S. A. Healy Co. v. United States

576 F.2d 299, 24 Cont. Cas. Fed. 82,317, 216 Ct. Cl. 172, 1978 U.S. Ct. Cl. LEXIS 118
CourtUnited States Court of Claims
DecidedApril 19, 1978
DocketNo. 328-76
StatusPublished
Cited by18 cases

This text of 576 F.2d 299 (S. A. Healy 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
S. A. Healy Co. v. United States, 576 F.2d 299, 24 Cont. Cas. Fed. 82,317, 216 Ct. Cl. 172, 1978 U.S. Ct. Cl. LEXIS 118 (cc 1978).

Opinion

Nichols, Judge,

delivered the opinion of the court:

This Wunderlich Act case comes before the court i on plaintiffs motion and defendant’s cross-motion for summary judgment in review of a decision of the Department of Interior Board of Contract Appeals. The case was initially referred to a trial judge of this court who issued an order pursuant to Rule 166(b) to the effect that the appeal is limited to questions of law within the purview of section 2 of the Wunderlich Act.

The plaintiff herein, S. A. Healy Company, seeks a monetary award under Construction Contract No. 14-06-D-7058, in the form of an equitable adjustment for [176]*176losses incurred in a shutdown of work. Plaintiff alleges the shutdown was caused by defendant’s failure to request and secure sufficient funds from Congress to finance the project for a full fiscal year. Defendant disclaims liability, arguing principally that the work stoppage was brought about instead by plaintiffs voluntary acceleration of performance. The Interior Board of Contract Appeals found for defendant. We hold that defendant was ultimately responsible for the shutdown, and find in favor of plaintiff.

In November of 1970, plaintiff was awarded a fixed price contract for the construction of two tunnels and diversions and appurtenant structures for the Strawberry Aqueduct, a Central Utah Project sponsored by the Bureau of Reclamation. The contract divided the work into two parts. Part one consisted of diversion works with a November 18, 1971, deadline for completion. The remainder of the work, including construction of the tunnels and a concrete siphon, was contained in part two, to be completed within 1,400 days of the notice to proceed. Defendant notified plaintiff to proceed on November 18, 1970, which set September 19, 1974, as the completion date for part two.

For purposes of this suit, the significant clauses in the contract are paragraphs 11 and 15. Paragraph 11, "Funds Available for Earnings,” provides in pertinent part:

Pursuant to Section 12 of the Reclamation Project Act of 1939 (43 U.S.C. Sec. 388), funds for earnings under this contract will be made available as provided in this paragraph.
a. Under the contract to be entered into under these specifications, the liability of the United States is contingent on the necessary appropriations being made therefor by the Congress and an appropriate reservation of funds thereunder. Further, the Government shall not be liable for damages under this contract on account of delays in payments due to lack of funds.
b. Funds for payment of earnings under this contract are included in the budget for fiscal year 1971 which is now before the Congress and it is anticipated that they will be included in the Appropriation Act of fiscal year 1971. Prior to the effective date of the Appropriation Act, payment for earnings may be made from such funds as may be available by appropriations [177]*177for interim periods by Congress within such limitations as may be imposed by Congress. The contractor will be advised of funds which are thus available. After the Appropriation Act is effective, the contractor will be notified of the sums, if any, reserved and available for payments under this contract for the fiscal year 1971. During this period between the end of fiscal year 1970 and the effective date of the Appropriation Act for fiscal year 1971, the provisions of Subparagraph e. regarding the giving of notices by the contractor and the Government as to exhaustion of funds shall not apply.
* * * * *
e. Should it become apparent to the contractor that existing fund reservations will be exhausted within the next 30 days, the contractor shall at that time give written notice thereof to the contracting officer. If additional funds can be made available, the contracting officer may issue an additional fund reservation as provided for in Subparagraph d. hereof. It is expressly understood, however, that the Government has no obligation to provide funds in addition to those reserved in writing. The contractor is also cautioned that the prosecution of the work at a rate that will exhaust the funds reserved before the end of the fiscal year will be at his own risk. If additional funds cannot be made available, the contracting officer will give written notice thereof to the contractor. If at any time funds are being made available by appropriations for interim periods prior to the enactment of an Appropriation Act, the contractor will be so advised in writing in which case the other notice requirements of this subparagraph will not apply. * * *

This paragraph also provides various procedures to be followed by the contractor in the event of an exhaustion of funds. In general, the contractor has the choice of continuing performance while awaiting the availability of additional funds, or suspending performance until additional funds are forthcoming. In the latter event, additional time for completion is allowed commensurate with the time when suspension became necessary.

Paragraph 15, "Construction Program,” provides in part:

Within forty-five (45) calendar days after date of receipt of notice of award of contract, the contractor shall submit to the authorized representative of the [178]*178contracting officer for approval a complete and practicable construction program. The construction program shall show in detail his proposed program of operations and shall provide for orderly performance of the work. Pending approval of his program the contractor shall proceed with the work in accordance with these specifications and his proposed construction program.
The construction program shall be in such form and detail as to show the following:
a. Sequence of operations.
b. The dates for commencing and completing the work on the several controlling features of the project. (Including erection of construction plant and each item or group of like items involving placement of concrete, if applicable.)
c. The dates of issuance of orders for procurement of contractor-furnished materials and equipment and their delivery and installation dates.
d. The dates on which contractor-prepared drawings will be submitted for approval (including all shop drawings as required in these specifications).
The construction program shall be in suitable form and show the percentage of work for each line item scheduled for completion each month, and shall include the contractor’s estimate of earnings by months. The contractor’s estimate of. earnings by months shall not obligate the Government to provide funds in any manner other than as provided in the paragraph of these specifications entitled "Funds Available for Earnings.”
*****

Plaintiff was advised on December 3, 1970, that $500,000 had been reserved for payments under the contract through June 30, 1971. On December 22, 1970, plaintiff submitted a proposed construction program, as required by paragraph 15, projecting expected earnings under the contract. Plaintiffs schedule forecasted earnings of $116,000 in fiscal year 1971, $4,887,000 in fiscal year 1972, $4,714,000 in fiscal year 1973, and $1,254,000 in fiscal year 1974.

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Bluebook (online)
576 F.2d 299, 24 Cont. Cas. Fed. 82,317, 216 Ct. Cl. 172, 1978 U.S. Ct. Cl. LEXIS 118, Counsel Stack Legal Research, https://law.counselstack.com/opinion/s-a-healy-co-v-united-states-cc-1978.