Olson Construction Co. v. United States

75 F. Supp. 1014, 110 Ct. Cl. 249, 1948 U.S. Ct. Cl. LEXIS 25
CourtUnited States Court of Claims
DecidedMarch 1, 1948
DocketNo. 47265
StatusPublished
Cited by3 cases

This text of 75 F. Supp. 1014 (Olson 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
Olson Construction Co. v. United States, 75 F. Supp. 1014, 110 Ct. Cl. 249, 1948 U.S. Ct. Cl. LEXIS 25 (cc 1948).

Opinions

MaddeN, Judge,

delivered the opinion of the court:

In this construction contract case the plaintiffs allege two bases of recovery: (1) that there was a mutual mistake and oversight in that the written contract failed to express the true intention of the parties and, as a result, plaintiffs were required to furnish more expensive insulation material than was contemplated, and therefore the contract should be reformed; (2) plaintiffs claim in the alternative that under [255]*255the terms of the contract they were given an election in the use of three types of insulation material; that defendant ordered plaintiffs to use only one, the most expensive of the three; and that since plaintiffs relinquished their right to use either of the two cheaper materials the defendant became obligated to pay the difference in cost.

On May 20, 1943, the defendant, acting through the Area Engineer, United States Corps of Engineers, at Lincoln, Nebraska, issued a request for bids for the construction of a cold storage building at the airfield near Lincoln, Nebraska. Bids were to be received in the area office at Lincoln until 2:00 p. m., May 27, 1943, at which time such bids were to be opened. The award was to be made on the basis of negotiation and not necessarily to the lowest bidder.

During the period involved the plaintiffs were engaged in the construction business as joint contractors. They submitted a bid upon a Government standard form of offer just prior to 2:00 p. m., May 27, 1943, to the office of the Area Engineer at Lincoln, Nebraska. The bid was for a unit price for the construction plus a specific price per yard for concrete pavement, the amount of the latter being estimated at 2,422 square yards. The bid contained no qualification or request to change the specifications.

About May 25, 1943, the Baker Ice Machine Company and the D. K. Baxter Company decided to endeavor as joint contractors to obtain a subcontract to supply and install the insulation material and the refrigeration machinery from whatever contractor should be awarded the prime contract by the Government. It was decided by Baker and Baxter that bids and contracts would be made in the name of Baker Ice Machine Company.

The specifications were referred to in the invitation for bids, were attached to the invitation, and were made a part of the contract by reference. They contained the following:
8-02 General.— * * * Bigid insulation shall be applied for cold temperature insulation as shown on the drawings. The rooms which are to be refrigerated to a temperature of 40 degrees or lower shall be insulated with compressed corkboard, celo-block or mineral wool moulded block. The 50-degree room shall be insulated with celo-block or mineral wool moulded block.

[256]*256Celo-block was defined in paragraph 8-03 of the specifications as follows:

(b) Oelo-Blooh. — Celo-Bloek shall be a product similar and equal to the material so trade-named, and manufactured by the Celotex Corporation, and as otherwise approved by the Contracting Officer.

The celo-block was the cheapest of these three materials. The cost of mineral wool moulded block was 50 percent greater and corkboard was approximately twice as expensive as celo-block.

The Baxter Company examined the specifications which were attached to the invitation to bid, then contacted suppliers of insulation material and became convinced that Fir-Tex, a trade name for a certain type of insulation material equivalent to celo-block, could be obtained in time to comply with the contract. Accordingly, an official of the Baker Ice Machine Company telephoned to the plaintiffs on the morning of May 27, 1943, the amount of a bid price to supply and install the insulation material and refrigeration machinery. This information was also furnished to other prospective bidders. The Baxter Ice Machine Company prepared a statement of their proposal, including drawings, and as the time was short took it to the Area Engineer’s office.

The bids were opened. The plaintiffs were the low bidders and they were advised about 2: 00 p. m. on May 27 that the contract would be awarded to them. The Area Engineer’s office inquired of plaintiffs whether their bid was based on the bid of the Baker Ice Machine Company. Keceiving an affirmative answer, the statement of the Baker Ice Machine Company was then called to plaintiffs’ attention. It contained the following:

Belative to .the room construction, we have based our bid on using corkboard in the floors, and celo-block or equivalent, in the walls and ceiling.
If a contractor who is using our bid is the successful bidder, we will be glad to offer an alternate bid on using corkboard throughout, * * *

The contract was signed by the contracting officer and by plaintiffs on the same date, May 27, 1943. No change was [257]*257made in the language of the specifications, which were made a part of the contract by reference.

Within a few days it was found that neither celo-block nor mineral wool moulded block insulation would be available to the subcontractors in time for completion of the work within the 60 days provided by the contract. The Baker Ice Machine Company then asked plaintiffs for permission to use a semi-rigid insulation material known as Zero-cell in lieu of Fir-Tex. The contracting officer refused to accept the substitute. There was further discussion and it was agreed that, in the circumstances, the plaintiffs should use corkboard in the places where they had intended to use Fir-Tex. The subcontractor then put in the corkboard. The plaintiffs were instructed to prepare a cost break-down covering the increased cost of the insulation and submit it to the Area Engineer for appropriate action. This break-down was submitted on July 10, and showed an additional cost of $6,636.08, including 10 percent for overhead and profit. A proposed supplemental agreement was prepared by the Area Engineer’s office on September 17, 1943. By its terms it stated that it would not be binding upon either the plaintiffs or the defendant until approved by the Chief of Engineers. It proposed to strike out the sentence specifying the three classes of acceptable insulation material and insert in lieu thereof a provision for compressed corkboard. The proposed agreement provided for an increase in the contract price of $4,318. This document was signed by the then contracting officer and by proper representatives of the plaintiffs. The supplemental agreement was not approved by the Chief of Engineers.

Subsequently plaintiffs’ claim for additional payment in the sum of $4,318, based on the use of corkboard, was denied by the District Engineer. Plaintiffs appealed to the Secretary of War, who referred the matter to the Board of Contract Appeals in his department, which board denied the claim on October 25, 1944.

As we have said one theory of the plaintiffs’ suit is that the contract should be reformed, and enforced as reformed, because, by inadvertence, the parties neglected to limit its provisions to the one material, Fir-Tex, which both parties [258]*258intended to be used for the part of the insulation job here involved. That both parties did so intend, we have no doubt. Before the contract was signed, they examined and discussed the bid of the subcontractor which made clear what material he proposed to use.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Flexible Metal Hose Manufacturing Co. v. United States
31 Cont. Cas. Fed. 72,120 (Court of Claims, 1984)
Union Painting Co. v. United States
198 F. Supp. 282 (D. Alaska, 1961)
Millimet Construction Co. v. United States
83 F. Supp. 691 (Court of Claims, 1949)

Cite This Page — Counsel Stack

Bluebook (online)
75 F. Supp. 1014, 110 Ct. Cl. 249, 1948 U.S. Ct. Cl. LEXIS 25, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olson-construction-co-v-united-states-cc-1948.