Chalker & Lund Co. v. United States

107 F. Supp. 734, 123 Ct. Cl. 381, 1952 U.S. Ct. Cl. LEXIS 52

• Court: United States Court of Claims
• Decided: October 7, 1952
• Docket: No. 47694
• Status: Published

Opinion

Littleton, Judge,

delivered the opinion of the court:

The plaintiff entered into a contract with the defendant dated March 26, 1943, for the construction of a number of warehouses and a repair building at the Army Air Forces Depot at 36th Street Airport, Miami, Florida. The original specifications in the Government’s invitation to bid required the contractor to “perform all work of clearing, excavating, filling, backfilling, and grading,” required in connection with the construction.

In February 1943, prior to submission of plaintiff's bid, the Government entered into a contract with the Hooper Construction Company, for the necessary filling and rough grading, and accordingly the original specifications in the invitation to plaintiff to bid were amended on March 17, 1943, to eliminate the work of filling and rough grading. Defendant notified plaintiff of the amendment by telegram on March 20, 1943, stating in part: “All earth fill will be placed by others. Building contractor will fine grade fill only.”

The amended specifications included the following:

1A-04. Excavation, -filling and grading. — (a) Rough grading over the building site is covered under another contract, including compaction of the fill, specified as follows:

Buildings having elevated concrete floor slabs on fill, shall have the fill carefully placed to the proper elevation.

* * * The embankments shall be placed in layers not exceeding six inches, each layer to be compacted by puddling, tamping, or rolling to 100 percent of the maximum density at optimum moisture.

(b) Under this contract, the contractor shall complete the grading, as necessary to place the concrete slabs and to construct the foundations, and shall base his quotations upon estimates of the work required to accomplish this, which estimates shall be based upon the contractor’s visual inspection of the grading work actually accomplished. No separate payment nor any adjustment of the contract price will be allowed for any grading done under this contract.

1A-05. Section III — Concrete worlc. — (a) All concrete slabs on earth fill shall be 6 in. thickness.

Plaintiff submitted its bid on the contract under the amended specifications on March 24, 1943, and the contract was awarded to plaintiff March 26, 1948. As far as filling and grading were concerned, plaintiff had only to fine grade the fill placed and rough graded by the Hooper Company.

It is from the nature of the material used by Hooper in the fill that the controversy here arises, under plaintiff’s first cause of action. The fill placed by Hooper consisted principally of a materia] technically known as “oolite” containing a high percentage of lime. The material was excavated from under water and was soft when dumped on the fill. When it became dry, however, after about a week, it became quite hard. Plaintiff had planned to perform the fine grading by hand labor, using shovels at first and then leveling the fill at the specified elevation with straight edges aftei1 the screeds for the concrete slab floors were set in place. This is a method commonly used in fine grading a sand fill.

Because of the hardness of the fill material, however, plaintiff was unable to fine grade it with hand labor as planned, and had to bring in a scarifier and power grader to accomplish the work. After the oolite had been scarified and graded, it became necessary for plaintiff to put sand on top to achieve a fine grade exactly 6 inches below the finished floor level, as required by the specifications. As a result of the extra work occasioned by the use of oolite in the fill by the Hooper Company, plaintiff’s costs were considerably above those originally anticipated by plaintiff on this particular item when it submitted its bid to defendant. It is for this difference in costs that plaintiff sues in its first cause of action.

Plaintiff contends in effect that its contract did not contemplate the use of oolite in the fill, and that plaintiff could not reasonably have been expected to anticipate the use of oolite as a fill material. Plaintiff asserts rather that its obligation under the contract was to fine grade a sand fill and that the use of oolite instead of sand was a breach of the contract by the Government.

In support of its position plaintiff relies upon the telegram of March 20, 1943, and the amended specifications which referred to an “earth fill.” Plaintiff contends that the term “earth fill” did not include an oolite fill. Plaintiff also points to that part of the amended specifications which required compaction of the fill by puddling, tamping, or rolling. Plaintiff argues that this method of compaction was inappropriate to compaction of oolite but was entirely appropriate to compaction of a sand fill.

Plaintiff further cites that part of the amended specifications which increased from 4 to 6 inches the thickness of the concrete floor slabs to be placed on the fill. In this regard plaintiff argues that an increase in thickness of the floor slab would not normally have been consistent or necessary with the use of a high content limestone fill such as oolite, but was consistent with the use of a softer fill such as sand.

These arguments are advanced to show that plaintiff reasonably construed the contract to contemplate the fill would consist of sand and not an oolite. Whatever the force of these arguments in the absence of other factors, however, they are not persuasive of the validity of plaintiff’s position in the face of certain other specific provisions in plaintiff’s contract.

The invitation to bid contained the following provision:

XII. Investigation oe conditions: Bidders are expected to visit the locality of the work and acquaint themselves with all available information concerning the nature of materials to be excavated from structure excavations and the local conditions bearing on trans-portion [sic], handling and storage of materials. They are also expected to make their own estimates of the facilities needed, difficulties in attending the execution of the proposed contract, including local conditions, availability of labor, water, electric power, roads, uncertainties of weather, and other contingencies. In no event will the Government assume any responsibility whatever for any interpretation, deduction, or conclusions drawn from examination of the site. At the bidder’s request, a representative of the Government will point out the site of the proposed operations. Failure to acquaint himself with all available information concerning these conditions will not relieve the successful bidder from responsibility for properly estimating the difficulties and costs of successfully performing the work.

Paragraph 1A-04 of the amended specifications, supra, was equally explicit in charging plaintiff with knowledge of the grading work at the site.

Plaintiff did not send a representative, its superintendent, to inspect the site until receipt of the amended specifications. No borrow pit was actually opened when the superintendent visited the project area. The first pit was opened by the Hooper Company on March 23,1943, the day after the superintendent’s visit, and the day before plaintiff’s bid was submitted. Oolite was taken from this pit to build a haul load for Hooper, but none was placed on the fill itself until March 27, 1943.

The evidence discloses that the soil in and adjacent to the airport site consisted principally of oolite, with an overburden of sand and muck which varied in depth from 6 to 18 inches. The sand overlying the lime rock was a fine sand, knoAvn locally as “ball-bearing sand,” because its particles would not adhere. Such sand could be used for a fill in the construction of small buildings but was not suitable as a fill for large buildings unless confined by foundation walls.

The extent of the superintendent’s investigation is not altogether clear, and it does not appear that in fact he saw any lime rock. He reported merely that the construction area was level and sandy and covered with grass, and that no fill had yet been placed. Nevertheless the evidence is that the oolite or lime rock was definitely visible to an observer in the spoil banks around the drainage canals adjacent to the airport site.

In addition, plaintiff’s president, Mr. Chalker, had previously performed another contract in the same area, and was himself familiar with the site and the nature of the soil.

Further, the amended specifications expressly advised plaintiff that the fill was to be placed by another contractor. The contract and specifications of the other contractor, the Hooper Construction Company, were on file in the District Engineer’s office in Jacksonville, Florida, where plaintiff’s president had prepared plaintiff’s bid. Although the drawings attached to the Hooper contract did not themselves indicate the nature of the fill material, they did indicate the borrow area from which that material was to be taken, and core borings taken from that area disclosed the presence of oolite. Plaintiff made no inquiry and no effort to see that contract, or to further determine the nature of the fill to be placed by the Hooper Company.

In view of the contractual provisions charging plaintiff with investigation of conditions in the locality, and with knowledge of the grading work, and of the fact that oolite was actually observable in the spoil banks around the drainage canals adjacent to the airport site, and of the further fact that plaintiff’s president had actual knowledge of the nature and condition of the soil in the vicinity, the principal component of which was oolite, we do not believe that plaintiff was free under the contract to assume that oolite would not be used in the fill, or that sand would be used to the exclusion of oolite.

Plaintiff’s assumption that the fill would be sand which had only a very limited use as a fill material for large buildings, was made at plaintiff’s peril, and the resultant loss cannot, under the facts and the terms of the contract, be shifted to the Government. Plaintiff’s first cause of action must be dismissed.

Eecovery by plaintiff on its second cause of action depends upon the scope and effect of an agreement made between plaintiff and the defendant’s area engineer concerning certain lumber allocations by the Government under the contract.

The contract specifications originally called for the construction of eight warehouses and a repair building. Under the contract plaintiff was required to purchase a portion of the lumber requirements on the open market. The major portion, however, plaintiff was to purchase under Government allocations, as follows: the Government was to make awards to the various vendors of lumber in the name of and to the account of the plaintiff, who was in turn to purchase such lumber for use on the contract, and make payment to the vendors.

Plaintiff was instructed by the specifications to include in the computation of its bid under the contract the amount of $251,700 as the cost of the allocated lumber. This figure was subject to equitable adjustment upon the completion of the contract if the actual costs of the allocated lumber differed therefrom.

Through a misinterpretation of the specifications, however, which is not here in dispute, plaintiff failed to include this amount when it submitted its bid on the contract. As will be seen, this error was later corrected.

On March 29, 1943, plaintiff was notified that the repair building was to be eliminated from the contract, and that a change order would be issued crediting the Government with $49,600, which was the price bid by plaintiff on that item, including a proportionate share of overhead and profit. Plaintiff was having difficulty in securing lumber on the open market, and shortly after the notice was received plaintiff informed the Government’s area engineer that it would consent to the deduction of the full amount of its bid on the repair building, including loss of overhead and profit allocated to that item, provided the defendant would not reduce the total quantity of allocated lumber. To this the area engineer agreed. This agreement, which is the one in question, was not in writing, however, and it does not appear that the defendant’s contracting officer had any knowledge thereof until almost a year later, in February 1944. Under date of April 12, 1943, the contracting officer, acting pursuant to the notice of March 29, 1943, issued a change order which deleted the repair building from the contract, and reduced the contract price by $49,600.

The evidence does not disclose when the plaintiff signed the change order, but on April 17, 1943, it wrote the area engineer regarding the deletion, enclosing a Memorandum of Construction Change, and stating:

We are authorizing you to deduct the net amount from the contract with the thought in mind, that should the Eepair Building, at a later date, be built, that same will be given back to us at the same price providing same is agreeable to us.

On April 3, and again on April 5, 1943, in conferences with the Government’s contracting officer in Jacksonville, Florida, plaintiff’s president informed the contracting officer that plaintiff had mistakenly omitted the $251,700 item for allocated lumber in computing its bid on the contract, and requested an increase in the contract price by .that amount. Upon investigation by the contracting officer the contract was amended to increase the contract price as requested. No mention was made during these conferences of the verbal agreement between plaintiff and the area engineer in Miami. The $251,700 figure, of course, represented the cost of the allocated lumber for the entire project as originally contemplated, including the amount of $9,786.73 as the proportionate cost of allocated lumber which would have been used in construction of the repair building.

On January 7, 1944, after completion of the contract, the contracting officer issued a further modification of the contract in final settlement and accounting for the allocated lumber. Included in that modification was a provision which reduced the contract price by $9,786.73, which is the sum here sought by plaintiff in its second cause of action. Defendant contends that plaintiff is not entitled to that amount, that is, the proportionate cost of lumber allocated to the repair building, because the repair building had been deleted from the contract, relieving plaintiff from the necessity of incurring that cost.

Plaintiff contends, however, that it is entitled to the full cost of the allocated lumber, without reduction, notwithstanding the deletion of the repair building, by virtue of the verbal agreement with the area engineer that the lumber allocations would not be reduced.

To this argument defendant replies first that even though there may have been an agreement not to reduce the amount of lumber allocated to plaintiff, there was no agreement by the area engineer that defendant would relinquish its right to reduce the contract price by the cost of the lumber not used in the deleted repair building.

Defendant says further, and this is its chief defense, that regardless of the terms of the understanding between plaintiff and the area engineer, the latter had no authority to make such an agreement, and that in no event can it be held binding upon the Government.

This position is well taken. Although the area engineer may have been the authorized representative of the contracting officer for certain limited purposes under the contract, there is no indication either in the contract or elsewhere of any authority in the area engineer, without approval of the contracting officer, to so amend the contract itself by an agreement of this sort.

Not only was the agreement not reduced to writing, the man who did have such authority, the Government’s contracting officer, did not know of it until long after it was made. Plaintiff’s president did not mention it in his conferences with the contracting officer, at a time when it was certainly material to the subject under discussion. Plaintiff was bound to take notice of the limits of the area engineer’s authority, and the Government is not bound by his unauthorized acts. Kelly v. United States, 116 C. Cls. 811, 817-820.

Defendant has also contended that this agreement is not binding upon the Government for- lack of consideration. Our holding that the area engineer had no authority to make the agreement in the first place, makes it unnecesary to consider this defense.

The plaintiff is not entitled to recover, and its petition is dismissed. It is so ordered.

Howell, Judge; Maddeet, Judge; Whitaker, Judge; and JoNes, Chief Judge, concur.