PETER KIEWIT SONS'CO. v. United States, 47562.

• Decision Date: 03 November 1947
• Docket Number: No. 47562.,47562.
• Citation: 74 F. Supp. 165,109 Ct. Cl. 517
• Parties: PETER KIEWIT SONS' CO. et al. v. UNITED STATES.
• Court: U.S. Claims Court

74 F. Supp. 165

109 Ct. Cl. 517

PETER KIEWIT SONS' CO. et al. v. UNITED STATES.

No. 47562.

Court of Claims.

November 3, 1947.

Dan MacDougald, of Atlanta, Ga., and J. M. Martin, of Los Angeles, Cal. (Robert S. Sams, of Atlanta, Ga., and Martin & Martin, of Los Angeles, Cal., on the brief), for plaintiffs.

Gaines V. Palmes, of Washington, D. C., and Peyton Ford, Asst. Atty. Gen., for defendant.

Before JONES, Chief Justice, and MADDEN, HOWELL, WHITAKER and LITTLETON, Judges.

MADDEN, Judge.

The Government has demurred to the plaintiffs' petition. We therefore state the facts as the plaintiffs have alleged them in their petition. On October 30, 1943, the plaintiffs, three corporations acting as joint contractors and co-adventurers, entered into a contract with the Government for the grading required for the proposed extension and reconstruction of the air field runways at Hensley Field, Texas. The contract fixed unit prices per yard for the amounts of earth to be moved, and the amount to be paid was estimated at approximately $1,832,000. The work was to be commenced by November 2, 1943, and completed by May 1, 1944. It was completed on time.

Hensley Field was bounded on the south by Mountain Creek Lake. The former north-south and northwest-south east run-ways ended at the lake shore. The new runways were to extend into the then area of the lake, and the fill for that extension of the north-south runway was to block the channel of Cottonwood Creek, the then outlet of the lake. A new outlet channel for the lake was to be excavated under the contract. The material procured from the excavation of the new channel, as well as that procured from the grading of the field was to be used in making the fill necessary to extend the runways into the lake. It was known, however, that the material from these two sources would not be enough to make the fill, and that additional material would have to be brought from a "borrow" area designated by the Government. The principal problem in the case arises out of the facts concerning the borrow material.

The plaintiffs obtained their contract by competitive bidding. With a view to making a bid, representatives of the plaintiffs visited the site on October 25, 1943. They had been furnished plans of the work showing the contours and slopes of the three types of excavation, i. e., field, channel and borrow, but had not yet been given the specifications and blue prints for the work. Their representative telephoned Mr. C. M. Weller, who was in the Negotiation and Contract Section of the United States Engineers' Office at Denison, Texas, for information as to the quantities of excavation. Mr. Weller told him that the estimated quantities were 700,000 cubic yards from the field, 1,600,000 cubic yards from the diversion channel, and 2,300,000 cubic yards from the borrow. The plaintiffs, on October 26, checked the plans which showed that the above amounts were correct as to the field and channel. They then figured the cost per cubic yard of each type of excavation with a view to making a separate unit price bid for each type. The prices computed by the plaintiffs were 31.392, 51.23 and 29.77 cents per cubic yard for field, channel and borrow excavation, respectively.

On October 27, the representatives of the plaintiffs went to the District Engineers' Office at Denison, and were, for the first time furnished with the specifications and blue prints for the work. From the specifications they learned that they must submit a single unit price bid for channel and borrow excavation. As shown above, their intention had been to bid 51.23 cents for the channel excavation and 29.77 cents for the borrow excavation, the former being much more difficult and expensive than the latter. The plaintiffs, therefore, computed a unit price bid for all three types of excavation by taking an average of their proposed separate bids weighted in accordance with the estimated amounts of each type of excavation. Their bid was 37.476 cents per cubic yard, which meant that they counted on a contribution of 6.108 cents and 7.44 cents from each estimated cubic yard of field and borrow excavation, respectively, to make up for the difference between the bid price of 37.476 cents and the intended separate bid price of 51.23 cents for the channel excavation. The plaintiffs' bid was accepted and the contract was entered into.

While the work was in progress the Government notified the plaintiffs that the finished grade for the borrow excavation was being changed and that the amount of the borrow excavation would be reduced by 750,000 cubic yards. The plaintiffs promptly informed the Government that this change would increase the composite unit cost of the work. They finished the work, and were paid their bid price of 37.476 cents a cubic yard for the yardage actually excavated. The plaintiffs presented their claim to the Contracting Officer who denied it on June 1, 1944. In accordance with Article 15 of the contract, they appealed to the Secretary of War, who referred the appeal to the War Department Board of Contract Appeals. The Board found that the cost of the channel and borrow excavations were not comparable, and that the contractor had sustained a loss of profits of $82600 on the work actually performed but denied the plaintiffs' appeal on the ground that the shortage in the borrow yardage was not unreasonable or...