1

Opinion of the Court

Proctor, in the sum of $6,144.71 for placing reinforcing steel, and $109,502.12 for extra costs in connection with concrete structures, as well as the sum of $23,409.48 for added equipment rentals and overhead of the prime contractor. The contracting officer issued his findings of fact and decision denying the claim on December 15, 1947. The contracting officer stated that the claims should be denied as claims for unliquidated damages, although he issued findings of fact on each item of the claim asserted. In connection with the claim for damages for delays resulting from late delivery of reinforcing steel, the contracting officer found that the Government made diligent efforts to secure the necessary reinforcing steel, but due to conditions beyond the control of the Government the steel could not be obtained without delay. On January 12, 1948, plaintiff filed an appeal dated January 7, 1948, with the head of the Department, the Secretary of the Interior, from the decision of the contracting officer. In his appeal he contended that the claims asserted were not claims for unliquidated damages; that he was seeking and was entitled to an equitable adjustment under the provisions of articles 3 and 15 of the contract as a result of changes in the drawings or specifications; and that the decision of the contracting officer was not supported by the provisions of the contract or by his findings of fact. The decision of the contracting officer was affirmed by the duly authorized representative of the head of the Department, the Solicitor of the Department of the Interior.

Plaintiff now seeks to recover from the Government damages for himself and his subcontractor, Proctor, resulting from delays for which the contracting officer granted extensions of time under article 9 of the contract; viz, 54 days for late delivery of reinforcing steel and 20 days for inadequate labor, together with damages for extra costs in connection with its concrete operations on the ground that the actual quantity of concrete was less than defendant's estimate. The question on which this case turns is: Did the Government obligate itself to pay damages to the contractor because of delay in furnishing material and labor together with excess costs incurred in concrete operations?

Opinion of the Court

130 C. Cls.

Because of the more complex problem presented by the first contention, we will first take up the question of liability of the Government for excess costs incurred in concrete operations. We feel that the plaintiff has presented no legal basis for recovery upon this claim. Any liability of the Government was specifically excluded by the provisions of the contract. Specification 4 (finding 5) provides:

The quantities noted in the schedule are approximations for comparing bids, and no claim shall be made against the Government for excess or deficiency therein, actual or relative. Payment at the prices agreed upon will be in full for the completed work and will cover materials, supplies, labor, tools, machinery, and all other expenditures incident to satisfactory compliance with the contract, unless otherwise specifically provided. [Italics supplied.]

Specification 49 (finding 5) provides:

***Some of the drawings included in these specifications are typical only of the structures to be constructed and the detail dimensions of the structures as they are to be constructed will be fixed by the contracting officer to adapt the structures to the existing conditions at the structure sites, and the contractor shall be entitled to no additional allowance above the unit prices bid in the schedule by reason of the dimensions fixed by the contracting officer or by reason of any modifications or extensions. ***

We hold that the provisions above quoted are plain and unambiguous. Plaintiff is bound by them and is, therefore, not entitled to recover on this claim.

Plaintiff next contends that it suffered damage because of delays resulting from an inadequate supply of labor and that defendant is liable. We find no proof in the record that the Government was negligent in providing labor. Furthermore, we find no instance in which plaintiff complained about labor shortages until time extensions were requested to avoid imposition of liquidated damages. Under the circumstances, and because of a complete failure of proof, we believe there was no breach of contract for which the Government can be liable on this claim.

1

Opinion of the Court

Plaintiff's first, and we believe most serious, contention is that the failure of the Government to furnish reinforcing steel resulted in delays for which the defendant is liable. We use the well-chosen words of Judge Littleton in the case of Chalender v. United States, 127 C. Cls. 557:

Generally, even though the Government may fail for justifiable reasons to secure timely delivery of materials which under a construction contract it is required to furnish, no liability for resulting delays will attach, unless it can be found that its representatives were at fault. U. S. v. Foley, 329 U. S. 64; Barling v. U. S., 126 C. Cls. 34. Cf. Torres v. U. S., 126 C. Čls. 76.

We believe there was fault on the part of defendant in this case.

Again, quoting from the Chalender case, supra:

There is present, in a contract such as this one, an implied obligation on the defendant that it will not do that which will hinder the contractor in the performance of the contract. When the contractor is delayed by a negligent act chargeable to the government, it is a breach of this clearly implied obligation, and the government is liable for the damages sustained by the contractor because of the delay. Fuller v. U. S., 108 C. Cls. 70; Kehm Corp. v. U. S., 119 C. Cls. 454. Cf. J. J. Kelley Co. v. U. S., 107 C. Cls. 594

In the absence of evidence to the contrary, when one party agrees to furnish particular materials to be used by the other, he must be held to have agreed "to furnish them in time to be installed in the ordinary and economical course of the performance of the contract." Walsh v. U. S., 121 C. Cls. 546, 554-555.

In this case defendant is guilty of just such a breach. Defendant agreed to furnish the reinforcing steel for this project. Unquestionably this was an urgent job. Plaintiff had a right to believe the reinforcing steel would be furnished by the Government in time to complete the job within the contract time, and this the Government failed to do. This very important fact was decided by the contracting officer, who granted an extension of time for this specific failure.

Defendant contends that this case is on all fours with the case of United States v. Foley, supra. We believe not. In

Opinion of the Court

130 C. Cls.

this case we find that the defendant was negligent and at fault. The evidence establishes that defendant was negligent in failing to furnish sufficient reinforcement steel to enable plaintiff to perform the contract in the specified time in an orderly and efficient manner. Notwithstanding the urgency of this job, the shortness of the time to perform it in, and the vitalness of the reinforcement steel in the performance of the job, defendant (1) did not advertise for bids on the steel until September 4, 1945; (2) upon receiving no bids from any of the 20-odd steel companies invited to bid, defendant only readvertised for 80,000 pounds when it could and should have obtained the estimated 264,000 pounds needed for the job, or at least another 80,000 pounds; (3) made no effort to obtain more than the 80,000 pounds of steel for the job until November 30, 1945; (4) informed plaintiff that more steel had been ordered when in fact it had not; (5) did not authorize for an extended period after its arrival the use of various quantities of steel that defendant and plaintiff had secured in 1946; and (6) did not place orders for the steel, with delivery being delayed if desired, while the steel could still have been obtained under priorities. The evidence also shows that plaintiff could have obtained the steel as an accommodation, as it subsequently in fact did, had defendant apprised plaintiff of its inability to obtain the steel. Also, defendant's agents, who were in constant contact with various steel companies' representatives, were apparently oblivious to the shortage of this type steel caused by the steel companies' desire to manufacture other and more profitable types of steel.

Under the circumstances defendant failed to act diligently and its negligence directly caused the delay here complained of. There is no provision, or room for implication, in the contract permitting defendant to negligently delay the performance of it. On the contrary, we believe that under the circumstances there was an implied warranty upon the part of the Government to provide necessary steel in order that plaintiff could complete the contract in the specified time, and the negligent failure to do so was a breach thereof. These facts distinguish this case from that of United States v.

1

Findings of Fact

Foley, supra; W. E. Barling v. United States, 126 C. Cls. 34; Otis Williams & Co. v. United States, 120 C. Cls. 249.

The delay occasioned by the negligent failure of defendant to provide reinforcement steel as required caused both the prime contractor and the subcontractor to incur costs which would not otherwise have been necessary.

We find that plaintiff is entitled to recover the costs occasioned by the delay of the defendant in furnishing necessary reinforcement steel.

The case is referred to a Commissioner of this court to determine the amount of such costs which plaintiff is entitled to recover.

MADDEN, Judge; WHITAKER, Judge; LITTLETON, Judge; and JONES, Chief Judge, concur.

FINDINGS OF FACT

The court, having considered the evidence, the report of Commissioner William E. Day, and the briefs and argument of counsel, makes findings of fact as follows:

1. During the pertinent times hereinafter mentioned, William C. Thompson, the plaintiff herein, was a resident of the city of San Francisco, California, and was engaged in the construction business.

2. After defendant had invited bids and plaintiff had submitted a bid, plaintiff and defendant, acting through the Chief Engineer of the Bureau of Reclamation, entered into a contract dated August 27, 1945, designated as Contract No. 12r-15498, by the terms of which plaintiff, in consideration of the payment of the unit prices set out in said contract totaling an estimated $245,290.50, covering 17 items of work, agreed to furnish the materials and perform the work for the construction of earthwork and structures for certain irrigation canals designated as lateral M-43 and sublaterals, Deschutes Project, Oregon, in strict accordance with the specifications, schedules, and drawings prepared by defendant and designated as Specification No. 1100, which were made a part of said contract. Correct copies of said contract and specifications were received in evidence and are made a part hereof by reference.