Wagner Whirler & Derrick Corp. v. United States

121 F. Supp. 664, 128 Ct. Cl. 382, 1954 U.S. Ct. Cl. LEXIS 136
CourtUnited States Court of Claims
DecidedJune 8, 1954
DocketNo. 47735
StatusPublished
Cited by10 cases

This text of 121 F. Supp. 664 (Wagner Whirler & Derrick Corp. 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
Wagner Whirler & Derrick Corp. v. United States, 121 F. Supp. 664, 128 Ct. Cl. 382, 1954 U.S. Ct. Cl. LEXIS 136 (cc 1954).

Opinion

Whitaker, Judge,

delivered the opinion of the court:

This action arises out of a contract dated December 15, 1941, between plaintiff and defendant whereby plaintiff agreed to manufacture and erect two 20-ton jib cranes at the Philadelphia Navy Yard, for a consideration of $265,000, which was later increased by two change orders to $278,192.13.

The controversy presented concerns the following four things:

(1) The extra cost to which plaintiff alleges it was put for completing parts of the cranes at the Philadelphia Navy Yard instead of at the. plant of its subcontractor in New York, as the result of defendant’s order to it to ship these parts of the cranes before they had been completed;

(2) Additions to or reductions in cost of performing the contract as a result of changes made;

(3) The cost of completing the contract by the defendant after it had terminated plaintiff’s right to proceed;

(4) The cost to defendant of correcting allegedly defective work, which defendant asserts as a counterclaim.

All of the questions presented, except the cost of correcting defective work, have been decided by the Chief of the Bureau of Yards and Docks, who was the contracting officer, and his decision has been affirmed by the head of the department. Defendant says that under article 15 of the standard [385]*385Government contract, as construed by the Supreme Court in United States v. Wunderlich, 342 U. S. 98, his decision is final and not subject to review, because of our finding that theré is no proof of conscious wrongdoing on the part of the contracting officer or of the head of the department or of an intention on their part to cheat or defraud plaintiff; and this, notwithstanding our finding that the contracting officer’s decision in many respects was arbitrary, capricious, grossly in error, and not supported by substantial evidence.

Since the case was tried and submitted, Congress passed Public Law 356,83d Congress, 2d Session, approved May 11, 1954 (68 Stat. 81), which reads as follows:

Be it enacted by the Senate and Rouse of Representatives of the United States of America in Congress assembled, That no provision of any contract entered into by the United States, relating to the finality or conclusiveness of any decision of the head of any department or agency or his duly authorized representative or board in a dispute involving a question arising under such.contract, shall be pleaded in any suit now filed or to be filed as limiting judicial review of any such decision to cases where fraud by such official or his said representative or board is alleged: Provided, however, That any such decision shall be final and conclusive unless the same is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence.
Sec. 2. No Government contract shall contain a provision making final on a question of law the decision of any administrative official, representative, or board.

The rule to be applied, therefore, is not that laid down by the Wunderlich decision, but that set out in the Act quoted, since it applies to “any suit now filed or to be filed.” That rule makes the decision of the head of the department final and conclusive, unless it is fraudulent or arbitrary or capricious or so grossly erroneous as to imply bad faith, or is not supported by substantial evidence.

. Prior to the Wwnderlich decision the rule laid down by the Supreme Court in quite a number of cases was that the decisions of the head of the department were not final where they were arbitrary, or capricious, or so grossly erroneous as to imply bad faith, or a failure to exercise an honest judg[386]*386ment. Burchell v. Marsh, 17 Howard, 344, 349; Kihlberg v. United States, 97 U. S. 398; United States v. Gleason, 175 U. S. 588; Ripley v. United States, 223 U. S. 695; Penner Installation Corp. v. United States, 116 C. Cls. 550, aff’d., per curiam by an equally divided court, 340 U. S. 898. See also Merrill-Ruckgaber v. United States, 241 U. S. 387 Plumley v. United States, 226 U. S. 545, and others. And in several cases this qourt has held that where a ruling was not supported by substantial evidence, it must be treated as-having been arbitrary, capricious, or so grossly erroneous as to imply bad faith, and, therefore, lacking in finality. In Needles v. United States, 101 C. Cls. 535, the court said,, at page 607:

* * * if the Court is satisfied that no reasonable man-could have determined the dispute upon all the relevant-facts and data as the administrative officer did, then the-court is justified in inferring, as a fact, that the decision was not made impartially or in good faith. If this-should not be the process contemplated by the rule that a decision may be set aside if “so grossly erroneous as-to imply bad faith,” it is difficult to see how the rule could ever be consistently and properly applied within, the realm of the probable intention of parties to a. contract.

See also Penner Installation Corp. v. United States, 116 C. Cls. 550, at page 564; Mitchell Canneries, Inc. v. United States, 111 C. Cls. 228, 247; Loftis v. United States, 110 C. Cls. 551, 630; Bein v. United States, 101 C. Cls 144 (concurring opinion).

Public Law 356, therefore, reinstated the rule applied in this court prior to the Wunderlich decision.

The case at bar was tried before the Wunderlich decision and under the rule applied in this court prior to the W wilder - lich decision, but it was-argued after that decision.

1. Cost of completing parts of the cranes at the Philadelphia Navy Yard. — The contract was awarded plaintiff on the day before the attack on Pearl Harbor, and was actually entered into on December 15, 1941. Defendant was, therefore, in urgent need of the cranes at the earliest possible date. Por a number of reasons plaintiff had been unable to complete the contract on time, and, hence, in an effort to expedite the [387]*387work, defendant ordered the trucks for the cranes and tlie hoist machinery and rotating mechanism, being manufactured at the plant of one of plaintiff’s subcontractors in New York City, to be shipped to the Philadelphia Navy Yard before completion, where the major portion of the cranes were being constructed. Plaintiff says that it cost it considerable additional sums to complete the construction of these portions of the cranes at the Philadelphia Navy Yard, instead of at the plant of the subcontractor in New York City.

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Cite This Page — Counsel Stack

Bluebook (online)
121 F. Supp. 664, 128 Ct. Cl. 382, 1954 U.S. Ct. Cl. LEXIS 136, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wagner-whirler-derrick-corp-v-united-states-cc-1954.