Commerce International Company v. United States
| Decision Date | 16 October 1964 |
| Docket Number | No. 287-55.,287-55. |
| Citation | 338 F.2d 81 |
| Parties | COMMERCE INTERNATIONAL COMPANY, Inc. v. The UNITED STATES. |
| Court | U.S. Claims Court |
COPYRIGHT MATERIAL OMITTED
Whitney North Seymour, New York City, for plaintiff. Simpson, Thacher & Bartlett, William J. Manning and Roy L. Reardon, New York City, of counsel.
Frances L. Nunn, Washington, D. C., with whom was Asst. Atty. Gen., John W. Douglas, for defendant. Kendall M. Barnes, Washington, D. C., was on the brief.
Before JONES and WHITAKER, Senior Judges, and LARAMORE, DURFEE and DAVIS, Judges.
This is a breach-of-contract suit charging defendant with unreasonable delay in supplying parts and drawings, and in failing to permit the prompt commercial purchase of parts when none were available in Government stores. Plaintiff is said to have suffered over $1,650,000 in damages because of defendant's improper delay.1
In 1950, the Army prepared to let a contract for the rebuilding of some 500 M36 90mm. motor gun carriages (tanks) which were believed needed to meet the emergency of the Korean hostilities. The vehicles were in a poor state, having been left in the open since World War II. Plaintiff had had some previous experience in rebuilding tanks and was one of five companies asked to submit bids. As plaintiff's representative, Mr. Ambrose Cates (who had been in charge of the earlier "rebuild" operations) spent two weeks at Rock Island Arsenal, in Illinois, inspecting some of the M36 tanks located there, meeting with Army representatives, and familiarizing himself with the work in order to prepare a bid; the contract specifications were not yet completed. Agents of the other companies did the same. Four concerns submitted bids on November 30, 1950, and plaintiff was found to be the low bidder. A pre-award survey was made, by Army officials accompanied by Cates, of the facilities at Cramp Shipyard (at Philadelphia) which plaintiff had an option to sublease and where it proposed to perform. The report made to the Government confirmed the suitability of the premises for conducting the "rebuild" operation and plaintiff received a notice of award dated December 28, 1950. The contract was not formally executed until sometime in March 1951.
Although the specifications had still not been fully readied at the time of the award, the notice directed plaintiff to proceed with the work "in order that the delivery schedule outlined in your proposal may be strictly maintained." The contract called for the rebuilding of 581 M36 tanks to be delivered by the contractor to the Government in accordance with the following schedule:2
April 1951 .................. 75
May 1951 .................... 100
June 1951 ................... 100
July 1951 ................... 125
August 1951 ................. 125
September 1951 .............. 56
Among other things, the Government was to supply reconditioned engines and 90mm. guns for all of the tanks. In addition, at the contractor's written request, the Government was to furnish, "to the extent available from its existing stores," parts and materials "which have been declared unserviceable by the Contracting Officer or which after inspection were found to be missing from the vehicles." If such replacement items could not be furnished, the contractor, when directed by the Contracting Officer in writing, was to manufacture or purchase the parts and would be reimbursed its actual costs in an aggregate not exceeding $500,000.3 There was also the normal clause permitting extensions of time if the Government's failure to supply parts and materials caused delay in the work.
At the outset of performance, in early January 1951, plaintiff had basically to start from scratch in organizing an operational physical plant and production line. It had a nucleus of only three men (management or administrative personnel) in Philadelphia and had yet to hire a full complement of administrative and production employees. It also had to exercise its option on the Cramp Shipyard facilities and to prepare the premises for receiving and storing tanks, parts, and equipment. All of this plaintiff says was accomplished in time to complete the rebuilding on schedule were it not for government-caused delays. Completion, originally set for September 1951, did not come until September 1952.4 From December 28, 1950 (notice of award) to December 15, 1951,5 plaintiff finished the rebuilding of 261 tanks; then, because the Government could not for a time supply further engines and guns, the work was suspended until March 15, 1952; operations resumed thereafter and were continued in an orderly and prompt fashion. This history of performance is divided by the parties into three periods. The "first phase" was from January 1951 until suspension; then came the "suspension period" (from December 15, 1951, until March 15, 1952); finally, there was the "second phase" from March 15, 1952, until completion in September 1952. Plaintiff makes no claim for delay (or other damages) during the second phase (except that which may have been an after-effect of the three-month suspension from December 15, 1961, to March 15, 1952). Defendant, on its part, does not contest liability for damages during the suspension period. The main battleground is the first phase, during which plaintiff claims, and defendant denies, that undue Government delay caused the considerable loss which the contractor incurred on this contract.
This claim has not been administratively considered on its merits. Although plaintiff did apply to the Contracting Officer for compensation, the claim was denied without any consideration on the ground that it was outside agency jurisdiction as a demand for unliquidated damages. Plaintiff's petition was then filed in this court, the case tried, the Trial Commissioner's findings reported, and the briefs and exceptions filed, without any objection by the defendant to the trial and determination of the case in this court and without any suggestion of the need for administrative proceedings. After the filing of the Commissioner's report and of all the exceptions and briefs, but before the oral argument, the defendant for the first time moved for a stay to permit the parties to have the issues determined administratively, citing United States v. Carlo Bianchi & Co., 373 U.S. 709, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963). Plaintiff opposed the motion and it was denied (before argument) without prejudice. The point was again raised at the argument. We reject it. Whatever might have been the defendant's right to seek administrative determination of the facts if the issue had been timely raised, we hold, as we have before, that in this case defendant waived any such right by making its first move too late. WPC Enterprises Inc. v. United States, Ct.Cl., 323 F.2d 874, 878, decided Oct. 11, 1963; Stein Bros. Mfg. Co. v. United States, Ct.Cl., 337 F.2d 861, 862-863, decided July 12, 1963; Wingate Construction Co. v. United States, Ct.Cl., No. 394-60, decided Jan. 24, 1964, slip op., p. 7.
As the case comes to us, the overriding issue is whether defendant should be held responsible for expenses said to have been caused plaintiff by the alleged failure of the Government, during the first phase of performance (December 28, 1950-December 15, 1951), to be reasonably prompt in (i) furnishing parts available from Government stores, (ii) making known its inability to supply such parts so that plaintiff could procure them elsewhere, (iii) furnishing drawings necessary for such outside procurement of parts, and (iv) facilitating such outside procurement. It is settled, of course, that mere delay, per se, incident to the Government's making work or material available to a contractor is not compensable, in a claim for breach of contract, without a specific warranty. E. g., United States v. Howard P. Foley Co., 329 U.S. 64, 67 S.Ct. 154, 91 L.Ed. 44 (1946); United States v. Rice, 317 U.S. 61, 63 S.Ct. 120, 87 L.Ed. 53 (1942); Gilbane Building Co. v. United States, Ct.Cl., 333 F.2d 867, decided June 12, 1964; Barling v. United States, 111 F.Supp. 878, 126 Ct.Cl. 34 (1953); Otis Williams & Co. v. United States, 120 Ct.Cl. 249 (1951); Daum v. United States, 120 Ct. Cl. 192 (1951). Absent a warranty (and there is none in this case), the contractor's recourse for mere delay is to seek an extension of the time of his performance. See, e.g., United States v. Howard P. Foley Co., supra. But this general principle presupposes that the Government has met the ever-present obligation of any contracting party to carry out its bargain reasonably and in good faith. See, e. g., Walsh v. United States, 102 F. Supp. 589, 121 Ct.Cl. 546 (1952). Unless expressly negatived, that duty is read into all bargains. It would be intolerable if the Government could disregard that responsibility, or were free to stretch its tardiness for however long it fancied, without sterner control than the mere prolongation of the completion date of the contract. The rule is, rather, that, when the Government's delay in furnishing work or materials stems from its failure to do what it should under the particular contract, it will have to respond in damages for the resulting additional outlays which are proved to have been caused the contractor. E. g., Peter Kiewit Sons' Co. v. United States, 151 F.Supp. 726, 138 Ct.Cl. 668 (1957); Thompson v. United States, 124 F.Supp. 645, 130 Ct.Cl. 1 (1954); Chalender v. United States, 119 F.Supp. 186, 127 Ct.Cl. 557 (1954); Kehm Corp. v. United States, 93 F.Supp. 620, 119 Ct.Cl. 454 (1950); Laburnum Construction Corp. v. United States, Ct. Cl., 325 F.2d 451, 458, decided Dec. 13, 1963. Under this principle, the plaintiff cannot prevail merely by proving that there was a lapse of time in receiving materials or even that the defendant was the source of that lapse. The lapse of time must be tied to the defendant's breach of its obligation of reasonable cooperation. The...
To continue reading
Request your trial
-
Bonnar v. United States
...550, 553 (1965); Litchfield Mfg. Corp. v. United States, 338 F.2d 94, 98, 167 Ct.Cl. 604, 612 (1964); Commerce Int'l Co. v. United States, 338 F.2d 81, 86, 167 Ct.Cl. 529, 537 (1964). Significant in the exception to the Commissioner's findings and the argument on the burden of proof by defe......
-
Buckley & Co., Inc. v. State
...solely to the Department's default and it is appropriate to limit the recovery accordingly. Cf. Commerce International Co., Inc. v. United States, 338 F.2d 81, 89, 167 Ct.Cl. 529 (Ct.Cl.1964); J. D. Hedin Construction Co. v. United States, 347 F.2d 235, 245, 171 Ct.Cl. 70 B. Liability for D......
-
Rda Constr. Corp. v. United States, 11-555 C
...(Fed. Cir. 1993) ("The government must avoid actions that unreasonably cause delay[.]"); see also Commerce Int'l Co. v. United States, 338 F.2d 81, 86 (Ct. Cl. 1964) (holding that actions that cause a "breach of [the] obligation of reasonable cooperation" depend upon the "particular contrac......
-
Acme Process Equipment Co. v. United States
...236, 242, 34 S.Ct. 843, 58 L.Ed. 1294 (1914); Vogt Bros. Mfg. Co. v. United States, 160 Ct.Cl. 687, 709 (1963); Commerce Intern. Co. v. United States, Ct. Cl., 338 F.2d 81, 90, decided Oct. 16, 1964. That result is fair. It does not deprive the Government of an opportunity to prove and reco......
-
CASES AND STATUTES
...Western Corp. v. Vela , 122 Ariz. 28, 592 P.2d 1294 (1979)................... 3.9-8; 5.9-10, 12, 22Commerce Int’l Co. v. United States, 338 F.2d 81 (Ct. Cl. 1964)........................................................... 5.3-33Commercial Cornice & Millwork, Inc. v. Camel Constr. Servs. Cor......
-
§ 15.3 Owners' Damages
...recovery unless the claimant clearly demonstrates the proper apportionment. See, e.g., Commerce Int'l Co. v. United States, 167 Ct Cl 529, 338 F2d 81, 90 (1964) ("there can be no recovery where the defendant's delay is concurrent or intertwined with other delays"); United States for Use & B......
-
5.3.1.7.2 Type II Conditions
...Dyad Constr., Inc., 565 P.2d 423 (Wash. Ct. App. 1977), review denied, 91 Wash. 2d 1007 (1978) 5.3-26Commerce Int’l Co. v. United States, 338 F.2d 81 (Ct. Cl. 1964)........................................................... 5.3-33Commercial Cornice & Millwork, Inc. v. Camel Constr. Servs. C......
-
5.3.1.4.7 Concurrent Delays
...551 F.2d 1026 (5th Cir.), modified, 559 F.2d 268 (1977), cert. denied, 434 U.S. 1067 (1978).[120] Commerce Int’l Co. v. United States, 338 F.2d 81 (Ct. Cl....