conditions unfavorable for laying pipe. Defendant knew that if it could not be laid before winter weather set in, the work would have to carry over until the spring and summer of 1951. Plaintiff started relaying the 30-inch line on April 13, 1951, and completed that part of the work about May 10, 1951. Work on the sewer lines on the eastern part of the site began June 1, soon after delivery of the piling needed for its support. The sewer installation was finally completed on December 10, 1951.
104. On February 27, 1952, plaintiff submitted to defendant its summary of the cost of work performed pursuant to change order t in the amount of $53,465.45 and asked for this sum together with a time extension of 160 days. The parties exchanged correspondence in which plaintiff outlined the history of the delays caused by the change and the effect thereof on the progress under the contract. Plaintiff emphasized the instability of the ground, the interference of the delays with the schedule of progress for installation of roads, steam trenches, utility lines, walks, and grading. Plaintiff asserted that there had been a delay of 21 months, that it was entitled to one-fourth of this as a time extension, but that it would be impossible to secure sufficient extension to compensate for added labor and material costs during the delay period asserted to be from November 1949 to December 1951.
105. On September 3,1952, defendant's contracting officer issued change order jjjjj which canceled change order t of October 23, 1950. The new change order provided for the same change ordered by change order t but increased the contract price therefor to the sum of $53,465.45 which was the sum plaintiff represented its extra costs to have been attributable to the change. Change order jjjjj provided a time extension of 120 calendar days. This change order was accepted by plaintiff company which agreed that it compensated plaintiff for the extra work directly related to the change ordered by defendant but not for defendant's alleged breaches of contract. Plaintiff asserts that it is entitled to damages suffered and represented by increased costs caused by being required to perform other work under more costly conditions on account of defendant's faulty plans and specifications and the delays of defendant in promptly notifying plaintiff of necessary changes.
106. The evidence establishes that defendant was fully advised that sewer problems existed and that prompt action thereon by the central office of the Veterans Administration was necessary after the work thereon began. Defendant, however, did not take prompt action to issue a change order. There is no evidence justifying the defendant's delay which was eventually recognized by change orders respecting the sewers. This delay increased the job costs and impeded progress of other phases of the contract work such as installation of some underground utility lines, earth fill and grading, and building of roads, walks and parking areas. Normal job sequence was interrupted and coordination of the work of the trades impeded.
TIME EXTENSIONS
107. The contracting officer, pursuant to the provisions for equitable adjustments under article 3 (Changes) extended the time for performance through several change orders and extensions of time by a total of 868 days as follows:
Extensions relating to foundation mid Humber of sewer difficulties: calendar day*
Change order pp (pile difficulties)-1- 126
Change order qqq (spread tooting difficulties)_ 45
Change order jjjjj (sewer difficulties)-- 120
Change order i*l (soil tests)- 2
- 292
Material shortages:
Extension of time No. 3, April 13,1963_ 191
Extension of time No. 7, November 10, 1953- 78
- 269
Abnormal weather:
Extension of time No. 2- 62
- 62
Labor strikes:
Extension of time No. 1_ 6
Extension of time No. 4- 11
Extension of time No. 5- 6
- 23
Changes in plans:
Change order u (x-ray suite)- 1
Change order v (additional catch basin)- 4
Change order n (changes in oxygen system)- 3
Change order sssssss (steam for testing)- 5
Change order aaaaaaaa (change in neuropsychiatric
ward) - 69
Change order zzzzzzz (boiler house change)_ 20
Extension of time dated November 3, 1953 (miscellaneous change orders)- 120
- 222
868
Plaintiff contends in this case that the 292 days added to the contract time directly resulted from sewer and foundation difficulties ensuing from defendant's faulty specifications and undue delays and that plaintiff would not have been subject to the subsequent delays, on account of material shortages and abnormal weather and 17 of the 23 days on account of strikes, had it not been for the earlier delays caused by defendant. Plaintiff alleges further that changes involving 214 of the 222 calendar days of time extensions for changes in plans were beyond the scope of the contract within the meaning of article 3 (Changes) or were occasioned by inadequate specifications.
108. The Defense Production Act of 1950 was enacted on September 8, 1950, to divert certain materials and facilities from civilian to military use and related purposes on account of the war in Korea which began in July of that year. Priority controls for certain materials went into effect in January 1951 and thereafter some materials were replaced with substitutes, and shortages of materials became more acute. Delays beyond plaintiff's control on account of such shortages impeded progress under this contract, and defendant granted two extensions of time totaling 269 days. The first extension (No. 3) was granted April 13, 1953, for 191 calendar days and the second (No. 7) was granted November 10, 1953, for 78 days. Plaintiff had sought extensions of 244 and 212 days, respectively.
109. Both extensions of time referred to above were granted upon administrative determinations by defendant that the delay was due to unforeseeable causes beyond the control and without the fault and negligence of plaintiff. The first extension was for plaintiff's inability to obtain materials between March 1,1951 and March 1,1952, and the other extension for the same reasons was based upon inability to obtain materials between March 1, 1952 and July 31, 1953. Both extensions were predicated upon detailed, written memoranda by the contracting officer. These memo-randa, which are in evidence, recount how plaintiff was unable to prosecute the work in a scheduled manner, thereby delaying all operations under way or scheduled during the periods stated above. Specific reference was made to items involved in material shortages and the effect thereof on job progress. These determinations, which resulted in the time extensions, are fully supported by the evidence. Further, had it not been for the earlier delays respecting foundations and sewers, the material shortages would have been substantially avoided.
110. On August 23, 1951, plaintiff applied to defendant for a time extension of 83 calendar days for the period April 1, 1950 to August 1, 1951, due to alleged abnormal weather conditions described principally as excessive rainfall. On December 12, 1951, defendant, after evaluating plaintiff's application and the official weather reports, determined that the contract had been delayed 62 calendar days during the aforesaid period due to unusually severe weather and extended the contract time for completion by 62 calendar days. Work in progress during the stated period involved foundations and sewers, landscaping, roadways, sidewalks and parking areas. The weather adversely interfered with this work which could have been completed prior to the bad weather starting April 1,1950, had there not been the delays in the foundations and sewers as previously described.
111. Defendant found on several occasions that plaintiff was subject to strikes which delayed the contract progress and granted extensions of time therefor totaling 23 calendar days. Extension of time No. 1, March 6,1951, extended the time 6 days on account of a carpenter strike which, occurred in 1949. This strike would have affected the normal progress of the project had no other delays occurred and plaintiff makes no claim in respect to this extension. Extension of time No. 4, June 25, 1953, extended the contract time by 11 days for delays to work progress caused by a strike of employees of a supplier. This strike occurred between February 1 and May 15, 1953. Extension of time No. 5, August 31,1953, extended the contract time by 6 days resulting from a plumbers' and steamfitters' strike in the Detroit area between May 1 and May 12, 1953.
If tbe delays as heretofore discussed had not occurred, plaintiff would not have been subject to delays arising from strikes in 1958.
112. Defendant issued 27 miscellaneous change orders for contract extras in the last half of 1952 and the first half of 1953. On November .8, 1958, an extension of 120 days was granted therefor. At the time these orders were issued by defendant the work was not less than 84 percent complete and it was completed in July 1953. Plaintiff contends as a matter of law that because contract performance was extended into the aforesaid period by reason of faulty specifications and delays of defendant, it was unreasonable and not within the scope of the contract as intended by the parties for defendant to issue 27 change orders and thus increase the contract time by 120 days.
The contract price increase allowed by defendant for these 27 miscellaneous changes was $64,159.58,. which includes overhead of $2,943.89.
113. Defendant's change order of August 19, 1953 (7z), extended the contract time by 20 calendar days for installation by plaintiff of additional reinforcing supports in the boiler house which was work not included in the original contract plans and specifications. A change order on May 26, 1953, provided a price increase of $4,731.01 therefor. Overhead allowed was $355.33.
The change order (sa) extending time by 69 days for changes in the neuropsychiatric facilities was for work not originally required by the contract. These changes were not directed by defendant until April 30, 1952, and a change order of August 27, 1953, provided a price increase of $36,895.23 therefor with no allowance for overhead stated.
A change order (7s) issued on July 14,1953, extended the contract time by 5 calendar days and increased the contract price by $1,314.74 by reason of plaintiff's furnishing steam needed by the Veterans Administration to test its equipment. Section 601, paragraph 129(f), of the specifications had provided that, unless otherwise specified, steam for the test would be furnished by the Government.
Change order n of December 28, 1950, increased the contract price $16,05468 and extended the contract time 3 calendar days on account of changes ordered by defendant in the oxygen system.
Change order y of October 25, 1950, for changes in catch basins and connecting lines provided a contract price increase of $1,390.89 and a time extension of 4 calendar days.
Change order u of August 31, 1950, called for changes in the x-ray room and dental examination room for which defendant granted a contract price increase of $1,556.33 and a time extension of 1 day.
Although change orders 7z and 7s above were dated after the contract was completed on July 31, 1953, there were earlier change orders directing the changes but provided that time extensions therefor would be determined later, as was done.
114. (a) The evidence in the record does not show that the contract price was increased to compensate plaintiff for protraction of contract performance for the reasons and periods set forth in the following extensions of time totaling 348 days for which plaintiff contends that it is entitled as a matter of law to recover overhead and other expenses related to this time:
Calendar days
Extension of time No. 2_ Abnormal weather_ 62
Extension of time No. 3_ Material shortages_ 191
Extension of time No. 4_ Strikes_ 11
Extension of time No. 5_ Strikes _ 6
Extension of time No. 7_ Material shortages_ 78
(b) Overhead allowed for miscellaneous changes and those relating to the boiler house has been stated in findings 112 and 113 and totals $3,299.22. Plaintiff was advised by the Veterans Administration early in performance of the contract that 7% percent would be allowed as reimbursement for overhead and related expenses over and above the direct costs of extra work covered by a change order. Defendant sometimes actually allowed 10 percent near the completion of the contract.
(c) As a result of the previously discussed govemment-caused delays, the defendant is responsible for the delays resulting from:
Extent of I Faulty Specifications delays
(a) Piles _ 125
(b) Spread Footings-1- 45
(e) Sewer _ 120
II Material Shortages, Weather & StriJces
(a) Material Shortages_ 269
(b) Abnormal Weather_ 62
(c) Labor Strikes- 17
Total _ 638
NON CO JULIAN CE
115. Defendant contends that plaintiff did not comply with many contract requirements and that this resulted in much corrective work which delayed the job. Defendant has cited examples of noncompliance and corrective work, including the cement topping, plaster grounds at window frames and the terrazzo base bead. There were instances of noncompliance and corrective work which interrupted job progress. Such instances are not unusual on such a large job. Even though in certain instances they may have been greater than usual on the job in issue the evidence does not support any finding that noncompliance and corrective work were a delaying factor on the job. Defendant's contracting officer made no such finding administratively.
116. Defendant assigns many alleged derelictions of duty against plaintiff. Defendant has offered evidence that plaintiff created unnecessary labor trouble with the unions that furnished bricklayers and cement finishers; that it suffered from a general shortage of manpower brought on by its labor policies which created a "sour job"; that plaintiff's brick work was defective; that plaintiff had poor organization and management which brought on friction with labor and subcontractors, did a poor housekeeping job on the project site, and permitted accumulation of much unnecessary and dangerous debris; that plaintiff afforded inadequate protection to the work and workers from ice and snow, had poor equipment inadequately maintained and violated safety and fire protection standards, and that plaintiff had incompetent, dilatory subcontractors and made little or no effort to expedite the progress of the work which was unsatisfactory throughout.
There is a color of truth in some of these allegations but the ultimate fact is that defendant did not assess any liquidated damages against plaintiff for its alleged failures, as provided by article 9 of the contract; defendant did not exercise its rights under the guaranty clause of the contract; seek redress from the performance bond; withhold any money from plaintiff on final settlement, or assert any counterclaim in this suit based on any of the foregoing allegations which presumably would have increased costs if substantially true. The work was completed in accordance with the plans and specifications, and the contracting officer so determined. Plaintiff received the full contract price plus compensation for change orders as heretofore shown. The contracting officer ascertained the facts and extent of delays, as required by article 9 of the contract and extended the contract time a total of 868 days for reasons therein set forth, none of which blamed plaintiff for job delays from noncompliance, corrective work or fault or negligence as above described and alleged. Article 9 provides for the finality of his administrative 'determinations.
THE EISCHBACH & MOORE SUBCONTRACT
117. On November 17,1949, plaintiff entered into an agreement with use-plaintiff Fischbach & Moore, Inc., whereby the latter as subcontractor for a consideration of $425,000 agreed to furnish all labor, material and equipment to install all electrical work on the Ann Arbor project. The subcontract incorporated by reference the terms and provisions of the prime contract including the general conditions, drawings and specifications.
ill8. The electrical subcontractor had to adapt its work to that of the general progress on the job because electrical equipment and materials were, generally, to be installed in facilities which first had to be built. Outside cables, such as for lighting parking lots and roads, had to be put in after tbe sewer lines which, were below them. Some of the electrical work had to be done concurrently with construction, such as installation of conduits in concrete floor slabs. The job delays, heretofore discussed and for which plaintiff was not to blame, delayed the work of the electrical subcontractor beyond the original contemplated completion date, interrupted the normal sequence of its work and increased the costs of the subcontractor's performance.
119. The electrical subcontractor's superintendent arrived on the jobsite in January 1950 planning to commence the work promptly and complete it by the end of the prime contract period on March 16,1951. The subcontractor remained on the site through the actual completion date of July 31, 1953, the longer period of performance being required by the contract time extensions totaling 868 days, as heretofore found. This delayed performance required more labor than the 42,700 manhours the subcontractor had reasonably estimated. During the period from January 1950 to September 1, 1953, the subcontractor expended a total of 89,809 man-hours, including at least 7,885 manhours in performance of change orders involving the electrical work. Examples of the use of additional manhours include the installation and maintenance of temporary power and light facilities, moving of stored materials and the inefficiency created by severe weather.
120. On February 5, 1954, plaintiff wrote to Fischbaeh & Moore, Inc., as follows:
Enclosed is our check No. 7801 in the amount of $24,094.27 covering payment in full for all labor and material which you furnished in connection with the above captioned project.
Itemization of your account as it appears on our books is attached hereto. In the event your records indicate an additional amount due, please feel free to use this check, pending further checking, without prejudice to your rights for further claim.
Plaintiff claims as a matter of law its right to sue on behalf of its electrical subcontractor because the subcontract contained no provision absolving the prime contractor from liability to the subcontractor for breaches of contract, includ ing breaches by .the Government. Paragraphs 8 and 9 of the subcontract read:
8. The Contractor agrees to be bound to the Sub-Contractor by all the obligations that the owner and/or Architect assumes to the Contractor under the Agreements, General Conditions, Drawings, Specifications, Alternates and Addenda, and by all the provisions thereof affording remedies and redress to the Contractor from the Owner and/or Architect.
9. Time is of Essence in this Contract.
DAMAGES
The Electrical Subcontract
121. The electrical subcontractor expended 89,809 man-hours of labor, including field supervision, on this project from January 23, 1950 to September 1, 1953, which total hours are not in dispute. The Ann Arbor project was accepted by defendant on July 31, 1953, and, as previously found, the delay period of 868 calendar days ended as of that date. Thus, the manhours spent by this subcontractor subsequent to July 31, 1953 (August 1 through August 31, 1953) are not chargeable to the delay period having apparently resulted from correcting minor electrical faults disclosed upon inspection by defendant. Although the number of manhours actually incurred subsequent to July 31, 1953, is not in evidence, there is available a chart disclosing that the subcontractor expended 15,622 manhours during the 258 calendar days from December 17,1952 to September 1,1953. The average calendar-day rate of manhours over this period is 60.55 manhours and would result in 1,877 manhours for the 31 calendar days from August 1 through August 31, 1953. Thus, it is found the subcontractor expended a total of 87,932 manhours, including field supervision, from the inception of work in January 1950 to acceptance by defendant on July 31, 1953, of which 13,745 manhours were expended during the period December 17, 1952 through July 31, 1953.
The subcontractor reasonably estimated there would be expended 42,700 manhours of labor (exclusive of supervision) to complete the work, absent delay, and expended 7,885 man-hours on change orders (not in issue) during the course of the project, for a total of 50,585 manhours. Supervision was reasonably estimated at 15 percent of labor which would amount to 7,588 manhours based on the 50,585 manhours to complete the work. It is hereby found that the subcontractor would have expended 58,173 manhours, including supervision, to complete all the electrical work on this project, absent delay. This results in 29,759 excess manhours, including supervision thereon, attributable to the 868 days of delay summarized as follows :
Manhours expended 1/23/50-9/1/53 (including field
supervision) _ 89,809
Manhours expended after 7/31/53_ — 1, 877
Manhours expended 1/23/50-7/31/53_ 87,932 Less:
Original estimate of manhours to complete- 42, 700 Manhours expended on change orders_ 7,885
Subtotal_ 50,585
Supervision — 15 percent of above- 7,588
Total manhours to complete, absent delay- 58,173
Excess manhours attributable to delay (including field supervision)_ 29,759
122.. The excess manhours attributable to the delay were paid at the latest wage rates in force at the project. From December 17, 1952 to completion, the wage rate was $3.05 per hour, during which time 13,745 manhours were expended. For the remainder, or 16,014 manhours, the rate of $2.90 per hour was applicable.
As part of its damages, the subcontractor claims job overhead during the delay period, consisting of such items as the salaries of the foreman and a part-time clerk, shanties, tools and equipment, telephone, heat, and light. The salaries of the foreman and part-time clerk are admittedly for the field supervision on the job and thus are already included in the computation of excess manhours. The record does not support the contention that the subcontractor incurred additional costs for shanties or tools and equipment over and above that required to do the work absent any delays. The allocation of maintenance expenses, such as telephone, heat, and light in the amount of $620 is reasonable and conservative and is based on a review of expenditures for such expenses over the life of the job.
The parties are in agreement that the applicable rates for payroll taxes and insurance are 7.304 percent and 12.519 percent for home office overhead.
The subcontractor's excess costs for the delay period of 868 days are found to be $107,384.61, computed as follows:
13,745 excess manhours @ $3.05 per hour- $41, 922. 25
16,014 excess manhours @ $2.90 per hour- 46,440. 60
29,759 excess manhours attributable to delay (including supervision)- 88,362. 85
Payroll taxes and insurance on above (7.304
percent) _ 6,454. 02
Job overhead allowed_._ 620. 00
Excess costs during delay period_ 95, 436. 87
Home office overhead on above costs (12.519 percent) _ 11, 947. 74
Total excess costs during delay period- 107,384. 61
The excess costs attributable to the 868 days of delay amount to $123.71 per day. Since it has been found that defendant is responsible for 638 days of delay, the plaintiff is entitled to recover on behalf of its electrical subcontractor $78,926.98 (638 X $123.71).
Costs Incident to Changes in Foundations
123. As a result of the delays ensuing from the pile and spread footing difficulties, as previously shown, plaintiff incurred costs on the foundation work in excess of those costs it would have sustained had the delays not occurred. Due to the extended period the excavations remained open, there were problems of sloughing-in of- the walls, drainage of water, damage to forms and the like, all of which had to be corrected and thereby increased the cost to plaintiff. The exact amount of extra work which had to be performed as a result of the foundation problems is difficult, if not impossible, to determine because of the nature of the corrective work which was being performed.
Plaintiff's total costs for the foundation work (other than subcontracted work), excluding overhead and profit thereon, consisted of $161,324.62 in labor costs and $3,943.56 in other costs. Plaintiff was reimbursed for certain labor costs incident to the foundation work by change orders in the amount of $7,072.34. The original estimate for the foundation work, absent delay, was $80,433, which estimate was prepared by plaintiff's chief estimator, an engineer employed by plaintiff principally in this capacity since 1943, and it was not challenged by defendant as to its reasonableness and completeness.
There was no evidence presented indicating any of the items of labor or materials as originally estimated by plaintiff were too high, too low, or not realistic. Plaintiff's successful bid was based on this estimate which was approximately 4 percent and 7 percent, respectively, below the bids of the next two bidders. From the record it is reasonable to conclude that plaintiff's excess costs, as caused by the delays, is the difference between this unchallenged estimate and the total costs incurred. There is no other reasonable method for a determination of the excess costs which plaintiff incurred as a result of the foundation difficulties.
124. Defendant alleges that said excess costs are overstated by certain backcharges, i.e., work or services performed by or paid by plaintiff for the benefit of subcontractors and charged to the subcontractor's accomit. The evidence does not support the allegation that these back-charges are included in the above excess costs.
Although defendant verified the amounts expended by plaintiff, with any exception noted being accepted by plaintiff, defendant alleges it could not verify the allocation by plaintiff of certain amounts of labor to items of the claim since "back up" records, such as individual time cards, are not now available. While this is admittedly true, there is no showing that the records which were produced and examined by defendant, consisting principally of weekly labor distribution sheets, were inaccurate since they were in agreement with the payroll records and were further established as being records maintained in the normal course of plaintiff's construction record-keeping.
125. In view of the foregoing, it is reasonable to conclude plaintiff incurred excess costs incident to the foundation work and attributable to the previously found delays in the amount of $86,621.15 computed as follows:
Total labor_$161,324.62
Estimated labor_ $80,433. 00
Change orders_ 7, 072.34 87,505.34
73,819.28
Payroll taxes and insurance (12 percent of $73,819.28) _ 8,858.31
Other costs_ 3,943.56
Total excess costs_ 86,621.15
Temporary Roads
126. Plaintiff, from about December 1, 1949, constructed and utilized temporary roads throughout the hospital site. It was reasonably estimated that permanent roadways and parking areas would be in use about July 1, 1950, thus requiring the maintenance of temporary road service for a total of 30 weeks. Due to the delays in foundation and sewer work as previously found, the permanent roadways were not completed and in use until September 4, 1951. Plaintiff was, therefore, required to maintain temporary road service for a total of 91 weeks resulting in excessive maintenance being required for 61 weeks.
127. It was reasonably estimated that it would require 5 cubic yards of fill material, 20 hours of labor time and 4 hours of time by a bulldozer operator each week to maintain the temporary road service. Plaintiff's costs attributable to excess maintenance of temporary road service, excluding profit, amounts to $3,347.44, computed as follows:
Fill material (5 cu. yd. @ $1.50 x 61 weeks)- $457.50
Laborers (20 hours @ $1.65 x 61 weeks)_ 2, 013.00
Bulldozer operator (4 hours @ $2.32% x 61 weeks)_ 567.30
Payroll taxes and insurance on labor (12 percent of $2,580.30)_ 309.64
Excess costs_ 3,347.44
Plaintiff also claimed a $10 hourly fee for the use of a bulldozer. However, plaintiff testified this was its own equipment and Is therefore a depreciable item to be included under the depreciation charge.
Plaintiff claimed that at least double maintenance costs were required on the temporary roads during a 24-week period caused by the trucks carrying the heavier steel piles than originally contemplated. The record does not support a conclusion that the use of temporary roads by trucks loaded with particular materials caused any greater stress on the temporary roads than trucks carrying loads of other heavy material and equipment.
Temporary Heating and Snow Removal
128. As a result of the delays as previously found, plaintiff was required to provide additional temporary heat during the construction in the winters of 1951-1952 and 1952-1953. Further, plaintiff incurred labor costs during the 1951-1952 winter necessary to remove heavy amounts of snow so construction could go forward. Plaintiff thereby incurred total costs of $49,277.30, excluding any profit thereon, for temporary heat and snow removal, which costs would not have been incurred except for the delays. Said costs incurred are as follows:
Temporary heat:
Labor_$21,392.00
Fuel_ 21,171.04
Equipment cost_ 923.26
Equipment repairs- 94.20
Services by others- 992. 81
Snow removal:
Labor_ 1,908.00
Payroll taxes and insurance (12 percent of $23,300)— 2,796. 00
Total excess costs_ 49,277.30
Home Office Overhead
129. For the years 1949 through 1954, which is the period during which this contract was performed, plaintiff incurred home office overhead of $746,014.82 as follows:
1949_$32,738.16
1950_ 126,157.31
1951_ 134,784.14
1952_ 156,243.38
1953_ 145,984.69
1954_ 150,107.14
For the full performance period of the Ann Arbor contract, the allocation of home office overhead to this job amounted to $223,576.26, or $158.79 per day, over the performance period of 1,408 days. Since it has been found there are 638 days of delay for which defendant is responsible, plaintiff is entitled to recover home office overhead in the amount of $101,308.02 (638'days X $158.79).
Job Overhead
130. The plaintiff's job overhead items of cost, which were affected as a result of the delays, totaled $210,690.73, as shown in the table below. Since the contract performance period was 1,408 days, the average daily rate for these extended costs is $149.64. For the delay period of 638 calendar days for which defendant is responsible, plaintiff's job overhead applicable to said delay is $95,470.32 (638 X $149.64) minus $2,286.86 (overhead granted plaintiff by Change Orders QQQ and J JJJJ) or a total of $93,183.46.
Supervisory personnel, engineers, operators and maintenance men_ $154, 076.10
Watchman_ 1, 610. 00
Waterboy_ 2, 576. 00
Protection labor_ 680. 80
Payroll taxes and insurance (12 percent of above labor totaling $158,942.90)_ 19, 073.15
Travel_ 2,211.65
Expense_ 5,119.30
Electric power and light_ 7,103.22
Telephone and telegraph_ 5,625. 80
Hoists and towers_ 7, 786. 82
Sanitary and office supplies_ 389. 94
Photographs_ 4,437. 95
Total_ 210, 690. 73
Losses on Labor, Exclusive of Bricklayers
131. As a result of the delays as previously shown, plaintiff was required to pay wages for laborers, exclusive of bricklayers, at a higher rate than if the work had been done during the originally scheduled time. Plaintiff paid the sum of $25,386.33 due to such wage increases which went into effect subsequent to March 16, 195Í.
In addition, plaintiff paid certain other labor expenses after March 16,1951, for union welfare dues, retroactive pay increases and travel time in the sum of $3,818.56. Accordingly, plaintiff paid excess wage increases in the amount of $29,204.89.
132. Plaintiff also claims an additional sum of $87,274.97, being an estimate of wage increases applicable to labor performed after March 16, 1951, but due to wage increases in effect prior to that date.
Plaintiff's estimate is based upon the assumption that 40 percent of the project was completed'as'of March 16, 1951, leaving 60 percent yet to be done and using this same percentage of completion in a calculation of its own labor expended and to be expended. Plaintiff's original estimate represented it would supply approximately 37 percent of the labor and material on the Ann Arbor project with the remainder being subcontracted. While it may be said that the project was approximately 40 percent completed as of March 16, 1951, there is no evidence in the record to establish what percentage of plaintiff's own labor had been expended by that date. In addition, plaintiff's calculation of claimed excess wages makes no allowances for considerable excess labor costs for which it has been reimbursed under various recovery-of-damage findings herein. In view of the above it is concluded that this portion of plaintiff's claim for losses on labor is unsupported by the record.
Losses on Subcontracts
il33. Plaintiff entered into a painting subcontract dated April 3, 1950, with the Carlane Decorating Company in the amoimt of $71,500, which was subsequently amended by change orders to a total of $72,538. Plaintiff's records reflect payments- and backcharges to this subcontractor totaling $115,797.42 and resulting in a claimed overage of $43,-264.42. Plaintiff claims this overage was caused by the delays, as previously described, which necessitated plaintiff's taking over this subcontract and assuming financial responsibility so that the work could be completed.
The record reflects that a suit was filed May 12, 1954, on behalf of the subcontractor against Hedin in the United States District Court, Eastern District of Michigan, Southern Division, Detroit, Michigan, in the amount of $47,234.56 for alleged extra painting required to be done by the subcontractor. Hedin denied this allegation and counterclaimed for the amount of the overage as alleged above.
Subsequent to trial, said district court on April 8, 1958, made findings of fact and conclusions of law which determined the subcontractor was entitled to an additional $28,-763.06 for extra work performed, and plaintiff was allowed payments and backcharges totaling $95,267.88, thus resulting hi an allowance for plaintiff on its counterclaim of $22,734.88.
From the record there is no showing the delays, as found hereinbefore, were responsible for the additional painting expenditures. Eather, the record discloses plaintiff and the subcontractor were continually at odds whether the subcontract covered the painting of a number of items, such as a cabinet, which the subcontractor claimed should have come from the supplier with certain finish or prime coats of paint thereon. As found by the district court, expenditures over and above the subcontract amount resulted from extra work plaintiff required of the painting subcontractor.
134. Under date of November 19, 1951, plaintiff entered into a subcontract with the Mitchell Tile & Marble Company-in the amount of $201,000 to furnish and install all tile and terrazzo required on the hospital pro j ect. Subsequent change orders reduced this amount to $200,083.84. Plaintiff claims that, due to the delays, it was required to take over this work and assume financial responsibility for its completion. Plaintiff's records reflect total expenditures of $212,865.30, including claimed backcharges against the subcontractor, resulting in an overage of $12,781.46 over the subcontract amount. This overage is claimed by plaintiff.
The record discloses plaintiff originally contracted for this work with the Standard Tile & Marble Company, hereinafter referred to as Standard, under date of April 3, 1950, in the amount of $228,400. Mr. E. E. Mitchell, general manager of Standard, left this firm in late 1951 and founded his own company. Mitchell, being without funds, arranged with plaintiff's president to receive financial assistance consisting of a $5,000 advance to Mitchell, plaintiff to pay off Standard for work then done, and plaintiff to finance Mitchell's payroll and purchase of material to complete the work. For this assistance a new subcontract was consummated between plaintiff and Mitchell whereby Mitchell would complete the tile and terrazzo work for a total price of $201,000, or a reduction of $27,400 from that originally subcontracted with Standard. The subcontract with Standard was mutually terminated and Standard paid for work it had completed. Mitchell took over and completed the tile and terrazzo work with financial backing by plaintiff for payrolls and material.
There is no showing that the delays, as previously found, caused plaintiff to take over this subcontract as claimed, or caused plaintiff to expend funds over and above the original subcontract amount. The record does, in fact, establish that by virtue of the arrangement with Mitchell plaintiff actually expended less, including all claimed backcharges ($212,-865.30) than would have been expended had the subcontract with Standard ($228,400) not been terminated.
135. Under date of December 2,1949, plaintiff entered into a subcontract with Wayne Plastering Company to perform all lathing and plastering on' the hospital project in the amount of $294,000. Subsequent change orders amended this amount to $287,186.02. Plaintiff claims that due to the delays it was required to take over this work and assume financial responsibility to complete it. Plaintiff's records reflect expenditures on behalf of this subcontractor totaling $389,949.62, including $40,325.77 in backcharges. This results in an overage of $102,763.30 above the subcontract amount, which overage is claimed by plaintiff.
Defendant alleges this subcontractor was neither competent nor financially able to perform under this subcontract. This allegation is based upon two things: first, a letter from plaintiff to J. A. Jones, president of Wayne, charging him with considerable use of liquor and warning that further adverse reports on his conduct would result in his removal and, second, information in the record indicating that this subcontractor was in receivership approximately 1 year after beginning his work. It appears plaintiff actually took over this subcontract in December 1951 after making payments of approximately $40,000 to Wayne for work accomplished to that time. Plaintiff then carried the work through to completion in March 1953.
Due to the delays, as previously shown, it is reasonable to conclude plaintiff incurred higher costs for labor and material to complete this work. Plaintiff's records show expenditures of $349,340.08 for said labor and material resulting in excess costs of $62,154.06 above the subcontract price of $287,186.02. With regard to backcharges against the subcontract by plaintiff in excess of $40,000, the record does not establish that-said charges would have been accepted or paid by the subcontractor and it would appear that an undetermined. amount resulted, not from delays, but rather from rejection of the work upon inspection by defendant' and thus not attributable to any delay.
Plaintiff is entitled to recover $62,154.06, the amount of actual expenditures over and above the subcontract amount.
Losses on Labor of BricMayers
136. As a result of the aforesaid delays and interruptions to plaintiff's performance under the contract, it became necessary for plaintiff to pay wages for bricklayers at a higher rate than if the work had been done during the originally scheduled period. Plaintiff paid the sum of $4,331.36 in wage increases which went into effect on January 3, 1952, or subsequently. In addition, plaintiff paid overtime wages to bricklayers beginning as of July 7, 1951, in the amount of $9,658.18. Thus, plaintiff paid a total of $13,989.54 in wages to bricklayers over and above what would have been paid if the labor had been performed prior to the cited dates.
Summary of Damages
137. As a result of the delays as previously shown, plaintiff suffered damages in the following amounts:
For the use and benefit of subcontractor Fisehbach & Moore, Inc_ $78,926.98
Costs incident to changes in foundations- 86, 621.15
Maintenance of temporary roads_ 3, 347.44
Temporary heating and snow removal_ 49,277.30
Home office overhead_ 101,308. 02
Job overhead_:_ 93,183.46
Losses on labor, exclusive of bricklayers_ 29,204. 89
Losses on subcontracts_ 62,154. 06
Losses on labor of bricklayers_ 13,989. 54
Total damages_$518, 012. 84
CONCLUSION OF 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 plaintiff is entitled to recover, and it is therefore adjudged and ordered that it recover of and from the United States four hundred thirty-nine thousand eighty-five dollars and eighty-six cents ($439,085.86) in its own behalf, and the sum of seventy-eight thousand nine hundred twenty-six dollars and ninety-eight cents ($78,926.98) for the use of Fisehbach & Moore, its subcontractor.
Defendant liad not driven any test piles as a part of its investigation of subsurface conditions. This idea ivas rejected because of the cost involved, i.e., $10,000.
"Jetting" is a method sometimes used when the driving of a pile "dry" is not possible because of factors such as extreme compaction of the soil. In such a situation, the jetting of a thin stream of water under very high pressure will loosen the soil so that the pile can be driven. However, this procedure is used as a last resort, when no other alternative exists, because of the unfavorable soil conditions created by the water.
Defendant contends that plaintiff unreasonably delayed in providing the subcontractor with water so that "jetting" could be accomplished. The record does not support such a contention.
Defendant's superintendent recognized this when he wrote Central Office on November 18, 1949. The Chief of Veterans Administration Structural Division, in his memorandum of January 10, 1950, recognized that the piles as originally specified could not be properly driven. See also finding 33.
The contention óf changed conditions was raised for the first time by defendant in its reply brief. In defendant's proposed finding 70(b) it-requested the commissioner to find that "[p]rior to the submission of its bid, plaintiff had adequate notice of the conditions which it subsequently encountered and which were not such as to constitute changed or latent subsurface conditions within the terms of the contract."
As of the middle of March 195,0, pile driving was about 80 percent completed, at a driving rate of 200 piles per week. The remaining 20 percent of the piles (340) took eight weeks.
Defendant takes the position that if plaintiff had proceeded after the issuance of Change Authorization No. 13, of July 25, 1950, it could have acquired the necessary pipe and completed the sewer work within a month. However, a change authorization is not a change order. Defendant did not issue the order until October 23. until then, plaintiff had no obligation to proceed.
Our commissioner's suggested finding with respect to these damages was based on 854 days of government-caused delays.
Plaintiff obtained one other bid for the piling. It was from Raymond Concrete Corporation. Raymond was experienced and had done work for plaintiff before and in fact had made four borings at this construction site, which information was available to bidders. Its bid price was $163,500 and included an allowance of $30,000 for jetting and a 10-percent factor (about 150) for redrives. Raymond estimated 140 calendar days to complete the work after the site was ready, which time included 19 days to set up and drive the first pile, 21 days to make the first load test and await approval and 100 days to complete the work. Western ultimately drove the heavier piles, subsequently specified, in 59 driving days, and was given extra time and money as described in later findings relating to change order pp.
The subcontractor's original estimate disclosed the use of a 10-percent rate tor supervision on change orders. There is, however, no evidence in the record to support the consideration of a lower rate for supervision on any particular phase of the wort.
As part of its claim, the subcontractor computed the increase of wage rates which it was required to pay as a result of the delay. Since the excess manhours attributable to the delay are being computed herein on the latest (and highest) wage rates in effect on the job, there is no need to make this separate computation.
Plaintiff's claim included 10 percent o£ excess costs for overhead which is considered under plaintiff's claim for job overhead. Also claimed is 10 percent of excess costs as profit to plaintiff.
Amounts expended for estimating, dues, subscriptions, advertising, and travel by the home office of plaintiff, which were disallowed by defendant, are found to be reasonable and includable in the home office totals. Certain other amounts claimed for contributions, depreciation and insurance, disallowed by defendant, are found not supported by the record and not includable in home office totals above.
Plaintiff claimed that costs for salaries of various foremen and truck drivers, construction of temporary offices, cost of tests, repairs, fuel, freight for and rental of equipment should be included in the overhead computation. While there may be merit to inclusion of such costs in an overhead computation, there is no support in the record to substantiate said costs were increased as a result of the delay over and above that which would have normally been expended. Plaintiff is entitled to an allocation of those expenses which were increased as a result of the delay, not an allocation of expenses which would have been incurred irrespective of, and not increased by, any delay. The above schedule lists the accounts in job overhead which appear from the evidence to be .the ones in which costs were increased by reason of the delays. Por the same reason, reductions by the parties of differing amounts for overhead possibly included in change orders and backcharges are considered only to the extent they affect the above-listed accounts.
The counterclaim was in the amount of $43,257.25, a difference of $7.17 from the amount claimed herein. One of the items of the claim in each instance was alleged payment by plaintiff for insurance on behalf of the subcontractor. This item was shown in the counterclaim in the amount of $154.19, whereas in the present claim it is shown to be $161.36, or the difference of $7.17.
The subcontractor was allowed a total of $101,296.06 consisting of the subcontract amount of $72,533, plus $28,763.06 for additional work. Plaintiff was allowed to offset, for the benefit of the subcontractor, $95,267.88, including accepted backcharges of $4,004.83. This amounted to $22,734.88 above the subcontract amount. The result of this action was a net of $6,028.18 due the subcontractor for additional work.