United States v. Utah Construction & Mining Company

PETITIONER: United States
RESPONDENT: Utah Construction & Mining Company
LOCATION: General Petroleum Corporation

DOCKET NO.: 440
DECIDED BY: Warren Court (1965-1967)
LOWER COURT:

CITATION: 384 US 394 (1966)
ARGUED: Mar 23, 1966 / Mar 24, 1966
DECIDED: Jun 06, 1966

Facts of the case

Question

Media for United States v. Utah Construction & Mining Company

Audio Transcription for Oral Argument - March 24, 1966 in United States v. Utah Construction & Mining Company

Audio Transcription for Oral Argument - March 23, 1966 in United States v. Utah Construction & Mining Company

Earl Warren:

Number 440, United States, Petitioner, versus Utah Construction and Mining Company.

Mr. Jaffe.

Irving Jaffe:

Mr. Chief Justice, may it please the Court.

This case involves primarily two issues.

One deals with the scope of the disputes clause and that is whether or not that clause requires submission of all disputes concerning questions of fact to agency determination.

We believe that that issue was not covered in the Bianchi decision.

The second issue presented by this case is whether fact determinations concededly made by an agency under the disputes clause and concededly final under the Wunderlich Act, a binding on the parties and on the courts for all purposes or may the same facts be tried and determined de novo by the Court if deemed relevant to a breach of contract action allegedly outside the scope of the disputes clause.

We believe that that issue has been decided by the Bianchi decision of this Court.

The facts of this case are pertinent only to the extent that they illustrate the legal arguments that will be made.

Suffice it to say that this case concerned a contract which was entered into in 1953 for the construction of an aircraft nuclear reactor project in the State of Idaho.

During the course of performance of this contract, several disputes arose, many of them were -- well, and they were submitted to the agency for determination, some were favorably acted upon, some unfavorably.

Four of these disputes, all of which had been submitted to the agency before are in -- present in this Court.

Each of those claims are presented in the same manner as they were presented administratively.

Two -- three of them at least include damages for delays.

The fourth one was not conceded by the Board because it was deemed to be untimely.

That too was a claim for damages for delays.

There is added in the petition however, an overall claim for delays damages allegedly resulting from the interaction of each of these four specific matters.

Now, if we look at the disputes clause itself, we find that its language is apparently clear.

The pertinent phrase of that clause says, “All disputes concerning questions of fact arising under this contract shall be decided by the contracting officer.”

Tom C. Clark:

Where is that, do you have it in the record?

Irving Jaffe:

We have that on page 3 of our brief or page 4 -- just a moment.

It appears on page 6 of our brief, excuse me, on page 6 of our brief, subject to appeal and the decision shall be final.

The Court of Claims however, in construing the phrase arising under the contract reads that clause as though it read all disputes concerning questions of fact arising under other clauses of this contract in which the granting of relief is specifically authorized shall be decided by the contracting officer, etcetera.

I might also point out that the clause itself begins with the words except as otherwise specifically provided in this contract, all disputes shall be decided by the contracting officer.

The Court seemingly says, “Only as otherwise specified in this contract shall the contracting officer be authorized to decide disputes.”

We believe as a practical matter, certainly, the disputes clause ought to read in a manner in which the word says, that is all disputes arising under the contract.

This clause is the only one, as you will notice, which requires that the contracting -- the contractor shall proceed diligently with the work during the resolution of the dispute and until it is resolved.

If -- as the Court of Claims contends, there are some disputes that are outside the scope of the disputes clause, there is no provision on the contract that would require the work to continue while the dispute was resolved.

Conceivably, the contractor did say, that this dispute between me and you Mr. Contracting Officer is outside the scope of the disputes clause.

It's going to be costly for me to continue as you direct and since it's outside the clause, I'm going to stop working, go to court and find out which of us is right.