Luria Brothers & Company v. United States

• Decision Date: 16 December 1966
• Docket Number: No. 475-59.,475-59.
• Citation: 369 F.2d 701
• Parties: LURIA BROTHERS & COMPANY, Inc. v. The UNITED STATES.
• Court: U.S. Claims Court

369 F.2d 701 (1966)

LURIA BROTHERS & COMPANY, Inc. v. The UNITED STATES.

No. 475-59.

United States Court of Claims.

December 16, 1966.

COPYRIGHT MATERIAL OMITTED

Thomas H. McGrail, Washington, D. C., attorney of record, for plaintiff. Thompson, McGrail & O'Donnell, Washington, D. C., of counsel.

Russell W. Koskinen, with whom was Acting Asst. Atty. Gen. J. William Doolittle, for defendant.

Before COWEN, Chief Judge, WHITAKER, Senior Judge, and LARAMORE, DURFEE and DAVIS, Judges.

OPINION

WHITAKER, Senior Judge.

This action arises out of a contract between Lipsett, Inc.¹ and the defendant's Bureau of Yards and Docks of the Department of the Navy. The contract, dated January 30, 1953, provided that the plaintiff, in return for $1,480,112 (subsequently increased by change orders to $1,700,166.50), would construct certain aircraft maintenance facilities at the Naval Air Station, Willow Grove, Pennsylvania, by December 31, 1953.

Performance of the contract was substantially completed on May 3, 1955, some 518 calendar days beyond the scheduled completion date. Although the contract contained a clause for the assessment of liquidated damages against the plaintiff for each day of delay beyond the original completion date, none were assessed. Instead, the defendant extended the time of performance of the contract the entire 518 days of the overrun.

On January 30, 1956, the plaintiff submitted to the contracting officer claims totalling $248,665.76 as compensation for certain additional items of work. By letter of April 17, 1956, the defendant advised the plaintiff that the contracting officer had determined that, except for an item relating to engineering expense, its claims were considered to be "in the nature of claims for damages and therefore could not be the subject of compensation under the contract."

On May 11, 1956, the plaintiff appealed the contracting officer's decision to the Secretary of the Navy and at the same time submitted all of its claims, except for the item relating to engineering expense, to the General Accounting Office. The General Accounting Office, by settlement certificate dated December 4, 1956, disallowed plaintiff's claims in their entirety.

Subsequently, the Armed Services Board of Contract Appeals, acting for the Secretary of the Navy, ruled that the issuance of the settlement certificate precluded further consideration by the Board of those claims submitted to the General Accounting Office.² With respect to the single item of claim not referred to the General Accounting Office, the Board ruled that further proceedings would be in order. However, the plaintiff thereafter withdrew this claim (for engineering expense) from the Board's consideration.³

On November 9, 1959, the plaintiff filed a petition in this court asserting that the defendant breached the contract as follows: (a) the original plans were defective and faulty; (b) defendant was dilatory in making necessary contract changes and taking other action; (c) a trial and error method was imposed upon plaintiff by defendant to accomplish certain aspects of the construction and this was contrary to the contract terms and was unreasonable and costly to plaintiff; (d) the magnitude and nature of some of the changes were beyond the scope of the original contract; and (e) the frequency and extensiveness of the revisions to other phases of the construction work were also unreasonable and beyond the scope of the contract. As a result of these breaches, plaintiff contended that its costs of construction were increased and performance of the contract was protracted unduly and into periods of more adverse conditions than would otherwise have occurred.

An extensive trial was held⁴ and our trial commissioner issued a report in which he determined that the defendant unreasonably delayed the plaintiff in the performance of the contract work by a total of 420 days out of the 518-day overrun period. He further determined that as a result of these unreasonable delays the plaintiff incurred delay costs for idle equipment, field supervision, winter protection, rehandling materials, maintaining excavations, wage and material price increases, and additional insurance premiums.

As the case comes to us, the parties accept the trial commissioner's report with the following exceptions: The defendant contends that only 300 days (as opposed to the 420 days found by the trial commissioner) were unreasonable delays attributable to the defendant. The plaintiff accepts the trial commissioner's findings on the extent of the delay but contends that he erred in not allowing two items of damage, to wit, for excess home office overhead and loss of productivity of its labor force. For reasons hereinafter set out, we are of opinion that the defendant's exception is without merit and agree with the trial commissioner that the extent of delay was 420 days, but we think that in computing plaintiff's damage the trial commissioner should have allowed plaintiff's claims for excess home office overhead and loss of productivity of its labor force. We thus adopt the trial commissioner's findings and factual conclusions with a few exceptions and additions.

Since the defendant contests the extent of the delay, it will be necessary to state the facts in some detail.

The contract provided that plaintiff was to furnish the materials and perform the work for the construction of a large airplane hangar with an attached leanto. The airplane hangar building was to be 240 feet by 150 feet in dimension and was to have a reinforced concrete arch-type roof with an arch span of 150 feet. The sides of the arch were to rest on concrete columns which in turn were supported by foundation footings placed in the ground. A one-story building, called a leanto, with a partial basement was to be constructed at the north side of the hangar and was to be 240 feet long by 100 feet wide. In addition, the plaintiff was to install various utility systems in and around the building, including a sewer line, a steam line, a water line, a sprinkler system, an electrical system, a telephone system, and a fire alarm system.

Prior to letting the bids for the construction of these facilities, the defendant had contracted with The Ballinger Company, a Philadelphia-based firm of architects and engineers, for the preparation of plans and drawings describing the contract work.⁵ It was the plans and drawings prepared by The Ballinger Company upon which plaintiff based its bid and according to which it expected to perform the contract work.

Because of the unusual design of the hangar building, which required the exterior building foundations to carry the entire weight of the structure (principally a concrete roof supported by 9 arches), the 18 foundation footings for the arch columns were of utmost importance. The foundation plan showed 9 arch-column footings along the D-line (south side of the hangar building), running the length of the building at about 30-foot intervals, to be placed at elevation 325 feet or about 8 or 9 feet below the ground surface. The elevations along the E-line (north side of the hangar building) were shown at 320 feet, which was about 11 feet below the surface of the ground. In addition, notes appearing on the plan stated that the arch-column footings were to bear on rock good for a safe load of 15 tons per square foot.

In arriving at the elevations for the arch-column footings which appeared on the foundation plan, The Ballinger Company had relied upon information obtained from some 11 test borings made by the defendant at the construction site.⁶ Test bores 2, 5, and 8 were along the D-or south arch-column footing line, and showed either shale or sandstone at elevation 325 feet. Test bores 1, 4, and 7 were along the E- or north arch-column footing line, and showed red sandstone at test bore 1 at elevation 320.71, fractured sandstone at test bore 4 at elevation 320.61, and fractured sandstone at test bore 7 at elevation 317.21. There is no evidence in the record that any tests of the bearing value of the material underlying the arch-column foundation footings were made until after several of the footings had been poured and in place.

On March 4, 1953, the first shipment of reinforcing steel for the building foundations arrived at the site and excavations for foundations of both the leanto and the hangar proceeded. By April 14, 1953, 6 arch-column footings, D-3, D-4, D-5, D-6, D-7, and D-8, for the hangar had been poured.

In each instance approval of the defendant's inspection force had been obtained before concreting.

On April 15, 1953, up to which time the foundation work had been progressing in an orderly manner, defendant's resident officer in charge of construction began to have grave doubts as to the bearing capacity at the excavations for two of the D-line footings yet to be poured and at the first excavations for the E-line footings. Because of the nature of the material in these excavations, he directed the plaintiff to make bearing tests on the rock at a level 3 feet below the foundation plan elevations for footings E-8 and E-9. In addition, he or the Government inspection force requested that a representative of the architect-engineering firm visit the construction site to inspect the foundation material in the excavations then opened.

Two representatives of The Ballinger Company came to the site on April 17, 1953. Upon inspection of the excavations they found material at the contract depth which in their opinion would not be adequate for the 15-ton bearing value called for on the drawings. They therefore recommended that additional load tests and core borings be made at several of the arch-column footing locations.

As a result of encountering this apparently unsuitable bearing rock, the defendant ordered the plaintiff to stop all pouring of footings on April 17, 1953, and to stop all foundation work on April 24, 1953. Inasmuch as the foundation work was the...