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Reporter's Statement of the Case

directed to proceed with the work, that all necessary construction details would be ready and furnished to plaintiff when required, and plaintiff is accordingly entitled to recover.

The Reporter's statement of the case:

Mr. M. Walton Hendry for the plaintiff.

Mr. J. Robert Anderson, with whom was Mr. Assistant Attorney General Francis M. Shea, for the defendant.

92 C. Cls.

The court made special findings of fact as follows:

1. The plaintiff entered into a contract with the defendant October 13, 1932, whereby, for the consideration of $52,150.00, plaintiff agreed to "furnish all labor and materials, and perform all work required for the construction of the Post Office at Bingham Canyon, Utah, including approaches, retaining wall, and Bingham Creek conduit," in accordance with specifications, schedules, and drawings made a part of the contract, the work to commence as soon as practicable after the date of receipt of notice to proceed and to be completed within 360 calendar days after the date of receipt of such notice.

A copy of the contract is attached to the petition and is made a part hereof by reference.

2. The contracting officer for the Government signing the contract was the Chief Clerk of the Treasury Department, F. A. Birgfeld.

The Supervising Architect of the Treasury Department was by agreement the duly authorized representative of the contracting officer.

3. On November 11, 1932, the plaintiff received notice to proceed, thus fixing the date for completion November 6, 1933.

On November 21, 1932, the Supervising Architect notified plaintiff that Construction Engineer Clement J. Gerber had been detailed to supervise the work on and after November 25, 1932, that his headquarters were at the Post Office, Salt Lake City, Utah, and that correspondence in connection with the work should be addressed to Gerber at his headquarters.

4. Plaintiff's representative had inspected the site prior to submission of the bids, and work was started the latter


Reporter's Statement of the Case part of November 1932, at which time Construction Engineer Gerber arrived at the location. 5. Paragraphs 66, 67, and 68 of the specifications read:

66. Any old foundation walls, floors, or footings in place inside of a line drawn 2 feet outside of all new footings shall be entirely removed, except such portions as exist below the levels of new excavations and do not interfere with the proper installation of new work. Any other walls, curbs, paving, etc., in place inside the lot lines shall be removed to a depth of 2 feet below the finished grade, unless indicated on the drawings to remain.

67. The basis of bidding shall be that all other material to be removed is earth. Material which it is practicable to remove and handle with pick and shovel or by hand or to loosen and remove with a power shovel shall be classed as earth.

68. If excavation of other materials becomes necessary the additional expense will be determined by the

contracting officer. 6. The first work consisted of excavating for the foundations and for that purpose a power shovel was placed on the premises.

Excavating was done during the winter when the ground was frozen, the freezing extending downward a maximum of approximately three feet below the surface.

The material encountered was not easily excavated and about 2,430 cubic yards consisted of boulders, dirt, natural debris, timbers, junk, all or a part of which had at some previous time fallen in, or been dumped there in the process of back-filling voids left in gold-mining operations or in the abandonment of old flumes. This heterogeneous material was frozen together and could not be removed efficiently without blasting. Plaintiff used some 250 blasts to loosen it and when loosened removed it in part by pick and shovel, in part by hand and in part with a power shovel.

The delay in commencing the work, which caused the excavation to be done after the ground was frozen, was caused by the failure of the defendant to have its construction engineer at the site before freezing weather set in.

Plaintiff wrote to the supervising architect in January regarding the condition of the material which had to be excavated and making a claim for additional compensation.


92 C. Cls.

Reporter's Statement of the Case

February 10, 1933, the Acting Supervising Architect notified plaintiff:

Referring to your letter of January 23d, relative to rock excavation, you are advised that a report from the Construction Engineer does not bear out your contention that solid rock was encountered nor that any of the material could not be loosened with either pick or power shovel.

Unless further information is forthcoming tending to substantiate your claim no additional compensation can be allowed for this work.

February 18, 1933, plaintiff replied offering to prove its allegations by affidavits, and March 20, 1933, the Acting Supervising Architect finally rejected plaintiff's application for additional compensation for the excavation of material which it had described as being of a "rock-like nature.”

On March 22, 1933, plaintiff by letter requested the Supervising Architect to change its claim of February 4, 1933, to read 2,430 cubic yards at $1.25, $3,037.50, submitting affidavits in support of its claim.

Thereafter plaintiff continued to press its claim for additional compensation for excavation of so-called "rock-like material."

On December 29, 1933, Assistant Secretary of the Treasury Stephen B. Gibbons, in letter to plaintiff sustained the Acting Supervising Architect's decision of March 20, 1933.

On January 10, 1934, plaintiff appealed from Assistant Secretary Gibbons' decision to the Secretary of the Treasury, and on January 17, 1934, to the same official from the decision of the contracting officer with respect to excavation of a "rock-like nature."

March 14, 1934, plaintiff applied to the Procurement Division, Public Works Branch, Treasury Department, for allowance of the claim for $3,037.50. The Director of Procurement, Public Works Branch, Treasury Department, denied the claim March 26, 1934. The plaintiff appealed from this decision to the Secretary of the Treasury April 23, 1934, and the Acting Secretary of the Treasury sustained the Director of Procurement and so notified the plaintiff September 13, 1934.


Reporter's Statement of the Case The decision of the construction engineer upon plaintiff's claim for additional compensation for the excavation of material which was not practicable to remove and handle with pick and shovel, or loosen and remove with a power shovel, was grossly erroneous and showed such a bias and prejudice as to be entirely arbitrary, and raised an implication of bad faith on the part of the government official who made it. Even if the work had not been delayed it would not have been practicable to remove with pick and shovel, or power shovel, the material encountered.

Plaintiff removed 2,430 cubic yards of material described in Specification 67. The reasonable compensation for this work was $1.25 per yard, or $3,037.50.

7. Upon substantial completion of the footing excavations plaintiff wired the Supervising Architect February 15, 1933, that a very unsatisfactory soil condition had been encountered therefor, that the company declined to accept responsibility of proceeding with the pouring of concrete footings, suggested that a survey be made and all footings be redesigned, and asked for a reply by wire to avoid “further unnecessary expenditure.”

The Acting Supervising Architect wired plaintiff two days later that the architect had been instructed to visit the site, to confer and recommend procedure. Defendant's Construction Engineer immediately investigated and found the situation to be as described.

On February 27, 1933, plaintiff again wired the Supervising Architect, asserting that delay in settling the matter of procedure might cause damage by reason of sloughing of dirt from vertical banks into the footing excavations, and that it believed the additional cost was chargeable to the Government.

March 2, 1933, plaintiff requested an extension of time for delay in arriving at a decision on the question of proper footings.

The Construction Engineer devised plans for changes in footings and on March 4, 1933, the plaintiff offered to revise the footings to accord with the new design for an additional sum of $1,064.00, with 20 days' extension of contract time for the additional work made necessary.

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92 C. Cis. Reporter's Statement of the Case March 15, 1933, the Assistant Secretary of the Treasury issued to plaintiff the following change order:

The following telegram was sent to you today and is hereby confirmed:

“Reference your proposal March fourth ten hundred sixty-four dollars additional your contract construction Postoffice Bingham Canyon, Utah, you ordered proceed with work lowering footings, etcetera, as described at cost plus ten percent overhead ten percent profit, total not exceeding figure named by you, with twenty additional davs all subject consent surety, form for which follows: Essential completion.”

Payment will be made from the appropriation,“Post Office, Bingham Canyon, Utah.”

This modification of your contract is made upon the express condition that it is subject generally to all the contract stipulations and covenants; that it is without prejudice to any and all rights of the United States under your contract and bond; that the time for completion of the work shall be twenty (20) calendar days in addition to the time originally specified and previously approved; and that you shall first furnish the formal consent of your surety to the said modification, a form for which consent will be forwarded for prompt

execution and return here. On March 22, 1933, the plaintiff and its surety made and delivered to the defendant a writing, “Stipulation and Consent”, which was executed by the plaintiff and its surety as required by the change order set out above. This writing was approved by the Assistant Solicitor of the Treasury, and recited that the total amount to be paid for additional labor and materials required for "lowering footings, etc.," was “not to exceed the sum of $1,064.00."

Plaintiff completed the footings as modified, and kept and reported to the Construction Engineer a daily record of the work and labor cost. On April 24, 1933, the plaintiff reported this cost to the Supervising Architect as $1,225.62, adding thereto 10% for overhead, which aggregated $1,348.18, and 10% on the aggregate for profit, a total of $1,482.99, and requested that it should be allowed the items set out in its report, instead of $1,064. This request was denied July 3, 1933, by the Assistant Secretary of the Treasury on the ground that "this work was ordered at the upset price of $1,064.00."


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