Centaur Construction Co. v. United States

69 F. Supp. 217, 107 Ct. Cl. 498, 1947 U.S. Ct. Cl. LEXIS 79
CourtUnited States Court of Claims
DecidedJanuary 6, 1947
DocketNo. 46242
StatusPublished
Cited by2 cases

This text of 69 F. Supp. 217 (Centaur 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
Centaur Construction Co. v. United States, 69 F. Supp. 217, 107 Ct. Cl. 498, 1947 U.S. Ct. Cl. LEXIS 79 (cc 1947).

Opinion

Jones, Judge,

delivered the opinion of the court:

This is a suit for remission of liquidated damages and additional costs incurred due to change orders in connection with a construction contract.

The contract, dated November 20,1939, called for construction work at the New York Navy Yard.

After the work was started December 26,1939, plaintiff was directed by the officers in charge to drive certain test piles. These tests disclosed conditions materially different from those shown on the drawings and the specifications.

Revised plans were drawn, and plaintiff estimated that the additional cost would be $87,450 and estimated the additional time required would be 49 days.

The changes and revised plan were approved January 26, 1940, with the understanding that the total additional cost of the revised plan would not exceed $87,450. Work was suspended approximately four weeks while these changes were being made and approved. .

Four change orders were made during the progress of the work.

The contracting officer, upon recommendations of a board that had been appointed, increased the price due to the change orders in the sum of $70,263.59 and granted certain extensions of time for completion of the contract. The comple[508]*508tion dates of different parts of the contract were delayed beyond the period allowed by these extensions.

The contracting officer assessed liquidated damages in. the sum of $5,080 which sum was deducted from the amount allowed plaintiff for work done under the contract.

Final vouchor was issued to plaintiff June 9, 1941. The plaintiff executed a general release containing the following reservation, “except that the contractor reserves the right to make claim for, sue for, and endeavor to collect the following amounts:

1. Assessed liquidated damages-$5, 080.00

2. Engineering Services for redesigning the sewer- 3,600. 00 .

3. Deductions of $20.06 and $5545.63 from Changes “A” and “B” under contract, Bureau of Yards and Docks letter NOy-3739, dated August 3, 1940- 5, 565. 69”

No appeals were taken by the plaintiff from the orders of the contracting officer either in approving any of the change orders or the assessment of liquidated damages prior to the', date of the final voucher on June 9,1941, nor was any appeal] taken from the action of the contracting officer in denying the three items upon which the above reservation was made.

Insofar as the record discloses no further action was taken on any of these three reserved items until August 13,1942.

In the meantime the First War Powers Act of December 18, 1941, was enacted.

In a letter dated August 13, 1942, the plaintiff- wrote the Chief of the Bureau of Yards and Docks requesting a review of the items reserved in its release of June 1941, first, on the ground that the allowance of the items was merited by the work performed under the change orders, and second, on the ground that the Executive Order of the President, dated December 27,1941, issued pursuant to the First War Powers Act, conferred authority to modify any Government contract, past or present, if, in the judgment of the authorized department, it would aid in the prosecution of the war. In this letter the plaintiff called attention to the fact that it was engaged in current war contracts for the Government and that the settlement of these items would assist it in carrying out the obligations of these war contracts. A supplemental letter on the same subject was sent by plaintiff on August 20, 1942.

[509]*509On'October 22, 1942, two letters, signed by L. B. Combs, Assistant to the Chief of the Burean of Yards and Docks, who was also the contracting officer under the contract, were sent to plaintiff in reply to his letters of August 13 and August 20. In these letters the Bureau rejected the second item, for engineering services, as being without merit. As to the first and third items, the letter recited that it was the judgment of the Navy Department that the release to plaintiff of the liquidated damages in the sum of $5,080 that had been assessed and withheld, and the allowance to it of the sum of $4,581.59 covering the adjustment for the additional costs which it claimed it had incurred because of the change orders, would facilitate the prosecution of the war in that such settlement would enable the plaintiff the better to carry on the war work in which it was then engaged, and that therefore, under the authority of the First War Powers Act of 1941 and the Executive Order No. 9001, of December 27, 1941, issued pursuant thereto, the contracting officer, acting under the direction of the Secretary of the Navy “hereby releases and allows said sums under the contract, subject to your delivering an unqualified release of claims on account of the contract; and the contract will be regarded as amended accordingly/

Pursuant to these letters, a voucher and release were prepared and were forwarded to the General Accounting Office on April 14, 1943, for approval and settlement.

The Comptroller General, on January 28,1944, rejected the proposed settlement and declined to honor the voucher on the ground that the work under the contract had been completed and payment made therefor before the enactment of the First War Powers Act of 1941, and that the attempted amendment of the contract by the Navy Department under date of October 22,1942, had no valid effect and constituted no authority for the payment of the additional sums claimed.

Two issues are before the court. The first is whether the contracting officer had a right to change his ruling and allow these items on their merits aside from the authority conferred by the War Powers Act, and second, whether'the War Powers Act and the Executive Order issued pursuant thereto authorized the Navy Department to modify the contract [510]*510as a war measure after tbe work had been completed and accepted and final voucher, with the exception of the reserved items, had been paid.

On the question of the time limit within which these reserved items claimed by plaintiff might be pressed, the defendant urges that, since no appeal was taken within 30 days after the final rejection of these claims by the contracting officer, the issue is closed, the contract completed, and the contracting officer has no authority to take further action thereon. The plaintiff on the other hand says that while Article 9 places a time limit within which the causes of delay shall be presented to the contracting officer, the contracting officer, with the approval of the head of the department or his duly authorized representative, may grant a further period of time prior to' the date of the final settlement of the contract, and further urges that as to these reserved items there has been no settlement of the contract and that the contracting officer had the authority to reverse his previous decision and authorize the payment of the items as set out in the three claims.

It is not necessary to pass on the question as to whether, under the peculiar wording of Article 9, it was essential that plaintiff file an appeal to the head of the department within 30 days after the final rejection, or whether the contracting officer might have had a reasonable time beyond this period within which to reconsider the merits of the items claimed.

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Cite This Page — Counsel Stack

Bluebook (online)
69 F. Supp. 217, 107 Ct. Cl. 498, 1947 U.S. Ct. Cl. LEXIS 79, Counsel Stack Legal Research, https://law.counselstack.com/opinion/centaur-construction-co-v-united-states-cc-1947.