United States v. Blair

Background

The dispute involved the Government, a prime contractor who announced plans to finish work early, another contractor who allegedly delayed or interfered, and a subcontractor who later claimed extra labor costs. The lower Court of Claims awarded damages on several items the parties treated as disputes “arising under this contract,” and separately allowed the subcontractor to recover extra labor costs it said were caused by Government-imposed conditions.

Reasoning

The Court addressed whether the Government had any duty to take affirmative steps to stop one contractor from delaying or interfering with another contractor’s attempt to finish early. The Court said the Government contract imposed no such duty, so the Government was not liable for delays caused by a contractor. The Court also held that damages awarded on contract disputes were erroneous because the contractor had not followed Article 15’s required appeal to the departmental head — and it did not appear that that internal appeal process was inadequate. At the same time, the Court agreed the subcontractor could recover extra labor costs that were caused by conditions improperly imposed by the Government superintendent.

Real world impact

Contractors working on Government projects cannot assume the Government must stop other contractors’ delays unless the contract explicitly imposes that duty. Contractors must follow the contract’s internal appeal step to the department head before pursuing certain claims. Subcontractors can recover for extra labor when a Government superintendent wrongly imposes conditions that increase costs.

Dissents or concurrances

Justice Frankfurter filed a partial dissent joined by Justice Roberts; the opinion notes their disagreement but does not give their reasons in this summary.