United States v. Wyckoff Pipe & Creosoting Co.

Background

A private contractor agreed in December 1917 to lay creosoted wood block floors in Navy Yard buildings at Norfolk and to supply labor and materials. The Government was to lay concrete bases before the contractor set the flooring. The Government delayed providing those bases for over two years. The contractor bought lumber and creosote oil and completed the job when the bases were ready. The Government paid the fixed contract rate and a contract item equal to 50% of an estimated labor-cost increase, but it refused other sums the contractor claimed. The contractor sued in the Court of Claims and obtained a judgment for $10,122.99 based mainly on increased market values and the higher value of the completed work.

Reasoning

The central question was what measure of damages applies when the Government’s delay causes a contractor loss. The Court held that damages for delay are limited to the contractor’s actual losses, not the mere increase in market value of work or materials. The Court noted the contractor chose to hold the supplies rather than resell or use them elsewhere, and that carrying charges could be recoverable but were not shown. Because the Court of Claims awarded recovery based on the higher market value of the completed work rather than an actual-loss calculation, the award was legally incorrect.

Real world impact

The Court reversed the judgment and remanded because the record lacks findings to determine actual loss. Contractors in Government construction cases must prove specific losses from delay—carrying costs, extra labor, and similar items—to recover; they cannot automatically recover value increases in materials or finished work.