Merritt-Chapman & Scott Corp. ( 1975 )

Contracts; breach; delays and disruption of work; multiplicity of changes; escalation of labor costs; financing costs; delay in payment.—This case arose out of a fixed-price contract for construction of the savannah nuclear-powered merchant ship (see the report of an earlier phase of this case, New York Shipbuilding Corp. v. United States, 180 Ct. Cl. 446, 385 F. 2d 427 (1967)). In connection with the actual performance of the contract, plaintiff has alleged and submitted a delay and disruption claim on the basis that defendant was responsible for the overrun of 576 days. In a recommended decision filed August 29, 1973 (reported in full at 19 CCF para. 82,468), Senior Trial Judge Mastin G. White concluded that all of the delay was not due entirely to the breach by defendant of its contractual obligation to make timely delivery of GFM items, and that plaintiff is entitled to recover, the amount to be determined in subsequent proceedings; that although the changes were extremely numerous, they were, individually and collectively, within the scope of defendant’s discretion to make under the contract, and the completed project was essentially the same as that contracted for; that since both parties shared the responsibility for the delay it is fair and equitable to apply the contract formula respecting the claim for increased labor costs; that plaintiff’s claim of increased financing costs must be denied for lack of proof; that defendant is not liable for failure to make prompt payment despite the delay because the “final decision” was a nullity having been made by one not authorized to decide plaintiff’s claim, and furthermore the claim is essentially a demand for payment of interest. This case came before the court on a stipulation of the parties filed January 21, 1975, whereby plaintiff agreed to accept the sum of $2,572,991.61 in full settlement of all claims set forth in the petition and defendant consented to entry of judgment in that amount and to dismissal of its counterclaim with prejudice. On January 31,1975 the court, by Order, entered judgment for plaintiff for $2,572,991.61 and dismissed with prejudice defendant’s counterclaim.