H & M MOVING, INC. v. United States

• Decision Date: 04 October 1974
• Docket Number: No. 37-73.,37-73.
• Citation: 499 F.2d 660,204 Ct. Cl. 696
• Parties: H & M MOVING, INC. v. The UNITED STATES.
• Court: U.S. Claims Court

204 Ct. Cl. 696, 499 F.2d 660 (1974)

H & M MOVING, INC. v. The UNITED STATES.

No. 37-73.

United States Court of Claims.

June 19, 1974.

As Amended October 4, 1974.

William W. Scott, Washington, D. C., attorney of record, and Barton J. Menitove, Washington, D. C., for plaintiff; Collier, Shannon, Rill & Edwards, Washington, D. C., of counsel.

Clarence T. Kipps, Jr., Washington, D. C., for The National Security Industrial Association, amicus curiae; John L. Rice and Miller & Chevalier, Washington, D. C., of counsel.

Rose E. Adewale-Mendes, Washington, D. C., with whom was Acting Asst. Atty. Gen. Irving Jaffe, for defendant.

Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.

BENNETT, Judge:

Plaintiff, H & M Moving, Inc., a District of Columbia corporation, brings this contract action under section 2 of the Wunderlich Act, 41 U.S.C. § 322. In moving for summary judgment, plaintiff maintains that the failure of the Department of Commerce Appeals Board (DCAB), Docket No. OAS-1, February 28, 1972,¹ to award travel time payments for the period from September 1, 1969 through May 11, 1970, was an error of law redressable in this court. Defendant has filed a cross-motion for summary judgment contending that the board was correct in disallowing travel time payments for the period from September 1, 1969 through May 11, 1970 (count I), but that the board erred in awarding plaintiff travel time for the period from May 12, 1970 to January 31, 1971 (count II), the date the contract in question terminated. For reasons which shall be set out, the court concludes that the DCAB result was correct but only in part and for the wrong reason and that plaintiff is entitled to recover for all travel time under the contract and all extensions thereof because of plaintiff's reasonable interpretation of a latent ambiguity in the contract written by defendant.

On August 15, 1969, plaintiff received a solicitation for bids for moving services to be performed in the District of Columbia metropolitan area for the Department of Commerce. The solicitation invited bids for straight, night and overtime rates to be paid under a moving contract. Plaintiff was awarded the contract, No. 0-35009, on September 10, 1969.

Article XI of the contract, entitled Payment, provided in part as follows:

Billing for contractual services rendered shall be submitted monthly to the designated "COTR" appropriate paying office as shown on the Task Order, in the form of an itemized invoice covering all services furnished during the month. The invoice shall be supported by the time cards or suitable time sheets for each Contractor\'s employee signed by the authorized Commerce Department COTR as evidence of hours worked by each employee of the Contractor. The time card shall indicate the date worked, number of hours worked and hourly rate for each employee.

Article II A-3, which contained a provision for travel time payments, is the contract section which gave rise to the dispute here at issue. That section provided:

In determining hours worked on a particular job, the Government will allow reasonable time for travel to and from the Contractor\'s place of business to the job location. Such time allowed will be a minimum of thirty (30) minutes and a maximum of sixty (60) minutes depending upon the location of the job.

When it entered into this contract, H & M was conducting the great percentage of its business with the Government. The travel time provision, however, had never previously been in a contract between H & M and the Government. The DCAB found that the travel time provision was an unusual one in Government moving contracts. As a result, no general understanding existed in the moving industry regarding the interpretation of the clause. Unknown to plaintiff, the travel time provision had been placed in Department of Commerce moving contracts in 1967 and 1968 in order to permit movers to bill for truckdrivers who drove trucks from the mover's place of business to the jobsite and back and who were paid by the mover for such services. Plaintiff's president, Robert E. Mee, knew that a similar travel time provision had been part of a series of contracts between another moving service and another Government agency during 1961-64. Plaintiff also knew that said moving company charged for and was paid for such travel time from 1961 through early 1964 even though it did not pay its employees for such travel time. Plaintiff did not know, however, that when the other agency learned that the moving company was not paying its employees for the travel time, it stopped such payments, recaptured those it had made, and terminated the contract.

H & M's bid for laborers' straight time was $3.78 per hour and for laborer's overtime, $4.55 per hour. The hourly rates bid for straight time by the next three lowest overall bidders were, respectively, $3.85, $3.95, $3.88. The overtime rates bid by these bidders were, respectively, $5.78, $3.95, and $4.50. All of these bids were found by the DCAB to have been competitive.

H & M performed moving services under the contract for eight separate bureaus of the Department of Commerce. They were as follows: Office of the Secretary (OAS), Patent Office (Patent), Economic Development Administration (EDA), Maritime Administration (MARAD), Census Bureau (Census), National Oceanic Atmospheric Administration (NOAA), Office of Minority Business Enterprise (OMBE), and Office of Business Economics (OBE).

The DCAB found that when Mr. Mee bid on the moving contract he construed the travel time provision to allow H & M to charge and collect for one hour per day per man for travel time in addition to the hours actually worked. Consequently, Mr. Mee pegged his bid for the laborers' straight time rate at 50 and 52 cents below the rate he was charging other Government agencies under two other contemporaneous contracts which had no similar travel time provision. Since Mr. Mee believed that H & M could charge one hour per day per man for travel time at the overtime rate, he expected that H & M would be able to recover the difference between its hourly bid on the instant contract and its bid on the two other contracts.

During the course of its performance on the instant contract, H & M only paid travel time to those of its employees assigned to report to H & M's place of business in order to drive H & M's trucks to the moving site. No other H & M employees were paid for travel time, even though some others reported to work at H & M's premises. Throughout the performance period of this contract, H & M obtained some extra employees from Labor Pool, Inc., an employment service for temporary employees located approximately 2 or 3 miles from the Main Commerce Building where most of the work under the contract was performed. On a normal contract day, H & M trucks would leave H & M's premises with those employees who reported directly there, stop by Labor Pool to pick up whatever temporary help was needed and then proceed to the moving site, where still other part-time employees reported direct. It was stipulated before the DCAB that at least 85 percent of the H & M employees who worked on the Commerce contract did not punch in at H & M's warehouse and were not transported to and from H & M's place of business.

H & M began its performance early in September, 1969. Regular bills were submitted monthly to Commerce for services performed by H & M. It was not until February 1970, however, after H & M's accountant had determined that H & M was losing money on the contract, that H & M discovered that it was not charging Commerce for travel time, even for its truckdrivers. As soon as Mr. Mee learned of H & M's billing omission, he sought and obtained a meeting, in early March, with Carroll J. Cummings, chief of the Contract Administration Branch, Procurement Division, Office of the Secretary, Department of Commerce. At the meeting Mr. Mee informed Mr. Cummings of H & M's failure to bill for travel time. The two men did not, however, discuss whether H & M transported all its employees to the jobsite or whether it paid them for travel time.

As a result of their conversation, Mr. Cummings instructed Mr. Mee to submit bills for the unbilled travel time accompanied by a statement from H & M's legal counsel that such billing was proper. The board found that Mr. Cummings made this request because he associated travel time provisions in previous Government contracts only with payments for truckdrivers, whereas Mr. Mee was applying the travel time provision to all H & M employees on the job. Mr. Cummings did not believe that a claim would be made for travel time unless plaintiff had been paying its employees for the same. Mr. Mee, however, never told Mr. Cummings that H & M was paying all its men for travel time. What Mr. Mee did tell Mr. Cummings at their first meeting was that on his lawyer's advice H & M did not have to pay its employees travel time in order to collect the same under its contract with the Government. Though Mr. Cummings was skeptical of this interpretation, he did not pursue it since he considered it to be a hypothetical statement and not the basis for H & M's claim for travel time.

H & M on April 23, 1970, submitted its bill for back travel time direct to Mr. Cummings at his request. The bill, received by Mr. Cummings on April 28, 1970, was accompanied by a letter indicating that H & M's "legal counsel advises that the billing is in order." The bill was directed to six agencies of Commerce and totaled approximately $27,822.² Where an employee had worked 8 hours or more on a particular day, the billing was at the overtime rate. Where an employee had worked less than 8 hours, the billing was figured at the straight-time rate. In both instances, pursuant to Mr. Mee's interpretation of article II A-3, one extra hour of time was billed for each employee day.

Mr. Cummings turned the invoices for back travel...