103 Ct. Cl. 613 | Ct. Cl. | 1945
Lead Opinion
delivered the opinion of the court:
The plaintiff, a partnership, entered into a contract in August of 1935 to build for the United States Lock and Dam No. 9 in the Allegheny Kiver in Pennsylvania. The work was done in the autumn of 1935, and in the open seasons of 1936, 1937, and 1938. It was completed on or about October 6, 1938. The plaintiff was paid the agreed
The alleged duty on the part of the Government to supply the plaintiff with labor is said to flow from the following provision of the contract:
Art. 19. (a) Labor -preferences. — With respect to all persons employed on projects, except as otherwise provided in Regulation No. 2, (a) such persons shall be referred for assignment to such work by the United States Employment Service, and (b) preference in employment shall be given to persons from the public relief rolls, and, except with the specific authorization of the Works Progress Administration, at least ninety per centum (90%) of the persons employed on any project shall have been taken from the public relief rolls: Provided, however, That, expressly subject to the requirement of subdivision (b), the supervisory, administrative, and highly skilled workers on the project, as defined in the specifications, need not be so referred by the United States Employment Service. * * *
The plaintiff’s interpretation of this provision of the contract is given in its reply brief as follows:
We submit that under Article 19 of the contract the defendant undertook the responsibility of supplying plaintiff with sufficient workers to properly staff the job.
We think that this interpretation is not the correct one. The primary purpose of most of the public works financed by the Government during this period was to relieve unemployment. In order that the jobs created with public money for this purpose should go to those who were in such distress
We think, therefore, that Article 19 was a promise by the plaintiff not to employ labor except as therein provided. We think it also, by implication, contained a promise by the Government to apply the provisions of the article with fair consideration for the problems and difficulties of the contractor, and to make it possible for him to get his work done, if there was not enough relief labor available, but there were persons not on relief who desired to work for the plaintiff. For example, we think that the Government would have breached this implied term of the contract if its Works Progress Administration had not, when there were not enough men on the relief rolls to fill the plaintiff’s needs, authorized the United States Employment Service to refer men to the plaintiff who were not on the relief rolls. But there was no such failure, as such authorizations were given with reasonable promptness when the need for them arose, many of them in the first months of the work, and remained in effect for the duration of the work.
The relevant facts concerning the plaintiff’s shortage of labor seem to be about as follows. In the summer of 1935, when the plaintiff was about to bid on the work, it inquired in the locality and found that there was a large labor surplus, with many workmen on relief. It therefore assumed and counted on an adequate supply of labor, since it needed only some 600 men. When it began its work, however, it found almost immediately that some classes of labor, such as crane operators, pile drivers and, a few weeks later, form carpenters could not be obtained from the relief rolls. It requested permission to hire nonrelief workmen for these trades, and the Works Progress Administration authorized the Employment Service to send nonrelief men. The Gov
The Government was responsible for practically none of the factors listed above, which prevented the plaintiff from getting enough men. It may be that it could have, by the closing down of relief work projects in adjacent areas compelled men to take jobs with the plaintiff and board away from home, though the net wages available to support their families would have been small. We think it has not been proved that the refusal of the relief authorities to thus forcibly recruit workmen for the plaintiff was so inconsiderate of the plaintiff’s difficulties as to be a breach of the Government’s implied contract.
The plaintiff contends that the Government should have cancelled the requirement of Article 19 (a) that the plaintiff
The plaintiff urges that it is entitled to recover under the doctrine laid down by this court in the case of Young-Fehlhaber Pile Company v. United States, 90 C. Cls. 4. We think not. In that case the Government, though it could not supply the contractor with labor, “in effect declined to consider”
But there was no such breach of the implied contract in the instant case. Exemptions were granted early in the course of performance of the contract, and remained in effect for the duration of the contract, which made it possible for the plaintiff to hire any available workmen merely by having them register at the United States Employment Service. As we have said, it has not been proved that this requirement had any material bearing upon the plaintiff’s labor shortage.
We have stated above that the qualifications written into the plaintiff’s requests for labor were so strict that they may have contributed to the plaintiff’s shortage. It is difficult to reconcile the language of these requisitions with the plaintiff’s claim of an acute and damaging shortage of labor. In August 1938, in the fourth season of the shortage, the plaintiff stipulated, for the 15 carpenters requested, “previous experience on dam construction necessary.” How, out of this area, it expected to get carpenters with such experience, is hard to understand. In July 1938 it requested 150 laborers and said, “Must report for work supplied with hip boots.” One of the plaintiff’s executives testified that in fact the plaintiff bought the hip boots wholesale at a low price and his testimony may mean that they were supplied to the workmen without charge. This being so, the plaintiff was negligent to its own damage, since it may have, by this and other requisitions such as are quoted in finding 15, which stipulated qualifications which it did not in fact intend to insist upon, aggravated its shortage of labor. To whatever extent it did so, the Government was relieved of responsibility even if Article 19 (a) could be read, as the plaintiff urges, as a promise by the Government to furnish sufficient labor. Such a promise would not mean that it was bound to furnish labor having unusual qualifications not reasonably to be expected to be available.
The determination by the Engineer’s Office of the extent of the delay caused by shortages of labor is, of course, not binding here. It made that determination for the purpose of performing its function, provided in the contract, of determining whether liquidated damages for late completion should be assessed or excused. For its purposes, an unavoidable shortage of labor would have been just as good a reason for waiving liquidated damages as a shortage resulting from the fault of the Government or its breach of contract. It did not purport to decide that the Government had breached its contract and was liable in damages for that breach.
The computation of the number of days’ delay caused by labor shortages was palpably wrong, since it was based on a mathematically erroneous formula. The method used was to tabulate (1) the number of men requisitioned for labor of various classes, (2) the number of men reporting on time, (3) the number of men at work before the new men were due to report, and (4) the total number of men needed for the work. The percentage of deficiency was then determined by subtracting item (3) from item (4) and dividing the difference by item 4. This formula gave the percentage of deficiency before any of the men requisitioned had reported, but disregarded the number of men who did report. It therefore produced a- ratio of deficiency substantially higher than the true ratio, and gave the plaintiff a correspondingly higher number of days of excusable delay.
A witness for the Government presented a recomputation, based upon a formula which eliminated the error in the former one, and which showed that 103 days’ time was lost in the years 1935, 1936, and 1937 because of shortages of labor. If this computation is approximately correct, the plaintiff would have had a considerable amount of work to do in 1938, even if it had had sufficient labor in the earlier seasons, and would not have completed the work until about June 15,1938.
As to many items of its claim, the only evidence presented by the plaintiff as to the amounts of its alleged damages is computations based upon its contention that it would have, but for the shortage of labor, completed the work on November 2, 1937. Even if we were of the opinion that the insufficiency of the labor supply was a breach of contract by the Government, we would not have evidence as to the amount of damage resulting from it, for the period from June 15, 1938, to the completion of the work.
The plaintiff’s sixteen causes of action will now be discussed. The first, covered in finding 32, is for the cost of replacing copper strips destroyed by a spring flood in 1938. Since, as we have found, the Government did not by breach of contract cause the work to be carried over into 1938, the plaintiff was bound by its contract to replace any work damaged by flood prior to completion of the contract. Its doing so was not, therefore, extra work, and it is not entitled to extra pay for it.
In its second cause of action, detailed in finding 33, the plaintiff complains that it was required to spread a layer of mortar on the concrete already placed, whenever it poured additional concrete on top of it. The specifications said “Where necessary to secure adequate bond, tbe surface of existing concrete shall be cleaned and roughened and shall then be spread with a %-inch layer of mortar * * * before the new concrete is deposited.” The plaintiff was required to spread mortar on all horizontal concrete surfaces,
In its third cause of action the plaintiff complains that it was required to place cork and tar paper in many joints not required by the contract. The specifications provided that expansion joints of cork and tar paper would be made “as indicated or required.” Only one was “indicated” specifically on the drawings of the lock and abutment. The reason for this was that the size of the concrete monoliths to be poured was not specified, but was left to the contractor and the Government officials to determine as the work proceeded. As it did proceed, expansion joints were required between all monoliths. The plaintiff seems to have contemplated this requirement, as shown in finding 34. We think the requirement was reasonable, and that the decision of the Contracting Officer and the Chief of Engineers imposing the requirement should not be disturbed.
The fourth, fifth, sixth, and seventh causes of action are for costs of electric power, workmen’s compensation insurance, unemployment and social security taxes, and surety bond premiums, which were greater because the work was carried over into 1938. See findings 35, 36, 37, 38. As to the first three items, the rates were higher in 1938 than in 1937. The surety bond would have expired if the work had been completed in 1937, and no premium would have accrued in 1938.
As we have said, the shortage of labor which, the plaintiff claims, caused the work to be carried over into 1938 was not a breach of the contract by the Government. Its consequences cannot therefore, be recovered from the Government. Also, as we have said above, we do not have the evidence from which to determine what these increased costs would have been from June 15, 1938, the approximate date
The eighth cause of action is for the cost of repairing damages to the work caused by cold weather, floods, and ice during the winter of 1987-1938 (Finding 89). The ninth is for the reasonable value for the period of the alleged delay due to labor shortages of the services of the two partners who make up the plaintiff’s partnership and who devoted their time to this contract throughout its performance (Finding 40). Since we have found that the Government is not responsible for the delay, these causes of action cannot be sustained.
The tenth and eleventh causes of action are for the cost of upkeep and operation of its plant, and for material, maintenance and overhead charges incurred by it after November 2, 1937, and up to the completion of its work in 1938. Some of these costs resulted from whatever delay was caused by shortages of labor, but we have held that the Government was not answerable for the delay.
The twelfth cause of action is for all social security taxes paid to the State of Pennsylvania and the Federal Government on account of the contract work during the several years of its performance (Finding 43). The theory of the claim is that the law imposing these taxes was enacted after the contract was entered into. We think the Government does not, in its contracts, agree to pay any new or increased taxes of general application imposed by a state or by itself. Compare United States v. Standard Rice Co., 323 U. S. 106 (decided December 4,1944), affirming 101 C. Cls. 85.
The thirteenth cause of action is for the alleged increased cost of procuring gravel in 1938 over what its cost would have been in 1937 (Finding 44). From what we have said it follows that the plaintiff could not recover this cost, even if the fact and the amount of the increase had been proved. The fifteenth cause of action is for the rental value of the plaintiff’s machinery for the alleged period of delay (Finding 46). This claim is foreclosed by what has been said above. The sixteenth cause of action is alternative to all the others, and claims the difference between what it actually cost it to do the work, plus a reasonable profit, and what it
The fourteenth cause of action is for the cost of a raise of fifteen cents in the hourly wages of the plaintiff’s common labor. It had been paying 45 cents up to September 19, •1937, when it raised the hourly wage to 60 cents. The contract required the plaintiff to pay not less than 45 cents for common labor. The WPA had other projects in the vicinity of the work, and had been paying 35 cents an hour, but raised its wages to 50 cents. The plaintiff found it difficult to hold workmen on its work. It consulted the Government’s representatives and was assured that an increase in its minimum wage would.be recommended. If an increase had been directed by the Government, the contract price would have, by the terms of the contract, been increased to cover it. The Contracting Officer requested permission from the Chief of Engineers to order the increase, but permission was denied.
The plaintiff urges that the Government, by its action in raising the wages of WPA laborers in the vicinity from 35 cents to 50 cents, made it necessary for the plaintiff to raise its wages, in order to hold its workmen. We think that, in the circumstances, the Government’s action in raising WPA wages made it impossible or difficult for the plaintiff to secure.labor at 45 cents an hour. If so, it was a violation of the term which we found in Beuttas v. United States, 101 C. Cls. 748, to be implied in all contracts, i. e., that, subject to exceptions not here necessary to define, one party to the contract will not so act as to increase the cost of performance by the other. In the instant case, the contract itself provided that the minimum wage rates set in the contract were subject to change by the contracting officer, and that the contract price should be adjusted to compensate for any change he made. We think it was fairly implied in the contract that if the Government should do something which made it impracticable for the contractor to obtain labor at the minimum wage set in the contract, the power to increase that minimum, and compensate the contractor for the increase would be used. That it was necessary for
The plaintiff is entitled to recover $4,264.58 plus the costs of workmen’s compensation attributable to that amount of wages.
It is so ordered.
Dissenting Opinion
dissenting in part:
I am of opinion that defendant did not breach the wage provisions of its contract with plaintiff and that plaintiff is not, therefore, entitled to recover the amount of $4,264.58 which the court has allowed. _LeVeque et al. v. United States, 96 C. Cls. 250, and dissenting opinion in Beuttas et al. v. United States, 101 C. Cls. 748.
Upon a stipulation by the'parties showing that in accordance with the court’s opinion “the amount of Workmen’s Compensation paid by the plaintiff because of the increase in wages of $4,204.58 is the sum of $405.30,” and upon plaintiff’s motion for judgment, it was ordered October 1, 1945,
ON PLAINTIFF’S MOTION FOR NEW TRIAL
This case comes before the court on plaintiff’s motion for a new trial, and on consideration thereof:
It is ordered this 4th day of June 1945 that said motion be and the same is overruled.
Dissenting Opinion
dissenting:
I think the motion for a new trial in this case should be granted.
The parties agree that the defendant was delayed because there was an insufficient supply of labor; the defendant granted plaintiff an extension of time of 149 days on this account; and the proof convinces me that there was an adequate supply of relief labor on the rolls available for reference to this job. It was not referred to it because the Works Progress Administration refused to furnish to the United States Employment Service the names of men then on relief for referral to this job since the job was in a remote section of the county and transportation facilities were meager and expensive, and the amount a laborer could earn on the job was small. However, the project was established for the benefit of the people in this community on relief in order to take them off of relief and provide employment for them on this project. From this I think there arose an implied agreement on the part of the defendant to furnish plaintiff with relief labor to the extent that such labor was available to it.
It is true that the Works Progress Administration did exempt plaintiff from the requirement of securing certain of its labor from the relief rolls, but this exemption proved inadequate; plaintiff still was unable to get an adequate supply of labor. In this situation and with relief labor in hand adequate to have supplied plaintiff’s needs, the obligation was on the defendant either to do all it could do to furnish this relief labor or to waive this article of the contract altogether and permit plaintiff to get its labor where it could. It did neither and as a result thereof the plaintiff was damaged. Plaintiff was entirely without fault, so far as I can see, and in my opinion it is entitled to recover the damage that it has suffered as a result of the defendant’s breach of its implied obligation.