Opinion
No. 45469.
May 7, 1945.
James E. Grigsby, of Oklahoma City, and Thomas P. Gore, of Washington, D.C. for plaintiff.
William A. Stern, II, of Washington, D.C. and Francis M. Shea, Asst. Atty. Gen., for defendant.
Before WHALEY, Chief Justice, and LITTLETON, WHITAKER, JONES, and MADDEN, Judges.
Action by Leo Sanders against the United States to recover for excess costs and equipment rental alleged to have occurred as a result of delay caused by defendant.
Judgment for plaintiff in accordance with opinion.
Plaintiff seeks to recover $40,720.79, excess costs and equipment rental alleged to have accrued as a result of 133 days' delay claimed to have been caused by defendant in failing to furnish, with reasonable promptness, an adequate number of skilled workmen and in refusing to release plaintiff from the labor requirements of the contract so that he might employ such workmen direct.
Special Findings of Fact
1. July 9, 1936, plaintiff, a resident and citizen of Oklahoma City, Okla., entered into a contract with defendant, acting by and through the Federal Housing Division of the Federal Emergency Administrator of Public Works, for the construction of a superstructure for the Rotary Park Housing Project, No. H-8108, in Oklahoma City, Oklahoma (which project was later referred to as "The Will Rogers Memorial Housing Project"), in consideration of the sum of $1,559,965.
Work under the contract was to be commenced upon receipt of notice to proceed and be completed within 270 calendar days from such notice. Plaintiff received notice to proceed July 29, 1936, thus fixing April 27, 1937, as the time for completion. By a change order the time for completion was extended to June 23, 1937. Plaintiff completed his contract September 4, 1937.
The project consisted of the building of one- and two-story houses or buildings on concrete foundations which had been constructed by plaintiff under a prior contract. This foundation contract had been completed on time before notice to proceed on the superstructure contract in suit had been received by plaintiff. There were about 86 separate buildings of various sizes involved, some to accommodate 4 or 5 families, while others were to accommodate 8 or 10 families, the area covering 30 or 40 acres. The work of constructing these buildings required the employment of a large force of skilled workmen and common labor.
2. The contract was signed for the Secretary of the Interior, as Federal Emergency Administrator of Public Works, by Horatio B. Hackett, assistant administrator. Under the terms of the contract H. A. Gray, Director of the Housing Division of the Administration of Public Works, was the contracting officer, and Hackett was duly authorized to act for and did act as the head of the department under the contract in connection with all matters with reference thereto. Subsequently, by Executive Order No. 7732 of October 27, 1937, 42 U.S.C.A. § 1404 note, the U.S. Housing Authority, of which Nathan Straus became the administrator, took jurisdiction and authority from the Administrator of Public Works over plaintiff's contract and similar projects. Plaintiff had completed all work called for by his contract on September 4, 1937, but final decision and settlement of certain matters thereunder were not concluded until after October 27, 1937.
3. Art. 9 provided for liquidated damages for delayed completion but plaintiff was not to be charged thereunder for any delay in completion due to unforeseeable causes beyond his contract and without his fault or negligence, including, among other things, acts of the Government. The work was completed 73 days beyond the contract period as extended 60 days, but no liquidated damages were charged for the reason hereinafter set forth.
Art. 15 provided that "All labor issues arising under this contract which cannot be satisfactorily adjusted by the contracting officer shall be submitted to the head of the department." This article further provided that all other disputes concerning questions arising under the contract should be decided by the contracting officer or his authorized representative, subject to appeal to the head of the department or his authorized representative "whose decision shall be final and conclusive upon the parties."
4. Arts 20 and 24(a) of the contract are important to the question presented, and are as follows:
"ART. 20. (a) Employment Service. — With respect to all persons employed under this contract, except as otherwise provided in Regulation No. 2, issued by Executive Order No. 7060, dated June 5, 1935, (i) such person shall be referred for assignment to such work by the United States Employment Service, (ii) preference in employment shall be given to persons from the public relief rolls; provided that persons not on public relief rolls may be employed on this project where qualified persons cannot be obtained from the public relief rolls and provided further, that supervisory, administrative, and highly skilled workers on the project, as defined in the specification, need not be so referred by the United States Employment Service, provided that when organized labor, skilled or unskilled, is desired by any contractor employed to handle all or any part of this project, the contractor shall requisition such workers as may be required from the representative of each recognized union concerned; the representative of the union will select union members for work on the project giving preference, first, to those members of the union who are on the local public relief rolls; second, upon exhaustion of union members on such rolls, to any other members of the union; actual assignment of these workers to projects thereafter will be the responsibility of the Works Progress Administration.
"(b) Except as specifically otherwise provided in this Contract, workers who are qualified by training and experience and certified for work on the project by the United States Employment Service shall not be discriminated against on any ground whatsoever.
"(c) The Contractor shall have the right, subject to disapproval by the Contracting Officer, to dismiss any employee.
"(d) Only one member of a family group may be employed on work under this contract, except as specifically authorized by the Works Progress Administration."
"ART. 24. (a) No person under the age of 16 years, and no one whose age or physical condition is such as to make his employment dangerous to his health, or safety, or the health and safety of others, may be employed on the project. This paragraph shall not be construed to operate against the employment of physically handicapped persons, otherwise employable, where such persons may be safely assigned to work which they can ably perform."
Under art. 24(a) of the contract, plaintiff required a preemployment physical examination or a doctor's certificate as to the physical condition of all workmen to be employed on the project.
5. After receipt of notice to proceed, plaintiff's and defendant's engineers prepared a monthly progress schedule showing the time expected to be used for each of the various operations in carrying on the work and the time of its completion. This schedule was approved by defendant as reasonable.
6. Immediately prior to commencing operations under the contract in suit on July 29, 1936, plaintiff had performed and completed another contract with defendant for the concrete foundations for the same project. The foundation contract contained arts. 20 and 24 above quoted, and under that contract plaintiff adopted and pursued the practice under art. 24(a) of requiring of all workmen employed on the project, a preemployment certificate from their own physician, or from a physician provided by plaintiff, that their physical condition was such as not to make their employment on the project dangerous to their health or safety, or to the health or safety of others engaged on the work.
7. In performance of the foundation contract plaintiff employed union and non-union workmen in skilled and semiskilled trades. All union workmen were, under art. 20, requisitioned and obtained by plaintiff from the union, and all non-union workmen and all common labor were requisitioned and obtained, under art. 20, from the Employment Service specified by that article. Toward the end of the work on the foundation contract, a controversy developed between plaintiff and the union as to whether union workmen had to furnish a doctor's certificate or submit to a physical examination prior to being employed. Upon plaintiff's insistence that such physical examination would be required under the contract' most of the union men left the work, and the union thereafter demanded that plaintiff should not only abandon the requirements of physical examination, but should restrict all skilled jobs to union men. No strike was declared by the union under the foundation contract. The controversy continued after commencement of work under the superstructure contract. The union workmen who had quit work on the prior contract did not return to work under the next contract, and the union declined plaintiff's requests for skilled workmen under the superstructure contract. A representative of the contracting officer and the head of the department went to Oklahoma and endeavored to adjust and settle the controversy without success; however, the controversy was narrowed to the matter of the preemployment physical examination. Plaintiff held out for it and the union held out against such requirement.
8. Plaintiff entered upon the work of performing the superstructure contract upon completion of the foundations with substantially the same force which had been employed under the prior contract. During most of August 1936 plaintiff was engaged principally in organizing the work under the building contract and in assembling the necessary materials therefor, and did not make requisitions for skilled workers but continued to use a number of skilled workmen who had been employed on the foundation contract and who continued with him on the instant contract.
9. The U.S. Employment Service designated the Oklahoma State Employment Service (hereinafter referred to as the SES) as the agency to act for it in referring workmen on plaintiff's requisitions for assignments to the work under plaintiff's contract. The SES was affiliated with the U.S.E.mployment Service and was subject to its rules and regulations.
Plaintiff regularly throughout his entire operations under both contracts with defendant requisitioned all common labor from SES and at no time had any complaint to make as to quantity, quality, or efficiency of the common labor referred. Plaintiff was advised under both contracts that the Employment Service would not supply or refer union labor, and that, in accordance with the terms of the contracts, any union labor must be secured directly from the unions.
Plaintiff made a request of the union for certain skilled workmen on the superstructure project, but the unions refused to supply such labor because of plaintiff's insistence upon the preemployment physical examinations. Therefore, on August 28, 1936, plaintiff began and continued until March 26, 1937 to make and deliver to the SES requisitions for such skilled nonunion mechanics as were needed on the job. Such labor, although available and immediately obtainable, was not referred or supplied by the SES with reasonable promptness, and the contracting officer and the head of the department delayed unreasonably in releasing plaintiff from the contract requirement that he obtain all such labor through requisitions to and referrals by the SES. The SES office was unreasonably slow and in many respects was inexperienced and inefficient.
10. The first requisitions for skilled labor to the SES were received by it August 31, 1936, being nos. 1073, 1098, 1099, 1100, and 1101. These requisitions called for 50 carpenters whose appearance was requested in groups of 10 each on September 1, 3, 5, 8 and 10, 1936. In addition to the 50 carpenters requisitioned, plaintiff asked for 4 bricklayers and 2 cement finishers.
Upon receipt of the requisitions SES immediately asked Works Progress Administration for a list of available carpenters, brickmasons, and cement finishers who were on relief in Oklahoma County. There were 27 employment-service offices in the State of Oklahoma from which labor was to be obtained for referral to plaintiff's work, if sufficient labor was not obtainable locally by the Oklahoma City employment office. On receipt of such a list it was checked by SES to determine whether or not the men were competent and qualified. September 2, 1936, SES sent letters to 73 carpenters, 6 brickmasons and 4 cement finishers to present themselves to plaintiff for interviews for employment at plaintiff's project. This referral was from what is termed the "mass list." Comparatively few men from the mass list reported to plaintiff for employment.
11. The SES in response to plaintiff's formal requisitions for workmen began referring to plaintiff's project various skilled workmen. Typical referrals are as follows:
1936 1936 1936 1937 1937 1936 1936 1936 1936 1936 1936
Referrals as to Carpenters -------------------------------------------------------------------------------------------------------------------- Requisition Number of Date To report — Referrals dated number carpenters -------------------------------------------------------------------------------------------------------------------- 1073 ............ Aug. 28 10 Sept. 3 ........... Sept. 10, 12, 14. 1098 ............ Aug. 28 10 Sept. 1 ........... Sept. 4, 5. 1099 ............ Aug. 28 10 Sept. 5 ........... Sept. 9. 1100 ............ Aug. 28 10 Sept. 8 ........... Sept. 9, 10; Oct. 2, 31; Nov. 5, 7, 9. 1101 ............ Aug. 28 10 Sept. 10 .......... Sept. 15, 17, 19, 22; Oct. 30. 1242 ............ Sept. 7 10 Sept. 9 ........... Sept. 23, 24, 30. 1308 ............ Oct. 2 20 Oct. 5 ............ Oct. 3, 5, 7, 10, 15, 19, 20, 29, 30, 31; Nov. 4, 10. 1559 ............ Nov. 10 20 Nov. 12 .......... Nov. 10, 11, 12, 13, 16, 17, 18, 19, 20, 23, 24, 25, 30; Dec. 1, 10, 30; Jan. 4, 1937. 2078 ............ Mar. 24 25 Immediately ....... Mar. 26, 29, 31; Apr. 1, 3, 5, 6, 12, 13, 14, 15, 17, 19, 20, 21. -------------------------------------------------------------------------------------------------------------------- Referrals as to Bricklayers -------------------------------------------------------------------------------------------------------------------- Requisition Number of Date To report — Referrals and men referred number bricklayers -------------------------------------------------------------------------------------------------------------------- 1098 .......... Aug. 28 4 Sept. 1 ........... Sept. 4, 5. 1185 .......... Sept. 14 25 Oct. 1 ............ Oct. 14th, 2 men; 19th, 6; 20th, 1; 21st, 1; 22d 3; 24th, 1; 26th, 2; Nov. 5, 1; 9th, 1; 10th, 1; 14th, 1; 16th, 2; 17th, 2; 18th, 1. 1219 .......... Sept. 18 25 Sept. 24 .......... Sept. 22, 4 men; 23rd, 6; 24th, 1; 26th, 1; Oct. 1, 2; 8th, 3; 9th, 6; 13th, 3. 1559 .......... Nov. 10 20 Nov. 12 ........... Nov. 12th, 1 man; 18th, 2; 23rd, 1; 27th, 1; 30th, 3; Dec. 2, 1; 3rd, 2; 4th, 1; 7th, 2; 10th, 2; 14th, 1; 15th, 3. 1559 .......... Nov. 17 25 Nov. 19 ........... Dec. 15th, 2 men; 16th, 3; 17th, 4; 18th, 2; 21st, 12; 22d 2. 1715 .......... Dec. 11 3 Dec. 12 ........... None referred. 1716 .......... Dec. 11 50 Dec. 12 ........... Dec. 22d 1 man; 23rd, 1; 24th, 1; 28th, 21; 29th, 6; 30th, 2; 31st, 3; Jan. 4, 1937, 6 men; 6th, 3; 11th, 1; 12th, 3; 13th, 2; 14th, 2; 18th, 3; 19th, 4; 20th, 2; 21st, 1. 1937 1937 1878 .......... Jan. 20 25 Immediately ....... Jan. 22d 1 man; 23rd, 1; 25th, 1; 26th, 1; 28th, 2; 30th, 1; Feb. 3rd, 1; 5th, 3; 9th, 1; 11th, 1; 15th, 1; 17th, 1; 18th, 1; 23rd, 1; 25th, 2. -------------------------------------------------------------------------------------------------------------------- Referrals as to Plumbers -------------------------------------------------------------------------------------------------------------------- Requisition Number of No. Date To report — Referrals and men referred plumbers -------------------------------------------------------------------------------------------------------------------- 1185 ............ Sept. 14 10 Sept. 15 ........... Sept. 17th, 1 man; 19th, 1; 23d 1; 24th, 1; 25th, 2; 28th, 1; 30th, 1; Oct. 7th, 1; 8th, 1; 31st, 1; Nov. 2d 2; 5th, 1. 1233 ............ Sept. 21 10 Sept. 23 ........... Sept. 26, 1 man; Oct. 9th, 2; 12th, 1; 13th, 2; 14th, 2; 15th, 1; 19th, 1. --------------------------------------------------------------------------------------------------------------------The foregoing serves to illustrate the manner and method of referring workmen to plaintiff's project. They are typical of all referrals. A number of those who were referred failed to report. Some workmen reported promptly and were employed, but there was material and serious delay on the part of SES in referring a large number of workmen to the project. Plaintiff employed practically all who reported for work.
Included in the lists of referrals are names of workmen who were brought over from the foundation contract and also a number who were otherwise recruited locally by plaintiff, sent to the Employment Office and formally referred by the Employment Office to plaintiff's project.
12. The requisitions show that plaintiff called for 159 carpenters to December 31, 1936, and that 119 were referred to and employed by plaintiff on the instant project.
13. Plaintiff's pay roll during the period September 3 to December 31, 1936, shows the number of carpenters, brickmasons and cement finishers employed each week during the period as follows: 1936
-------------------------------------------------------------------------------------------- Period Carpenters Brickmasons Cement finishers -------------------------------------------------------------------------------------------- Sept. 3-Sept. 9............................... 52 1 1 Sept. 10-Sept. 15............................. 49 2 4 Sept. 17-Sept. 23............................. 43 2 0 Sept. 24-Sept. 30............................. 40 1 5 Oct. 1-Oct. 7................................. 57 0 9 Oct. 8-Oct. 14................................ 87 6 16 Oct. 15-Oct. 21............................... 87 24 11 Oct. 22-Oct. 28............................... 84 23 10 Oct. 29-Nov. 4................................ 81 22 11 Nov. 5-Nov. 11................................ 85 23 6 Nov. 12-Nov. 18............................... 90 27 12 Nov. 19-Nov. 25............................... 95 28 10 Nov. 26-Dec. 2................................ 95 32 13 Dec. 3-Dec. 9................................. 96 36 13 Dec. 10-Dec. 16............................... 95 56 13 Dec. 17-Dec. 23............................... 81 63 10 Dec. 24-Dec. 31............................... 82 85 9 -------------------------------------------------------------------------------------------- 14. September 21, 1936, plaintiff telegraphed H. A. Gray, contracting officer and Director of Housing at Washington, as follows:"Since August thirteenth [thirtieth], endeavored get proper skilled labor through US Employment Service. Progress of work unsatisfactory because necessary mechanics not furnished. Request release from labor provision requiring skilled labor from employment service or time extension to permit work to be completed with limited force of mechanics."
Plaintiff also wrote Gray November 5, 1936, urging action. In this letter plaintiff stated:
"Our shortage of skilled labor still continues and our requisitions are unfilled. Since you have not advised us that we are at liberty to secure workers at our discretion, it is assumed that it is your intention to make an extension of the contract time to adjust this condition.
"Your attention is further directed to the contract, Article 9, Delays and Damages, which states: * * *
"Our telegram served you with notice of the acts of the government which delayed this work, since the United States Employment Service is a Governmental Agency and our contract required us to secure workmen from that source. Therefore, we shall expect an adjustment of the contract time to cover this delay."
Gray as contracting officer advised plaintiff November 17, 1936, that relief from liquidated damages, if accrued, would be considered at the approach of termination of the contract time.
15. From the beginning of work on the project until the contracting officer on March 26, 1937, acted on plaintiff's request and released him from the labor requirements of art. 20, plaintiff constantly complained of lack of labor for carrying on the work, such complaints being made to V. D. Alden, project manager, to R. H. Krogstad, manager of SES, and to the Labor Commission of Oklahoma and to H. A. Gray, Director of Housing and contracting officer.
16. October 6, 1936, plaintiff advised the manager of SES by letter that the agency had not furnished his requirements in a satisfactory manner in order to carry on the work, and that he had advertised in local papers for men, and was enclosing a list of 10 men who reported as relief eligibles for assignment to the work. He also enclosed a list of names of 22 registered applicants and proposed them for assignment for work on plaintiff's requisitions; also a list of 38 names, with request that they be referred. Plaintiff also stated in the letter that he found an abundance of skilled labor to man the project, if the agency would cooperate in assigning them.
In reply the manager of SES on October 9th advised plaintiff as follows:
"With further reference to the list of names included in your letter of October 6, 1936, will advise I have discussed this matter with Mr. Richard H. Lawrence, Associate Director of this Service. Mr. Lawrence's decision is that we shall not make referrals from this list unless these individuals meet the requirements as set forth in the following points:
"No. 1. They must be bona fide residents of Oklahoma County for the past 6 months and of the State for the past year.
"No. 2. Their cards must be in the active file at the time referral is made.
"No. 3. They must satisfy the requirements of this office as to competency in the trades or crafts for which they are to be assigned.
"Elaborating on these points I might say that a good many of these men have been away from Oklahoma City long enough so they have lost their residency here; in other words they have established residency in some other town and State, although they might have been registered in this office for several years.
"Point No. 2 — Upon checking the cards of the men on the list you gave me I find a good majority of them are now in our inactive file, which means that the applicant has not contacted this office within the past 30 or 60 days. These men can make their cards active by contacting this office, at which time they will be reinterviewed.
"Point No. 3 — As these men contact our office they will be questioned as to their ability in the crafts for which you have them listed. If we feel they are competent and qualified to perform the work of that particular craft and they meet the other requirements, then and then only will they be referred. In this connection I might say I have checked quite a few of these cards and find the men showing very little record of employment, and in some cases none whatsoever, in the classifications at which you have them listed. I shall go over each one of the names in your list, case by case, and consider each of these individually.
"It is the duty of the Employment Service to refer competent qualified mechanics in their respective classifications, and in order to comply with this duty it will be necessary to proceed as above."
October 12, 1936, plaintiff advised SES that he was the judge of the competency of the workmen in the skilled crafts and that he had placed men on the payrolls and that the agency would be expected to make the proper assignment.
By letter of October 12, 1936, the manager of SES advised plaintiff as follows:
"This will acknowledge receipt of your letter under date of October 12th in which you request the issuance of assignment slips USES 325 on the list of mechanics furnished by you in your letter of October 6th; due to the fact that you have already hired these gentlemen and have entered their names on your payroll.
"I regret very much that we will be unable to comply with your request until such time as these men have been interviewed by this office to determine their eligibility and qualifications and their ability to do the work under the classifications on your WPA 401 requisitions.
"It is true that the contractor is the sole and final judge as to the fitness of all men whom he hires on a project, but at the same time the Employment Service is charged with the responsibility of referring to the employers men who are qualified under the classifications for which they are registered. Therefore, as I have stated above it will be necessary for us to reinterview these applicants to determine their qualifications before referring them to you for your consideration, due to the fact that in many instances the men included in the list of names submitted by you on October 6th have occupational classifications on our records entirely different from those called for on your requisitions."
November 27, 1936, plaintiff wired J. B. French, Principal Engineer, Inspection Division, Public Works Administration, Washington, as follows:
"Twenty bricklayers requisitioned November tenth, twenty-five November seventeenth. Only four referred. Brick work progress retarded. Am informed workmen going to employment office for referral this job sent to other jobs. Request permission to employ men anywhere available. Request immediate reply in order to run ad in Sunday papers."
In reply, on November 30, 1936, plaintiff received the following telegram from the Director of Inspection Division at Washington:
"Washington office of National Reemployment Service advise that they will wire request to Oklahoma City Office to clear bricklayers to you immediately. Advise us of outcome."
17. December 11, 1936, the manager of SES wrote plaintiff as follows:
"This will acknowledge receipt of your requisition dated December 11th calling for various mechanics of the skilled classifications. Included therein is an item calling for 50 bricklayers to report for work at 7:00 a. m., December 12, 1936.
"We have on file at this time your requisition dated November 10th (our requisition No. OSES 1550) calling for 20 bricklayers. On this requisition our records indicate we have referred 16 bricklayers. We also have in our files your requisition dated November 17th calling for 25 bricklayers. Our records indicate that at this writing we have not made any referrals on this requisition.
"This letter is to advise that we have made a diligent search of the City, County, and State for bricklayers, to fill these requisitions, and have called upon all public employment offices in the State for any men available. However, due to conditions beyond our control, we are unable to get competent mechanics to report, due to the fact that they are not willing to submit to a preemployment physical examination.
"This letter is your official notification that we are unable to supply bricklayers as called for in your requisitions from within the boundaries of the State of Oklahoma."
18. December 12, 1936, plaintiff wrote the project manager that he was unable to obtain workmen as needed in order to carry on the work. He also requested a waiver of the 130 hour per month limitation and permission to substitute a 40 hour per week limitation on the crafts affected.
December 18, 1936, the Director, Inspection Division, at Washington, acting for the contracting officer, granted plaintiff permission to work bricklayers in excess of 130 hours per month, but not to exceed 8 hours per day and 40 hours per week, for the period expiring February 16, 1937, and without waiving the right to assess liquidated damages.
January 14, 1937, upon plaintiff's request, the Director amended the December 18 letter so as to include crane operators and welders.
19. January 7, 1936, the Oklahoma City Building Trades Council of the American Federation of Labor wrote the following letter to W. A. Pat Murphy, Labor Commissioner of the State of Oklahoma:
"This is to notify you that the Oklahoma City Building Trades Council in regular meeting October 7, 1936, officially declared a state of strike and lock-out existing on the Will Rogers Court Housing Project #H 8101, Leo Sanders, Contractor, Oklahoma City, Oklahoma, but was held in abeyance at the request of Mr. R. C. Kirkpatrick, Chief Mediator on Labor Relations Public Works Administration, pending negotiations to attempt settlement of the controversy by his department.
"On January 6, 1937, the Oklahoma City Building Trades Council in regular meeting withdrew the hold order on this strike and lock-out and requested that all departments of the Government be notified of this condition existing on Project #H 8101 with the request of [that] the law pertaining to Strikes and Lock-outs be observed.
"We feel that your department will give the Building Trades Council your cooperation in this matter."
On the same date, Murphy, who was also the Director of the Oklahoma State Employment Service, wrote the following letter:
" To All Managers,
" Oklahoma State Employment Service.
"Enclosed herewith is copy of a letter from A. E. Edwards, Acting Secretary of the Oklahoma City Building Trades Council, which is self-explanatory.
"In all future dealing of the Oklahoma State Employment Service with the Will Rogers Court Housing Project #H 8101, Leo Sanders, Contractor, Oklahoma City, Oklahoma, you will be governed by the rules of the Employment Service pertaining to strikes and lock-outs."
20. This notice was received by SES on January 9, 1937. Thereupon SES invoked the terms of the Wagner-Peyser Act, 48 Stat. 113, 29 U.S.C.A. § 49 et seq., and section 112 of the Rules and Regulations issued pursuant to said Act. Under said regulations, in the case of a strike, lock-out, or other labor trouble, the Employment Service could not recruit from its files, or personally contract by mail, telegraph, or other means, individuals to be referred to a Public Works or a private project. Any individual desiring employment on such a project had to appear at the Employment Office voluntarily and ask to be referred to that project. Thereupon the Employment Office was required to inform the individual verbally and in writing of the existence of such a strike, lock-out, or other labor trouble, and if the individual would sign a memorandum to the effect that he had been so informed, he was referred to the job and the referral would be marked "nominated by contractor."
After January 9, 1937, SES, in compliance with the Wagner-Peyser Act and the Regulations issued pursuant thereto, discontinued the recruiting of men for plaintiff's project, but referred all men who signed the notice of lockout. The Employment Agency did not otherwise interfere in any manner with plaintiff's obtaining such men as he needed on the project. But the defendant refused to relieve plaintiff from the requirements of art. 20 of the contract.
21. January 23, 1937, Alden, project engineer, wrote plaintiff as follows:
"A survey of the actual progress made in comparison with scheduled progress as shown on your Monthly Progress Schedule P. W. Form I-III H, Revised, indicate that progress since November 1, 1936, has not been up to schedule.
"At present actual progress is shown to be approximately 30%, scheduled progress approximately 50% and contract time elapsed 66%. Thirty-eight items of work show as not having been started on schedule and nine items of work started show as not completed on schedule.
"We find it necessary to warn you that this condition indicates the work is not progressing with sufficient speed to complete the project within the contract time.
"You are urged to clear up all outstanding approvals and tests, delays in material deliveries, and to organize your forces so that the delay occasioned in the past may be overcome, and progress be brought up to schedule."
January 28, 1937, plaintiff replied as follows:
"Your letter of January 23rd regarding progress has been received. I am greatly surprised that you would write such a letter when we have repeatedly called to your attention the attitude of the Employment Office and the delay occasioned by them regarding the referral of mechanics requisitioned by us for our work on the above Project. For the past four months, we have called to your attention the fact that the work was being held up and we requested that we be released from the necessity of securing our workmen through the Employment office. No action has been taken by you or your superiors in this matter.
"You are further informed, in regard to outstanding approvals, that the right of approval is vested in the Housing Division and not in ourselves. We have submitted all necessary materials for approval to the Housing Division. The fact that such approvals have not been secured is beyond my control.
"Your suggestion that the force be organized to overcome the delay that has been occasioned in the past is not practical. The work is progressing as rapidly as conditions permit and will be completed at the earliest possible date."
22. March 1, 1937, plaintiff wrote the contracting officer, H. A. Gray, Director of Housing, as follows:
"You are advised that the referral agency is continuing to refuse to make referrals of workmen to the above project for mechanics as requested.
"This practice has continued for several months. The State Employment Office has refused to cooperate and the progress of the job has been greatly damaged. Approximately three weeks ago, we requisitioned painters. We have already sent you a copy of a letter from the Employment office stating that, due to the alleged strike, they could not make referrals from their active files to our Project but would assign men who went to the Employment office. We sent qualified workmen to them, residents of this City who were registered in the Employment office, after they had failed to send workmen. The Employment Office then refused to refer these men to the project, stating there were plenty of painters on relief rolls if a way could be found to make the referrals.
"The painters needed have not yet been referred. I enclose herewith affidavit of three men, made in the presence of a Notary Public, concerning this matter.
"In conformity with the contract, you are again notified that for several months we have requested you to release us from the provision of the contract requiring assignment of men from the Employment Service. You have failed to do this and in strict accordance with the contract between us, we herewith renew our notice to you that we shall expect extension of time and damages to compensate us for the delay which has been caused by the referral agency. The extent of damages and delay will be computed at the end of the contract, in conformity with the facts and the record."
Sometime in March 1937 the Employment Service advised the Housing Division that it was unable to procure workmen for the project, and on March 26, 1937, the contracting officer advised plaintiff that he might approve employment of qualified mechanics as "highly skilled workers," without recourse to the Employment Service, in sufficient numbers to man the project to successful completion. From March 26, 1937, plaintiff was allowed to and did obtain skilled and semiskilled labor from any source available without applying to the Employment Service. He immediately and in the following months greatly increased his force of skilled workmen.
23. June 28, 1937, plaintiff, in response to defendant's request, submitted a bid for certain extra work consisting of the installation of a medium gas pressure system in connection with the project. This bid was accepted, and on August 30, 1937, change order No. 14 was issued by the defendant and accepted by plaintiff.
The bid set forth a detailed estimate of the work to be performed including the services of a foreman for outside work and engineering services, and also included 10% overhead and 10% profit, the total amount being $6,267.75.
The change order contains the following statement:
"Now, therefore, an equitable adjustment of the contract time for this change is hereby established, as follows:
"The contract price is increased Six Thousand Two Hundred Sixty-seven and 75/100 Dollars ($6,267.75); and
"The contract time is extended Sixty (60) calendar days; provided, however, that the consent of each of your sureties shall be obtained and filed with the Contracting Officer before this Change Order shall become binding insofar as the extention of time is concerned.
* * * * * *
"This change order expressly satisfies any and all claims against the United States of America of whatsoever nature or purpose incidental to or as a consequence of the change herein described."
The change order was the subject of the negotiation. There is no evidence that any part of the additional time of sixty days allowed therein in connection with the additional work had any relation to or was on account of any delay in connection with performance of the original contract work. The surety on plaintiff's bond consented in writing to the change order and stated, in such consent, that the period allowed would operate "so as to require that the time for completion of all work embraced in said contract shall be extended 60 days."
24. July 20, 1937, the Director of the Inspection Division wrote plaintiff as follows:
"This will acknowledge receipt of your letter dated July 13, which supplements your previous report of labor shortage and requests establishment of the 40-hour week for the following workers:
Electric Welders Bricklayers Machine Operators Lathers Carpenters Painters Plasterers Plumbers Electricians
"Due to the existence of special and unusual circumstances, it will be found impracticable to require adherence to the 130-hour limitation of your contract and permission is hereby given to work the above trades on a 40-hour week basis not to exceed eight hours per day.
"This relaxation of hours is for a definite period expiring August 31, 1937, and is subject to all conditions of our former approval of December 18, 1936."
25. Plaintiff completed the contract September 4, 1937, 73 calendar days after expiration of the contract time as extended by change orders. The contracting officer, who then was the Administrator of U.S. Housing, on July 22, 1938, made findings of fact in which he determined that the Employment Service was dilatory in referring skilled workmen to plaintiff on his requisitions and that the delay in carrying on and completing the work was beyond plaintiff's control.
Pursuant to these findings payment was made to plaintiff of the balance due under the contract and no liquidated damages were assessed against plaintiff by reason of the delay of 73 days.
26. Soon after receipt of these findings plaintiff filed a claim in the sum of $48,572.61 for damages alleged to have been sustained by reason of the failure of defendant to furnish an adequate supply of labor under art. 20 of the contract for 133 days' delay from April 24, 1937, the original completion date, to September 4, 1937, when the project was accepted, as follows:
Supervisory pay-roll expense ..................... $29,813.88 Rental on equipment for the idle time ............ 11,724.91 Interest on deferred payments .................... 6,634.82 Field office expense ............................. 399.00 ---------- $48,572.61
27. The last two items are not now claimed. Plaintiff incurred during the period of 133 days from April 24 to September 4, 1937, and he now claims $28,995.88 for supervisory pay-roll expenditures, including workmen's compensation, public liability and unemployment insurance and Social Security taxes, after deducting such expenses with respect to extra work under change order 14 and a sewer lift station covered by a separate contract. The other item claimed is equipment rental of $11,724.91, which, for a period of 133 days, is reasonable. These two amounts total $40,720.79.
28. For the period of 73 days from June 23, 1937, the contract time for completion as extended under an extra work change order, to September 4, 1937, the date of completion, such supervisory and other expenses were $15,914.73, and the reasonable rental value of equipment used on the job was $6,435.68. These amounts total $22,350.41.
29. Plaintiff's claim for reimbursement for supervisory pay roll and other expenses above mentioned and for compensation for rental of equipment was referred by the Comptroller General February 2, 1940, to the Administrator of the U.S. Housing Authority for consideration. The Comptroller concurred in the administrator's letter of July 22, 1938, in which he made a finding that plaintiff should be relieved of liquidated damages for the period of delay listed in the certificate of completion — namely, 73 days.
The Administrator, Nathan Straus, in a letter to the Comptroller of September 10, 1940, made findings, after an examination of plaintiff's records and the evidence submitted, that from April 24 to September 4, 1937 (a period of 133 days), plaintiff expended $28,995.88 to cover supervisory pay roll, workmen's compensation, public liability and unemployment insurance, and Social Security taxes; that for such a period the reasonable rental value on major items of equipment for the necessary standby and useful service time was $11,725; that interest, computed at 6% on deferred payments 8 to 10, inclusive, was $6,634.82, and that plaintiff actually paid interest of $3,295.57 on money borrowed during that period and used in completion of the work.
The Administrator found, however, that if plaintiff's claim could be allowed and paid administratively, he was only entitled to reimbursement and compensation for 73 days (June 23 to September 4, 1937), or 73/133ds of the supervisory payroll expenses and equipment rental, or a total sum of $22,350.41. The Administrator disallowed the claim for interest.
The Administrator's findings and conclusions in his letters of July 22, 1938, and May 28, 1940, are in evidence as plaintiff's exhibits 63 and 65, which are made a part hereof by reference.
30. The Employment Service delayed unreasonably in referring skilled workmen to the project. As to a large number of skilled workmen, the time elapsing between requisition and referral of workmen was at times 30 to 90 days, and at times greater. On a number of occasions practically no workmen at all were referred in response to requisitions. This delay was beyond the control and without the fault of plaintiff. The effect of this situation disorganized the work and was the cause of 73-days' delay in completion of the work. The extra costs and damages to plaintiff by reason of this delay of 73 days were $22,350.41, as set forth in finding 28.
The question presented is whether the defendant unreasonably delayed plaintiff in the completion of the contract of July 9, 1936, by failing to exercise proper diligence and to furnish with reasonable promptness an adequate number of skilled and semi-skilled workmen, and in declining for an unreasonable length of time to release plaintiff from the requirements of art. 20 of the contract (finding 4) on account of the failure or inability of the Employment Service to furnish or refer sufficient workmen to properly man the job.
We think defendant did unreasonably delay plaintiff. The facts established by the evidence show that plaintiff was seriously delayed in the completion of the contract for want of an adequate number of skilled workmen and that defendant delayed unreasonably in obtaining information as to workmen available locally for referral to the job from relief and unemployed rolls. A very large number of unemployed skilled workmen were available locally and in surrounding counties in Oklahoma, many were on the relief rolls, and others were on the rolls of the twenty-seven employment service offices in Oklahoma. If the workmen who were available for referral had been promptly referred by the employment service upon plaintiff's requisitions, as the contract contemplated would be done, plaintiff would have been able to complete the contract work by or before June 23, 1937, the expiration date of the contract time as extended by an extra work order.
The facts also show that defendant delayed unreasonably in acting upon and granting plaintiff's protests and requests made continuously from September 21, 1936, that such workmen be furnished or that he be released from the requirements of art. 20 in order that he might directly obtain and employ such workmen who were available and could have been obtained in large numbers locally and throughout the State of Oklahoma. When, on March 26, 1937, defendant waived the employment service requirement of the contract plaintiff immediately and continuously thereafter greatly increased his force of skilled workmen in substantial accord with the requirements of the work, but due to the delay which had occurred as a result of his inability to obtain such workmen through the employment service he was unable to complete the work on time although he made every effort to do so. There was a delay of 73 days when the work was completed on September 7, 1937. This delay was due to the fault of the defendant and was without the fault or negligence of plaintiff.
Except for the delay caused by the abovementioned failures of defendant plaintiff would have been able to complete the work on or before the expiration date of the contract as extended. Since the delay was due to the failure of defendant to fulfill the duties required of it under art. 20 of the contract there was a breach thereof, and plaintiff is entitled to recover the extra costs and damages amounting to $22,350.41 occasioned by such delay (finding 28).
Plaintiff contends that if the Employment Service had been diligent and if the available skilled workmen had been referred with reasonable promptness or if, in the circumstances, he had been relieved at the proper time of the requirement that he obtain such workmen through the employment service office, he could and would have completed the work, including the amount of work required under change order 14, within the original contract time of 270 days and substantially in accordance with his original progress schedule. This is probably true, as the Administrator of the U.S. Housing Authority concluded from the evidence before him, but in the change order given April 10, 1937, and formally issued August 30, 1937, the parties agreed upon a new contract period for completion of 330 days which expired June 23, 1937. The change order calling for additional work and allowing 60 days additional time, by reason thereof, cannot be regarded in whole or in part as merely an extension of time by the defendant on account of delay in connection with the original contract work, if it had been work such as would not operate to relieve the Government of liability for damages for breach of its contract by causing the delay for which such an extension is granted. Cf. Seeds Derham v. United States, 92 Ct.Cl. 97. Under the terms of the order which was accepted by plaintiff and his sureties in writing, the additional 60 days agreed upon became a part of the original contract period of 270 days for completion for any and all purposes. The change order was made under and fulfilled the requirements of the equitable adjustment provisions of the contract. It was without restriction or qualification and the additional time applied to the completion of the original as well as to the additional work specified therein. Both parties became entitled to the full benefit of the new contract period of 330 days and either party could point to it in defense of a claim by the other party for damages for delay. Blair v. United States, 321 U.S. 730, 734, 64 S.Ct. 820, 88 L.Ed. 1039.
Counsel for defendant contend, in addition to the contention that the Employment Service referred to in art. 20 acted throughout with reasonable diligence, promptness and efficiency, that plaintiff's delay in completing the superstructure contract was primarily caused by an existing strike of union workmen, formal notice of which was served on defendant's employment service January 9, 1937, and that defendant was not responsible in damages for such delay. There was a strike when certain of the union workmen who had been obtained through the unions and employed by plaintiff on the foundation contract quit work for the reason stated in the findings and the unions refused to furnish plaintiff skilled union workmen on the contract in suit, but under the contract plaintiff was entitled to use nonunion skilled workmen and he was required to obtain such workmen through the employment service unless and until he was released from that requirement. The plaintiff, although authorized by art. 20 to do so, was not required by that article to obtain the necessary skilled and semi-skilled workmen through or from the unions, but could secure them through the employment service. He endeavored to do so without success. However, upon receipt on January 9, 1937, of formal notice from the Oklahoma Building Trades Council that a strike existed on the project the Employment Service ceased and declined further to select and refer workmen on plaintiff's requisitions unless such workmen voluntarily came to the employment service office, asked to be referred, and signed a statement that he had been advised of the existence of the strike. The Employment Service took this action under the Wagner-Peyser Act, 48 Stat. 113. As a result of this situation plaintiff was able to obtain only a very few skilled workmen through the employment service office, due evidently to the fact that available nonunion workmen did not wish to sign a document which in effect amounted to a request that they be employed on a project on which a strike existed. Except for the requirement of art. 20 and the conditions imposed by the employment service on referrals, plaintiff on and after January 9, 1937, could have obtained and employed an adequate number of workmen to carry on the work, and he did so when, on March 26, 1937, defendant released him from the requirements of art. 20 of the contract. Defendant delayed unreasonably in taking this action.
We think it was intended that neither the Wagner-Peyser Act nor art. 20 of the contract should operate, under such circumstances as are here presented, to hamper a contractor in employing on a work-relief project workers who were without jobs and who were willing to work thereon if employed directly by the contractor. That plaintiff could have obtained such workmen is shown by the fact that upon being released from the requirements of art. 20, that he obtain skilled workmen through the employment service, he immediately increased the number of workmen by 114 men and soon thereafter the number of workmen were increased by 224 men. All the additional workmen, except a few bricklayers (all of the 85 houses called for by the contract were of brick construction), were obtained from Oklahoma City and surrounding counties as a result of plaintiff's advertisements in local papers for skilled workers in various classes.
There is in the record reference to some bad weather in February 1937 and to a controversy from December 28, 1936 to March 13, 1937, with reference to a drawing for installation of boilers and steam lines. The boilers were promptly installed by plaintiff and no change was necessary since the drawing as submitted was approved March 13, 1937. The evidence satisfactorily shows that completion of the contract work as a whole was not delayed either by bad weather or by the boiler controversy.
Plaintiff is entitled to recover $22,350.41 and judgment will be entered accordingly. It is so ordered.
WHALEY, Chief Justice, and MADDEN and WHITAKER, Judges, concur.
JONES, Judge, took no part in the decision of this case.