Stiers v. United States

121 Ct. Cl. 157, 1951 U.S. Ct. Cl. LEXIS 131, 1951 WL 5394
CourtUnited States Court of Claims
DecidedDecember 4, 1951
DocketNo. 49115
StatusPublished
Cited by3 cases

This text of 121 Ct. Cl. 157 (Stiers 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
Stiers v. United States, 121 Ct. Cl. 157, 1951 U.S. Ct. Cl. LEXIS 131, 1951 WL 5394 (cc 1951).

Opinion

Jones, Chief Judge,

delivered the opinion of the court:

Plaintiffs entered into a contract with the defendant to-protect, preserve and maintain the Illinois Ordnance Plant which during World War II had been a shell and bomb-loading plant, and which had, at the time, been deactivated.. A detailed statement of the services to be rendered is. set out in finding 5.

[168]*168The plant and facilities included some 22,000 acres of land ■and 532 buildings, together with railroad lines, roads, water -filtration and sewage disposal plants, and fire stations.

Prior to the execution of the contract and after the facility had been deactivated, the War Assets Administration had a survey made by an engineering firm to determine the estimated cost of protection and maintenance of the facility in its deactivated condition. The survey resulted in an estimate of approximately $17,000 per month as the cost of such services.

The War Assets Administration invited bids in April or May 1946, the plaintiffs’ bid was submitted May 8,1946, and the award of the contract to plaintiffs was approved by the War Assets Administration June 27,1946.

During June and July 1946 the officials of the 'central office of the War Assets Administration in Washington and the officials of its regional office in St. Louis discussed by mail, telegraph and telephone plans for the gradual reactivation of the facility looking toward the multiple occupancy of it by tenants.

On July 1, 1946, the Acting Deputy Begional Director in St. Louis wrote to the central office stating that the $17,000 per month reimbursable cost was for the maintenance and protection of the plant only in its deactivated status, and not as a going operation, stating that the rehabilitation work would probably run the monthly expense to approximately $41,700, and suggesting that a 5 percent additional fee be allowed the contractor for the additional work necessary to keep the organization in a going condition. He suggested that it should be agreed upon at that time and should be on the basis of 5 percent of the cost of the additional work, to be added to his fixed fee. He advised that the contractor was agreeable' to this, but it would necessitate a rider to the contract.

The Deputy Director in Washington on July 15, 1946, replied that his office had already approved the protection and maintenance cost of $17,000 per month, plus a fixed fee of $850 pet month, and that if acceptable to the Stiers Bealty Management Company, which was the contemplated contractor, it would approve a supplemental agreement, for per[169]*169forming tbe necessary alterations to make this plant ready for multiple occupancy at an. estimated cost of $45,700 total and a fixed fee of $2,285.

The contract was executed August 8,1946, and was to run for a period of one year, being subject to renewal or cancellation by either party under specified conditions.

Plaintiffs were to be reimbursed for all the cost and expense of such protection and maintenance, and were also to receive in addition a fixed fee of $850 per month which reflected 5 percent of the engineers’ estimate of over-all cost.

Among the general conditions embodied in the contract as executed was the following provision:

Government may at any time by a written order and without, notice to the sureties, if any, issue additional instructions, require additional services, require changes or alterations in the Services or direct the omission of Services covered by this Contract. If, in the opinion of Government, said additions, changes, alterations, or omissions result in a material increase or decrease in the amount or character of the Services, an equitable adjustment of the fixed fee will be made and the contract modified in writing accordingly. The amount of the fixed fee will not be adjusted or changed because of any errors or omissions in computing the estimated Cost of the Services, or where the actual cost varies from the estimated cost.

The defendant terminated the contract on April 18, 1947, in conformity with contract provisions. It has reimbursed plaintiffs for all costs incurred and has paid the fixed fee on the basis of $850 per month.

The costs incurred by plaintiffs, for all of which they have been reimbursed, totaled $296,839.55. These reimbursable costs actually incurred exceeded the costs as estimated by $155,172.89, or 108 percent. During the period of operation under the contract extensive preparations were made for prospective leasing of portions of the facility to tenants who would become lessees of the Government, and portions of the facility were occupied by several firms and three Government agencies.

Plaintiffs knew at the time of the execution of the contract and for some time prior thereto of defendant’s plans to reactivate the facility or portions of it looking toward [170]*170possible leases of reactivated portions. Soon after work began plaintiffs were given orders by defendant to reopen and reactivate portions of the facility for multiple occupancy by tenants leasing from the defendant. These orders were oral; none of them was given in writing. Officials in the St. Louis Regional Office of the War Assets Administration telephoned orders and instructions to plaintiffs or to defendant’s employees at the facility who relayed them to plaintiffs, and plaintiffs carried out the orders and instruc.tions so given.

A few weeks after the service operations under the contract were begun plaintiffs applied to defendant’s responsible officials in the St. Louis office for an adjustment of the fixed fee payable under the contract. The regional official agreed with plaintiffs that the orders and instructions which had been and were being issued to plaintiffs comprised “additional instructions” and required “additional services” and “changes or alterations in the Services,” and therefore warranted the issuance of a formal change order relating to plaintiffs’ fee. The regional official believed it impossible at that time to make a reasonable estimate of the cost finally to be incurred by the plaintiffs.

No change order was given and no adjustment of plaintiffs’ fees was made. The official to whom plaintiffs had applied for such adjustment severed his connection with the War Assets Administration before the contract was terminated.

On September 18,1947, one of the officials of the regional office wrote plaintiffs asking for a detailed statement showing the estimated labor and material costs which were used as a basis for submitting the original bill aiid also for reflecting the increased costs from time to time throughout the period during which the contract was in force, stating “this should be a detailed itemization clearly showing changes as they occurred throughout the period in question.” Plaintiffs by letter dated June 12, 1948, submitted to defendant a detailed statement showing the excess costs over the amount originally estimated. On September 14,1948, the Regional Director of the War Assets Administration replied to plaintiffs’ letter of June 12, 1948, acknowledging their claim for an increase .in the fixed fee in the amount of $7,447.82, but [171]*171inviting their attention to Article Y of the contract which stated in part:

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Related

Williams v. United States
127 F. Supp. 617 (Court of Claims, 1955)
Whitman v. United States
110 F. Supp. 444 (Court of Claims, 1953)

Cite This Page — Counsel Stack

Bluebook (online)
121 Ct. Cl. 157, 1951 U.S. Ct. Cl. LEXIS 131, 1951 WL 5394, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stiers-v-united-states-cc-1951.