Case: RAYMOND CONSTRUCTORS OF AFRICA, LTD. v. THE UNITED STATES
Abbreviation: Raymond Constructors of Africa, Ltd. v. United States
Decision Date: 1969-06-20
Docket Number: No. 175-65
Citation: 188 Ct. Cl. 147
Volume: 188
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: RAYMOND CONSTRUCTORS OF AFRICA, LTD. v. THE UNITED STATES
Judges: Before Cowen, Chief Judge, Laramore, Durpee, Davis, Collins, 'Skelton, and Nichols, Judges.
Pages: 147–201

Head Matter:
411 F.2d 1227
RAYMOND CONSTRUCTORS OF AFRICA, LTD. v. THE UNITED STATES
[No. 175-65.
Decided June 20, 1969]
Thomas 8. Jackson, for plaintiff; Austin P. Frum, attorney of record. Jackson, Gray <& Laskey, of counsel.
Steven L. Cohen, with whom was Assistant Attorney General WilUam D. Buckelshaus, for defendant. B. W. Koskinen, of counsel.
Before Cowen, Chief Judge, Laramore, Durpee, Davis, Collins, 'Skelton, and Nichols, Judges.

Opinion:
Per Curiam :
The plaintiff presented in the petition six claims growing out of the construction by the plaintiff of a demonstration road in the Sudan.
Three of the six claims that were originally set out in the petition have been abandoned by the plaintiff. Therefore, only three claims remain in the case for disposition by the court.
It is our opinion that the plaintiff is entitled to recover on one of the remaining claims, but not on the other two.
Introduction
The plaintiff is a corporation organized and existing under the laws of Liberia. It is a wholly owned subsidiary of Bay-mond International, Inc., a corporation organized and existing under the laws of New Jersey. During the period that is involved in the present case, both the plaintiff and its parent corporation maintained their home offices in New York City.
During the period 1959-1962, the defendant's International Cooperation Administration (now the Agency for International Development), in furtherance of the defendant's foreign aid program, maintained in The Eepublic of the Sudan a mission that was known as the United States Operations Mission and was frequently referred to as "the USOM." This mission, which operated under the general supervision of the defendant's embassy at Khartoum, the capital of the Sudan, was headed by a (Erector, who was stationed in Khartoum. The USOM handled the technical, financial, and other assistance that was provided by the defendant to the Sudanese government.
Sometime prior to April 1959, the United States Operations Mission proposed to officials of The Eepublic of the Sudan that a demonstration road project be constructed in the Sudan, with financial assistance from the defendant. At that time, there were no modern highways in the Sudan. It was proposed by the USOM to the Sudanese government that the demonstration road be constructed as a modern blacktop highway in the vicinity of Khartoum, for the purpose of demonstrating what was involved in the construction of a modern highway, what it would cost, and the benefits that would be derived from it. It was also believed by personnel of the USOM that the construction of a segment of a modern road as a demonstration highway would educate the Sudanese in contracting for, administering, and financing a road project, and also in the engineering aspects of road-building to some extent.
The government of The Eepublic of the Sudan approved the proposal relative to the construction of a demonstration road project. With the concurrence of the United States Operations Mission, the Sudanese government decided that the demonstration road would start at Khartoum North and go approximately 21 kilometers in a northerly direction to Khogalab. The latter is situated in a rather large agricultural area near the Nile Eiver, downstream from the confluence of the Blue Nile and the White Nile.
On or about June 25,1959, the defendant and the government of The Eepublic of the Sudan entered into an agreement (usually referred to as "the project agreement") relative to the construction of a demonstration road approximately 21 kilometers in length from Khartoum North to Khogalab. The project agreement was subsequently revised several times. In its final form, the project agreement not only covered the construction of the demonstration road from Khartoum North to Khogalab, but it also provided for the extension of the road to Kabbashi Village, approximately 8y2 kilometers beyond Khogalab. Total financing equivalent to $1,460,000 was provided for, of which total the Sudanese government was to furnish the equivalent of $900,000 in Sudanese pounds (LS 318,200). The remainder of the financing, $560,000, was to be provided by the defendant in United States dollars, $310,000 being made available for "contract services" and $250,000 being made available for "commodities." The "commodities" were to consist of major items of construction equipment that would be procured by the defendant and delivered at Port Sudan to the Sudanese government, which, in turn, was to make such construction equipment available for use in the construction of the demon-station road by the contractor selected for the job. The ownership of the equipment was to be vested in and retained by the Sudanese government.
The Sudanese Ministry of Works issued an invitation for competitive tenders or bids with respect to the construction of the demonstration road, the plaintiff and other construction companies submitted such tenders, and the plaintiff was selected as the successful low bidder. The plaintiff's tender was accepted on or about October 21, 1959; and a formal contract was entered into between the plaintiff and the government of The Eepublic of the Sudan on or about November 11, 1959. The contract ance by the plaintiff of the various items of work involved in the construction of the demonstration road, stating as to each item the estimated quantity, the unit price, and the estimated total price for the item. The original contract gave the estimated contract price for all items as the equivalent of $750,455, and provided that the maximum amount to be paid in United States dollars was $175,000, with the remainder of the estimated contract price to be paid in Sudanese pounds.
After the project agreement between the Sudanese government was revised, as previously indicated, for the purpose of extending the demonstration road for an additional distance of approximately 8 y2 kilometers beyond Khogalab to Kabbashi Village, the plaintiff and the Sudanese government entered into a supplemental contract providing for the 8%-kilometer extension of the demonstration road. This supplemental contract enlarged the estimated quantities previously set out in the contract; and it increased the estimated contract price to the equivalent of $1,158,091.57, increased the maximum amount to be paid in United States dollars to $310,000, and increased the amount that was to be paid in Sudanese pound's. The unit prices stated in the original contract were not changed by the supplemental contract.
The plaintiff made a subcontract with the Sudanese Construction Company for the performance by the latter of the earthwork items under the prime contract between the plaintiff and the Sudanese government.
At about the time when the plaintiff entered' into the contract with the Sudanese government for the construction of the demonstration road, the plaintiff also entered into a letter of understanding with the International Cooperation Administration. This document referred to a request from the Sudanese government that the ICA finance the dollar payments under the contract for the construction of the demonstration road, and further stated in part as follows:
ICA requires, as conditions or prerequisites to its financing., agreement by you [i.e., the plaintiff] to certain conditions as follows:
1. Conformity — You will fully and completely perform said Contract in accordance with, its terms and comply in all respects with the terms and conditions of this Letter of Understanding.
2. Maximum Dollar Obligation — It is understood that ICA's maximum obligation in financing the Contract shall not exceed 175,000 U.S. dollars, unless ICA shall, by written notice to you at the above address, agree to increase its maximum obligation hereunder.
Sjí # iH # #
5. Non-Dollar Costs — It is understood that no non-dollar costs under the Contract will be financed by ICA.
Subsequently, after arrangements were made for the extension of the demonstration road for approximately 8*4 kilometers beyond Khogalab to Kabbashi Village, paragraph numbered 2 of the letter of understanding between the plaintiff and the International Cooperation Administration was amended "to increase ICA's maximum obligation in financing the Contract from $175,000 to $310,000."
Aggregate Base
One of the claims asserted by the plaintiff in the present action is based upon the allegation that the cost of constructing the demonstration road in the Sudan was increased because personnel of the defendant violated an "agreement with the plaintiff that only unsieved and mechanically loaded 'pit run' aggregate material need be used" in constructing the base of the demonstration road.
Pit-run aggregate is aggregate just as it is dug out of a pit or borrow area. It is excavated mechanically, and it is loaded on a vehicle and delivered to the job site for use in the construction process, without being screened or sieved by hand labor.
The evidence in the record shows that personnel of the defendant's Bureau of Public Boads was assigned to, and formed part of, the United States Operations Mission in the Sudan. The top person in this category was Herman Gaines. He was the principal official of the USOM with respect to highway matters, although he served under the administrative supervision of the Director of the USOM.
The evidence also shows that the specifications for the proposed demonstration, road, and ments which the Sudanese Ministry of Works furnished to the plaintiff and other prospective bidders as part of the invitation for tenders, were prepared in the office of Herman Gaines and by personnel of the defendant, in conjunction with the Sudanese Ministry of Works. The specifications and other contract documents were modeled principally on documentary material customarily used by the defendant's Bureau of Public Koads.
One of the items of work referred to in the tenders was designated as "Aggregate Base," with an estimated quantity of 75,000 cubic meters.
In August 1959, B. B. Talley, a of the U.S. Army, who at that time was president of the plaintiff and vice president of the plaintiff's parent corporation, visited the Sudan during the course of a business trip abroad. General Talley had previously heard of the proposal for the construction of a demonstration road in the Sudan. On the occasion of the August 1959 visit to the Sudan, General Talley was permitted to examine the plans 'for the proposed demonstration road; he went over part of the prospective route in a jeep with one of Herman Gaines' assistants; and he discussed with personnel of the defendant the subject of the materials that were to be used in the construction of the demonstration road. General Talley was shown certain borrow areas that had been designated by Sudanese officials, acting on the advice of personnel of the defendant's Bureau of Public Roads, as sources of aggregate to be used in constructing the base of the demonstration road. He looked at some of the material in such designated areas, but he did not make any engineering tests. General Talley noted that the aggregate material in the designated borrow areas which he examined was primarily a desert sand, and was quite fine. This caused General Talley some concern, because it was his opinion that the material contained an excess of "fines" and was deficient in coarse material.
General Talley was aware that a road base made of aggregate containing an excess of fines would provide shoulders to the road that would not stand up under usage. He was also aware that the borrow areas which he examined would not provide a sufficient amount of aggregate for the base of the entire demonstration road.
On or about September 21, 1959, the plaintiff received an invitation for tenders or bids on the proposed contract for the construction of the demonstration road in the Sudan. The invitation stated that the deadline for the submission of tenders was noon on October 27, 1959. They were to be submitted to the Sudanese Ministry of Works in Khartoum.
After receiving the invitation for tenders referred to in the preceding paragraph, the plaintiff began the preparation of its estimate of the costs that would be involved in the construction of the demonstration road, and the preparation of a tender to be submitted on the proposed contract. This work was completed by October 20, 1959. General Talley went to Khartoum a few days later for the purpose of submitting the plaintiff's tender. He arrived in Khartoum on Sunday, October 25, 1959.
After arriving in Khartoum, General Talley called Herman Gaines on the telephone and made an appointment to see him the next day, October 26, 1959. On the morning of October 26, General Talley went to see Herman Gaines; and they discussed the specifications for the demonstration road project. General Talley asked Mr. Gaines for a clarification of, inter alia, the specifications with respect to aggregate and overhaul.
As previously indicated, General Talley in August 1959 had looked at some of the borrow areas that were designated as sources of aggregate to be used in constructing the base of the demonstration road; and he had noted that the material in those borrow areas seemed to contain an excess of fines and to be deficient in coarse material. In connection with the submission of the plaintiff's tender, General Talley wanted to find out whether it would be necessary to utilize hand labor for the purpose of screening or sieving such material in order to eliminate the excess of fines, or whether it was intended under the proposed contract that pit-run aggregate would be used. In response to an inquiry, Herman Gaines informed General Talley at the conference on October 26,1959, that it was intended under the proposed contract that pit-run aggregate would be used in the the road base, without screening or sieving it.
As General Talley was aware aggregate which he had examined in August 1959 did not contain enough aggregate for the construction of the entire road base, and that it would be necessary to obtain part of the aggregate from somewhere else, he wanted to find out whether the contractor would be paid for any overhaul of aggregate (i.e., haulage for any distance greater than 1,000 feet). General Talley mentioned this subject to Herman Gaines at the conference on October 26, 1959; and Mr. Gaines informed General Talley that the contractor would be paid for any overhaul of aggregate for the road base.
As a result of Gaines on October 26, 1959, General Talley modified the bid that had been prepared on behalf of the plaintiff relative to the aggregate base item. On the basis of the understanding that pit-run aggregate would be used for the road base, thus eliminating the factor of hand labor for screening or sieving the aggregate, and that the contractor would be paid for any overhaul of aggregate, General Talley reduced the plaintiff's bid on the aggregate base item from a unit price of $3.78 per cubic meter, as theretofore tentatively fixed by the plaintiff, to a unit price of 37 cents per cubic meter. Furthermore, in order that the bid might conform to his understanding that no screening or sieving of the aggregate to be used in the construction of the road base would be required, General Talley placed a handwritten asterisk next to the item relative to the aggregate base on the bid, with the asterisk referring to a handwritten note added by General Talley on the back of the same sheet and stating as follows: "Unseived [sic] machine loaded aggregate placed and compacted on prepared roadbed in accordance with Article 200-1.1."
The article cited by General Talley in the handwritten note which he added to the plaintiff's bid was contained in FP-57, the Standard Specifications for Federal Road Projects, promulgated by the defendant's Bureau of Public Roads. The contract papers accompanying the invitation for tenders indicated that this article was to be incorporated by reference in the contract for the construction of the demonstration road.
When the plaintiff's tender was subsequently accepted and the plaintiff entered into the contract with the Sudanese government for the construction of the demonstration road, the note which General Talley had added to the plaintiff's bid on the aggregate base item became a part of the contract.
The personnel of the defendant's Bureau of Public Boads in the Sudan, forming part of the United States Operations Mission, was organized to work with the Sudanese officials in connection with the construction of the demonstration road, and to advise them and instruct them regarding methods of operation. The objective was for the Sudanese officials to handle the administration of the project, and for the personnel of the Bureau of Public Boads to act in the role of consultants. Thus, it was customary for all written directives to the plaintiff (or its subcontractor) to be issued by the Sudanese resident engineer, but with respect to all matters of consequence, he acted after consultation with, and on the advice of, personnel of the Bureau of Public Boads. Also, in the actual administration of the project, some directives to the plaintiff (or its subcontractor) regarding important matters were issued orally in the first instance by personnel of the Bureau of Public Boads, and were then confirmed in writing by the Sudanese resident engineer.
The Sudanese Construction Company, which was the plaintiff's subcontractor for the performance of the earthwork items under the prime contract, began laying the aggregate base sometime between October 1 and October 15,1960.
The aggregate for the road base was excavated mechanically from designated areas; it was loaded on vehicles and delivered to the job site; and it was dumped on the roadway for incorporation in the road base, without being screened or sieved. However, in those instances where the aggregate from a particular borrow area would not, if used alone, make a suitable road base because of an excess of fines, the plaintiff (or its subcontractor) was required, after such aggregate was dumped on the roadway, to add to it and blend in with it coarser material from another source, so that the blended aggregate would provide a suitable road base in accordance with FP-57. The addition and blending of the coarser material were accomplished by the use of machinery.
Instructions for the addition and blending of aggregate, as indicated in the preceding paragraph, were issued to the plaintiff (or its subcontractor) by the Sudanese resident engineer. However, the latter official acted upon the advice of personnel of the defendant's Bureau of Public Boads.
The plaintiff's project manager complained about the requirement with respect to the addition and blending of aggregate ; and on November 15,1960, he notified the Sudanese resident engineer that "Under the circumstances we must advise that we shall place a claim for the extra costs incurred in performing this item in the manner instructed by you ."
The primary question in connection with the plaintiff's claim relative to the aggregate base is whether the requirement concerning the addition and blending of aggregate, as previously described, was inconsistent with and violated General Tally's note, as incorporated in the contract, to the effect that the aggregate base was to consist of "Unseived [sic] machine loaded aggregate placed and compacted on prepared roadbed in accordance with Article 200-1.1" of FP-57. It is our conclusion that this primary question should be answered in the negative.
The evidence indicates clearly that the note quoted in the preceding paragraph was added by General Talley to the plaintiff's bid on the aggregate base item in order to make sure that the plaintiff would not be required to utilize hand labor for the purpose of screening or sieving aggregate for the road base, but, instead, that the plaintiff would be permitted to use for the road base aggregate just as it was after being mechanically excavated from designated borrow areas. In the actual construction process, the plaintiff (or its subcontractor) was permitted to do just what General Talley sought to ensure, i.e., to excavate the aggregate mechanically from designated borrow areas, load it on vehicles, deliver it to the job site, and dump it on the roadway for incorporation in the road base, without being screened or sieved.
The possibility of having to blend mechanically aggregate from different sources in order to achieve a suitable road base meeting the requirements of FP-57 was not raised by General Talley during Ms conference with. Herman Gaines on October 26,1959; and such, a possibility was not negatived, either expressly or impliedly, by the handwritten note which General Talley added to the plaintiff's bid on the aggregate base item. That note merely specified that the aggregate base was to consist of "Unseived [sic] machine loaded" material, and such material was actually used.
Furthermore, the blending of aggregate in the road base was seemingly contemplated by a special provision in the contract between the plaintiff and the Sudanese government, which stated in part as follows:
It is intended that the completed base shall conform to one of the grading schedules in table 200-1 but minor deviations will be permitted if quality is otherwise satisfactory. It is intended that desired gradations will be produced by selection amd blending. [Emphasis supplied.]
Thus, it is not surprising that when the plaintiff's project manager wrote to the plaintiff's home office in New York City concerning the requirement that aggregate from different sources be blended in order to achieve a satisfactory road base, the reply from the plaintiff's home office stated in part as follows:
In checking our files the only qualification to our bid reads as follows: "Aggregate base is understood to be unseived [sic], machine loaded aggregate, placed andcompacted onprepared roadbed in accordance with Article 200-1.1". There is an amendment to Section 10b in Aggregate Base Specification which definitely calls for the material to be blended by the contractor at his own expense. If it is possible to open negotiations for farther payment on this item, you are authorized to negotiate.
It must be concluded, therefore, that the evidence in the record does not sustain the allegation in the petition to the effect that personnel of the defendant violated an "agreement with the plaintiff that only unsieved and mechanically loaded 'pit run' aggregate material need be used" in constructing the base of the demonstration road.
The conclusion stated in the preceding paragraph makes it unnecessary to consider any of the subsidiary questions that would otherwise be involved relative to the aggregate base.
Borrow Course
Another claim presented by the plaintiff in the present litigation is based upon the allegation that personnel of the defendant required the plaintiff "To blend, disc, harrow and rework the borrow materials, notwithstanding that defendant had designated certain 'borrow pits' and agreed that the material from the said borrow pits would be acceptable for use on the said road."
The plaintiff did not point out clearly in the petition, or through its witnesses at the trial, just how the quoted requirement with respect to the borrow material violated any agreement between the plaintiff and the defendant or the plaintiff's contract with the Sudanese government.
The original contract between the plaintiff and the Sudanese government called for the placement by the plaintiff of an estimated quantity of 330,000 cubic meters of "Borrow Excavation (Case 1)" at a unit price of 33 cents per cubic meter. The estimated quantity was later increased when arrangements were made to extend the demonstration road for an additional distance of kilometers. The work of placing the borrow course was to be done in accordance with FP-57, the Standard Specifications for Federal Boad Projects, promulgated by the defendant's Bureau of Public fioads.
The borrow course of a roadway is the subbase for the aggregate base. It is usually constructed of whatever type of local earth that is available, such as sand or clay, but it should have a sufficiently low plasticity index to provide a stable subbase when the completed road is subjected to the passage of heavy vehicles or wet weather, and it should be of such a consistency as to be capable of compaction prior to the placement of the aggregate base upon it.
The borrow course for the initial 21-kilometer section of the demonstration road was laid by the plaintiff's subcontractor, the Sudanese Construction Company. The subcontractor began this work sometime before February 29,1960, and completed the borrow course for the initial 21-kilometer section of the road in February 1961. The borrow course for the 8 %-kilometer extension of the demonstration road was laid by the plaintiff in conjunction with the subcontractor.
The material for the borrow course was taken from borrow pits designated by the Sudanese resident engineer, acting on the advice of personnel of the defendant's Bureau of Public Roads. Some of the borrow thus obtained was a very plastic clay material from alluvial deposits along the Nile River; and as such material was dumped on the roadway for use on the borrow course, the plaintiff (or its subcontractor) was required by the Sudanese resident engineer — acting upon the advice of personnel of the defendant's Bureau of Public Roads — to add some sand to the clay for the purpose of lowering the plasticity index, to blend the sand and clay together mechanically, and then to water and compact the blended material. On the other hand, some of the designated borrow areas consisted of sand; and in those situations, after the sand was dumped on the roadway for use in the borrow course, the plaintiff (or its subcontractor) was required to add some clay to the sand in order to make it more compact-able, to blend the sand and clay together mechanically, and then to water and compact the blended materials.
The evidence in the record does not prove that the Sudanese resident engineer, or the personnel of the defendant's Bureau of Public Roads, went beyond .the requirements of the contract between the plaintiff and the Sudanese government, or violated any agreement between the plaintiff and the defendant, in requiring the plaintiff (or its subcontractor) to blend mechanically borrow materials from different sources in order to achieve a borrow course which was capable of being compacted and would provide a stable subbase for the aggregate base, and thus meet the requirements of FP-57.
It necessarily follows that the plaintiff is not entitled to recover on its claim relative to the borrow course.
Equipment
As previously indicated in the introductory portion of this opinion, the project agreement, as revised, between the defendant and the Sudanese government provided that the defendant would procure the major items of construction equipment which, would be needed in the construction of the demonstration road and would deliver them to the Sudanese government at Port Sudan; that the ownership of such equipment was to be vested in and retained by the Sudanese government; and that the Sudanese government would make the construction equipment available to the contractor selected for the job.
Also, the contract that was subsequently entered into between the Sudanese government and the plaintiff for the construction of the demonstration road included an "equipment and rental list" describing 42 pieces of equipment that were to be furnished by the Sudanese government to the plaintiff for use in the performance of the work under the contract, and specifying the hourly rental rates in Sudanese pounds that were to be paid by the plaintiff for the several pieces of equipment. The equipment was to be operated and maintained at the expense of the plaintiff.
It should also be mentioned in this connection that the subcontract between the plaintiff and the Sudanese Construction Company, covering the performance by the latter of the earthwork items under the prime contract, contemplated that the earth-moving equipment which the Sudanese government was to furnish the plaintiff would, in turn, be furnished by the plaintiff to the subcontractor, and that such equipment would be operated and maintained at the expense of the subcontractor.
These several documents included, of course, an implied requirement that the equipment should be made available when it was reasonably needed for the construction of the demonstration road. However, this requirement was not fulfilled.
The evidence in the record indicates that there was a great deal of delay in the delivery of government-furnished earth-moving equipment to the job site for use by the subcontractor in the construction of the demonstration road. The first piece of such equipment was made available on December 29, 1959; other pieces of equipment were made available in January, February, May, and June of I960; and the last piece of such equipment was not made available until October 20, 1960, which, was about a year after the commencement of the work.
While awaiting the delayed delivery of the earth-moving equipment provided for under the project agreement, the prime contract, and the subcontract, the subcontractor improvised by renting other equipment, either from the Sudanese Ministry of Works or 'from other sources in the Sudan. Equipment was rented by the Ministry of Works to the subcontractor on a day-to-day basis, so that it could be taken back by the Ministry when needed on other work or could be returned by the subcontractor when not needed on the project. Some of the equipment thus obtained by the subcontractor was old, and was more expensive to operate and maintain than new equipment would have been.
The evidence in the record clearly warrants a general finding to the effect that the subcontractor incurred additional expenses because of the delay in receiving government-furnished earth-moving equipment. However, no actual cost figures from the subcontractor's books and records were presented at the trial, and there is no way of determining with reasonable accuracy the amount of the subcontractor's additional expenses attributable to the delay in receiving government-furnished equipment.
Furthermore, no evidence was presented to establish that the plaintiff has made any extra payment to the subcontractor, or is obligated to make any extra payment to the subcontractor, because of the additional expenses incurred by the subcontractor due to the late delivery of government-furnished equipment. The lack of such evidence is doubtless due to the circumstance that the subcontract contained an exculpatory provision expressly stating that:
Subcontractor shall not be entitled to, and hereby waives, any and all damages which it may suffer bv reason of Eaymond or Owner [Sudanese government] hindering or delaying Subcontractor in the performance of the work, or any portion thereof, from any cause whatsoever.
In order for any recovery to be allowed in the present action on account of the extra expenses incurred by the subcontractor due to the delay in the delivery of government- furnished equipment, it would be necessary to be consistent with a valid claim by the subcontractor against the plaintiff under the subcontract. In the absence of that liulr, there is no basis upon which to impose on the defendant in the present action responsibility for the extra expenses incurred by the subcontractor due to the late delivery of government-furnished equipment.
The evidence in the record shows that was layed a total of 142 days in completing the work under the contract for the construction of the demonstration road, and that the plaintiff's own expenses, in the form of indirect costs, were increased to the extent of $22,319.57 as a result of such delay. The plaintiff originally attributed the entire 142 days, and all of its extra expenses, to the defendant's delay in delivering equipment that was needed for the performance of the work under the contract.
However, the evidence shows that although the delay in the delivery of government-furnished equipment to the job site was partially due to delay on the part of the defendant in procuring such equipment and delivering it to the Sudanese government at Port Sudan, there was also delay on the part of the Sudanese government in transporting the equipment from Port Sudan to the j ob site.
Furthermore, the evidence shows that the overall delay in completing the work under the contract was not only attributable to the late delivery of government-furnished equipment to the job site, but was also partially due to the subcontractor's inexperience, inefficiency, and failure to use available equipment to maximum advantage.
Actually, there is no basis in the record on which a precise allocation of responsibility for the overall delay in completing the work under the contract can be made as between the defendant's delay in procuring equipment and delivering it to the Sudanese government at Port Sudan, the Sudanese government's delay in transporting equipment from Port Sudan to the job site, and the subcontractor's shortcomings. In such a situation, it seems that the only feasible thing to do is to make a finding in the nature of a jury verdict that the defendant's delay in procuring equipment and delivering it to the Sudanese government at Port Sudan was responsible for one-third of the overall delay in the completion of the work •under the contract and, hence, for one-third of the extra indirect expenses that were incurred by the plaintiff because of such overall delay, or $7,440.
In this connection, the defendant says that its commitment with respect to the furnishing of equipment was made to the Sudanese government in the project agreement, as revised, and that the plaintiff was not a party to such agreement. However, there was, in addition, a direct contractual tie between defendant and plaintiff. The letter of understanding with the International Cooperation Administration (referred to at the beginning of this opinion) constituted a contract directly between the two parties now before us. The Government argues that, so far as the United States was concerned, that agreement was strictly limited to a promise by the defendant to pay a portion of the contract price in dollars. But taken in context and with the surrounding circumstances, we think that there was also implied in the letter of understanding an undertaking (directly to the plaintiff) on the part of the Federal Government to perform those things, bearing on plaintiff's work, which the defendant had told the Sudanese government and the plaintiff that it would do. Not only did the International Cooperation Administration solicit the plaintiff's interest in the work (finding 11), but the formal invitation for bids characterized "the proposed project" as "a joint effort by the Ministry of Works, an agency of the Government of the Republic of the Sudan, and the International Cooperation Administration (IOA), an agency of the Government of the United States of America". Defendant's employees and representatives were intimately connected with the entire course of the project and often dealt directly with plaintiff's representatives. The letter of understanding provided that the United States would pay its share directly to the plaintiff, and the plaintiff's contract with the Sudanese government provided for an appeal of disputes "which will directly affect the amount of U.S. dollar payments under the contract" to the Director, ICA. In these circumstances, the case is very different from D. R. Smalley & Sons, Inc. v. United States, 178 Ct. Cl. 593, 598, 372 F. 2d 505, 508, cert. denied, 389 U.S. 835 (1967), in which the "defendant did not sign the contracts with the plaintiff and there were no negotiations or communications whatsoever between them". Here, in contrast, there was a written agreement directly between plaintiff and defendant, and in context that written agreement should be read as impliedly binding the Government to the plaintiff to perform what the Government had squarely told plaintiff (as well as the Sudanese government) that it would perform.
The defendant then argues that, in any case, the plaintiff's recovery is subject to the limitation in the contract between the plaintiff and the Sudanese government that "the total of U.S. dollar payments to the Contractor in no event shall exceed $310,000.00" (emphasis supplied), and to the limitations in the letter of understanding that "It is understood that ICA's maximum obligation in financing the Contract shall not exceed 310,000 U.S. dollars, unless ICA shall, by written notice to you , agree to increase its maximum obligation hereunder", and that "It is understood that no non-dollar costs under the Contract will be financed by ICA." We have held, however, that maximum limitations of this type "do not ordinarily control where the contractors suffer additional costs because of the Government's fault". Scherr & McDermott,, Inc. v. United States, 175 Ct. Cl. 440, 450, 360 F. 2d 966, 971 (1966) (also involving a direct contract with ICA). To the same effect are Anthony P. Miller, Inc. v. United States, 172 Ct. Cl. 60, 348 F. 2d 475 (1965), and Boss Construction Corp. v. United States, 183 Ct. Cl. 694, 392 F. 2d 984 (1968). The inclusion, in this instance, of the words "in no event" in the project agreement (but not, it may be noted, in the letter of understanding) does not persuade us that the maximum limitation was intended to apply even though the overrun was directly due to the Government's failure to perform. As in our prior decisions on this point, we refuse to attribute to the contracting parties "an intention that would produce an impractical, unjust, and unworkable result unless the intention appears clearly on the face of the [contract] or in the supporting record." Anthony P. Miller, Inc. v. United States, supra, 172 Ct. Cl. at 68, 348 F. 2d at 480; Ross Constr. Corp. v. United States, supra, 188 Ct. Cl. at 698, 392 F. 2d at 986. Accordingly, plaintiff is entitled to recover the entire sum of $7,440, which we have found is the amount of damage attributable to the defendant. Judgment will be entered for that sum.
Findings ok Fact
The court, having considered the evidence, the report of Trial Commissioner Mastin G. White, and the briefs and arguments of counsel, makes findings of fact as follows:
General
1. (a) The plaintiff is a corporation organized and existing under the laws of Liberia. It is a wholly owned subsidiary of Raymond International, Inc., a corporation organized and existing under the laws of New Jersey.
(b) Luring the period that is involved in the present case, both the plaintiff and its parent corporation maintained their headquarters or home offices in New York, New York.
2. (a) During the period 1959-1962, the defendant's International Cooperation Administration, in furtherance of the defendant's foreign aid program, maintained in The Republic of the Sudan a mission that was known as the United States Operations Mission and was frequently referred to as "USOM." This mission, which operated under the general supervision of the defendant's embassy at Khartoum, was headed by a director, who was stationed in Khartoum. The USOM handled the technical, financial, and other assistance that was provided by the defendant to the Sudanese government.
(b)Herman Gaines, an employee of tbe Bureau of Public Roads, was assigned to tbe United States Operations Mission in tbe Sudan. He was the principal official of tbe mission with respect to highway matters. Mr. Gaines served under the administrative supervision of the Director of the USOM.
3. (a) Sometime prior to April 1959, the United States Operations Mission proposed to officials of The Republic of the Sudan that a demonstration road project be constructed in the Sudan, with financial assistance from the defendant. The idea of a demonstration road project originated in the USOM; and the idea was developed in a general way by Herman Gaines and other USOM personnel before the project was proposed to the Sudanese government.
(b) At the time referred to in paragraph (a) of this finding, there were no modern highways in the Sudan. It was proposed by the USOM to the Sudanese government that the demonstration road be constructed as a modern blacktop highway in the vicinity of Khartoum, the capital of the Sudan, so that the road would become known to the government officials and other residents of Khartoum, and would demonstrate to them what was involved in the construction of a modern highway, what it would cost, and what benefits were to be derived from it. It was also thought by personnel of the USOM that the construction of a segment of a modem road as a demonstration highway would educate the Sudanese in contracting for, administering, and financing a road project, and also in the engineering aspects of road-building to some extent.
(c) The proposal by the United States Operations Mission to the Sudanese government contemplated that the specific location for the demonstration road would be selected by the Sudanese government, with the concurrence of the USOM.
(d) At the time when the proposal was made by the United States Operations Mission for the construction of a demonstration road project, it was expected by the USOM that the road would cost less than half a million dollars.
4. (a) The government of The Republic of the Sudan approved the proposal referred to in finding 3 with respect to the construction of a demonstration road project.
(b) With the concurrence of the United States Operations Mission, the Sudanese government decided that the demonstration road would start at Khartoum North and go approximately 21 kilometers in a northerly direction to Khogalab. The latter is situated in a rather large agricultural area near the Nile River, downstream from the confluence of the Blue Nile and the White Nile. The Sudanese government contemplated that farmers living in the agricultural area would use the demonstration road to bring agricultural products into Khartoum, and thus the road would tap an important agricultural area. Also, it was thought by the Sudanese officials that the demonstration road would ultimately become a segment of a highway from Khartoum to Port Sudan, and thus would be part of a modem highway system for the Sudan.
5. While on a business trip to Khartoum in April 1959, B. B. Talley, a retired brigadier general of the U.S. Army, who at that time was president of the plaintiff and vice president of the plaintiff's parent corporation, learned of the proposal for the construction of a demonstration road project in the Sudan. He received this information from the Director of the United States Operations Mission in the Sudan.
6. General Talley visited Khartoum again in May 1959. At that time, he obtained further information regarding the proposed demonstration road. He learned that the road would be a modern black-top road; and he was informed (erroneously, as it later turned out) that invitations for tenders or bids with respect to the construction of the road would probably be issued late in June 1959.
7. (a) On or about June 25,1959, the defendant, in furtherance of its foreign aid program, entered into an agreement with the government of The Republic of the Sudan. The agreement was signed for the defendant by the Director, USOM, and for the Sudan by the Commissioner for development, Ministry of Finance and Economics.
(b) The agreement referred to in paragraph (a) of this finding (hereinafter usually called "the project agreement") provided that the parties thereto would cause to be con structed a demonstration road project approximately 21 kilometers in length from Khartoum North to the Khogalab School, in the Sudan.
(c) The project agreement contained the following provisions (among others):
Project Description a/nd Explanation
The Gr.O.S./USOM [Government of the Sudan/ United States Operations Mission] operating under project 75-81-004 is creating a Sudanese Road Organization within the Ministry of Works. This organization is to prepare as part of its initial duties _ comprehensive road construction proposals for consideration of the G.O.S. Development authorities. These _ proposals will embody detailed quantities and cost estimates for the recommended roads of various types throughout the country. Since the Sudan has no prior consequential experience in modern road construction having no major resident contractors who have had previous opportunity to contract for construction against plans and designs requiring modern construction techniques, it has been determined to contract on a demonstration basis for the construction of a section of road to be built to. standards which will provide construction data for use in the formulation of the aforementioned comprehensive construction proposals. This demonstration project shall in addition to provision of construction data, induce an interest on the part of U.S. and local firms to create the competence within the Sudan which would be able to construct highways using modem techniques. The staff under project 75-81-004 will be responsible for detailed construction plans and will provide engineering supervision to the construction to be undertaken by contract. ‡ ‡ $
The financing and attendant arrangements for this construction are as follows:
Total Financing-$1,460,000
U.S. Dollar Financing_ 560,000
Contract Services_ 560,000
* ‡ It is understood that this contract will be between the G.O.S. Ministry of Works and the Construction Firm. Contract is subject to initial review and clearance by USOM/S and ICA/W in accordance with the procedures concerning use of ICA funds for Contract Services.
Sudanese Pound, Financing LB SIS,WO=$900,000
The direct Sudanese Pound Financing shall for the initial increment be wholly supplied from Special Account (Counterpart) funds.
This amount shall be earmarked for release by the G.O.S. to the Ministry of Works to meet the Sudanese Pound payment requirements as may be specified under contract for the road construction outlined under U.S. Dollar Financing above.
All Counterpart release requests must hear the approval of the Project Director and Senior USOM Eepresentative then submitted to the G.O.S. Development Branch and USOM Eepresentative then submitted to the G.O.S. Development Branch and USOM for final approval and issuance under the signature of the Ministry of Finance and USOM Director/Controller of the Counterpart Eelease Authorization form. *
B. The Department of Eoads shall appoint a Project Director to have operational responsibility for the entire project; or, in instances where the project has two or more sub-projects, the Department may appoint or cause to be appointed Sub-Project Directors. The Project Director of Sub-Directors will, in addition to operation responsibilities, be the contact point in the Government of Sudan for the Senior USOM Technical Eepresenta-tive assigned to assist in execution of the Project.
8. The specifications for the proposed demonstration road, and the other contract documents that were to be mailed out with the invitation for tenders or bids, were prepared in the office of Herman Gaines and by personnel of the defendant, in conjunction with the Ministry of Works of the Sudan. The specifications and the other contract documents were modeled principally on documentary material customarily used by the defendant's Bureau of Public Eoads.
9. (a) General Talley was in the Sudan again in August 1959. At that time, the route for the proposed demonstration road had been selected; and General Talley went over part of the route in a jeep with one of Herman Gaines' assistants. Due to recent rains and the muddy condition of the road, they could not go all the way.
(b) On the occasion of the August 1959 visit, General
Talley was permitted to examine the plans for the demonstration road.
(o) During his August 1959 visit to the Sudan, General Talley discussed with personnel of the defendant the matter of the materials that were to be used in the construction of the demonstration road. He was shown certain borrow areas that had been designated by Sudanese officials, acting on the advice of personnel of the defendant's Bureau of Public Beads, as sources of aggregate that would be used in constructing the base of the demonstration road. He looked at some of the material in such designated areas, but he did not make any engineering tests. He noted that the aggregate material in the designated borrow areas which he examined was primarily a desert sand, and was quite fine. This caused General Talley some concern, because it was his opinion that the material contained an excess of "fines" and was deficient in coarse material.
(d) General Talley was aware that a road base made of aggregate containing an excess of fines would provide shoulders to the road that would not stand up under usage.
(e) General Talley was also aware that the borrow areas which he examined would not provide a sufficient amount of aggregate for the base of the entire demonstration road.
10. (a) Bevision No. 1 to the project agreement (see finding 7) was dated August 31,1959. It reduced tthe direct dollar financing, earmarked for "contract services," from $560,000 to $210,000, a reduction of $350,000; but it provided for the direct dollar financing of "commodities" to the extent of $850,000.
(b) Bevision No. 1 provided in part as follows:
This revision reduces U.S. dollar funds originally earmarked for Contract Services and provides for purchase of construction equipment to be used by the contractor as IOA/W has advised that equipment should be procured and owned by GOS and made available to the contractor. The unit price estimate has been revised to reflect advantage to the contractor of having construction equipment furnished by GOS. Equipment will be furnished to the contractor free of any rental charge. Operating and maintenance costs will be the responsibility of the contractor, but operation and maintenance will be supervised by GOS engineers and equipment specialists.
$ $ & $ $
The financing and attendant arrangements for this construction are as follows:
Total Financing_$1,460,000
U.S. Dollar Financing_ 560,000
Commodities_ 350,000
This amount is the estimated U.S. dollar acquisition cost on a C&F Port Sudan basis of construction equipment which shall be subsequently determined by the Project Director and Senior USOM Representative .
Procurement will be by U.S. Bureau of Public Roads. Specification details will be prepared by U.S. Bureau of Public Roads. All commodities will be consigned to the Ministry of Works, Government of Sudan, and title to all commodities will be vested in that agency.
The purpose of this procurement being to provide the construction firm to be contracted under this project with the major items of construction equipment required for the Khartoum North-Khogalab Road, it is understood that the equipment so procured shall be turned over to the contractor and retained for his use as long as needed in execution of this project.
$ $ ‡ $
The estimated unit prices are intended to reflect the advantage to the contractor of having major items of equipment furnished as is being provided under this project estimated at $360,000 in cost.
*
L. The construction firm employed under this contract shall be required to consider itself as a part of the program to foster the economic development of Sudan and their operations shall be so conducted as to be sensitive to this responsibility.
(c) The estimated unit prices were reduced substantially by reason of the provision for the furnishing of construction equipment to the prospective contractor. For example, the estimated unit price for the item of "Borrow Excavation, Case 1" was reduced from 60 cents per cubic meter to 45 cents per cubic meter; and the estimated unit price for the item of "Aggregate Base" was reduced from $1 per cubic meter to 75 cents per cubic meter. The total estimated cost was reduced from $1,460,000 to $1,110,000.
11. Under the date of September 4,195,9, the headquarters of the International Cooperation Administration in Wash ington, D.C., sent a form letter corporation in New York City and to other construction companies. The form letter stated in part as follows:
The Ministry of Works of the Government of the Sudan proposes in the near future to issue invitations for bids to selected U.S. and Sudanese contractors for the construction of a demonstration highway in the Sudan. Pursuant to agreements entered into between the Ministry and the International Cooperation Administration (ICA), certain of the costs of the contract are to be financed by ICA. This letter is addressed to you to determine your interest in submitting a bid on the project.
The project for a mately 21 kilometers from the end of pavement in Khartoum North to Khogalab School.
# * # * ❖
The work will be performed pursuant to a unit price contract to be entered into between the successful bidder and the Ministry of Works, Government of the Sudan. The contractor will be furnished certain road building equipment at a value of approximately $850,000.00 which is bemg purchased by the Government of the Sudan for this purpose and which is to be returned to the Government upon construction of the project. Contractor will be expected to provide an effective maintenance program in order that the equipment when returned to the Government have the maximum remaining life. The list of the equipment to be provided will also be available for inspection at the places noted above.
Payments basis of progress estimates of completed units of work. If the contract is awarded to a U.S. firm, payments will be made in Sudanese pounds and U.S. dollars in the pound-to-dollar proportion established by its tender, not to exceed the maximum dollar amount stated in its tender. However, the total of U.S. dollar payments to the contractor in no event shall exceed $210,000.00.
12. The plaintiff replied to the inquiry mentioned in finding 11, and indicated that it was interested in submitting a tender.
13. The project agreement, as modified by Kevision No. 1 (see findings 7 and 10), was further modified by Eevision No. 2, which was issued on September 12,1959. This revision reduced the direct U.S. dollar financing for the purchase of road-building equipment from $850,000 to $250,000, but it also provided that additional items of equipment would be purchased in the Sudan with counterpart funds not to exceed the equivalent of $165,000. This revision did not substantially reduce the details of such procurement, other than the source of the funds, and such procurement remained under the control of the defendant's Bureau of Public Boads.
14. (a) On or about September 21, 1950, the plaintiff received an invitation for tenders or bids in connection with the construction of the proposed demonstration road in the Sudan. The invitation, which was issued by the Sudanese Ministry of Works, included a bill of estimated quantities, a schedule of estimated prices, a list of equipment to be made available to the successful bidder, general conditions and special provisions of the proposed contract, and other documents and specifications relating to the demonstration road project.
(b) The invitation stated that the deadline for the submission of tenders was noon on October 27,1959. They were to be submitted to the Sudanese Ministry of Works in Khartoum.
(c) The invitation further provided in part as follows:
The proposed project will be a joint effort by the Ministry of Works, an agency of the Government of the Be-public of the Sudan, and the International Cooperation Administration (ICA), an agency of the Government of the United States of America.
All borrow pits for embankment and all base material pits and all rights of way for haul roads and all work areas will be furnished by Government at no cost to the contractor. The contractor will construct and maintain haul roads to material pits.
The Ministry of Works will furnish to the contractor for his use on the project certain road building equipment. The contractor will be charged a monthly rental in Sudanese pounds for the equipment at rates established by the Ministry of Works. The contractor will be expected to provide an effective maintenance program in order that the equipment, when returned to the Ministry, shall have a maximum remaining useful life. A list of equipment and rental rates are attached hereto.
15. After receiving the invitation for tenders referred to in finding 14, the plaintiff began the preparation of its own estimate of the costs tion of the demonstration road, and the preparation of a tender to be submitted on the proposed contract. This work was concluded by October 20, 1959. General Talley went to Khartoum a few days later for the purpose of submitting the plaintiff's tender. He arrived in Khartoum on Sunday, October 25, 1959.
16. (a) After arriving in on General Talley called Herman Gaines and made an appointment to see him the next day, October 26.
(b) On the morning of October 26, 1959, went to see Herman Gaines, and they discussed the specifications for the demonstration road project. General Talley asked Mr. Gaines for a clarification of, inter alia, the specifications with respect to aggregate and overhaul.
(c) As indicated in finding 9 (c), viously examined some of the borrow areas designated for the procuring of aggregate to be used in constructing the base of the demonstration road, and he had noted that the material in such borrow areas contained an excess of fines and was deficient in coarse material. In connection with the submission of the plaintiff's tender, General Talley wanted to find out whether it would be necessary to utilize hand labor for the purpose of screening or sieving such material in order to eliminate the excessive fines, or whether it was intended under the proposed contract that pit-run aggregate would be used. Pit-run aggregate is aggregate just as it is dug out of a pit. It is excavated mechanically, and is loaded on a vehicle and delivered to the job site for use in the construction process, without being screened or sieved by hand labor. Herman Gaines informed General Talley at the conference on October 26,1959 that it was intended under the proposed contract that pit-run aggregate would be used in the construction of the road base, without screening or sieving it.
(d) As General Talley was aware areas for aggregate which he had examined did not contain enough material for the construction of the entire road base, and that it would be necessary to obtain part of the aggregate from somewhere else, he wanted to find out whether the contractor would be paid for any overhaul of aggregate (i.e., haulage for any distance greater than 1,000 feet). He mentioned this subject to Herman Gaines at the conference on October 26, 1959. Mr. Gaines informed General Talley that the contractor would be paid for any overhaul of aggregate for the road base.
17. As a result of General Talley's conference with Herman Gaines on October 26, 1959, General Talley modified the bid that had been prepared on behalf of the plaintiff relative to the aggregate base. On the basis of the understanding that pit-run aggregate would be used for the road base, thus eliminating the factor of hand labor for screening or sieving the aggregate, and that the contractor would be paid for any overhaul of aggregate, General Talley reduced the plaintiff's bid on the aggregate base item from a unit price of $3.78 per cubic meter, as theretofore tentatively fixed by the plaintiff, to a unit price of 37 cents per cubic meter. Furthermore, in order that the bid might conform to his understanding that no screening or sieving of the aggregate to be used in the construction of the road base would be required, General Talley placed a handwritten asterisk next to the item relative to the aggregate base on the bid, with the asterisk referring to a handwritten note added by General Talley on the back of the same sheet and stating as follows: "Unseived [sic] machine loaded aggregate placed and compacted on prepared roadbed in accordance with Article 200-1.1" (of FP-57, the Standard Specifications for Federal Koad Projects, promulgated by the defendant's Bureau of Public Boads).
18. General Talley timely submitted a tender or bid on behalf of the plaintiff to an official of the Sudanese Ministry of Works on October 27, 1959.
19. After the tenders on the contract for the construction of the proposed demonstration road were submitted by the plaintiff and other persons, the plaintiff was selected as the successful bidder. The selection was made jointly by the Sudanese Director of Works and Herman Gaines, acting for the Director of the United States Operations Mission. The selection was based solely on the factor that the plaintiff submitted the lowest bid.
20. The plaintiff's tender was accepted on or about October 27, 1959.
21. Ai letter of understanding was entered into between the plaintiff and the International Cooperation Administration under the date of November 2, 1959. It provided in part as follows:
The Ministry of Works, an agency of the Government of Sudan, in accordance with separate arrangements between it and the International Cooperation Administration has requested ICA to finance certain dollar amounts payable to you under a Contract between Ministry and Contractors designated as Contract No. GQS-PWD-1-59/60 ICAc-1319. "Interpretation of Terms" set forth in Paragraph I, Clause 1, of the General Conditions for Contract No. GOS-PWD-1-59/60, ICAc-1319, applies to this letter. .
ICA requires, as or financing, agreement by you to certain conditions as follows:
1. Conformity — You will fully and completely perform said Contract in accordance with its terms and comply in all respects with the terms and conditions of this Letter of Understanding.
2. Maximum that ICA's maximum obligation in financing the Contract shall not exceed 175,000 U.S. dollars, unless ICA shall, by written notice to you at the above address, agree to increase its maximum obligation hereunder.
3. Payment — For performed under the Contract payment of U.S. dollars shall be made by the Director, USOM, upon submission of properly executed voucher SF-1034, m original and three copies supported by a signed copy of the Certificate described in Paragraph 49(B) of the Contract, evidencing approval by the Director.
«i* «J»
5. Non-Dollar Costs — It is understood that no non-dollar costs under the Contract will be financed by ICA.
22. On or about November 11, 1959, the plaintiff entered into a contract with the government of The Republic of the Sudan for the construction of the demonstration road. The contract was numbered GOS-PWD-1-59/60, ICAc-1319.
23. The plaintiff's contract with the Sudanese government provided in part as follows:
This deed is made the iith day oe November 1959 between The Ministry of Works of the Gover3iment of the Sudan (hereafter referred to as the "Ministry") as represented by its Director and Raymond Constructors of Africa, Ltd. (hereinafter called "Contractors") a corporation organized and existing under the laws of Liberia, having its principal office at 80 Broad Street, Monrovia, Liberia.
Wytnesseth
Whereas, Ministry desires to have a demonstration road from Khartoum North to Khogalab School in the Khartoum Province of the Sudan constructed;
_ Whereas, the International Cooperation Administration, an agency of the Government of the United States, has agreed with the Government of the Sudan to provide certain assistance in connection with said road; and
Whereas, the Contractors represent that they are qualified, willing and able to construct said road; and
Whereas, previous to-the execution of this Deed the Contractors have examined the plans, drawings and specifications and related materials describing said road; and
Whereas, previous to the execution of this Deed the Contractors have visited and examined the sites of the work and have satisfied themselves as to any and all conditions and circumstances pertinent to the construction by them of said road .
$ * $ ‡ $
Now therefore, in consideration of the premises, the Contractors do hereby agree to construct and maintain the aforesaid road and do all other things necessary thereto in strict accordance with the following documents, for and in consideration of the payment provided for in said documents.
The following changes were made in the contract before it was signed by the parties hereto:
None.
Aggregate base is understood to be unseived [sic] machine loaded aggregate, placed and compacted on prepared roadbed in accordance with Article 200-1.1.
Bill or Quantities and Schedule or
Item Estimated Quantity Unit Unit Estimated Price* Total Price*
Common Excavation.- 30,000 Cu. Meter 0.28 8,400.00
Borrow Excavation (Case 1) 330,000 Cu. Meter 03.38 108,900.00
Overhaul on excavated material... 2,100,000 Cu. Meter 0.09 189,000.00 Kilometer.
Water (embankment & base)_ 60,000 1,000 Imp. Gal. 2.66 127,600.00 Units.
Rolling (embankment & base)_ 5,000 hours.. — . 4.60 23,000.00 Aggregate Base _.......__ 76,000 Cu. Meter..... 0.37 27,760.00
Estimated Contract Price*. $760,466. —
*Note: All prices shall be stated in either Sudanese pounds or U.S. Dollars. Maximum Amount to be paid in U.S. Dollars..... Balance to be paid in Sudanese Pounds.— (Estimated Contract Price Less Maximum Dollar Amount) $176,000.00 LS 676,466.00
24. Paragraph 56 of the general conditions of the contract between the plaintiff and the Sudanese government provided in part as follows:
56. Disputes
(A) Any dispute arising under the Contract he submitted to the Director of the Ministry of Works and the Director, TJSOM. The Contractors shall be granted a reasonable opportunity to make oral and written presentations of their positions to the said Direcotrs [sic], who shall thereafter promptly render their decision in writing to the Contractors. The decision of the said Directors shall be final and conclusive unless an appeal is taken therefrom as hereinafter provided.
(B) Within thirty have rendered their decision, the Contractors may file a written appeal (with copies to the said Directors) stating their position with respect to the despute [sic] and the basis for their dissatisfaction with the decision rendered. As to disputes the resolution of which will not directly effect [sic] the amount of U.S. dollar payments under the contract, the appeal shall be made to a Board of Arbitrators consisting of three (3) members, one of whom shall be designated by the Director, another by the Contractors and the third by the members so designated by the Director and the Contractors. As to disputes the resolution of which will directly effect [sic] tlie amount of U.S. dollar payments under the contract, the appeal shall be made to the Director, ICA, in Washington, D.C. On any such appeal, the parties shall be afforded an opportunity to he head [sic] and to give evidence. Pending final decision on any appeal hereunder, the Contractor shall proceed diligently with the work and in accordance with the decision of the said Director.
(C) In the event of any such appeal, the Board or Director, ICA, as the case may be, shall have full power to open up, review and revise any decision, opinion, direction, certificate of caluation [sic] involved in the dispute, and neither party shall 'be limited in the proceedings to the evidence or arguments put before the said Directors for the purpose of obtaining their devision [sic] so appealed from. The decision of the Board or Director, ICA, as the case may be, shall be final and binding on the parties.
25. Addendum No. 1 to general conditions of the contract between the plaintiff and the Sudanese government provided in part as follows:
Paragraph 47 (A): Add a second subparagraph as follows:
"If the Contractor is a Sudanese firm, payments will be made wholly in Sudanese poundSj except that if the Contractor has incurred proven foreign exchange costs, approved in advance by the Engineer, he shall be entitled to receive payment for completed work in U.S. dollars in an amount not to exceed the lesser of (a) such proven foreign exchange costs or (b) the maximum dollars amount stated in this [sic] Tender. If the Contractor is a U.S. firm, payments will be made in Sudanese pounds and U.S. dollars in the pound-to-dollar proportion established by his Tender, not to exceed the maximum dollar amount stated in his Tender. Regardless of whether the Contractor is a Sudanese or U.S. firm, however, the total of U.S. dollar payments to the Contractor in no event shall exceed $310,000.00. Where conversion between pounds and dollars is required; it shall be made at the official rate of exchange prevailing in Khartoum at the time of payment to the Contractor."
26. (a) The special provisions of the contract between the plaintiff and the Sudanese government stated in part as follows:
10. Aggregate Base
Section 200 of FP-57 is incorporated herein with the following revision:
* S:
(B) Article 200-2.3, subparagraphs 1 and 6 — references to table 200-1 are deleted and the following added, "nature of material and grading requirements will be furnished by the Engineer as the work progresses."
(b) Addendum No. 1 to the special provisions stated in part as follows:
Item 10(B): Add, "It is intended that the completed base shall conform to one of the grading schedules in table 200-1 but minor deviations will be permitted if quality is otherwise satisfactory. It is intended that desired gradations will be produced by selection and blending."
(c) The contract between the plaintiff and the Sudanese government included an "equipment and rental list" that described 42 pieces of equipment that were to be furnished by the Sudanese government to the plaintiff for use in the performance of the work under the contract, and specified the hourly rental rates in Sudanese pounds that were to be paid by the plaintiff to the Sudanese government for the several pieces of equipment. The equipment was to be operated and maintained at the expense of the plaintiff.
27. On December 9, 1959, an official of the plaintiff explained how the plaintiff planned to carry out its obligation under its contract with the Sudanese government as follows:
This week we received a tabulation of the sub-contract bids that have been developed in Khartoum for the above project.
In the event we are not able to sub-let the remaining items, for prices equal to or less than those we bid, the following summary has been made indicating the status of the job as presently indicated.
Sub-contracts have been arranged between the Sudanese Construction Company for the earthwork items and the Sudan Diesel Company for the structural items which aggregate approximately $500,000 out of our total bid of $750,000.
The remaining items of supplying the aggregate base and the surface treatment and asphalt items are still to be done by Raymond in tbe event we are not able to subcontract any or all of these items.
A revised estimate has been made on the basis that we will proceed with the remaining items and concluding our arrangements with the sub-contractors.
Raymond will also provide a minimum overhead during the 18-month period of the job, however, to supervise the sub-contractors and take care of the items of work under our direct supervision.
28. (a) The plaintiff's subcontract with Sudanese Construction Company provided in part as follows:
6. 8fecial Provisions: This subcontract covers the items of work set out below, all as described in the General and Special Conditions and Drawings of Contract No. GOS-PWD-1-59-60, ICAc-1319. shall be determined by Baymond performance of the work, the performance of which has been delayed thereby, shall be extended, in writing, by Baymond.
VII. Extension op time — subcontractor's waiver op damages por delay: In case of any delay caused by Raymond or the Owner, or any delay which is beyond the reasonable control of Subcontractor, the cause of which was not reasonably ascertainable by Subcontractor at the time this Subcontract was entered into, written notice thereof and of the anticipated results shall be given promptly to Raymond by Subcontractor. Failure to give such written notice promptly shall be deemed sufficient reason for a denial of an extension of time by Raymond. Raymond shall notify Subcontractor promptly if, in its opinion, the cause of delay specified is such as to not entitle Subcontractor to an extension of time. After such cause of delay has ceased to exist, Subcontractor shall file with Raymond a statement in writing of the actual delay resulting from such cause. If in the opinion of Raymond, the cause of delay was beyond the reasonable control of Subcontractor and was not reasonably ascertainable by Subcontractor, at the time the Subcontract was entered into, the duration of delay
Subcontractor shall not be entitled to, and hereby waives, any and all damages which it may suffer by reason of Baymond or Owner hindering or delaying Subcontractor in the performance of the work, or any portion thereof, from any cause whatsoever.
(b) The plaintiff's subcontract with the Sudanese Construction Company contemplated that the earth-moving equipment which the Sudanese Government was to furnish the plaintiff would, in turn, be furnished by the plaintiff to the subcontractor. The equipment was to be operated and maintained at the expense of the subcontractor.
29. The personnel of the defendant's Bureau of Public Boads in the Sudan, forming part of the United States Operations Mission, was organized to work with the Sudanese officials in connection with the construction of the demonstration road, and to advise them and instruct them regarding methods of operation. The objective was for the Sudanese officials to handle the administration of the project, and for the personnel of the Bureau of Public Boads to act in the role of consultants. Thus, it was customary for all written directives to the plaintiff (or its subcontractor) to be issued by the Sudanese resident engineer, but with respect to all matters of consequence, he acted after consultation with, and on the advice of, personnel of the Bureau of Public Boads. Also, in the actual administration of the project, some directives to the plaintiff (or its subcontractor) regarding important matters were issued orally in the first instance by personnel of the Bureau of Public Boads, and were then confirmed in writing by the Sudanese resident engineer.
SO. (a) On April 12,1961, the project agreement, as revised (see findings 7, 10, and 13), was further revised so as to provide for the construction of the demonstration road for an additional distance of approximately 8% kilometers from the Khogalab School to Kabbashi Village, thus making the total demonstration road project about 29% kilometers in length.
(b) As revised on April 12, 1961, the project agreement provided that the financing of the demonstration road project by the defendant in United States dollars would total $560,000, of which total $310,000 would be for "Contract Services" and $250,000 would be for "Commodities." The $250,000 figure for "Commodities" was said to be "the approximate U.S. dollar acquisition cost on a C & F Port Sudan basis of major items of construction equipment
31. Under the date of May 10,1961, paragraph numbered 2 of the letter of understanding between the plaintiff and the International Cooperation Administration (see finding 21) was amended "to increase ICA's maximum obligation in financing the Contract, with Supplemental Agreement, from. $175,000 to $310,000."
32. On May 11, 1961, the plaintiff entered into a supplemental contract with the government of The Republic of the Sudan (see findings 22-26 relative to the original contract) providing for the 8%-kilometer extension of the demonstration road. This supplemental contract enlarged the estimated quantities previously set out in the contract; it increased the estimated contract price to $1,158,091.57, increased the maximum amount to be paid in United States dollars to $310,000, and increased the balance to be paid in Sudanese pounds to $848,091.57; it made certain other changes in the contract that are not significant from the standpoint of the present litigation; and it then provided that "all other conditions and provisions of the contract remain the same." Thus, the unit price of 37 cents per cubic meter for laying the aggregate base, as prescribed in the original contract, remained in effect.
Aggregate Base
33. The plaintiff's subcontractor, Sudanese Construction Company, began laying the aggregate base sometime between October 1 and October 15, 1960.
34. On November 12,1960, the Sudanese resident engineer issued the following written instruction to the plaintiff on the subject of "Aggregate Base":
Please add 10% from Sand which will be designated. After adding the Sand blend the material uniformly.
Test will 'be Taken before Compaction to ensure uniform blending. After tbe test result approval will be given for compaction.
35.On November 15, 1960, tbe plaintiff's project manager responded to tbe instruction mentioned in finding 34, and stated in part as follows:
Receipt of your written instruction is acknowledged. Tbe work as directed will be performed in accordance with tbe details outlined in your letter.
However, in accordance with the terms of tbe Contract as outlined in the Disputes Clause thereof, we wish to state that this work will be taken under protest since we do not believe that the specifications and tbe Contract itself require us to perform work that is outside tbe intent of tbe Contract, thus experiencing costs not contemplated at tbe time we priced our tender.
*
Under the circumstances we must advise that we shall place a claim for the extra costs incurred in performing tbis item in tbe manner instructed by you in reference letter. It will take us some time to appraise tbe additional costs involved but on doing so we shall forward our proposal to you promptly.
36.Tbe plaintiff's project manager made a report to tbe plaintiff's home office in New York City concerning the requirement that aggregate be blended. In its reply, the plaintiff's home office stated in part as follows:
(1) Base Oowrse — In checking our files tbe only qualification to our bid reads as follows: "Aggregate base is understood to be unseived [sic], machine loaded aggregate, placed and compacted on prepared roadbed in accordance with Article 200-1.1". There is an amendment ¡to Section 10b in Aggregate Base Specification which definitely calls for the material to be blended by the contractor at his own expense. If it is possible to open negotiations for further payment on this item, you are authorized to negotiate.
37.In the construction of the demonstration road, the plaintiff (or its subcontractor) was permitted to use pit-run aggregate for the road base. The aggregate was excavated mechanically by the plaintiff (or its subcontractor) from designated areas; it was loaded on vehicles and delivered to the job site; and it was dumped on the roadway for incor poration in the road base, without being screened or sieved. However, in those instances where the aggregate from a particular borrow area would not, if used alone, make a suitable road base because of an excess of fines in such material, the plaintiff (or its subcontractor) was required, after such aggregate was dumped on the roadway, to add to it and blend in with it coarser material from another borrow area, so that the blended aggregate would provide a suitable road base in accordance with FP-57. The addition and blending of the coarser material was accomplished by the use of machinery.
38. Instructions for the blending of aggregate, as indicated in finding 37, were issued to the plaintiff (or its subcontractor) by the Sudanese resident engineer. However, the latter official acted upon the advice of personnel of the defendant's Bureau of Public Roads.
39. On May 10,1961, the plaintiff's project manager wrote to the Sudanese Ministry of Works with regard to the aggregate base, as follows:
The question regarding the gradation of the aggregate base has been brought up by your Resident Engineer.
We are using material from the pits as designated by the Resident Engineer. We are also blending non plastic materials from other sources, as requested. Inasmuch as the control and designation of the pits is the responsibility of the Resident Engineer, Raymond assumes no responsibility for the gradation, properties, or qualities of this material.
The above is all in accordance with the specifications and is pointed out at this time so that there will be no misunderstanding in the future.
Equipment
40. In a letter dated October 26,1959 and addressed to the plaintiff's parent corporation in New York City, the International Cooperation Administration stated in part as follows:
We have been advised by our Mission in Khartoum that, (a) equipment items 18 through 23 on the "List of Equipment" are immediately available, item 6 is delivered, and two caterpillar 619 scrapers (item 1) have been ordered with delivery expected March 1; (b) equipment available will permit bridge and culvert construction only from November 17 to the time of arrival of other equipment; and (c) the contractors should limit the size of the advance party to tbe foregoing equipment able locally and plan immediate beginning of the bridge construction.
41. In a communication which General Talley wrote in Khartoum on October 28,1959, and transmitted to the plaintiff's home office in New York City, it was stated in part as follows:
b. Eqw/pm&nt — Equipment Items 16 through 23 are here. Other equipment will be slow in arriving. It will be possible to rent other equipment locally, and possibly to get some work done on either sub-contract, or purchase and hire. I can do nothing about this until I am notified officially we have the job, but will get on it asap.
42. A communication dated October 31,1959, from General Talley to the plaintiff's home office in New York City said that items 16-23 from the list of equipment to be furnished were already on hand; and that it would be from 4 to 6 months before the other equipment would arrive from the United 'States.
43. A letter dated November 14,1959, from the plaintiff to the Sudanese Director of Works stated in part as follows:
Advice has been received that the delivery of items of equipment 1 through 15, with the exception of Item No. 6, Motor Grader, on the Equipment and Rental List of this contract will be delayed materially — perhaps beyond 1 March 1960.
We note at the same time that certain similar items of equipment have been received recently by the PWD, and presently are parked in a local storage yard.
So that we may proceed with the excavation and highway fill, albeit at a reduced rate, it is requested that the following items of equipment from that on hand be made available to us as a substitute for certain items of equipment yet to come:
10 ea Trucks, dump, 4-cy, 22,000 G.Y.W.
1 ea Motor Grader, 115 HP, (new).
1 ea Truck, Libricating [sic] Unit, Inti. R-200.
1 ea Truck, Flatbed, Inti. R-200.
1 ea Tractor, D-7, with angle dozer.
In addition to the foregoing, and essential to its operation, it is requested that there be procured from local sources, and furnished to us, the following item of equipment : 1 ea Traxcavator, D-4, with end loading bucket.
The above listed items of equipment will form an acceptably economic working unit. However; such a unit is not economical with less than 10 dump trucks.
44. In a letter dated November 24,1959, from the plaintiff to the Sudanese Director of Works, the plaintiff stated in part as follows:
This is to advise that we have exhausted every reasonable possibility of initiating common and borrow excavation, and the other items of construction of the subject contract, except structures, in advance of the arrival of the equipment scheduled to be furnished by the government under the terms and conditions of this contract. In the meantime, we stand ready to proceed with the construction of these items immediately the equipment arrives.
We would respectfully advise further that only on 23 Nov 59 did we receive a positive indication of the probable time of arrival of the bulk of this equipment. From the information so obtained it appears that it will not arrive until about 1 May 1960 — a date far 'beyond anything foreseen at the time of signing the contract. It is regretted that we did not receive this information earlier.
My first indication of a material delay was contained in a cablegram received from New York on 11 November. This cablegram stated that a letter dated 26 October had been received from ICA-Washington advising us of a delay in certain items of equipment. It was clearly impossible for this information to have been forwarded to me in advance of the submission of our bid.
❖ ❖ # H; *
The delay in the arrival of the equipment has occasioned additional costs to us, and will materially delay the completion of the project. When the full extent of these are known we shall advise you of them. In the meantime, we would ask that you be assured of our earnest desire and intent to execute this contract with the utmost dispatch consistent with sound construction procedures and practices, and with due economy.
45. A cablegram dated November 30,1959, from the Director of the United States Operations Mission in the Sudan to the International Cooperation Administration in Washington, D.C., stated in part as follows:
Contractor proceeding construction bridges. However, after canvassing all possibilities locally, impos sible obtain equipment necessary for excavation, fills, et cetera, at advantageous rates. Therefore Raymond has suspended all other activity and has notified Director PWD by letter dated November 24 of his intention postpone initiating borrow and common excavation until arrival ICA procured equipment which he reckons will begin about 1 May. (Copy letter being forwarded by pouch.)
# % * # *
In view despatch with which this project implemented to date, summary suspension work will unquestionably prove irritating to GOS and embarrassing USG. I wish to urge that every effort be made obtain January shipping date to permit equipment arrival late February.
46. The earth-moving equipment needed for the demonstration road project was obtained by the plaintiff's subcontractor, the Sudanese Construction Company, either from the Sudanese Ministry of Works or from other sources in the Sudan. Equipment was rented by the Ministry of Works on a day-to-day basis, so that it could be taken back by the Ministry when needed on other work or could be returned by the subcontractor when not needed on the project. Some of the equipment thus procured was old, and was more expensive to operate and maintain than new equipment would have been.
47. In a monthly report dated June 9,1960, and addressed to the plaintiff's headquarters in New York City, the plaintiff's project manager stated in part as follows:
Our subcontractors' activities were not brisk; they could have done better. Supervision — or rather lack of it — kept the pace of work from being excellent. On 12 May, we felt that we had been tolerant as long as we could endure the experiments, changing locations of work, etc., by people who did not understand the work in the first place, and announced to all, including M.o.W. and I.C.A., that we were going to call the turns from here in. Gaines immediately assigned a young engineer to the job — to protect the Government's interest, we presume. Supervision continued lax, but we filled in and by doing the planning were able to keep earthwork going at an increased rate, but found it difficult to get the bridge work to perk up. The heat seems to take the zip out of most people — and in the case of bridge work, there has never been any enthusiasm, so it is difficult to pump 'any life into that outfit.
48. A letter dated July 15,1960, from the plaintiff's project manager to the Sudanese Construction Company stated in part as follows:
Today, a scheduled non-work day, we found that our equipment was engaged in construction of a feeder road, Sababi-Bager Land No. 20 Area, Km 0 + 942. The operations included grading material placed by others, disc-ing, and rolling with equipment assigned to us by the Ministry of Works.
# % $ ❖ ❖
We were therefore surprised at the non-contract work that was under way at 0800 this morning under the direct supervision of Mr. Scotton, especially since no arrangements had been made for or advice given of such and [sic] undertaking. When questioned, Mr. Scotton did not elaborate on how we were to be paid for this work; his only comment being that the Ministry would not charge rental for the equipment.
We must again remind you that Eaymond Constructors holds the contract for the Khartoum North-Kho-galab Eoad, and all equipment furnished by the Ministry of Works is assigned to us and made available to you for performing work included in your sub-contract. Your employment of equipment and effort today in non-contract work, when the effort was sorely needed on contract work does not serve the Contractors' interest. We would be very obliged if you would duly consider your responsibility to us and hereafter moderate your actions accordingly.
49. A report by Herman Gaines dated August 18, 1960, stated that progress had been delayed by the slow delivery of the equipment purchased for the project; and that this was due in part to the procurement process in the United States, but was due in large part to the slowness of the movement from Port Sudan to Khartoum by the Sudan Kailways.
50. A letter dated August 19, 1960, from the plaintiff's project manager to the plaintiff's headquarters in New York City stated that "This sub continues difficult to handle, fails to keep his job organized, and does not give the work the personal attention it requires, especially since his employed supervision is weak."
51. A letter dated August 20, 1960, from the plaintiff's project manager to the Sudanese Construction Company stated in part as follows:
Recent experiences reflect the cumulative results of weaknesses in your operation/maintenance of equipment, planning of work, and supervising it. While we have pointed out to you informally over the past months that permitting these weaknesses to continue would not be in our mutual interest, we have not made an attempt to diligently record all of our instructions or arrangements with you, and therefore do not have a complete formal file background of past activities. However, we shall hereafter record in writing all important matters and situations that develop during the course of the work.
52. The following table shows when certain pieces of equipment procured by the defendant arrived on the job:
53. A letter dated February 10, 1961, from the plaintiffs project manager to the plaintiff's headquarters office in New York City stated in part as follows:
The Sudanese Construction Co. is doing no better. They refuse to accept any advice and as they do not know how to do this kind of work, their job is a mess. We have tried to help them but they just listen, agree, and then proceed to go back to their old ways.
54. In a report prepared in February 1961 by the plaintiff's project manager and sent to the plaintiff's home office in New York City, it was indicated that he had recently met with the Director of the United States Operations Mission in the Sudan and had discussed the Sudanese Construction Company's lack of progress; and that he had explained how the plaintiff had continually tried to assist the subcontractor, but had actually gained nothing. An enclosure further indicated that the subcontractor had repeatedly assured the plaintiff that it would have no difficulty in hauling 1,000 cubic meters daily, but that the maximum haulage had been only one-third of that amount; and that it was the project manager's "firm belief" that this was caused by lack of experienced supervisors and technicians. The enclosure also indicated that it was the project manager's opinion that inasmuch as the subcontractor was unable or unwilling to fulfill its contractual obligations, corrective measures should be taken immediately.
55. In a letter dated February 15,1981, from the plaintiff's project manager to the acting chief of the Transportation Division, United States Operations Mission, it was stated (among other things) that " the Subcontractor is unable or unwilling to fulfill his contract obligations
56. In a letter dated February 18, 1961, the plaintiff's project manager wrote a letter to the plaintiff's home office in New York City, stating (among other things) that "There is ample equipment available on the job to do whatever is required." The equipment was listed and the statement was made that "The above is all government furnished with the exception of one new Gallion grader rented at the same rate."
57. On May 12,1962, the plaintiff's project manager wrote a letter to the plaintiff's parent corporation in New York City, stating in part as follows:
The following report is being sent to keep you informed on the bad situation existing on this project.
Hardly any progress to teport, mainly due to complete failure of our Sub-Contractor, Sudanese Construction Company hauling aggregate base on 8% kilometres extension. The past three weeks their production has amounted to only 2000 M3 with a promise day today [sic] the yardage would improve with additional hauling equipment. The last ten days they have completely stopped hauling base and their equipment are now hauling for the city outside of our project.
Tbe Sub-Contractor has failed to pay-item of the original contract, dig and line new water well in two years. On May 1st our personnel have taken this work over. The workmanship was very poor on lining the well and was necessary to remove one third of brick lining before the Resident Engineer will accept it.
58. In a letter dated June 9, 1962, and addressed to the Sudanese resident engineer, the plaintiff's project manager stated in part as follows :
In accordance with general conditions of the Contract Chapter VIII Page 28 paragraph 54 and Addendum #1 for the Khogalab Road project we hereby request extensions of time to the contract completion date of February 28 1962 due to reasons beyond our control and other extenuating circumstances as out-lined below.
Evidence is of the failure by the Government to provide the necessary Govt, owned equipment for use on the construction of above mentioned projects as out lined in the contract documents or proper other equipment in a reasonable length of time our planned sequence of operations could not be adhered to and by this action the start of the project was delayed and we were forced to improvise and operate in an inefficient, unproductive and very costly manner detrimental to Raymond and the proposed time schedule.
Numerous letter [sic] were written advising you this state of affairs commencing at the inception of the project November 26, 1959 and continuously thereafter throughout the project. A detailed chart showing delivery dates has been drawn up and readily points out that the contract specified equipment was sporadically delivered from December 29, 1959 to November 20, 1960 a period of approximately 11 months. The M.O.W. during this period rented Raymond whatever pieces of equipment they had on hand and could spare however some of the equipment was not the type that could be effectively or productively used in normal good construction practice, at the time Raymond accepted these pieces of equipment in the order that they could be released by the M.O.W. knowing that a proper spread could not be formulated but in the best interests of cooperation and good will and in order to keep the project going Raymond used this equipment to the best of their ability and as directed.
Therefore in view of the above we hereby request an extension of time to the contract completion date of accumulative time for the entire period of 130 days.
59. A communication dated June 18,1962, from the Sudanese Ministry of Works to the plaintiff stated (among other things) that the plaintiff did not receive all the equipment which had been specified in the contract until October 20, 1960.
60. A letter dated May 23,1962, from the plaintiff's project manager to the Sudanese Construction Company stated as follows:
This is to inform you for past 90 days I have repeatedly requested that additional trucks to be used in the hauling of embankment and aggregate base material on the 8.5 kilometer of the Khogalab Eoad extension.
The major reason for our slow progress is due to shortage of trucks that you received duty free and have been observed working outside of Khogalab Eoad project. The duty free privileges was granted with the understanding that these units would be used only on the Khogalab Eoad until the completion of the project.
Your attention is requested to the provisions of the contract, paragraph 41(4) entitled "Plant Temporary Works, Materials, etc.," which specifically prohibit the removal of these trucks from the work without the consent of the Eesident Engineer.
At no time has this consent been requested or has permission to remove these vehicles been granted.
Your attention has been drawn to the noncompliance with clause 41-A of the contract.
You are therefore directed to comply with the provisions of the above cited paragraph or we will have no alternative but to take legal action in obtaining full use of the trucks mentioned above.
61. Change Order No. 1 was issued on behalf of the Sudanese Director of Works. It was dated June 19,1962, and was accepted by the plaintiff on June 20, 1962. The change order stated that it had been determined that the contractor was prevented from completing the construction work within the time fixed by the contract, as supplemented, for reasons beyond the contractor's control. The change order further stated in part as follows:
(a) Per the provisions of Contract paragraph 54, as modified by Addendum No. 1, the Ministry of Works was aware that delays in the delivery furnished equipment, as listed in the contract documents, would be credited as an extension of contract time. It has further been determined that all of this equipment was not delivered to the Contractor until October 20th, 1960, a period of 328 days from the commencement of the work; and that during this period, the Contractor's forces were considered to be operating at an average, of 66%% of capacity. This has led to the determination that the Contractor is entitled to an extension of contract time in the amount of 33%% of 328 days, i.e., 109 days.
62. As indicated in finding 23, the original contract between the plaintiff and the Sudanese government called for the placement by the plaintiff of an estimated quantity of 330,000 cubic meters of "Borrow Excavation (Case 1)" at a unit price of 33 cents per cubic meter. This work was to be done in accordance with FP-57, the Standard Specifications for Federal Road Projects, promulgated by the defendant's Bureau of Public Roads.
borrow Course63. The borrow course of a roadway is the subbase for the aggregate base. It is usually constructed of whatever type of local earth that is available, such as sand or clay, but it should have a sufficiently low plasticity index so as to provide a stable subbase when the completed road is subjected to the passage of heavy vehicles or wet weather, and it should be of such a consistency as to be capable of compaction prior to the placement of the aggregate base upon it.
64. (a) The borrow course for the initial 21-kilometer section of the demonstration road was laid by the plaintiff's subcontractor, the Sudanese Construction Company. The subcontractor began this work sometime before February 29, 1960, and completed the borrow course for the initial 21-kilometer section of the road in February 1961. The borrow course for the 8%-kilometer extension of the demonstration road was laid by the plaintiff in conjunction with the subcontractor.
(b) The material for the borrow course was taken by the plaintiff (or its subcontractor) from borrow pits designated by the Sudanese resident engineer, acting on the advice of personnel of the defendant's Bureau of Public Roads. Some of the borrow thus obtained was a very plastic clay material from alluvial deposits along the Nile River; and after such material was dumped on the roadway for use in the borrow course, the plaintiff (or its subcontractor) was required by the Sudanese resident engineer — acting upon the advice of personnel of the defendant's Bureau of Public Roads — to add some sand to the clay for the purpose of lowering the plasticity index, to blend the clay and sand together, and then to water and compact the blended material. On the other hand, some of ¡the designated borrow areas consisted of sand; and in those situations, after the sand was dumped on the roadway for use in the borrow course, the plaintiff (or its subcontractor) was required to add some clay to the sand in order to make it more compactable, to blend the sand and clay together, and then to water and compact the blended material.
(c) The process of adding and blending borrow material, as described in paragraph (b) of this finding, was accomplished by the use of machinery.
65. In response to complaints by the Sudanese Ministry of Works about the way the subcontractor was performing the work, the plaintiff's project manager wrote a letter to a Sudanese official on April 20,1960, stating in part as follows:
As you know, our contract provides for us to borrow material for the embankment by the open pit method from a pit designated by you. The pit provides materials of a wide range of gradations and quality and when this is placed in the embankment the layer to be watered and rolled is spotty and requires a varying amount of water, making it almost impossible to place the proper amount of water over the entire layer.
Every tank of water, every pass of the water truck, and every pass of the rollers on all of the work performed to this date has been at the direction of your representatives, which is the way it should be since both the rolling and the watering are variable pay items and we must have the Resident Engineer's approval before we can collect payment for each of these two items.
Following receipt of your letter we have made a concentrated effort to eliminate the conditions that you refer to therein. We have enlisted more direct advice and approval from your staff; we have placed the best quali fied people on the and we have been trying a number of different methods of performing the work. The conditions have improved only slightly and are, as before the date of your letter, still not satisf actory to us. We plan to continue a number of experimental procedures in an attempt to produce work that is first acceptable to us and secondly acceptable to you. We believe that our conception of the standards of work are high, exceeding the minimum specifications required by the contract. In short, we were not satisfied with the quality of the work and we are not now satisfied with it. It is and has been our desire to perform the watering and rolling most expeditiously since this part of the work continually falls behind our performance of the other items.
Any suggestions that you or any may have will be tried. Your patience and full understanding of the problems involved will be appreciated.
66. On November 21,19,60, an official of the plaintiff who had visited Khartoum during the period November 8-10, 1960, made a report to the plaintiff's home office, stating in part as follows:
Still about 60,000 m3 of embankment to place and payment has been made for embankment whether finished or not. Hard to determine exactly how much more is to be placed since apparently no effort made to bring embankment anywhere close to grade. Staking of fills uncoordinated and no effort made to transfer grade to offsets. Government has three parties setting centerline and grades and can't keep ahead because stakes are not taken care of. Necessary to reset blue tops 2 and 8 times with result that errors cause subcontractor to come back to supposedly finished grade several times. Inexperienced survey crews of government can't be blamed too much. Work was disorganized from beginning since sub was permitted to work any and every place he could get the biggest volume so he could get big progress payment. No attempt was made to finish grading close behind embankment completion. No attempt was made to keep limited equipment confined to limited area to take advantage of substituting workable equipment for broken down pieces.
67. The evidence in the record does not show that the Sudanese resident engineer, or the personnel of the defendant's Bureau of Public Roads, went beyond the requirements of the contract in requiring the plaintiff (or its subcontractor) to blend borrow materials from different pits in order to achieve a borrow course which was capable of being compacted and which would provide a stable subbase for the aggregate base, and thus meet the requirements of FP-57.
Admi/mstraiive Proceedings
68. The demonstration road project in the Sudan was completed on July 7, 1962, except for some clean-up work, which the plaintiff did during the 3-month maintenance period following such completion.
69. (a) In September 1962, the plaintiff, in accordance with paragraph 56 of the general conditions of the plaintiff's contract with the Sudanese government (see finding 24), submitted several claims to the Director of the Sudanese Ministry of Works, and then to the Director of the United States Operations Mission in the Sudan. Such claims included the claims that are involved in the present action.
(b) The plaintiff's administrative claims referred to in paragraph (a) of this finding were denied by the Director of the United States Operations Mission in the Sudan. Thereupon, the plaintiff filed an appeal with the Administrator of the Agency for International Development (successor to the International Cooperation Administration).
(e) After the petition in the present action was filed with the court, the Acting General Counsel of the Agency for International Development rendered an opinion to the effect that the agency had no jurisdiction over the plaintiff's claims in excess of $1,959.19 by reason of the $310,000 limitation contained in the letter of understanding between the plaintiff and the International Cooperation Administration, as revised (see findings 21 and 31), and that the plaintiff "must proceed with such claims in another forum."
Abandonment of Certain Claims
70. (a) The plaintiff's petition contained a claim for extra work in the amount of $25,947, and a claim for delay in settlement in the amount of $62,290. The plaintiff's brief indicates that the plaintiff has abandoned those claims.
(b) The plaintiff's petition a for moneys allegedly wrongfully withheld by the government of The Eepnblic of the Sudan. In its brief, the plaintiff states that this claim was settled by the Sudanese government on July 10,1965.
Damages
71. (a) The plaintiff's subcontractor, Sudanese Construction Company, incurred additional expenses because of the delay in receiving government-furnished equipment.
(b) No actual cost figures from the subcontractor's books and records were presented at the trial, and it is not possible to determine with reasonable accuracy the amount of the additional expenses incurred by the subcontractor because of the delay in receiving government-furnished equipment.
72. No evidence was presented to establish that the plaintiff has made any extra payment to its subcontractor, Sudanese Construction Company, or is obligated 'to make any extra payment to the subcontractor, because of the additional expenses incurred by the subcontractor due to the late delivery of government-furnished equipment.
73. (a) In completing the work under the contract for the construction of the demonstration road, the plaintiff was delayed a total of 142 days beyond the date fixed in the contract for the completion of the work.
(b) The plaintiff's expenses in the form of indirect costs were increased to the extent of $22,319.57 as a result of the 142-day delay in completing the work under the contract, such indirect costs consisting of the following items:
Wages:
American personnel-$11, 737. 82
Sudanese office staff- 2,185. 76
Other Sudanese personnel- 3, 322.60
Other extra expenses_ 4,049.09
Total _ 21,295.27
Home office overhead and general expense, 4.81 percent_ 1, 024.30
Total _ 22,319.57
74.The delay of 142 days in completing the work under the contract for the construction of the demonstration road was due partially to delay on the part of the defendant in pro curing equipment that was needed for the construction of the road and delivering it to the Sudanese government at Port Sudan, it was due partially to delay on the part of the Sudanese government in transporting the equipment from Port Sudan to the job site, and it was due partially to the Sudanese Construction Company's inexperience, inefficiency, and failure to use available equipment to maximum advantage.
75. There is no basis in the record on which a precise allocation of responsibility for the overall delay of 142 days in completing the work under the contract can be made as between the defendant's delay in procuring equipment and delivering it to the Sudanese government at Port Sudan, the Sudanese government's delay in transporting equipment from Port Sudan to the job site, and the shortcomings of the Sudanese Construction Company.
76. It is determined, in the nature of a jury verdict, that the defendant's delay in procuring equipment and delivering it to the Sudanese government at Port Sudan was responsible for one-third of the overall delay in the completion of the work under the contract and, hence, for one-third of the extra indirect expenses that were incurred by the plaintiff because of such overall delay, $7,440.
77. There is no evidence in the record indicating that the International Cooperation Administration ever agreed in writing (or otherwise) to increase its maximum obligation under the project agreement and under the letter of understanding with the plaintiff beyond the sum of $310,000.
78. The plaintiff has already been paid the sum of $303,-020.26 in U.S. dollars by the defendant in connection with the contract for the construction of the demonstration road.
Conclusion ok 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 the plaintiff recover of and from the United States the sum of seven thousand four hundred and forty dollars ($7,440).
This opinion incorporates, with some changes in the portion headed "Equipment", the opinion of Trial Commissioner Mastín G. White.
There is no evidence that ICA ever agreed in writing (or otherwise) to increase its maximum obligation beyond $310,000.
The contract limitation in Scherr & McDermott, supra, also contained the phrase "in no event", 175 Ct. Cl. at 443, 360 F. 2d at 967.
Before the trial commissioner, but not before the judges, defendant argued that the plaintiff's claim is barred by 28 U.S.O. § 1502 (1964), providing that this court "shall not have jurisdiction of any claim against the united States growing out of or dependent upon any treaty entered into with foreign nations". We need not, and do not, consider this defense, both because defendant has failed to preserve it before the judges and because we place our holding, not on the project agreement between the United States and the Sudanese government, but on the letter of understanding directly between plaintiff and defendant. In that respect (as in others) this case is like Scherr & McDermott, Inc. v. United States, supra.
This item had a handwritten asterisk beside it; and on the back of the sheet there was another handwritten asterisk and the following handwritten note after it:
Note Unseived [sic] machine loaded aggregate placed and compacted on prepared roadbed in accordance with Article 200-1.1.