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Syllabus

SILAS MASON COMPANY, INC., WALSH CONSTRUCTION COMPANY, ATKINSON-KIER COMPANY v. THE UNITED STATES

[No. 44659. Decided October 1, 1945. Plaintiffs' motion for new

trial overruled February 4, 1946]*

On the Proofs Government contract; jurisdiction; plaintiffs not entitled to sue

where administrative procedure agreed to in contract as to settlement of disputes is abandoned without jus ification.Where it was provided in the contract in suit (article 15) that all disputes, except as to labor issues, “concerning questions arising under this contract shall be decided by the contracting officer or his duly authorized representative, subject to written appeal by the contractor within 30 days to the head of the department or his duly authorized representative, whose decision shall be final and conclusive upon the parties thereto as to such questions;" and where it is found, ụpon the evidence adduced, that the plaintiffs abandoned, without justification, this administrative procedure which they had, in their contract, agreed to follow; it is held that plaintiffs are not entitled to

to sue in the Court of Claims upon the claims in dispute. Same; Article 15 of Standard Government Construction contract.

Article 15 of the Standard Government Construction Contract frequently is so written as to apply only to disputes concerning "questions of fact,” and when so written does not bind the contractor to resort to, nor the Government to accord, administrative determination of disputes concerning questions of law but article 15 as written in plaintiffs' contract applied (except as to labor issues not involved in the instant dispute) to all "disputes concerning questions arising under this contract," and plaintiffs were thereby required to submit all disputes upon which the instant suit is based to the stipulated adminis

trative procedure. Same; recovery for deduction of liquidated damages not contested.

Where the contracting officer decided that the plaintiffs were entitled to $1,099.80, which had been deducted, as liquidated damages, from compensation otherwise due them; and where under article 15 of the contract his decision was, without appeal, final; and where the Government does not contest the correctness of the decision; it is held that plaintiffs are entitled to recover this amount.

*Plaintiffs' petition for writ of certiorari pending.

105 C. Cls. Reporter's Statement of the Case Same; recovery for amount withheld for contemplated repairs which

ucre not made.- Where there was withheld by the contracting officer from compensation otherwise due the plaintiffs the sum of $125,120 with the expectation that this sum would be expended by the Government to make certain repairs; and where the need for the repairs did not develop and the money was not expended for that purpose; and where the decision of the contracting officer was based upon a mistaken assumption as to future events; it is held that the contracting officer's decision as to this item was not intended to be, and was not, final, and plaintiffs are entitled to recover the sum stated.

The Reporter's statement of the case:

Mr. Samuel T. Ansell for plaintiffs. Messrs. Ansell, Ansell & Marshall were on the briefs.

Mr. John B. Miller, with whom was Mr. Assistant Attorney General Francis M. Shea, for the defendant.

The court made special findings of fact as follows:

1. Plaintiffs are, and during the time in controversy were, Silas Mason Company, Inc., a corporation organized and existing under the laws of the State of Delaware, of the City of New York, New York; Walsh Construction Company, a corporation organized under the laws of the State of Iowa, of the City of Davenport, Iowa; and Atkinson-Kier Company, a partnership consisting of Guy F. Atkinson, George H. Atkinson, William E. Kier, and Elmer L. Kier, of the City of San Francisco, California.

2. On July 16, 1934, plaintiffs entered into a contract with the United States, represented by R. F. Walter, Chief Engineer, Bureau of Reclamation, as contracting officer, to furnish labor and materials, and perform all work required for construction of Grand Coulee Dam and Power Plant (first development) as covered by Items 1 to 85, inclusive, of the schedule of Specifications No. 570, Columbia Basin Project, Washington, for the estimated consideration of $29,339,301.50, dependent upon final quantities of work performed, in strict accordance with the specifications, schedules, and drawings. This amount was exclusive of materials which were to be furnished by the Government. The contract and

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Reporter's Statement of the Case

specifications are in evidence and are made a part hereof by reference.

3. The schedule attached to Specifications No. 570 (pages 3 to 12, inclusive) contains 85 separate items of work. The prices for which the work was to be done, except Items 1, 83, 84, and 85, were unit prices for designated units of measurement and estimated quantities, the ultimate price to depend on the actual number of units. The prices for the four items mentioned were lump-sum prices for all of the work covered thereby. Paragraph 5 of Specifications No. 570 reads as follows:

Quantities and unit prices.—The quantities noted in the schedules 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 other

wise specifically provided. 4. The Grand Coulee dam was built across the Columbia River about 95 miles west and north of Spokane, Washington. Of all the rivers in the United States, the Columbia River is exceeded only by the Mississippi River in volume of water carried. In potential power the Columbia River far exceeds that of any other river in the United States, and has within it one-sixth of all the hydroelectric power possible of capture in the entire country. Much of the water in this river comes from the melting snow and ice of the Canadian Rockies, with the result that high water occurs during the months of May and June at a time when the water of all other rivers in the country usually is low. The water impounded by the high dam (finding 13) extends 151 miles to the Canadian border. At the dam site the river flows north, although its general direction in that area is southwest.

5. The contract required that the work commence within 30 days after receipt of notice to proceed and be completed within 1,650 calendar days from the date of receipt of such notice. Notice to proceed was received by plaintiffs on September 25, 1934, thereby fixing the date of completion as 105 C. Cls. Reporter's Statement of the Case April 2, 1939. Actual construction work started October 4, 1934, and the contract was completed and accepted by the defendant on March 21, 1938, one year and 12 days prior to the contract completion date.

6. The office of the contracting officer was in Denver, Colorado, and he was rarely at the site of the work. F. A. Banks, construction engineer and representative of the contracting officer on the job, was on the site for some time prior to the letting of the contract and was there continuously during the performance of the work.

7. Before the contract was let the nearest railroad to Grand Coulee dam was about 30 miles south through a station named Coulee City, on the Northern Pacific Railroad. There were practically no houses near the site of the dam to accommodate the great number of workmen to be employed on the dam. Plaintiff's first built a town for the accommodation of its workmen on the east side of the river just below the dam, called Mason City, which was known as the contractor's town. This required about three months, and by the first of the year 1935 the town was well occupied by plaintiffs' employees, who at the peak were over 5,000, working in three 8-hour shifts daily, from 12 midnight to 8, the graveyard shift; from 8 to 4, the day shift; and from 4 to 12, the swing shift. To house the defendant's employees of between 500 and 1,000, the defendant built a town on the west side of the river just below the dam, called Grand Coulee Dam, which was known as the Government town.

8. The contractor's plans required the construction of a west cofferdam, an east cofferdam, and cross-river cofferdams. The plan was to build the west abutment within the west cofferdam and then after that abutment was built to cofferdam

up

and down stream and turn the water over the west abutment. By June 1935 the west cofferdam had been completed and a large amount of earth excavation and some rock excavation had been done within this cofferdam. There had also been some rock excavation in the east abutment area. At the time of the change order, June 5, 1935, referred to in finding 11, plaintiffs had much equipment on the site, had more than 3 million dollars invested in the job, and also had large commitments outstanding.

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Reporter's Statement of the Case 9. Paragraph 18 of Specifications No. 570 reads in part as follows:

Description of dam.-The general plan for the Grand Coulee dam provides for progressive development involving two principal stages of construction and the successive installation of power units. Plans for the ultimate development include a concrete straight-gravity dam about 500 feet high above the lowest point in the foundation, with a crest length of about 4,000 feet, and a power plant containing eighteen 105,000 kilowatt units. The river channel section of the dam will have an overflow spillway 1,800 feet long, at each side of which, and immediately below the dam abutments, 9 units of the power plant will be installed. The first development, which is covered by these specifications, includes thé main portion of the excavation for the high dam, the construction of a concrete straight-gravity dam to an elevation about 200 feet below that planned for the high dam, construction of a permanent downstream cofferdam, and the construction of a power plant at the extreme left of the dam, as shown on the drawings. The permanent cofferdam, located below the toe of the low dam, will be constructed to form the toe of the high dam and the downstream portions of future power

houses. 10. Paragraph 25 of Specifications No. 570 reads in part as follows:

Termination of contract.-If at any time within the contract period, the construction of the Grand Coulee dam to the full height contemplated for the ultimate development of the project is authorized, the Government shall have the right to terminate the contract under these specifications upon thirty (30) days' notice in writing to the contractor, and, in such event, the contractor shall turn over to the Government, free of encumbrance, all plant, tools, and equipment of the contractor, including camp and appurtenances, which are installed at the time of such termination or contracted for in writing, in use or to be used exclusively in the work under these specifications, and, at the option of the contractor, shall include consumable supplies of the contractor, on hand or in transit on the date of the notice of termination, including explosives, fuel, lubricants, and materials of construction not incorporated in the work, but shall not include commitments for the purchase of consumable supplies or construction materials

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