Peter Kiewit Sons' Co. v. United States

151 F. Supp. 726, 138 Ct. Cl. 668, 1957 U.S. Ct. Cl. LEXIS 83
CourtUnited States Court of Claims
DecidedJune 5, 1957
DocketNo. 283-52
StatusPublished
Cited by46 cases

This text of 151 F. Supp. 726 (Peter Kiewit Sons' 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
Peter Kiewit Sons' Co. v. United States, 151 F. Supp. 726, 138 Ct. Cl. 668, 1957 U.S. Ct. Cl. LEXIS 83 (cc 1957).

Opinion

Madden, Judge,

delivered the opinion of the court:

The plaintiffs, Peter Kiewit Sons’ Co. and Morriison-Knudsen Company, Inc., were partners in a joint venture to perform a construction contract made with the United States. The plaintiffs sue for damages alleged to have been suffered by reason of the increased costs of performance of the contract which were due to delays claimed to have been caused by the Government’s breach of the contract.

On or about the 28th of March 1947, the plaintiffs and the Government, acting through the Bureau of Reclamation, Department of the Interior, entered into a standard form Government contract. Under this contract the plaintiffs were to construct earthwork and structures for the Estes and Marys Lake power plants, the parking area adjacent thereto, the gatehouse, spillways, and penstock connected to the power plants. The Estes and Marys Lake power plants were part of a much larger project known as the Colorado-Big Thompson Project, which is an extensive hydroelectric and irrigation project located on the east and west slopes of the Continental Divide in the state of Colorado. Other parts of the overall Colorado-Big Thompson Project were constructed by different contractors under separate contracts with the Government.

The work to be performed by the plaintiffs was covered in Schedules I, II, and III of the specifications accompanying the contract. Schedule I covered the Estes power plant, switchyard, and parking area; Schedule II the Marys Lake power plant with its switchyard and parking area; and Schedule III the spillway for Marys Lake, the penstock gate structure and penstock for both Estes and Marys Lake. Plaintiffs submitted separate bids for Schedules I, II, and III, but stated on the last page of the bids that if the Government accepted and awarded them contracts for all three of the schedules, then they could deduct from the total contract price the sum of $238,000. The Government accepted plaintiffs’ bid on the combined three schedules for the total contract price of $2,176,708, which took account of the $238,-[670]*670000 reduction from the separate bids by the plaintiffs on the three schedules. This amount, together with additional sums for extras and changes not here in issue, has been paid to the plaintiffs.

The contract provided that the work should be completed within 900 calendar days after the Government gave notice to proceed. This notice was given to the plaintiffs on May 3,1947, and called for completion of the contract by October 19, 1949. Under the terms of the contract the plaintiffs were to supply all labor and equipment and some of the material, and the Government was to furnish the steel penstock for both plants, steel and iron pipes and fittings, electrical conduits, metal sash windows, and plumbing fixtures. The contract was extended several times by the Government. Completion dates as finally fixed by the Government, and met by the plaintiffs, were:

Schedule I. October 18,1950
Schedule II. September 18,1950
Schedule III. September 30, 1950

The plaintiffs sue for $261,792.72 which they allege is the increased cost resulting from delays in the performance of the contract, which delays are claimed to have been occasioned by breaches of contract by the Government. Plaintiffs’ claim is broken down into two separate categories: Penstock and General and Concrete.

Penstock

Under Schedule III of plaintiffs’ contract, they were to construct a gatehouse at the lower terminal of the Earns Horn Tunnel. Earns Horn Tunnel carried water to the eastern slope of the Continental Divide and was to provide the necessary water for the Marys Lake power plant. From the gatehouse, which regulated the flow of water from the Earns Horn Tunnel, a single 96-inch diameter penstock was to be installed to carry the water to the Marys Lake power plant, a distance of 482 feet. Penstock is a tubular steel conduit. The schedule also provided for the construction of a gatehouse at the lower terminal of another tunnel, Prospect Mountain, to regulate the flow of water [671]*671into the Estes power plant. Three parallel lines of pen-stock, each 78 inches in diameter, were provided to carry •the water a distance of 3,941 feet from the gatehouse to the Estes power plant. The penstock was delivered to the sites in various lengths to fit specified areas of installation. The Marys Lake penstock consisted of 18 sections, and the Estes penstock 432 sections which were to be installed in three lines of 144 sections each.

The plaintiffs’ original plan of construction provided for the installation of the penstock during the period from approximately May 1, 1948 to October 31, 1948. A revised schedule for the installation of the penstock was prepared and submitted to the defendant about March 18, 1948, and called for completion of the penstock installation by December 1, 1948. However, actual delivery by the Government of penstock to the sites did not start until May 26, 1948, and the final delivery was not received until August 20, 1949. Installation was started by the plaintiffs August 1, 1948, and was completed about September 17, 1949. The plaintiffs claim damages for this delay.

In anticipation of its needs in supplying the penstock for the Marys Lake and Estes power plant projects, the defendant solicited bids for the fabrication of the required pen-stock. The bids called for opening on June 24, 1946, which was some nine months before the plaintiffs’ contract was entered into. The bid of the Darby Corporation of Kansas City, Kansas, hereinafter called Darby, was low. Darby notified the Bureau of Declamation that delivery of the required penstock could be made within 450 days from the time that notice to proceed was given. An inspector of the defendant reported that Darby could meet the requirements for the supply of the needed penstock and could arrange for its deliveries to agree with the schedule of the general contractor. On October 25,1946, the defendant wrote to Darby notifying it of the award of the contract to it and stating that the performance period would commence with the receipt of the award. Darby received the notice October 28, 1946. The Darby contract provided for the completion of the 96-inch penstock section for the Marys Lake power plant within 360 days from the receipt of the award and the completion [672]*672of the 78-inch penstock sections for the Estes project within 720 days. Thus the completion dates for the fabrication of the penstock were October 23, 1947 for Marys Lake, and October 17, 1948 for Estes. Darby completed the Marys Lake penstock by June 30, 1948, and delivered it to the site in July of that year. It completed the Estes penstock about August 13,1949, with final delivery to the site by August 20, 1949. Much of the delay in the delivery of the penstock was caused by the shortage of steel and the difficulty that Darby was having in finding and maintaining a source of supply of the plate steel needed for the manufacture of the pen-stock. This difficulty began sometime before the award of the plaintiffs’ contract in March 1947.

Eecognizing the difficulty that Darby was encountering, the Government attempted to secure priorities assistance for Darby so that manufacture of the penstock could begin on schedule.

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Bluebook (online)
151 F. Supp. 726, 138 Ct. Cl. 668, 1957 U.S. Ct. Cl. LEXIS 83, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peter-kiewit-sons-co-v-united-states-cc-1957.