A-37454, JULY 24, 1931, 11 COMP. GEN. 27

A-37454: Jul 24, 1931

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THE CONTRACTOR IS NOT ENTITLED TO PAYMENT OF ANY INCREASED COSTS DUE TO SUCH DELAY. 591.95 AS DAMAGES AND EXCESS COSTS ALLEGED TO HAVE BEEN SUSTAINED IN THE PERFORMANCE OF THE WORK UNDER CONTRACT A.M.B. WHICH IS AS FOLLOWS: TIME FOR COMPLETION AND LIQUIDATED DAMAGES. - THE FOUNDATIONS TO CARRY THE WORK OF THIS CONTRACT ARE BEING BUILT UNDER A SEPARATE CONTRACT. NOT ALL OF THE FOUNDATION WORK WILL HAVE BEEN COMPLETED BY THE TIME THE WORK OF THIS CONTRACT IS STARTED. THE APPROVED PROGRESS SCHEDULE FOR THE FOUNDATION CONTRACT IS AS FOLLOWS: TABLE STRUCTURE DATES FIXED FOR COMPLETION OF FOUNDATIONS SEA WALL . THE GRANITE TO BE SET UNDER THIS CONTRACT IS BEING DELIVERED UNDER CONTRACTS NOS. 31.

A-37454, JULY 24, 1931, 11 COMP. GEN. 27

CONTRACTS - DELAYS - INCREASED COSTS WHERE A CONTRACT EXPRESSLY PROVIDES FOR A PROBABLE DELAY IN THE COMPLETION OF CERTAIN FOUNDATION WORK BEING PERFORMED UNDER A SEPARATE CONTRACT, AND FOR THE GRANTING OF AN EXTENSION OF TIME IN THE EVENT OF SUCH CONTINGENCY, THE CONTRACTOR IS NOT ENTITLED TO PAYMENT OF ANY INCREASED COSTS DUE TO SUCH DELAY.

DECISION BY COMPTROLLER GENERAL MCCARL, JULY 24, 1931:

THE NATIONAL CONSTRUCTION CO. HAS REQUESTED ALLOWANCE OF $148,591.95 AS DAMAGES AND EXCESS COSTS ALLEGED TO HAVE BEEN SUSTAINED IN THE PERFORMANCE OF THE WORK UNDER CONTRACT A.M.B. NO. 34, DATED OCTOBER 2, 1929, DUE TO DELAYS OF ANOTHER CONTRACTOR IN COMPLETING CERTAIN WORK. THE EXECUTIVE OFFICER OF THE ARLINGTON MEMORIAL BRIDGE COMMISSION REPORTED IN LETTER OF JUNE 29, 1931, THAT HE HAD BEEN UNABLE TO ALLOW ANY PART OF THE CLAIM BUT HAD CONCLUDED TO SUBMIT IT TO THIS OFFICE.

THE SPECIFICATIONS ADVERTISED AUGUST 1, 1929, FOR THE PERFORMANCE OF THE WORK IN QUESTION, CONSISTING OF SUPERSTRUCTURES OF BRIDGE PLAZA AND WATER- GATE FEATURES OF THE ARLINGTON MEMORIAL BRIDGE, NOTIFIED ALL PROSPECTIVE BIDDERS THAT THE CONTRACTOR WOULD BE REQUIRED TO COMMENCE WORK WITHIN 30 CALENDAR DAYS AFTER THE DATE OF RECEIPT OF NOTIFICATION OF THE SIGNING OF THE CONTRACT BY THE CONTRACTING OFFICER AND THAT THE WORK SHOULD BE PROSECUTED IN SUCH A MANNER AS TO MAINTAIN THE PROGRESS AS CALLED FOR BY THE SCHEDULE PREPARED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 44, FINISHING THE ENTIRE WORK WITHIN THE TIME FIXED BY THE CONTRACT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 42, WHICH IS AS FOLLOWS:

TIME FOR COMPLETION AND LIQUIDATED DAMAGES.--- THE FOUNDATIONS TO CARRY THE WORK OF THIS CONTRACT ARE BEING BUILT UNDER A SEPARATE CONTRACT, NO. 28, AND NOT ALL OF THE FOUNDATION WORK WILL HAVE BEEN COMPLETED BY THE TIME THE WORK OF THIS CONTRACT IS STARTED. THE APPROVED PROGRESS SCHEDULE FOR THE FOUNDATION CONTRACT IS AS FOLLOWS:

TABLE

STRUCTURE DATES FIXED FOR COMPLETION

OF FOUNDATIONS

SEA WALL ------------------------------------ SEPTEMBER 15, 1929.

LOWER STEPS --------------------------------- SEPTEMBER 1, 1929.

MAIN STEPS ---------------------------------- OCTOBER 2, 1929.

WING WALLS AND PLAZA WALLS ------------------ NOVEMBER 5, 1929.

PARKWAY UNDERPASS --------------------------- DECEMBER 1, 1929.

PARKWAY APPROACH ---------------------------- DECEMBER 1, 1929.

THE GRANITE TO BE SET UNDER THIS CONTRACT IS BEING DELIVERED UNDER CONTRACTS NOS. 31, 32, AND 33, DATES OF DELIVERY FOR THE SEVERAL PARTS INTO WHICH THE GRANITE WORK IS DIVIDED BEING AS FOLLOWS:

TABLE

STRUCTURE COMPLETIONS OF DELIVERY

SEA WALL ------------------------------------ OCTOBER 10, 1929.

LOWER STEPS --------------------------------- OCTOBER 10, 1929.

MAIN STEPS ---------------------------------- NOVEMBER 25, 1929.

PLAZA AND WING WALLS ------------------------ MAY 10, 1930.

PARKWAY UNDERPASS--

BALUSTRADE COURSES ------------------------ MAY 10, 1930.

TORUS COPING COURSE AND STEP -------------- JANUARY 10, 1930.

ALL GRANITE BELOW TORUS COPING ------------ NOVEMBER 25, 1929.

PARKWAY APPROACH--

BALUSTRADE COURSES ------------------------ MAY 10, 1930.

TORUS COPING COURSE AND STEP -------------- JANUARY 10, 1930.

ALL GRANITE BELOW TORUS COPING ------------ JANUARY 10, 1930.

THE WORK COVERED BY THESE SPECIFICATIONS SHALL BE COMPLETED PROGRESSIVELY AND AS NEARLY AS PRACTICABLE IN THE ORDER IN WHICH THE VARIOUS PARTS ARE ENUMERATED IN PARAGRAPH 22.

THE SEA WALL, LOWER STEPS, AND THE MAIN STEPS SHALL BE COMPLETED ON OR BEFORE DECEMBER 31, 929; THE REMAINDER OF THE WORK SHALL BE COMPLETED ON OR BEFORE JUNE 30, 1930. THE TIME FOR COMPLETION OF THE ENTIRE WORK, AS JUST STATED, WILL BE MADE A PART OF THE CONTRACT WHICH WILL ALSO PROVIDE FOR LIQUIDATED DAMAGES IN THE AMOUNT OF ONE HUNDRED DOLLARS ($100) PER CALENDAR DAY FOR ALL DELAY IN COMPLETING THE WORK BEYOND THE DATE FIXED THEREFOR: PROVIDED, HOWEVER, THAT THE DATE FOR COMPLETION AS JUST FIXED SHALL BE POSTPONED BY THE SAME NUMBER OF DAYS WHICH THE CONTRACTOR IS ACTUALLY DELAYED BY REASON OF THE NONCOMPLETION OF THE FOUNDATION WORK OR NONDELIVERY OF THE GRANITE BY THE TIMES STATED IN THE SCHEDULE QUOTED ABOVE.

PROSPECTIVE BIDDERS WERE INFORMED, ALSO, THAT THE ACCEPTED BIDDER WOULD BE REQUIRED TO EXECUTE THE STANDARD FORM OF CONSTRUCTION CONTRACT, WHICH CONTAINS ARTICLE 13, AS FOLLOWS:

THE GOVERNMENT MAY AWARD OTHER CONTRACTS FOR ADDITIONAL WORK, AND THE CONTRACTOR SHALL FULLY COOPERATE WITH SUCH OTHER CONTRACTORS AND CAREFULLY FIT HIS OWN WORK TO THAT PROVIDED UNDER OTHER CONTRACTS AS MAY BE DIRECTED BY THE CONTRACTING OFFICER. THE CONTRACTOR SHALL NOT COMMIT OR PERMIT ANY ACT WHICH WILL INTERFERE WITH THE PERFORMANCE OF WORK BY ANY OTHER CONTRACTOR.

THE PROPOSAL OF THE NATIONAL CONSTRUCTION CO. (INC.), WAS ACCEPTED, AND THE CONTRACT OF OCTOBER 2, 1929, PROVIDED FOR THE PAYMENT OF AN AGGREGATE OF $368,000 FOR PERFORMANCE OF THE WORK IN QUESTION. THE STANDARD FORM OF CONTRACT CONTAINED, ALSO, ARTICLE 9, IN PERTINENT PART THAT THE CONTRACTOR SHOULD NOT BE---

* * * CHARGED WITH LIQUIDATED DAMAGES BECAUSE OF ANY DELAYS IN THE COMPLETION OF THE WORK DUE TO UNFORESEEABLE 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, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER, OR DELAYS OF SUBCONTRACTORS DUE TO SUCH CAUSES * * *.

THERE WAS ORDERED SOME EXTRA WORK OR CHANGES IN ACCORDANCE WITH ARTICLES 3 AND 4 OF THE CONTRACT, AND THE CONTRACTOR HAS BEEN PAID THE AGREED COMPENSATION THEREFOR; BUT THE CONTRACTOR HAS ALLEGED IN LETTER OF JUNE 8, 1931, AND ACCOMPANYING PAPERS THAT IT HAD ACTUALLY EXPENDED THE SUM OF $417,961.53, OR $49,961.53 MORE THAN IT RECEIVED IN PAYMENT ON THE ORIGINAL CONTRACT, AND HAS ASSERTED CLAIM FOR $148,591.95, WHICH WAS STATED IN THE AFORESAID LETTER OF JUNE 29, 1931, AS FOLLOWS:

THE CLAIM TRANSMITTED HEREWITH IS FOR ADDITIONAL FUNDS AND IS DIVIDED INTO THREE ITEMS, AS FOLLOWS:

1. "LOSS"--- ORIGINAL CONTRACT ------------------- $48,459.53

2. "PROFIT"--- 15 PERCENT OF THE SUM OF THE

ORIGINAL BID PRICE AND THE "LOSS" ----------- 62,694.23

3. RENTAL OF EQUIPMENT BEYOND EXPIRATION OF

ORIGINAL CONTRACT TIME ------------------------ 35,936.19

TOTAL --------------------------------------- 148,591.95

IN ESTIMATING HIS LOSS IT APPEARS THAT THE CONTRACTOR DEDUCTED THE SUM OF THE ORIGINAL CONTRACT PRICE (AUGMENTED BY THE AMOUNTS PAID TO HIM FOR ADDITIONAL AND EXTRA WORK PERFORMED UNDER THE PROVISIONS OF PARAGRAPHS 31 AND 33 OF THE SPECIFICATIONS) FROM THE TOTAL AMOUNT WHICH HE CLAIMS TO HAVE SPENT IN COMPLETING THE WORK. HE THEN DETERMINED THE PROFIT ITEM BY TAKING FIFTEEN PERCENT (15 PERCENT) OF THE SUM OF THE ORIGINAL CONTRACT PRICE PLUS THE LOSS CALCULATED AS JUST DESCRIBED. THE ITEM FOR RENTAL OF EQUIPMENT BEYOND THE DATE WHEN HE WAS SUPPOSED TO FINISH THE WORK IS INDICATED IN DETAIL ON EXHIBIT VIII, THE LAST PAGE OF HIS DOSSIER.

THERE IS NO QUESTION OF FACT IN THE CONTRACTOR'S CLAIM THAT HE WAS DELAYED THROUGH NO CAUSES FOR WHICH HE IS RESPONSIBLE. ON THE OTHER HAND, TO ESTABLISH THE CORRECTNESS OF THE ACTUAL AMOUNT OF EACH OF THE THREE ITEMS MENTIONED ABOVE, IT WOULD BE NECESSARY TO UNDERTAKE A THOROUGHGOING AUDIT OF THE CONTRACTOR'S BOOKS. NO CHECK HAS BEEN POSSIBLE FROM INFORMATION AT PRESENT IN POSSESSION OF THIS OFFICE AS TO ITEMS 1 AND 2; BUT A SUPERFICIAL EXAMINATION OF ITEM 3,"RENTAL OF EQUIPMENT," INDICATES THAT SOME OF THE ENTRIES COMPRISING THIS ITEM ARE RATHER HIGH; FOR EXAMPLE, FOR THE SECOND ENTRY FOR THE P. AND H. CRANE THE RENTAL ASKED SEEMS TO BE GREATER IN AMOUNT THAN THE TOTAL VALUE OF THE CRANE.

THE NECESSARY VERIFICATION OF THE AMOUNTS OF THE CLAIM HAVE NOT BEEN MADE BY ME BECAUSE OF THE PURELY LEGAL NATURE OF THE QUESTION INVOLVED. I AM NOT AWARE THAT THE CONTRACTOR IS LEGALLY ENTITLED TO THE DIFFERENCE BETWEEN ACTUAL COST AND BID PRICE, EVEN WHEN PARTLY OR WHOLLY DUE TO DELAYS NOT HIS FAULT. HOWEVER, IN AN ACCOMPANYING LETTER FROM HIS COUNSEL HE REFERS TO VARIOUS COURT DECISIONS TO SUSTAIN HIS CONTENTION.

COUNSEL FOR THE CONTRACTOR, IN LETTER OF JUNE 24, 1931, HAS CITED A NUMBER OF CASES IN AN ATTEMPT TO SUSTAIN THE CLAIM OF THE CONTRACTOR. THESE CASES INCLUDE FIGH V. UNITED STATES, 8 CT.CLS. 310; PNEUMATIC GUN- CARRIAGE AND POWER CO. V. UNITED STATES, 36 CT.CLS. 71; MCLAUGHLIN V. UNITED STATES, 36 CT.CLS. 138, TOGETHER WITH A NUMBER OF CASES BETWEEN PRIVATE PARTIES OR WHERE SOME LOCAL GOVERNMENT SUBDIVISION WAS INVOLVED, SUCH AS ROBERT GRACE CONTRACTING CO. V. CHESAPEAKE, ETC., RAILROAD CO., 281 FED.REP. 904; BATES AND R. CONSTRUCTION CO. V. CUYAHOGA COUNTY, 274 FED.REP. 659; TOBEY V. PRICE, 75 ILL. 645; OLSON V. VIROQUA, 121 WIS. 571; STATE V. FARISH, 23 MISS. 483, AND A NUMBER OF OTHER CASES. HOWEVER, HE DID NOT CITE THE LEADING CASE OF CROOK V. UNITED STATES, 270 U.S. 4, OR POINT OUT THAT THE DECISIONS CITED IN THE COURT OF CLAIMS WERE RENDERED PRIOR TO THE CROOK CASE. MR. JUSTICE HOLMES SAID IN THE CROOK CASE, WHICH WAS ONE FOR DAMAGES ON ACCOUNT OF ALLEGED DELAYS WHICH THE GOVERNMENT CAUSED THE CONTRACTOR IN THE PROSECUTION OF THE WORK, THAT:

* * * LIQUIDATED DAMAGES ARE FIXED FOR HIS (CONTRACTOR-S) DELAYS. BUT THE ONLY REFERENCE TO DELAYS ON THE GOVERNMENT SIDE IS IN THE AGREEMENT THAT IF CAUSED BY ITS ACTS THEY WILL BE REGARDED AS UNAVOIDABLE, WHICH, THOUGH PROBABLY INSERTED PRIMARILY FOR THE CONTRACTOR'S BENEFIT AS A GROUND FOR EXTENSION OF TIME, IS NOT WITHOUT A BEARING ON WHAT THE CONTRACT BOUND THE GOVERNMENT TO DO. DELAYS BY THE BUILDING CONTRACTORS WERE UNAVOIDABLE FROM THE POINT OF VIEW OF BOTH PARTIES TO THE CONTRACT IN SUIT. THE PLAINTIFF AGREED TO ACCEPT IN FULL SATISFACTION FOR ALL WORK DONE UNDER THE CONTRACT THE CONTRACT PRICE, REDUCED BY DAMAGES DEDUCTED FOR HIS DELAYS AND INCREASED OR REDUCED BY THE PRICE OF CHANGES, * * *. NOTHING MORE IS ALLOWED FOR CHANGES, AS TO WHICH THE GOVERNMENT IS MASTER. IT WOULD BE STRANGE IF IT WERE BOUND FOR MORE IN RESPECT OF MATTERS PRESUMABLY BEYOND ITS CONTROL. THE CONTRACT PRICE, IT IS SAID IN ANOTHER CLAUSE, SHALL COVER ALL EXPENSES OF EVERY NATURE CONNECTED WITH THE WORK TO BE DONE. LIABILITY WAS EXCLUDED EXPRESSLY FOR UTILITIES THAT THE GOVERNMENT PROMISED TO SUPPLY. WE ARE OF OPINION THAT THE FAILURE TO EXCLUDE THE PRESENT CLAIM WAS DUE TO THE FACT THAT THE WHOLE FRAME OF THE CONTRACT WAS UNDERSTOOD TO SHUT IT OUT, ALTHOUGH IN SOME CASES THE GOVERNMENT'S LAWYERS HAVE BEEN MORE CAREFUL. WOOD V. UNITED STATES, 258 U.S. 120. THE PLAINTIFF'S TIME WAS EXTENDED AND IT WAS PAID THE FULL CONTRACT PRICE. IN OUR OPINION IT IS ENTITLED TO NOTHING MORE.

THE CONTRACTOR IN THIS CASE WAS NOT CHARGED UNDER ARTICLE 9 OF THE CONTRACT WITH LIQUIDATED DAMAGES ON ACCOUNT OF THE DELAYS IN THE GOVERNMENT FURNISHING THE FOUNDATION SITES IN ACCORDANCE WITH THE SCHEDULE AS STATED IN THE ABOVE-QUOTED EXTRACT FROM THE CONTRACT SPECIFICATIONS. THE COURT OF CLAIMS, SUBSEQUENT TO THE CROOK CASE, HAS HAD OCCASION TO FURTHER CONSIDER THE QUESTION OF DAMAGES ON ACCOUNT OF DELAYS CAUSED BY THE GOVERNMENT IN THE INCEPTION OR PROSECUTION OF WORK UNDER A CONTRACT WITH THE UNITED STATES. SEE G. AND H. HEATING CO. V. UNITED STATES, 63 CT.CLS. 164; POOLE ENGINEERING AND MACHINE COMPANY V. UNITED STATES, 63 CT.CLS. 234; H. B. CONVERSE AND CO. V. UNITED STATES, 61 CT.CLS. 672, CERTIORARI DENIED 273 U.S. 708; LANGE AND BERGSTROM V. UNITED STATES, 61 CT.CLS. 666; ID. 682; CARROLL ET AL. V. UNITED STATES, 68 CT.CLS. 500. THE COURT APPLIED THE PRINCIPLES OF THE CROOK CASE AND HELD IN THESE CASES THAT THE UNITED STATES WAS NOT LIABLE FOR DAMAGES ON ACCOUNT OF DELAYS CAUSED THE CONTRACTOR IN THE COMPLETION OF THE WORK. THE SAME COURT IN MCCLOSKEY JR., INC., ETC. V. UNITED STATES, 66 CT.CLS. 105, HELD THAT THE GOVERNMENT WAS CHARGEABLE WITH DAMAGES WHERE IT BREACHED A SPECIFIC STIPULATION TO FURNISH THE FOUNDATION SITE WITHIN A CERTAIN PERIOD, SAYING THAT THE AGENTS ACTING FOR THE GOVERNMENT PAID NO ATTENTION TO THE AGREEMENT TO HAVE THE SITE CLEARED UP A CERTAIN DATE AND WERE CARELESS AS TO THE PERFORMANCE OF THE PROVISIONS OF THE WRITTEN CONTRACT WITH REFERENCE TO HOW THE SITE SHOULD BE CLEARED. SEE ALSO DETROIT STEEL PRODUCTS CO. V. UNITED STATES, 62 CT.CLS. 686.

THIS OFFICE HAD OCCASION TO CONSIDER THE MATTER SOMEWHAT AT LENGTH IN 4 COMP. GEN. 404, 409, AND THE FACTS IN THIS CASE BRING IT WITHIN SAID DECISION AND THE PRINCIPLES STATED BY MR. JUSTICE HOLMES IN THE CROOK CASE. THE ADVERTISED SPECIFICATIONS MADE A PART OF THE CONTRACT SPECIFICALLY NOTIFIED ALL CONCERNED THAT THE FOUNDATION SITES CARRYING THE WORK UNDER THE CONTRACT WERE NOT COMPLETED AND, FURTHER, THAT THERE MIGHT BE DELAYS IN THE COMPLETION OF SUCH FOUNDATION SITES BECAUSE A PROVISION WAS SPECIFICALLY MADE THAT THE FINAL DATE FOR COMPLETION OF THE CONTRACT WOULD BE POSTPONED BY THE SAME NUMBER OF DAYS WHICH THE CONTRACTOR MIGHT BE DELAYED BY REASON OF THE NONCOMPLETION OF THE FOUNDATION WORK OR NONDELIVERY OF THE GRANITE BY THE TIME STATED IN THE QUOTED SCHEDULE. NOTHING WHATEVER WAS CONTAINED IN EITHER ARTICLE 9 OF THE CONTRACT OR IN THE PROVISIONS OF THE QUOTED SCHEDULE OR ELSEWHERE IN THE SPECIFICATIONS THAT THE UNITED STATES WOULD PAY THE CONTRACTOR DAMAGES IN EVENT THE FOUNDATION SITES WERE NOT COMPLETED IN ACCORDANCE WITH THE SCHEDULE. THE MAXIM EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS HAS APPLICATION HERE, FOR HAD IT BEEN THE INTENTION OF THE PARTIES THAT THE UNITED STATES SHOULD PAY ANY EXCESS COSTS OCCASIONED THE CONTRACTOR THROUGH THE FAILURE TO HAVE THE FOUNDATION SITES COMPLETED IN ACCORDANCE WITH THE SCHEDULE, IT IS TO BE ASSUMED AN EXPRESS STIPULATION TO THAT EFFECT WOULD HAVE BEEN CONTAINED IN THE CONTRACT. ON THE CONTRARY, THE STIPULATIONS IN THE CONTRACT FOR REMISSION OF LIQUIDATED DAMAGES ON ACCOUNT OF DELAYS CAUSED THROUGH THE NONCOMPLETION OF THE FOUNDATION SITES AND THE DELIVERY OF GRANITE MUST BE ACCEPTED UNDER PRINCIPLES STATED IN THE CROOK CASE TO NEGATIVE ANY LIABILITY ON THE UNITED STATES FOR ANY EXCESS COSTS OCCASIONED THE CONTRACTOR THROUGH SUCH DELAY WHICH WAS NOT CAUSED THROUGH CARELESSNESS, ETC., OF THE OFFICERS OF THE BRIDGE COMMISSION.