
    READY-MIX CONCRETE COMPANY, LTD. v. THE UNITED STATES
    [No. 49279.
    Decided January 15, 1958.
    Plaintiff’s and defendant’s motions for new trial, for rehearing and to amend judgment denied June 4, 1958]
    
      Mr. O. E. McGuire, Jr. for the plaintiff. Messrs. Hogam, & Hartson were on the brief.
    
      Mr. John B. FranJelin, with whom was Mr. Assistant Attorney General George Goehram, Doub, for the defendant. Mr. Gerson B. Kramer was on the brief.
   Madden, Judge,

delivered the opinion of the court:

The plaintiff on June 23, 1944, made a contract with the United States to supply crushed rock and gravel of various types during the fiscal year 1945. The rock was to be supplied “in sucli quantities and at such times as ordered by” any one of several officials, named only by their titles, who were the supply officers of various activities of the United States Navy on the Island of Oahu, in Hawaii.

The contract contained a tabulation of estimated quantities, and a statement that these figures were given for information only, since it was “impossible to determine the quantity or quantities of the articles and materials described herein that may be required during the contemplated period of the contract.” It said further that the supplies would be ordered “in such quantities * * * as the needs of the Naval Service require.”

The contract here involved was a “requirements” contract, that is, a contract which bound the supplier to furnish, and the purchaser to accept from the supplier, whatever of the specified materials the purchaser needed during the period' of the contract. Johnstown Coal and Coke Co. v. United States, 66 C. Cls. 616; Gemsco, Inc. v. United States, 115 C. Cls. 209.

The plaintiff was engaged on the Hawaiian Island of Oahu in the business of producing and selling ready-mixed concrete and also crushed rock and sand. It had had, since 1941, a series of “requirements” contracts with the Navy for the supply of crushed rock for various construction projects at the Kaneohe Naval Air Station on the eastern side of the island. Honolulu is on the opposite side of the island, and it is some fifteen miles by road from the Naval Air Station to Honolulu, there being a mountain range between the two places. In order to service its Navy business without making this long haul, the plaintiff established a quarry near the Naval Air Station. The main economic activity on the island was in the Honolulu area.

. In the performance of its earlier contracts, the plaintiff had been able to keep posted as to the probable needs of the Navy, and to supply those needs satisfactorily. As we have seen, the contract involved in this suit was for the year July 1, 1944, to June 30, 1945. In July of 1944, the plaintiff, having on hand an inventory of more than 40,000 tons of crushed rock, shut down its plant. By December 1944, this inventory was reduced to about 6,000 tons, but the plaintiff was not aware of any early need for more rock. However, the Government had authorized additional construction projects which would use up some 66,000 tons of rock. One of these projects was a runway extension which would require about 40,000 tons.

The plaintiff, being unaware of these new projects, had no plans for the resumption of quarrying and crushing. A Mr. Pruyn was a project engineer employed by Pacific Naval Air Bases (PNAB) a group of local specialists which assisted the Navy’s construction battalions, the “Seabees”, in obtaining materials for their construction projects. Mr. Pruyn kept in touch with the plaintiff and other suppliers of the Navy’s construction projects to see that they had adequate supplies on hand to meet anticipated needs. Mr. Pruyn, having observed that the plaintiff’s supply of crushed rock was low, telephoned the plaintiff’s assistant manager, Mr. Winstedt, in December 1944, and told him that the plaintiff’s supply of rock was insufficient, that the runway extension was to be built, as well as various concrete structures. Pruyn was asked how much rock would be needed and he estimated 40,000 tons for paving the runway and 15,000 tons for other structures. He told Winstedt what particular sizes of rock would be needed. He said that the Seabees would do the construction work and would take delivery of the rook at the plaintiff’s stockpile. He said that the Seabees would mix the rock into asphaltic concrete at a hot-mix plant which the Navy had leased from the Hawaiian Bitumuls Company, which plant was located near the Naval Air Station; that once the Seabees started paving, which would be in about two months, they would pave without interruption, and that the plaintiff should go ahead and crush additional rock so that it would be available when needed.

Winstedt told Pruyn that he wanted “some confirmation of this” and Pruyn replied “you will get an order in due course.” Winstedt informed Mr. Makin, the plaintiff’s general manager and later president, of the conversation with Pruyn, and Makin issued orders for the resumption of quarrying and crushing operations as soon as the necessary preparations could be made.

On January 11, 1945, tbe contracting officer wrote the plaintiff amending the contract by increasing the quantities of rock named in it by 69,000 tons. The amendment said “All other conditions and specifications remain in full force and effect.”

The plaintiff resumed operations early in January, before receiving the communication from the contracting officer. As soon as the necessary personnel could be recruited, a double shift operation was commenced, in order to be ready to meet the anticipated urgent needs for the crushed rock. By March 17, a total of 57,670 tons had been produced.

On March 12, Mr. Brouk, another employee of PNAB, telephoned Winstedt that the Seabees had been ordered from Hawaii to a forward area, that the Navy would not need any more of the plaintiff’s rock for construction purposes, and that the plaintiff should not crush any more rock for the Naval Air Station project. Brouk said that his oral statement would be confirmed by a letter. No such letter was received by the plaintiff. Makin, the plaintiff’s president, waited a few days for the letter, then closed the operation down on March 17.

The Seabees were transferred from Hawaii to a forward area. The Navy surrendered its lease of the asphalt mixing plant to the Hawaiian Bitumuls Company. The Navy made a contract with the Hawaiian Dredging Company for the paving of the runway. The contract did not specify where that contractor should obtain its rock for the runway. The Dredging Company, with the approval of the Navy, subcontracted to its wholly owned subsidiary, the Hawaiian Bitumuls Company, the paving of the runway.

Bitumuls had two asphalt mixing plants, the one on the Naval Air Station side of the island, which the Navy had surrendered to it when the Seabees were moved out, and one on the Honolulu side of the island. It did not have sufficient manpower to operate both, and it chose to operate the one on the Honolulu side, obtaining .its rock from a quarry and crusher on that side and hauling the mixed asphalt concrete around the mountain to the runway. It used some 30,000 tons of crushed rock for the job, which was not finished until April 1946. We do not know how much of this was used before June 30,1945, which was the last day of the plaintiff’s contract period.

When the plaintiff stopped its operation on March 17, 1945, it had in its stockpile about 50,120 tons, all but 1,918 tons of which was of the sizes suitable for the runway paving job. In a letter dated March 26, it demanded that the Navy accept and pay for its entire stockpile because, as the letter said, the rock had been produced “on what amounts to a special order from the Navy.” The Navy’s contracting officer rejected the plaintiff’s demand, saying that the rock had not been ordered and that “Unless and until there is a requirement for the material and orders have been placed for it as provided in the Contract, the Navy is not obligated to accept delivery of the material.” The plaintiff took an appeal from the contracting officer’s decision to the Board of. Contract Appeals of the Navy Department.

The Navy, during the January to June 1945 period, bought some 21,000 tons of rock from the plaintiff for construction projects other than the one at the Naval Air Station. This rock was taken from the stockpile. The plaintiff sold some 6,000 tons from the stockpile to other persons during the January to June period. At the end of the contract period on June 30, 1945, the plaintiff still had in its stockpile some 34,000 tons of rock of the sizes suitable for the Navy’s runway and other projects. During the following three years the plaintiff sold to other persons 24,771.79 tons of the rock with which we are concerned, but at prices less than the Navy contract prices, and with greatly increased selling expense. The rest of the stockpile deteriorated to the extent that it became unsaleable.

The Board of Contract Appeals made its decision on July 25,1946. It decided that Pruyn’s telephone call to the plaintiff in December 1944 was “merely informative” in character, that the contract amendment made January 11, 1945 by the contracting officer was merely an increase in the estimates stated in the original contract, and that Brouk’s call to the plaintiff in March of 1945 was not a termination of the contract, for the convenience of the Government, but was merely advice that were was an anticipated decrease in the Navy’s requirements.

From the above recital it is apparent that the plaintiff has, without any fault on its part, suffered a large loss as a result of its dealing with the Government. Our question is whether its loss is legally recoverable.

The contract said that the Government should pay for the rock which it would require and which the contracting officer should order. The Government says that the contracting officer did not order the rock which the plaintiff produced. We think he did. He authorized Mr. Pruyn to contact suppliers and say to them what Pruyn did in fact say to them. There can be no question that Pruyn reported to the contracting officer what he had said to the plaintiff. What he had said was the only thing that could sensibly have been said, in the circumstances. The Navy proposed to pave a runway, and to do the work in an expeditious and economical way. It did not propose to have its battalion of Seabees waiting around while crushed rock dribbled from the quarry and the crusher. The only way to insure that the rock would be ready was to order it, and Pruyn did order it. The plaintiff asked that the telephone conversation be confirmed and Pruyn reported the conversation to the contracting officer. If the contracting officer was not willing to confirm what Pruyn had said, good faith would have required him to so advise the plaintiff. He did not do so, but instead sent the plaintiff the amendment to the contract. The amendment used substantially the same tonnage figures which Pruyn had used in his telephone conversation, and thus indicated to the plaintiff that it was the confirmation which he had requested.

The statement at the end of the contract amendment “All other conditions and specifications remain in full force and effect”, to which the Government points in this suit, had plenty of room for play without its being a concealed repudiation of Pruyn’s order. There were numerous conditions and specifications in the contract none of which were repeated in the amendment, and which were, of course, intended to be applicable to the amendment.

Taken literally, and in disregard of the circumstances, the amendment might be regarded as a mere increase in the estimated quantities of the contract, an increase in the Government’s rights to call -upon the plaintiff for crushed rock if it should happen to want it, but giving no assurance to the plaintiff that the rock would be taken or paid for. In the circumstances, the amendment cannot have meant that.

If the contracting officer had really meant to repudiate rather than to confirm the order which Pruyn had given to the plaintiff, he should, in good faith, have advised the plaintiff as follows. “We plan to use some 65,000 tons of crushed rock in the second half of your contract year. With your facilities, of which we were aware when we made our contract with you, you will have to crush and stockpile large quantities of this rock, since your contract requires you to deliver it within 48 hours after we order it. We realize that if you crush a large quantity of this rock and we do not take and pay for it, you have, in your isolated position, no other market for it. But I must, in fairness, warn you that we are not obligated to take nor pay for one ton of this rock, if our circumstances should change so that we do not need it. Be sure to have this in mind when you consider whether you will accept our proposed amendment of your contract, increasing greatly the amounts of rock which we may demand from you, but not increasing at all our obligation to take and pay for the rock.”

The contracting officer, of course, had no such intention. He did not foresee the possibility that the authorized and projected work would not be done. In prior years, what was planned was done, and the contracts with the plaintiff • were performed and settled without controversy. This year, with a projected greatly increased use of rock concentrated in the last few months of the year, he knew that the rock would not be available unless it was ordered in advance and he ratified, Both by silence and by conduct, the order which Pruyn had given the plaintiff.

When the Seabees were ordered out of Hawaii and the Navy’s plans had to be changed, the contracting officer put his mind on the legal consequences of what had occurred. In a spirit of humanity, he had the Navy’s agent, Brouk, tell the plaintiff what had happened, but as to fulfilling Brouk’s promise that his conversation would be confirmed in writing, he exercised the better part of valor and did not write.

When the Seabees were moved out, the Navy still wanted to bave the runway built. As we have said, the Navy had the work done by contract. So far as appears, it, in negotiating the contract, gave no consideration whatever to the plight in which it had left the plaintiff. The plaintiff’s stockpile of rock, accumulated at the request of the Navy, was near the runway. An asphalt mixing plant belonging to the contractor was also on that side of the island. Yet the Navy made a contract which permitted the contractor to buy its crushed rock on the other side of the mountain, mix it there, and haul the asphalt concrete fifteen miles around the mountain to the runway. This apparently completely inconsiderate action contributes no equity to the Government’s side of this case. It is worthy of note that, in negotiating the runway contract, the Navy specified that the contractor should obtain its asphalt from the Navy. If it had not so specified, the Navy would have been in the same unfortunate position as to the asphalt which it had accumulated for the job, as the plaintiff was in as to the crushed rock.

Our conclusion is that the Government ordered, and was obligated to accept and pay for, the 57,670 tons of crushed rock which the plaintiff produced after the giving of the order as well as the 6,000 tons which it had on hand when the order was given. As we have said, the Government did take and pay for some 21,000 tons of this rock. The proceeds of the sale of some of the remaining rock to third persons, less the necessary expenses incurred in so disposing of the rock, will be deducted as a mitigation of the damages caused by the Government’s breach of contract.

The plaintiff, in its first count, claims that it should recover the profits which it would have made if it had crushed, and the Government had paid for, all the rock specified in the amended order. When the plaintiff was notified to stop crushing, it still lacked 20,836.1 tons of the amount so specified. As we have said, it seeks to recover the profit which it would have made on this amount.

Our conclusion that Pruyn’s conversation and the contracting officer’s conduct and writing amounted to an order would seem to justify the plaintiff’s contention. To reach that conclusion, we gave great weight to the circumstances. We think the same circumstances justify us in interpreting the order as being subject to cancellation to whatever extent it had not been acted upon by crushing rock, at the time notice of cancellation was given.

In computing the plaintiff’s expenses in disposing of the remaining rock, there is a question with regard to equipment rental. The process of liquidating the plaintiff corporation began in 1945, and the title to the power shovel which was used in loading out the crushed rock from the stockpile was transferred to Mr. Makin, who was the plaintiff’s sole stockholder. No lease or other express arrangements for the plaintiff’s compensating Makin for the use of the shovel was made. The Government says that the plaintiff is entitled to no allowance for the use of the shovel, after the title passed to Makin, because the plaintiff did not own the shovel and did not pay nor promise to pay anything for its use. There is, of course, no intimation in the record that the plaintiff or Makin intended to, in effect, make a gratuitous contribution to the Government, on whose account it was, really, selling and shoveling the rock. If there had been a payment of rental from the plaintiff to Makin it would have been as significant as shifting money from one pocket to the other. The same would have been true of a promise to pay. We hold that the fair rental value of the shovel for the entire period of disposition is an allowable expense.

The Board of Contract Appeals of the Department of the Navy affirmed the contracting officer’s decision that the plaintiff had no claim. This case involves the construction of the contract, a “question of law.” There is no real dispute as to any fact. The finality provision of the contract is not applicable.

THE COUNTERCLAIM

In 1948 the United States Department of Labor filed a complaint against the plaintiff under the Walsh-IIealey Public Contracts Act, 41 U. S. C. 35-45 for failure to pay overtime wages to its employees who worked on Government contracts. Hearings on the complaint were had before a Hearing Examiner, and much oral evidence and many records and documents were received in evidence. The Hearing Examiner on May 11,1951, made a finding that the Act had been violated during the performance by the plaintiff of several contracts, including the contract here in litigation. He concluded that the plaintiff was liable to the Government in the amount of some $22,000 under the applicable provisions of the law. The Hearing Examiner’s decision was reviewed by the appropriate superior who revised it somewhat and decided that the proper amount of the plaintiff’s liability was $19,908.58. The Government has interposed a counterclaim for that amount in this case.

In an earlier consideration in this case of the question of the counterclaim, we held that affirmative enforcement of the counterclaim was barred by the statute of limitations, but that it would be treated as a defensive measure, the amount claimed in it being capable of being set off against any amount which might be found to be otherwise due to the plaintiff. Ready-Mix Concrete Company, Ltd. v. United States, 131 C. Cls. 204, 210. Since we do find the Government liable to the plaintiff, we now consider this set off.

The Walsh-Healey Act in section 39 of 41 U. S. C. states that the findings of the Department of Labor “if supported by the preponderance of the evidence, shall be conclusive in any court of the United States.” We think that when a statute provides for an administrative trial of questions of fact, and such a trial has been had, and the administrator has mads findings, Congress did not intend that the administrative proceeding should go for naught. Since the instant statute, unlike many others, makes the administrative findings conclusive only if they are supported by a preponderance of the evidence, the administrative proceeding would go for naught if it did not, when the case is taken to court for enforcement, at least shift the burden of going forward with the evidence to the party against whom the administrative decision went.

The commissioner of this court concluded that he could not determine whether or not the Labor Department’s findings were supported by the preponderance of the evidence. He said that those findings stated the amounts by which the plaintiff’s payments of wages were deficient as to each of 214 hourly wage employees and 35 salaried.employees during a five-year period of performance of Government contracts. But, he said, the findings “do not state the specific days or •weeks when the respective employees performed overtime work for which they were not, properly compensated, the amount of time that the employees worked on such occasions, the employees’ rates of pay at the pertinent times, and the amount of compensation (if any) that the employees received for their work during the pertinent days or weeks.”

If the Labor Department’s findings had contained all the detail, the omission of which is adverted to by our Commissioner, they would have constituted a bulky document indeed. In United States v. Pierce Auto Lines, 327 U. S. 515, 529, the Court said, “* * * the Commission is not compelled to annotate to each finding the evidence supporting it.” If our commissioners embodied in their reports supporting details such as the commissioner has referred to in this case, the bulk of these reports would be increased to a great, perhaps to an intolerable degree. The reason why it would not be useful to embody such detail is that nearly always our commissioners’ findings are correct, and the occasional case in which a finding may be incorrect is more economically left to be called to our attention by the party who thinks it is incorrect. When he does so, he details for us the evidence relating to the point.

All triers of fact have to take many things on faith. That faith is justified if it is faith in a finding to which no one has taken exception, or if an exception has been taken, the party taking it does not point out wherein the finding is wrong. In the instant case the Labor Department made findings that particular employees were underpaid by determined amounts. We have no reason to suppose that those figures were drawn out of a hat, rather than compiled from work sheets based on evidence. We do have reason to suppose that if the figures were not in accordance with the evidence which was before the department, the plaintiff would tell us so, and point out wherein.

If all the detail to which our commissioner adverts had been contained in the findings, we would still have to take them on the faith that if they were not correct the plaintiff would tell us wherein they were not correct. If one fears that other Government agencies make findings by -unorthodox methods, he must remember that detailed findings, as well as more general findings, could be made by such methods. It would only take longer to make them.

Other courts have held that when the United States sues an employer to collect the amounts found by the Department of Labor to be due for violation of the Walsh-Healey Act, the employer has the burden of showing wherein the administrative determination was wrong. United States v. Sweetbriar, 92 F. Supp. 777 (W. D. S. C.); United States v. Hudgins-Dize Co., 83 F. Supp. 593 (E. D. Va.).

In the writing of pleadings, one must steer the ill-defined course between stating over-naked legal conclusions, on the one hand, and reciting evidence, on the other. Likewise, it is not possible to lay down a rule of more than very general application as to when findings are too scanty and when they are too detailed. This court, in the case of The Snake or Piute Indians v. United States, 125 C. Cls. 241, 248 ff., discussed the applicable general principles, and applied them to the particular situations involved in that case. The lesson to be drawn from The Snake or Piute case, and from other cases such as Kelley v. Everglades District, 319 U. S. 415, 420, and Saginaw Broadcasting Co. v. Federal Communications Commission, 96 F. 2d 554 (C. A. D. C.), is that the adequacy of the findings must be determined with regard to the nature of the case. A naked finding that a plan for the composition of debts is “fair, equitable and nondiscriminatory,” Kelley v. Everglades, or that the granting of a broadcasting license would not be “in the public interest,” Saginaw Broadcasting, presents a problem different from a finding that employer A failed to pay employee B a stated number of dollars for overtime worked in the performance of certain contracts.

In our earlier consideration of this case, 131 C. Cls. 204, we concluded that the withholding right given to the Government by section 36 of the Walsh-Healey Act permitted the Government to withhold against amounts due a contractor on one contract, amounts due the Government for violations of the Walsh-Healey Act by the contractor in the performance of other contracts covered by that Act. The plaintiff, however, now calls our attention to a regulation issued by the Secretary of Labor which regulation was incorporated' into the contract involved in this suit. 41 C. F. R. 201.1 (f). The pertinent part of this regulation reads as follows:

Any sums of money due to the United States of America by reason of any violation of any of the representations and stipulations of the contract as set forth herein may be withheld from any amounts due on the contract or may be recovered in a suit brought in the name of the United States of America by the Attorney General thereof. [Italics supplied.]

The plaintiff says that the Government’s making this regulation a term of the contract gave up the right of the Government, conferred upon it by section 36, to withhold amounts owed by the plaintiff for violations committed in the performance of other contracts.

Section 38 of the Walsh-Healey Act authorized the Secretary to “make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions of” the Act. We would have serious doubts as to whether the Secretary had the power to surrender, by regulation or by contract, a right reserved to the United States by statute. In any event we think the Secretary did not intend to do that. The regulation was written as a direction to contracting officers as to what to incorporate in their contracts, so far as the Walsh-Healey Act was concerned. It was not intended to state all the legal consequences which would result from a breach of the statute. It was, naturally enough, limited to notifying the contractor that if he violated the Act in the performance of the contract, his pay under the contract would be reduced by the amount necessary to compensate for his violation. To tell him that compensation for other violations under other contracts would be withheld would have been comparable to, though not identical with, telling him that if he owed back taxes, or damages for a contract violation or a tort, the General Accounting Office would require that those amounts be deducted from his pay under the contract. We think the cited regulation does not affect the Government’s right to withhold.

The plaintiff is entitled to recover $60,859.92 for the Government’s breach of contract. The United States is entitled to an offset of $19,908.58 against the plaintiff’s recovery. Judgment will be entered for the plaintiff in the amount of $40,951.34.

It is so ordered.

Whitaker, Judge; Littleton, Judge; and Jones, Chief Judge, concur.

Laramore, Judge, took no part in the consideration and decision of this case.

EINDINGS OE FACT

The court, having considered the evidence, the briefs and argument of counsel, and the report of Commissioner Mastin G. White, makes findings of fact as follows:

1. (a) The plaintiff, Ready-Mix Concrete Company, Ltd., is a corporation duly organized and existing pursuant to the laws of the Territory of Hawaii. At all times material to this litigation, it was engaged in the business of (among other things) quarrying, preparing, and selling crushed rock, and it maintained its principal office and place of business in Honolulu, T. H. James J. Makin (usually referred to hereinafter as “Makin”) was the general manager of the plaintiff during such period.

(b) The plaintiff went into voluntary liquidation in 1945. The present litigation is the only item of outstanding business that prevents the plaintiff’s final dissolution.

(c) Since at least December 31, 1945, Makin has been president of the plaintiff and the sole owner of all its stock.

2. (a) The plaintiff alternatively seeks to recover $101,-346.84 under the first count of its petition, or $63,898.61 under the second count, or $63,898.61 under the third count, because of the defendant’s alleged failure during the fiscal year 1945 to accept delivery of and pay for certain quantities of crushed rock in two categories (designated as #3 rock and #4 rock, or crusher screenings) which, according to the plaintiff, the defendant had ordered from the plaintiff under the provisions of contract N 38U-S-4Y5, as amended.

(b) The defendant has filed a pleading denominated “Defendant’s Counterclaim”, which alleges that there is due and owing to the defendant from the plaintiff the sum of $19,-908.58 pursuant to a determination that was made on September 9, 1953 by the Administrator of the Wage and Hour and Public Contracts Divisions of the Department of Labor under the Walsh-Healey Public Contracts Act (41 U. S. C. 35-45). In a decision dated April 5,1955 on the plaintiff’s motion for a summary judgment dismissing the counterclaim, the court denied the motion and held that the counterclaim will be treated “as a defensive pleading, asserting merely the right to withhold the amount claimed from any amount to which the plaintiff may be found to be entitled for the breach of its contract” (131 C. Cls. 204, 210).

FINDINGS RELATIVE TO PLAINTIFF’S CLAIM

3. Contract N 384-S-475 was entered into on June 23,1944 between the plaintiff and the defendant (acting through a contracting officer of the Navy Department). Its provisions related to the supplying of various types of crushed rock and gravel by the plaintiff to the defendant during the fiscal year 1945, which commenced on July 1, 1944 and ended on June 30, 1945. In pertinent part, the contract provided as follows:

Article 1. /Scope of this Contract. — The Contractor shall furnish and deliver all of the articles * * * described in the schedule * * * attached hereto, for the consideration stated therein * * *. The rights and obligations of the parties hereto shall be subject to the provisions contained in Articles 1 to 18 of this contract * * * and the provisions of the attached schedule. In the event of any inconsistency between the provisions of the said articles * * * and the provisions of the attached schedule, the provisions of the attached schedule shall be deemed to control to the extent of such inconsistency.
Deliveries shall be made as stated in the attached schedule.
$ ‡ $
Article 7. Payments. — The Contractor shall be paid, upon the submission of properly certified invoices or vouchers, the prices stipulated herein for articles delivered and accepted * * *.
ij: * * sfc
ARticle 11. Termination for convenience of the Government. — The Government may, by written notice to the Contractor, terminate this contract as to all or any portion of the articles not already delivered * * * whenever the contracting officer shall determine that such termination is for the best interest of the Government. Such termination shall become effective on the date specified in such notice, which date shall not be earlier than 10 days after the date of receipt thereof by the Contractor. In the event of such termination, the Government shall pay to the Contractor within a reasonable time (1) an amount equivalent to the aggregate of the unit prices, as specified in the contract, for * * * articles completed and delivered and accepted by the. Government and not previously paid for, and (2) an amount representing fair compensation to the Contractor, with due regard to the amounts already paid to it or to be paid under (1) hereof and to its costs, expenditures, liabilities, commitments, work and expenses of settlement, and including such allowance for profit as is reasonable under all the circumstances: Provided, however, That the total sum to be paid to the Contractor in the event of such termination shall not exceed the total contract price for full performance of the contract. In the event of failure of the parties to agree upon the amount to be payable hereunder, such amount shall be determined in accordance with the Article hereof entitled “Disputes.”
*****
Article 18. Walsh-Hedley Act. — If this contract is for a definite amount in excess of $10,000 or for an indefinite amount which may exceed $10,000,- there are hereby incorporated herein by reference the representations and stipulations pursuant to Public Act No. 846, 74th Congress, known as the Walsh-Healey Public Contracts Act, as set forth in Article 1 of Part I of Regulations No. 504, issued by the Secretary of Labor pursuant to such Act, as from time to time- amended.
H* $ * $ ‡
Article 17. Disputes. — Except as otherwise specifically provided in this contract, all disputes concerning questions of fact arising under this contract shall be decided by the contracting officer, subject to written appeal by the Contractor within 30 days to the Secretary of the Navy or his duly authorized representative, whose decision shall be final and conclusive upon the parties hereto. In the meantime the Contractor shall diligently proceed with performance.
Article 18. Definitions. — (a) The term “Secretary of the Navy,” as used herein, shall mean the Secretary, Under Secretary, or any Assistant Secretary of the Navy, and the term “his duly authorized representative” shall mean any person authorized to act for him other than the contracting officer.
(b) The term “contracting officer,” as used herein, shall include his duly appointed successor or his authorized representative.

The schedule that was attached to and constituted part of the contract provided in pertinent part as follows:

DELIVERY: Deliveries to he made all transportation charges paid, in such quantities and at such times as ordered by the Supply Officer, Navy Yard, Pearl Harbor, T. II., Supply Officer-in-Command, Naval Supply Depot, Pearl Harbor, T. H., Medical Officer-in-Command, Naval Hospital, Aiea, Depot Quartermaster, 6th Base Depot, Supply Officer and/or Commanding Officer of any Naval Activity during the fiscal year 1945, commencing 1 JULY 1944 and ending 30 JUNE 1945, inclusive.
The contractor shall be required to start delivery of any quantities of the materials described in the specifications which may be ordered under the contract, within 48 hours after receipt of each order and shall continue delivery without interruption until the quantities required by each such order have been furnished.
REQUIREMENTS
(More or nnlt less) Price
(S) STONE, broken designated as #3 rock, for delivery in motor dump trucks to points specified below_ 30,000 Ton
(O) Naval Air Station, Kaneohe Bay, Oahu, T. H. and vicinity_$2.85
(Q) E. O. B. Government trucks at Contractor’s bins at Waimanalo, Oahu, T. H_ 2.15
(Y) Hawaiian Bitumuls Concrete Plant, at the Junction of Kailua, Kokokahi and Mokapu Roads, Oahu, T. H_ 2. 80
(4) STONE, broken, designated as #3% rock * * *- 3,000 Ton
(6) STONE, broken, crusher screenings, #4 (More or Unlt rock, for delivery in motor dump trucks less) Price to points specified below:_ 8,000 Ton
(O) Naval Air Station, Kaneobe Bay, Oahu, T. H. and vicinity_$3.00
(Q) E. O. B. Government trucks at Contractor’s bins at Waimanalo, Oahu, T. H_ 2.30
(Y) Hawaiian Bitumuls Asphalt Plant at Junction of Kailua, Kokokahi and Mokapu Roads, Oahu, T. H._ 2.95
(6) STONE, broken, designated as #4 roof gravel * * *_ 9,000 Ton
* * * * *
(8) STONE, broken, designated as #4 commercial * * *_ 6,000 Ton
* * * c *
(9) PEA GRAYEL * * *_ 9,000 Ton
* * * * *
INDEFINITE QUANTITIES: The uncertain and varying needs of the Government (Navy) make it impossible to determine the quantity or quantities of the articles and materials described herein that may be required during the contemplated period of the contract. Estimated quantities are stated for information only. It is mutually understood and agreed that the Government will order and the contractor will deliver the quantities of the kinds of articles and materials described in the specifications that in the judgement [sic] of the ordering officer may be required during the contract period. These supplies will be ordered from time to time during the life of the contract in such quantities for delivery in such forms and to such places provided for by the contract as the needs of the Naval Service require.

4. Contract N 384-S-475 was one of a series of annual contracts between the parties during World War II that provided for the supplying of indefinite quantities of construction materials by the plaintiff to the defendant. As a wartime supplier of construction materials to the defendant under indefinite-quantities contracts, the plaintiff never counted upon selling to the defendant the exact quantities mentioned in such a contract. Instead, the plaintiff had on its staff a number of highly paid supervisors who made daily contacts with responsible persons who were involved in the conduct of the defendant’s construction projects in Hawaii, and endeavored to obtain from them full and accurate information regarding the defendant’s current and anticipated construction activities and tbe probable extent of the defendant’s future needs for construction materials. Such, information was furnished to Makin, wlio utilized it for the purpose of calculating the timing and the extent of the defendant’s prospective demands under the then current indefinite-quantities supply contract held by the plaintiff. The plaintiff’s production of the materials covered by the contract was scheduled by Maldn in such a way as to fit the anticipated demands of the defendant, as gleaned from the “intelligence” reports made by the plaintiff’s personnel.

5. The procedure established for the actual procurement by the defendant of construction materials under the indefinite-quantities supply contracts mentioned in finding 4, including contract N 384-S-475, customarily involved several steps. In the first place, a supply officer representing the contracting officer would issue to the plaintiff written blanket orders which bore separate numbers and which, in effect, called on the plaintiff to deliver during the then current fiscal year to the various construction agencies mentioned in the several orders the types of rock referred to in the orders. No quantities were specified in these orders, which constituted authorizations for the construction agencies mentioned in them to call on the plaintiff to deliver specific quantities of rock at specified times and places, and for the plaintiff to make delivery in accordance with the instructions received from the construction agencies. Thereafter, a representative of a construction agency mentioned in such a blanket order would telephone the plaintiff and direct that a specific quantity of a certain material be delivered at a designated time and place. The plaintiff would make delivery in accordance with the oral instruction, and a receipt for the quantity delivered would be signed by a representative of the construction agency at the place of delivery. Subsequently, the plaintiff would submit an invoice to the defendant, citing the number of the blanket order involved in the transaction, and payment would thereupon be made by the defendant to the plaintiff.

6. (á) Because of the points of delivery specified in contract N 384-S-475, it was contemplated by the parties that tbe crushed rock mentioned in the contract would be supplied by the plaintiff from its quarry located at Waimanalo, a place on the windward (or eastern) side of the Island of Oahu, T. H., about 10 miles from the Kaneohe Naval Air Station. After this quarry had been inactive for some time, rock-crushing operations were resumed there in December 1943 (or approximately seven months before contract N 384-S-475 became effective). The Waimanalo quarry was operated continuously from December 1943 until the end of the fiscal year 1944 (except when operations were interrupted by bad weather or by mechanical breakdowns). As a result of these operations, the plaintiff had on hand at Waimanalo a crushed-rock inventory of 51,232 tons when the fiscal year 1944 ended on June 30, 1944. The same amount of rock was, of course, on hand when contract N 384-S-475 became effective at the beginning of the fiscal year 1945 on July 1,1944.

(b) The production operations at Waimanalo were continued for a short time in July 1944, with the result that 4,036 tons of rock were crushed after the beginning of that month and the plaintiff’s inventory at Waimanalo was increased to 55,268 tons. When the inventory reached the figure mentioned, the plaintiff discontinued its rock-crushing operations at Waimanalo in the early part of July 1944 because Makin believed, on the basis of all the information available to him, that the stockpile would be sufficient to supply the defendant’s actual requirements under contract N 384-S-475 throughout the entire fiscal year 1945. (It was estimated in the contract itself that such requirements would aggregate 65,000 tons, more or less.) No more rock was crushed by the plaintiff during the remainder of the calendar year 1944.

7. During the first half of the fiscal year 1945 (i. e., during the last six months of the calendar year 1944), the plaintiff supplied to the defendant under contract N 384-S-475 a total of 38,259.375 tons of crushed rock from the stockpile at Waimanalo. During the same period of time, the plaintiff made other dispositions of crushed rock from the Waimanalo stockpile that totaled 13,795.15 tons. As a result of these sales, there was on hand at Waimanalo as of December 31, 1944 a theoretical inventory of 5,218.475 tons of crushed rock. However, an actual inventory was made at the end of the calendar year 1944 for accounting purposes, and a corrected inventory of 6,162 tons as of December 31, 1944 was established.

8. Although the plaintiff had supplied to the defendant under contract N 384-S-475 only about 36,000 tons of crushed rock out of the total requirements of 65,000 tons estimated in the contract, it was Makin’s belief, on the basis of the information available to him as the end of the first half of the contract year approached in December 1944, that performance under the contract had been substantially completed in the sense that the defendant’s actual needs for crushed rock during the fiscal year 1945 had been satisfied. Therefore, despite the fact that the plaintiff’s stockpile of crushed rock at Waimanalo had dwindled to about 6,000 tons, Makin did not, prior to the incident mentioned in finding 9, plan to resume the rock-crushing operations that had been discontinued at Waimanalo early in July 1944.

9. (a) Sometime in December 1944, the events leading to the present litigation were set in motion by a telephone call from William H. Pruyn to C. W. Winstedt. The latter was assistant manager of the plaintiff and an important part of the plaintiff’s system of gathering “intelligence” concerning the defendant’s construction activities and anticipated needs for construction materials. Pruyn was employed as a project engineer by Pacific Naval Air Bases (commonly referred to as “PNAB”), a group of local specialists that were under contract with the Navy Department. At the time involved in this case, it was the function of PNAB and its personnel, including Pruyn, to assist the Navy’s construction battalions (popularly known as “Sea-bees”) in obtaining the materials needed for construction projects handled by the Seabees. In his capacity as project engineer for PNAB, it was Pruyn’s duty to render procurement assistance in connection with the construction work done by Seabees at two naval installations on the windward side of the Island of Oahu. One of these installations was the Kaneohe Naval Air Station. Pruyn endeavored to insure that adequate materials would be available when needed for the construction projects under his jurisdiction. He did this by (among other things) keeping in touch with the plaintiff and other holders of Navy Department supply contracts, and seeing to it, if possible, that such suppliers had on hand at the proper times the necessary materials to meet the Navy’s needs as they developed.

(b) Pruyn stated to Winstedt during the telephone conversation mentioned in paragraph (a) of this finding that a new runway-extension project had been authorized for the Kaneohe Naval Air Station; that substantial quantities of crushed rock would be needed for the project; that he (Pruyn) had gone to see the plaintiff’s stockpile of crushed rock at Waimanalo; and that the amount of crushed rock on hand was not going to be enough to meet the Navy’s anticipated needs for the construction work at the Kaneohe Naval Air Station. Winstedt pressed Pruyn for an estimate regarding the quantity of crushed rock that would be needed for the newly authorized construction work at the Kaneohe Naval Air Station. Pruyn, in reply, estimated that close to 40,000 tons of crushed rock would be needed for paving purposes and approximately 15,000 additional tons would be needed for incidental concrete structures; and Pruyn further indicated' that the types of crushed rock needed would be #8 and #4, the #3 rock to be heavy in “fines” and the #4 rock to be very heavy in “fines”. Pruyn’s estimates were based on the approved construction program then extant.

(c) Pruyn also stated to Winstedt that the Navy planned to have the Seabees do the construction work at the Kaneohe Naval Air Station; that the Seabees would take delivery of crushed rock at the plaintiff’s Waimanalo stockpile; that the Seabees would mix the rock into asphaltic concrete at a hot-mix plant on the windward side of Oahu which the Navy had leased from the Hawaiian Bitumuls Company; that once the Seabees started paving, which would be in about two months, they would probably pave continuously until the completion of the job; that the plaintiff should be prepared to make delivery of the crushed rock required for the project; and that the plaintiff should go ahead and crush additional rock so that it would be available when needed.

(d) Winstedt indicated to Pruyn that he desired “some confirmation on this”, and Pruyn replied that “you will get an order in due course”.

10. C. W. Winstedt promptly informed Makin of the telephone conversation between Winstedt and William H. Pruyn mentioned in finding 9. Makin thereupon issued instructions for the resumption of operations at the Waimanalo quarry as soon as the necessary preparations could be made.

11. Following the telephone conversation between William H. Pruyn and C. W. Winstedt mentioned in finding 9, the contracting officer under date of January 11, 1945 addressed to the plaintiff the following communication amending contract N 384-S-475:

The subject contract is hereby amended to provide for an increase in quantity under Items #8 and #5 and to read as follows:
Item #8• — Stone, broken, designated as #3 rock to be increased 23,000 tons, Total 53,000 tons
Item #5 — Stone, broken, crusher screening #4 rock to be increased 46,000 additional tons, a Total ' of 54,000 tons.
All other conditions and specifications remain in full force and effect.

12. Early in January 1945, and prior to the receipt by the plaintiff of the contract amendment dated January 11, 1945, the plaintiff reopened its Waimanalo quarry. The rock-crushing operations proceeded at first on a single-shift basis, but as soon as the necessary personnel could be recruited (which was in about a week or ten days), the plaintiff instituted a double shift in order to assemble in ample time a stockpile that would be adequate to meet the anticipated urgent needs of the defendant for the construction work at the Kaneohe Naval Air Station. As a result of such operations, crushed rock was produced during the periods and in the amounts indicated below:

Ton a
January 11-31, 1945_13, 848
February 1945_ 27, 368
March 1-17, 1945_16,454
Total_ 57,670

13.(a) On or about March 12, 1945, C. W. Winstedt received a telephone call from Otto Brouk, an employee of PNAB. Brouk told Winstedt that the Seabees who were doing the construction work at the Kaneohe Naval Air Station mentioned in previous findings had been ordered from Hawaii to a forward area; that the Navy Department would not need any more of the plaintiff’s crushed rock in connection with such construction work; and that the plaintiff should not crush any more rock for that project.

(b) Brouk also informed Winstedt that his oral statement would be confirmed by means of a letter. However, no confirmatory letter was ever received by the plaintiff.

14. C. W. Winstedt immediately informed Makin of the conversation with Otto Brouk mentioned in finding 13. Makin waited for several days in anticipation of the receipt of a written communication concerning the change in the situation at the Kaneohe Naval Air Station. Then, no such letter having been received, Makin on March 17,1945 directed that rock-crushing operations at Waimanalo be discontinued.

15. (a) The Seabees who had been engaged in the construction work at the Kaneohe Naval Air Station mentioned in previous findings were actually transferred from Hawaii to a forward area at about the time of the conversation between Otto Brouk and C. W. Winstedt (see finding 13). Following the transfer of the Seabees, the Navy Department surrendered its lease of the asphalt mixing plant owned by the Hawaiian Bitumuls Company on the eastern side of the Island of Oahu, which the Seabees had been operating in connection with the construction work at the Kaneohe Naval Air Station.

(b) In order to provide for the completion of the runway-extension project at the Kaneohe Naval Air Station after the departure of the Seabees, the Navy Department entrusted that project to the Hawaiian Dredging Company, a contractor that was doing other construction work for the Navy under a contract numbered NOy-8511. That contract was amended by the Navy Department so as to bring the project at the Kaneohe Naval Air Station within its scope. The amendment did not specify the source from which the Hawaiian Dredging Company was to obtain the crushed rock needed for the completion of the project.

(c) The Hawaiian Dredging Company also took over, under amendments to contract NOy-8511, certain other construction projects that Seabees had been performing in Hawaii.

(d) The Hawaiian Dredging Company, with the approval of the Navy Department, entered into a subcontract with its wholly-owned subsidiary, the Hawaiian Bitumuls Company, whereby the latter undertook the completion of the runway-extension project at the Kaneohe Naval Air Station. In performing the subcontract, the Hawaiian Bitumuls Company procured the necessary crushed rock from a quarry located on the western side of the Island of Oahu, mixed the crushed rock into asphaltic concrete in its own hot-mix plant on the same side of the island, and then transported the hot asphaltic concrete in trucks about 15 miles to the Kaneohe Naval Air Station on the eastern side of the island. Approximately 30,000 tons of crushed rock (about 8,000 tons of #3 rock and about 22,000 tons of #4 rock) were used by the Hawaiian Bitumuls Company for the work, which extended through April 1946. The evidence does not show how much of this crushed rock was used during the fiscal year 1945.

(e) The Hawaiian Bitumuls Company did not have available to it sufficient manpower to operate both of the asphalt mixing plants that it owned — i. e., the one on the western side of Oahu mentioned in paragraph (d) of this finding and the one on the eastern side of the island that the Navy Department had surrendered. The company preferred to operate the plant on the western side of the island in performing the subcontract referred to in paragraph (d) of this finding.

16. When the plaintiff discontinued its rock-crushing operations at the Waimanalo quarry on March 17,1945 (see finding 14), the plaintiff’s stockpile of rock at the quarry amounted to approximately 50,120 tons (about 32,237 tons of #3 rock, about 15,965 tons of #4 rock (crusher screenings), and about 1,918 tons of pea gravel). In a letter dated March 26, 1945, the plaintiff demanded that the Navy Department accept delivery of its entire stockpile of rock because (according to the plaintiff) the rock had been produced “on what amounts to a special order from the Navy”. The contracting officer of the Navy Department, in a letter dated April 11, 1945, rejected the plaintiff’s demand, stating (among other things) that the rock in the inventory had not been ordered and that “Unless and until there is a requirement for the material and orders have been placed for it as provided in the Contract, the Navy is not obligated to accept delivery of the material”. Thereafter, the plaintiff took an appeal from the contracting officer’s decision to the Board of Contract Appeals of the Navy Department.

17. (a) The Navy Department did not at any time during the fiscal year 1945 terminate contract N 384-S-475. During the period from March 17, 1945 until the end of the fiscal year, the Navy Department continued to order rock from the plaintiff under contract N 38Ns-475 (for construction projects other than the one at the Kaneohe Naval Air Station) , and the plaintiff continued to deliver such rock to the Navy Department from the stockpile at Waimanalo.

(b)As of the end of the contract year, the plaintiff had sold to the Navy Department under contract N 384-S-475 a total of 57,254.375 tons of rock from its Waimanalo quarry. These sales were distributed as follows among the periods indicated:

Tons
July-December 1944_ 36,259.375
January-March 1945_ 8,838. 75
April-June 1945_12,156.25
Total_ 57,254.375
During the same periods, the plaintiff made other dispositions of rock from its Waimanalo quarry, as follows:
Tons
July-December 1944_ 13,795.15
January-March 1945_ 3,865
April-June 1945_ 2,453.7
Total_!_20,113.85

(c) The 57,254.375 tons of rock that the plaintiff sold to the Navy Department during the fiscal year 1945. under contract N 384r-s-475 consisted of 30,604.375 tons of #3 rock, 22,044.275 tons of #4 rock (crusher screenings), and 4,605.725 tons of pea gravel.

(d) The plaintiff was ready, willing, and able to produce for delivery to the defendant during the fiscal year 1945 the entire amounts of #3 rock and i¿4 rock (crusher screenings) referred to in contract N 384-S-475. as amended.

18. (a) At the end of the fiscal year 1945 on June 30,1945, the plaintiff had on hand at its Waimanalo quarry a stockpile that aggregated 35,874.69 tons, composed of the following grades of rock:

Tons
#2 rock _ 580.91
#3 rock_ 22,195.28
#4 rock (crusher screenings)_11,319.97
Pea gravel_ 1, 778. 53
Total_ 35,874. 69

(b) The #2 rock and the pea gravel referred to in paragraph (a) of this finding are not involved in the present controversy, because contract N 384-S-475 did not refer to #2 rock and pea gravel was not mentioned in the December 1944 telephone conversation between William H. Pruyn and C. W. Winstedt (see finding 9) nor in the contract amendment dated January 11, 1945 (see finding 11).

(c) Between July 1,1945 and August 31, 1948, the plaintiff sold to persons not involved in the present litigation substantial portions of the #3 rock and the #4 rock referred to in paragraph (a) of thin finding, realizing the following sums:

Tons
#3 rock_ 16,975.12 $27, 862.34
#4 rock_ 7,796. 67 11,277.66
Totals_ 24, 771. 79 $39,140.00

The remainder of the #3 rock and #4 rock that the plaintiff’s June 30, 1945 inventory had contained was not reasonably saleable because it had deteriorated during the intervening years.

(d) In making the sales referred to in paragraph (c) of this finding and in selling 825.3 tons of pea gravel during the same period, the plaintiff incurred the following expenses:

Bookkeeping, insurance, and incidental expenses_$3,800. 00
Equipment expenses- 19, 000. OO
Kent on stockpile area- 2, 850. 00
Property taxes_ 701. 81
Telephone_i_ 364.70
Other utilities_;_ 423.24
Total_ 27,139. 75

The portion of these expenses properly allocable to the sales of #3 rock and #4 rock amounted to $26,244.14.

19. (a) The plaintiff’s appeal from the contracting officer’s decision (see finding 16) was decided on July 25, 1946 by the Board of Contract Appeals of the Navy Department, acting for the Secretary of the Navy. The board found with respect to the telephone call from William H. Pruyn to C. W. Winstedt in December 1944 (see finding 9) that it was “merely informative” in character, that it advised the plaintiff that the Navy Department had increased its estimates as to the quantities of crushed rock that would be needed during the balance of the fiscal year 1945 under contract N 384-S-475, and that it was not intended or phrased or understood by the plaintiff as the placement of an order under contract N 384-S-475.

(b) The Board of Contract Appeals found with respect to the contract amendment dated January 11,1945 (see finding 11) that it only increased the estimates previously made in contract N 384-S-475 respecting the requirements for #3 rock and #4 rock (crusher screenings), and that’ it was subject to the provision of the contract which declared that “Estimated quantities are stated for information only”.

(c) With regard to the telephone call from Otto Brouk to C. W. Winstedt in March 1945 (see finding 13), the Board of Contract Appeals found that Brouk did not direct the plaintiff to cease further operations at the Waimanalo quarry under contract N 384-S-475, but only advised the plaintiff that there was an anticipated decrease in the requirements of the Navy Department for the balance of the contract year.

(d) It was the conclusion of the Board of Contract Appeals that:

* - * * at no time was the Government under contractual obligation to purchase the estimated quantities set forth in the contract, and that the refusal of the Government to accept delivery of the entire amount of rock crushed by Appellant could not, and did not, constitute a termination of the contract for the convenience of the Government under the provisions of Article 11.

20.The defendant’s liability to the plaintiff is as follows:

Value of June 30,1945 inventory at contract prices:
#3 rock — 22,195.28 tons at $2.15-$47,719.85
#4 rock — 11,319.97 tons at $2.30- 26,035.93
Gross damages-$73, 755.78
Less: sales of #3 and #4 rock after end of contract year— 39,140.00
Plus: allowable expenses of making sales- 26,244.14
Damages — second or third count-$60,859.92

FINDINGS RELATIVE TO DEFENDANT’S COUNTERCLAIM

21. On April 21, 1948, there was filed by the Wage and Hour and Public Contracts Divisions of the United States Department of Labor a complaint (designated as No. PC-401) against the Ready-Mix Concrete Company, Ltd., and James J. Makin, individually and as an officer of the company. The complaint was based upon alleged failures to pay the overtime wages required by the provisions of the Walsh-Healey Public Contracts Act (41 U. S. C. 35-45) to employees in the performance of contracts that were subject to such act. Subsequently, hearings on the complaint were held before a hearing examiner of the Labor Department.

22. The principal evidence adduced by the Government in the proceedings under the Walsh-Healey Act to sustain the allegations in the complaint consisted of delivery tickets, invoices, payroll records, and other business records of the Ready-Mix Concrete Company, Ltd. In addition, testimony was taken from a large number of Ready-Mix’s employees.

23. (a) In a decision dated May 11,1951, the hearing examiner found that the provisions of the Walsh-Healey Act requiring the payment of overtime wages had been violated by the respondents in the performance of 17 Government contracts held by the Ready-Mix Concrete Company, Ltd., between July 1, 1941 and June 30, 1945. One of those contracts was N 384r-s-475, the contract that is involved in the present case before this court.

(b) With respect to the substantive defenses on the merits that the respondents had raised during the course of the proceedings, the hearing examiner made the following findings:

* * * Each of these contracts was subject to and contained the representations and stipulations required by the Act [footnote omitted] and the evidence establishes that work done by respondents’ employees was in performance of these specific contracts.
* * * Delivery tickets and invoices in evidence show when and which plants furnished the materials under these contracts. From this information, the payroll records, and the testimony, it is established not only when the work was done but also who worked on the Government contracts.
❖ * * * *
From the respondents’ records which are in evidence, it is established that work was done on the contracts subject to the Act in respondents’ establishment during the periods shown in Schedule A which follows. The information is in the record in the form of delivery tickets and invoices which show not only where the contract materials were worked on but also when they were furnished to the Government [citing exhibits].

(c) During the course of the proceedings before the hearing examiner, the respondents had complained that they had been denied due process of law and a fair hearing, in that the hearing was held without adequate notice and they were denied an opportunity to obtain counsel, to present evidence, and to cross-examine witnesses. With respect to these contentions, the hearing examiner found as follows:

* * * Pursuant to the Rules of Practice, the Complaint was filed April 21, 1948. May 3, 1948, a Supplemental Notice of Hearing to be held in Honolulu, Territory of Hawaii on June 10,1948, was filed. It was served on the corporate respondent in Honolulu, Territory of Hawaii on May 6, 1948. On May 11, 1948, both of the respondents filed an answer and also their first Motion to Dismiss the Complaint based on Section 6 of the Portal-to-Portal Act of 1947. Both the Answer and the Motion to Dismiss were prepared and filed by a well recognized and eminently qualified firm of California lawyers. * * *
After being advised by the Government’s attorneys and the Hearing Examiner to do so, Respondent Makin refused to employ counsel to represent him at the hearing. Then among other things he stated on the record.
“I am not going to be represented by an attorney at this hearing.”
When told by the Hearing Examiner that he needed an attorney, Makin again stated:
“* * * but the pocketbook objects a little bit. In other words it is my choice, and I choose not to have one. I mean I am fully aware of what I am doing.” *****
As the hearing proceeded, a number of the witnesses were extensively cross-examined by Makin. By agreement a number of written employee statements were received in lieu of sworn testimony with the understanding that if the respondents desired it any one or all of the employees who made the written statements would be available, while the hearing was in progress, for cross examination. After participating in the hearing from June 10 until June 23 respondent Makin withdrew, declined to participate further, and voluntarily absented himself from the hearing, which then proceeded to a conclusion in Honolulu without him. While the hearing was in progress, respondents did not ask to cross examine any of the employees who had made these written statements. Before Makin left, he was advised of the legal effect and consequences of his withdrawal, and he was also given an opportunity to reconsider his decision.
* * * On the basis of the record and the provisions of the Rules of Practice, it is evident that respondent has been afforded procedural due process of law and a fair hearing in these proceedings.

(d) The hearing examiner found that the respondents were liable to the United States under the Walsh-Healey Act in the amount of $22,060.57 because of failures to pay the overtime required by the act to 214 hourly-wage employees and 37 salaried employees.

24. (a) Subsequently, the hearing examiner’s decision was reviewed by the Administrator of the Wage and Hour and Public Contracts Divisions of the Department of Labor. In a decision dated September 9,1953, the Administrator eliminated two of the salaried employees from the computation and revised a number of the amounts that the hearing examiner had found to be due the United States with respect to other salaried employees, but the Administrator otherwise affirmed the hearing examiner’s findings that the respondents were liable to the United States under the Walsh-Healey Act because of failures to pay the overtime required by that act to 214 hourly-wage employees and 85 salaried employees.

(b) With respect to the applicability of the Walsh-Healey Act to Ready-Mix’s contracts (Schedule A of the hearing examiner’s decision), the Administrator concluded:

* * * I am entirely satisfied that the record more than amply supports the findings reflected in Schedule “A”.

(c) With respect to the respondents’ complaint that they were denied procedural due process, the Administrator stated:

Respondents complain that they were denied procedural due process. In view of the gravity of such a contention I have exhaustively reviewed the entire record of this case with a view to finding any factual or legal basis for such charge.
The same general charge was made by respondents’ counsel in the “Brief for Respondents” submitted to the Examiner [citing brief]. In his decision I believe the Examiner fairly and adequately summarizes the procedural steps taken in this proceeding from the date the complaint was filed. He concludes that, on the basis of the record and the provisions of the Rules of Practice governing such proceedings, respondents were afforded procedural due process and a fair hearing. My review of the record finds complete justification for this conclusion.

(d) The Administrator’s conclusion on the whole record was stated in the following language:

On the basis of the entire record I have concluded that the Examiner’s findings, except as noted herein, are supported by the preponderance of the evidence. * * *

25. According to the hearing examiner’s findings, as modified and affirmed by the Administrator, the amount due the United States because of the violations of the Walsh-Healey Act was found to be $19,908.58, calculated as follows:

For failure to pay required overtime to 214 hourly-wage employees_ $5,503.15
For failure to pay required overtime to 35 salaried employees_ 14,405.43
Total $19,908. 58

26. The findings of the hearing examiner, as affirmed by the Administrator, to the effect that the respondents in the proceedings under the Walsh-Healey Act were granted procedural due process and a fair hearing are supported by a preponderance of the evidence. The findings of the hearing examiner, as modified and affirmed by the Administrator, relative to the liability of the respondents to the United States under the Walsh-Healey Act are supported by a preponderance of the evidence.

CONCLUSION' OE LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is entitled to recover $60,859.92 for the Government’s breach of contract, and the Government is entitled to an offset of $19,908.58 against the plaintiff’s recovery.

It is therefore adjudged and ordered that plaintiff recover of and from the United States the sum of forty thousand nine hundred fifty-one dollars and thirty-four cents ($40,951.34).  