236 Reporter's Statement of the Case There were approximately 30 prime contracts made in connection with the construction of the Navajo Ordnance Depot, and the contract described in finding 2 was one of them. That contract provided for the construction of approximately 17 miles of main line track and about 101⁄2 miles side track, including the necessary excavation, culverts, turnouts (switches), highway crossings, whistle posts and other items, at unit prices estimated to cost $1,462,272. The total length of the railroad, including main and side track, turnouts and bridges was to be about 31 miles. It was necessary to have the railroad completed at the earliest possible moment, since the construction of the entire project was dependent to a large extent on having the railroad in operation so that other contractors would have a means of receiving their material, and thus facilitate work on the balance of the project. 4. Article 1 of the contract provided that the work should be commenced on or before April 8, 1942, and completed on or before June 21, 1942. The formal contract, although dated April 8, 1942, was not executed for a number of weeks after that date but, pursuant to a provision of Paragraph 1-06 of the specifications, a "letter of contract" dated April 7, 1942, was accepted by plaintiffs on April 9, 1942. The letter of contract required the work to be started on or before April 9, and plaintiffs entered into the performance of the work on that date. Article 3 of the contract reads in part: Changes. The contracting officer may at any time, by a written order, and without notice to the sureties, make changes in the drawings and/or specifications of this contract and within the general scope thereof. If such changes cause an increase or decrease in the amount due under this contract or in the time required for its performance, an equitable adjustment shall be made and the contract shall be modified in writing accordingly. Any claim for adjustment under this article must be asserted within 10 days from the date the change is ordered: Provided, however, That the contracting officer, if he determines that the facts justify such action, may receive and consider, and with the approval of the Reporter's Statement of the Case 115 C. Cls. head of the department or his duly authorized representative, adjust any such claim asserted at any time prior to the date of final settlement of the contract. If the parties fail to agree upon the adjustment to be made the dispute shall be determined as provided in article 15 hereof. But nothing provided in this article shall excuse the contractor from proceeding with the prosecution of the work so changed. Article 9 of the contract provides for termination of the contract by the defendant in the event of delay on the part of the contractor in prosecuting the work, and for liquidated damages if the contractor should fail to complete the work within the contract time. The article reads in part: Provided, That the right of the contractor to proceed shall not be terminated under this Article or the contractor charged with liquidated damages because of any delays in the completion of the work due to unforseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God, or of the public enemy, acts of the Government (including, but not restricted to any preference priority or allocation order), if the contractor shall within 10 days from the beginning of any such delay (unless the contracting officer, with the approval of the head of the department or his duly authorized representative shall grant a further period of time prior to the date of final settlement of the contract) notify the contracting officer in writing of the causes of delay, who shall ascertain the facts and the extent of the delay and extend the time for completing the work when in his judgment the findings of fact justify such an extension, and his findings of fact thereon shall be final and conclusive on the parties hereto, subject only to appeal, within 30 days, by the contractor to the head of the department concerned or his duly authorized representative, whose decision on such appeal as to the facts of delay and the extension of time for completing the work shall be final and conclusive on the parties hereto. The specifications provide that in case of failure on the part of the contractor to complete the work within the time agreed upon the contractor shall pay to the Government as 236 Reporter's Statement of the Case liquidated damages $1,000 for every calendar day of delay until the work is completed and accepted. 5. Paragraph 1-11 of the specifications, as amended by Addendum No. 2, reads: 1-11. MATERIAL PROCUREMENT OF WHICH IS ARRANGED BY THE GOVERNMENT: (a) The Government will designate the source or sources of and allocate to the contractor the materials listed below in sufficient quantity to construct the Railroad as set forth in the invitation for bids or any addition or additions thereto. The material to be thus allocated in the name of the contractor is: 1. Rail. 2. Angle bars, bolts, and lock washers. 4. Intermediate tie plates. 5. Spikes. 6. Anticreepers. 7. Frogs. 8. Switch points. 9. Closure rails. 10. Lowmast, switch stands, links, and targets. 12. Ties. 13. Gauge rods. Paragraph 5-02 of the specifications reads: 5-02. GENERAL.-The contractor shall procure from sources designated by the Government, cross-ties, rail material, switches, frogs, tie plates, and spikes for which an allocation has been made. Paragraph 1-14 of the specifications reads: 1-14. PRIORITIES.-Attention of the contractor is called to the fact that a priority rating of A-1-b will be established for this contract. In case the contractor is unable to obtain the required delivery materials and/ or equipment which are to become a permanent part of the construction, the contractor shall notify the contracting officer, submitting with his notification supporting data to his claim that the required delivery of such materials or equipment cannot be obtained. If the completion of the undertaking to be performed under the terms of this contract be delayed by reason of delay in the delivery of materials or supplies essential Reporter's Statement of the Case 115 C. Cls. to such performance because of national-defense priorities and without the fault or negligence of the contractor, the time of performance will be extended for a period equal to such delay, as determined by the contracting officer, and subject to appeal, as provided in Article 9 of the contract. Paragraph 1-26 of the specifications reads: 1-26. CLAIMS, PROTESTS AND APPEALS.-If the contractor considers any work demanded of him to be outside the requirements of the contract, or if he considers any action or ruling of the contracting officer or of the inspectors to be unfair, the contractor shall, without undue delay, upon such demand, action, or ruling, submit his protest thereto in writing, to the contracting officer stating clearly and in detail the basis of his objections. The contracting officer shall thereupon promptly investigate the complaint and furnish the contractor his decision, in writing, thereon. If the contractor is not satisfied with the decision, of the contracting officer, he may, within thirty (30) days appeal in writing to the Secretary of War, whose decision, or that of his duly authorized representative, shall be final and binding upon the parties to the contract. Except for such protests or objections as are made of record in the manner herein specified and within the time limit stated, the records, rulings, instructions, or decisions of the contracting officer shall be final and conclusive. 6. At the time that plaintiffs submitted their bid for the construction of the railroad, they agreed with a certain partnership known as "William E. Orr, Contractors," consisting of W. E. Orr, C. O. Huff, and W. E. Orr, Jr. (hereinafter referred to as "the Orrs"), that, in the event plaintiffs were the successful bidders, they would enter into a subcontract with the Orrs under which the latter would perform the track-laying portion of the contract. On April 20, 1942, plaintiffs and the Orrs executed an agreement, whereby in consideration of the payment of $392,143.74 the Orrs undertook to perform the track-laying portion of the construction of the railroad, described in Section V of the specifications. A copy of this contract is in evidence as plaintiffs' exhibit 1. The following is a list of the items of work which the Orrs agreed to perform, the unit prices for which they agreed to 236 Reporter's Statement of the Case do the work, and the unit prices to be paid plaintiffs by the defendant: 7. The subcontract reads in part: However, the performance of the items sublet to second party under the terms of this contract shall be the sole responsibility of said second party, and in the event said first party is unable to assist second party in procuring equipment from the said railroad company, such failure to assist shall not relieve the second party from its duties to perform said contract. First party agrees to perform the portion of the contract with the United States of America not sublet to the second party in satisfactory manner, and at such progress as to not unduly delay the second party in the performance of its contract, so as to cause second party to incur a penalty. Should first party cause such delay and a penalty as provided in said contract with the United States of America is incurred, then first party shall bear all of such penalty. However, should first party perform its proportion of the contract so as not to delay the second party hereto, but such second party shall not perform its portion of said contract within the time required by the general contract with the United States of America, and a penalty is incurred, then second party shall bear the whole of such penalty. In open court at the outset of the trial of the facts the parties made the following stipulation: Mr. KEATING [Attorney for defendant]. Plaintiffs are not liable to the subcontractor, W. E. Orr and W. E. |