1. The Government construction contract here involved imposed no
duty on the Government to take affirmative steps to prevent a
contractor from unreasonably delaying or interfering with the
attempt of another contractor to complete construction in advance
of the time specified, and the Government was not liable for
damages for such delay. P.
321 U. S. 733
The fact that, after the execution of the contract, the
contractor gave notice to all other parties of his intention to
finish ahead of schedule does not alter the obligation of the
2. An award of damages by the Court of Claims against the
Government on items which were the subject of "disputes concerning
questions arising under this contract" -- though the actions of the
Government agents upon which the claims were based be assumed to
have been unauthorized, unreasonable and arbitrary -- held
erroneous in view of the failure of the contractor to appeal to the
departmental head as required by Article 15 of the contract, it not
appearing that the appeal procedure provided was in fact
inadequate. P. 321 U. S.
3. The Court of Claims properly allowed a claim of the
contractor, to the use of a subcontractor, for extra labor costs
incurred by the subcontractor under conditions erroneously imposed
by the Government superintendent. P. 321 U. S.
99 Ct.Cls. 71 reversed in part.
Certiorari, 320 U.S. 720, to review a judgment for the plaintiff
in a suit against the Government upon a contract.
Page 321 U. S. 731
MR. JUSTICE MURPHY delivered the opinion of the Court.
Respondent, a general contractor of long experience in
constructing federal buildings, was awarded a contract by the
United States to construct certain buildings at the Veterans'
Administration Facility at Roanoke, Virginia. After completing the
contract, respondent filed a claim with the Veterans'
Administration for certain expenses which he claimed were caused by
the delay of a mechanical contractor and for other expenses alleged
to have been imposed on him by the arbitrary, capricious, and
unfair conduct of Government agents at the worksite. The claim was
rejected, and this suit in the Court of Claims followed. Judgment
in the sum of $130,911.08 was awarded by that court to respondent,
99 Ct.Cls. 71. We granted certiorari because of important questions
of interpretation of the Government construction contract used in
this case. [Footnote 1
Respondent's contract provided that the construction work was to
be completed within 420 days from the receipt of notice to proceed.
Concurrently, one R. J. Redmon was awarded a mechanical contract
] by the United
Page 321 U. S. 732
States to perform the plumbing, heating, and electrical work in
the buildings to be constructed by respondent. Redmon's work was to
be commenced promptly after receipt of notice to proceed, and was
to be completed at a date not later than that provided in
Respondent proceeded promptly with the construction work. He
planned to complete the work within 314 days, instead of the 420
days allowed him by the contract. However, no representative of
Redmon reported at the worksite until nearly three months after he
received notice to proceed. The contracting officer had previously
made many urgent demands that Redmon proceed with his work, and had
advised him that the progress of respondent's construction work was
being delayed by his failure to start work; Redmon had also been
threatened with termination of his contract. He finally started
work, but made slow progress. At no time did Redmon have adequate
equipment or a sufficient number of men on the job properly to
carry on the work called for by his contract, nor was he
financially able at this time to complete his work. The Court of
Claims found that reasonable inquiry by the Government would have
disclosed these facts, but that no such inquiry was made because of
false statements and reports made to the contracting officer by the
Government agents in charge of the work at the site.
Several months later, Redmon advised the contracting officer
that he was unable to proceed with his contract. Redmon's surety
secured a substitute, and every effort was made to overcome the
delay. As a result, respondent was able to finish his construction
work within the required 420 days, but not within the 314 days as
he had planned. The court below found that respondent was
unreasonably delayed for a period of three and one-half months due
to the failure of the United States promptly to terminate
Page 321 U. S. 733
Redmon's right to proceed, that the cost of the delay to
respondent was $51,249.52, and that the United States was liable
We are of the opinion, however, that nothing in the Government
construction contract used in this case imposed an obligation or
duty on the Government to aid respondent in completing his contract
prior to the stipulated completion date, and that it was error for
the Court of Claims to award damages to respondent based upon a
breach of this nonexistent obligation.
If the parties did intend to impose such an obligation or duty
on the Government, they failed to embody that intention expressly
in the contract. Article 13 of the contract merely obligates the
contractor to cooperate with other Government contractors and to
refrain from committing or permitting any act which would delay
such other contractors. Article 9 imposes liquidated damages upon
the contractor for delay in completing his work unless due to such
unforeseeable causes as "acts of the Government." Nowhere is there
spelled out any duty on the Government to take affirmative steps to
prevent a contractor from unreasonably delaying or interfering with
the attempt of another contractor to finish ahead of his
Nor is there anything in the context of the contract to lead us
to believe that the parties meant more than they said, or that the
contract implies something that was not expressed. The Government
and respondent covenanted that the construction work would be
completed within 420 days; Redmon's contract was grounded on this
same time estimate. They cannot be said to have executed these
contracts in contemplation of the then unrevealed intention of
respondent to complete his work three and one-half months early.
The fact that respondent subsequently gave notice of this intention
to all the other parties concerned
Page 321 U. S. 734
could not give rise to a new obligation on the Government to
compel accelerated performance from Redmon.
Respondent had the undoubted right to finish his construction
work in less time than the stipulated 420 days, but he could not be
forced to do so under the terms of the contract. To hold that he
can exact damages from the Government for failing to cooperate
fully in changing the contract by shortening the time provisions
would be to imply a grossly unequal obligation. We cannot sanction
such liability without more explicit language in the contract.
Compare Crook Co. v. United States, 270 U. S.
; United States v. Rice, 317 U. S.
The Court of Claims, in addition to awarding damages for the
Government's delay in terminating Redmon's contract, awarded
respondent $79,661.56 damages for extra labor and materials, excess
wages and miscellaneous costs found to be the result of
unauthorized acts, rulings, and instructions of the Government
superintendent and his assistant. The court also found that these
acts, rulings, and instructions were unreasonable, and in many
instances arbitrary, capricious, and so grossly erroneous as to
imply bad faith.
Assuming, without deciding, that the actions complained of were
unauthorized, unreasonable, and arbitrary, we cannot conclude that
recovery of the resulting damages was proper in this case. Article
15 of the contract in suit provides that all disputes
"concerning questions arising under this contract shall be
decided by the contracting officer or his duly authorized
representative, subject to written appeal by the contractor within
30 days to the head of the department concerned or his duly
authorized representative, whose decision shall be final and
conclusive upon the parties thereto as to such questions."
Page 321 U. S. 735
of the items on which the recovery of $79,661.56 was based were
the subject of "disputes concerning questions arising under this
contract." Respondent appealed some of the decisions or
instructions of the Government superintendent to the contracting
officer, which resulted in at least one ruling favorable to
respondent. [Footnote 3
] As to
the adverse rulings, however, respondent made no further appeal to
the head of the appropriate department or his authorized
representative. Moreover, the remaining items which were the
subject of sharp dispute between respondent and the superintendent
were not even appealed by respondent to the contracting officer.
And where the contracting officer could be said to have acquiesced
in the superintendent's rulings, no attempt was made to appeal
further to the departmental head.
Respondent has thus chosen not to follow "the only avenue for
relief," United States v. Callahan Walker Const. Co.,
317 U. S. 56
317 U. S. 61
available for the settlement of disputes concerning questions
arising under this contract. In Article 15, the parties clearly set
forth an administrative procedure for respondent to follow. Such a
procedure provided a complete and reasonable means of correcting
the abuses alleged to exist in this case. Arbitrary rulings and
actions of subordinate officers are often adjusted most easily and
satisfactorily by their superiors. Furthermore, Article 15 provided
the Government with an opportunity to mitigate or avoid damages by
correcting errors or excesses of its subordinate officers. Having
accepted and agreed to these provisions, respondent was not free to
disregard them without due cause, accumulate large damages, and
then sue for recovery in the Court of Claims. Nor can the
Government be so easily deprived of the benefits of the
administrative machinery it has created to adjudicate disputes and
to avoid large damage claims.
Page 321 U. S. 736
The Court of Claims sought to justify respondent's failure to
pursue the procedure outlined in Article 15. It found that the
superintendent and his assistant acted so unreasonably as to make
it impossible for respondent to invoke the appeal procedure without
subjecting himself to punishment and reprisals. It also found that
respondent reasonably concluded that "the best and most practical
way of handling the matter of protests" was informally, through
conferences with the contracting officer in Washington; the latter,
however, was often unable or unwilling to help him. Thus, the court
ruled that respondent was excused from following the procedure set
forth in the contract. We cannot agree. Even if the conduct of the
Government superintendent or contracting officer, or their
assistants, was so flagrantly unreasonable or so grossly erroneous
as to imply bad faith, the appeal provisions of the contract must
be exhausted before relief is sought in the courts. There was no
finding or evidence that appeal to the head of the appropriate
department or to his authorized representative would have been
futile or prejudicial. Compare United States v. Smith,
256 U. S. 11
256 U. S. 16
Ripley v. United States, 223 U. S. 695
223 U. S.
. We cannot on this record attribute to the
departmental head the alleged unreasonable attitude of his
subordinates. Nor can we assume that the departmental head would
have adopted an arbitrary attitude or refused to grant respondent
the relief to which he may have been entitled. Moreover, nothing in
the record suggests that he could not effectively supervise his
subordinates or provide full and prompt relief. Thus, absent a
valid excuse for not appealing the disputed items to the
departmental head pursuant to Article 15, respondent cannot assert
a claim for damages in the Court of Claims. If it were shown that
the appeal procedure provided in the contract was in fact
inadequate for the correction of the alleged unreasonable attitude
of the subordinate Government officials, we would have quite a
Page 321 U. S. 737
different case. But here we must insist not that respondent turn
square corners, but that he exhaust the ample remedies agreed
Included in the $79,661.56 award of miscellaneous damages was
one item of $9,730.27 on a claim to the use of the Roanoke Marble
& Granite Company, Inc., a subcontractor of respondent who
furnished the materials and performed the labor necessary to
install the title, terrazzo, marble, and soapstone work called for
in respondent's contract with the Government. This award was based
upon extra labor costs incurred under conditions erroneously
exacted by the Government superintendent. Respondent appealed this
matter to the contracting officer, who finally rendered a decision
in favor of respondent and the subcontractor. The Government has
not reimbursed either respondent or the subcontractor for these
excess labor costs; nor has respondent paid the subcontractor for
such costs. The court below made no finding, and the subcontract as
introduced in the record does not expressly indicate, that
respondent was liable to the subcontractor for the acts of the
Government upon which the claim was based.
Clearly the subcontractor could not recover this claim in a suit
against the United States, for there was no express or implied
contract between him and the Government. Merritt v. United
States, 267 U. S. 338
it does not follow that respondent is barred from suing for this
amount. Respondent was the only person legally bound to perform his
contract with the Government, and he had the undoubted right to
recover from the Government the contract price for the title,
terrazzo, marble, and soapstone work whether that work was
performed personally or through another. This necessarily implies
the right to recover extra costs and services wrongfully demanded
of respondent under the contract, regardless of whether such
Page 321 U. S. 738
costs were incurred or such services were performed personally
or through a subcontractor. Respondent's contract with the
Government is thus sufficient to sustain an action for extra costs
wrongfully demanded under that contract. Hunt v. United
States, 257 U. S. 125
The decision of the Court of Claims is reversed as to all items
except the claim of $9,730.27. We affirm the judgment as to the
The form of Government contract here involved was "U.S.
Government Form P.W.A. 51," the critical provisions of which are
substantially the same as those in the standard form of Government
The terms and conditions of both respondent's and Redmon's
contracts were identical, differing only in the description of the
work to be performed.
See 321 U. S.
MR. JUSTICE FRANKFURTER, dissenting in part.
Those dealing with the Government must no doubt turn square
corners. While agents for private principals may waive or modify
provisions in contracts which circumstances have rendered harsh,
provisions in government contracts cannot be so alleviated. But, in
order to enforce the terms of a government contract, courts must
first construe them. And there is neither law nor policy that
requires that courts, in construing the terms of a government
contract, should turn squarer corners than if the same terms were
contained in a contract between private parties.
"A government contract should be interpreted as are contracts
between individuals -- with a view to ascertaining the intention of
the parties and to give it effect accordingly, if that can be done
consistently with the terms of the instrument."
Hollerbach v. United States, 233 U.
, 233 U. S.
-172. Like all other writings that do not have the
precision of mathematical terms, government contracts have
interstices that secrete relevant implications. Neither a statute
which provides that contracts shall be reduced to writing, nor the
parol evidence rule "precludes reliance upon a warranty implied by
law." United States v. Spearin, 248 U.
, 248 U. S. 138
Unless the terms of a contract are so explicit as to preclude it,
the presupposition of fair dealing surely must underlie a
government, as well as a private, contract. Ripley v.
Page 321 U. S. 739
States, 223 U. S. 695
223 U. S.
-702; United States v. Smith, 256 U. S.
, 256 U. S.
Accordingly, provisions in a government contract defining
methods for settling controversies by appeal to the contracting
branch of the Government presuppose effective resort to such
methods of settling questions that arise in carrying out a contract
-- they presuppose that administrative remedies as a condition to
judicial relief are not rendered futile and nugatory. This does
not, of course, question the good faith of the head of the
Veterans' Administration. But, where the man on the spot, in his
daily relations with the contractor, shows the kind of arbitrary
attitude found by the Court of Claims, he cannot be effectively
supervised by the head of a department. In any event, the burden of
incurring the subordinate's future hostility by appeals to the head
of a department should not be cast on the contractor. The findings
of the Court of Claims in this case can only mean that it would
have been wholly futile, and worse than futile, to invoke the
explicit provisions of the contract for resort to administrative
relief. Therefore, as a reciprocal duty of the Government, the
contract brings into operation the implied warranty that those who
have in effective keeping the administrative machinery for settling
controversies will not prevent its utilization for all practical
The Court of Claims awarded respondent $79,661.56 to compensate
for losses and increased costs resulting from the unreasonable and
improper requirements imposed upon the contractor by the
Government's superintendent of construction and his assistant. The
circumstances surrounding the various items which go to make up
this sum differ in details, but the basis on which the Court of
Claims found for the contractor is the same.
The findings of fact of the court below tell a story of
arbitrary impositions. From the outset, the superintending
Page 321 U. S. 740
government officers required the contractor "to do things
admittedly not required of him under the contract on threat of
reprisals for refusal." These were not empty threats. The evidence
shows that an unauthorized and unreasonable order to erect outside
scaffolding for laying bricks was enforced by rejecting brickwork
which was not precisely uniform to a maximum of one-sixteenth of an
inch by measurement, and exacting of plaintiff mortar joints that
did not vary more than one-eighth of an inch by measurement. That
these rejections and exactions were willful and oppressive became
clear when all objections ceased as soon as the contractor decided
to comply and erect the outside scaffolds. This is but one
illustration of what was apparently a systematic practice of
unjustified demands and vexations.
The Court of Claims found that the superintendent and his
"resented plaintiff's making protest to the contracting officer,
thereby rendering it impossible for plaintiff effectively to
protest in writing in each instance to the contracting officer
through the defendant's officer at the site of the work. . . . The
contracting officer in those cases involving unreasonable and
arbitrary acts and instructions of the officers at the site of the
work stated to plaintiff that he understood and appreciated the
troubles and difficulties under which plaintiff was having to
perform the work, but there was practically nothing he could do
about it, and that plaintiff should keep him informed, but that
plaintiff 'would just have to do the best he could to get along'
with the officers and inspectors at the site of the work, to the
end that the work be completed as soon as possible."
If there is substantial evidence supporting these findings, this
Court's power of review is confined to questions of law. 53 Stat.
752, 28 U.S.C. § 288.
For all but one item, there can be no doubt that the evidence is
adequate and the award in accordance with
Page 321 U. S. 741
law. The contractor was awarded $107.50 for the extra cost of
temperature steel used by order of the superintendent of
construction in slabs reinforced with two-way rods. The record
makes clear that the contract specifications supported this order
of the superintendent, in that no distinction was made as to
whether the slabs were reinforced by one-way or two-way rods, and
the fact that the contracting officer subsequently relieved the
contractor of this requirement as to two-way rods does not justify
the award. In view of what I deem to be legal principles governing
the construction of contracts, I should therefore affirm the
judgment of the Court of Claims for damages resulting from the acts
of the superintending officers after deducting $107.50.
MR. JUSTICE ROBERTS joins in this opinion.