Reporter's Statement of the Case

Mr. James J. Sweeney, with whom was Mr. Assistant Attorney General Francis M. Shea, for the defendant.

The court made special findings of fact as follows:

1. Murch Brothers Construction Company, Inc., is a corporation organized under the laws of the State of Missouri, with its principal office in St. Louis, Missouri. Its original petition herein was filed on September 30, 1933, and is docketed as No. 42519. This petition was based on two distinct contracts, one with the United States War Department and one with the United States Veterans' Bureau. On December 17, 1935, the court ordered plaintiff to separately state its two causes of action. Thereafter the two causes of action were docketed as Nos. 42519-A [decided April 4, 1938, 86 C. Cls. 632] and 42519-B, the case at bar.

On January 3, 1936, pursuant to Chapter 36, Revised Statutes of Missouri for 1929, plaintiff assigned all its property to John Schmoll, as trustee, for the benefit of its creditors. On July 31, 1936, this court substituted John Schmoll, as such trustee, for the original plaintiff herein. On September 25, 1936, John Schmoll, as such assignee, filed his petition herein, No. 42519-B. His petition is based on the contract with the United States Veterans' Bureau.

2. On June 13, 1929, the United States, represented by L. H. Tripp, Chief, Construction Division, United States Veterans' Bureau, as contracting officer, and the Murch Brothers Construction Company, as contractor, entered into a contract whereby the contractor, in consideration of the sum of $1,204,000.00 agreed to furnish all labor and materials and perform all work required for the construction and completion, at United States Veterans' Hospital, Somerset, New Jersey, of one Main Building No. 1; one Dining Hall No. 3; one Continued Treatment Building No. 4; one Attendants' Quarters No. 10; one Boiler House No. 14; one Nurses' Quarters No. 16; one Gate House and Fence No. 20; Flag Pole No. 21; one Acute Building No. 2; one Recreation Building No. 5 and Connecting Corridors 1-3, 2-3, 3-4, and 4-5, including all sound deadening specified under Sound Deadening Treatment (alternate); also all Roads, Walks, Grading, and Drainage in connection with these buildings; all in accordance with the contract, specifications, and ad

Reporter's Statement of the Case

denda thereto, schedules and drawings, which are of record as plaintiff's exhibit 100 and are by reference made a part hereof.

The contract required work thereunder to commence within ten (10) calendar days after date of receipt of notice to proceed and to be completed within three hundred fifty (350) calendar days thereafter.

3. On June 13, 1929, the contractor was notified of the award to it of the contract. Notice to proceed with all the work "except Attendants' Quarters No. 10," was received on July 12, 1929, which stated that notice to proceed with that building would be made the subject of a later communication. Notice to proceed with "Attendants' Quarters No. 10" was received on September 26, 1929.

On June 22, 1929, the contractor began the preliminary work of laying out the buildings. On June 25, 1929, it started excavating with a steam shovel.

The date for completing all the work, except building No. 10, was June 27, 1930. On account of the delay in giving notice, the date for completing building No. 10 was understood to be September 11, 1930. The extended date for completing all work except building No. 10 was August 27, 1930. The extended date for completing building No. 10 was November 11, 1930. This was in accordance with the findings and recommendation of the contracting officer of defendant to the head of the department, which findings and recommendation were approved by the Director October 4,

1930.

The specifications provided that the contractor should complete the boiler house No. 14, so that it might be available for use at least ninety days prior to the contract date for the completion of the remainder of the work.

All the contract work, except buildings Nos. 1, 5, and 10, was completed and accepted on September 24, 1930. Buildings Nos. 1, 5, and 10 were completed and accepted on September 27, 1930.

4. Extra work over and above that provided for by the contract was required by defendant which made necessary time extensions aggregating sixty-one days and extensions for performance of the work were accordingly granted pur

Reporter's Statement of the Case

suant to the contract. Change order "F," dated November 25, 1929, granted forty-five days' extension of time on account of additional rock excavation. Change order "Q," dated October 3, 1930, supplemented change order "F," and granted thirteen additional days, making a total of fiftyeight days, on account of that item of extra work. Change order "P," dated October 2, 1930, granted three additional days on account of miscellaneous items of extra work.

The contractor was also granted seventy-six additional days within which to complete building No. 10 on account of the deferred notice to start work on that building. The reason for this deferred notice was that the Government had not acquired title to the site for the building.

5. On September 2, 1930, the contractor wrote the defendant's contracting officer requesting that certain buildings be taken over, to relieve it of the assessment of liquidated damages. The letter requested that George H. Murch, contractor's treasurer, be given an opportunity to discuss the contractor's claim of about four hundred days for extension of time to offset the liquidated damages being assessed against it before the preparation of the final voucher. All the claims asserted by the contractor for extensions of time were considered and discussed in conferences between the defendant's contracting officer and representatives of the contractor prior to the preparation of the final voucher and the making of final settlement thereunder.

During the progress of the work, the Veterans' Bureau forwarded the monthly vouchers and also the final voucher to the General Accounting Office for preaudit before payment thereof.

The contracting officer did not forward any item of claim. arising under the contract to the Comptroller General for his decision. During the early part of the contract work, the contracting officer did address several letters to the contractor, stating in substance that he was without authority to grant requested extensions of time other than on account of extra work, particularly before the completion of the

contract.

However, at the time of final settlement, the contracting officer made a statement of the account, and assessed and

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Reporter's Statement of the Case

deducted liquidated damages on account of all delays in completing the contract work. This was done after he had granted extensions of time, and before the matter was forwarded to the Comptroller General for preaudit.

The final voucher is dated October 2, 1930. It is signed by George H. Murch, treasurer, on behalf of the contractor, and approved by Colonel Tripp, the contracting officer, on behalf of the defendant. It shows on its face the facts respecting the assessment and deduction of liquidated damages by the contracting officer, and the additional compensation allowed by him for extra work on change orders made pursuant to the contract. On October 15, 1930, $128,842.20, the full amount approved by the contracting officer for payment under the final voucher, was paid to the contractor. The contractor reserved the right to submit its claim to the General Accounting Office for the remission of such liquidated damages.

On October 4, 1930, the Director of the Veterans' Bureau approved the final settlement on the basis of the recommendations made by the contracting officer. A copy of the final settlement was delivered to George H. Murch, the contractor's representative.

The contracting officer made no findings of fact but did file with the Comptroller General a summary showing the price of the work under the original contract, the changes made, the time of completion of the several buildings, and a statement of the account between the contractor and the defendant. Upon this statement the so-called final settlement and payment of $128,842.20 was made, but an additional payment was subsequently made as shown in the next finding.

6. After final settlement was effected, the contractor, by letters dated October 30, 1930, May 6, 1931, and July 1, 1931, respectively, filed its claim directly with the Comptroller General for the remission of liquidated damages, payment for alleged extra work performed, and additional contract time.

These claims were forwarded to the Veterans' Bureau by the General Accounting Office for administrative examination and report.

Reporter's Statement of the Case

On April 29, 1932, the Comptroller General issued a certificate of settlement certifying that there was due the contractor the sum of $3,626.47 on account of "(1) liquidated damages overassessed for four days in making final payment, $740.00; and (2) earth furnished for fill-in purposes, $2,886.47, all under contract No. VB c-498, dated June 13, 1929." The remainder of plaintiff's claim for additional compensation and additional periods of time was denied.

The action of the Comptroller General in authorizing the additional payment of $3,626.47 was based on the recommendations of the contracting officer, made after the payment referred to in Finding 5 had been made as a final settlement.

In the Certificate of Settlement the Comptroller General stated with respect to the refund of $740.00 theretofore assessed and deducted as liquidated damages:

The contracting officer, however, has found that you were delayed four days on account of the strike;

This related to a claim by the contractor for twenty-seven days' extension of time on account of "sheet metal workers' strike."

7. Claim for refund of liquidated damages.-Paragraph G35 of specifications 2935-H, reads:

LIQUIDATED DAMAGES: The contractor will pay to the Government, by way of liquidated and ascertained damages and not as a penalty, the sum herein specified for each calendar day beyond the date stated in his bid which he may require to complete the contract, to compensate the Government for its delayed possession. If any unit of the work therein contracted for is accepted in advance of. the whole, the amount of liquidated damages then operative will be reduced in proportion to the total value of the work contracted for and of that remaining unaccepted. If a separate price has not been stated in the contractor's bid for the work remaining unaccepted, determination of the value thereof will be made from the approved schedule of cost hereinbefore provided under "Payments to Contractors."

The deductions for failure to complete the work included under each item of the bid, in the time stated, will