Case: FARNSWORTH & CHAMBERS CO., INC. v. THE UNITED STATES
Abbreviation: Farnsworth & Chambers Co. v. United States
Decision Date: 1967-07-20
Docket Number: No. 276-60
Citation: 180 Ct. Cl. 992
Volume: 180
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: FARNSWORTH & CHAMBERS CO., INC. v. THE UNITED STATES
Judges: Before Cowen, Chief Judge, Jones, Senior Judge, Lara-m:ore, Dttiieee, Davis, Skelton, and Niohols, Judges.
Pages: 992–1010

Head Matter:
383 F. 2d 407
FARNSWORTH & CHAMBERS CO., INC. v. THE UNITED STATES
[No. 276-60.
Decided July 20, 1967]
Wilson Sims, attorney of record, for plaintiff.
Bussell W. Koshinen, with whom was Acting Assistant Attorney General Oarl Eardley, for defendant.
Before Cowen, Chief Judge, Jones, Senior Judge, Lara-m:ore, Dttiieee, Davis, Skelton, and Niohols, Judges.

Opinion:
Per Curiam:
This case was referred to Trial Commissioner Paul H. McMurray with directions to make findings of fact and recommendation for conclusions of law. The commissioner has done so in a report and opinion filed on January 12,1967. Exceptions to the commissioner's findings and recommended conclusion of law were filed by the parties and the case has been submitted to the court on oral argument of counsel and the briefs of the parties. Since the court agrees with the commissioner's findings, opinion and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Plaintiff is, therefore, entitled to recover and judgment is entered for plaintiff in the sum of $89,638.43.
OBINION OE COMMISSIONER
McMurray, Commissioner:
This case involves a claim for an equitable adjustment concerning damages resulting from a changed condition encountered by plaintiff in attempting to perform a construction contract entered into with the Corps of Engineers, United States Army. An adjustment in the contract price was denied by the Corps of Engineers Claims and Appeals Board, primarily, it appears, because the Board did not accept plaintiff's report that there was a large opening in the bed of the river (a crevice, cavern, channel, trench or hole).
On June 24, 1964 the commissioner filed his report. The court handed down an opinion on June 11, 1965, 171 Ct. Cl. 30, 346 F. 2d 577, which found that plaintiff is entitled to recover and entered judgment to that effect, stating "the amount of recovery will be determined, in accordance with this opinion, under Pule 47(c)." Stein Bros. Mfg. Co. v. United States, 162 Ct. Cl. 802, 337 F. 2d 861 (1963).
The opinion of the court also stated that determination of the amount due plaintiff:
should not assess against the defendant those extra costs, if any, of dewatering the cofferdam, which are fairly attributable to causes other than the changed conditions — such as leaks in cofferdam walls_ or an inadequate or incomplete grouting program (including grouting which plaintiff expected to perform). Nor should the defendant be charged again for the leakage through the timber crib for which it has already paid.
A formal trial was convened for the purpose of taking proof with a view to determining the amount of damages to which plaintiff might be entitled under the Changed Conditions article of the contract. During the trial plaintiff offered three witnesses, (1) a cost engineer, (2) a licensed Civil Engineer and general contractor and (3) a vice-president of plaintiff corporation experienced in general construction. These witnesses testified with respect to the subject of damages and explained in considerable detail the manner in which records were kept concerning the type of woi-k performed, the number of hours or days worked in connection with the changed condition encountered, the type of material and equipment used and the costs involved.
Employees and representatives of defendant were present during the period when strenuous efforts were being made by plaintiff to handle the problem involved and were greatly concerned about getting the job done. Representatives of both plaintiff and defendant maintained a daily record of the labor, material and equipment used to combat the changed condition. Each party maintained notes and they were able to resolve any discrepancies found and reach an agreement before plaintiff's monthly reports of claimed costs were filed. Defendant also made a thorough audit of all items of plaintiff's claim from actual books and records.
All who were concerned with the operation were aware that records were being made which could be used, if necessary, to support a claim for damages or an equitable adjustment of the contract price. Testimony at the trial showed that representatives of defendant had access to the records maintained by plaintiff and, on occasion, made revisions and offered suggestions with respect to keeping those records.
Defendant did not offer any witnesses at the trial concerning damages. Counsel for defendant cross-examined plaintiff's witnesses and indicated a desire to have the pertinent facts reflected in the record made at the trial.
At the conclusion of the trial on July 14, 1966, proof was closed and, on the same date, counsel were directed to submit memorandum reports to the commissioner on or before August 15,1966. Each party submitted a report on August 15, 1966. Those reports are a part of the record in the case concerning the issue of damages.
In view of the court's restriction on recovery of grouting which plaintiff expected to perform, a review of plaintiff's grouting plans is in order. Plaintiff submitted the original grouting program to defendant on March 10, 1954 which provided for a program of drilling 3-inch grouting holes 5 feet apart on centers to depths averaging 45 feet within and around the periphery of the cofferdam cells. This planned grout curtain was to be placed prior to the beginning of any dewatering operations. It extended 1,065 feet laterally and included 213 3-inch holes, totaling 9,483 vertical feet of drilling.
A second set of drawings of intended grouting was submitted by plaintiff on April 4, 1954. This second plan was similar to the first. Neither of these grouting programs was put into execution.
On the basis of advice from plaintiff's consulting geologist the grouting program was reduced to one with holes on 20-foot centers, with provision for filling in on closer centers as the need arose. The geologist made no recommendations with respect to the final depths for grouting, leaving that to the contractor. The drilling and grouting operations were to be carried on simultaneously.
Defendant's foundation engineer, Charles Eochell, testified that there was little difference between the original plan and the one which began on 20-foot centers with intermediate holes as needed.
On July 23, 1954 when only 39 holes of the originally-planned 213 holes had been drilled to the anticipated depth and grouted, plaintiff attempted to dewater the cofferdam pool, but abandoned the effort when it was unsuccessful. Some holes which had been drilled were left open. The material placed in the grout curtain as of July 23,1954 was 4,685 cubic feet, less than 10 percent of the estimated quantity in the dewatering plan of March 10,1954.
Defendant's resident engineer wrote plaintiff on August 2, 1954 expressing his dissatisfaction with the results of plaintiff's efforts in the grouting program and the "utter inadequacy" in reducing the water level in the inside cofferdam pool more than 214 feet with a pumping capacity of 30,000 gallons per minute. He concluded by requesting that the contractor submit a written plan of operation for reducing the leakage in both the subsurface and cofferdam, outlining additional methods, equipment and shifts, if contemplated, and a schedule for the additional work which was to be done.
On August 6, 1954 the contracting officer wrote plaintiff again emphasizing that much valuable time had been lost in an effort to correct a most pressing and immediate problem, namely, the correction of cofferdam structural defects and the establishment of an adequate grout cut-off in the cofferdam foundation rock.
Plaintiff responded by letter of August 10,1954 to the contracting officer notifying him of a changed condition described as "subsurface or latent conditions at the site differing materially from those indicated in the contract documents."
Work on the changed condition from August 3, 1954 through October 5, 1954 included clearing the solution channel under Cell D-5, driving a 60-foot H-beam into the solution channel, building a temporary earthen dike which extended roughly from the Cell D-4 area to Cell A-l, and driving a temporary sheet pile wall. Plaintiff also poured concrete, a black clay blanket and other assorted plugging materials into the changed condition area in an attempt to stop the flow of water. The audited records establish that plaintiff grouted on 1 day only during this period, namely on August 12,1954 when plaintiff attempted to pump grout into the solution channel with no satisfactory results. Between October 6 and October 12, 1954, 3 days were spent plugging the changed condition and 4 days were spent on the grouting program.
Tbe work performed from October 13 through November 28, 1954 was concerned solely with plaintiff's 'additional grouting program in the Cell D-5 area in the general vicinity of the changed condition.
Final grout performance in the changed condition 'area reveals that plaintiff drilled three less than the 44 holes contemplated, of which 33 were not below the foundation grade; grouted 16 less holes; performed 950 lineal feet less drilling; and used approximately 3,400 cubic feet less materials than was anticipated for grouting this area at the time of its bid.
With regard to damages claimed, plaintiff presented no invoices or other documentary evidence to show that defendant was in error in adjustments made with respect to material costs claimed, and/or to refute defendant's adjustments of the time shown for labor and equipment used. Plaintiff's use of Associated Equipment Distributor (hereafter AED) rental rates for contractor-owned equipment was disputed by defendant. Plaintiff's actual cost of rental from outside sources was allowed by defendant, but defendant applied plaintiff's actual intercompany equipment charges for all contractor-owned equipment. The AED rates claimed are not an indication of plaintiff's additional equipment costs, but are higher than its costs and include a profit, which is also included in another portion of this claim. The inter-company equipment charges are meant to show actual cost of depreciation, ownership, maintenance and operation of plaintiff's equipment and are the proper measure of recovery on which to base a reasonable profit. Additional equipment expenses not included in this intercompany charge, such as insurance, taxes, or storage, will be reimbursed by the 10 percent overhead allowed on all direct charges.
The findings of fact made by the court review in detail the serious problem encountered 'and the steps taken by plaintiff to combat the changed condition involved. The record supports a determination that the job did not progress from August 10,1954 to November 28, 1954, a period of 110 days. Plaintiff worked 57% days on the changed condition, 1% days on the timber crib for which he was reimbursed, 51 days on its grouting program of which the entire period from October 13 through November 28,1954 (47 days) was devoted solely to its grouting program.
Defendant has stipulated that plaintiff was assessed $68,000 in liquidated damages for combined delays of 170 days on three generating units at $400' per day. The record shows that plaintiff was delayed 57% days on the changed condition in the Cell D-5 area, which, when applied against the delays assessed on all three generating units, totals 135% days. Therefore, plaintiff is entitled to the remission of liquidated damages to the extent of $54,100.
Accordingly, it is found that plaintiff is entitled to (1) recover the amount of $35,538.43 as an equitable adjustment under the contract costs chargeable to the changed condition encountered in the Cell D-5 area, and (2) the remission of $54,100 in liquidated damages assessed for late performance; a total recovery of $89,638.43.
Findings or Fact
1. This is a case involving a claim for an equitable adjustment of damages resulting from a changed condition, specifically, a large water-bearing opening in the bed of the river, which was encountered by plaintiff in attempting to perform a construction contract entered into with the Corps of Engineers, United States Army. An adjustment in the contract price was denied by the Corps of Engineers Claims and Appeals Board (hereafter the Board) because the Board ruled that plaintiff failed to prove the existence of a cavern or channel large enough to cause the difficulty encountered. On July 11, 1960 the petition was filed in this court. Pursuant to a review of the administrative record the commissioner filed a report with the court on June 24, 1964. The court handed down an opinion on June 11, 1965 stating:
The plaintiff is entitled to recover, and judgment is entered, to that effect. The amount of recovery will be determined, in accordance with this opinion, under Rule 47(c).
The opinion of the court also states that the determination of the amount due plaintiff:
should not assess against the defendant those extra costs, if any, of dewatering the cofferdam, which are fairly attributable to causes other than the changed conditions — such as leaks in cofferdam walls or an inadequate or incomplete grouting program (including grouting which plaintiff expected to perform). Nor should the defendant be charged again for the leakage through the timber crib for which it has already paid.
2. A formal trial was convened for the purpose of taking proof with a view to determining the amount of damages to which plaintiff might be entitled under the Changed Conditions article of the contract. During the trial plaintiff offered three witnesses, (1) Elliott Raymond Null, a cost engineer, (2) Frank T. Tinnon, a licensed Civil Engineer and general contractor, and (3) John I. Green, a vice-president of plaintiff corporation experienced in general construction. These witnesses testified concerning the subject of damages and explained in considerable detail the manner in which records were kept relative to the type of work performed, the number of hours or days worked in connection with the changed condition encountered, the type of material and equipment used and the costs involved. At the conclusion of the trial, proof was closed and counsel were directed to submit memorandum reports. Those reports are a part of the record in the case concerning the issue of damages.
3. In view of the comment of the court with respect to plaintiff's recovery, a brief review of events which preceded the discovery of a changed condition and plaintiff's vigorous efforts to combat the unexpected condition appears to be in order. Plaintiff's original grouting program which was submitted to defendant on March 10,1954 provided for a program of drilling and grouting 3-inch holes spaced 5 feet apart on centers to depths averaging 45 feet within and around the periphery of the cofferdam cells. As planned, the grout curtain, to be placed prior to the beginning of any dewater-ing operations, extended 1,065 feet laterally and included 213 3-inch holes totaling 9,585 vertical feet of drilling.
Plaintiff submitted a second set of drawings of intended grouting by letter dated April 4, 1954. The second plan was substantially the same as the first. The curtain grouting program was never put into execution. Based on the advice of plaintiff's consulting geologist the grouting program was reduced to one with holes on 20-foot centers, with the provision for filling in on closer centers, first 10, then 5, as the need arose. He made no recommendation as to the final depths for grouting, leaving this to the contractor. Drilling and grouting was not to be completed in advance of dewatering, as originally proposed, but those operations were to be carried on simultaneously. Mr. Charles Bochell, defendant's foundation engineer, testified that there was not much difference between the original plan and the one which began on 20-foot centers, with intermediate holes as needed. He stated that such a plan would not necessarily line up on 5-foot centers, but that this was an average. He also stated that if the contractor started drilling holes at 20-foot centers he might not proceed further, or he could drill holes closer than 5-foot centers. The contractor starts at 20-foot centers, then to 10-foot centers, then 5-foot centers, or as needed.
4. On July 23,1954, when only 39 holes of the originally-planned 213 holes had been drilled to the anticipated depth and grouted, plaintiff attempted to dewater the cofferdam pool, but abandoned the effort when its was unsuccessful. Some holes which had been drilled were left open. The material placed in the grout curtain as of July 23,1954 was 4,685 cubic feet, less than 10 percent of the estimated quantity in the dewatering plan of March 10, 1954.
On August 2, 1954 defendant's resident engineer wrote plaintiff expressing his dissatisfaction with the results of plaintiff's efforts in the grouting program and the "utter inadequacy" of reducing the water level in the inside coffer pool more than 2y2 feet with a pumping capacity of 30,000 gallons per minute. The engineer concluded his letter by requesting the contractor to submit in writing a plan of operations for reducing both the subsurface and cofferdam leakage - outlining additional methods, equipment and shifts, if contemplated, and a schedule for the additional work which was to be done.
By letter of August 6, 1954 the Contracting officer wrote plaintiff emphasizing that much valuable time had been lost in an effort to correct a most pressing and immediate problem, namely, the correction of cofferdam structural defects and the establishment of an adequate grout cut-off in the cofferdam foundation rock.
Plaintiff responded by letter of August 10,1954 notifying the contracting officer of the changed condition described as "sub-surface or latent physical conditions at the site differing materially from those indicated in the contract documents."
Work on the changed condition from August 3, 1954 through October 5, 1954 included clearing the solution channel under Cell D-5, driving a 60-foot H-beam into the solution channel, building a temporary earthen dike which extended roughly from the Cell D-4 area to Cell A-l, and driving a temporary sheet pile wall. Plaintiff also poured concrete, a black clay blanket and other assorted plugging materials into the changed condition area in an attempt to stop the flow of water. The audited records establish that plaintiff grouted on 1 day only during this period, namely, on August 12, 1954 when plaintiff attempted to pump grout into the solution channel with no satisfactory results.
5. Work on October 6 and 7,1954 was partially related to the operations referred to in finding 4 and partially concerned with the new grouting program instituted by plaintiff in the vicinity of the changed condition. Approximately half the time and cost for the 2 days mentioned was performed in stopping the leakage on the changed condition by the described methods, and half the time and cost was expended on the additional grouting program. October 8, 1954 was devoted entirely to the grouting program, and from October 9 through October 12, plaintiff performed work on both the grouting program and the other plugging methods. It is found in determining damages that half the time and cost was devoted to plugging of the changed condition and half to the grouting program. Thus, from October 6 through October 12,1954,3 days were devoted to plugging the changed condition and 4 days to the grouting program.
6. The work performed from October 13 through November 28, 1954 was concerned solely with plaintiff's additional grouting program in the Cell D-5 area in the general vicinity of the changed condition.
7. Plaintiff's original grouting program as proposed on its cofferdam draAving dated March 10,1954 consisted of:
Lineal feet of grout curtain- 1,065. 0
Holes on 5-foot centers- 213. 0
Required average depth of holes to go helow final foundation grade, in feet- 45. 0
213X45 equals (lineal feet drilling)- 9,585
Average 5 cu. ft. grouting material per lineal foot of drilling (cu. ft.)- 47,925
Plaintiff's actual grouting program prior to the dewatering attempt July 23,1954 was:
Holes drilled- 57
Holes not to elevation 332.0_ 18
Holes helow elevation 332.0- 39
Holes to refusal_ 31
Holes not to refusal_ 15
Holes grouted_ 46
Total lineal feet drilled_ 2,254. 4
Material used:
Bags of cement _2,143. 0
Ou. ft. of limestone dust_2,180. 0
Ou. ft. of sand- 339. 0
Ou. ft. of asphalt (174.5 gallons)_ 23.3
Total cu. ft. of material used_ 4, 685.3
Plaintiff's actual grouting program for the entire job Avas:
Holes drilled_ 196
Holes drilled below elevation 332.0_ 89
Holes not drilled to full depth_ 107
Holes drilled- 196
Holes grouted_ 136
Holes not grouted_ 60
Total lineal feet drilled_ 6,483.2
Material used:
Bags of cement-16, 012. 0
Ou. ft. of limestone dust_14, 650. 0
Cu. ft. of sand- 1,136. 0
Cu. ft. of asphalt (32,719.5 gallons)- 4, 374. 3
Total cu. ft. of material used- 36,172. 3
The actual grouting for the entire cofferdam consisted of 17 less holes drilled, 77 less holes grouted, 124 less holes drilled below final foundation grade, approximately 3,000 less lineal feet of drilling and approximately 11,750 cubic feet less materials than it was originally anticipated would be required for the cofferdam grouting program. Only 89 of the 213 holes anticipated were fully drilled and grouted as planned.
Considering the location of the changed condition as having been somewhere behind the clay dike, which extended from Cell D-4 to Cell A-l, plaintiff's original proposed grouting program for that area was:
Lineal feet of grout curtain_ 220
Holes on 5-foot centers- 44
Average depth of holes, in feet- 45
Lineal feet drilled-1, 980
Average 5 cu. ft. grouting material per lineal foot of drilling (cu. ft.)-9,900
The actual grouting program in the changed condition area prior to the dewatering attempt on July 23, 1954 was:
Holes drilled_ 19
Holes drilled to or below elevation 332.0_ 10
Holes not drilled to full depth_ 9
Holes drilled_ 19
Holes grouted- 16
Holes not grouted_
Holes to refusal-l-t
Holes not to refusal
Holes grouted-1C
Total lineal feet drilled. 684.8
Material used:
Bags of cement- 970.0
Cu. ft. of limestone dust- 970.0
Cu. ft. of sand_ 125. 0
Cu. ft. of asphalt (44.5 gallons)_ 6. 0
Total cu. ft. material used_2, 071. 0
Tbe actual grouting in the changed, condition area behind the dike through November 28, 1954 was:
Holes drilled_ 41
Holes drilled to 45 foot depth _ 8
Holes not drilled to full depth_ 33
Holes drilled_ 41
Holes grouted_ 28
Holes not grouted_ 13
Total lineal feet drilled_1, 030
Material used:
Bags of cement_2, 750
Cu. ft. of limestone dust_2, 750
Cu. ft. of sand_ 179
Cu. ft. of asphalt (5,672 gallons)_ 758
Total cu. ft. material used_6,477
8. Final grout performance in the changed condition area reveals plaintiff drilled three less than the 44 holes contemplated, of which 33 were not below the foundation grade; grouted 16 less holes; performed 950 lineal feet less drilling; and used approximately 3,400 cubic feet less materials than was anticipated for grouting this area at the time of plaintiff's bid.
9. An analysis of the data set out in findings 7 and 8 establishes that there was less grouting overall and in the changed condition area than was originally contemplated. Actually, there is no reliable evidence that the final plans, as suggested by plaintiff's geologist, reflected less grouting than was actually performed since the geologist contemplated that grouting would cover more than 20-foot centers. He thought plaintiff should go down to 10-foot centers, then 5-foot centers and further if necessary.
10. In comparing the percentage of grouting in the general area of the changed condition, i.e. behind the clay dike, with the entire other portion of the project, there were 28 holes grouted in the changed condition area compared with 44 holes originally proposed to be grouted. This is 63.64 percent. 6,477 cubic feet of grouting material was used. 9,900 cubic feet was proposed. This is 65.42 percent. For the remainder of the job, only 108 holes of 169 proposed were grouted, or 63.69 percent. Only 29,685.3 cubic feet of the proposed grouting material of 38,025 cubic feet was used. This is 78.09 percent. Thus, the number of grouted holes drilled in the changed condition area as compared with the entire other area of the project was almost identical, however the amount of grout used, as a percentage of the original plan, was actually higher in the areas outside the area of the changed condition. This may well have been caused by the fact that plaintiff had placed substantial amounts of plugging material in the changed condition 'area including a black clay blanket, which could have reduced the necessity for as much grouting material per hole as used in the other areas involved under the contract. Based on the record it is concluded that plaintiff's grouting program as finally performed was completely adequate, and that its grouting within the changed condition area, including grouting in October and November 1954, was no more than plaintiff had expected to perform in that area.
11. When plaintiff encountered the changed condition, its representatives maintained a daily record of the material, labor, and equipment used to combat the changed condition. Defendant's resident engineer suggested that such a detailed method would be necessary to avoid future questions concerning the cost involved. Defendant's representatives maintained their own notes and records concerning the changed condition, and on occasion found discrepancies in plaintiff's field notes which were worked out between the parties so that there was a meeting of the minds and agreement before plaintiff's monthly reports of claimed costs were filed.
12. Plaintiff's method of maintaining a daily record of its labor, material and equipment necessary to combat the changed condition is probably the best available method to Show its actual additional cost, particularly when defendant examined the daily records and made corrections when errors were found. Defendant's contention at this time, that plaintiff's books and records do not segregate the changed condition costs from other project costs is wholly without merit. Defendant made a thorough audit of all the items of plaintiff's claim from the actual books and records. Defendant has verified from such books and records the actual cost 'as claimed by plaintiff for its labor, materials, and rental from outside sources, and has made adjustments correcting plaintiff's claim When the hours worked, either labor or equipment as shown by plaintiff's books and records, do not correspond to the claim for each specific date or where the material cost was not exactly as shown on the invoices.
13. Plaintiff presented no documentary evidence from its books and records to refute defendant's adjustments of the time shown on its audited claim for labor and equipment .used on the dates indicated. It presented no invoices or other documentary evidence in attempting to show that defendant was in error in adjustments made with respect to material costs claimed.
14. The major dispute between the parties on the specific items claimed was the use by plaintiff of Associated Equipment Distributor (hereafter AED) rental rates for contractor-owned equipment. While defendant allowed plaintiff's actual rental cost from outside sources, it disputed the use of AED rates for contractor-owned equipment and has instead applied plaintiff's actual intercompany equipment charges for 'all contractor-owned equipment. Plaintiff contends these intercompany charges, which admittedly were reflected on its books and records, are not a fair rental for plaintiff's equipment used on the changed condition and insists that these charges represent a depreciation, ownership and maintenance reimbursement which is comprised of depreciation based on capitalized value, plus operation and maintenance charges, including fuel and lubrication. Plaintiff maintains these charges are used for bidding purposes, and although they are shown on its books and records, they do not give a "break-even" figure for tbe equipment used, and should not be used as a fair measure of damages herein.
The AED rental rates claimed are not an indication of plaintiff's additional equipment costs, but are substantially higher than its costs and include a profit, which is also included in another portion of this claim. The intercompany equipment charges as shown by plaintiff's books are meant to show actual cost of depreciation, ownership, maintenance and operation of plaintiff's equipment, and are the proper measure of recovery herein on which to base a reasonable profit. Any additional equipment expenses not included in this intercompany charge, such as insurance, taxes, or storage, will be reimbursed by the 10 percent overhead allowed on all direct charges.
15. It is found that the method of computation set out in finding 14 more accurately reflects plaintiff's expense in combating the changed condition and is used herein as a proper measure of damages with an added factor for profit.
16. Plaintiff originally claimed the entire purchase price of three tar kettles used in grouting. The kettles were burned in a fire which occurred at the construction site; two were destroyed entirely and the third was badly damaged. Those items were not insured. The fire is not shown to be chargeable to defendant. Defendant properly allowed only plaintiff's intercompany operational charge.
17. The evidence supports a determination that one-half the work performed on August 23,1954 is related to work on the changed condition. Defendant deleted this item as applicable to the timber crib. Plaintiff admits it failed to segregate its claim for work performed on September 15, 1954 when it drove 18 sheets at the crib section and five sheets in the retaining wall. Defendant has deleted that item in its entirety. It would appear fair and reasonable to allocate one-fourth of that day's effort to the changed condition. On September 16,1954 defendant again deleted the entire charge on the basis that such work was performed entirely on the timber crib. The evidence supports a finding that approximately one-half the costs incurred on that day is properly attributable to the changed condition. The evidence reasonably supports a determination that work performed on August 3,1954 which involved the pouring of concrete in the solution channel below Cell D-5 in an attempt to form a seal was wholly related to the changed condition, as was the work performed on August 11, 1954 which involved driving the H-beam into the solution channel. Mr. Tinnon testified at the trial on damages that while grouting went on in other areas of the cofferdam during August and September 1954 none was charged against this claim until about October 8, 1954. Plaintiff's claim, however, does in fact include grouting on August 12,1954 and the audit verified this cost. Plaintiff's claim, prepared from contemporaneous records, shows that grout was pumped into this changed condition with no satisfactory results on that date. There was uncon-tradicted testimony before the Board that plaintiff attempted to grout the cavern and that the grout blew right on through and came up on the outside. The evidence shows that the grouting on August 12, 1954 was related entirely to the changed condition and should be so charged. The evidence further shows that work done between August 8, 1956 and August 20, 1956 (approximately 2 years later) which was concerned with the removal of a temporary piling, the earthen dike and other fill material from the navigable river, was attributable in its entirety to the changed condition.
18. Tire uncontroverted testimony was that the job did not progress from August 10, 1954 through November 28, 1954. That period amounted to 110 days. From August 11 through October 12, 1954 plaintiff worked for 57*4 days on the changed condition, 1% days on the timber crib for which plaintiff was previously reimbursed, 51 days on its grouting program of which the entire period from October 13 through November 28, 1954 (47 days) was devoted to its grouting program.
19. Plaintiff's total direct cost for the changed condition and the additional grouting program as audited by defendant and corrected herein is as follows:
Direct labor_$6, 641.49
Material _ 5,431.25
Equipment costs_ 25,196.39
Total direct costs. 37,269.13
Plaintiff's properly claimed expenses attributable solely to the changed condition, including the undisputed factor of 10 percent for overhead and a fair and reasonable profit of 10 percent is as follows:
Direct labor_ $4, 358. 52
Taxes and insurance @ 10%- 435.85
- $4,794.37
Material_ 1,266.94
Tennessee 2% State Sales Tax- 25.34
- 1,292.28
Contractor's Equipment Cost- 23,283. 95
Subtotal _ 29,370.60
Overhead @ 10%- 2, 937. 06
Total Cost_ 32,307.66
Profit @ 10% _ 3,230. 77
Total equitable adjustment for changed condi-tion_ 35,538.43
20. The parties have stipulated that the total penalties were 170 days or $68,000. These penalties were assessed at $400 per day on a unit basis. The contractor was given a specific deadline for the completion of each of the four generating units; unit one was due a certain date and then unit two followed by 90 days and unit three followed unit two by 90 days. Ninety-two days was the longest period of delay damage assessed against any unit. There were a lesser number of days assessed against units two and three, and by the time the deadline for unit four was reached, plaintiff had entirely caught up the delay. The delay occasioned by the changed condition is found to be 57% days. The computation of liquidated damage penalties assessed against plaintiff, which have been found to be attributable to the changed condition and should now be refunded, is as follows:
The proper remission of penalties for late performance occasioned by the changed condition should be $54,100 (13514 daysX$400 per day=$54,100).
21. Based on the facts supported by the record and reflected in the findings with respect to damages, it is concluded that plaintiff is entitled to the amount of $35,538.43 as an equitable adjustment under the contract because of the changed condition encountered in the Cell D-5 area, and remission of $54,100 in liquidated damages assessed against plaintiff for late performance; for a total recovery of $89,638.43.
Conclusion op Law
Upon the foregoing findings of fact and opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover of and from the United States the sum of eighty-nine thousand six hundred thirty-eight dollars and forty-three cents ($89,638.43), and judgment is entered for plaintiff in that amount.
The opinion, findings of fact and recommended conclusion of law are submitted under the order of reference and Rule 57(a).
The costs to a contractor, attributable to a changed condition encountered during tbe performance of a contract, or 'Changes in the contract, can be determined by means of an equitable adjustment. Thomas Earle & Sons v. United States, 100 Ct. Cl. 494 (1944).
under the facts in this case, no equitable adjustment could have been made until completion of the work involved. MacDougald Constr. Co. v. United States, 122 Ct. Cl. 210 (1952).
Details of plaintiff's proposed and actual grouting programs are set out in finding 7.
The grouting was required to be performed under tlie contract.
'The delay due to tlie>ehangod condition is detailed in finding 21.
Each bag of cement equals 1 cu. ft.
Although defendant's foundation engineer testified before the Board that 10 holes had been drilled below expected foundation depth prior to the July 23, 1954 attempt to dewater, details from the drilling and grouting books, as set forth on p. 22 of defendant's brief before the Board, reveal that only eight of the 41 holes drilled were to the expected depth of 45 feet.
Defendant disagrees with the allowance of profit. Although this court does not normally allow profit in eases of breach of contract, the Armed Services Procurement Regulations applicable to the Changed Conditions article under the contract, provides for an equitable adjustment which usually includes a profit factor, under the changed condition of this contract, it has been found that plaintiff is entitled to a reasonable profit. Defendant has made no contention as to the unreasonableness of a 10 percent profit factor claimed and allowed herein.