George F. Driscoll Co. v. United States

LittletoN, Judge,

delivered the opinion of the court:

Plaintiff and defendant entered into a contract for the erection by plaintiff of certain buildings on Ellis Island. One building was to be erected upon piles. The provision of the specifications relating to driving of the piles is set forth in finding 4. It provides that “All piles shall be driven in the presence of the construction engineer.” The contract drawings furnished by defendant designated the places at which these piles were to be driven. After plaintiff had driven certain piles in accordance with the drawings and was ready to drive another, it discovered that, if driven at the place designated on the drawings, this pile would probably strike an 8-inch underground water main which supplied the Island with water.

Defendant had a construction engineer, Paul H. Heimer, in charge of the work as the representative of the contracting officer. The contracting officer was the Director of Procurement of the Treasury Department. The construction engineer had an assistant, B. S. Eyres, in charge of the work at the site. Plaintiff called the attention of the construction engineer to the fact that if the next pile should be driven as shown on the drawings it might strike the underground water main. Thereupon a conference was held, at which plaintiff’s construction engineer and its superintendent and the defendant’s construction engineer and his assistant construction engineer were present, the results of which are set forth in findings 9 to 14, inclusive.

After probing for the water main, as stated in the findings, at a point indicated by tlie construction engineer, but different from the point at which the drawings showed this pile should be driven, plaintiff, with the approval of the assistant construction engineer in charge of the work, drove the pile at that point. When the pile was so driven it struck the water main and broke it. The break in the water main was not at once apparent. By the next morning, May 2, there was no water supply and many Government buildings on Ellis Island were in urgent need of water; the supply in their tanks would last only a short time. The construction engineer ordered plaintiff to make necessary repairs to the water main. Plaintiff at once, in view of the emergency situation and the orders of defendant’s construction engineer, set to work to repair the break as quickly as possible and, also, under like orders, made arrangements to haul water by tugboats to Ellis Island; in addition it procured over one thousand feet of fire hose, extending it from the Island, under the water, to a point on the New Jersey shore, where connection was made to a water main. In this manner water was supplied to Ellis Island until the broken main had been repaired. It required approximately one week, working 24 hours a day, to repair the broken main. Plaintiff at all times denied responsibility for the breaking of the water main and, on May 3, plaintiff made claim, as set forth in finding 13, for reimbursement of all costs of repairs made necessary by the break in the water main. On May 11, the construction engineer, as set forth in finding 13, denied its claim for reimbursement, and confirmed the directions previously given to plaintiff to furnish water and repair damage to the water main.

On June 5, after this work had been completed, plaintiff submitted to the contracting officer an itemized claim for the costs incurred and this claim was denied by the contracting officer, from which no appeal was taken by plaintiff to the head of the Department.

Article 15 of the contract, quoted in finding 15, made the decision of the contracting officer, subject to appeal to the head of the Department, final and conclusive as to “All disputes concerning questions arising under this contract.”

The contracting officer upon consideration of plaintiff’s claims of May 8 and June 5 and all the facts submitted by plaintiff, and those obtained as a result of his own investigation, decided that plaintiff, and not the Government, was responsible for locating the water main before driving the pile which resulted in its being broken, and that under all the facts and circumstances plaintiff was responsible for the cost of making necessary repairs and for furnishing the Government with fresh water until the repairs had been completed.

Plaintiff does not claim and has submitted no proof to show that the decision of the contracting officer was so grossly erroneous as to imply bad faith, and it is clear that such a claim could not be made. Plaintiff argues that the contracting officer’s decision was conclusive only as to matters of fact and that the decision which was made consisted merely of conclusions of law. It is contended that the decision was not final as to matters of law relating to the interpretation of the contract. Under article 15 this contention cannot be sustained. The decision of the contracting officer consisted of a decision on matters of fact, as well as matters relating to the proper interpretation of the contract, drawings, and specifications, and his authority to decide the dispute included both questions.

We think the claim which plaintiff made to the contracting officer, and which it makes here, involves a dispute which arose under the contract which the contracting officer was not only authorized but was required to decide under the provisions of article 15. Except for this, plaintiff would be entitled under the findings to recover $7,787.12, as set forth in findings 16' and 17. However, we are of the opinion that the decision of the contracting officer, from which plaintiff took no appeal, was final.

The contracting officer under the contract provisions and on the facts, as he interpreted them, decided the dispute against plaintiff and, even if the decision had been grossly erroneous, we could not set it aside unless we were justified from the evidence in finding that it was so grossly erroneous as to imply bad faith. Plaintiff submitted a claim and complete statement of facts and argument in support thereof. The contracting officer secured a report from the construction engineer, after which he had a further investigation made of the facts and circumstances by holding a hearing with plaintiff on its claim at the site of the work, and, subsequently, appointed a committee to consider and make recommendation upon the claim before he rendered his decision. Upon the record thus made he honestly and in good faith reached the conclusion that upon the facts and under the terms and conditions of the contract the plaintiff, rather than the Government, was responsible for the break in the water main and for the cost of repairing the damage thereto. In his decision sent to plaintiff he stated as follows:

* * *. Supplementing your proposal of June 5, wherein you submitted statement for $8,474.00 for this work, on July 17, you submitted further information and asked favorable consideration for reimbursement.

Subsequent to the conference between the representatives of this Office and yourself at the site, the committee of Government representatives reviewed the terms of your contract in the light of the evidence presented and finds the responsibility for the additional expense, which was incurred by you in the repair of this broken water main, is for your assumption, and your proposal that the Government compensate you therefore is hereby rejected.

The petition must therefore be dismissed. It is so ordered.

Whaley, Chief Justice, concurs.