JD Hedin Construction Company v. United States

• Decision Date: 11 June 1965
• Docket Number: No. 387-56.,387-56.
• Parties: J. D. HEDIN CONSTRUCTION COMPANY, Inc., for Its own Use and for the Use of Fischbach & Moore, Its Sub-Contractor v. The UNITED STATES.
• Court: U.S. Claims Court

171 Ct. Cl. 70, 347 F.2d 235 (1965)

J. D. HEDIN CONSTRUCTION COMPANY, Inc., for Its own Use and for the Use of Fischbach & Moore, Its Sub-Contractor v. The UNITED STATES.

No. 387-56.

United States Court of Claims.

June 11, 1965.

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Thomas H. McGrail, Washington, D. C., for plaintiff. Gallagher & Thompson, Washington, D. C., of counsel.

Mary J. Turner, Washington, D. C., with whom was Asst. Atty. Gen., John W. Douglas, for defendant. Mary K. Fagan, Washington, D. C., on the brief.

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

LARAMORE, Judge.

This action arises out of a contract between plaintiff and defendant's Veterans Administration for the construction of hospital facilities at Ann Arbor, Michigan. The contract was entered into by the parties on August 24, 1949, and provided that construction was to be completed within 540 calendar days from the date of receipt of the notice to proceed (September 22, 1949). The project consisted generally of a 500-bed hospital proper and numerous appurtenant buildings and was not completed until July 31, 1953, which was 1,408 days after receipt of the notice to proceed and 868 days after the scheduled completion date. Although the contract provided for assessment of liquidated damages against the plaintiff for each day of delay beyond the original completion date, none were assessed by defendant. Moreover, the time for performance was extended by defendant from 540 days to 1,408 days.

Plaintiff contractor brings this suit on its own behalf and for the use and benefit of its electrical subcontractor, Fischbach & Moore, Inc., in which it charges defendant with a series of breaches of contract. The claims being prosecuted here are generally for delay-damages, primarily in the form of additional overhead, incurred as a result of the protracted performance time ensuing from defendant's various alleged breaches of contract, rather than for the cost of extra work. Plaintiff's delay-damages claims, aside from those of its subcontractor, can be generally grouped into three categories: (1) delays occasioned by defendant's faulty specifications and its tardiness in correcting such errors; (2) delays resulting from material shortages, abnormal weather, and strikes, which delays plaintiff claims would not have been encountered but for the original government-caused delays; (3) delays caused by a series of change orders issued during the final stages of the project, which plaintiff contends, taken collectively, were beyond the scope of the contract. Plaintiff also claims that defendant's breaches of contract with respect to the faulty specifications forced plaintiff's operations into periods of higher costs. Plaintiff seeks the increased costs incurred. Plaintiff, on behalf of its electrical subcontractor, asserts that the above enumerated government-caused delays stalled the subcontractor's operations, interrupted its normal sequence of work, and increased its cost of performance. The damages sought in this claim consist of the excess hours of labor caused by the delays, plus excess overhead. In defending on the merits, the government invokes a series of factual and legal propositions which it claims show that either the delays encountered were due to no fault of defendant or that as a matter of law plaintiff is not entitled to recover.

An extensive trial was held and in a complete and well-documented report our trial commissioner has found for plaintiff on most of the factual issues presented. The net of his report is that a vast majority of the delays encountered during performance of the contract were due to no fault of plaintiff. He has found that (1) the Veterans Administration not only was in error and negligent in preparing the specifications, but also unduly delayed in correcting the faulty design; (2) had it not been for the government-caused delays with respect to the faulty specifications, plaintiff would not have been delayed by material shortages, adverse weather, and labor strikes; (3) that as a result of the delays caused by defendant, plaintiff incurred additional costs described below.

As the case comes to us, defendant has the burden of showing that the commissioner was wrong in his factual conclusions. Such a task is far from slight since "we start with the double directive that due regard must be given to the Commissioner's opportunity to judge the credibility of the witnesses and that his factual findings `will be presumed to be correct.' Rule 48 now Rule 66. That presumption is dissipated only by a strong affirmative showing." Davis v. United States, Ct.Cl. No. 179-59, decided February 14, 1964, slip op. p. 4. See also Litchfield Mfg. Corp. v. United States, Ct.Cl. 338 F.2d 94, decided October 16, 1964.

We have carefully examined defendant's numerous objections to the commissioner's report. There is some color of truth to defendant's contentions that plaintiff's conduct with respect to the project left much to be desired. We think, however, that the genesis of the difficulties which were encountered was defendant's faulty specifications and its undue delay in correcting them. Whatever derelictions of duty plaintiff, as a contractor, might have been guilty of were not significant enough to counterbalance this initial government-caused difficulty. For this reason, we adopt the commissioner's evidentiary findings and factual conclusions with a few minor exceptions.

I. FAULTY SPECIFICATIONS

Plaintiff's claims involve three separate alleged errors in design with respect to the government-drawn specifications to be used for the concrete piles, spread footings, and sewer system. Plaintiff contends that the defendant's faulty specifications, by themselves, establish a predicate for a breach of contract claim for the delays encountered as a result thereof. Moreover, plaintiff asserts that defendant's undue delay in correcting these errors in design establishes a separate basis for a breach of contract claim.

It is well settled that where the government orders a structure to be built, and in so doing prepares the project's specifications prescribing the character, dimension, and location of the construction work, the government implicitly warrants, nothing else appearing, that if the specifications are complied with, satisfactory performance will result. E. g., United States v. Spearin, 248 U.S. 132, 39 S.Ct. 59, 63 L.Ed. 166 (1918); Laburnum Construction Corp. v. United States, 325 F.2d 451, 163 Ct.Cl. 339 (1963); Arcole Midwest Corp. v. United States, 113 F.Supp. 278, 125 Ct. Cl. 818 (1953); Stapleton Construction Co. v. United States, 92 Ct.Cl. 551 (1940). This rule rests on the presumed expertise of the government where it sees fit to prescribe detailed specifications. National Presto Industries, Inc. v. United States, Ct.Cl., 338 F.2d 99, 105, decided October 16, 1964, cert. denied 380 U.S. 962, 85 S.Ct. 1105, 14 L.Ed.2d 153 (1965). "This implied warranty is not overcome by the general clauses requiring the contractor to examine the site, to check up the plans, and to assume responsibility for the work until completion and acceptance." United States v. Spearin, supra, 248 U.S. at 137, 39 S.Ct. at 61 (Court footnotes omitted). Moreover, this implied warranty is not defeated by a contract clause permitting the prospective bidders to conduct independent subsurface investigations, if such explorations could not reasonably be completed before the bids were to be submitted. Fehlhaber Corp. v. United States, 151 F.Supp. 817, 138 Ct.Cl. 571, cert. denied 355 U.S. 877, 78 S.Ct. 141, 2 L.Ed.2d 108 (1957). However, an experienced contractor cannot rely on government prepared specifications where, on the basis of the government furnished data, he knows or should have known that the prepared specifications could not produce the desired result for "* * * he has no right to make a useless thing and charge the customer for it." R. M. Hollingshead Corp. v. United States, 111 F.Supp. 285, 286, 124 Ct.Cl. 681, 683 (1953). Cf., Flippin Materials Co. v. United States, 312 F.2d 408, 160 Ct.Cl. 357 (1963). If faulty specifications prevent or delay completion of the contract, the contractor is entitled to recover delay damages for defendant's breach of its implied warranty, and this breach cannot be cured by the simple expedient of extending the time of performance. Litchfield Mfg. Corp. v. United States, supra, 338 F.2d at 95. We will treat each of the alleged errors in the specifications separately.

(A) Concrete Piles

The plans and specifications for the foundations, and in fact for the entire project, were prepared by the Structural Division of the Veterans Administration. These government-prepared specifications were based on subsurface investigations conducted for the Veterans Administration by the Interstate Engineering Company. These explorations disclosed that the soils at the hospital site were a glacial moraine, consisting of an accumulation of earth, stone, sand, silt, clay and gravel, with occasional boulders, and in some cases nested boulders. The boring logs showed a stratum of compact sand and gravel at varying elevations. They also confirmed the existence of highly resistant materials and boulders. On the basis of this information defendant prepared the specifications for the foundation piles.¹ The specifications required piles to be of the cast-in-place concrete type and were to be formed by one of three specified methods. Each of the three types of piles specified were to be encased within a thin steel shell of approximately 0.05 inch thickness. Piles were called for and used in about 90 percent of the building foundations.

The invitations for bids, specifications and drawings were issued to bidders on June 27, 1949, and provided for receipt of bids and bid openings on August 9, 1949. Drawings included logs of all borings and test pits, the...