Archie and Allan Spiers, Inc. v. United States

• Decision Date: 06 December 1961
• Docket Number: No. 219-58.,219-58.
• Citation: 155 Ct. Cl. 614,296 F.2d 757
• Parties: ARCHIE AND ALLAN SPIERS, INC. v. UNITED STATES.
• Court: U.S. Claims Court

155 Ct. Cl. 614, 296 F.2d 757 (1961)

ARCHIE AND ALLAN SPIERS, INC. v. UNITED STATES.

No. 219-58.

United States Court of Claims.

December 6, 1961.

Gaines V. Palmes, Washington, D. C., for plaintiff.

David V. Anthony, Washington, D. C., with whom was Asst. Atty. Gen. William H. Orrick, Jr., for defendant. John F. Wolf, Washington, D. C., was on the brief.

LARAMORE, Judge.

This action involves three separate claims by plaintiff resulting from a contract with the Navy to rehabilitate certain piers at the U. S. Naval Base (Naval Supply Center), Norfolk, Virginia.

Claim No. 1 is for damages for delays which occurred during an alleged 4-months' period subsequent to completion of the contract work, which resulted from defendant's alleged failure to accept the work promptly after it was completed.

Claim No. 2 is for damages caused by what plaintiff contends was an erroneous contract drawing on which plaintiff relied in bidding.

Claim No. 3 is for increased costs sustained in maintaining certain pipelines after they were completed by plaintiff and possession thereof taken by defendant.

Plaintiff's claims were rejected by the contracting officer, and the Armed Services Board of Contract Appeals dismissed them for lack of jurisdiction. Suit in this court resulted and trial was had before a commissioner of this court. The commissioner has filed his report and numerous exceptions are taken by plaintiff to the commissioner's findings.

Since the exceptions are many, we will not here undertake to discuss each one. Suffice to say that from an examination of the record we conclude that the commissioner's findings are, with one exception, correct. The exception above noted has reference to commissioner's finding 5. This finding lists the original contract price and the price as amended by change orders. The finding then recites payment for the contract work as amended and lists the contractor's costs in the performance of the contract as amended. Finally, finding 5 sets forth the profit as being $43,073.03, or 8.99 percent of costs, and states that the contractor "* * * thus realized a profit in excess of the 8% anticipated by it."

We deem the profit made by plaintiff to be irrelevant to the issue of whether or not plaintiff sustained damages; consequently, plaintiff's exception to finding 5 is sustained, and said finding is not adopted by the court.

The facts relating to plaintiff's claims are as follows: On June 30, 1951, pursuant to an invitation for bids, plaintiff and defendant entered into a contract calling for the rehabilitation of designated pipelines on piers at the U. S. Naval Base (Naval Supply Center), Norfolk, Virginia. The contract price as increased by change orders was $522,148.90. The plaintiff's bid was the only bid received by defendant under its invitation.

The plaintiff, a Virginia corporation, has its principal place of business in Newport News, Virginia, and for many years has been engaged as a plumbing and mechanical contractor.

The contract required that work be commenced on June 30, 1951, and be completed by March 26, 1952. The contract contained a liquidated damages provision. By change orders issued pursuant to the termination of the contract, the contract completion date was extended by 538 calendar days, increasing the time for performance from the originally specified time of 270 days to 808 days, and the revised completion date was September 15, 1953. The work was completed in September of 1953 and no liquidated damages were charged. The contract work was accepted on January 12, 1954, retroactively to September 8, 1953.

The work required under the contract consisted of the removal and renewal of fuel oil and diesel oil piping on five piers, each approximately 1,350 feet long. Also required under the contract was the renewal of fresh water piping on two piers, and removal of gasoline piping on all piers. The contract also called for some earth work, concrete, steel and iron work, as well as insulation and weatherproofing on the pipelines. The piping was to be removed from and installed on the underside of the piers where it was suspended by hangers and supports.

Plaintiff was requested by telephone to bid on the project in suit. It appears that one of the considerations with which the Navy contracting officer was faced at the time was the impending close of the fiscal year. In any event, on Friday, June 22, 1951, Mr. Allan Spiers went to the naval base and obtained the bid data. On June 28, 1951, plaintiff submitted its bid and was awarded the contract on June 30, 1951.

No examination of the site of the work was made on behalf of plaintiff before submission of its bid, although under the provisions of paragraph 1-21 and article 4(b) of the contract it was informed that inspection of the site was expected.

Paragraph 1-21 of the contract specifications provides:

"1-21. Examination of Premises. — Before submitting proposals, bidders are expected to inspect carefully the work in place and satisfy themselves as to the character and amount of work to be removed, renewed or replaced, and of new work. In this connection particular attention is invited to paragraph 1 of form no. 767d."

Article 4(b) of the contract provides:

"Article 4. — Performance of the Work

"(b) Changed Conditions. — Information respecting the site of the work given in drawings or specifications has been obtained by Government representatives and is believed to be reasonably correct but the Government does not warrant either the completeness or accuracy of such information and it is the responsibility of the Contractor to verify all such information; Provided, That in case of subsurface, latent, or unknown conditions, this contract may be modified, when, in the manner, and to the extent hereinafter in this subparagraph provided: Should the Contractor encounter, or the Government discover, during the progress of the work, subsurface or latent conditions at the site materially differing from those shown on the drawings or indicated in the specifications, or unknown conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as being inherent in work of the character provided for in the drawings and specifications, the Contracting Officer shall be notified before the existing conditions are disturbed. The Contracting Officer shall thereupon promptly investigate the conditions, and if he finds that they do so materially differ, the contract shall be modified by the Contracting Officer to provide for any increase or decrease in cost and difference in time resulting from such conditions and an equitable adjustment in the pertinent contract terms shall be made in accordance with the provisions of paragraph (a) of Article 10 hereof. Such modification by the Contracting Officer shall be final, subject only to appeal under the provisions of Article 16."

Much of the work was contracted for and performed by plaintiff during the Korean conflict, and plaintiff knew at the time of bidding that there was a steel shortage. Plaintiff qualified its bid in this regard, as follows:

"* * * NOTE. — Manufacturers state, materials will not be shipped, before sometime in the fourth quarter of this year, even with a D.O. rating. Contract Limits will have to be discussed later. * * *"

Plaintiff's letter of June 29, 1951, discussed the time extension that would be required to obtain materials. All materials required for performance were furnished by the contractor. There was no provision for Government-furnished material.

While plaintiff appears to have ordered the necessary material shortly after award of the contract, very little was done to perform the work until October of 1951.

By the end of January 1952, approximately 530 pipe hangers had been fabricated in accordance with the dimensions shown on the contract drawings for a typical hanger. When the first hanger was fabricated it was checked at one place where a hanger was to be located, and it appeared to be satisfactory for that location. On the assumption by the plaintiff's workmen that the measurements for the typical hanger were correct for every location where a hanger was to be placed, and without further verification of conditions at other hanger locations, the 530 hangers were made to the same dimensions.

On January 21, 1952, plaintiff began drilling at hanger locations preparatory to erection of the hangers. This continued until January 27, when it became apparent that the 530 pipe hangers fabricated could not be used due to interferences caused by pilings supporting the concrete deck of the pier, and also due to uneven grade on the underside of the concrete deck of the pier.

The contract drawings had been prepared by a private firm of architects and engineers and consisted of eight sheets, one of which showed the general piping layout for all five piers. The general piping layout contained "general notes" as follows:

"For detail description of work see individual pier drawings.

"Contractor shall verify all dimensions and conditions at the site."

There were also five separate drawings, one for each pier. These drawings also contained under "general notes" the following statement:

"Contractor shall verify all dimensions and conditions at the site."

Four days after plaintiff learned that some pilings on pier 2 were not in the exact location indicated on the plans, the architect-engineer, the plaintiff, and the Government's representatives, met to discuss the matter. By February 5, 1952, the architect-engineer had conducted a field survey and had determined the trouble. The architect-engineer immediately proceeded to revise the plans, which were submitted to plaintiff for estimate on March 4, 1952. These estimates were submitted by plaintiff on March 10, 1952, and formal authorization to proceed was issued on April 10, 1952. However, prior to receipt of formal authorization to proceed, plaintiff fabricated new hangers...