Paccon, Inc. v. United States, 306-61.

• Decision Date: 17 July 1968
• Docket Number: No. 306-61.,306-61.
• Citation: 185 Ct. Cl. 24,399 F.2d 162
• Parties: PACCON, INC. v. The UNITED STATES.
• Court: U.S. Claims Court

185 Ct. Cl. 24, 399 F.2d 162 (1968)

PACCON, INC. v. The UNITED STATES.

No. 306-61.

United States Court of Claims.

July 17, 1968.

David V. Anthony, Washington, D. C., for plaintiff; Gilbert A. Cuneo, Washington, D. C., attorney of record. John M. Allen and Sellers, Conner & Cuneo, Washington, D. C., of counsel.

Ray Goddard, Washington, D. C., with whom was Asst. Atty. Gen. Edwin L. Weisl, Jr., for defendant.

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

ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON COUNTS ONE AND FOUR AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT ON THOSE COUNTS

DAVIS, Judge.^*

These cross-motions for summary judgment present for review two board of contract appeals decisions on two separate contracts held by the plaintiff. The first claim, set forth in Count 1 of the petition, challenges a determination of the Armed Services Board of Contract Appeals (1963 BCA ¶ 3686 and ¶ 3796), affirming, after de novo review on the lower board's record, an earlier decision of the United States Army Japan Board of Contract Appeals (USARJ BCA No. 59). The second claim, in Count 4, attacks a ruling of the Japan Board on another matter (USARJ BCA No. 70).¹ We consider Count 1 in Part I and Count 4 in Part II.

I

The Count 1 claim is for the cost of delays allegedly caused by the failure of the Government to coordinate the operations of a separate contractor, Shimato Construction Co., Ltd. (Shimato), with those of plaintiff so as to avoid interference by Shimato with Paccon's performance. The issues are: (1) Did the Government's assurances to plaintiff prior to award, or any explicit or implicit provision of the contract, constitute a warranty that the work of Shimato would not delay or interfere with plaintiff's performance? (2) If not, did the Government undertake an obligation which was less than a full warranty and was this obligation violated? And (3) in any case, do the waivers which plaintiff executed bar this delay claim?

The preliminary facts are not in dispute. At the end of June 1954, the Corps of Engineers awarded a fixed-price contract to plaintiff for the construction of 128 houses at two sites, Sada (77 houses) and Futema (51 houses), in Sukiran, Okinawa, for an estimated contract price of $1,856,100. The first house was to be completed 150 days after receipt of the notice to proceed, with subsequent completions due one-a-day thereafter. Plaintiff's contract covered only the construction of the houses and the pads on which they stood. A separate award was to be made for site grading, utilities, roads, and sidewalks. Plaintiff's ability to meet its completion schedule depended on the timely grading of the sites and installation of utilities, roads, and sidewalks since the sites had to be graded before construction of the houses could start.

Paccon was aware at the time of negotiating the contract that no final site had been fixed for the contemplated construction other than it would be generally at Sukiran. It also knew that negotiations were simultaneously being conducted with Shimato for the site grading, roads, and utilities systems by an "Island-Wide" contract for such work at Sukiran and elsewhere on Okinawa. The "Island-Wide" contract was awarded to Shimato on June 30, 1954, simultaneously with the award of plaintiff's contract. Both this and the plaintiff's contract provided:

Article 12. Other Contracts. The Government may undertake, or award other contracts for additional work, and the Contractor shall fully cooperate with such other contractors and Government employees and carefully fit his own work to such additional work as may be directed by the Contracting Officer. The Contractor shall not commit or permit any act which will interfere with the performance of work by any other contractor or by Government employees.

Shimato's "Island-Wide" contract provided in addition:

SC-3F Priority of Work: Since Contractor is to supply roadways, drainage facilities and utilities for structures to be built by others, it will be necessary to coordinate installation of items under this contract with the expected times of completion for these structures in order that the structures and appurtenant roads, drainage facilities and utilities may be completed at approximately the same time. The priority for commencement and completion of each portion of each lot will be established by the Contracting Officer and contractor shall commence work at such time and in such places as the Contracting Officer shall direct.

Plaintiff received a notice to proceed on October 13, 1954, and shortly thereafter was given a copy of Shimato's contract. Prior to receiving the notice to proceed the plaintiff was informed by the Government that Shimato would be unable to complete the site grading at the Sada site without causing a delay to plaintiff, and the contracting officer requested plaintiff to perform Shimato's contract grading at the Sada site at Shimato's unit prices. The plaintiff did so under a modification of its own contract, and completed its obligations at Sada within the allowed time. Not so at Futema.

Soon after the plaintiff received its notice to proceed it became apparent that, at its then rate, Shimato was not going to discharge its site grading responsibilities at Futema in time to permit plaintiff to proceed with its construction schedule. On October 22, 1954, one week after the modification had been executed transferring to plaintiff Shimato's responsibility for site grading at the Sada area, the Government requested plaintiff to submit a quotation for performing Shimato's site grading and certain other work at Futema. The plaintiff supplied a quotation for this work but did not receive the job.

As a result of Shimato's failure to make satisfactory progress at Futema, conditions there became progressively worse. Shimato's late commencement of operations, the slow pace of its work, and its method of operations (such as leaving ditches standing open and backfill uncompacted) impeded plaintiff's access to the worksite and interfered with its work, as well as increasing its costs of performance. Plaintiff frequently and vigorously complained to the Government about the delays and interference it was experiencing from Shimato's indiscriminate performance without regard for priority schedules, and asked the Government to take appropriate corrective action. For example, in its letter of February 14, 1955, to the contracting officer the plaintiff stated:

* * * the other Contractor has failed to complete "necessary grading and compaction to prepare house sites to necessary grades" insofar as any of such work being performed by the other Contractor is concerned. Specifically, due to such failure to perform, we have been unable to place base course building pads and to proceed with structural work on any of the building sites where the other Contractor is performing grading work. * * *

* * * * * *

As in the Sada Area the other Contractor has performed work indiscriminately throughout the Futema area without regard to priority schedules, leaving ditches open indefinitely, rendering areas inaccessible or hazardous to work in. * * *

In none of these complaints to the Government did the plaintiff refer to the Government's responsibility under its alleged warranty, later asserted before the Boards and here.

On June 9, 1955, the plaintiff informed the Government that "in order to meet the proposed schedule, certain work being performed by others must be accomplished well in advance of turnover dates", referring to the connecting of utilities, completion of sidewalks, and backfilling and compaction of ditches. In reply to plaintiff's letter of August 22, 1955, complaining of Shimato's delays which were resulting in excessive contract costs to plaintiff, the Government's letter of August 24, 1955, stated in part:

The Contracting Officer knows of no guarantee, stated or implied, that you would be given paved entrance and exit to your building at any given stage of construction.

The Contracting Officer cannot agree to have the work done by others performed in the sequence you desire, nor does your contract state that work by others will be done as you desire.

Following a conference on August 27, 1955, attended by the interested parties to discuss mutual interference problems between plaintiff and Shimato, the Government on September 12, 1955, furnished plaintiff a schedule showing revised completion dates for utilities and paving, as well as revised turnover dates of the houses at Futema (and Sada). These dates were predicated on the completion schedule submitted by Shimato, and the communication ended: "Maximum effort will be made to meet the above schedule." Although Shimato promised to be completed at Futema by December 15, 1955, on May 24, 1956, the Government informed the plaintiff that Shimato would not complete all utilities until June 8, 1956. By January 27, 1956, the plaintiff had completed 97 percent of its contract, but delays by Shimato prevented final completion and turnover by plaintiff until July 13, 1956, or 154 days late. The extent to which change orders and the plaintiff itself may have contributed to this delay need not be considered at this stage of the litigation. Time extensions were granted plaintiff matching the delays.

On October 22, 1957, plaintiff submitted a formal claim to the contracting officer requesting that a modification be issued to compensate it for its increased costs "brought about by delays on the part of the utilities contractor in the performance of his work." These claimed costs totaling $169,200² consisted of increases in overhead ($115,000), labor ($44,000), and building maintenance ($10,200). On February 20, 1958, the contracting officer denied plaintiff's claim on the ground that it had been waived by plaintiff by the execution of the waiver provision in Modification No. 49. On March 13, 1958, plaintiff...