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But the appellant is not now alleging damages for delay in the approval of the first articles. It says that the contracting officer improperly rejected the first articles and demanded revision therein as the condition precedent to acceptance. If true, and in consideration of this motion we must consider the appellant's facts as alleged, this would be a claim of a constructive change entitling the appellant to an equitable adjustment under the Changes article. Polan Industries, Inc., ASBCA No. 3996, et al., 58-2 BCA par. 1982; Gordon A. Ball, Inc., ASBCA No. 8316, 1963 BCA par. 3925; Hardeman-Monier-Hutcherson, ASBCA No. 11785, 67-1 BCA par. 6210. If, as alleged, production of the manuals should have been integrated with the manufacture of the equipments, the additional costs incurred in connection therewith may possibly be included as a part of an equitable adjustment in price.
The seeming contradiction, between holding that improper rejection of materials or finished articles, with resulting delays, is a constructive change, while similar delays resulting from mere Government tardiness in making approvals is not actionable under the contract, is actually illusory. Rejection of the articles offered, without default termination, is always accompanied by instructions to make the article differently or implies that, if it is made differently, it will be accepted. Some change in the design, or method of fabrication, or inspection, is required and this falls within the coverage of the Changes article. Mere inaction in contravention to a duty to inspect and approve is a breach absent a suspension clause, but makes no change in the drawings, designs, specifications, methods of shipment or packing, or place of delivery.
During the arguments on the motion, Government counsel raised the additional objection that the claim has never been presented to the contracting officer in its present pos ture. This is true.
It was presented to the contracting officer as a claim for delay in approval of first articles and manuals, rather than as a change. We have long held that proceedings before the Board are de novo, and not limited to review of the contracting officer's findings and decision. The Board's jurisdiction is not affected by the presentation to it of a different theory of recovery than that made to the contracting officer. The contracting officer may, of course, always consider or reconsider a claim, upon which an appeal is pending, until the Board reaches the point of decision.
The motion to dismiss is denied.
E. Subcontractor Appeals
SEVERIN v. UNITED STATES
99 Ct. cl. 435 (1943)
Cert. denied 322 U.S. 733 (1944)
MADDEN, Judge, delivered the opinion of the court:
Plaintiffs entered into a contract with the United States on August 3, 1933, to furnish all labor and materials and perform all work required for "the construction, including approaches, etc., of the Post Office at Rochester, New York, per Bid No. 4 (using sandstone for all exterior stonework except where marble and granite are required and substituting steel casement windows for the aluminum casement windows)" for a consideration of $805,923.00, in accordance with designated drawings and specifications. The work was to be completed within 540 days after receipt of the notice to proceed. Plaintiffs were notified to proceed September 2, 1932, thus fixing the date of completion on or before February 24, 1934.
The defendant employed a firm of architects who were "authorized to prepare all drawings * * * criticize and approve plaster models or ornamental work as shown or noted on contract drawings." Article 46 of the specifications provided that the defendant would furnish the models indicated on the drawings. Plaintiffs proceeded with the work but they, and the subcontractor with whom they had made a contract for the cutting of the marble caps and the ornamental work, were delayed because of the failure of the defendant to furnish the models for the exterior marble column caps for the porticos which were at two entrances to the building, The roofs of the porticos were supported by the columns, the caps of which were between column and frieze.
The letter from the Supervising Architect, who was the duly appointed representative of the contracting officer under Article 30 of the specifications, to plaintiffs on January 26, 1934, shows that there was delay in furnishing models No. 6 and No. 7, due to the fact that the contract for the models had not been awarded because of faulty designs furnished to the Supervising Architect and the necessity for new designs. Award of the contract for models was in May instead of the early part of 1933. The models were not approved until the following June and the marble caps were not received by plaintiffs until August 17, 1933,
The defendant does not deny that by reason of its failure to furnish the models plaintiffs and their subcontractor were delayed. A change order was issued extending the time for completion of the contract for 21 days. No allowance was made in this change order for the actual loss sustained by plaintiffs and their subcontractor by reason of the fact that the delay caused plaintiffs to stop work to await the arrival of the models. The subcontractor had its force ready to go to work on the carving of the column caps. It was impossible for plaintiffs to complete the roofs of the porticos because the roofs were to be supported by the columns.
The actual delay caused by the subcontractor was for thirteen days. The actual damage sustained by the subcontractor due to the cost of labor and rental of equipment, which had to be kept idle awaiting the arrival of the models, and the uncertainty as to when they would arrive, amounted to $702.00. The subcontractor's overhead was $35.10, and the plaintiffs' extra overhead on account of this delay was $73.71.
Plaintiffs may have suffered other losses on their own account, as a result of the delay, but if so, they have not adequately proved them.
We have, then, a case in which plaintiffs are suing for damages sustained by themselves as a result of the Government's breach of contract and also for damages sustained by another person, a subcontractor, Plaintiffs may, of course, recover for their own loss, which so far as proved, was $73.71.
As to the items of $702.00 and $35.10 which represent losses of the subcontractor, we think plaintiffs may not recover. The subcontractor could not sue the Government since it has not consented to be sued except, so far as relevant to this case, for breach of contract. But the Government had no contract with the subcontractor, hence it is not liable to, nor suable by him. Herfurth v. United States, 89 Ct. Cls. 122.
If the subcontractor did have a claim against the Government, it could not transfer that claim to another person, plaintiffs, for example, since assignment of such claims is forbidden by statute. R. S. 3977; 31'U.S.C. 203. The Supreme Court said of this statute, in Spofford v. Kirk, 97 U.S. 484, 488, 489:
"It would seem to be impossible to use
See also National Bank of Commerce v. Downie, 218 U.S. 345; Seaboard Air Line Ry v. United States, 53 C. Cls. 107; Packard Co. v. United States, 59 C. Cls. 354.
If, then, we regard the subcontractor as the real party in interest in this claim, we are faced with a legally forbidden attempted assignment of a nonexistent claim.
If we look at plaintiffs as the real party in interest in their own suit we encounter these facts. Plaintiffs did have a contract with the Government. That contract was breached. That breach might, if the contract had been one between private persons, have given rise to a right to win a suit, and to recover nominal damages, even if no actual damages resulted from the breach. But the futile exercise of suing merely to win a suit was not consented to by the United States when it gave its consent
to be sued for its breaches of contract. Nortz v. United States, 294 U.S. 317, 327; Great Lakes Construction Co. v. United States, 95 C. Cls. 479, 502.
Plaintiffs therefore had the burden of proving, not that someone suffered actual damages from the defendant's breach of contract, but that they, plaintiffs, suffered actual damages. If plaintiffs had proved that they, in the performance of their contract with the Government became liable to their subcontractor for the damages which the latter suffered, that liability, though not yet satisfied by payment, might well constitute actual damages to plaintiffs, and sustain their suit. Here, however, the proof shows the opposite. The subcontract, which is in evidence, shows that plaintiffs and the subcontractor agreed with each other as follows:
"21st. The Contractor or Subcontractor
Thus plaintiffs, effectively so far as we are advised, protected themselves from any damage by way of liability over to the subcontractor for such breaches of contract by the Government as the one which occurred here.
Plaintiffs must, then, so far as their claim includes items of losses suffered by their subcontractor, be merely accommodating another person who was damaged, by letting that other person use, for the purposes of litigation, the name of plaintiffs, who had a contract and could properly have sued if they had been damaged. Orderly administration of justice, as well as the statute against assignment of claims, seem to us to forbid that.
Plaintiffs may recover $73.71.
It is so ordered.
WHITAKER, Judge; and LITTLETON, Judge, concur.
DISSENTING OPINION BY CHIEF JUSTICE WHALEY
WHALEY, Chief Justice, dissenting:
I cannot agree with the majority opinion.
There is no legal or equitable assignment involved. This is an action by a contractor to recover damages suffered by himself and his subcontractor, occasioned by the delay of the defendant. It is submitted that defendant's delay caused damages to both the contractor and the subcontractor. The
plaintiff failed to prove the amount of his own damages but the damages suffered by the subcontractor were established by clear proof. The majority opinion admits that the subcontractor was damaged in the amount of $737.10 by allowing overhead on this amount to plaintiff.
For fifty years it has been the settled doctrine of this court that a contractor could bring suit for himself and his subcontractor for losses occasioned by delay by the defendant before payment was made to the subcontractor. In innumerable cases from Stout, Hall & Bangs v. United States, 27 C. Cls. 385, to Consolidated Engineering Company, No. 43159, decided February 1, 1943 (98 C. Cls. 256), this doctrine has been uniformly followed and never been questioned.
We must bear in mind that general contractors usually sublet specialized work like plumbing and electrical installations to subcontractors. The effect of the majority opinion would be to compel such subcontractors, and they are legion in numbers, to sue in their own names, which they could not do for lack of privity with the United States. This anomalous situation has never been recognized by this court in all its history. And the majority opinion cites no case in the Supreme Court in which subcontractors have been held to be assignors of claims against the United States, merely because they were unfortunate enough to be subcontractors.
The subcontractor of plaintiff agreed in his contract not to hold the contractor for "loss, damage, detention or delay caused by the owner."
The contractor is the plaintiff in this action. The subcontractor is not suing the contractor or the defendant. Plaintiff is suing for himself and his subcontractor for an admitted loss. The defendant was not a party to the subcontract. No consideration has been paid by the defendant for the protection given the contractor in the subcontract and without it the de fendant cannot avail itself of this defense.
In my judgment it is a travesty of justice to allow plaintiff overhead on the losses suffered by his subcontractor and to deny recovery to plaintiff for his subcontractor of the amount admittedly due him from the defendant, which any court of equity would require the contractor to pay over to his subcontractor after payment to him by the defendant.
I think plaintiff is entitled to recover $810.81.
ASBCA No. 11739 (1967)
ON MOTION TO DISMISS
The Government has moved to dismiss an appeal brought by AerojetGeneral Corporation for and on behalf of its subcontractor, Electrac, Incorporated.