Stock & Grove, Inc. v. United States

493 F.2d 629, 204 Ct. Cl. 103, 1974 U.S. Ct. Cl. LEXIS 120
CourtUnited States Court of Claims
DecidedMarch 20, 1974
DocketNo. 495-71
StatusPublished
Cited by24 cases

This text of 493 F.2d 629 (Stock & Grove, Inc. 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
Stock & Grove, Inc. v. United States, 493 F.2d 629, 204 Ct. Cl. 103, 1974 U.S. Ct. Cl. LEXIS 120 (cc 1974).

Opinion

Pee Ctjeiam :

This case comes before the court on defendant’s request for review of the opinion filed by Trial Judge C- Murray Bernhardt on March 7, 1973, pursuant to Rule 54(b) (3), and plaintiff’s response thereto. It has been submitted on the briefs and oral argument of counsel. It arises out of the denial by the Department of Transportation Contract Appeals Board, 70-2 BCA ¶ 8589, of a claim under the “Disputes” clause of a contract between plaintiff and defendant. The claim asserts a right to an equitable adjustment. The court has made certain modifications in the said opinion and agrees with the same, as modified, affirms and adopts the same as the basis of its judgment.

As fully appears in the opinion, the plaintiff was awarded a contract for the repair of a road skirting the perimeter of Douglas Island, near Juneau, Alaska. The road had suffered erosion damage from the sea. The contract designated a stretch of rocky land adjacent to the road as Quarry No. 1 and required plaintiff to quarry therefrom a sufficient number of pieces of “armor stone” to be placed on the seaward side of the road to protect it against further erosion. Armor stone was defined as hard, durable, rough, angular stone in pieces of two to six tons, having a specific gravity not under 2.80, and meeting a number of other requirements. Plaintiff encountered difficulty getting armor stone from Quarry No. 1 and eventually defendant agreed to use of another quarry, and still later, it relaxed its armor stone specifications, en[108]*108abling plaintiff to complete the contract. The claim is primarily for a Category 1 changed condition, i.e., subsurface or latent physical conditions at the site differing materially from those “indicated” in the contract. Such a claim requires the Board, 'and this court in a Wunderlich Act review, 41 U.S.C. §§ 321, 322, in passing on entitlement, to determine what conditions were “indicated” in the contract, and then to what extent the actual subsurface or latent conditions differed. Nevertheless, the Board, and the trial judge on review, both run through a series of alleged derelictions by plaintiff in prebid planning and post award performance. The trial judge shows that many of the Board’s conclusions therein lack the support of substantial evidence. We consider that the plaintiff’s alleged performance deficiencies are perhaps marginally relevant as to entitlement, because they bear on whether it was the changed condition, or the alleged deficiencies in planning and performance, that caused plaintiff’s losses.

Focusing, as the court deems it should, first and foremost on the contract indications, the contract designation as Quarry No. 1 of a rock cliff alongside the road between stations 531 and 539 constituted a representation of defendant’s belief that by use of correct quarrying techniques, sufficient armor stone could be obtained from that source. The other significant indication was a memorandum of January 24, 1967, by Edward It. Walter, the Project Engineer, hereinafter called the Walter memo. It was made available to bidders. It states that on January 20, a group of officials had inspected the site and concluded that the high ledge formation at stations 535 to 539 would be a superior source for large size (2 tons plus) riprap stone over the lower formation at 521 + 50 to 526+50. Another official group, according to the Walter memo, inspected the rock sources on January 23, this time including Mr. J. K. Daniel, a geologist with considerable first-hand experience in blasting work. He too favored the high ledge source, stations 535 to 539, and “felt” a yield of 50% armor stone of two tons plus could be obtained there, as against 15% at stations 521 to 526. He went on to recommend a blasting technique which [109]*109the memo describes. That a person “feels” a certain thing to be true, is one of these ambiguous indications beloved of Government officials. At least, it denotes that a thing is considered more probably true than not.

The Board held in effect that plaintiff should have disbelieved these indications or at least have allowed a cushion in its bid against their being fallacious, because of other indications. These included a report dealing with testing and analysis of selected rock samples from scattered points in the selected quarry. Nowhere does this report say the samples tested out as non-specification rock, except that one sample was below the required specific gravity. We think an ordinary bidder would have concluded that the geologist, Mr. Daniel, had taken rock samples into account and discounted them so far as they reflected against Quarry No. 1 as a source. (Not the same samples, as the ones above mentioned were collected later.) Again, the Board refers to the observable geologic structure at the Quarry, which, it says, would indicate to a trained engineer or geologist that the production of the Quarry would be questionable and the nature of the rock would cause difficulty. Specifically, the shaley ledge relied on by plaintiff as a latent condition outcropped and could be seen. Plaintiff, however, was not required to hire its own geologist, and was entitled to suppose Mr. Daniel or other of defendant’s experts had seen the shale outcropping too.

In determining what the contract indicated, we think the Board erred 'as a matter of law, in a Category 1 claim, by imposing upon the bidder in these circumstances an obligation to make a scientifically educated and skeptical analysis of the contract, as defendant proffered it for adhesion, and the official documents made available for bidders therewith. What the contract, as thus supplemented, said, it “indicated”. This is not to say, of course, that such indications would excuse a site inspection or that such site inspection need not discover patent indications plainly, to a layman, contradicting the contract documents. That is not this case.

If it were as apparent as the Board now holds, that Quarry No. 1 was no better than a marginal source of armor stone, [110]*110the defendant committed a serious breach of duty in putting out the Walter memo with the bid documents. As we said in Womack v. United States, 182 Ct. Cl. 399, 412, 389 F. 2d 793, 801 (1968):

An estimate as to a material matter in a bidding invitation is an expedient. Ordinarily it is only used where there is a recognized need for guidance to bidders on a particular point but specific information is not reasonably available. * * * Intrinsically, the estimate that is made in such circumstances must be the product of such relevant underlying information as is available to the author of the invitation. If the bidder were not entitled to so regard it, its inclusion in the invitation would be surplusage at best or deception at worst. Assuming that the bidder acts reasonably,3* he is entitled to rely on Government estimates as representing honest and informed conclusions. * * * [*Footnote omitted.]

However, in considering what the contract indicated, the Board rightly put to one side, as does the trial judge, contract clauses that designated Quarry No. 1 as a “type B source” and indicated that defendant would not make an equitable adjustment if contractor should “elect” to use a type B source and found it did not contain sufficient acceptable material. The contract said that if contractor elected a type A source, which failed, such an adjustment would be made. Yet the contract designated no type A alternative and none was ever designated.

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Bluebook (online)
493 F.2d 629, 204 Ct. Cl. 103, 1974 U.S. Ct. Cl. LEXIS 120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stock-grove-inc-v-united-states-cc-1974.