Neal & Co. v. United States

36 Cont. Cas. Fed. 75,802, 19 Cl. Ct. 463, 1990 U.S. Claims LEXIS 37, 1990 WL 10844
CourtUnited States Court of Claims
DecidedFebruary 9, 1990
DocketNo. 657-85C
StatusPublished
Cited by21 cases

This text of 36 Cont. Cas. Fed. 75,802 (Neal & 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
Neal & Co. v. United States, 36 Cont. Cas. Fed. 75,802, 19 Cl. Ct. 463, 1990 U.S. Claims LEXIS 37, 1990 WL 10844 (cc 1990).

Opinion

OPINION

SMITH, Chief Judge.

The two claims tried in this case are part of a series of disputes between a government contractor and the United States Naval Facilities Engineering Command, Western Division (WestDiv) stemming from construction projects at the United States Navy base at Adak, Alaska. The other claims already have been resolved. Plaintiff successfully bid on a contract to manufacture and erect two fuel storage tanks at the Defense Fuel Support Point in the Aleutians, and entered into a lump sum, fixed-price contract with the Navy. The contract has been performed, the project has been completed, and plaintiff now seeks an equitable adjustment on its two claims, following denials by the contracting officer.

In light of the evidence presented at trial, and after careful consideration of the parties post-trial submissions, the court finds that plaintiff is entitled to recover on both claims under the Contract Disputes Act of 1978 (now codified at 41 U.S.C. §§ 601-611 (1982)). Because each claim presents different factual and legal issues, the claims are discussed separately.1

I. WARPED PANEL CLAIM

BACKGROUND

As part of the contract to construct the two storage tanks which are the subject of this dispute, plaintiff was required to manufacture, transport to Adak, and install 96 concrete and steel wall panels. Generally, each was to be 20 feet 6 inches tall, 8 feet 9 inches wide, and 8 inches thick, with a ¼ inch steel plate attached to one side, forming a liner in the constructed tanks. These panels weighed about 21,000 pounds. Because of the climate and remoteness of the project’s ultimate destination, the government’s design called for the concrete to be cast and the steel plate attached prior to shipment to Adak.

To perform this aspect of the contract, plaintiff subcontracted with Concrete Technology Corporation (CTC), a manufacturer specializing in the production of precast, prestressed concrete products, which was responsible for manufacturing, loading, and shipping the panels, as well as for supervising the on-site post-tensioning of the tanks.2 The design of the panels did not contemplate any bonding between the concrete and the steel liner. During the curing period, however, it was discovered that the concrete did bond to the steel and that the wall panels were bowing to a greater degree than had been expected, i.e., they had an unanticipated curvature from end to end. Neal notified the Navy of the bowing as soon as it was discovered.

CTC perceived that the bowing created the potential for great difficulties in the erection of the panels, and, in cooperation with the designer, performed calculations to determine if the stress caused by the bonding was acceptable. Thereafter, CTC, the designer, and Neal’s quality control representative determined that the panels would be measured and a solution would be found to prevent the need for rejecting the panels. The Navy was advised that CTC [467]*467would be taking actions to minimize the impact of the bowing, and suggested that the designer check the bowing again at Adak to determine whether there had been any change from the time they left CTC’s operation in Tacoma, Washington.

CTC’s plan for minimizing the harm created by the bowing essentially involved giving each panel a unique number, to permit sequencing the bowed panels in a precise erection order, so that panels with similar bowing were erected next to one another. This would serve to minimize the relative bowing of the panels. This plan also required additional work in loading the panels on the barge according to a panel erection schedule, and off-loading them in such a way as to ensure that they did not become out of sequence. At that time, plaintiff notified the Navy that if the cause of the additional bowing was a design problem, it would request compensation for its additional time and expense. Although plaintiff requested the Navy to investigate the cause of the bowing, the Navy accepted its designer’s representation that the cause of the problem was not in the design and that the plan proposed by CTC would ameliorate the problem.

Neal adopted its subcontractor’s plan, without protest from the Navy, and additionally engaged CTC’s precast concrete wall specialist, William Allyn, to supervise the off-loading and erection of the panels. Although Mr. Allyn did go to Adak, he returned to Tacoma before all adjustments to the panel alignment were made. Plaintiff was charged $5,782.35 for Mr. Allyn’s expenses and services in Adak.

On August 31, 1984 plaintiff submitted a claim to defendant for costs of $17,486.71 for the specialist’s services on the basis that the bowing was a design problem and that the services of a specialist familiar with the design would mitigate any other extra costs incurred at the job site due to the bowing. Defendant disallowed the submitted costs on the basis that an erection schedule had been prearranged and the panels marked accordingly, obviating the need for additional work at the site. Neal requested the Navy reconsider its request, and asked for a contract modification in the amount of $7,863.96, which included room and board and mark-up for Mr. Allyn’s activities. Five months later, plaintiff received a letter from the Navy advising it that insufficient evidence had been presented to warrant a contract modification.

On March 21, 1985, plaintiff submitted a certified claim for actual costs and mark-up associated with the bowing, and for a time extension of three days for handling and erecting the bowed panels. The claim was referred to the contracting officer on December 26, 1985, and on March 21, 1986 plaintiff’s claim was denied on the basis that Neal had failed to substantiate its contention that the bowing was due to a design deficiency. Further, in light of the contract and the industry’s typical tolerance limits, the actual measurements did not support Neal’s allegation of a design error. Plaintiff then filed this action.

DISCUSSION

Plaintiff claims that the additional bowing was caused by a flaw in the government’s design specifications, and that defendant therefore must bear the resultant costs. The law is clear that the government warrants design specifications. It has been stated by our predecessor court:

where the government orders a structure to be built, and in so doing prepares the project’s specifications prescribing the character, dimension, and location of the construction work, the government implicitly warrants, nothing else appearing, that if the specifications are complied with, satisfactory performance will result.

J.D. Hedin Constr. Co. v. United States, 347 F.2d 235, 171 Ct.Cl. 70, 76-77 (1965) (quoted in J.L. Simmons Co. v. United States, 412 F.2d 1360, 188 Ct.Cl. 684 (1969) (relying on United States v. Spearin, 248 U.S. 132, 39 S.Ct. 59, 63 L.Ed. 166 (1918))) (citations omitted). Thus, if this court finds the cause to be a deficiency in a design specification the government would bear the risk, and consequently be liable [468]

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Bluebook (online)
36 Cont. Cas. Fed. 75,802, 19 Cl. Ct. 463, 1990 U.S. Claims LEXIS 37, 1990 WL 10844, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neal-co-v-united-states-cc-1990.