Callahan Walker Construction Co. v. United States

95 Ct. Cl. 314, 1942 U.S. Ct. Cl. LEXIS 144
CourtUnited States Court of Claims
DecidedJanuary 5, 1942
DocketNo. 43102
StatusPublished
Cited by1 cases

This text of 95 Ct. Cl. 314 (Callahan Walker Construction Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Callahan Walker Construction Co. v. United States, 95 Ct. Cl. 314, 1942 U.S. Ct. Cl. LEXIS 144 (cc 1942).

Opinions

GreeN, Judge,

delivered the opinion of the court:

It appears that the plaintiff entered into a written contract with the defendant for performing a certain amount of earth work according to specifications attached, this work being in the construction of a levee.

After the work provided for in the contract had been nearly completed, the contracting officer of defendant issued an order for the construction of a riverside false berm as described in finding 6, and stated in the order that “payment for additional yardage made necessary would be made at the contract price per yard.” This additional work ordered was not contemplated or required under the original contract, but the plaintiff was paid for the work only in accordance with the yardage price stated therein. It now brings suit to recover the additional cost of this work over and above the contract price.

The order made by the contracting officer unquestionably ■changed the contract and increased the amount due under it. The work was necessary for the completion of the project and within the general scope thereof and the contract provided for changes being made but Article 3 (see finding 6) provided that “If such changes cause an increase or decrease in the amount due under this contract, or in the time required for its performance, an equitable adjustment shall be made and the contract shall be modified in writing accord[325]*325ingly.” The contracting officer paid no attention to the provision quoted above but required the plaintiff to perform the work in accordance with his order, although the change made a large increase in the amount due under the contract.

This we think was clearly a breach of the contract. As against this conclusion it is argued that Article 3 provided that “no change involving an estimated increase or decrease of more than $500 shall be ordered unless approved in writing by the head of the department or his duly authorized representative.”

It is said that this provision was not complied with, but the contracting officer who made the contract and the order for additional work was the “duly authorized representative” of the department and has so been treated in all of our decisions. As he ordered the change he must have approved it. It is also said that the plaintiff was not obliged to comply with the order if it was unauthorized but the order was authorized and the contract required the contractor to immediately proceed with the work in accordance with the-order. It is quite evident that the order of the contracting officer fixing the contract price as a rate of payment for this additional work was not an “adjustment” required byArticle S. An “adjustment” is a change to meet changed conditions. Here no change was made although the findings show clearly changed conditions which made the additional work more-costly not merely in quantity but per yard. In view of this-fact, it is clear that it was not an “equitable adjustment” for no allowance whatever was made to the plaintiff on account of the additional cost per yard. Moreover the reading of the order shows that the contracting officer was not making any attempt at adjustment or any pretense thereof. He simply held that the contract rate applied to the additional work done. Here we have a case where the contracting officer not only refused to make an equitable adjustment but no adjustment whatever was made and certainly not an equitable adjustment. This was a breach of Article 3, and by reason of this breach, the defendant was not entitled to any benefit from the remaining provisions of this article. As the case stands,, it is merely one in which the defendant’s agent ordered additional earth moved above that required by the contract. The-[326]*326findings sliow that this earth was so located that the cost of moving it would be much increased over the yardage price stated in the original contract.

It is especially urged, however, in the dissenting opinion that Article 15 provided that all disputes concerning questions of fact arising under this contract shall be decided by the contracting officer subject to appeal by the contractor. It is argued that there was a dispute of fact involved in the order of the contracting officer and that when he stated that the plaintiff would be paid for the additional work at the contract rate, he was in effect saying that this was the reasonable value of the additional work ordered and that this was a question of fact which he had the power to decide.

We think it has been shown above that he was not deciding a question of fact and that his order cannot be so construed. He did, in effect, assert that the contract rate applied to the additional work ordered but this involved a question of law which he had no authority to decide. We have also held above that he not only did not make an equitable adjustment but made no adjustment whatever.

Where extra work is ordered by the proper officer which is necessary and it is accepted and used by the defendant we have held that there is an implied contract to pay the contractor the reasonable value thereof unless there is a provision in the contract directly forbidding payment under the circumstances of the case. The general provisions with reference to the naval contracts do not prevent the application of this rule, and it was held in United States v. Spearin, 248 U. S. 132, 139, that neither 3744 of the Revised Statutes, which provides that contracts of the Navy Department shall be reduced to writing, nor the parol evidence rule, precludes reliance upon a warranty implied by law. See Kellogg Bridge Co. v. Hamilton, 110 U. S. 108. United States v. Spearin, supra.

It is difficult to find any case where the precise question involved in this case was discussed at length, although the controlling principles have been decided. It has been held heretofore in effect that the provision for equitable adjustment where a change was made in the contract which increased either the quantity or the expense of the work was [327]*327a peremptory requirement and must be followed. The reason for this assumption is manifest, for if it were not an absolute requirement but left to the opinion or judgment of the contracting officer, it would be no protection whatever to the plaintiff and would permit the taking of plaintiff’s work without compensation.

As no adjustment was made of the additional cost, the ■plaintiff under all of the authorities was not obliged to take an appeal or even to protest and without an appeal could ■bring suit to recover on an implied contract the reasonable value of the work. The plaintiff, however, did protest against the decision of the contracting officer that payment would be made under the contract rate.

It should be observed in this connection that even if the ■contracting officer was intending to make an equitable adjustment of the price per yard (we think it is clear that he •did not) this was not a matter upon which he was authorized to make a final decision. The Supreme Court has held in two cases that the question of what is an equitable adjustment is not one of fact but one of law. See Case v. Los Angeles Lumber Co., 308 U. S. 106, 114, 115, 119, and Securities Commission v. U. S. Realty Co.,

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Related

Whitman v. United States
110 F. Supp. 444 (Court of Claims, 1953)

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Bluebook (online)
95 Ct. Cl. 314, 1942 U.S. Ct. Cl. LEXIS 144, Counsel Stack Legal Research, https://law.counselstack.com/opinion/callahan-walker-construction-co-v-united-states-cc-1942.