*2 excavation, suspension and the Di- MERRITT, Before CONTIE and WELL- *3 representative rector’s ruled that TVA FORD, Judges. Circuit $361,336 owed Massman a total of for the WELLFORD, Judge. Circuit suspended period of 1977.1 Valley Tennessee On March Claiming for the additional amounts (TVA) Authority awarded Massman Con- suspension period and substantial amounts (Massman) for ex- struction Co. a contract job, for the onset at Massman discharge cavation of channel and con- appeal timely filed a with TVA’s General pile sheet struction of cells TVA’s Rac- Manager pursuant to the contract’s dis- Pumped Storage Project coon Mountain on putes provision. Manager ap- The General Chattanooga, River Tennessee near pointed Penegar, Dean Kenneth L. initially Tennessee. The contract called for University College Law, of of Tennessee as 15, of completion by all work December representative his an conduct evidentia- 1975, “Disputes” and contained a standard ry hearing on Massman’s claims. In re- setting handling clause out the manner for sponse inquiries to Massman’s about hear- in disputes accordance with TVA’s ing procedures, TVA stated letter on procedures. usual administrative The con- 18, January “only published that the $2,565,400.00. price tract regulations hearings relating to in TVA project Because delays, of TVA disputes advised contract implementing those begin project Massman not to Disputes until the Contract Act 1978.”2 of Ac- August, letter, 1976. TVA later directed cording Mass- to the TVA the instant con- man dredging to shut down its troversy governed by and soil “not that act operation April August between 30 and Disputes but Contract was to be [the Act]” 1977 due to environmental concerns and solely Disputes determined spawning fish at the location most of clause of the contract. dumping. river excavation and Mass- agreed parties separate hearings finally completed required man all work liability damages aspects of February under the contract of 1978. August Massman’s claims. On subsequently opened Penegar hearings submitted claims Dean on liability, allegedly additional costs liability caused wherein contested for both delays $1,168,-

these of the start-up delay suspension amount and the later exchange evidence, 984.00. An presenting letters ensued be- excavation. After tween parties parties over these post-hear- substantial both submitted numerous agent claims. purchasing rejected A TVA briefs. In March of Dean Pene- cost in a gar Massman’s calculations letter dat- holding issued a decision that TVA was ed June 1979. On June start-up delay liable for due to costs appealed man to TVA’s Director of Pur- suspension. well as the later work Dean chasing appointed repre- and the Director Penegar a later scheduled McCarter) (James parties sentative W. again consider for which the submitted mul- tiple post-hearing year Massman’s claims. On November briefs. Almost a representative the Director’s decided Penegar later issued his deci- damage TVA was pertaining rejecting computa- liable excess costs sion suspension to the three-month of excava- tions. $361,336 paid

1. TVA Massman the award 41 U.S.C. 601-613. §§ job some additional extras on the claimed Massman, $420,667.00. a total

1H7 legal parties asked the erence due to numerous Penegar Deán had errors as capricious well as an computations arbitrary accordance with his submit treat- liability ment of evidence in record. Finally, on issues TVA. order for an award Massman asserts that court proposed should not $420,667 $809,472 granted judgment summary al- have addition because computa- material issues exist ready paid. concerning submitted its of fact $378,541, procedural which fairness tion for a total award claim. return required that Massman the differ- Disputes ap- I. Does the Contract Act approximately ence of between the ply? $420,067 already paid proposed out and its The trial following court reached the award.3 negative conclusion with to this a final order on entered question: essentially accepting May TVA’s rights Plaintiff’s under the

proposed liability rejecting calculations *4 Disputes regulated Contract Act are by Shortly Massman’s calculations. before provisions of 18 C.F.R. 1308.4 § order, hearing officer’s Massman filed requires This section that in all against court suit federal district TVA involving pre-Act claims contract dis- claiming damages, procedural a lack of putes 1, 1979, initiated after March process, legal fairness the administrative proceed written notice of election to un- officer, hearing errors part der the Act must included in the be doc- demanding hearing.4 a de novo requesting ument first a decision by the subsequently granted contracting The district court officer. Plaintiff failed to summary judgment. TVA’s motion for include such a notice election in its rejected letter of plaintiff court Massman’s contention June wherein hearing to that it was entitled de novo first submitted its claim to TVA. There- Disputes by plaintiff rights all issues under the Contract Act proceed waived its 1978, against held that and instead Massman TVA under the Act and is bound proceed by any right appellate had waived under the the administrative remedies judge upheld provided Disputes Act. also The district the Contracts clause as neither administrative decision arbi- Brown See & Boot [of contract]. TVA, trary, lacking in capricious, Development, nor substantial Inc. v. (11th Cir.1982). fairness. court held Finally, the that an ex by parte communication TVA with Dean The trial court discuss failed to circumstances, Penegar, under the was no assertion knowingly that it did not waive basis void the decision. inference, however, rights. By its court by held that Massman was bound challenges Massman now the district regulations regard- relevant statutes and grant summary judgment court’s affirm- any knowledge. less of lack of actual Penegar’s administrative deci- express sion. Massman asserts that TVA failed to We about the reservations dis- provide the minimum information trict position neces- court’s that Massman waived sary make a knowing statutory remedy failing for Massman to waiv- its to follow right procedure er of hearing required its to demand de novo under 18 C.F.R. Second, regardless under the agree Act. of its 1308.4. We the district court with § alleged right hearing requires pre-Act to a novo under that 18 C.F.R. all de 1308.4 § Act, dispute Massman asserts that the adminis- contractors who initiate a after judicial provide trative decision fails to deserve def- March immediate notice suit, slightly Upon learning 4. a TVA 3. This amount was more than the dam- of Massman’s attor- ney inquire ages officer to contacted the amount the Director of Pur- calculated forthcoming. when his decision would chasing’s representative, but the officer objects parte ex to this communica- novo. considered the case de tion. exchanges agent of their the Act.5 purchasing election Baltz did not question, technically There whether therefore constitute a is some con- troversy “contracting before a officer.” actually dispute Massman had initiated specified The contract instead clear, Director 1979. It March exam- before Purchasing contracting officer,8 as the ple, this date Massman that before had of and did bring the issue be- exchanged more than a dozen memos with fore the until Director the June regarding charges. their cost claimed letter in “dispute” which the word appeal argues On that not until used for the first time.9 after March the varying date did We could thus base a on cost exchanged estimates TVA and regulatory language referenced and defini- “dispute” Massman materialize into a un- concerning tions dispute lack of emphasizes der the Act. TVA that Mass- pending TVA, however, on March literally man never referred dis- published regulations under the Con- agreements “dispute” with TVA as a until Disputes tract Act May only 1979— June 1979. This first use of the word two purchasing agent weeks before its re- “dispute” request came in Massman’s jected most of charges Massman’s cost Purchasing TVA Director of to recon- less than a month before Massman re- purchasing agent’s rejection sider the of its sponded by initiating “dispute” with the final cost estimates.6 Purchasing. Director of Before the belat- argues dispute TVA also that no ed regulations, issuance of TVA’s the lan- pending with a contracting before guage officer certainly of the Act itself seemed to *5 1, March points 1979. TVA out that 18 give posture contractors the of Massman 1308.4(a) C.F.R. “any refers dispute § open opportunity proceed under its pending contracting on provisions. The official the note on “Effec- before officer March 1979----” The TVA contract tive Date” of the legis- Act stated the with specifically stated that the lation purchasing agent TVA administering the apply shall entered contracts into Contracting contract was not “the officer” twenty one days hundred the after date purposes disputes of the clause of the of enactment Not- [November 1978]. contract.7 pre-March withstanding any provision in a contract pertinent conditions, 5. part: general § 18 C.F.R. 1308.4 states in 7. In its the contract stated: (a) A Contractor whose is contract excluded Contracting Contracting Officer Officer. 1308.3(b) part may from this § under elect to TVA, Purchasing, shall be the Director of or proceed any dispute pend- ... duly representative. his Except authorized ing Contracting before Officer on March disputes provision decisions on under the enti- thereafter____ 1979, or initiated DISPUTES, Purchasing has tled the Director of (b) A Contractor makes an election under designated Purchasing Agent who adminis- the (a) paragraph by giving of this section written duly autho- ters this contract for TVA as his Contracting stating notice to the Officer Contracting representative to act the rized proceed the Contractor elects to with the dis- purposes administration all in the Officer for pute disputes pending the Act. under For on of this contract---- 1, 1979, actually March the notice shall be added). (Emphasis Contracting received the Officer within 30 days the after Contractor the receives Con- specification 8. any See id. In the absence of tracting disputes Officer’s decision. For initi- contract, 1308.2(e) the § 18 C.F.R. states that a thereafter, ated the notice shall included in purchasing agent possesses status of the "con- requesting the document first a decision tracting 1308.2(j) officer.” Yet 18 § C.F.R. Contracting the Officer. meaning specified states that for a term in a pertinent part: The Massman letter stated in precedence contract take will over usual undersigned, Co., Massman Construction regulatory definition. your general is contractor for the above-refer- arisen, project. dispute enced A has which Purchasing passed 9. The Director then Baltz, George Supervisor, Mr. H. Construction representative, issue to his Mr. McCarter. General, Section, Equipment and Mechanical 1979____ ruled on letter dated June added). (Emphasis

1H9 grounds We rather state as date for our made the effective before proceed decision that Act, may long elect Massman has waited too the contractor any claim respect to for institution of plain this Act with action under under contracting offi- pending language then before the Act rep itself. cer or initiated resentative issued a final decision on No thereafter. vember more than a year after (Nov. Stat. 2383 Pub.Law 95-563 § Disputes Act Contract became law. (West 1, 1978), 41 U.S.C.A. § regardless And import regu of the of TVA Date”) (Note (empha- “Effective Supp.) on pursuant Act, lations issued the con added). sis put tractor should have been on notice by quite different and also note We language of the Act that action pre-Act treatment of con- equitable more seeking judicial review under the Act itself disputes pending before tractors with year receipt shall be within a from its filed 1,1979, regula- under the same TVA March contracting officer’s decision. The 1308.12(b)(3) tions. Under C.F.R. § clearly Act states: required to include “information (2) In against the case of an action right appeal” under a contractor’s about Valley Authority, Tennessee the contrac- in the final Act to all such contractors only may bring directly tor an action contracting officer. TVA the claim in a United States district court only ambiguous refer- gave a somewhat pursuant to section 1337 of Title not- Disputes Act on Janu- ence to the Contract withstanding any provision, reg- inquired had ary 1980 after Massman ulation, or rule of contrary. law to the governed the regulations what TVA about (2) Any paragraph (1) action under or Penegar. hearing procedure before Dean shall be within twelve months explanation, Gener- further TVA’s Without filed receipt by the date the con- regulations Manager stated that such al tractor the decision the contract- (i.e., applied seq.) only 1308 et C.F.R. § claim, concerning the disputes Disputes Contract officer shall de novo accordance with dispute that this was not under the Act and appropriate rules of the court. *6 Act. 609(a)(2) (3) (emphasis and add- 41 U.S.C. § circuit has affirmed the consti- Another ed). complaint was not filed regulations against these a tutionality of 1983, 17, forty until March some months complaint about lack of similar contractor receipt contracting of the officer’s after its general procedural unfairness. notice and decision. It is thus evident that Massman Development, Brown Root Inc. v. See & statutory comply has failed to with the (11th Cir.1982). TVA, 681 F.2d 1313 Yet argues requirement. Massman that TVA’s Root, the contractor had more Brown & adequate provide refusal notice about and a half months to discover and than two procedural regulations pursuant issued reg- master the intricacies of the new TVA timely the Act excuses its failure to seek Act. concerning election under the ulations judicial review under the statute. We are thirty contractor had less than Here the persuaded; TVA’s actions had no effect days rights. to ascertain its Under the plain language hide the of the that could circumstances, difficulty holding we have precludes statute which Massman’s de- knowing made a waiver of that Massman hearing under the Act. mand for a de novo holding right the Act. its Such clear in this record that Mass- contrary to the stated It seems would seem view States, present knowingly man chose to its claims Progress v. United S.E.R. Jobs for 1, Dispute clause. (Fed.Cir.1985), pursuant to the contract’s 759 F.2d 3 and National 595, U.S., hearing officer then considered 227 Ct.Cl. Electric Coil v. independently from the contract- (1981), must make a evidence that the contractor find that waiving prior officer’s decision. We “knowing election” before 1) opportunity fair had a full and rights under the Act. administratively, 2) present findings its case “grossly administrative er- charged knowledge knew or should be unsupported roneous” or by “substantial Dispute Act’s time limita- Contract evidence.” Algonac Mfg. v. Co. United tions, 3) apprised and least was States, 649, 1241, 192 Ct.Cl. 428 F.2d promulgated regulations. existence of (1970) (using substantial evidence stan- the appli- Thus Massman’s failure claim dard); Services, Milmark Inc. v. United timely legal- cability of the Act fashion States, (Fed.Cir.1984) that has ly forecloses claim. Massman also (opting clearly standard). erroneous any equitable persuade failed to us of en- Penegar’s March 1981 decision apple” by “another titlement to bite evidentiary hearing after a full concluded novo under the circumstances of de review (1) that delay starting work “was record, especially in view of Act’s responsibility TVA’s far as the contrac- —so purpose facilitating “speedy effi- tor’s escalation in costs because of that public cient resolution” dis- delay concerned,” is “interruption putes. of dredging spoiling for three months hearing II. Should the decision of the TVA____” chargeable 1977 was also officer be affirmed? Thus, hearing originally officer decided disputes The contract clause states liability the two issues submitted him is officer’s decision “final substantially in favor Massman.10 except on questions conclusive ... Dean Penegar, did not or unless determined to law” be “fraudu adopt Massman’s contentions about the ex capricious arbitrary” lent or or “grossly or liability. tent of TVA’s claimed supported by erroneous” or “not substan (from fourteen month at the outset variegated evidence.” tial This but defi August 18, 1976).11 June 1975 to nitely limited contractual standard re hearing officer decided that TVA was approved by has view been the courts. See chargeable ten delay (Octo with a month T.V.A., (E.D. v. F.Supp. Crass August 18, 1976) ber 1975 to at the Tenn.1978), (6th affd, 627 F.2d 1089 Cir. outset, finding 1980). upon Massman knew This limited review is mandated visiting making the construction site by 41 before also U.S.C. 321-322. See Crown §§ its bid that the States, begin work “could not Coat Front v. be Co. United 386 U.S. fore October 1975.” He noted 18 L.Ed.2d further (1967) (discussion upon “expected” that the beginning review of a date of June clause.) burden, similar disputes specifically guaran 1975 was “not course, upon Thus, Massman to establish that teed.” despite the fact that “time contest, appeal, does not equitable price did adjust- not call for full-scale *7 1975, 1, officer's determination delay. ultimately of October as a rejected ments due to He also purposes computing damages,” "start date argument for of equitable estoppel against the of TVA although position it took the at the prove administra- due to Massman’s failure to that it detri- appeal it mentally agent’s tive delay that should not be for unjustified prom- liable relied on the starting project. the performed ise and would not have the contract hearing otherwise. This determination the clearly officer is not expecting erroneous. Massman also claimed that it was equitable adjustment full-scale in the contract price purchasing agent's prom- due to specifically the TVA’s 12. The contract stated that the June concerning delays ise the starting in a letter dated Octo- "expected date was and not argued letter, ber guaranteed.” April 1975. Massman it that would In an Mr. gone Massman, through job not have president appellant with the without John of the con- promise firm, major equitable adjustment. such of a acknowledged pur- struction also to TVA's hearing agent chasing agent officer meeting found the TVA that at an earlier “we possessed apparent although authority no scheduling actual were prob- informed that of because promise equitable adjustment a full-scale delays having, lems and our initial start- up rather than mere breach of contract relief. delayed As be contract will until after 1124-1125, hearing (cid:127) discussed the January acknowledged officer 1976.” He further infra authority looking found no actual project because the contract that earlier when at the before

H21 job labor, day hearing of the essence” and that a 215 indirect the was officer failed Penegar specified, time length grant was and refused to Massman even one delay October found that TVA’s until dollar for equipment this rental for 1 liability. was not basis day, let the alone days claimed of delay or 184 days the compensable hearing re findings of the officer delay acknowledged by demonstrably hearing the offi- garding this issue not legal con cer. The compensate also affirm the failure to so erroneous. We delay clusion that there was unreasonable for equipment man during costs incurred than part approxi on TVA’s for no more period delay this is a clear error of law mately ten months. See Parish v. United subject to de novo review. States, F.Supp. 347, 120 Ct.Cl. First, issue, in addressing this we dis- (1951), denied, cert. U.S. agree alleged that the compen- “failure to (distinguishing 96 L.Ed. 708 be- equipment sate” added rental delay by government’s caused tween “want law,” an was “error of and we al- have diligence” delay “resulting from the ready decided that Massman is not entitled government right exercise some , to de novo review. Massman must show contract]”). reserved itself [in hearing officer Penegar’s decision in also seems contends respect “grossly this either erroneous” arbitrary that the decision must be deemed or was not based “substantial evidence.” capricious simply hearing because the found Massman’s “days-of- ultimately officer awarded Massman less total-delay approach generally unac- damages the representative than did ceptable” because there were other contrib- contracting agree officer. cannot We uting factors to Massman’s in- claimed argument. Disputes this with clause creased costs besides TVA’s actions stated that the offi postponing start-up project “upon cer’s decision was basis suspending ongoing operations. He presented the evidence hearing” at the be concluded that Massman must establish necessarily

fore him. He bound breach in causing start-up TVA’s delay as presented findings evidence to or the causing “a substantial factor in injury” previously by representa made the TVA form of claimed generally and only tive. We will specif thus consider equipment expenses. to extra He fur- damages findings ic about which Massman ther respect: concluded in this complains.

There specific has been no clear and Equipment expense (apart A. showing of arising origi- loss out of the suspension). 1977 three month delay by nal TVA. equip- The owned ment Massman was released to other major Massman makes this complaint: enough jobs early apparently $726,212.00 Massman incurred worth of any idling may to obviate it loss have equipment expenses, mainly which was during period incurred of time. And equipment parties, rented from third pay- claim for rental days beyond of delay ments, Massman’s own witness has Although month shutdown. days equivalent shown that there was gain officer found 184 an for which equitable Massman was entitled to Massman in the cheaper use of its *8 adjustment such as equipment for items direct and jobs presum- on the other — frame____ accepted, agent the Massman bid was [emphasis based on some time add- personnel may August "had informed our that be responded it In 1975 TVA to Mass- ed].” October 1st before mence____" work could com- in a for man letter that the "estimated date April beginning in April added this In work” was "about 1976.” bidding letter that we that start-up "feel documents October amended this esti- August indicated that starting the work would some- mate to a date not before during time 1975 and that bid our had to during any all ably of the times project.” available utilize on the question dispute. in this equipment Lima was big described “the machine that was used to perform all the Penegar, As indicated Dean Mass- excavation “monthly work.” owned emphasized theory dif- man’s applied by rate” equipment Massman to expected its ference in costs for use of allegedly comparable to the rented Lima owned equipment and actual rental costs $9,860 Barge (in Crane was a month con- delay. support after In of its conten- $30,000 trast alleg- month rental equipment rent,” tion for “outside paid). expected edly This rate for owned indicating man submitted a worksheet “ac- equipment “basically ... represents equip- $882,629.50 tual eight rental costs” of for depreciation ment company ... inter en- items, $415,292.50 including for a Lima tries that we establish in an overall Barge, Crane balance other for ” pool— president Massman’s testified barges allegedly and scows utilized for appellant had 15 or 20 cranes at the varying monthly periods. Offset from this expectancy time with life of from four to figure total “expected was owned years, eight paid and that the rates for the equipment,” including only, four items Barge rented Crane Drill Barge (three barges three and one scow of them “certainly high rates,” were and that the months) $198,215. for a maximum of ten equipment, rented like Massman’s owned regard Added to total claim this equipment, was not new.15 expense an insurance for certain equipment $47,800. A figure net “extra cost” Penegar concluded that Massman $317,000 nearly proven was claimed to been have had an insufficient causal connec- expended on the Crane Barge Lime rented tion between its claim for substantial extra months, about whereas Massman’s regarding costs initial delay respect expected ten month “owned rate” for com- major equipment. Like the TVA contract- parable equipment set out to be less representative, however, officer than one-fourth of that total.13 allowed extra amount for “the difference between the president testified if monthly pieces rental of the four equip- firm been had able to start job question____for ment in three months on “anticipated October of it would have ” one hand and the projected owner having rent some of the listed rental charges equivalent for the equipment for equipment (emphasis added). He also testi- three those months ...” We find substan- fied, however, that expected “we to utilized support tial evidence to this finding latter some certain of equipment items [sic] respect to the 1977 interrup- summer less time than we did utilize it.” testify- In tion. ing specifically about Crane Lima Barge, Massman said it was hand, “utilized as a On the other we must examine the result of not having our owned equipment carefully respect record to the hearing president 13. Massman’s testified that if work 15. It should also be noted that in Massman's 1, 1975, started on October he would have ex- purchasing written claim submitted to TVA’s pected completed project days to have in 287 agent Baltz on October the total requirements due to added during construction "equipment amount set out for escalation” was job. original TVAamended this schedule of $498,762 approximately for "additional rental.” days allowing days extra. Massman This, sure, to be did not include all "additional actually days testified that his firm took 306 party equipment job,” third or the mobili- perform, including assigned "the extra work $25,000, charge zation but did include the TVA.” major category items, equipment of additional Barge, such as the Barge, Lima Crane Drill Barge," 14. With to an “EHB “Rig Barges.” other cost insurance $11,788 sought for which Massman to claim as a claimed "for the item, time rented” was in- damage president claim testified that $47,800. attempt stead Massman does not equipment. was "owned" not rented This explain discrepancies these testimony in its claims at dif- seems inconsistent with the listed barge ferent times. claim for extra rental costs.

H23 any plaintiffs’ officer’s of claimed dam- It obligation disallowance in the case at age delay by prove month beginning the ten bar with reasonable certainty extent of TVA. The existence of some the delay substantial unreasonable which from resulted damages during inevitable a ten- defendant's actions seems and to provide a basis delay inadequacies making month of regardless the reason- ably approximation correct proof. analysis, nevertheless, Our must dam- which ages arose guided by indisputable legal princi- be [Citations therefrom. generalities Broad and infer- ple prove omitted.] that the burden to such actual ences effect that defendant damages must squarely plaintiff. lies As caused delay have some and damage (now be- Circuit) the Court of Claims Federal cause contract took 318 days longer stated in Contracting Wunderlich Com- complete anticipated than are not suf- pany States, v. United 173 351 Ct.Cl. ficient. Id. 351 [Citation F.2d (1965): omitted.]. F.2d 968-69 at 969. emphasis added; [First second A prove claimant need his emphasis original]. certainty with absolute or mathematical Stripped of any presumption exactitude. favor Dale Construction Co. v. ing the existence damage, States, 134-57, Ct.Cl., United No. Massman’s De presentation proof is, 1964; unfortunately, in Ready-Cut cember Houston adequate. damage Massman’s States, calculations F.Supp. House v.Co. United essentially based on net 629, 119 differences (1951). Ct.Cl. 120 It is sufficient originally between lower cost expected if he furnishes court reason- with a using its owned equipment versus the computation, though able basis for even higher cost actually incurred to rent equip only approximate. result F.H. light ment in delay and consequen States, McGraw v. supra & Co. United tial equipment. release its owned As (1955)]; F.Supp. 131 Ct.Cl. 501 [130 Penegar’s rightly suggests, States, Locke v. United however, this kind of calculation fails to leniency Ct.Cl. 262 Yet this provide a realistic estimate because it as computa- as to the actual mechanics of sumes Massman’s equipment owned tion does not relieve the contractor of his during fact, was idle In delay. how essential burden of establishing the fun- ever, president testified that his causation, damental of liability, facts company transferred equipment its owned injury. resultant River Construction jobs being to other soon after informed of Corp. v. United States Ct.Cl. [159 delay in October 1975. (1962)], supra; Miller, Addison Inc. v. States, supra, 347 F.2d din Construction S.Ct. United [171 (1947), States, Ct.Cl. 92 L.Ed. 408 cert, 70] [1965]. 70 F.Supp. denied, Co., ^[235] (1947); Inc. U.S. at v. 108 Ct.Cl. J.D. pp. United 246- He- costs month experienced, transporting We lay-up expenses. can plausibly reason of the at the at least, transferring equipment, outset imagine theOn substantial added for maintaining, unexpected that Massman other hand, may experienced signifi- have In plaintiff Wunderlich contractor cantly equipment lower costs on these oth- experienced delays numerous unforeseen jobs er due to its unexpected use of owned partly govern- least attributable to the equipment. rather than rented ment. The consequently took 318 had clear present burden to these cost days longer expected complete. than and prove estimations a rea- directly The Wunderlich court thus ad- damage sonable basis for its calculations. dressed question whether a substantial Wunderlich, supra. damage simply amount can presumed long delay. this kind of is some Wunder- There relevant evidence in this lich rejected appropriateness supporting Penegar’s court record ultimate presumption by stating: significant such finding prove of failure to loss *10 1) $148,304: part. president on Massman’s Its testified Denied Profit of spread rented and the cost between Massman claims that it was due f jobs repre- equipment owned on the other profit “equitable adjustment” as an ' sented “a similar difference in rates” to the the contract. spread equip- rented and owned between In a plaintiffs suit for breach of contract job. ment at the TVA Thus it is uncertain ordinarily are not profit entitled to surely experi- that Massman must have damages. amount of their See Torres v. enced a loss and the extent of substantial States, United 126 Ct.Cl. any such In the clear loss. absence of (1953). F.Supp. possible A excep- persuasive explanations, cost we decide tion is the situation where a contract con- clearly that Dean or “suspension-of-work” tained a or otherwise grossly wrong finding that Massman has specifically-designed change” “constructive specific showing made “no clear and See, e.g., clause. Bennett v. United here, respect loss” at least with to the States, 178 Ct.Cl. 61 paid difference in rental rates what Penegar, found no such ex- anticipated ceptional with to the use of clause in the contract. Thus he held that heavy equipment. owned was a mere breach rath- “equitable er than an adjustment” under fairness, however, In it seems uncontro- profit the contract and no could be recov- vertible that the movement to and from the ered. Tennessee River site involved considerable responds “Changes” that a heavy equipment by owned Massman. Ac- actually clause the contract does allow holding tual incurred in per- over equitable adjustment profit. an This equipment sonnel and for the ten months Changes clause reads as follows: delay period may have involved considera- Changes. Contracting may Officer Massman, damage apart ble loss or time, order, by written and with- claimed allocation of office administrative sureties, out notice to the changes make expense or overhead generally.16 We will general scope the work within the case, therefore, remand the to the district contract, including changes in the court for resubmission to hearing offi- drawings specifications. If such damages cer for another limited determina- changes an cause increase or decrease in tion. The specifical- officer should the amount of work under this contract ly possible consider Massman’s damages or necessary per- in the time respect moving, with transfer and trans- formance, equitable adjustment will portation lay-up costs and costs for the ten price be made or the time allowed delay period by month incurred Massman. both, performance, or and the con- damages,- any proved, Such allowable if writing tract shall modified in be accord- would damages addition to the award ingly. by All claims the Contractor for already by made officer. We adjustment paragraph under this must afford opportunity this in the interest of days be asserted within 30 from the date justice since affirm we otherwise the deci- ordered, change is and in the mean- regard sion major equipment with ex- time, the Contractor shall penses. changed. [Emphasis the work as so add- Specifically B. Other Costs Identified ed.] argument about Massman has identified four other “Changes” language, however, principal cost areas in it allegedly which was de Rice, ly refuted United States v. ' prived Penegar. (1942), U.S. 87 L.Ed. 53 following: These are the Changes wherein a contract clause strik- costs, 16. On these see at 1125-1126. infra

H25 to the instant was in THE ingly similar one HEARING OFFICER: Pardon *11 expression, but Changes the is this overhead dispute. The court ruled that the [the expense pain your and encompass equitable money calculation] clause did not suffering? delay. virtually mere adjustments for language pain in about THE WITNESS: The and suffer- identical contract Rice But, ing is down under the interest. completion simply this project “time” for of part pain suffering, yes, is sir. losing protected the contractor from the delayed by work if was Dealing contract THE HEARING OFFICER: government and contractor thus could with these claims? the time complete project

not within Now, maybe THE WITNESS: it’s 66-68, specified. at 123-24. Id. S.Ct. maybe I pain misunderstood not— suffering. therefore, affirm, of an We the denial counsel then Massman’s broke and vain- profit “equitable adjustment” item ly attempted up posi- to shore Massman’s the circumstances. tion. (2) $83,- expenses of Denied office home claims Massman that offi- $20,453 suspension including during effectively cer’s decision rescinded the of work. purchasing agent’s original award of Penegar again rejected Dean Massman’s $20,453 for established home office ex- damage here inadequately claims as sub- penses during the later three-month sus- emphasized He stantiated. that pension. Penegar acknowledged required proof man’s devoid of the was expenses represented home overhead that home office could demonstration work plausible cost during more the three-month projects not have been transferred to other suspension. It would also seem that the See, during delay. e.g., the ten-month representative contracting of the TVA offi- Coating, Co. v. Ceramic W.G. Cornell cer found some reasonable basis com- (D.C.Cir.1980). F.2d the most For puting Equitably, amount. part, persuasively has not dis- then, Massman should be allowed to puted this conclusion. present very specific evidence this limit- testimony president is upon ed issue remand and resubmission to quite instructive here. Massman essential- officer. ly expenses derived its home office claim $553,524: Denied Interest of by indicating represented that these costs against Interest on claims the Unit (6%) percent six of total work cost. Mass- ed cannot States be recovered the ab legal began ques- man’s counsel own his express provision sence of to the con tioning by saying: of Massman trary in the relevant or statute contract. Massman, Q. Now, Mr. I want to direct 2516(a); 28 U.S.C. United States v. Al § your attention back to Item Exhibit Tillamooks, cea Bank 341 U.S. point you Number out to 95 L.Ed. S.Ct. represents home office and in- nevertheless cites L.L. Hall Constr. Co. v. percent. dicates a six There no back- is States, United 177 Ct.Cl. 379 F.2d 559 that, up data Exhibit within 79 for (1966), standing principle for the that an there, Mr. Massman? judgment interest is available because TVA added). “No, (Emphasis Massman answers performing proprie Sir,” although goes he on to that this insist tary capacity. than sovereign rather figure derived from “audits” 6% opinion, Hall not even ad does Corps Engineers such entities as or prejudgment dress the issues interest Whinney. Penegar finally Ernst & proprietary government status of con question support broke in to for this tracting. Supreme We also note that figure. presi- getting questioned He succeeded Court has in similar contexts significance dent to admission: make this distinction between “proprietary” judged TVA will be from its own government’s the federal See, selected and forum.” controlled “sovereign” e.g., functions. versus County v. Board Federal Land Bank case bolstering Massman cites no law 146, 150-51, Comm’rs, 368 U.S. comprehensive process procedural due 282, 285-86, (1961). A num 7 L.Ed.2d argument against TVA’s administrative also refused to award ber of circuits have circuit, process. The Columbia District and/or ex prejudgment interest law, citing rejected a wealth of case a sub construction cases private tra cost in be stantively Corp. similar claim Jonal v. usually liquidated cause *12 (D.C. Columbia, 533 District F.2d 1192 of readily See, ascertainable. or otherwise Cir.), denied, cert. U.S. Ernst, Inc. v. Manhattan e.g., E.C. (1976). complaint 50 L.Ed.2d 88 there (5th Cir.), Co., F.2d Constr. Corpora- was that Columbia the District of part reh’g part, granted in on denied tion Counsel was able to choose the admin- issue, (5th F.2d 268 Cir. unrelated attorney defending istrative board and the 1977), denied, sub nom. cert. Providence against the municipal corporation claims of Co., Hospital v. Constr. Manhattan contractors. The court held that this struc- 55 L.Ed.2d 769 U.S. S.Ct. se, not, per ture “does constitute a viola- (1978). presented per- We have no been process tion of the clause due of the Fifth distinguishing argument suasive for these Following Amendment.” Id. at Jon- interest; awarding prejudgment cases and al, we hold district court that the was accordingly, it is denied. reject complaint correct against general the administrative struc- Wages Supervisory dispute procedure ture of the contract’s as lacking procedural fairness. accepted Penegar

Dean Massman’s in- charge wages for of field em- creased cost relegated Thus Massman is to the claim ($9,303), he ployees but found that the of the rising actual bias level of a due $54,794 larger much claim for home process particular deprivation in this case lacking in payroll evidentiary parte office virtue of the ex administrative here support. specifically Massman also problem communication. The here is that complains Penegar’s that Dean respond simply Massman does not in a con- to take sweeping was so as back vincing spe- district fashion to the court’s granted agent purchasing super- for holding parte cific that the ex communica- visory wages during delay. the three-month prejudicial tions were not and thus not le- specif- We find the record unclear as to this gally significant enough bring about charge ic basis of and the disallowance. process due violation. specific We would reconsidera- remand testimony in uncontroverted tion and of this claim that the treatment record indicates TVA contacted hearing swept broadly officer’s decision too Penegar simply discovering when his improperly reduced the award here for long-awaited damages decision was to be $12,208.00. suspension by the three-month goes issued. Massman’s so far as brief III. Issues of Fact Whether Material argue depositions key that “the Concerning Still Existed Fairness of employees abundantly make it clear that Process that Administrative TVA Pro- ‘the merits’ of the case were discussed [in vided to Massman. communications]____” parte the ex argued provides or analyses to the district man no discussion Instead, general depositions. only court that structure of these it makes TVA’s process fleeting deposition. one to one administrative claims violated basic reference principles testimony procedural ap fairness. On there of TVA Associate involved, however, peal argues empha- General again that “TVA Counsel setting must be sizes that the the case were not barred ... its own merits of guidelines inquired disputes and standards on how discussed. He stated

U27 plan- about man of a fair only when circum- ning to issue a final decision. stances of this record. note, as did District Columbia We CONCLUSION

circuit v. Federal Labor Rela- PATCO (D.C.Cir. Authority, 685 F.2d tions respects In most we affirm the actions of 1982), procedural report” that a or “status officer and of the those district inquiry by party parte is not “ex regard longstanding court with to this con- communication” defined Govern- troversy. In of the limited remand Act, In The Pub.L. No. 94- ment Sunshine damage claims, as to certain we hope that The Act Stat. 1241 defines parties seek to will settle resolve parte ex communication as remaining relatively these minor disputes an oral or written communication not on light length already of the time public record which reasonable elapsed stages the administrative prior parties given, notice to all is not but controversy and also in view the time including] requests ... not status judicial disposition involved proceeding. matter or reports issues. *13 added); 563, citing at (emphasis then, In summary, we Affirm the district 551(14). request Thus a mere for U.S.C. § holding court its that the Contract Dis- report Penegar a status from Dean does putes Act apply of 1978 does not and that prohibited by not rise to the level this stat- Massman is not entitled to dea novo hear- utory parte of ex definition communication. ing. We also Affirm the district court’s hand, however, theOn other the D.C. ruling essentially received passage legisla- circuit cited from fair administrative untainted Act, history tive which notes that parte TVA’s ex communication with the request report A for status or a back- hearing officer. We find no clear error ground may in discussion effect amount responsible the decision that TVA was an or effort to indirect subtle to influ- the ten-month at the outset and for pro- ence the substantive outcome of the delay; the later three month but that Mass- judgment ceedings. will have to be generally prove major man failed to particular whether a made communica- damages, particularly claims for with re- agency’s tion could affect the spect major to the equipment extra costs agency the merits. In doubtful cases and rentals. We in the interest Remand, official should treat the communication (1) permit justice, only an assessment parte protect ex as to integrity so moving transportation, lay-up and costs making process. S.Rep. of the decision being required entailed Massman in supra, at Act No. Sunshine major job equipment transfer site for Accord, H.R.Rep. Sourcebook at anticipated beginning and then 880, Pt.I, 20-21, supra, No. at Sunshine sending equipment jobs other on to at Act Sourcebook 531-32. mitigate (2) 1975 to the delay, 685 F.2d at 563. permit a determination of Massman’s expenses keep- actual costs and entailed in passage legislative This from the maintaining necessary personnel and history of the Sunshine Act makes clear equipment, and if any, other the TVA report” that even one-sided “status in job period site for the ten months quiries discouraged. are analysis to be On August record, October 1975 to agree 1976 before of this we with the beginning of job, per- actual and support district court that there no actions, specific presentation un mit Massman’s evi- although the view that TVA’s establishing adversary and dence offi- wise without notice to holding supervisory party, against could rise to the level of a cer’s home due swept process wages violation. claims TVA’s communication overhead deprive broadly purchasing with Dean did not too with $20,453 for over- agent’s original award super- for home expense

head the three-month

visory wages during sus-

pension. party bear its own costs.

Each will

CONTIE, Judge, concurring. Circuit Judge

I agree with Milburn that Mass- affirmatively

man failed elect to required the Act as the statute regulations. regulations “These were

published Register in the Federal and the Regulations,

Code of Federal have the law, persons

force and effect of and all thereby charged legal

affected provisions.”

notice of their Adamsville Company, Rainey,

Lumber Inc. v. (W.D.Tenn.1972) (Well-

F.Supp.

ford, J.).

Accordingly, I judgment concur opin-

the court and II III Parts

ion.

Robyn DOUGLASS,

Plaintiff-Appellee-Cross-Appellant,

v. MAGAZINE, INC.,

HUSTLER

Defendant-Appellant-Cross-Appellee,

Augustin Gregory, Defendant. 84-2919,

Nos. 84-2985. Appeals,

United States Court of

Seventh Circuit.

Argued April 1985.

Decided June 1985.

Rehearing Rehearing En Banc Aug.

Denied