Foster Const. CA & Williams Bros. Co. v. United States

• Decision Date: 11 December 1970
• Docket Number: No. 417-66.,417-66.
• Citation: 435 F.2d 873
• Parties: FOSTER CONSTRUCTION C. A. AND WILLIAMS BROTHERS COMPANY, a Joint Venture, etc. v. The UNITED STATES.
• Court: U.S. Claims Court

435 F.2d 873 (1970)

FOSTER CONSTRUCTION C. A. AND WILLIAMS BROTHERS COMPANY, a Joint Venture, etc. v. The UNITED STATES.

No. 417-66.

United States Court of Claims.

December 11, 1970.

James T. Lewis, Washington, D. C., attorney of record, for plaintiff. Hudson & Creyke, Washington, D. C., of counsel.

Edward J. Friedlander, Washington, D. C., with whom was Asst. Atty. Gen. William D. Ruckelshaus, for defendant.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges.

ON PLAINTIFF'S MOTION AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT

PER CURIAM:

This case was referred to Trial Commissioner David Schwartz with directions to prepare and file his opinion on the issues of plaintiff's motion and defendant's cross-motion for summary judgment under the order of reference and Rule 166(c). The Commissioner has done so in an opinion and report filed on March 25, 1970. Defendant filed a request for review by the court, plaintiff urged the court to adopt the commissioner's opinion and the case has been submitted to the court on oral argument of counsel and the briefs of the parties.

The court agrees with the trial commissioner's conclusions, his recommended disposition, his discussion of the general principles of law applicable to this type of case, and the reasoning of his opinion, except that the court finds it unnecessary to consider whether the particular boring logs in this case indicated conditions other than those actually encountered.

The reason why the court need not pass upon the correctness of the commissioner's discussion of this problem (in the parts of his opinion headed "The indications in the logs, on their face", "The Board's decision on the logs as permissible indicators of the subsurface", and "The alluvial condition and its discoverability on a minimum site examination") is that the court is of the view that the other indications in the contract of an impermeable subsurface permitting excavation in the dry — the notation as to the types of concrete; the direction that "all concrete shall be placed in the dry"; the omission from the concrete provisions of the documents of any provision for a concrete seal or for a class of concrete of which seals are made; and the so-called "6 tons" note — are sufficient in themselves, without the logs, to sustain the determination that a changed condition was encountered. While the commissioner characterizes these indications as "confirmatory" (in view of his reliance on the logs), the court believes that these features, taken together, supply an independent basis to sustain plaintiff's claim. The first category of changed conditions in the Changed Conditions Clause refers to conditions materially different from those "indicated in this contract", and the design features to which we have referred reasonably "indicate" the type of subsurface conditions expected to be encountered. For this part of the Changed Conditions Clause to apply, it is not necessary that the "indications" in the contract be explicit or specific; all that is required is that there be enough of an indication on the face of the contract documents for a bidder reasonably not to expect "subsurface or latent physical conditions at the site differing materially from those indicated in this contract." In this instance, as Commissioner Schwartz well points out, the design features mentioned above performed that function and could very well lead a reasonable bidder to conclude that he would not meet the type of subsurface conditions plaintiff actually met during performance.

On this basis, the court by-passes the issue of whether the logs were another such "indication", without agreeing or disagreeing with the trial commissioner's opinion on this point, and treats the case, for the purposes of decision, as if there had been no boring logs at all. The other indications, all of which present purely legal questions unmixed with factual issues, are enough to dispose of the changed conditions problem favorably to plaintiff.

As supplemented and qualified by the foregoing discussion, the court agrees with the trial commissioner's opinion (without adopting or rejecting his discussion of the particular logs in this case) and his recommended conclusions as hereinafter set forth, and hereby adopts the same as its basis for judgment in this case. Therefore, plaintiff is entitled to recover in accord with and to the extent of the conclusion set forth hereinafter.

OPINION OF COMMISSIONER

SCHWARTZ, Commissioner:

Plaintiff sues for $1,417,923 for changed conditions and changes, under a standard government construction contract dated June 18, 1956 with the Bureau of Public Roads of the Department of Commerce for the construction of a bridge over the Terraba River in Costa Rica.

The contract provided for the construction of a 56-mile stretch of road of the Inter-American Highway, of which the bridge was a part. The total contract fixed price was $9,607,185; the portion for the bridge was $1,087,560. Plaintiff, a joint venture composed of Foster Construction, C.A., and Williams Brothers Company, was the successful bidder; it subcontracted the bridge for $936,838 to another joint venture known as Caribbean-Macomber-Brunzell, for whose benefit the suit is brought. Both contractor and subcontractor will herein be referred to as the plaintiff or the contractor, except as may otherwise be required.

In a proceeding under the disputes clause in the contract, the claims have with minor exceptions been denied by the contracting officer and, on appeal, by the Department of Commerce Appeals Board. This suit followed, and the parties have now made cross-motions for summary judgment, whose disposition requires review of the decision of the Appeals Board, pursuant to the standards of the Wunderlich Act, 41 U.S.C. §§ 321-322. Plaintiff contends that the Board committed errors of law and made findings of fact unsupported by substantial evidence, within the meaning of the Act.

All but one of the claims are herein upheld and the decision of the Board is reversed. The determination of damages was in the administrative proceedings postponed to the determination of liability. In accordance with United States v. Anthony Grace & Sons, Inc., 384 U.S. 424, 86 S.Ct. 1539, 16 L.Ed.2d 662 (1966), therefore, proceedings are suspended to give the parties the opportunity to obtain an administrative determination of the amount of the equitable adjustment to which plaintiff is entitled.

I. The Claim of Changed Conditions at Piers 4, 5 and 6

Clause 4 of the contract, the standard changed conditions clause, authorizes claims for two types of changed conditions, often called category one and category two: "(1) subsurface or latent physical conditions at the site differing materially from those indicated in this contract, or (2) unknown physical conditions at the site, of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in this contract."¹ (The full text of clause 4 is set out in an appendix, together with the other contract provisions to which reference will be made.) Plaintiff claims that it encountered both types of changed conditions. Because the claim of category one changed conditions is herein upheld, it will not be necessary to discuss the validity of the claim of category two changed conditions.

The controversy centers on the excavation of the cofferdams for the foundations of piers 4, 5 and 6 of the six piers of the bridge. Piers 1, 2 and 3 were constructed without serious trouble. They were on the north, shallow side of the river, which remained dry except at the height of the rainy season. The riverbed sloped downward from the north bank to the deepest part of the channel, between pier 6 and abutment 2 on the south bank. Accordingly, piers 4, 5 and 6 were designed to be larger in size, deeper in the elevation of their footings and wider apart than piers 1, 2 and 3.

Drill hole logs and design details and directions attached to the contract, plaintiff contends, indicated that the subsurface at the sites of piers 4, 5 and 6 would be firm and stable, with a 6-ton per square foot bearing capacity at the footings, and relatively impermeable, that is, impervious or resistant to the flow of water, to such degree as would allow the dewatering of the cofferdam by pumping and thereby permit excavation "in the dry." Further, plaintiff contends that the subsurface conditions encountered were materially different in that the materials were soft, not firm, and unstable, without the expected bearing capacity, and highly permeable. These changed conditions, it is contended, caused a "quick" condition, in which loose and permeable materials gave no firm hold for the sheet piling, and water in great quantities entered the cofferdams, leading to great difficulties in excavation, including losses of cofferdams, and, at piers 5 and 6, made it impracticable to dewater the cofferdam by pumping and thus impossible to excavate in the dry.

It is further claimed that the Bureau acknowledged the existence of changed conditions in a series of change orders, in which the conditions encountered were met by a redesign of the foundations, lifting their elevations and providing for steel bearing piles under the foundation of pier 4 and the pouring of concrete seals at the bottom of the cofferdams for piers 5 and 6. Plaintiff was, of course, paid for the piles and the seals. The claim is for other costs incurred by reason of the alleged changed conditions.

The defense, a reliance on the decision of the Board denying the claims, will be discussed below.

Intimately involved in the claims are the processes termed excavation "in the wet" and "in the dry" of cofferdams, and the pouring of concrete for pier foundations "in the wet" and "in the dry." The cofferdams for the pier foundations were constructed by driving...