Laburnum Construction Corporation v. United States

• Decision Date: 13 December 1963
• Docket Number: No. 530-59.,530-59.
• Citation: 325 F.2d 451
• Parties: LABURNUM CONSTRUCTION CORPORATION v. The UNITED STATES.
• Court: U.S. Claims Court

325 F.2d 451 (1963)

LABURNUM CONSTRUCTION CORPORATION v. The UNITED STATES.

No. 530-59.

United States Court of Claims.

December 13, 1963.

Jay M. Weinberg, Richmond, Va., for plaintiff. Alan G. Fleischer and Hirschler & Fleischer, Richmond, Va., were on the briefs.

John R. Franklin, Washington, D. C., with whom was John W. Douglas, Asst. Atty. Gen., for defendant. Edna P. Goldberg, Washington, D. C., was on the brief.

Before JONES, Chief Judge, and WHITAKER, LARAMORE, DURFEE and DAVIS, Judges.

WHITAKER, Judge:

This is an action for breach of a contract for the installation of approximately 10,000 feet of high pressure steam line at the United States Naval Base in Norfolk, Virginia. The specifications called for the construction of a 16-inch pipeline above the ground connecting an existing steam line outside the Base with a steam plant at the South Annex area within the Base. The pipe was to be supported by concrete pedestals which in turn would rest upon wooden piles driven into the ground except for a few short underground stretches where the line connected with existing steam lines or went beneath roads.

Plaintiff, the low bidder,¹ was awarded the contract on April 19, 1957, and was authorized to proceed on April 24. By the terms of the contract, the work was to be completed on February 18, 1958, 300 days after it was started. Actually, however, the work was not completed until October 20, 1958, 544 days from the authorized starting date and, since the work had not been inspected and a few odd jobs remained to be done, plaintiff did not completely quit the site until November 12, 1958.

Plaintiff alleges that defendant's unreasonable delays, resulting from errors in the specifications and tardiness in correcting those errors, constitute a breach of the contract. Plaintiff says that, but for these delays, it could have completed the work, as set forth in the specifications on which it bid, in 210 days. It claims damages for its costs and loss of profits incurred during the excess of 334 days over 210 days, with a deduction of 56 days of delay which it admits were not the fault of defendant. In the alternative, plaintiff claims that the changes made by defendant were so extensive as to constitute a fundamental alteration of the scope of the contract and, hence, a breach of it.

The Trial Commissioner to whom the case was referred concluded that plaintiff's prognosis of a 210-day work schedule was unrealistically optimistic, and that it could not have reasonably expected to complete the work in less than 300 days. He calculated the period of delay from the completion date specified in the contract and found that plaintiff's work had been delayed during the construction period from February 18, 1958 to October 20, 1958. The Commissioner concluded that one-half of this eight-month period was consumed by circumstances beyond the control of either party, and that the remaining four months of delay were caused by the defendant and were unreasonable in the circumstances. He further found that plaintiff had prosecuted the work as diligently as possible, and that none of the delay was chargeable to it.² The Trial Commissioner calculated plaintiff's damages by computing its net loss on the entire contract (direct costs minus the price paid) and allowed plaintiff one-half of this amount.

Neither party is satisfied with the result reached by the Commissioner. Plaintiff contends that the period of delay should be calculated from November 30, 1957, 210 days after it began work, and that defendant is liable for more than 80% of the delay during the remaining time it was on the job. Defendant says that any delay it caused was reasonable and that, in any event, recovery should be limited to costs that were incurred during the last few weeks of performance, when plaintiff had only a few men and virtually no equipment at the site. In addition, both parties quarrel with the method used to compute the damages.

We have concluded that the Trial Commissioner was right in finding that the defendant caused unreasonable delay. However, we think the delay was somewhat longer than four months, as found by the Commissioner, and we cannot agree with the Commissioner's method of computing the damages.

At the outset of the work the plaintiff had hired a firm of surveyors and engineers to stake out the route the steam line would take and to compute the alignment and grade of the pedestals that were to support the pipe in accordance with the specifications. But as soon as the surveyors began work it became evident that errors abounded in defendant's specifications.

Near the eastern terminus, where the line was to join an existing steam line, the surveyors discovered that, in order to follow the routing set out in defendant's plans, 84 feet of pipe in addition to the quantity called for in the specifications would be needed. It required a week of conferences between plaintiff's surveyor, plaintiff's foreman and defendant's representatives before defendant authorized inclusion of the missing footage and consequent respacing of the pedestals. During that time, defendant directed the surveyors to abandon that part of the line and to proceed to another area.

At another point, the drawings called for the pipeline to skirt a trash dump and to run between the dump and a tidal basin. The plaintiff found, upon surveying this route, that the area between the dump and the basin was a swamp in which the piles could not be sunk. On June 3, 1957, having been advised of this difficulty, the defendant's inspector told the surveyors to do no more work in this area pending a relocation of the line. It was not until July 8, 1957 that plaintiff was told to move the line away from the water and out of the swamp. That decision ran the line through a large pile of trash and debris in the dump. The plaintiff could not drive piling until this obstruction was removed, and it was defendant's obligation to remove it.³ Removal of the trash and debris from the route should not, according to the evidence, have taken more than a few hours. Yet defendant did not remove a sufficient quantity to permit plaintiff to lay the line until September 10, 1957.

The two instances mentioned in the above paragraphs seriously delayed the entire project, for the reasons explained below.

When plaintiff's surveyors came to the western terminus of the line in the South Annex area, they discovered numerous errors in the specifications. The specifications placed the line over an existing concrete road, and it appeared that the supports, if installed as specified, would have protruded from the steps of a building. Also in this area, the plans led the line under a high tension wire (where the line could not be installed) and directly across an access road. After these mistakes were discovered, defendant decided to re-design the entire South Annex area. The surveyors pointed out these errors on May 21, 1957. Defendant produced a sketch of the new design on June 11, 1957 and requested plaintiff to supply cost estimates on the proposed changes. Although plaintiff gave its estimate of the cost to make the changes on July 5, defendant did not authorize plaintiff to proceed with the surveying of the new location until October 8, 1957, four and one-half months after the defects were first brought to defendant's attention.

These defects in the plans also seriously delayed the entire project. Defendant says that since plaintiff was working from the eastern end of the line towards the western terminus, where the South Annex was located, the work there was to be done last anyway, and, hence, plaintiff was not delayed by the re-design of the South Annex. This contention ignores the fact that the work was planned to be done in stages and that each stage was to run the entire length of the line. First, plaintiff was to do the surveying, then the piledriving, then the construction of the pedestals, next the installation of the steel pipe, and finally the insulation and finishing work. As each stage was completed, plaintiff could release the subcontractor responsible for that stage and remove the skilled workmen particularly concerned with it from the payroll. When defendant prevented plaintiff from doing any work at all on a certain segment of the line, therefore, it completely dislocated plaintiff's work schedule and increased the time and expense of completing the job.

As a result of the changes necessary to correct errors in the plans, the surveyors did not complete their work until October 14, 1957, more than four months after they had started. They could not work throughout this period, but had to wait to see where defendant would place the route; out of the four months they were on the job, they spent only 22 days in the field, some of which were consumed laying out a portion of the line that they had previously gone over, where defendant had altered the route. Meanwhile, plaintiff was able to accomplish some work that did not involve laying the line above ground. The underground stretches, at points where the line went under roadways and connected with the existing steam line, were finished first. As a result, not all of the time during which the surveyors awaited design changes was lost. After a while, though, only the overland portion of the line remained to be done, and this necessarily awaited the work of the surveyors.

The spacing of the uprights was a critical matter that could not be fully resolved until the survey and staking out was completed. The plans specified that they be located at intervals of 35 feet. When one segment of the line was moved, therefore, the result was a respacing of the pedestals all along the line. Since the surveyors had to mark the locations where the posts were to be situated, relocation of the line compelled them to redo any staking previously accomplished in the vicinity of the change. Virtually all productive work had to be suspended, after the...