Petition — L. G. Everist, Inc. v. United States
Supreme Court brief1983
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82-1504 | oice Supreme Court, US. |
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waR 10 1983
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In the Supreme Court of the United States
October Term, 1982
L. G. EVERIST, INC.,
Petitioner,
VS.
THE UNITED STATES.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
BERNARD M. JUNG
(Counsel of Record)
Suite 1820, City Center Square
1100 Main Street
Kansas City, Missouri 64105
(816) 842-2980
Attorney for Petitioner
E. L. Menpenwatt, Inc., 926 Cherry Street, Kansas City, Mo. 64106, (816) 421-3020
QUESTIONS PRESENTED
In an action brought by a Government contractor
under §10(a) of the Contract Disputes Act of 1978 (41
U.S.C. §609 (a) ):
1. Did the Court of Claims err by holding that, for
purposes of summary judgment under Court of Claims
Rule 101(d), only disputes as to “underlying,” evidentiary
facts, and not disputes as to inferences and conclusions
of fact, shall constitute issues of “material fact’’?
2. Do the conflicting inferences and conclusions of
fact drawn by the parties raise genuine issues as to ultimate
facts material to petitioner’s causes of action:
(a) for breach of contract by misrepresentation;
(b) for an equitable adjustment under the contract
Differing Site Conditions clause; and
(c) for breach of contract by non-disclosure of su-
perior knowledge;
which preclude summary judgment under Court of Claims
Rule 101(d)?
TABLE OF CONTENTS
TIENEN « eneestpheiecnivqniescbensinnactsoatetonscenmecseesstnesees 1
TINIE * ‘Ganesesisssnutecnecnoceesocmeseuscovesvseen 1
PERU RMD BOO V ORV IED cccccsescsesecesssscocscscscsoccscscess ,
STATEMENT OF THE CASE 4
ARGUMENT . scidslelssidineimineniiinatiniiivn 10
I. THE COURT OF CLAIMS HAS PRE-
SCRIBED AN IMPROPER STANDARD OF
REVIEW FOR SUMMARY JUDGMENT ........ 10
II. CONFLICTING INFERENCES OF FACT
RAISE GENUINE ISSUES OF ULTIMATE
MATERIAL FACT ..... ‘we 16
A. Breach Of Contract Based Upon Misrep-
resentation ‘ 16
B. Equitable Adjustment Under The Differ-
ing Site Conditions Clause .......................... 23
C. Breach Of Contract By Non-Disclosure
Of Superior Knowledge - 27
CONCLUSION ensiliteilhieiainndsstbhetenbecemtnoncnssciems 30
INDEX TO APPENDIX
Opinion of the United States Court of Claims ........ Al-Al12
Order of the United States Court of Appeals for the
Federal Circuit Al3
Notice of Receipt and Filing of Petition for Rehearing
and Suggestions for Rehearing in Banc ...................... Al4
Invitation for Bids ...................... Al15-A19
Iv
November 27, 1978 Geological Trip Report ............ A20-A21
July 23, 1979 Geological Trip Report ..........-.......-0-++- A22-A23
August 31, 1979 Project Memorandum .....................0+0-0++ A24
November 14, 1979 Construction Logbook Entry ........ A25
pe ey G8 ee A26
Excerpts from the Deposition of Bobby G. Kilcrease
sicisnessiaeaaesiithlasaataaitaeeeaiiaeiaintaaeceialliananial A27-A30
Excerpts from the Deposition of Garland Everist ....A20-A33
Excerpts from the Deposition of Cy Schulte .......... A34-A35
Excerpts from the Deposition of Aubrey C. Sanders,
Jr. A35-A45
Excerpts from the Deposition of George Spencer ....A45-A54
Excerpts from the Deposition of Bill Cutter ............ A54-A55
Excerpts from the Deposition of William K. Andersen
A55-A57
Defendant’s Responses to Interrogatories Nos. 50 and
94 of Plaintiff’s First Set of Interrogatories ........ A57-A58
TABLE OF AUTHORITIES
Cases
Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S. Ct.
1598 (1970) 12, 19, 24, 26-27
American Manufacturers Mutual Insurance Co. v.
American Broadcasting-Paramount Theatres, Inc.,
388 F. 2d 272 (CA 2 1967) 15
Central National Life Ins. Co. v. Fidelity and Deposit
Company of Maryland, 626 F. 2d 537 (CA 7 1980) .... 13
Charbonnages De France v. Smith, 597 F. 2d 406 (CA
4 1979) 15
Cole v. Cole, 633 F. 2d 1083 (CA 4 1980) 20.000... 14
Vv
Empire Electronics Co. v. United States, 311 F. 2d 175
(CA 2 1962) cccdiabcianialddtanialeaslantainadeiaiiuabannbaiisbeties 13
Fitzsimmons v. Best, 528 F. od 692 (CA 7 1976) ........ 15, 27
Fortner Enterprises, Inc. v. United States Steel, 394
ce ee ee 14, 27
Foster Construction C.A. v. United States, 193 Ct. Cl.
587, 435 F. 2d 873 (1970) .................. 30
Heyman v. Commerce and Industry Insurance Co., 524
RE | SRR ie Lene 15, 27
Hollerbach v. United States, 233 U.S. 165, 34 S. Ct. 553
ITN =, suciecsiaatasganaionseriacessranteidbhcedidcananatasilicsab doediesdaeniclanmetteie 29
Insurance Company of North America v. Bosworth
Construction Co., 469 F. 2d 1266 (CA 5 1972) ............ 13
Kaiser Industries Corp. v. United States, 169 Ct. Cl.
310, 340 F. 2d 322 (1965) 23, 25, 26
Kamen Soap Products Co. v. United States, 124 Ct. Cl.
— eB ee ER OU) 10
Luckett v. Bethlehem Steel Corp., 618 F. 2d 1373 (CA
AIOE © ceseidinbeenticeicssiniipbemnesien 13
Moore-McCormack Lines, Inc. v. United States, 175
Ct. Cl. 496 (1966) 10
Morrison v. Nissan Co., Ltd., 601 F. 2d 139 (CA 4 1979) 13
Old Colony Trust Co. v. Omaha, 230 U.S. 100, 33 S. Ct.
967 (1912) 25
Paul E. Lehman, Inc. v. United States, 673 F. 2d 352
(Ct. Cl. 1982) 13
Pepper & Tanner, Inc. v. Shamrock Broadcasting, Inc.,
563 F. 2d 391 (CA 9 1977) 14
South Corporation v. United States, 690 F. 2d 1368
(CAFC 1982) 16
Stock & Grove, Inc. v. United States, 204 Ct. Cl. 103,
493 F. 2d 629 (1974) ..23, 26
VI
Tobin Quarries, Inc. v. United States, 114 Ct. Cl. 286,
SO eS SEES > CIID ® acpembsensbesenssbeenesinennssntseuraassntini 19
United States v. Diebold, Inc., 369 U.S. 654, 82 S. Ct.
993 (1962) hideiniensilatinness 12, 13, 15, 21, 30
United States v. Johnson, 153 Pr. 2d 846 (CA 9 1946) .... 19
United States v. Perry, 431 F. 2d 1020 (CA 9 1970) ...... 13
United States v. Seckinger, 397 U.S. 203, 90 S. Ct. 880
(1970) 26
United States v. Spearin, 248 U.S. 132, 39 S. Ct. 59
(1918) rs .26, 29
Statutes
5 U.S.C. §552(a) et seq. —_ ©
i IIE MEITIIIIIIID cscssscisihedeunindiirensuenestotenszernsescenetavetesensooans 2
28 U.S.C. §1255(1) . 2
28 U.S.C. §2071 .3, 10,11
28 U.S.C. §2072 10
28 U.S.C. §2503 2,14
41 U.S.C. §605 8
41 U.S.C. §609 2,4, 8, 13, 15, 16, 30
Federal Courts Improvements Act of 1982, Pub. L. No.
97-164, 96 Stat. 25
§161(10) 16
§403 (c) 2,9
Rules of Court
Rule 56(c) of the Federal Rules of Civil Procedure ....10, 11
Rule 13 of the Court of Claims Rules 14
Rule 101(d) of the Court of Claims Rules 3,11
Rule 133 of the Court of Claims Rules 14
Rule 134 of the Court of Claims Rules 14
vil
Miscellaneous
Restatement, Contracts, Second §159 22
Evans, Current Procedures in the Court of Claims, 55
yy EE ce 15
Lydon, The 1969 Rules Revision for the United States
Court of Claims, 58 Geo. L.J. 317 (1969) ................ 11
No.
In the Supreme Court of the United States
October Term, 1982
L. G. EVERIST, INC.,
Petitioner,
vs.
THE UNITED STATES.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
Petitioner prays that a writ of certiorari issue to re-
view the judgment herein of the United States Court of
Claims entered on September 24, 1982.
OPINIONS BELOW
The opinion of the United States Court of Claims,
not reported, is presented in the Appendix hereto at App.
Al-A12.!. There are no other opinions in this case.
JURISDICTION
The judgment of the United States Court of Claims
was entered on September 24, 1982. On October 8, 1982,
1. References to the Appendix are to “App. ......... ”
2
petitioner timely filed a petition for rehearing and sug-
gestions for rehearing en banc with the Court of Appeals
for the Federal Circuit pursuant to §403(c) of the Federal
Courts Improvement Act of 1982, Pub. L. No. 97-164, 96
Stat. 25. (App. Al4) On December 13, 1982 the Court
of Appeals for the Federal Circuit denied the petition for
rehearing and suggestions for rehearing en banc. (App.
Al13) Jurisdiction is invoked under both 28 U.S.C.
§1254(1) and 28 U.S.C. §1255(1).
STATUTES INVOLVED
1. 410U.S.C. §609(a) (1) (Supp. III 1979) which provides:
“(1) Except as provided in paragraph (2), and in
lieu of appealing the decision of the contracting of-
ficer under Section 6 [41 USC §605] to an agency
board, a contractor may bring an action directly on the
claim in the United States Court of Claims, notwith-
standing any contract provision, regulation, or rule
of law to the contrary.” ,
2. 41 U.S.C. §609(a)(3) (Supp. III 1979) which pro-
vides:
“(3) Any action under paragraph (1) or (2) shall
be filed within twelve months from the date of the
receipt by the contractor of the decision of the con-
tracting officer concerning the claim, and shall pro-
ceed de novo in accordance with the rules of the ap-
propriate court.”
3. 28 U.S.C. §2503 (1976 ed.) which provided:
“(a) Parties to any suit in the Court of Claims may
appear before a commissioner in person or by attorney,
produce evidence and examine witnesses. In accor-
3
dance with rules and orders of the court, commis-
sioners shall fix times for trials, administer oaths or
affirmations to and examine witnesses, receive evi-
dence and report findings of fact and, when directed
by the court, their recommendations for conclusions of
law in cases assigned to them, Hearings shall, if con-
venient, be held in the counties where the witnesses
reside.
“(b) The rules of the court shall provide for the fil-
ing in court of the commissioner’s report of facts and
recommendations for conclusions of law, and for op-
portunity for the parties to file exceptions thereto, and
a hearing thereon before the court within a reasonable
time. This section shall not prevent the court from
passing upon all questions and findings regardless of
whether exceptions were taken before a commis-
sioner,”
28 U.S.C. §2071 (1976 ed.) which provides:
“The Supreme Court and all courts established by
Act of Congress may from time to time prescribe rules
for the conduct of their business. Such rules shall be
consistent with Acts of Congress and rules of practice
and procedure prescribed by the Supreme Court.”
Court of Claims Summary Judgment Rule 101(d)
which provided:
“(d) Motion and Proceedings Thereon: After a mo-
tion for summary judgment has been filed, and after
the expiration of the time allowed for a response
thereto or for a reply to the response, if any (Rule 52
2. Pursuant to Court of Claims General Order No. 2 of
1973, after August 1, 1973, “Commissioners” of the Court of
Claims were known and referred to as “Trial Judges.”
4
(b)), such motion may (subject to the provisions of
Rules 54(b), 146(b) (2), and 166(b)) be assigned to
the calendar. (See Rule 14(b)(2).) The judgment
sought shall be rendered if the pleadings, depositions,
and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a
judgment as a matter of law. A summary judgment
may be rendered on the issue of liability alone although
there is a genuine issue as to the amount of damages.”
28 U.S.C. App. p. 627 (1976 ed.)
STATEMENT OF THE CASE
Petitioner brought this action in the United States
Court of Claims pursuant to 41 U.S.C. §609(a)(1) for the
trial de novo of its contract and breach of contract claims.
No trial, however, was ever held and accordingly no find-
ings of fact were ever prepared by the Court of Claims
Trial Judge to whom the case was originally assigned.
On March 16, 1979, the United States, acting by and
through the Department of Agriculture, Soil Conservation
Service, issued an Invitation for Bids for the “Aravaipa
Creek Emergency Watershed Project” (the “Project’’).
(App. Al5) The Project contract work, as detailed in the
construction specifications, called for the excavation, selec-
tion, handling and placement of 75,000 tons of rock riprap.
(App. Al6; Al9) Construction Specification 216-8 directed
that the rock riprap was to be excavated from “the des-
ignated sources, or from other sources approved by the
Engineer.” (App. Al9) Bid opening was scheduled for
April 11, 1979.
Pursuant to a special “INSPECTION OF WORKSITE”
provision contained in the Invitation for Bids, the Project
Engineer (who was also the authorized representative of
the Contracting Officer) conducted a group showing of
the Project worksite, including the Government-designated
Project rock source, on April 4, 1979. (App. Al€; A26)
When the tour group arrived at the Government-designated
rock source (also known as the “Lackner quarry”), the
Project Engineer proceeded to designate the precise loca-
tion of the source, advising the prospective bidders that
the “designated area was approved.” (App. A27-A28)
The Project Engineer further stated that the rock at the
source was “approved” and that the Government geologist
had investigated the source and had determined that it
was rock “of quality” and “hard enough for riprap.”
(App. A27-A28)
Contrary to the pre-bid representations of the
Project Engineer, however, the Government geologist had
in fact not approved the rock at the Government-desig-
nated rock source. Rather, on the basis of his geological
investigations conducted in November, 1978, he had de-
termined that the risk of an “excessive breakdown of the
rock” resulting in “an excessive quantity of undersized
materials” existed at that source. (App. A20) By “ex-
cessive,” he testified that: “I meant the breakage would
be more than average or normal.” (App. A39) The ge-
ologist prepared a geological Trip Report dated November
27, 1978 expressly advising the Soil Conservation Service
engineers, including the Project Engineer, of this risk and
further stating that “a determination to use this source
should be contingent upon the results of the laboratory
tests in conjunction with test quarrying to evaluate the
breakdown characteristics of the rock.” (App. A20-A21;
A40) (Emphasis added.) Notwithstanding the specific
recommendations of its geologist, the Soil Conservation
Service made conscious decision not to test quarry the rock
source. (App. A55-A56)
The November 27, 1978 geological Trip Report, and
the conclusions and recommendations of the Government
geologist contained therein, were never disclosed to the
prospective bidders. (App. A4)
On April 9, 1979 petitioner’s Construction Manager
conducted a pre-bid inspection of the Project worksite, in-
cluding the Government-designated rock source. He had
been informed by petitioner’s Construction Superintendent,
who had attended the April 4, 1979, “worksite” showing,
that the Government-designated rock source was an ap-
proved source and that the rock within the source was
approved. (App. A48) The petitioner’s Construction Man-
ager, who prepared petitioner’s bid for the project, testi-
fied that: “The rock source appeared to me to be com-
petent, suitable for the use intended and we had been
informed that it was an approved source and the rock
in the source had been approved, which indicated to me
that construction losses would certainly be within normal
amounts, ratios.” (App. A50) Accordingly, he included a
15% allowance for waste material in petitioner’s bid esti-
mate for the Project. (App. A5l) The Government ge-
ologist testified that a high percentage of useable rock
would be the normal recovery rate to be expected from
a good commercial riprap quarry site. (App. A42)
On April 11, 1979, petitioner submitted the low bid for
the Project, and on May 2, 1979, petitioner was awarded
the contract for the Project, under its company trade name
of “Connolly-Pacific Co.” Following award of the con-
tract, petitioner commenced the excavation and handling
of rock from the Government-designated rock source, in
accordance with Construction Specification 216-8. After
substantial excavation into the bedrock, however, it be-
came apparent that, contrary to the Government’s represen-
7
tations, the vast bulk of the rock at the source was indeed
wholly unsuitable for use as riprap. Due to the uncon-
trollable tendency of the rock to break down excessively
into fines and fragments less than 3 inches in size during
excavation and handling, over 60-70% of the total rock
material excavated from the source was unsuitable for
use as riprap. (App. A22-A24) The record establishes, and
the Court of Claims has found in its order, that the waste
encountered by petitioner at the Government-designated
rock source was excessive. (App. A6; A42; A54-A55)
Petitioner gave timely notice under Clause 4, “DIF-
FERING SITE CONDITIONS,” of the contract General
Conditions that the excessive waste rock condition at the
Government-designated rock source constituted a com-
pensable differing site condition entitling petitioner to an
equitable adjustment to the contract price and time for
performance. (App. Al7-Al8) With the Government’s
vermission petitioner attempted to obtain better rock
from another source located nearby on the north side of the
Right Prong of Fourmile Creek, an area which had orig-
inally been specifically disapproved by the Project En-
gineer. (App. A27-A28; A35; A51) The rock on the north
side of the creek, however, proved to be of equaily poor
quality. No other rock sources were available as feasible
alternatives. (App. A35; A49)
Petitioner ultimately completed the Project on Jan-
uary 9, 1980, more than 75 days beyond the original 150
calendar days allowed for contract performance. The Gov-
ernment assessed petitioner $13,845.00 in liquidated dam-
ages, retaining $195.00 for each calendar day of delay after
October 29, 1979.
On February 18, 1980, petitioner submitted 5 total
claim for an equitable adjustment to the contract price in
the amount of $478,268 for the excessive waste rock con-
dition, together with a claim for the full remission of the
$13,845.00 in retained liquidated damages. Following the
submission of the claims, the Government released the
November 27, 1978 geological Trip Report, pursuant to a
Freedom of Information Act request by the petitioner.
(5 U.S.C. §552(a) et seq.) On August 15, 1980, petitioner’s
written claims were certified pursuant to 41 U.S.C.
§605(c) (1). On September 11, 1980, the Contracting Of-
ficer issued a final decision denying the claims.
On October 21, 1980 petitioner brought an action on
its claims against the United States directly in the United
States Court of Claims pursuant to 41 U.S.C. §609(a) (1),
for the trial de novo of its differing site condition claim and
its breach of contract actions based upon fraudulent mis-
representation and non-disclosure of superior knowledge.
On March 23, 1982, the Government filed a motion for
summary judgment under Court of Claims Rule 101, con-
tending that “there is no genuine issue as to any material
fact and defendant is entitled to judgment as a matter of
law.” The Government alleged that the Government-
designated rock source was not “at the site” within the
intended meaning of the differing site conditions clause;
that there were no erroneous representations; and that the
Government’s knowledge concerning the Government-
designated rock source was not superior knowledge. In-
cluded with its motion were a 51l-page brief, and 119 pages
of appended materials.
In response to that motion, petitioner filed a 68-page
brief in opposition, together with 214 pages of appended
documentary exhibits and deposition transcripts, vigor-
ously challenging the contention of the United States that
there was no genuine issue as to any material fact. On
August 12, 1982 the Government filed a 33-page reply
brief, together with 14 pages of appendix materials. The
total record before the Court of Claims on the motion for
summary judgment consisted of over 475 pages of deposi-
tions, affidavits and exhibits.®
On September 24, 1982, the Court of Claims entered
an order, without oral argum. it, granting the United
States’ motion for summary judgment. In addressing the
question of whether the Government had demonstrated
that there was no genuine issue as to any material fact,
the court stated on page 2 of its order:
“Before reciting the facts, we note our conclusion
that there are no genuine issues of material fact in
the record which would, in themselves, preclude sum-
mary judgment. While the inferences and conclusions
drawn from the facts by the parties differ radically at
times, the underlying material facts are not in genuine
dispute.” (App. A2) (Emphasis added.)
On September 30, 1982, the Court of Claims concluded
business. On October 8, 1982, petitioner timely filed a peti-
tion for rehearing and suggestions for rehearing en banc
with the United States Court of Appeals for the Federal
Circuit in accordance with §403(c) of the Federal Courts
Improvement Act of 1982. On December 13, 1982, the
Court of Appeals for the Federal Circuit denied the peti-
tion for rehearing and suggestions for rehearing en banc,
without opinion. (App. A13)
3. Material portions of that record are contained in the
Appendix on pages Al5 through A58.
10
ARGUMENT
I. THE COURT OF CLAIMS HAS PRESCRIBED AN
IMPROPER STANDARD OF REVIEW FOR
SUMMARY JUDGMENT
The Court of Claims has prescribed a summary judg-
ment rule in this case which is in direct conflict with the
rules of practice and procedure prescribed by the Su-
preme Court and which flatly contravenes petitioner’s
statutory right to trial de novo under the Contract Dis-
putes Act of 1978. The Court of Claims has, by its ruling
and order in this case, so fundamentally erred and so
completely departed from the usual and accepted course of
judicial proceedings as to call for an exercise of this
Court’s power of supervision.
The rule-making authority of the Court of Claims is
based upon, and subject to, 28 U.S.C. §2071, which pro-
vides:
“The Supreme Court and all courts established
by Act of Congress may from time to time prescribe
rules for the conduct of their business. Such rules
shall be consistent with Acts of Congress and rules of
practice and procedure prescribed by the Supreme
Court.” (Emphasis added. )
See: Moore-McCormack Lines, Inc. v, United States, 175
Ct. Cl. 496, 501 (1966); Kamen Soap Products Co. v. United
States, 124 Ct. Cl, 519, 536-537, 110 F. Supp. 430, 439-440
(1953).
Rule 56(c) of the Federal Rules of Civil Procedure,
prescribed by the Supreme Court pursuant to 28 U.S.C.
§2072, expressly provides that summary judgment may be
rendered only where the “pleadings, depositions, answers
11
to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is en-
titled to a judgment as a matter of law.” Pursuant to 28
U.S.C, §2071, the Court of Claims has adopted Rule 101(d)
which, in words identical to those of Rule 56(c), Fed. R.
Civ. P., provides that summary judgment may be rendered
only where it has been shown that there “is no genuine is-
sue as to any material fact.’
While Rule 56(c), Fed. R. Civ. P., and Rule 101(d)
of the Rules of the Court of Claims both expressly pro-
vide that summary judgment may be rendered only where
it has been shown that there is “no genuine issue as to
any material fact,” the Court of Claims has nonetheless
held, by its ruling in this case, that only those disputes as
to the underlying, evidentiary facts themselves shall con-
stitute issues of fact for purposes of summary judgment.
On page 2 of its order, the Court of Claims states:
“Before reciting the facts, we note our conclusion
that there are no genuine issues of material fact in
the record which would, in themselves, preclude sum-
mary judgment. While the inferences and conclusions
drawn from the facts by the parties differ radically at
times, the underlying material facts are not in gen-
uine dispute.” (App. A2) (Emphasis added.)
In spite of the fact that the inferences and conclusions
drawn from the underlying facts by the parties do indeed
differ radically, the Court of Claims has proceeded to sum-
mary judgment based solely and expressly upon the con-
4. Rule 101(d) of the Rules of the Court of Claims is
itself based upon Rule 56(c), Fed. R. Civ. P. See 28 U.S.C,
App. pp. 607-608, “Cross-Reference Table” to Rules of the Court
of Claims; and see generally, Lydon, The 1969 Rules Revision for
the United States Court of Claims, 58 Geo. L.J. 317 (1969).
12
clusion that the “underlying” facts contained in the record
are themselves not in genuine dispute.
In the leading case of United States v. Diebold, Inc.,
369 U.S. 654, 82 S. Ct. 993 (1962), the Supreme Court held
that, where differing inferences may properly be drawn
from the “underlying” facts contained in the record, issues
of ultimate fact are thus raised, and the case is not one
for summary judgment.
“(The District Court’s] findings represent a
choice of inferences to be drawn from the subsidiary
facts contained in the affidavits, attached exhibits
and depositions submitted below. On summary judg-
ment the inferences to be drawn from the underlying
facts contained in such materials must be viewed in
the light most favorable to the party opposing the
motion. A study of the record in this light leads us
to believe that inferences contrary to those drawn
by the trial court might be permissable. The ma-
terials before the District Court having thus raised a
genuine issue as to ultimate facts material to the
rule of International Shoe Co. v. Federal Trade
Comm’n it was improper for the District Court to
decide the applicability of the rule on a motion for
summary judgment. Fed. Rules Civ. Proc., 56(c), 28
U.S.C.A.” 369 U.S. at 655, 82 S. Ct. at 994.
The Supreme Court reaffirmed this principle in Adickes
v. S.H. Kress and Company, 398 U.S. 144, 157-160, 90 S.
Ct. 1598, 1608-1609 (1970), pointing out that the burden
is upon the moving party to establish the absence of a
genuine issue as to any material fact, including any in-
ferences of fact, and that such inferences of fact must be
viewed in the light most favorable to the party opposing
the motion.
13
The United States Courts of Appeals have uniformly
observed this fundamental rule of Diebold. Thus, in
Central National Life Insurance Co. v. Fidelity and
Deposit Company of Maryland, 626 F. 2d 537, 539 (CA 7
1980), the Court of Appeals for the Seventh Circuit held:
“Equally well settled is the fact that summary
judgment under Rule 56, Fed. R. Civ. P., should be
granted only where it is perfectly clear that there is
no dispute about either the facts of the controversy
or the inferences to be drawn from such facts. United
States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct.
993, 994, 8 L, Ed. 2d 176 (1962). Accordingly, even
though there may be no dispute about the basic facts,
still summary judgment will be inappropriate, if the
parties disagree on the inferences which may reason-
ably be drawn from those undisputed facts.” 626 F. 2d
at 539-540, (Emphasis in original.) °
By its ruling in this case, the Court of Claims has
placed itself in direct conflict with the Supreme Court and
all of the other United States Courts of Appeals, except
the Court of Appeals for the Federal Circuit.
This summary judgment rule prescribed by the Court
of Claims also violates petitioner’s statutory right to trial
de novo under the Contract Disputes Act of 1978. Under
41 U.S.C. §609(a) (3), all “direct access” actions by Gov-
ernment contractors are to proceed de novo, “in accor-
dance with the rules of the appropriate court.” In Paul E.
Lehman, Inc. v. United States, 673 F. 2d 352, 353 (Ct.
Cl. 1982), the Court of Claims thus recognized that in
5. See also: Empire Electronics Co, v. United States, 311
F. 2d 175, 180-181 (CA 2 1962); Morrison v, Nissan Co., Ltd.,
601 F. 2d. 139, 141 (CA 4 1979); Insurance Company of "North
America v. Bosworth Construction Co., 469 F. 2d 1266, 1268
(CA 5 1972); United States v. Perry, 431 F. 2d 1020, 1022 (CA
: Begg. s Laavett v. Bethlehem Steel Corp., 618 F. 2d 1373, 1377
14
such actions “the court conducts a trial de novo.” More
specifically, prior to October 1, 1982, 28 U.S.C. 82503(a)
and (b) expressly provided that parties to any suit in
the Court of Claims were to be entitled to produce evi-
dence and examine witnesses before a Court of Claims
Trial Judge, and to have a report prepared by that Trial
Judge of his findings of fact in the case. No such findings
of fact were ever prepared in this case, in spite of the fact
that, as the Court of Claims itself observes, the inferences
and conclusions of fact drawn by the parties from -
“underlying” facts differ radically.
Instead, the Court of Claims has undertaken to fashion
an order of summary judgment, disposing of all of the
issues of fact in this complex case, based entirely upon
the selection of various alleged inferences of fact asserted
by the Government in support of its version of the case.
“Selecting one set of conflicting inferences, as opposed to
another, is part of the ultimate factfinding process, not
of the disposition at the summary judgment stage.” Cole
v. Cole, 633 F. 2d 1083, 1089 (CA 4 1980). On a motion
for summary judgment, a court may not “speculate as
to the ultimate findings of fact.” Fortner Enterprises,
Inc. v. United States Steel, 394 U.S. 495, 506, 89 S. Ct.
1252, 1260 (1969); Pepper & Tanner, Inc. v. Shamrock
Broadcasting, Inc., 563 F. 2d 391, 393 (CA 9 1977).
As shown in Part II., infra, this case turns upon com-
plex and crucial issues of ultimate fact involving knowledge,
state of mind and contractual intent, issues which are
6. In accordance with 28 U.S.C. §2503(a) and (b), Rules
13, 133, and 134 of the Rules of the Court of Claims provide
that in all trials in that court, testimony shall be taken “in open
court”; that the Court of Claims Trial Judge shall be responsible
in the first instance for all findings of fact; that the Trial Judge
shall declare the proof closed only after the complete presenta-
tion of evidence; and that after the closing of evidence, the
Trial Judge shall ascertain the facts from the evidence and file
a report of his findings of fact with the Clerk, which report
=> a part of the record. 28 U.S.C. App. pp. 609,
15
wholly inappropriate for disposition on a motion for sum-
mary judgment. Fitzsimmons v. Best, 528 F. 2d 692, 694
(CA 7 1976); Heyman v. Commerce and Industry Insur-
ance Company, 524 F. 2d 1317, 1319-1321 (CA 2 1975);
Charbonnages De France v. Smith, 597 F. 2d 406, 414
(CA-4 1979). In undertaking to decide this case on a
motion for summary judgment, in the face of admittedly
conflicting inferences of fact, the Court of Claims has
denied petitioner its fundamental statutory right to the
trial de novo of all issues of fact, including all issues of
ultimate fact. American Manufacturers Mutual Insurance
Co. v. American Broadcasting-Paramount Theatres, Inc.,
388 F. 2d 272, 279 (CA 2 1967).”
Moreover, this case presents issues of continuing crit-
ical importance for the administration of the Contract
Disputes Act of 1978 by the recently established Court
of Appeals for the Federal Circuit. In its petition for
rehearing and suggestions for rehearing en banc filed
with the Court of Appeals for the Federal Circuit, peti-
tioner urged that court to reconsider the September 24,
1982 order of the Court of Claims as being in direct
conflict with the rule of Diebold, and in clear violation
of petitioner’s statutory right to trial de novo under
41 U.S.C. 8609(a) (3). The Court of Appeals denied the
petition for rehearing and suggestions for rehearing en
banc, without any explication or modification of the ear-
lier order of the Court of Claims. (App. Al3) In failing
to rectify this fundamental error of the Court of Claims,
the Court of Appeals for the Federal Circuit has itself
7. See also: Evans, Current Procedures in the Court of
Claims, 55 Geo. L.J. 422, 426 n. 37 (1966), specifically pointing
out that where conflicting inferences of fact are drawn by the
parties, “the facts requisite for decision can be adequately de-
termined only through the usual method of submission of find-
ings of fact to the commissioner and his preparation of a report
in the conventional manner.” (Commissioner Evans was Chair-
man of the Court of Claims Committee on Rules from 1959 to
1968).
16
so far sanctioned a departure from the usual and accepted
course of judicial proceedings as to call for an exercise
of this Court’s power of supervision. Moreover, in its
first published decision, dated October 28, 1982, the Court
of Appeals for the Federal Circuit expressly adopted, as
binding precedent for the new judicial circuit, all of the
holdings of the Court of Claims announced prior to the
close of business on September 30, 1982. South Corpora-
tion v. United States, 690 F. 2d 1368, 1369 (CAFC 1982).®
In so adopting the holding of the Court of Claims in the
instant case, the Court of Appeals for the Federal Circuit
has placed itself, and its Federal judicial circuit, squarely
in conflict with the Supreme Court and the other United
States Courts of Appeals, and has effectively prescribed a
procedural rule which essentially vitiates the Government
contractor’s statutory right to trial de novo under 41
U.S.C. §609(a) (3).
II, CONFLICTING INFERENCES OF FACT RAISE
GENUINE ISSUES OF ULTIMATE MATERIAL
FACT
A. Breach of Contract Based Upon Misrepre-
sentation
1. Construction Specification 216-8, Rock Riprap, pro-
vides that “Rock from the designated sources, or from
other sources approved by the Engineer shall be exca-
vated, selected, and handled as necessary to meet the
grading requirements in Section 8 of this specification
or on the drawing” and that “[t]he suitability of the rock
for riprap shall be approved by the Engineer.” (App.
A19)
8. Accordingly, the United States Claims Court will be sub-
ject to the holding of the Court of Claims in this case. Under
§161(10) of the Federal Courts Improvement Act of 1982, ef-
fective October 1, 1982, the Claims Court succeeded to the trial
jurisdiction of the Court of Claims under 41 U.S.C. §609(a).
17
According to his own testimony, Mr. Kilcrease, the
Project Engineer, advised the prospective bidders during
the pre-bid “worksite” tour of the Government-designated
rock source (a) that the source itself was approved; (b)
that the Government geologist had investigated the source
and had determined that it was rock “of quality” and
“hard enough for riprap”; and (c) that the rock at the
source was approved. (App. A27-A28)
Mr. George Spencer, petitioner’s Construction Man-
ager, who prepared petitioner’s bid, testified as follows
concerning his understanding of the specifications and
the Project Engineer’s representations concerning the
Government-designated rock source:
(a) “If a deposit was approved as a rock source it
would indicate to me that there was rock within
that source that would meet the specifications as
set forth in the documents. If the rock in that rock
source were approved it would indicate to me that
the bulk of that deposit would be suitable for the
use intended.” (App. A46) (Emphasis added.)
(b) “In that connection I was led to believe that
approval at the prebid showing was a valid indication
of the integrity of the source. It meant to me that
material from this source would be suitable for con-
struction of this project in accordance with the con-
tract documents.” (App. A48) (Emphasis added.)
(c) “The rock source appeared to me to be com-
petent, suitable for the use intended and we had been
informed that it was an approved source and the rock
in the source had been approved, which indicated
to me that the construction losses would certainly be
within normal amounts, ratios.” (App. A50) —
sis added.)
18
A high percentage of useable rock is the “normal” amount
of recovery which should be expected from a good com-
mercial riprap quarry. (App. A42) In view of the actual
condition of the rock at the Government-designated source,
it is clear that the Government’s representations, as under-
stood by Mr. Spencer, were indeed erroneous, It is beyond
dispute that in fact the vast bulk of the rock at that
source was wholly unsuitable for use as riprap. Fully
60-70%, at a minimum, of the rock material excavated
and handled from the source was unsuitable for use as
riprap, being fines and fragments less than 3 inches in
size. (App. A24; A25; A54-A55) The Government geol-
ogist himself characterized the volume of waste rock
actually encountered as “excessive”, meaning more than
“average or normal.” (App. A39; A42)
The Court of Claims, however, did not even acknowl-
edge this unequivocal testimony of Mr. Spencer in its
recitation of the “facts” on pages 2-7 of its order (App.
A2-A6), or in its discussion of the petitioner’s cause of
action for misrepresentation on pages 8-9 of its order.
(App. A6-A7) Rather, engaging in gross speculation as
to the ultimate facts of the case, the court simply pro-
nounces that the approval of the suitability of the rock
and the rock source pursuant to Construction Specification
216-8 was intended to relate only to those individual rock
fragments of acceptable gradation and quality which might
later be excavated from the source. Thus, the court states
that the Government’s approval was “with respect to the
quality and grading of the rock derived therefrom.” (App.
A4) (Emphasis in original.) Such an interpretation flies
squarely in the face of the Project Engineer’s own testi-
mony that both the Government-designated rock source
and the rock at that deposit were approved by him during
the pre-bid worksite tour. (A27-A28) This was obvi-
ously, and indeed had to be, an approval of the suitability
of the rock in situ, since no riprap at that time even
19
existed, the gradation of which could have been approved.
The interpretation adopted by the Court of Claims as
“fact” is thus not only contrary to the testimony of Mr.
Spencer, but manifestly illogical. The Government geol-
ogist himself testified that the percentage of specification
size rock fragments that it is possible to obtain from a
quarry for riprap is “primarily related to the quality of
the rock.” (App. A43) (Emphasis added.)
The Government, which has the burden of demon-
strating the absence of a genuine issue as to the inter-
pretation of Construction Specification 216-8, has never
even attempted to respond to this unequivocal testimony
of Mr. Spencer and the Government geologist, Adickes,
supra, at 157-159, 90 S. Ct. at 1608-1609.
2. The failure of the Government-designated Project
rock source to produce the necessary 75,000 tons of rock
riprap without excessive waste constituted a separate
breach of the implied warranty of suitability of the source.
United States v. Johnson, 153 F. 2d 846, 847-849 (CA 9 1946).
The Court of Claims has recognized that, in designating
a particular materials source for a Project, the Govern-
ment impliedly represents that the necessary materials
can be obtained frornm that source on a reasonably econom-
ical basis. Tobin Quarries, Inc. v. United States, 114
Ct. Cl. 286, 335, 84 F. Supp. 1021, 1022 (1949). Contrary
to the Court of Claims’ conclusion of “fact” that there
was no “designated” rock source (App. A3; A6; A7; Al0;
Al12), the evidence fully supports the reasonable inference
and conclusion that the Lackner quarry was indeed the
“contractually designated” Project rock source.
Construction Specification 216-8 at Section 2 “MATE-
RIALS” expressly provides that “Rock from the desig-
nated sources, or from other sources approved by the
Engineer shall be excavated, selected, and handled, . .”
(App. Al9) Clause 2, “Specifications and Drawings” of
20
the General Provisions provides that “The Contracting
Officer [including his authorized representative] shall fur-
nish from time to time such . . . information as he may
consider necessary, unless otherwise provided.” Pursuant
to Clause 2, the Project Engineer provided the necessary
further identification of the Government-designated rock
source, already expressly referred to in Section 2 of Con-
struction Specification 216-8 as the “designated” and “ap-
proved” source, by personally identifying its location for
the benefit of the prospective bidders during the pre-bid
worksite tour. As the Project Engineer most forthrightly
testified: “The designated area was approved, yes.”
(App. A28) (Emphasis added.)°
Petitioner’s President, Mr. Cy Schulte, further tes-
tified:
Q. [By Government counsel]: Schulte, prior to the
bidding, what was your understanding about the
contractual requirements regarding the source for
riprap? A. My understanding was that the ma-
terial would come from the designated source.
Q. And what was the designated source? A. Lack-
ner quarry.” (App. A34)
At no time did the Project Engineer advise the prospective
bidders that the proposed Lackner quarry site was not
to be considered the contractually designated Project rock
source. (App. A27-A28) Indeed, under questioning from
petitioner’s Construction Superintendent, he flatly stated
“The rock’s going to come from the Lackner quarry.”
(A32-A33) Moreover, the Assistant Contracting Officer
9. The status of the Lackner quarry as both a eee
“designated” and “approved” source is entirely consistent wi
Construction Specification 216-8—a fact which the Government
eT ce ce ne eee eee eee (App.
21
who attended the April 4, 1979 pre-bid “worksite” showing
expressly identified the Lackner quarry as a part of “the
project.” (App. A26) The foregoing evidence fully sup-
ports the inference and conclusion that the Lackner quarry
was indeed the contractually designated Project rock
source. Moreover, all such inferences must be viewed
in the light most favorable to petitioner. Diebold, supra.
3. In addition to the misrepresentations discussed in
A.l. and A.2., supra, the Government also breached its
contract with the petitioner by misrepresenting the pro-
fessional opinion of its own geologist concerning the suit-
ability of the rock at the Government-designated rock
source.
The Project Engineer expressly advised the prospec-
tive bidders that the Government geologist had inves-
tigated the Government-designated rock source, and had
determined that it was rock “‘of quality” and “hard enough
for riprap.” In fact the geologist had not approved the
rock, but rather had determined that the risk of an “ex-
cessive breakdown of the rock” resulting in an “excessive
quantity of undersized materials” existed at that rock
source, (App. A20) By “excessive” he meant “more than
average or normal.” Furthermore, by his geological Trip
Report of November 27, 1978, he expressly advised the
Soil Conservation Service to conduct test quarrying at
the site, in addition to the laboratory tests then being
conducted, in order to determine the breakdown char-
acteristics of the rock. (App. A20-A21; A40)*°
10. That the Government engineers relied upon this geologi-
cal information is clear from the record. (App. A29; A57)
Moreover, contrary to the court’s recitation of “facts” (App. A4),
the Government —_ expressly testified that his entire pur-
oy in investigating the source was to determine if it would
a “suitable source” (App. A37); that he was advising the
Government engineers as to the economic feasibility of the source
(App. A37); and that the risk of excessive waste was indeed
a to the question of the feasibility of the source. (App.
22
In so representing to the prospective bidders that
the Government geologist had determined that the Gov-
ernment-designated rock source was rock “of quality”
and “hard enough for riprap,” the Government grossly
misrepresented the facts. Indeed, the Project Engineer
testified:
Q. [By counsel for petitioner]: What was your
understanding of the term “hardness of the rock”?
* * * A. To me hardness is just what it says.
The hardness is such that it won’t break up in
handling.
Q. Breaking up— A. In smaller pieces.” (App.
A29)
It was precisely the risk of “an excessive breakdown of
the rock” at the Government-designated rock source about
which the Government geologist warned the Soil Con-
servation Service in his geological Trip Report. (App.
A20) And it was precisely this problem which was the
cause of the enormous quantities of waste rock which peti-
tioner actually encountered at the Government-designated
source. (App. A22-A24) The Government’s misrepresen-
tation of its geologist’s professional opinion constitutes
a clearly actionable misrepresentation of fact. Restate-
ment, Contracts, Second §159 and comment d thereto.
The Project Engineer’s representations concerning the pro-
fessional opinion of the Government geologist constitute
at the very least, an actionable misrepresentation by “‘half-
truth.” Restatement, Contracts, Second, §159, and com-
ment b thereto. While the petitioner discussed this mis-
representation at length on pages 39-44 of its brief in
opposition to the Government’s motion for summary judg-
ment, the Court of Claims avoided even addressing it in
its order of summary judgment. (App. A6-A7)
23
B. Equitable Adjustment Under the Differing
Site Conditions Clause
The Government-designated rock source was the des-
ignated and approved Project rock source referred to in
Construction Specification 216-8. (See discussion in Part
II.A.2., supra.) Moreover, Construction Specification 216-8
expressly required the contractor to excavate, select and
handle the necessary 75,000 tons of rock from the Gov-
ernment-designated rock source. (App. Al9) Under Stock
& Grove, Inc. v. United States, 204 Ct. Cl. 103, 110, 493
F. 2d 629, 632 (1974) (cited by the Court of Claims on
page 15 of its order (App. Al2)), the Government is
therefore contractually responsible under the Differing
Site Conditions clause for that designated rock source.
And see Kaiser Industries Corp. v. United States, 169
Ct. Cl. 310, 323, 340 F. 2d 322, 329 (1965).™
The Government further confirmed that the Govern-
ment-designated rock source was fully intended to be “at
the site” within the intended meaning of the Differing
Site Conditions clause by including it as a central and
integral part of the pre-bid Project “worksite” tour. Pur-
suant to the special “INSPECTION OF WORKSITE”
provision contained in the Invitation for Bids, the Project
Engineer conducted a “worksite” showing of the Project
on April 4, 1979. (App. Al6) The Project Engineer
testified, and petitioner’s Construction Superintendent fur-
11. The contention that some rock source other than the
Government-designated rock source may have existed as a pos-
sible alternative does not relieve the Government of its con-
tractual responsibility for the Project rock source which the
Government designated under the contract. Stock & Grove, supra,
at 110, 310 F.2d at 632. In fact, no other feasible and suitable
rock sources did exist. (App. A35) Indeed, the Project En-
gineer flatly stated that “The rock’s going to come from the
Lackner quarry.” (App. A32-A33) The Grand Reef Mine, al-
luded to by the court in footnote 6 on page 12 of its order (App.
Al0), was inaccessible to construction vehicles (App. A49), and
was never even considered by the Government as a suitable al-
ternative. (App. A41; A56-A57)
24
ther confirmed, that the Project “worksite” tour included
a showing of both the various rock placement sites and
the Government-designated rock source. (App. A27; A30-
A33) The Assistant Contracting Officer also testified
that the pre-bid showing of the Government-designated
rock source was included as an integral part of the Project
worksite tour:
“I attended the site showing of the Aravaipa
Project on April 4, 1978 conducted by Mr. Bobby
Kilcrease. I accompanied Mr. Kilcrease and the group
of potential bidders on a tour of the project, including
a visit to a rock source on the Lackner property.”
(App. A26) (Emphasis added.)
At no time did Mr. Kilcrease advise the prospective bid-
ders that the Government-designated rock source was
not to be considered a part of the Project “worksite.”
(App. A27-A28).
The Court of Claims failed to even include a reference
to the Inspection of Worksite provision in its recitation
of the “facts” of the case, or to acknowledge that the
Government-designated rock source was included as an
integral part of the Project worksite tour, by the Gov-
ernment’s own admission. And the Government, which
has the burden of demonstrating the absence of any gen-
uine issue of fact as to the intended scope of the Differing
Site Conditions clause, did not even attempt to respond
to these facts, Adickes, supra, at 157-159, 90 S. Ct. at
1608-1609."?
12. Openly acknowledging its assumed role of ultimate
fact-finder, the Court of Claims declared on page 15 of its order
that the Government-designated rock source “was by no means
as close to the contract as the quarries in the cited cases.” (App.
Al2) (Emphasis added.) This gross conclusion of fact not only
completely disregards the evidence firmly establishing that the
Government-designated rock source was the contractually des-
ignated and approved rock source, but totally ignores the fact
that the Government-designated rock source was expressly made,
(Continued on following page)
25
Moreover, the excavation, selection and handling of
the rock from the Government-designated rock source
constituted the major item of mandatory subsurface con-
tract work. As such, that contract work was obviously
“at the site”, since the Differing Site Conditions clause
expressly applies to “physical conditions at the site, of
an unusual nature, differing materially from those ordi-
narily encountered and generally recognized as inhering
in work of the character provided for in this contract.”
(App. Al7-Al8) (Emphasis added.) As the Court of
Claims observed in Kaiser Industries Corp., supra,
“The very heart of this undertaking was the ob-
taining of suitable rock in a reasonably economical
manner from a satisfactory quarry. It would be
illogical to conclude that Article 4, specifically ad-
dressed to subsurface conditions, was inapplicable to
the only part of the Project that involved such opera-
tions.” Id. at 323, 340 F. 2d at 329. (Emphasis added.)
The Assistant Contracting Officer expressly characterized
the Government-designated rock source as an integral
part of the “project” in his testimony concerning the
pre-bid worksite tour.”
Footnote continued—
and acknowledged to be, an integral part of the Project “work-
site,” a crucial fact not even present in the cases cited by the
court on pages 12-15 of its order. (App. Al0-A12)
13. That the Lackner quarry operation was contractually
intended to be an integral part of the Project contract “work’
and therefore within the scope of Article 4, is further confirm
by the fact that the Government assigned the Project me ap
tion Inspector to spend at least 50% oe See eee the
quarry operations. (App. A54) Indeed, his daily Construction
Log Book contains detailed reports of the q operation, not-
ing specifically the daily status of the “Work Force, ” in-
cluding men and equipment. (App. These actions are
clearly indicative of the Government’s sisekaiodl intent. Old
Colony Trust Co. v. Omaha, 230 U.S. 100, 118, 33 S. Ct. 967, 972
(1912). The court completely disregards these facts in its reci-
tation of the “ ” (App. A2-A6)
26
Finally, the court makes reference to Paragraph 2(a)
“MATERIALS” of the form set of Special Provisions,
which provides “Unless otherwise specified in this con-
tract the Contractor shall furnish all materials required
for completion of the contract.” (App. A3) This clause
does not even purport to refer to the Government’s ex-
press contractual responsibility for the differing site con-
ditions at the Government-designated rock source. As
the Supreme Court stated in United States v. Spearin,
248 U.S. 132, 137, 39 S. Ct. 59, 61 (1918) such provisions
“concerning contractor’s responsibility cannot be construed
as abridging rights arising under specific provisions of
the contract.” (Emphasis added.)'* In addition, under the
rule of United States v. Seckinger, 397 U.S. 203, 210, 90
S. Ct. 880, 884 (1970), Special Provision 2(a) must “be
construed most strongly against the drafter, which in
this case was the United States.” The Court of Claims,
in its order of summary judgment, never even addressed
these fundamental rules of contract interpretation as they
apply to Special Provision 2(a). And the Government,
which has the burden of demonstrating the absence of
any genuine issue as to the interpretation of these provi-
sions, has never attempted to even show how Special
Provision 2(a) was intended to deprive the mandatory
Differing Site Conditions clause of its normal application
to the Government-designated rock source. Adickes,
14. The Court of Claims itself has repeatedly held that
“clauses to whittle down or cut back the Changed Conditions
clause, which is prescribed for Government contracts, are not
broadly or sympathetically interpreted. Morrison-Knudson Co.
v. United States, 184 Ct. Cl. 661, 685-86, 397 F. 2d 826, 829, 841-42
(1968).” Stock & Grove, Inc. v. United States, 204 Ct. Cl, 103,
110, 493 F. 2d 629, 632 (1974). Thus, in Kaiser Industries Corp.
v. United States, 169 Ct. Cl. 310, 323-324, 340 F. 2d 322, 329
(1965) the court found that “{djefendant’s attempt to divest
itself of all contract responsibility with respect to these sub-
surface quarry conditions... cannot, in view of the retention of
Article 4 in the contract, be sustained,’
27
supra, at 157-159, 90 S. Ct. at 1608-1609. Moreover, as
stated in Fitzsimmons v. Best, supra, at 694 “The inter-
pretation of a contract the terms of which are disputed,
is very much a matter of the intent of the parties who
entered into the contract. Questions of intent are partic-
ularly inappropriate for summary judgment.” In such
circumstances, “[the court is] required to resolve all
ambiguities and disagreements in favor of the party
against whom summary judgment is sought, see United
States v, Diebold, Inc., supra, 369 U.S. at 655, 82 S. Ct.
993.” Heyman v. Commerce and Industry Co., 524 F. 2d
1317, 1321 (CA 2 1975).
C. Breach of Contract by Non-Disclosure of Su-
perior Knowledge
The court’s pronouncement that “the parties’ knowl-
edge was based upon data equally available to both” con-
stitutes gross speculation as to the ultimate facts of this
case. Fortner Enterprises, Inc. v. United States Steel,
supra. (App. A9) Contrary to the court’s assertion on
page 10 of its order (App. A8), that Mr. Spencer was
“aware of the potential significance of the extensive
jointing and fissuring of the rock,” Mr. Spencer expressly
testified that he did not consider the joints and fractures
which he observed to be “extensive” with respect to their
spacing. (App. A53)"® Specifically, he testified that the
distance between the joints and fractures which he ob-
served ranged at intervals of from 2 to 3 inches, at the
closest, up to several feet, and that he did not consider
15. The specifications provided that the rock riprap was
to be generally uniformly graded from 3 inches up to 18 inches,
with an allowance for 5% under 3 inches. The problem with
the excessive waste resulted from the fact that the material from
the Government-designated rock source was breaking down to
produce fines and fragments, 60-70% of which were smaller
than 3 inches in size. (App. A24; A30)
28
them to pose any problem with respect to rock breakdown.
(App. A53) Moreover, he considered the rock to be only
slightly to moderately weathered, and “very minor” in
extent. (App. A52) All told, on the basis of his April 9,
1979, pre-bid site inspection of the exposed rock out-
croppings at the Government-designated rock source (no
subsurface rock was exposed, since the rock source had
never previously been worked), Mr. Spencer testified that
“the rock source appeared to me to be competent, suitable
for the use intended and we had been informed that it was
an approved source and the rock in the source had been
approved, which indicated to me that the construction
losses would certainly be within normal amounts, ratios.”
(App. A50)
By contrast, Mr. Sanders, the Government’s geologist,
testified that on the basis of his November, 1978 geological
investigation of the Government-designated rock source,
he had determined that the jointing and fracturing which
he observed was “a result of the structural history of the
area; the movement of the rock masses probably related
to faulting”; and that it was therefore to be expected
that the subsurface bedrock would be weathered along
such fracture zones, (App. A39; A42)** He subsequently
reported, in his July 23, 1979 geological Trip Report, that
“(t]he problems with obtaining a high percentage of use-
able rock result from the high degree of fracturing, fault-
16. Mr. Sanders is an experienced Government geologist.
(App. A35; A36; A44-A45) Mr. Spencer, petitioner’s Construc-
tion Manager, by contrast is a civil engineer. (App. A45) The
Government engineers, who designed this Project, considered Mr.
Sanders’ geological advice and assistance essential to their plan-
ning of the Project, and specifically relied upon his geological
“knowledge, experience and expertise” in conducting the Govern-
ment’s evaluation of the Government-designated rock source.
(App. A29; A35; A57) Prior to his on-site investigation of the
Lackner quarry on November 17, 1978, the Government geologist
consulted a geological map of the area, and a geological publica-
tion maintained at his office in order to determine the geological
history and rock structure of the Project area. (App. A37; A44)
29
ing and weathering associated with these features; It is
extremely difficult to establish a blasting pattern to yield
a greater percentage of useable material due to the bed-
rock.” (App. A22-A23) He further expressly testified
that he was not surprised by the excessive waste, and
that indeed he expected such excessive waste to be en-
countered. (App. A42)**’ The foregoing evidence clearly
and convincingly supports the inference and conclusion
that the Government was indeed possessed of superior
knowledge concerning the subsurface geological conditions
at the Government-designated rock source.
Moreover, as discussed in Part II.A., supra, the Govern-
ment’s designation and approval of the Lackner quarry as
the Project rock source constituted a representation and
warranty that the material at the source was suitable for
the use intended. This was the understanding of peti-
tioner’s Construction Manager, and nothing in his pre-bid
inspection of the source led him to believe otherwise. The
law is well-settled that prospective bidders are not re-
quired to conduct extensive and costly subsurface ex-
ploratory investigations, such as test quarrying, in order
to verify such representations and warranties. United
States v. Spearin, supra, at 135-137, 39 S. Ct. at 61; Holler-
bach v. United States, 233 U.S. 165, 172, 34 S. Ct. 553, 556
(1914). The record is this case fully supports the con-
clusion that the prospective bidders should not reasonably
have been expected to test quarry the Government-
designated rock source. The Government had over
3 months, between its geological investigation in Novem-
ber, 1978 and the issuance of the Invitation for Bids on
March 16, 1979, within which to perform the recommended
test quarrying. The Government engineer who made the
17. Com with the court’s footnote 5 on page 10 of its
order (App. A8), asserting there was no evidence that the Gov-
ernment geologist knew that the excessive waste would be en-
30
decision not to test quarry testified that his decision may
have been based on “a time limitation.” (App. A56) The
prospective bidders had one week from the April 4, 1979
worksite showing of the Government-designated source
to the April 11, 1979 bid opening within which to pre-
pare a bid for the Project.’* Contrary to the court’s ap-
parent conclusion that “more conclusive data was available”
in the form of test quarrying (App. A9), the facts of the
case clearly support the reasonable inference and conclu-
sion that such “data” was most certainly not available in
the time allowed by the Government for the preparation
and submission of bids.
CONCLUSION
The summary judgment rule prescribed by the Court
of Claims in this case is in direct conflict with the rule
announced by the Supreme Court in United States v. Die-
bold, Inc., supra. In issuing an order of summary judg-
ment in this complex case, in the face of conflicting infer-
ences and conclusions of fact, the Court of Claims has vio-
lated petitioner’s fundamental statutory right to trial de
novo. Petitioner respectfully prays that the Court grant its
Petition For Writ of Certiorari, and that it vacate the
Court of Claims’ order of summary judgment and remand
this case to the United States Claims Court for trial in ac-
cordance with 41 U.S.C. §609(a).
BERNARD M. JUNG
18. In similar circumstances, the Court of Claims found in
Foster Construction C.A. v. United States, 193 Ct. Cl. 587, 616,
435 F. 2d 873, 888-889 re that “[t]he duty of the bidders
to investigate the site did not require to conduct geological
or other technical investigations, costly and perhaps impossible
in the 20 days available.”
Al
IN THE UNITED STATES COURT OF CLAIMS
No. 571-80C
L. G. EVERIST, INC., d/b/a CONNOLLY-
PACIFIC CO.
v.
THE UNITED STATES
Contracts; misrepresentation; superior knowledge;
equitable adjustment
Bernard M. Jung, attorney of record, for plaintiff.
Sandra P. Spooner, with whom was Assistant Attorney
General J. Paul McGrath, for defendant.
Before FRIEDMAN, Chief Judge, NICHOLS and
SMITH, Judges.
ORDER
(Filed September 24, 1982)
Plaintiff in this case seeks direct access review of a
contracting officer’s decision under the provisions of the
Contract Disputes Act of 1978. The case is before us on
defendant’s motion for summary judgment. Plaintiff
opposes the motion on the grounds that genuine issues
of material fact remain and that defendant is not entitled
to judgment as a matter of law. We grant defendant’s
motion for summary judgment.
A2
As is usual in this kind of case, plaintiff seeks relief
both off and on the contract. Off the contract, plaintiff
alleges that defendant has breached the contract on two
theories. First, plaintiff claims that the Government
fraudulently misrepresented the quantity of acceptable
rock in a quarry that the Government had approved as
a source for rock for the project herein. Second, plaintiff
claims that the Government had superior knowledge of
the quantity of acceptable rock, which it had a duty to
disclose to plaintiff but did not. On the contract, plaintiff
claims entitlement to an equitable adjustment based on
the Differing Site Conditions clause of the contract for
the unexpectedly small quantity of acceptable rock in
the quarry. We will discuss these three issues in the
foregoing order.
Before reciting the facts, we note our conclusion that
there are no genuine issues of material fact in the record
which would, in themselves, preclude summary judgment.
While the inferences and conclusions drawn from the facts
by the parties differ radically at times, the underlying
material facts are not in genuine dispute.
In early 1978, the Soil Conservation Service (SCS)
of the Department of Agriculture began planning the con-
struction of emergency streambank restoration on the
Aravaipa Creek in Arizona. As set out in the invitation
for bids (IFB), the contract, and the specifications, the
basic design of this project involved a compacted earth
fill core, with rock facing—called “riprap”’—to prevent
erosion. The specification for the riprap' read, in pertinent
part:
1. The Government used Specification No. 216-8—Rock
Riprap, instead of the more rigorous Nos, 61—Loose Rock Riprap
and 523—Rock for Riprap, because this project was designated
an emergency project pursuant to 7 C.F.R. §§ 624.1-624.9 (1982).
Of course, only the provisions of Specification No. 216-8 are
relevant here.
A3
2. MATERIALS
Individual rock fragments shal] be dense, sound and
free from cracks, seams and other defects conducive
to accelerated weathering. The rock fragments shall
be angular to subrounded in shape. The least dimen-
sion of each individual rock fragment shall be not less
than one-third the greatest dimension of the fragment.
Rock from the designated sources, or from other
sources approved by the Engineer[,] shall be exca-
vated, selected, and handled as necessary to meet the
grading requirements in Section 8 of the specification
or on the drawing. * * *
The specification addresses the characteristics of riprap.
First, it describes the quality of the rock itself. This
aspect of riprap is discussed at some length in the SCS
National Engineering Handbook, cited by plaintiff, where
the “quality” of rock is described as its soundness and
durability. Second, the specification describes the size,
or grading, of the rock used for riprap, The approval
requirement in section 8—‘‘The suitability of the rock tor
riprap shall be approved by the Engineer * * *”—refers
to these characteristics.
Besides its characteristics, the other issue concerning
the riprap is its source. There are only two references
to source in the contract. The first is Special Provision
2(a):
Unless otherwise specified in this contract the Con-
tractor shall furnish all materials required for the
completion of the contract.
The second is in the specification, quoted above: “the
designated sources, or * * * other sources approved by
the Engineer.” In the absence of any other contract
provisions relating to source, we must conclude that there
is no “designated source” of rock, that the contractor is
A4
free to find and use any source, that it is the contractor’s
duty to find a source, and that the source chosen by the
contractor is to be approved by the Government with
respect to the quality and grading of the rock derived
therefrom.
On November 17, 1978, as part of the preparation for
the project, Aubrey C. Sanders, Jr., an experienced Gov-
ernment geologist, made a field trip to one potential local
source of riprap, the Lackner quarry, for the purpose of
determining whether there was any local source of riprap.
Unless some source existed, regardless of its commercial
attractiveness, the project could not be undertaken at all.
The Lackner quarry was close to the project site, but it
was neither owned, operated, nor used by the Government.
Mr. Sanders stayed at the quarry for about one and
a half hours and produced a report (dated November 27,
1978) in which he stated that the rock was of sufficient
quality but expressed some reservations about the partic-
ular source. Noting that the rock was extensively fissured
and jointed, he was concerned that there could be “some
problem relative to excessive breakdown of the rock,
thereby yielding an excessive quantity of undersized mate-
rials.” He concluded that, all told, the quarry would
provide a sufficient quantity of rock of the appropriate
grading, but he cautioned that “a determination to use
this source should be contingent upon the results of * * *
test quarrying to evaluate the breakdown characteristics
of the rock.’”* The report was not made available to
prospective bidders.
2. Mr. Sanders also recommended laboratory tests, but it is
clear that such tests related solely to the quality of the rock.
These tests were conducted with satisfactory results.
The Government did not conduct any test quarrying because,
from its point of view, the purpose of the preparatory work was
only to ensure that a source of riprap existed, not necessarily
an economical source.
A5
On March 16, 1979, the IFB was issued. It contained
the contract provisions discussed above and announced
that tours of the site would be conducted. Pursuant to
this notice, an employee of plaintiff, L. G. Everist, who
was not a geologist, participated in a site tour on April 4,
1979, led by Bob Kilcrease, the SCS Area Engineer. Mr.
Everist (along with others) was taken to the construction
site and then to the Lackner quarry. Mr. Kilcrease told
the group that the Lackner quarry was an approved
source. According to his testimony, Mr. Everist took this
to mean that there was a sufficient quantity of rock of
adequate quality to satisfy the requirements of the con-
tract. Mr. Kilcrease also made it clear that the Govern-
ment did not own the quarry and that bidders would have
to strike their own bargain with Lackner. Mr. Everist
left the tour with the impression that the Government
expected that the Lackner quarry would be used because
of its proximity, but that bidders were free to use another
quarry, so long as its rock was approved,
A few days later, on April 9, 1979, Mr. Everist again
toured the quarry, this time with George Spencer, another
employee of plaintiff. Mr. Spencer was not a geologist
but he had had 30 years of experience in evaluating poten-
tial quarry sites for plaintiff. Mr. Spencer flew over
Lackner and another potential local source, the Grand
Reef Mine, and he toured Lackner on foot. He was aware
that Lackner was aproved for quality and understood
that his task was to decide whether it was also economical.
From the record it is clear that Mr. Spencer made virtually
the same observations as Mr, Sanders did, but Mr. Spencer
conducted no laboratory tests and did not consider test
quarrying due to the small size of the project. He con-
cluded that the Lackner quarry should be used and rec-
ommended it to his superior.
A6
Plaintiff submitted its bid on April 11, 1979, and was
awarded the contract on May 2, 1979. The contract, as
stated in the IFB, contained a Differing Site Conditions
clause; it required approval of any choice of rock; it neither
designated nor mentioned any quarry; and it required the
contractor to be responsible for supplying the materials
for construction.
Shortly after commencing quarrying operations, the
tendency of the Lackner rock to break excessively into
small pieces became apparent. The waste rate was run-
ning at about 50 percent, far higher than expected. There
is no dispute that the high waste rate slowed production
and increased costs to plaintiff. There is also no dispute
that an adequate quantity of riprap was eventually ob-
tained from the Lackner quarry.’ The contracting officer
denied plaintiff relief in a decision of September 11, 1980,
and plaintiff promptly filed its petition in this court on
October 21, 1980.
We first consider plaintiff's two breach of contract
claims—(1) misrepresentation and (2) superior knowledge
—and then consider (3) the equitable adjustment claim.
1. Plaintiff's claim of misrepresentation is founded
upon the contrast it draws between Mr. Sander’s reserva-
tions about the breakdown size of the rock in the Lackner
quarry and the statements of Mr. Kilcrease that the quarry
was an approved source of rock. The obvious difficulty
with this theory is the distinction, clearly drawn by the
contract, the specifications, Mr. Sanders, and Mr. Kilcrease
—and clearly understood by Messrs. Everist and Spencer—
3. The quarry consisted of two steep slopes facing each
other across a creek. The primary location was the northern
slope; however, Mr. Sanders noted in his first report that the
southern slope could be used if inadequate quantities were found
at the primary slope. Plaintiff did have to resort to the southern
A7
between the required physical characteristics of the riprap
(quality and grading) and the commercial requirements
for the source of the riprap. The short of the matter is
that Mr. Sanders expressed some hesitancy about the
amount of waste that might be involved, but Mr, Kilcrease
made no representations in that respect at all.‘ Mr. Kil-
crease said, and was only understood to say, that the
quality of rock was approved and that an adequate quan-
tity of it was available at Lackner. Plaintiff has alleged
no facts which would indicate that Mr. Kilcrease suggested
in any way what the cost of the quarrying would be.
Nor should we expect that such representations were
made. Bidders were encouraged to visit the project site
and to note sources of materials, and part of the calcula-
tion of the bid price must have been the estimated cost
of acquiring the required amount of riprap from whatever
source and by whatever means chosen. This was the
whole point of Mr. Spencer’s visit to the area, He visited
the Lackner quarry and the Grand Reef Mine and flew
over the whole area for the purpose of recommending
the most commercially attractive quarry. Having been
told only that the Government approved the Lackner rock
for quality and quantity, he chose Lackner as the most
economical.
Plaintiff's claim of misrepresentation must fail be-
cause the Government made no erroneous representation
material to the problem—excessive waste—upon which
plaintiff bases its suit, nor did plaintiff’s representatives
understand that any such representation was made.
4. It is instructive to compare this case with Tcbin Quarries,
Inc. v. United States, 114 Ct. Cl. 286, 333, 84 F. Supp. 1021,
1022 (1949). There the court found that a misrepresentation,
albeit innocent, had occurred because in designating in the con-
tract a ar site for the quarry the Government implicitly
represented that it was economical. Here, by contrast, no
designation was
A8
2. Plaintiff’s superior knowledge claim must also fail
on the threshold issue: we cannot find from the record
or from plaintiff’s factual allegations that the Government
had superior knowledge not reasonably available to plain-
tiff. Rather than entering into a detailed discussion of
the factors set out in Helene Curtis Industries ». United
States, 160 Ct. Cl. 437, 443-44, 312 F.2d 774, 778 (1963),
and H, N. Bailey & Assocs. v. United States, 196 Ct. Cl.
156, 177-78, 449 F.2d 376, 382-83 (1971), in this case we
are presented with a straightforward comparison of avail-
able information.
Mr. Spencer, while not a trained geologist, had a
great deal of experience in precisely the task before him.
His testimony and his longevity in his post demonstrate
that he was qualified for the task. Both he and Mr.
Sanders inspected the quarry on foot; Mr. Spencer also
examined it from the air. The observations of the two
were nearly identical and both were aware of the potential
significance of the extensive jointing and fissuring of the
rock. Mr. Spencer testified:
Q: [by Government counsel] Did you consider
whether these natural joints and fractures might
cause [exc]essive breakage when the placing was
done?
* os *
A: I decided they would not. [Emphasis supplied. ]
The only real difference between their reports was
their conclusions,® and then only in that Mr. Sanders was
5. Plaintiff makes much of Mr. Sanders’ statement, upon a
return visit to Lackner after | geen =! began to experience dif-
ficulties, that “[t]he degree o hee geen ta however, is not un-
expected as ted by my trip rt dated November 27,
1978.” (Emphasis supplied.) The post double negative cannot
be relied upon as evidence that Mr, Sanders knew that there
would be a high degree of breakdown. Indeed, his earlier sug-
on of test quarrying shows that he was in doubt prior to the
AQ
inclined to be cautious about the breakage rate and Mr.
Spencer was not. While Mr. Sanders would have test
quarried before using Lackner, Mr. Spencer, who was
actually deciding whether to use it, testified:
Q: [by Government counsel] Did you consider doing
some test quarrying?
A: No, ma’am.
ses ®@
Not on a job this size.
Q: Because it is too small?
A: That is correct.
We conclude that the parties’ knowledge was based
upon data equally available to both and that, while more
conclusive data was available, neither party chose to obtain
it. In these circumstances, there is no duty imposed upon
the Government to disclose its information to plaintiff.
T. F. Scholes, Inc. v. United States, 174 Ct. Cl. 1215, 1226,
357 F.2d 963, 970 (1966).
3. Finally, plaintiff's claim on the contract for an
equitable adjustment under the Differing Site Conditions
clause must fail because the excessive waste spoilage at
the Lackner quarry was not a site condition to which
the clause applied. The Differing Site Conditions clause
reads, in pertinent part:
(a) The Contractor shall promptly * * * notify
the Contracting Officer in writing of: (1) Subsurface
or latent physical conditions at the site differing mate-
rially from those indicated in this contract, or (2)
unknown physical conditions at the site, of an unusual
nature, differing materially from those ordinarily en-
countered and generally recognized as inhering in
work of the character provided for in this contract.
* * * [Emphasis supplied. ]
Al0
Our discussion of the terms of the contract should amply
demonstrate that the Lackner quarry was not “the site”
within the meaning of the contract. The Lackner quarry
was not designated or even mentioned by the contract;
furthermore, the contract made plaintiff solely responsible
for the acquisition of riprap. The Lackner quarry was
“at the site” only in the sense that plaintiff used it, not
within the contemplation of the contract.°
This does not entirely conclude our inquiry, however,
for this court has consistently given the Differing Site
Conditions clause a broad scope to effectuate it fully.
Kaiser Industries Corp, v. United States, 169 Ct. Cl. 310,
323-24, 340 F.2d 322, 329-30 (1965); Morrison-Knudsen Co.
v. United States, 184 Ct. Cl. 661, 666, 397 F.2d 826, 829
(1968); Stock & Grove, Inc. v. United States, 204 Ct. Cl.
103, 134-35, 493 F.2d 629, 646 (1974). Plaintiff argues,
based on the Kaiser doctrine that the Government cannot
disclaim all responsibility for conditions which, while
nominally not covered by the contract’s terms, are neces-
sarily part of the contractor’s performance. Kaiser Indus-
tries, 169 Ct. Cl. at 323-24, 340 F.2d at 329-30. Stated
thus, Kaiser states a doctrine which we wholeheartedly
endorse. On the other hand, it should not be expanded
to subvert the meaning of the contract.
The question for us is whether the use of the Lackner
quarry was necessarily so bound up with the contractor’s
performance that the Government should be responsible
for the conditions at the quarry. Examining the cases, we
6. To test the validity of this proposition, one might con-
sider the consequences of plaintiff's choosing the Grand Reef
Mine instead of the Lackner quarry. Not one word of the
contract or specifications would have changed, yet surely it is
clear that if plaintiff had chosen Grand Reef, all other facts re-
maining the same, plaintiff would have no action against the
Government. It only remains to be noted that plaintiff clearly
considered such an action in visiting Grand Reef Mine and in
making an aerial survey of the entire area.
All
find two particularly significant factors: the first and
most important is the extent to which the contract (and
accompanying drawings or specifications) or circumstances
anticipate the use of a particular quarry; the second is the
size of the difference between anticipated or represented
conditions and the actual conditions.
In Tobin Quarries, Inc. v. United States, 114 Ct. Cl.
286, 84 F. Supp. 1021 (1949), the contract required the
contractor to quarry its rock Moose Creek Butte, which
the Government represented to be “a solid rock forma-
tion.” Id, at 331-32, 84 F. Supp. at 1021. In that case,
however, there was an extreme amount of waste, stated by
the contractor to be 10 to 1 and 3 to 1, waste to suitable
rock, in various locations. Id. at 301, 304, 332, 84 F. Supp.
at 1021-22.
The facts in Kaiser were more extreme, which may
account for its broadly worded holding. In that case, the
Government owned two local quarries which, after years
of investigation, it had found to be the only ones in the
area. Kaiser Industries, 169 Ct. Cl. at 314, 340 F.2d at
324. The contract itself stated that the quarries were
“approved”—the Government had conducted extensive in-
vestigation of the quarries—and could be used without
charge. Id. at 314, 321-22, 340 F.2d at 324, 328-29. Indeed,
the way the bidding was set up, the Government in effect
allocated a particular quarry to the contractor. Id. at 319,
340 F.2d at 327. The quarry first used was “not a com-
mercially operable one at all.” It yielded 60 percent waste
and was exhausted of all usable material long before pro-
ducing the amount required by the contract. Id. at 314-15,
340 F.2d at 324-25.
Morrison-Knudsen also differs significantly from the
instant case. That contract not only designated borrow
pits, but it and the 98 accompanying drawings described
their location, section, relation to the project, and capacity
Al2
in great detail. Morrison-Knudsen, 184 Ct. Cl. at 672-73,
397 F.2d at 833. The proposal also included for the bid-
ders’ perusal field studies and material studies of the pits.
Id. at 672, 397 F.2d at 833. As in Kaiser, the pits failed
even to supply the quantity of material required by the
contract—contrary to express representations—and all of
the material from some of them was rejected by the Gov-
ernment for its low quality. Id. at 674, 379 F.2d at 834.
Finally, in Stock & Grove, the court was again pre-
sented with a contract that designated a specific site as
the quarry and required the contractor to quarry there.
Stock & Grove, 204 Ct. Cl. at 107, 110, 493 F.2d at 630,
632. And despite the Government’s implicit representa-
tions of quantity and quality, id. at 107-08, 493, F.2d at 630,
the contractor could not complete the contract without
more material from a new quarry and relaxed quality re-
quirements. Id.
Without again rehearsing the facts of the instant case
it should be apparent that the Lackner quarry was by no
means as close to the present contract as the quarries in
the cited cases. Neither the contract here, nor any of its
attachments, made any reference to Lackner and, as repre-
sented, Lackner supplied a fully sufficient quantity and
quality of rock for the project. It supplied the rock at
a higher cost than anticipated, but, in the circumstances,
that one fact cannot bring this case within the ambit of
the Kaiser doctrine.
IT IS THEREFORE ORDERED, after thorough con-
sideration of the parties’ submissions and without oral
argument, that defendant’s motion for summary judgment
is granted and the petition is dismissed.
BY THE COURT
/s/ Edward S. Smith
Edward S, Smith
Judge
SEP 24 1982
Al3
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
No. 571-80C
L. G. EVERIST, INC.,
d/b/a CONNOLLY-PACIFIC CO.,
Appellant,
v.
THE UNITED STATES,
Appellee.
ORDER
A suggestion for rehearing en banc and a petition for
reconsideration having been filed in this case,
UPON CONSIDERATION THEREOF, it is Ordered by
the court that the suggestion for rehearing en banc and
the petition be, and the same are hereby, Denied.
FOR THE COURT:
/s/ George E. Hutchinson
Clerk
December 13, 1982
Date
Al4
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
717 Madison Place, N.W.
Washington, D.C. 20439
George E. Hutchinson Telephone: 633-6550
Clerk Area Code 202
Date November 9, 1982
APPEAL NO. 571-80C, L.G. Everist, Inc. d/b/a
Connolly-Pacific Co. v. The
United States
The following has been receivea and filed this date:
October 8, 1982.
( ) Appendix/Brief (NOTE: Appellee’s Brief due
40 days from the date
of service)
( ) Brief for Appellee
( ) Brief for Amicus Curiae
( ) Reply Brief
(X) Petition for Rehearing & Rehearing and Sug-
gestions for Rehearing In Banc
4
George E. Hutchinson, Clerk
/s/ Elizabeth J. Carroll
By Elizabeth J. Carroll
Deputy Clerk
Al5
INVITATION FOR BIDS
(CONSTRUCTION CONTRACT)
INVITATION NO.
SCS-11-AZ-79
DATE
March 16, 1979
NAME AND LOCATION DEPARTMENT OR
OF PROJECT AGENCY
Aravaipa Creek U. S. Department of
Emergency Agriculture
Watershed Project Soil Conservation
Graham County, Service
Arizona
BY (issuing office)
Soil Conservation Service
Room 3008 - Federal Bldg.
230 N. First Ave.
Phoenix, AZ 85025
Sealed bids in single copy for the work described herein
will be received until 1:00 p.m. local time at the place of
bid opening April 11, 1979 at Room 3008 - Federal Build-
ing, 230 N. ist Ave., Phoenix, Arizona 85025 and at that
time publicly opened.
Information regarding bidding material, bid guarantee,
and bonds
sf. ®*®
The following attachments hereto form a part of this in-
vitation for bids and any resultant contract: Bid Sched-
ule, Special Provisions, General Provisions-Standard Form
Al6
23-A, Labor Standard Provisions - Standard Form 19-A,
Instructions to Contractors Form AD-425b, Disabled Vet-
erans of the Vietnam Era - AD-716, Employment of the
Handicapped - Form AD-655, and Specifications and Draw-
ings listed under “Contents”.
Description of work Construction of emergency stream
bank restoration including compacted earth fill and rock
riprap. The work will be commenced within ten (10)
calendar days and completed within 150 calendar days
after date of receipt of notice to proceed.
INSPECTION OF WORKSITE - Prospective bidders may
assemble at the Post Office, Klondike, Arizona on Wednes-
day March 29, 1979 and Wednesday April 4, 1979 for a
group showing of the worksite. The group will leave at
10:00 a.m. on each of the above days. If you are unable
to attend one of the group showings, arrangements to
inspect the site may be made with Bob Kilcrease, Area
Engineer, SCS, 3241 Romero Rd., Tucson, Arizona 85705
(Phone: (602) 792-6602).
BID SCHEDULE
ARAVAIPA CREEK PROJECT
EMERGENCY WATERSHED PROTECTION - 216
Bid Spec. Unit
Item Work or Material No. Unit Quantity Cost Amount
1 Mobilization 216-1 Job 1
2 Loose Rock
Riprap 216-8 Ton 75,000
Al7
GENERAL PROVISIONS
(Construction Contract)
1. DEFINITIONS
(b) The term “Contracting Officer” as used herein
means the person executing this contract on behalf of
the Government and includes a duly appointed successor
or authorized representative.
2. SPECIFICATIONS AND DRAWINGS
The Contractor shall keep on the work a copy of the
drawings and specifications and shall at all times give the
Contracting Officer access thereto. Anything mentioned
in the specifications and not shown on the drawings, or
shown on the drawings and not mentioned in the specifi-
cations, shall be of like effect as if shown or mentioned
in both. In case of difference between drawings and
specifications, the specifications shall govern. In case of
discrepancy either in the figures, in the drawings, or in
the specifications, the matter shall be promptly submitted
to the Contracting Officer, who shall promptly make a
determination in writing. Any adjustment by the Con-
tractor without such a determination shall be at his own
risk ana expense. The Contracting Officer shall furnish
from time to time such detail drawings and other informa-
tion as he may consider necessary, unless otherwise pro-
vided.
4. Dirrertnc Site Conpirions
(a) The Contractor shall promptly, and before such
conditions are disturbed, notify the Contracting Officer
in writing of: (1) Subsurface or latent physical conditions
Als
at the site differing materially from those indicated in this
contract, or (2) unknown physical conditions at the site,
of an unusual nature, differing materially from those
ordinarily encountered and generally recognized as inher-
ing in work of the character provided for in this contract.
The Contracting Officer shall promptly investigate the
conditions, and if he finds that such conditions do ma-
terially so differ and cause an increase or decrease in the
Contractor’s cost of, or the time required for, performance
of any part of the work under this contract, whether or
not changed as a result of such conditions, an equitable
adjustment shall be made and the contract modified in
writing accordingly.
(b) No claim of the Contractor under this clause
shall be allowed unless the Contractor has given the notice
required in (a) above; provided, however, the time pre-
scribed therefor may be exteuded by the Government.
(c) No claim by the Contractor for an equitable ad-
justment hereunder shall be allowed if asserted after the
final payment under this contract.
Alg
SOIL CONSERVATION SERVICE
ARIZONA
CONSTRUCTION SPECIFICATION
216-8. ROCK RIPRAP
2. MATERIALS
Individual rock fragments shall be dense, sound and
free from cracks, seams and other defects conducive
to accelerated weathering. The rock fragments shall
be angular to subrounded in shape. The least di-
mension of each individual rock fragment shall be
not less than one-third the greatest dimension of
the fragment.
Rock from the designated sources, or from other
sources approved by the Engineer shall be excavated,
selected, and handled as necessary to meet the grading
requirements in Section 8 of this specification or on
the drawing. When filter or bedding material is
specified, it shall be selected to meet the grading re-
quirements in Section 8 or on the drawings.
8. ITEMS OF WORK AND CONSTRUCTION DETAILS
Items of work to be performed in conformance with
this specification and the construction details are:
a. Bid Item 2, Loose Rock Riprap
(1) This item shall consist of the furnishing and
placing of loose rock riprap, including shap-
ing the slopes and excavating for the toe,
as shown on the drawings and as staked in
the field.
(2) The suitability of the rock for riprap shall be
approved by the Engineer.
Aravaipa Creek, Arizona
Emergency Watershed Frotection § (216-8-3) 2/79
A20
UNITED STATES DEPARTMENT OF AGRICULTURE
Soil Conservation Service
River Basin-Watershed Planning Staff
Suite 326, Arizona Title Bldg., 111 W. Monroe,
Phoenix, AZ 85003
DATE: November 27, 1978
SUBJECT: MGT - Trip Report - Geologic Assistance
on Aravaipa Creek
TO: T. Niles Glasgow
RBWP Staff Leader
On Friday, November 17th I travelled to Klondyke where
I met Bobby Kilcrease, Gene Goostree, a U.S. Forest Service
representative and the owner of Fourmile Ranch. The
purpose of this trip was to evaluate locally available rock
materials for use as riprap in conjunction with channel
stabilization work in the area.
The proposed quarry site is located in the SE 1/4 of sec-
tion 27, Township 7 South, Range 19 East on the south side
of Fourmile Creek. The rock is exposed on a steep, north
facing slope. This rock was field classified as andesite
porphry. Exposed rock is slightly to moderately weathered
at the surface. Weathering effects probably extend to a
depth of only a few feet. Fractures and joints cut the rock
at intervals ranging from a few inches to several feet.
The main limiting factor in using this source would ap-
pear to be the extensive jointing and fracturing. This
may create some problem relative to excessive breakdown
of the rock, thereby yielding an excessive quantity of
undersized materials. This problem can only be assessed
fully by doing some test quarrying at the site. The rock
appears to be of suitable hardness for use as riprap. How-
ever, the final determination of this should be based
upon the results of the tests currently being performed on
A21
rock samples submitted for laboring testing. This data will
be provided when testing is completed.
An alternate site was examined on the north side of the
creek about 400 feet west of the primary site. At this site
an andesitic basalt dike has intruded the porphry. This
rock is more dense and considerably less fractured than
the prophry. The dike is about 25 to 30 feet in width
and raises an estimated 40 feet above the canyon floor.
The dike trends in a northwesterly direction. This rock
appears to be of superior quality to the porphry. It is more
dense and much less fractured.
The required quantity of riprap has not yet been deter-
mined. The alternate site may not yield the required quan-
tity of material from the dike material. However, the ad-
jacent material is porphry like that at the primary site.
It is therefore recommended that the alternate site be
used as a riprap source. If the dike material does not yield
an adequate quantity of riprap than the adjacent porphry
could be utilized.
The primary site appears to offer useable materials. How-
ever, a determination to use this source should be con-
tingent upon the results of the laboratory tests in con-
junction with test quarrying to evaluate the breakdown
characteristics of the rock.
Aubrey C. Sanders Jr.
November 22, 1978
cc: (w/o att)
Ralph N. Arrington, SCE, Phoenix, AZ
Joseph L. Knisley, Jr., AC, Tucson, AZ
Bobby G. Kilcrease, ABS, Tucson, AZ
Gene R. Goostree, DC, Mesa, AZ
ACSANDERSJR: sls
A22
UNITED STATES DEPARTMENT OF AGRICULTURE
Soil Conservation Service
River Basin-Watershed Planning Staff
Suite 326, Arizona Title Bldg., 111 W. Monroe,
Phoenix, AZ 85003
DATE: July 23, 1979
SUBJECT: MGT - Trip Report - Geologic Assistance on
Aravaipa Creek 216 Project
TO: T. Niles Glasgow
RBWP Staff Leader
On July 17th I travelled to Klondyke where I met Messrs.
Bobby Kilcrease and Quenton Isaacson. We were joined by
Mr. John Googins, Project Superintendent for the con-
tractor performing 216 work on Aravaipa Creek.
The purpose of this trip was to evaluate the rock riprap
being quarried for channel] protection. The rock being
quarried, in many instances, is breaking down to produce
undersized materials. This rock is being removed and
disposed of. As a result of this breakdown, more excava-
tion is required to obtain the needed quantities. The de-
gree of breakdown, however, is not unexpected as indicated
by my trip report dated November 27, 1978. The material
which is being used appears to be of adequate quality.
The problems with obtaining a high percentage of useable
rock result from the high degree of fracturing, faulting,
and weathering associated with these features. It is ex-
tremely difficult to establish a blasting pattern to yield a
greater percentage of useable material due to the bedrock.
Despite the somewhat low production rate the contractor
should be able to obtain adequate quantities of acceptable
quality rock from the present site.
A23
In the event that it is deemed necessary or desirable another
quarry site could be opened. A potential quarry site which
should produce higher quality rock is located nearby as
described in my report dated November 27, 1978. There
are some problems of accessibility to this site but they
could be overcome.
There appears to be a good working relationship between
SCS personnel on the job and the Contractors Superin-
tendent.
/s/ Aubrey C. Sanders, Jr.
Aubrey C. Sanders, Jr.
Geologist
Enclosure
cc: Gus Dornbusch, ASTC (WR), Phoenix, AZ
Ralph Arrington, State Conservation Engineer, Phoe-
nix, AZ
Joe Knisley, Area Conservationist, Tucson Area Office
Bobby G. Kilcrease, Area Engineering Specialist,
Tucson Area Office
A24
UNITED STATES DEPARTMENT OF AGRICULTURE
Soil Conservation Service
Tucson Area Office
3241 N. Romero Road
Tucson, Arizona 85705
DATE: August 31, 1979
SUBJECT: AS - Contracts - 50-8A02-9-00068,
Aravaipa 216
TO: B.E. Osterquist, State Administrative Officer,
SCS, Phoenix
Attached is a construction schedule given to me this past
week by Connolly-Pacific’s Supt. John Googins. Their
projected completion date is December 21, 1979. This is
approximately 2 months past the contract date.
The quarry has produced a high percent of under 3 inch
material. This percentage has averaged 60-70% fines. The
result of this larger percentage of under 3 inch material is
a much larger handling of parent material in order to pro-
duce contract rock. The handling of extra material has
slowed the production of contract rock.
The contractor has added a second shift to his quarry opera-
tion this week in an attempt to increase production.
There is still a labor problem at the job site. The labor
union still has a picket line set up. The operators are cur-
rently working but that could change if a hearing set for
Sept. 4, 1979 in Tucson goes against Connolly-Pacific.
/s/ Bob Kilcrease
Bob Kilcrease
Government Representative
ce: Ralph Arrington (w/attach)
J. Knisley (w/o attach)
G.Goostree ”
A25
PLAINTIFF’S DEPOSITION EXHIBIT 30
(Excerpt from Government Construction Logbook)
Report No. 119 Date 14-Nov-1979
Weather Clear Cool Breeze
Work Period 0700 to 1630
WORK FORCE
Supt. John Googins Skilled Laborer
Foreman Bud Greer, Butch Raby 19 2
o + *
NARRATIVE
Rock riprap being hauled to “T” Section. 4 trucks
on riprap & 1 on waste - Loader for rock placement taken
to pit to work as one of 988’s blew a tire. Rock from last
nites shot is looking really good - Has a higher % useable
rock to waste. Maybe 40% useable to 60% waste. Rock
tests on “H” section completed this AM - No word as to
any more tests. Jack Stevenson, Portland TSC, Ralph
Arrington, Bill Andersen of Arizona State Office & Bob
Kilcrease Tucson A.O. were on the job site today - They
toured the repair of “W” Section - the work on Rattle-
snake Section. They looked at the test sections of “V”
“KF” “G” & “H” Sections - Talked with Googins & Dennis
of Connolly-Pacific about tests & round & square screens -
looked at “T” section rock to be placed & the rock pit
/s/ Bill Cutter C.E.T.
A26
IN THE UNITED STATES COURT OF CLAIMS
No. 571-80C
L. G. EVERIST, INC., d/b/a CONNOLLY-
PACIFIC COMPANY,
Plaintiff,
Vv.
THE UNITED STATES,
Defendant.
AFFIDAVIT
1. My name is Frank E. Wilimek. My present position is
Assistant State Administrative Officer with the Soil
Conservation Service, Phoenix, Arizona.
2. I attended the site showing of the Aravaipa Project on
April 4, 1978 conducted by Mr. Bobby Kilcrease. I ac-
companied Mr. Kilcrease and the group of potential
bidders on a tour of the project, including a visit to a
rock source on the Lackner property.
I declare under penalty of perjury that the foregoing is
true and correct. Executed on July 27, 1982.
/s/ Frank E. Wilimek
Frank E. Wilimek
A27
EXCERPTS FROM THE DEPOSITION OF
BOBBY G. KILCREASE
[8] Q. Would you identify all of the individuals who
represented the government who were present at the April
4, 1979 pre-bid work site tour for the Aravaipa Creek
project? A. There was myself and Frank Wilamek.
Q. Did the tour commence as scheduled at 10:00 a.m.
at the Klondyke post office? A. Approximately.
Q. Would you describe the various activities that were
undertaken during that tour? A. The tour consisted of
me taking the representatives of the contractors to the
various sites until they had a feel for what the project
was going to be, as far as placing the rock on dikes. Then
we made a tour up to this proposed site or—not proposed—
but what’s the word I want to use?—possible site that they
might use for rock. They looked at it and asked some ques-
tions and I told them some answers.
[11] Q. Was this the same source that was described
by the geologist as the proposed quarry site? A. Yes.
Q. Do you recall what you precisely told the bidders
at the time that you reached the proposed quarry site?
A. We went up and down the site and I told them that
our geologist had made an investigation of this source, he
had made an investigation, he removed samples to run
tests on; he said that the rock on that side, which would be
the south side, was hard enough for riprap, that on the
north side it was not quality rock to use on riprap.
[12] Q. And you told the bidders that, on the basis
of your investigation, the proposed quarry site was to
be considered as approved. A. Yes. The rock was ap-
proved on that side.
A28
Q. Did a discussion follow about the north side of
Right Prong Creek? A. To the best of my knowledge, no.
Q. But it was not approved. Is that correct? A.
That’s the best of my knowledge, yes.
[13] Q. The whole area was approved? Is that cor-
rect? A. No, sir.
Q. On the south side of the creek, that is? A. The
designated area was approved, yes.
Q. The designated area being what? A. One of the
faces of that bank.
Q. Which face was that? A. It was the south face.
[14] Q. Did you approve the site pursuant to the
specifications?
* * e
A. I said the geologist had approved that rock as be-
ing of quality.
Q. And the site was approved. A. The site was ap-
proved.
Q. That’s what youstated. A. Yes.
Q.. Was there anything else whatsoever said about
that quarry source? A. Not that I really know of.
[15] Q. Where was the reef? A. It was across the
Aravaipa Canyon. I have never been there. I just know
approximately where it was.
Q. The geologist had not investigated that. A. No.
Q. Had the geologist investigated any other sources
whatsoever? A. No. All we wanted was one source.
Q. How did it come about that that source was
choser: as the one to investigate? A. Mr. Lackner vol-
unteered it, and all we wanted was one source. So we
A29
knew that we had a project and could go on with our
engineering.
* * *
[19] Q. I’m now going to hand you what’s been
marked Plaintiff's Exhibit 7, and it’s the contracting of-
ficer’s decision on the claim of Connolly-Pacific Company,
which is the subject matter of this litigation, and I’d ask
you to review Claim Item No. 1 and the discussion under
that.
MS. SPOONER: No questions until I locate a copy,
please.
Okay, I have one.
[20] Q@. By MR. JUNG: Referring again to those
paragraphs under Claim Item No. 1, the first full para-
graph, it states:
“All bidders attending pre-bid site showings were in-
formed that the government had determined that the
quality of the rock as to hardness, located at the Lackner
property, had been determined to be acceptable to the gov-
ernment.”
What was your understanding of the term “hardness
of the rock”?
* * +
A. To me hardness is just what it says. The hard-
ness is such that it won’t break up in handling.
Q. Breaking up— A. In smaller pieces.
[24] Q. Why did you request geologic assistance in
your November 13th memo? A. To see if there was rock
available that could be used on the project.
Q. Did you consider the geologic advice and assis-
tance a necessity? A. Yes. It’s part of our planning
process.
A30
[33] Q. I’m now going to hand you what’s been
marked Plaintiff's Exhibit 21, and it’s a report dated
August 31, 1979, from you to Mr. Osterquist, and I’d ask
you to review that. A. Okay.
Q. Do you still agree with all of your findings and
observations? A. Yes.
Q. Do you feel anything should have been added to
that report which was not included? A. No.
Q. What do you mean by the term “fines”? A. Fines
is the material smaller than the minimum size specified.
Q. And in this case, that was three-inch? A. I
think three inches, yes.
Q. There was a tolerance, I believe, of five percent
under three inch. A. Yes.
EXCERPTS FROM THE DEPOSITION OF
GARLAND EVERIST
[11] Q. I'd like for you to tell me physically what
happened on the site showing, the government-sponsored
site showing, starting with the first time you contacted a
representative of the government or the government rep-
resentative contacted you. A. A group of contractors met
at the Klondyke General [12] General Store. Everybody
was logged in. From there everybody went up to a couple
of the dikes up on the—it would be the west end of the
job? Yeah, west or northwest, or whatever; showed
where the dike locations would be; and then we came
down, crossed the creek, and went up to the Lackner
ranch property.
s. ¢ 8
{[15] Q. Did anyone ask whether there were other
possible quarry sites— A. Yes.
A31
Q. Do you recall who asked? A. A representative
from D. C. Speer Construction Company.
Q. What was the question that was asked? A. He
asked if Mr. Kilcrease was familiar with the [16] Grand
Reef Mines.
Q. What did Mr. Kilcrease say? A. He said he
was not familiar and he did not know where they were
located, and that if he was interested in that, in the mines,
that he could contact some local people who would direct
him to where it was at.
Q. Did Mr. Kilcrease offer to take the D. C. Speer
representative or other representatives to the Grand Reef
Mine? A. No, he did not.
Q@. Are you certain about that? A. Yes.
’. * *
Q. Was there any other discussion of any other po-
tential [17] quarry site prior to your actual arriving at
the Lackner quarry? A. No.
Q. Tell me what happened after you arrived at the
quarry. A. When we arrived at the Lackner Ranch
everybody got out of their vehicles and into Eddie Lackner’s
four-wheel-drive pickup, in the back of it, and drove up
through the canyon, and Mr. Kilcrease said that the south
face was an approved source, or a source of approved rock.
Q. Did Mr. Kilcrease say anything else about the
Lackner quarry except that, as you say, the south face
was an approved source? A. He said that the north face
was not approved and that the large boulders in the creek
running down the center of the canyon would not be avail-
able to be used for riprap.
Q. Not available? Or not approved? A. Not ap-
proved.
A32
[18] Q. Do you recall anything else that was said?
A. Well, he said it was Lackner’s property, that the con-
tractor who got the job would be paying or making an
agreement with the Lackners for royalties. I’m sure there
were some other things said, but you have to ask me more
specific questions.
>. * *#
Q. Do you recall whether there was any discussion of
any other potential quarry sites during the tour of the
quarry? A. There were not.
Q. You’re certain about that? A. The reference to
the Grand Reef Mine was made at the Lackner Ranch.
It was a simple question-and-answer thing. It was never
brought up again during the tour.
[20] Q. Tell me again what he said. A. Okay. At
the initial meeting, when he told everybody about the
Lackner quarry that was listed in the plans, he said this
was the source of rock that the Soil Conservation had
found and had decided that approved quality rock could
be taken from that quarry site, and that they had looked
other places and hadn’t been able to find another area, but
that if a contractor wanted to go out and try to find an-
other quarry site some other place, they could try, sub-
ject to approval.
Q. Did he later change his explanation? A. Later,
after the group came back from the quarry, went and
looked at a couple of other dike locations toward the center
of the job, at that time he said, “All of the dike locations
are similar to this.” A majority of the contractors’ repre-
sentatives left at that time. I believe one or two of us
continued on down toward. I believe it was Area W, and
at that time, when we looked at that dike location, after
being asked about whether it was designated or approved,
A33
and what the difference was and what was the deal with
the Lackner quarry, he said, “The rock’s going to [21]
come from the Lackner quarry.”
Q. Are those his exact words? A. Those are very
close to his exact words.
[27] Q. In connection with the second time you
visited the Lackner quarry—in the company of Mr. Spen-
cer? A. Uh-huh.
Q. —What was the purpose of that visit? A. To
show him the quarry so that he could prepare a bid.
Q. What did you tell Mr. Spencer about the quarry?
[28] A. I told him, referring to your drawing again, that
area number one was the portion of the canyon which the
tour and Mr. Kilcrease had said was the source of rock.
Q. Was the source? A. The source of approved rock
or the rock was approved. Right there.
I told him that when we were given the SCS show-
ing that the SCS representatives took us into the canyon
and pointed toward area number one, shown on this dia-
gram, the south side of the canyon, and said, “This is where
the geologist has said there is sufficient and adequate rock
for riprap.”
eS #9
[29] Q. Did you tell Mr. Spencer that the area
marked number one on that map had been approved by
the Soil Conservation Service? A. Yes, as an adequate
source of rock.
* *¢ *
Q. What did you tell Mr. Spencer about the area
marked two on the map? [29A] A. That it was not an
approved source.
A34
EXCERPTS FROM THE DEPOSITION OF
CY SCHULTE
[13] Q. Mr. Shulte, the questions I’m going to ask
you now have to do with the Aravaipa Creek project, and
the first one is, did any Government representative prior
to the bidding ever represent to you personally that the
contractor on the Aravaipa Creek project would have to
obtain rock for riprap solely from the Lackner quarry?
A. No.
[14] Q. To your knowledge, was such a representation
made to anyone in Everist or Connolly-Pacific? A. Yes.
Q. To whom? A. To Garland Everist.
Q. (By MS. SPOONER) Shulte, prior to the bid-
ding, what was your understanding about the contractual
requirements regarding the source for riprap? A. My
understanding was that the material would come from the
designated source.
Q. And what was the designated source? A. Lack-
ner quarry.
* ss *
[28] Q. The map shows two outcroppings, one on the
south side of the creek labeled with number one and the
other on the north side of the creek labeled with a num-
ber two.
*. ¢ *#
Do you see those, Mr. Shulte? A. Yes.
Q. Do you recognize either of those sites as the site
of quarrying by Everist during the performance of the
Aravaipa Creek project? [29] A. Yes.
Q. Whichoneor both? A. Initially one.
Q. And was there also quarrying done in two? A.
Yes.
A35
Q. Was there quarrying done in any other site? A.
No.
Q. And you are certain about that? A. To the best
of my knowledge, yes.
Q. You testified earlier that it is your understanding
that a Government representative told Mr, Garland Everist
prior to the bidding that the Lackner quarry was the only
source from which a contractor could obtain rock riprap
for the Aravaipa Creek project, is that right? A. Yes.
Q. Is it your understanding that Mr. Everist was
directed to the area marked one or the area marked two
or both? A. The area marked one.
Q. How did it come that Everist did quarrying in
the area marked two? A. If I recall, they requested per-
mission to go to the area two to try and find some better
material.
[30] Q. Did you consider requesting going to some
area other than areatwo? A. No.
Q. Whynot? A. Noplace else to go.
EXCERPTS FROM THE DEPOSITION OF
AUBREY C. SANDERS, JR.
[6] A. Well, I have the responsibility, overall re-
sponsibility for all of the geology work, the technical as-
pects of the geology work in Arizona.
Q. Do you generally become involved in construction
projects when there is a geological problem involved? A.
I would say that’s true, yes.
[8] Q. Would you describe yourself as an engineering
geologist? A. Yes, I would,
A36
Q. What are the special qualifications and training
for an engineering geologist? A. Would you repeat that
question?
Q. Well, I'll rephrase it.
Does an engineering geologist have certain qualifica-
tions or training beyond that generally and normally at-
tained by a geologist? [9] A. Yes.
Q. What are those qualifications and training? A.
Well, the training can involve numerous things, but basi-
cally, it’s training in engineering principles as applied to
geology and geology as applied to the engineering pro-
fession.
Q. What is the special role that an engineering geol-
ogist plays that a regular geologist doesn’t in his day-to-
day activities? A. I would say that the engineering geol-
ogist interprets geological conditions as they relate to en-
gineering type projects, and it is just a specialized area.
Q. Is there any special experience or qualifications
that a geologist needs to have to hold himself out as an
engineering geologist? A. Yes, yes.
Q. What is the length of your experience as an en-
gineering geologist, in years? A. Well, I would say
about fifteen years.
[14] Q. Were you given an explanation as to what
was to be required of you during your field trip? A. Well,
of course I was given some indication of the requirements,
yes.
Q. What did you understand them to be? A. Basi-
cally, I was asked to go down and determine if there was
a suitable site available to obtain rock riprap for the
Aravaipa project.
Q. Who requested your assistance? A. Can you re-
phrase that question?
A37
Q. Yes. What individual contacted you to request
your assistance? A. To the best of my recollection, it
was Niles Glasgow.
Q. Who is Niles Glasgow? A. Niles Giasgow is an
assistant state conservationist in Arizona.
[15] Q. Did you review any particular documents
or reference materials prior to your investigation of the
proposed source of rock for the Aravaipa Creek project?
A. Yes.
Q. What was that? A. Well, I believe there were
two documents that I recall reviewing. One is the geologic
map of Graham County; the other one was a published
U.S. Geological Survey Report that I cannot recall the
title, but it covered that general area of the state.
Q. Where did you obtain access to this U.S.G.S. docu-
ment? A. The particular one in question?
Q. Yes. [16] A. We have it in our library.
[31] Q. Okay. Why did you describe this as a pro-
posed quarry site? A. Well, basically, it was the site,
the area which I was asked to look at to determine if it
would be a suitable source of riprap.
[33] Q. By MR. JUNG: Would you consider your
trip to the proposed quarry site as one to assist the en-
gineers in determining whether this source would provide
a feasible source in terms of economic feasibility for the
project?
THE WITNESS: Yes.
A38
Q. Well, isn’t it true that you state in the second
major paragraph of your trip report that there is a prob-
lem with respect to excessive breakdown of rock? A. No,
I don’t believe that I read that exactly that way.
Q. I’m referring to the sentence that states as fol-
lows:
[34] “This may create some problem relative to ex-
cessive breakdown of the rock, thereby yielding an ex-
cessive quantity of undersized materials.”
Doesn’t that relate to the economic feasibility of this
rock source for the project? A. It is relevant.
[49] Q. Did you determine the depth of the joints
and fractures? A. No.
Q. Why not? A. I didn’t have the equipment. It
wasn’t the purpose of the investigation to do this. This
was a preliminary investigation.
Q. But it was a feasibility investigation, wasn’t it?
A. In general terms, yes.
Q. * * * Was it a concern of yours as to the depth
of joints and fractures? A. Yes, I would say that was
a concern.
Q. But you were unable to determine whether these
were merely surficial joints and fractures or joints and
[50] fractures that extended to a depth into the bedrock?
A. It would be assumed that they extended to a depth.
Q. On what would you base that assumption? A.
Normally, jointing is not confined or related to the
weathering.
Q. So then you’re saying you did assume that the
joints and fractures extended some depth into the bedrock.
A. I assumed that.
A39
Q. What was the cause of the jointing and fractures
that you observed? A. Well, I would assume that the
jointing was a result of—could be the result of—well, it
is a result of the structural history of the area; the
movement, the rock masses probably related to faulting.
Q. You say related to faulting. What faulting was
there? A. At the site, at the time that I observed the
outcrops, I did not see any evidence of faulting at the
site itself, but there is faulting in the area.
[51] Q. Referring again to the second paragraph, sec-
ond full paragraph, does your terminology of “excessive
breakdown of rock” refer to a quantitative description or
a qualitative description, or both? A. I use that ter-
minology in a qualitative way.
Q. What do you mean, qualitatively, by the word
“excessive”? A. I suppose that I meant the breakage
would be more than average or normal.
[57] Q. Did you discuss the necessity of test quarrying
the site with Mr. Kilcrease when you conducted your geo-
logic investigation on November 17th, 1978? A. I don’t
recall that, whether I did or not.
Q. Your best recollection is what? A. Of course, I
believe that I did mention to him that it could only be
determined by doing some test quarrying, that the yield
could only be done by doing some test quarrying.
As I stated in my report, I think that we did talk
about that.
Q. And it was your recommendation that it be test
quarried.
A40
I’m referring to the top of page two, the last full sen-
tence, where you state as follows:
“However, a determination to use this source should
be contingent upon the results of laboratory tests in con-
junction [58] with test quarrying to evaluate the break-
down characteristics of the rock.” A. Okay. Are you
asking if I recommended that the SCS do test quarrying
at the site? Is this the question?
Q. I’m asking if it was your recommendation that,
before that source was chosen to be used for the project,
that it be test quarried. A. Are you referring to any
specific—
Q. I’m referring to use by the quarry by anyone. A.
Yes, then yes, right.
Q. So that was your professional recommendation.
A. Right.
[63] Q. How did you determine that those four in-
dividuals listed under the cc were to receive copies of
this report? A. Well, it’s procedural policy in the SCS
that certain individuals, depending upon their area of
responsibility, will eceive copies of such trip reports.
Q. And Mr. Arrington and Mr. Kilcrease were mem-
bers of the engineering staff.
Is that correct? A. Yes.
Q. And so, as a matter of course, they would receive
[64] this report. A. Yes.
Q. And to your knowledge, they did. A. Yes.
* * +s
[77] Q. By MR. JUNG: To your knowledge, was
any action ever taken as a followup to your recommenda-
tion for test quarrying the site, the proposed quarry site?
A. I’m not aware of any action along that line.
A4l
Q. Other than Mr. Kilcrease, did you discuss the
necessity for test quarrying with anyone? A. I don’t
recall for sure if I did or not. It’s possible that I did.
Q. Who would it be, more likely than not, that you
did, if in fact you did? A. Probably Ralph Arrington or
Bill Andersen, if in fact I did.
[78] Q. By MR, JUNG: Did you ever discuss or
confer with anyone at the SCS concerning sources of rock
for the project other than those described in your trip
report prior to the issuance of the invitation for bids? A.
Yes.
Q. What other sources were there? A. Bob Kil-
crease mentioned another source in the Klondyke area,
and that was about the extent of our discussion. In fact,
he mentioned that there was another possible source.
Q. How did he identify that source? A. I don’t
recall.
Q. When did he bring that up? A. At the time of
my trip report, my first trip report.
Q. Why didn’t you then check out that other source?
A. Well, we determined that the site that I looked at
[79] could provide a source of rock, and it was much
nearer, much more accessible, and we were merely trying
to ascertain the fact that there was a source available.
So there was no need, really, to check out another
site. He didn’t know exactly where the site was, either.
Q. So you were never asked then to view a source
known as the Reef or Grand Reef Mine? A. No.
[88] Q. When you visited the site on July 17th, 1979,
was the degree of the rock breakdown and the amount of
rock waste then being encountered consistent with your
expectations based upon your November 27th, 1978 field
trip? A. Yes, I think tliat it was consistent.
A42
Q. So, in other words, the amount of waste then
being encountered was the amount you expected to be
encountered. A. Relatively speaking, and in general
terms, yes, right, I would say so.
[89] Q. Is that to say you were not surprised by the
excessive waste? A. Yes.
Q. When you say in your 7-23-79 trip report, or
where you refer to a high percentage of usable rock, what,
[90] quantitatively, do you mean by high percentage of
usable rock”? A. * * * I mean basically normal per-
centage that you would expect from a good selected
quarry site. If you were out and selecting the ideal
quarry site, you would get a high percentage.
Q. That amount that would normally be encountered
in a good, economically feasible commercial riprap quarry?
A. * * * I would expect that high percentage of usable
rock from a good commercial quarry site.
[91] Q. You refer in your 7-23-79 trip report to the
fact that weathering was associated with certain features.
Why was weathering associated with the features de-
scribed in that trip report?
[92] A. Well, to some degree the weathering was
associated with fracturing and faulting, and it’s normal for
weathering to progress along fracture zones.
Q. Are you essentially saying then that the weather-
ing was more than you had anticipated? A. No, I didn’t—
no, no.
Q. Was the problem with the excessive waste rock
one of faulting and fracturing or one of unsound, weathered
A43
rock? A. I would say that there is no one single cause,
but these are contributing factors, along with the type of
operation conducted by the contractor.
Q. Would you say that, essentially, though, the rock
was unsound because of the effects of the weathering, to-
gether with the faulting and fracturing? A. Some of the
rock was unsound because of that; not all of the rock was
unsound.
Q. Are you saying there were zones of sound rock
and zones of unsound rock? A. You could possibly char-
acterize it that way.
[93] Q. Well, is that what you observed? A. Well,
let’s say there were areas with sound rock and areas with
more weathered rock. There were all gradations there.
But to say zones—I would characterize it more as areas.
But you could—you might choose to use the term “zones,”
but I would say “different areas.”
Q. These were on the south side. A. I am speaking
of the south side right now. The same could be said to be
true on the north side.
[95] Q. Would you say that the percentage of specifi-
cation size rock fragments which can be obtained from
a quarry for riprap is primarily determined by the quality
of the rock within the quarry itself?
[96] THE WITNESS: I would say that the amount
that you can or that it is possible to obtain would be pri-
marily related to the rock.
Q. By MR. JUNG: That is the percentage of spe-
cification size rock would be primarily dependent on the
quality of the rock in the quarry itself. A. The per-
centage that it would be possible to obtain would be pri-
marily related to the quality of the rock,
A44
[97] Q. * * * You referred earlier today about a
U.S.G.S. document that you had used in addition to the
geologic map of Graham and Greenlee Counties. [98]
A. Uh-huh.
Q. Did it discuss the proposed quarry site? A. No.
[99] Q. What did it discuss? A. As I said, as I re-
call, it was a general geology publication and it would dis-
cuss the rock types, the area of distribution, possibly the
ground water resources. I’m not sure it discussed ground
water resources or not. But a very general nature specific
to that general area.
Q. What information did you garner from reviewing
that document? A. Basically, a description of the type
of rock that might be found in that area, and probably some
information regarding the geologic structure of the area.
I don’t recall if the publication even included this specific
area. It may have been an adjacent area.
Q. Is this a standard document you have in your
geologic library? A. Yes, we have this in our library.
[102] Q. Let me ask you this: Have you had any
training or experience in drilling and blasting operations?
A. Do you mean by that question have I actually per-
formed these operations?
Q. Ejither/or. Either training in the form of formal
or informal education or on-hands training, or a combina-
tion. A. Well, I have observed drilling and shooting of
rock on many occasions.
Q. In connection with what kinds of projects A.
The construction of dams, construction of roads, around
quarries.
Q. When was this ? When did you observe these op-
erations? A. Over the last twenty years.
A45
[104] Q. Have you ever been an active participant
in a drilling or blasting operation? A. I have assisted
in an advisory role.
Q. What did you advise? A. On how to drill holes,
how to load the drill holes.
Q. You state in your July 27, ’79 trip report that it
was extremely difficult to establish a blasting pattern
due to the bedrock. A. Uh-huh.
Q. Do you still maintain that position? A. Yes.
Q. In what particular respects was it extremely dif-
ficult? A. Well, in one respect it was difficult to get the
drilling equipment into proper position, it was difficult
to predict how the rock was going to break initially, and
these things did make it difficult to establish a pattern.
Q. Your words are “extremely difficult.” Is that
correct? A. Oh, well, okay, I think it was extremely
difficult.
EXCERPTS FROM THE DEPOSITION OF
GEORGE SPENCER
[3] Q. And what is your position with L.G. Everist?
A. I'm a civil engineer.
[4] Q. Are you the manager of the construction divi-
sion of the company? A. In the Mid-West area, yes,
ma’am.
e aa e
Q. And what are your duties as manager of the con-
struction division of the central part of the United States
for Everist? A. I’m responsible for our construction proj-
ects.
A46
[8] Q. So would this work— I think I understand you
but I want to make sure I do understand. Would that work
include then going to a prospective source of building
material such as a quarry, looking at the quarry and de-
ciding whether it was a suitable source for building material
and how much it would cost you to retrieve building
material from that source? [9] A. I have trouble with
that in that I am not qualified to make all of the considera-
tions that you set forth, but it is an economic analysis as
opposed to a quality analysis.
Q. What is the difference between an economic anal-
ysis and a quality analysis? A. Well, once a particular
deposit has been approved or called acceptable, then we
compare the various deposits as to the degree of difficulty
in working— I suppose you would say the distance from
the project, the amount of material available. It’s more
economic investigations or determinations.
Q. And what is a quality determination? A. Quality
determinations are normally done in laboratories, I think.
In the final analysis they are done in laboratories.
Q. And what do you mean when you say the quality
of the source? Are you talking about hardness, perosity
(sp)? A. These are two of the criteria for structural
integrity.
’. * *#
[11] Q. What is your understanding of the term ‘ap-
proved’ when it is used in that context?
A. Ifa deposit was approved as a rock source it would
indicate to me that there was rock within that source that
would meet the specifications as set forth in the docu-
ments. If the rock in that rock source were approved it
would indicate to me that the bulk of that deposit would
be suitable for the use intended.
A47
Q. Would meet the specifications? A. Yes, ma’am.
[13] Q. Is there anything other than the distance be-
tween natural fractures that you look for in determining
the size of the material that will come out of the deposit?
A. Well, needless to say, we look at the material itself
if we are looking at a very loosely bonded sand stone and
there is a big distance between the seams, the distance be-
tween the seams in not indicative of large [14] rock com-
ing out. However we can go to a very good granite that
would have a uniform distance between the seams of a
foot or so and we will get foot or so rock out of it.
Q. Is there anything other than the kind of rock
and the distance between natural fractures that you look
for in determining the size of the material that will come
out of the deposit? A. Basically that’s it.
[24] Q. * * * What was your input into the L.G.
Everist bid for the Aravaipa Creek Project? [25] A. I
was responsible for assembling the bidding estimate.
Q. Initsentirety? A. Yes, ma’am.
Q. Did you work for anyone in that regard? In
other words, did you report to anyone who was ultimately
responsible for preparing the bid? A. Yes, ma’am.
Q. Whowasthat? A. Mr. Sholty.
Q. Were you responsible for determining the esti-
mated cost of obtaining rock riprap for that project? A.
Yes, ma’am.
Q. Anddidyoudothat? A. Yes, ma’am.
[26] Q. Did you do anything in connection with the
Aravaipa Creek Project on April 8th? A. Yes, ma’am.
A48
Q. What did you do? [27] A. Reviewed the plans,
specifications, discussed the project with people who had
been there prior to this.
Q. So you did not go out into the site until April
9th? A. This is correct.
[28] Q. What instructions were you given? A. Mr.
Sholty asked if I would be able to meet with Mr. Garland
Everist in Phoenix on 8th of April, 1979. He informed
me that early in the previous week Mr. Everist had viewed
the project on what is termed a prebid showing. He in-
formed me that Mr. Everist had attended this prebid
showing and as it relates to the rock source and Mr.
Kilcrease (sp) had informed Mr. Everist that the so-called
Lackner Quarry was an approved rock source and also
the rock in this source was approved. I subsequently met
with Mr. Everist and he confirmed this information to me.
Q. What did that mean to you when someone told
you that a Lackner quarry was an approved source of
rock? A. Thespecifications are very plain—By ‘specifica-
tions’ I mean the contract documents,—are very plain in
that they indicate the source of material to be approved
by the contracting agency. In that connection I was led
[29] to believe that approval at the prebid showing was
a valid indication of the integrity of the source. It meant
to me that material from this source would be suitable
for construction of this project in accordance with the
contract documents.
Se ££. *
Q. Are you saying the specifications led you to believe
that the approved rock source meant something specific
[30] to you? A. Yes, ma’am.
Q. What in the specifications told you what an ap-
proved rock source means? A. Do you have a copy of
the specifications with you?
A49
Q. No, I don’t. A. There is a recitaling in the
specifications that indicated the contracting office will
approve the rock source prior to its use, and I would
have to refer to that.
Q. And that’s what led you to believe— A. Yes,
ma’am.
*x ¢ *#
Q. Who was responsible on behalf of L. G. Everist
for deciding whether Everist would use that particular
[31] source or some other source? A. In the final analy-
sis Mr. Sholty.
Q. Did you make a recommendation? A. Yes,
ma’am.
Q. What did you recommend? A. I recommended
we use the Lackner source.
Q. Would you tell me specifically what you did when
you went to the Lackner Quarry on April 9th?
[32] A. I looked at the outcroppings of rock and
noted the dimensions of the seams, noted the extent of
exposures and attempted to ascertain the continuity of
the deposit. I also looked at some of the construction sites
or placement sites, I should say, apart from the quarry.
Q. Did you investigate any other potential sources
of rock for the Aravaipa Creek Project?
A. We talked with a Mr. Gordon White (sp), I think,
in connection with obtaining water. We asked him if
there were other sources in the area. He mentioned the
Grand Reef. We had heard it mentioned before so we
did fly over it and attempted to determine its accessibility
and decided it was inaccessible.
Q. Inaccessible for construction vehicles and— A.
Yes, ma’am.
A50
Q. Did you investigate any other potential sources
of rock prior to the bid? A. On our flight both to the
project and from the project we took an overview of the
area, and in that fashion, yes, [33] we looked at some
other outcroppings but we did not physically on the
ground go over any other potential quarry sites.
[38] Q. Isee down this list a stationary grizzly. What
is that? A. Rock separating device.
Q. Why did you determine to use a stationary grizzly
rather than a vibrating grizzly? A. There are many dif-
ferent ways of classifying riprap. In my estimate a job
of this size and the type of rock we were dealing with I
felt a stationary grizzly would be the proper tool to em-
ploy to meet the specifications as outlined in the contract
documents.
*. * *
[39] Q. What about the size? Was it small? A.
This is 75,000. This is a small job in our view as far as
quantity is concerned.
Q. Okay. And what about the rock source told you
that a stationary grizzly would be proper? A. We were
somewhat cramped as to room for equipment [40] in-
stallation early in the job. The rock source appeared to
me to be competent, suitable for the use intended and
we had been informed that it was an approved source
and the rock in the source had been approved, which
indicated to me that the construction losses would cer-
tainly be within normal amounts, ratios.
[45] Q. Now, when you went to the quarry on
April 9th you parked right by the area of the gate? A.
Yes, ma’am.
A51
Q. And you walked along the creek? A. Yes, ma’am.
Q. Did you look at both sides—both quarries, the one
on the north and the one on the south? A. I did not look
at the quarry on the north side because it had been in-
dicated at the prebid conference that that [46] quarry
would not be approved.
Q. That it would not be approved? A. It was not
approved.
Q. Or had not been approved? A. Was not.
Q. Did anyone tell you the government would not
approve that quarry if asked? A. Yes, ma’am.
Q. Who told you that? A. Mr. Everist told me that
he had been informed by Mr. Kilcrease that the north
quarry was not approved by the soil conservation geologists,
as the result it was not approved by the soil conservation.
Q. Did anyone tell you that the Soil Conservation
Service would not approve that quarry if a contractor
asked for approval? In other words, that that had been
specifically rejected as a quarry site? A. ‘That is my
understanding. It had oeen specifically rejected.
Q. This came by Mr. Everist? A. It came from Mr.
Everist who had been told by Mr. Kilcrease.
[49] Q. Okay. What does line Loss at 15% equals
13,000 tons mean? A. The project as outlined in the docu-
ments required 75,000 tons of material. It is my estima-
tion— It was my estimation that the loss we could rea-
sonably expect to encounter would be 15% or less for
this deposit, therefor 15% of the gross amount of material
required, which in this case is 88,000, is 13,000 tons. And
that is what the line Loss at 15% equals 13,000 tons means.
Q. You estimated in order to get 75,000 tons of usable
rock for the project you would have to excavate 88,000
tons? A. That’s correct. Yes, ma’am.
A52
[51] Q. Were you satisfied that the Lackner Quarry
would make [52] an acceptable source of rock for
Aravaipa Creek Project? A. Yes, ma’am.
Q. Did you test the rock at the Lackner Quarry for
hardness? A. In my fashion I did, ma’am.
Q. How did you do that? A. I—while walking over
the hill I selectively picked some of the reck that was
exposed and scratched it with a piece of steel, I knocked
2 or 3 pieces of it together at each stop, which to me was
an indication of hardness, tensile (sp) strength, com-
pressive strength, durability, things of that nature. I was
running a comparative test based on experience.
Q. And this was at the April 9th visit?
Q. Have you done core drilling? [53] A. Yes, ma’am,
I have.
Q. Prior to test hardness, prior to bidding? <A. Yes,
ma’am. If I could elaborate just a minute?
Q. Sure. A. Once again the economics involved
dictate the amount of investigation accomplished. When
I say we have done core drilling before we have, but the
contract arnount would be in the ten to twenty-five million
dollar range—
* * 7.
[57] Q. During your April 9th visit to the site did you
notice any weathering on the rock? A. Yes, ma’am.
Q. How would you characterize the degree of
weathering? A. What one would normally expect from
a lava flow.
Q. Was it slight weathering? A. Slight to moderate.
Q. Did you make an estimate in your own mind as
to how far the weathering extended down into the rock?
A. Yes,ma’am.
Q. Howmuch? A. Very minor.
A53
Q. Is minor a few inches or few feet or few yards?
A. Minor in my estimation would be certainly less than a
few feet, perhaps in the range of 8, 10, 12 inches.
Q. Did you see any natural fractures and joints in
the rock? A. Yes, ma’am.
Q. Were they extensive? A. Extensive in that I
saw them over a wide area but not extensive in that they
were very close together.
Q. How close were they together? [58] A. The
closest I observed them was about 2 to 3 inches and the
widest I saw one area where it was almost 3 feet between
the closest of these joints and fractures.
Q. Did you consider whether these natural joints and
fractures might cause obsessive breakage when the plac-
ing wasdone? A. Yes, ma,am.
Q. What did you decide? A. I decided they would
not.
Q. Did you consider doing some test quarrying? A.
No, ma’am.
Q. Do you know whether anyone connected with L.G.
Everist did consider doing test quarrying? A. Not to
my knowledge. This was never mentioned. Whether it
crossed somebody’s mind or not, I have no way of know-
ing.
Q. Is this not something that is generally done?
A. Notona job this size.
Q. Because it is too small? A. That is correct.
[64] Q. Mr. Lackner, I'm interested in the fact that
you appear to have been trained as a constructural en-
gineer but your work has been primarily in the area of—
at least somewhat in the area of geology. Do you have
training in geology? A. My name is Spencer.
Q. I’m sorry. What did I say? A. Lackner.
A54
Q. I’m sorry, Mr. Spencer. A. I have not had any
formal training in geology, no, ma’am.
Q. From where do you get your geologic expertise?
A. I really don’t know that I have geologic expertise. I
have been exposed to a lot of geology but I’m not a trained
geologist.
EXCERPTS FROM THE DEPOSITION OF
BILL CUTTER
[8] Q. Percentage-wise, approximately how much of
your time was spent at the quarry operation area? A. In
the early part of the job, probably twenty percent of my
time; in the latter portion of the job, probably eighty per-
cent.
Q. Eighty percent in the latter portion.
From what date would you delineate the latter por-
tion? A. I would have to have a calendar to reference
up the jobs. I’m not sure.
Q. Midway through the job? A. Probably.
[10] Q. By MR. JUNG: I’m now going to hand you
a log entry dated Wednesday, November 14th, and marked
Plaintiff's Exhibit 30, and ask that you review that.
THE WITNESS: Yes, sir.
Q. By MR. JUNG: Directing your attention again
to the underlined portion on the first page of the log entry,
which states “Rock from last night’s shot is looking really
good. Has a higher percentage useable rock to waste.
Maybe [11] forty percent useable to sixty percent waste.”
What do you by “higher”? Higher than what? A.
Higher percentage of usable rock compared to what they
had been running.
A55
Q. So they had been running over the sixty percent
waste. A. Yes, as best we could tell.
Q. This report here was based on a visual estimate.
A. Yes.
Q. Your statement that “this is really looking good”
then means that it’s good in comparison with what had
been achieved.
Is that what you’re saying? A. Yes.
Q. Would you consider this good in the sense that it
would be normally considered to be a good waste/rock
ratio in ariprap quarry? A. No.
. 8
EXCERPTS FROM THE DEPOSITION OF
WILLIAM K. ANDERSEN
[21] A. The approval of the source, contractor’s
source, would be given by the engineer.
Q. And what set of criteria or standards contained
in the specifications themselves would that approval be
based on?
SS *
A. It’s up to the engineer.
[48] Q. So you’re saying you based your final cost
estimate on the weight of rock and the type of rock that
was tested that had been previously selected for testing
by the geologist. Is that correct? A. True.
Q. It was stated in answer to Interrogatory No. 40
of the Plaintiff’s first set of Interrogatories in this [49] liti-
gation that you and Mr, Dornbusch had made the decision
not to test quarry what is described as the proposed quarry
A56
site in the second full paragraph of the memorandum dated
November 27th, 1978. Is that correct? A. True.
Q. When was that decision made? A. I don’t have
adate. It would have been after this report.
Q. Yes. Why was that decision made? A. Well, one,
because it was not a designated site. The contractor could
pick other sources of rock.
Other than that, I don’t recall, unless it was a time
limitation.
& + a
[50] Q. By MR. JUNG Could an approved source
also be a designated source?
THE WITNESS: That I don’t know.
Q. ByMR.JUNG: You drafted the 216-8 rock riprap
specifications, did you not? A. Yes.
Q. And you're testifying that you don’t know whether
an approved source could be a designated source?
7’. * *
[51] THE WITNESS: I don’t know.
Q. Did you conduct an archeological field trip with
a Mr. Lyle Stone in connection with the project? A. I
didn’t conduct it; I showed him all the sites that we had
on several projects.
Q. Did you show him the Aravaipa Creek project?
A. Yes.
Q. Did you take him to that area which has been
. designated in the geologic trip report of 11-27-78 by [52]
Mr. Sanders as the proposed quarry site?
THE WITNESS: Would you repeat that.
[Record read.]
THE WITNESS: I took him to the one in the report
that’s referred to as the proposed quarry site.
A57
Q. By MR. JUNG: Why did he have to be taken
to that site? A. We have environmental evaluations to
be made, and when government funding is used on a
project we’re required to have archeological clearance.
Q. Is that statutory or regulatory? Do you know?
That is, the requirement that you conduct archeological in-
vestigations during your design of the project? A. Not
during the design. This would be previous to the design.
Q. At some time, though, during the planning of
the project, you are required to conduct environmental in-
vestigations, including archeological investigations, are you
not?
THE WITNESS: Would you repeat that?
[Record read. 1
THE WITNESS: Yes.
[53] Q. By MR. JUNG: Did you show him any other
sources? A. No.
Q. Are you aware of any other archeological studies
having been undertaken at any other time in connection
with the project? A. No.
DEFENDANT’S RESPONSES TO PLAINTIFF’S
FIRST SET OF INTERROGATORIES
50. Identify each book, publication or guide relied
upon or consulted by the SCS in its investigation, evalua-
tion or testing of rock or rock sources for the Project.
Answer: Material Specification SCS-West No. 423; Per-
sonal knowledge, experience and expertise of
Aubrey C. Sanders, Jr. was utilized in conduct-
ing geologic investigation of site; geologic map of
Graham and Greenlee Counties, Arizona.
A58
94. Were you ever asked by a prospective bidder for
the Project to approve, inspect or otherwise consider a
quarry site known as the “Reef” or the “Grand Reef Mine”
for use as a source of rock for the Project?
Answer: No
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.