RELIEF OF THE TURNER CONSTRUCTION CO. COMMITTEE ON WAR CLAIMS, HOUSE OF REPRESENTATIVES, The committee met at 10.30 o'clock a. m., Hon. James G. Strong (chairman) presiding. The CHAIRMAN. We have before us H. R. 7562, a bill for the relief of the Turner Construction Co., of New York City. Congressman Simmons, a member of the committee, will present the facts. STATEMENT OF HON. ROBERT C. SIMMONS, MEMBER OF CONGRESS, STATE OF NEBRASKA Mr. SIMMONS. Pursuant to the arrangement that was made on behalf of Congressman Bacon, of New York, I would like to make a preliminary report to the committee, and especially in view of the fact that these gentlemen appeared once before this whole committee on this bill, I take it up with you and suggest that the whole committee should handle it, because it is purely a question of what we should do; there is no dispute of the facts. Briefly, if I may say this, the Turner Construction Co., of New York, entered into one of those form cost-plus contracts for building a supply base in the New York Harbor in May, 1918. As a part of that agreement they were required to remove considerable dirt. They were ordered by the War Department to deposit that dirt on certain ground owned by the Central Railroad Co. at another point in the harbor; they did that. There is a disputed question of fact there as to whether or not there was authority for it, but that is not involved now. The dirt was deposited there under instructions of the Army officers, and the Army was required under the contract to furnish a place to deposit the dirt. After they had deposited it and before a complete settlement was made, the railroad company came in and sued them for a million dollars for alleged damage to the land. They defended that suit at a cost of about $27,000. Now, that, at this time at least, is not primarily in dispute. The fact is it was a suit for a million dollars, and from reading the record I take it ably defended, purely on the question of fact that it involved the damages to the land, and the defense was that it had bettered instead of hurt the land, and on that the Turner Construction Co. won. This $27,000 includes expert witnesses, attorneys, etc. The War Department, throughout the whole thing, so far as the record shows, as I read it at least, considered this to be a valid obligation against the Government. They submitted the thing to the Attor ney General's office for a decision as to the amount of the attorney's fees involved; it has never been submitted to the Attorney General's office on the basis of the liability of the Government under the contract to pay attorney's fees. The War Department finally sent a claim through to the Comptroller General Mr. WILLIAMS. For the $27,000? Mr. SIMMONS. Yes, sir; for the $27,000, and they make this, which to me is a rather unique holding, at least, this is the holding: They hold that the Turner Construction Co. had no alternative except to obey the orders issued by the Army officers in charge of the work; pursuant to the said orders of the Army officers, the Turner Construction Co. was required to dump the material on the railroad company's ground-in other words, they did what they had to do under the contract, but that the contract can not be construed as reimbursing the contractor for such litigation as might be involved in pursuance of the contract-whether the question arose from a direction by a Government officer or not. Mr. REED of New York. This was during the actual operation of the war, was it not? Mr. SIMMONS. Yes, sir; in other words, the comptroller holds that while the Turner Construction Co. were required to do what they did do, the contract does not protect them from attorney fees resulting out of their doing what they were required to do that their expenses of litigation were part of their cost-plus agreement. The CHAIRMAN. As I remember the case when it was before the committee previously-and I want to refer to this so we can get it into our minds-the facts were something like this: The Government had arranged with the railroad company for permission to deposit this dirt on their right of way Mr. SIMMONS. That was a disputed question of fact. The CHAIRMAN. Yes; but they claimed that, and the railroad company brought suit claiming that that had not been done. Was it not declared in the suit that they had made that arrangement? Mr. SIMMONS. In the record, as far as I can find, nothing is said about that. The main defense of the suit was this: The record shows from the testimony of the Army officer that he had that verbal arrangement with the railroad, which was rather vague and indecisive and not satisfactory. The testimony of the railroad officials, according to this record, was positive that they had not given that authority. The CHAIRMAN. Then, the case was based upon the fact that there was no damage? Mr. SIMMONS. The main defense of the case was based on the fact that the dumping of this dirt on land which was submerged land, was of benefit instead of detriment of the railroad company holdings, and that was the main defense. The CHAIRMAN. Well, then, the thought comes to me, if a contractor makes a contract to do certain things, and says it will deposit ground, dirt, as they did in this case, on a certain place, and avers that he had the right to put it there, and a suit evolves, and is won by the contractee, is the contractor liable, or should they in any moral sense be liable for a suit of that kind? Would the contractor have a moral obligation to his contractee for any suit that might be brought against him, under those circumstances, moral, legal, or otherwise? Mr. SIMMONS. That is the first question involved here, whether or not we should submit this claim-and I am not certain that the Attorney General's office would answer it-to the Attorney General's office for an opinion as to the liability of the Government. Now, there is this question and phase in the case. When this suit was filed the Turner Construction Co. asked the Government to defend it; the record does show that they referred the matter to the district attorney up there and he took some preliminary steps, but did not go further than that in the defense of the case. The CHAIRMAN. Have we anything from him about the case? Mr. SIMMONS. No. Now, the situation as I see it is this: If this committee wants to hold that wants to interpret the contract and say that attorneys fees should be paid, we can go that far; if we want to interpret the contract and say it is not specifically provided for in there and that it should not be paid, as I take it we have that power. We ought to have some way of submitting this to some law officer of the Government to determine the liability of the Government. Now, this further thought occurs to me-and upon this it might be well that we hear these gentlemen--whether it is a matter that they should properly submit not to Congress but to the Court of Claims. I will say this frankly. I am at a loss to see where there are any outstanding equities that control in the case-it is purely a question what their rights are. The CHAIRMAN. What was the amount of the contract? Mr. WILLIAMS. Is not this a case where the Turner Construction Co. entered into a cost-plus contract with the Government, and where the contracting company was under obligation to deliver this dirt and deposit it where the Government directed, and, that being true, would not the Government have to assume all the responsibility in connection with the dumping of the dirt, if later on the dumping was questioned by the owners of the land, as was the case here, and if damage resulted, it would seem to me the Turner Construction Co. was entirely helpless, as far as I am concerned? The CHAIRMAN. This turns not upon the right to put the dirt on the land but on the question of damages; they could have been sued one hundred times Mr. REED of New York. I wanted to ask a question; what would have happened if the Turner Construction Co. had refused to put it where they were directed? Mr. WILLIAMS. They would have had their contract abrogatedthe Turner Construction Co. were absolutely helpless in the matter. Mr. SIMMONS. The question is this: Having put that dirt there, under authority of the Government, and under the Government orders, and being sued by the owners of the land for trespass and damage, and having successfully defended that suit, after having asked the Government to do so, and the Government not doing it, then, whether or not we should reimburse them for the cost of defending themselves. It involves this question too, which is contractual that is, whether or not we should write into the contract something that they themselves did not put in it. The CHAIRMAN. I suggest we hear from them. Mr. SIMMONS. On the question of the amount of the money spent, I do not think we should go into, because we must first decide liability. Mr. REED of New York. Have we not heard this before? The CHAIRMAN. Yes; but there was a request for them to come back. STATEMENT OF MR. FREDERICK HULSE, ATTORNEY FOR THE TURNER CONSTRUCTION CO. I Mr. HULSE. Gentlemen of the committee, I want to thank you, in the first place for giving up your time, and giving us the opportunity to come here a second time, and from what has been said, of course, you understand the general nature of the situation. Í would like to briefly point out to you-I can not, I will say, add anything, except to particularize, on what has already been so well said by Mr. Simmons. He has stated the case accurately, and I shall try to address myself to the question, particularly, whether when suits are brought of this kind, the Government should be responsible for the cost of defending them, which is a very proper question. Now, in the first place, and in partial answer to that, I wish to state that the difficulty comes from the peculiarity of the contract. Ordinarily contracts with the Government, of course, before the war, and I think they are now, I think were lump-sum contracts the contractor was to do work according to plans and specifications, and he was to use his own judgment and exercise and do whatever he thought was proper and right to complete it, and the Government, of course, generally, did not interfere with his activity. The only question was whether he brought the job to an end in accordance with the plans and specifications. That was not this contract at all. This contract starts out and says we are to do all of the work and furnish all of the material for an Army supply base at South Brooklyn, N. Y., in accordance with drawings and specifications to be furnished-the drawings and specifications were not wholly prepared at the time the contract was made-they were to be furnished by the contracting officer, and we were to be subject, in every detail, to his supervision, direction, and instruction. Mr. REED of New York. I was going to ask you if that word "direction" was in there. Mr. HULSE. It is; and then it goes on to say that these plans and specifications may be changed from time to time, and that other orders may be given, and that the contractor shall comply with all such written instructions or drawings. Then, we were to keep a superintendent on the work; also provision is made that at all times we shall keep a duly appointed representative who shall receive and execute, on the part of the contractors, such notices, directions, and instructions, as the contracting officer may desire to give. We do not have authority over subcontractors. The contract provides the contracts with subcontractors must be made only with the authority of the contracting officer, and satisfactory to him, and all the subcontracts were approved by the War Department, and we simply executed them as a rubber stamp. You will see that under the terms of this contract that we were simply an employee of the Government. What the Government did was to find, I suppose the best organized body of men for doing reinforced concrete work in the East-certainly in New York City. They wanted that company to do it because of their experience, because they had men who knew how to buy materials, because they had men who knew how to construct reinforced concrete work. They needed that expert help, and they simply employed us to do it. We had nothing to do, we had no work to perform, except as we were directed. Now, it became necessary to excavate for four piers, a thousand feet long, at the Army supply base, so that those piers could receive vessels of the greatest draft-30 feet. That was excavated and it required the removal of 1,700,000 cubic yards of material, and that material, of course had to be placed. In July 29, 1918, of course, during the time of the war, the subcontractor, the Great Lakes Dredging & Dock Co., who was excavating and transporting this material and dumping it, wrote a letter which shows, I think, the seriousness of the situation, and if you will indulge me I will read it, although I know reading letters is tiresome. It says: We are becoming very much concerned regarding the situation of the interstate dumps for the disposal of the dredged material from the Army supply base. By "interstate dumps" are meant dumps within the upper harbor at New York, because to take it out to sea could not be done with expedition, and more than that, it was too expensive. Of course, you will understand it has been said that the Government was to pay the cost of this work-we simply got a small percentage. At the time this contract was negotiated it was thought that the Comunicaw dump, which is in the upper bay would be available for around 500,000 to 600,000 cubic yards. We understood just before the work was started this total yardage had been restricted, but the consent of the Jersey Central people had been obtained for this amount. We have to date placed in this dump around 196,000 cubic yards, leaving approximately 60,000 cubic yards to be dumped here. While, of course, the Sea Gate dump, which was in the lower harbor and not out to sea, below the narrows, is now available, and has been used for considerable material, at the same time, all of the dumping at Sea Gate has to be done on the ebb tide, which restricts it. This had to do with the explanation that the Comunicaw dumping is done on flood tide, and with these two dumps available on opposite tides, the dumping can be handled to good advantage. However, you will readily appreciate the fact that if we are restricted to one tide only; that is, in going to Sea Gate, it will be impossible to handle as much yardage as we are now handling. You all understand how important the question of dumping was at this time-July 29, 1918. And it will be impossible to handle as much yardage as we are now handling unless additional dumping surface is available, and this we are having difficulty to obtain under present conditions. In view of this condition it is imperative that additional dumping facilities be provided at Comunicaw or some other dump that can be used to equal advantage, and we urge that everything possible be done to increase this allowable yardage at the Comunicaw. In our minds there is nothing more important to the completion of the work than obtaining this additional dumping capacity. Trusting this matter can be arranged without delay, we remain. Mr. WILLIAMS. Who writes that letter? Mr. HULSE. That is written by the subcontractor who was doing the excavating and removing of this material, and wanted a place to dump it. Mr. WILLIAMS. To whom was it addressed? |