JG Watts Construction Company v. United States

• Decision Date: 21 January 1966
• Docket Number: No. 148-56.,148-56.
• Citation: 355 F.2d 573
• Parties: J. G. WATTS CONSTRUCTION COMPANY v. The UNITED STATES.
• Court: U.S. Claims Court

355 F.2d 573 (1966)

J. G. WATTS CONSTRUCTION COMPANY v. The UNITED STATES.

No. 148-56.

United States Court of Claims.

January 21, 1966.

COPYRIGHT MATERIAL OMITTED

Lewis K. Scott, Portland, Or., for plaintiff; William F. Lubersky, Portland, Or., attorney of record; Koerner, Young, McColloch & Dezendorf, Portland, Or., 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., of counsel.

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

COLLINS, Judge.

In 1952, the Bureau of Public Roads, Department of Commerce, awarded to plaintiff a contract for the construction of approximately 4.3 miles of road in the Umpqua National Forest, Oregon. The road was completed by plaintiff and was accepted by the Bureau of Public Roads in December 1953. The basis for the present suit is plaintiff's charge that the Government breached certain contractual obligations. Plaintiff seeks to recover excess costs allegedly incurred as a result of negligence on the part of the Bureau of Public Roads personnel who set the stakes which governed construction of the road.

The facts may be summarized as follows: The road was built along the North Umpqua River in an area which was rough and mountainous. Plaintiff's work included the removal of soil, blasting through rock, use of earthmoving equipment to achieve subgrade, and finishing with a layer of "cushion" material. Stakes set by the Bureau of Public Roads provided the guidance for plaintiff's excavation. For example, center-line stakes, which were placed at intervals of no more than 50 feet, indicated the location of the middle of the prospective road. Each such stake contained data regarding the elevation of the subgrade at the particular point. Related functions were served by reference and slope stakes; these are explained in finding 6. Construction at a given location could not begin until the appropriate stakes had been set. Center-line stakes were destroyed during normal construction, but many of the slope and reference stakes remained.

The roadbed was divided into stations at 100-foot intervals. Plaintiff's basic plan was to commence operations at Williams Creek (station 794) and then work eastward. Upon reaching the eastern end of the project (station 875), plaintiff would return to Williams Creek and then proceed to the western terminus (station 654). Construction was started in the Williams Creek area in May 1952.

While performing the earlier stages of the excavation process, plaintiff's crews encountered no unusual problems. However, in certain locations, serious difficulties arose as the rough grading approached the subgrade. For example, during the spring of 1953, there were instances in which undulations appeared as the road surface came near the subgrade level indicated on the slope and reference stakes. In the latter part of April 1953, plaintiff replaced its job superintendent. However, neither this step nor other changes in personnel succeeded in eliminating the difficulty regarding subgrade fluctuations.

On a number of occasions, the new superintendent called in plaintiff's engineer, Clarence W. Chellquist. Mr. Chellquist checked the stakes in the specific areas and determined that errors were present. Finally (in May or June of 1953), Mr. Chellquist was relieved of his other duties and was directed to devote all of his time to the checking and correction of stakes. At first, Chellquist worked just ahead of plaintiff's excavating crew. Then, by July 1953, he began a resurvey of all stakes remaining over the entire project. The survey, which indicated numerous substantial errors in the slope and reference stakes, was submitted to the Bureau of Public Roads in the fall of 1953. The Bureau acknowledged that plaintiff's survey was substantially correct. (See finding 8.)

In the meanwhile, the grading operation had been completed. During the remaining months, plaintiff was involved in the process of finishing. As stated above, plaintiff's work was accepted by the Bureau on December 2, 1953.

The contract consisted of a number of different pay items or types of work, the largest of which, unclassified excavation, is the subject of the present suit. Payments to plaintiff were based upon estimated quantities. Thus, for each cubic yard of unclassified excavation, plaintiff was entitled to 90 cents. The final estimate, dated January 31, 1957, shows payments to plaintiff of $485,969.47 for all work under the contract. In addition, plaintiff submitted a claim to the contracting officer for an equitable adjustment. The contracting officer made allowances totaling $5,999.09. On January 14, 1959, the Appeals Board for the Department of Commerce held that plaintiff was not entitled to any equitable adjustment beyond that awarded by the contracting officer.

In the present action, plaintiff seeks not an equitable adjustment, but damages for breach of the contract. According to plaintiff, the various staking errors caused increases in plaintiff's costs to the extent of $130,228. Defendant denies that plaintiff is entitled to any recovery.

Commissioner Mastin G. White, to whom this case was referred, accepted the view that plaintiff had been injured as a result of the Bureau's errors in staking. Commissioner White found that plaintiff's damages amounted to $35,985. We are largely in agreement with the report of the commissioner.

Before discussing the question of negligence on the part of the Bureau of Public Roads, consideration must be given to defendant's assertion regarding finality of the administrative decision. According to defendant, since plaintiff has failed to prove or even allege that the determination of the Department of Commerce Appeals Board was arbitrary or unsupported, plaintiff cannot recover in this action. A sufficient answer to defendant's argument is contained in the opinion of the Appeals Board.

In accord with a request by plaintiff, the Board included in its opinion the following:

* * * the Board hereby states that it is passing only on the administrative claim for equitable adjustments, and is excluding from its consideration questions relating to award of damages for breach of contract.

The Board will limit its consideration to the claims for equitable adjustments under the contract, at the contract rate, for additional work caused the Contractor by the Bureau * * *.

Thus, the Appeals Board expressly recognized the distinction between plaintiff's administrative claims and plaintiff's action for breach of contract. Under these circumstances, the decision of the Appeals Board is not a bar to recovery by plaintiff in this suit. Cf. Ekco Products Co. v. United States, 312 F.2d 768, 160 Ct.Cl. 75, 84 (1963). Plaintiff has consistently asserted that its claim for unliquidated damages could not be determined administratively. For this reason, there is no basis for applying to plaintiff the doctrine of estoppel which was utilized in H. R. Henderson & Co. v. United States, 169 Ct.Cl. 228, 245 (1965).

There is another argument of defendant which appears to overlook the nature of plaintiff's present claim. Defendant emphasizes that contractual provisions "clearly contemplated * * * that changes, adjustments, and modifications in the alignment, grades, quantities, and slopes would become necessary as conditions developed in the field during layout and construction." Defendant's argument fails to recognize (1) that plaintiff has not challenged the right of the Bureau to effect changes in the plans for the road and (2) that plaintiff is not now seeking compensation for additional quantities of excavation. The theory of the present action is that the excavation which plaintiff accomplished (and for which plaintiff has been paid the contract rate) was rendered more costly as a result of the improper staking. We share plaintiff's view that the Bureau did not have a contractual right to supply incorrect and misleading stakes.

EXCAVATION PRIOR TO THE FINISHING STAGE

Commissioner White found that the slope and reference stakes placed by the Government were not within reasonable limits of engineering accuracy. This finding (number 8) is supported by the evidence, specifically by the testimony of plaintiff's expert witnesses. The parties disagree as to the precise standard of accuracy which was applicable to the staking. Defendant contends that a variance of 1 foot (too high or too low) would be reasonable, while plaintiff asserts that the proper limit was no more than three-tenths of a foot. Complete acceptance of plaintiff's assertion is unnecessary, for, even under the standard proposed by defendant, a substantial portion of the stakes (resurveyed by Chellquist) was in error. Furthermore, a tolerance of plus or minus five-tenths of a foot would appear to be reasonable, and, according to the Chellquist survey, 51 percent of the slope and reference stakes exceeded this limit of vertical tolerance. Thus, whatever the precise standard for staking accuracy, an excessive number of errors was committed by the Bureau of Public Roads. It is important to note that, after the making of various corrections, the Bureau admitted the validity of Chellquist's survey.

The contract imposed upon the Government the obligation to "set construction stakes establishing lines, slopes and continuous profile-grade in road work * * *" and further provided that "such stakes * * * shall constitute the field control by and in accordance with which the contractor shall govern and execute the work." In order to satisfy its contractual duty, it was incumbent upon the Government to perform in a reasonable and workmanlike manner. Otherwise, the Government would run afoul of the implied condition that neither party hinder the work of the other. Cf. Laburnum Constr. Corp. v. United States, 325 F.2d 451, 163 Ct.Cl. 339, 350 (1963). As indicated above, the Bureau of Public Roads failed...