Merritt-Chapman & Scott Corporation v. United States, 44-66.

• Decision Date: 15 July 1970
• Docket Number: No. 44-66.,44-66.
• Parties: MERRITT-CHAPMAN & SCOTT CORPORATION v. The UNITED STATES.
• Court: U.S. Claims Court

429 F.2d 431 (1970)

MERRITT-CHAPMAN & SCOTT CORPORATION v. The UNITED STATES.

No. 44-66.

United States Court of Claims.

July 15, 1970.

Thomas B. Treacy, New York City, attorney of record, for plaintiff. Eugene Schaffel and Jarvis & Piltz, New York City, of counsel.

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

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

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

PER CURIAM:

This Wunderlich Act suit was referred to Trial Commissioner Louis Spector for preparation and filing of his opinion and recommended conclusion of law. The commissioner has done so in a report dated February 25, 1970. The Government has requested review. The plaintiff supports the commissioner's report. The case has been submitted to the judges on oral argument and briefs. We agree with Commissioner Spector.

Wholly apart from the Suspension of Work clause, it is established that under the Changes and Changed Conditions articles the equitable adjustment can include increased costs which were the direct and necessary result of the change or the changed condition, where that condition or change directly leads to disruption, extra work, or new procedures. See Paul Hardeman, Inc. v. United States, 406 F.2d 1357, 186 Ct. Cl. 743 (1969); Ivey Bros. Constr. Co., Eng. BCA No. 1764 (1960). At least a portion of the claimed cost increase in this case — it is unnecessary to determine how large a portion — falls within this class and would be recoverable even if a Suspension of Work clause had been omitted from the contract.

A Suspension of Work provision was included, however, and under that clause the remainder of the cost increase, to the extent properly proved, can be recovered in this proceeding. There is no doubt, as the trial commissioner holds, that the work was in fact suspended and delayed for the Government's convenience, and also that there was a significant change in design. It is immaterial, in this instance, whether or not the suspension and delay was due, in whole or in part, to the Government's fault. There are occasions for the Suspension of Work clause to operate when the Government is at fault, as we recently noted (See Chaney & James Constr. Co. v. United States, 421 F.2d 728, 731-733, 190 Ct.Cl. 699, 705-708, (Feb. 1970)), but the clause can likewise be effective, as we have also held, when there is a suspension not due to the Government's fault, dereliction, or responsibility. See T. C. Bateson Constr. Co. v. United States, 319 F.2d 135, 162 Ct.Cl. 145 (1963); John A. Johnson & Sons v. United States, 180 Ct.Cl. 969 (1967). An instance of the latter category is a suspension and delay which lasts so long (regardless of the absence of government fault) that the contractor cannot reasonably be expected to bear the risk and costs of the disruption and delay. That is one type of suspension and delay "for an unreasonable length of time causing additional expense", within the meaning of the clause. Depending on the circumstances, a delay due to a non-fault suspension by the Government can obviously be so protracted that it would be unreasonable to expect the contractor to shoulder the added expense himself. We think that in its terms and its purpose the Suspension of Work clause covers that situation, among others.

The trial commissioner has properly concluded that that is the situation here. On this record, and with this project, it is impossible to hold other than that the delay-due-to-suspension of 419 days (considerably more than one year)^* was "for an unreasonable length of time." The contractor, informed by the Suspension of Work article that it would receive compensation for unreasonable delays due to a non-fault suspension, would not expect (and rightly so) to bear the costs of a delay of this character and magnitude. The delay was therefore "unreasonable". There is no finding by the Board, and defendant does not claim, that some lesser part of this 419 days would have been a "reasonable" delay (cf. Chaney & James Constr. Co. v. United States, 421 F.2d 728, 735-736, 190 Ct. Cl. 699, 712-713 (Feb. 1970)). In any event, the circumstances of the case would preclude a finding that any delay after April 20, 1960, would have been a "reasonable" one for which plaintiff should bear the extra expense.

The court understands Commissioner Spector's opinion to be fully consonant with this analysis of the case, and therefore adopts his opinion (in the light of and as supplemented by the foregoing discussion) as the basis for judgment.

Accordingly, plaintiff's motion for summary judgment is granted and defendant's cross-motion is denied. Further proceedings are stayed pursuant to Rule 167 for a period of ninety (90) days to afford the parties an opportunity to obtain an administrative resolution of the additional adjustment in contract price to which plaintiff is entitled. With respect to the plaintiff's claim for an extension of time of 419 days, in lieu of the 365 days allowed by the Board, it is held that there is no support in the record for a finding that plaintiff was delayed for any lesser period than that represented by the suspension of the central features of this project (the dam) from April 20, 1960, to June 12, 1961, and therefore that plaintiff is entitled to the additional claimed extension of 54 calendar days.

OPINION OF COMMISSIONER

SPECTOR, Commissioner:

This is a contract claim in the approximate amount of $2,000,000,¹ arising out of the construction by plaintiff of a dam and outlet works, power intake works and roads at Cougar Reservoir on the South Fork of the McKenzie River in Central Eastern Oregon. The contract, in the original estimated amount of $23,985,564, was executed June 9, 1959, and administered on behalf of defendant by the Army Corps of Engineers. The claim has heretofore been the subject of a decision by that agency's contracting officer and board of contract appeals.² Therefore, to the extent that it is a decision on a question of fact, it is subject to review by this court against the record compiled by the agency.³

Generally, the issue presented involves the adequacy of the adjustment in contract price and time of performance allowed by defendant under the circumstances hereinafter described. At issue are the contract clauses entitled GC-11, "Suspension of Work"⁴; Article 4, "Changed Conditions"⁵; and Article 3, "Changes."⁶ As the opinion of the Engineers Board of Contract Appeals states at the outset, "factually the matter is not too complicated."

Cougar Dam was constructed in very rugged country across a narrow river valley flanked by hills which rise precipitously to a height of about 700 feet on either side of the river. The top of the dam is about 519 feet above the existing river bed (which occurs at about elevation 1270). It had been designed by the Army Engineers Corps and its consulting engineers as a rock fill structure with an impervious core consisting of rock fragments or gravel with a sandy clay or silt binder, backed by a gravel transition zone and various zones of spall and rock both upstream and downstream. The designers, after long study, selected a rock fill type of dam because of the above described physical conditions at the site, and because large quantities of rock were readily available from the hills in the immediate vicinity.

Cougar Dam is the highest rock fill in existence, and the second highest rock fill type dam. "Preliminary subsurface investigations were made by the Government which indicated to the designers that a suitable foundation formation for the type of dam contemplated would be found at approximate elevation 1260.⁷ Due to the type of dam selected, it was not considered necessary to carry the foundation to rock over the entire dam site. The contract drawings indicated that in general a suitable formation, consisting of a cemented gravel,⁸ would be found at elevation 1260 with local variations and some pot holes which might or might not have to be excavated to lower elevations to obtain a suitable foundation. The drawings did not call for the foundation excavation across the floor of the valley to be carried to a fixed elevation but did indicate the approximate elevation with the note `Remove vegetation, topsoil and gravel as may be directed.'"⁹

The specified completion date for the dam was November 1, 1962. Because of the heavy seasonal rainfall in this geographical area, the normal core placement season was limited to the period from mid-May to mid-September. The contract having been executed on June 9, 1959, plaintiff contemplated that three core placement seasons would be available (1960, 1961 and 1962), with the work to be accomplished in two 10-hour shifts for the 5-month period above-mentioned, and in one 5-hour shift during the remaining 7 months of each year. At the outset, plaintiff mobilized machinery, plant and equipment valued at between 5 and 6 million dollars to meet this schedule. The contract required plaintiff to submit its plan for diversion of the river, and plaintiff submitted such a plan. The plan contemplated diversion by April 1, 1960, through construction of a coffer-dam upstream; excavation of the core trench by June 15, 1960; and the raising of the dam embankment to elevation 1390 by November 15, 1960. This river diversion plan, and plaintiff's overall progress schedule, were both approved by the Government. A provision of the contract relieved plaintiff from responsibility for damage to the work caused by overtopping, once a portion of the rock fill dam had been raised to elevation 1375. As can be observed from the above, the approved plans contemplated reaching that elevation during the 1960 construction season.

Work started in June 1959, and continued for the remainder of that season, and during the winter....