N. FIORITO COMPANY v. United States

• Decision Date: 17 October 1969
• Docket Number: No. 206-66.,206-66.
• Citation: 416 F.2d 1284
• Parties: N. FIORITO COMPANY, Inc. v. The UNITED STATES.
• Court: U.S. Claims Court

416 F.2d 1284 (1969)

N. FIORITO COMPANY, Inc. v. The UNITED STATES.

No. 206-66.

United States Court of Claims.

October 17, 1969.

John C. Hoover, Seattle, Wash., Atty., of record, for plaintiff. Paul R. Cressman, William L. Hintze and Short, Cressman & Cable, Seattle, Wash., of counsel.

Michael J. Rubin, Washington, D. C., with whom was Asst. Atty. Gen., William D. Ruckelshaus, for defendant.

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

PER CURIAM:

This case was referred to Trial Commissioner Richard Arens with directions to make recommendation for conclusions of law on plaintiff's motion and defendant's cross-motion for summary judgment under the order of reference and Rule 99(c) since September 1, 1969, Rule 166(c). The commissioner has done so in an opinion and report filed on June 5, 1969, wherein such facts as are necessary to the opinion are set forth. On July 17, 1969, defendant filed a motion wherein it requested that the court adopt the report of the commissioner and enter judgment in accordance therewith. On July 24, 1969, plaintiff filed a motion joining in defendant's said request. The case has been presented to the court on the commissioner's opinion and report and the said motions of the parties without oral argument. Since the court aggrees with the commissioner's opinion and recommended conclusions of law, as hereinafter set forth, it hereby grants the motions of the parties and adopts the report, opinion and recommendations of the trial commissioner as the basis for its judgment in this case. Therefore, defendant's motion for summary judgment is granted, and plaintiff's like motion denied, on the issues discussed in the opinion as overrun, time extensions, impossibility of performance, and Board proceedings and as to these issues the petition is dismissed; plaintiff's motion for summary judgment is granted, and defendant's like motion denied, on the issues discussed in the opinion as Compaction Difficulties (other than impossibility of performance) and Haul Distances; proceedings in this court are stayed for a period of 90 days from the date hereof under Rule 167 prior to September 1, 1969, Rule 100 to permit the Armed Services Board of Contract Appeals to determine (a) the amount of the equitable adjustment and extension of completion time to which plaintiff is entitled consistent with this opinion, because of compaction difficulties, (b) the impact of an extended contract completion date (because of compaction difficulties) on the Cure Notice and on defendant's counterclaim, (c) the amount by which an equitable adjustment of the Haul Distance should be increased by considering any fraction of a one-half mile as a one-half mile, and (d) the quantity of wasted material for which an equitable adjustment should be allowed; the parties are to comply with Rule 167 prior to September 1, 1969, Rule 100 and the appropriate provisions of the General Order of the court of April 1, 1968, implementing it; and upon conclusion of the Board's proceedings, the parties are to take further action for the final disposition of the case in this court.

OPINION OF COMMISSIONER

ARENS, Commissioner.

This case, which is before the court on cross-motions for summary judgment, arises out of a contract awarded plaintiff by the United States Air Force for the rebuilding of an operational apron at the Portland (Oregon) International Airport. Plaintiff challenges the decision of the Armed Services Board of Contract Appeals on certain factual and legal issues hereinafter set forth.¹

The major work involved in the project consisted of removing the old concrete pavement, excavating to a designated depth, stockpiling excavated material suitable for subbase or base, wasting unsuitable excavated material, compacting the left-in-place subbase, backfilling and compacting suitable subbase and base material, and constructing an 11-inch thick concrete pavement. The subbase and base were both to consist of granular, nonplastic material, but the 18-inch subbase was to be compacted to 95 percent of maximum density, while the 6-inch base was to be compacted to 100 percent of maximum density.

The project was divided into two phases, each of which consisted of half of the apron. Phase I was required to be completed before Phase II could be commenced.

The contract, awarded plaintiff, an experienced airport apron contractor, on December 20, 1962, provided that work should start within 10 days after the notice to proceed. The completion date, set by a Supplemental Agreement of May 31, 1963, was to be 155 days after the notice to proceed, which was thereafter issued on July 8, 1963, and accordingly fixed the completion date as December 10, 1963. By subsequent modification and change order, the completion date was extended to December 28, 1963.

Phase I was completed and turned over to the Air Force on October 30, 1963. Phase II was started on November 1, 1963. By February 24, 1964, the project was completed, except for the sawing and sealing of the joints on Phase II which was done by the end of March 1964.

Overrun

The contract schedule provided that 10,700 cubic yards of the base and subbase material were to come from the stockpile and that 11,800 cubic yards would be imported. When the base and subbase material from the old apron was removed, however, it proved to be unsuitable for reuse, and therefore plaintiff was required to haul all of it away and to import and place 23,800 cubic yards of base and subbase material. The parties agreed that plaintiff was entitled to an equitable adjustment because of this "overrun" but disagreed as to the interpretation of the contract specifications regarding the formula for payment. The pertinent specifications read as follows:

SP 1-01 Description of Work (Jul 1962)

(c) Quantity. (This paragraph is applicable to all unit price contracts but is inapplicable to all lump-sum contracts.) The Contractor may reasonably expect a variation in the estimated quantity set forth in the Schedule such that the total payment for the completed work may range from 90 percent to 110 percent of the total amount stated on the Standard Form 23 attached hereto. The Contractor will be required to complete the entire work as set forth herein subject to the allotment of sufficient funds to the contract: Provided, * * * (2) if the completed work ranges from 90 percent to 110 percent of the estimated quantities set forth in the Schedule, the contractor will be allowed no claims for anticipated profits or loss of profits or for damage of any sort because of differences between the estimate of any item and the amount of any item actually required, and (3) if work less than 90 percent or more than 110 percent of the estimated quantities set forth on the Schedule causes an increase or decrease in the unit price or prices there may be an adjustment of such prices in accordance with the procedures of Clause 3, Changes, in Standard Form 23A of this contract.

Clause 3 Changes, referred to above, read in part:

The Contracting Officer may, at any time, by written order, and without notice to the sureties, make changes in the drawings and/or specifications of this contract if within its general scope. If such changes cause an increase or decrease in the Contractor\'s cost of, or time required for, performance of the contract, an equitable adjustment shall be made and the contract modified in writing accordingly. In its opinion the Board stated:²

* * * * * *

The appellant and contracting officer have not reached agreement on a unit price for the overrun quantity. Although we are not deciding an equitable price for such quantities, certain matters are to be resolved prior to the remand to assist the parties in their negotiations. The appellant says that having exceeded 110 percent of the estimated quantity, the unit price for the entire overrun quantity is open to negotiation rather than just that on units exceeding the 110 percent. The Government says that only the price for units in excess of 110 percent are subject to price change. The pertinent portion of the specification provision says that "if work * * * more than 110 percent of the estimated quantities * * * causes an increase or decrease in the unit price or prices there may be an adjustment of such prices * * *." The clause appears to contemplate that if the reasonable cost of performing units of work which exceed 110 percent of the estimated number of units of work is greater than the originally-stated unit price, then that unit price shall be modified to reflect the higher cost of the units above 110 percent of the estimate. Presumably a new price would be negotiated for all units of work, but the only units which would serve to change the original bid price are those above 110 percent of the originally-estimated quantity. This, in somewhat different language, agrees with the Government\'s interpretation of the clause\'s applicability.

* * * * * *

Should the equitable adjustment encompass the entire increase in quantity of overrun, as contended by plaintiff, or should the equitable adjustment be limited to the quantity of overrun which exceeded 110 percent of the original estimate, as contended by defendant? In other words, is the initial 10 percent overrun computed under the original unit price cost, or is it to be included in the equitable adjustment? The issue presented is, of course, one of law which this court is free to answer independently of the Board's decision. Perini Corp. v. United States, 381 F.2d 403, 180 Ct.Cl. 768 (1967).

The cases cited by the parties to support their respective positions are so dissimilar in facts and in contract provisions as to be of no guidance in resolving the issue under consideration.³ Although the specification could perhaps have been drafted with greater clarity, it cannot be concluded that it is ambiguous so as to require that the scales be weighted against the...