
    WALTER D. LOVELL v. THE UNITED STATES.
    [No. 30359.
    Decided Mar. 27, 1911.]
    
      On the Proofs.
    
    The contract provides that the Government may make material changes; that for extra expense “ the engineer shall make reasonable allowance, which action shall be binding on both ‘parties’’; that “if ordered in writing by the engineer, it will be paid for at actual necessary cost, as determined by the engineer, plus 15 per cent.” Such extra work is done and the amount in value determined by the engineer, but the claim is disallowed by the accounting officers.
    I.The words in a contract that the contractor shall receive for extra work “ actual necessary cost ” include liability-insurance, depreciation of plant, and exxsenses of superintendents, but not losses which the contractor suffered by boarding his men at a less price than it was worth.
    II. The fact that extra work was paid and receipted for from tim6 to time as the work progressed will not preclude the contractor from recovering for expenses which could not be ascertained and paid for until the whole work was completed.
    III. A provision in a contract making the certificate of the engineer a condition precedent to payment does not extend to an agreed percentage of profit. Where such additional percentage is a mere matter of calculation which can be made by the accounting officers, it need not be certified by the engineer.
    
      The Reporter’s statement of the case:
    The following are the facts of the case as found by the court:
    I. On July 24, 1905, a contract was entered into between the United States, acting through Thomas Ryan, Acting Secretary of the Interior, and the claimant, with specifications and drawings attached, the same being for erecting the structures required in connection with the Huntley (Mont.) reclamation project, which, contract and specifications are set forth in claimant’s amended petition and are made a part hereof.
    II. The defendant, under said contract and section 24 of the specifications, by proper authority and from time to time, ordered various changes in said work originally specified in the “ Schedule ” of the contract, which was paid for at unit prices and none of which is in controversy herein. Extra work was also ordered to be performed on said project, which orders were embraced in the following letters, to wit:
    “ Huntley, MONTANA, November 4, 1905.
    
    “ Mr. W. D. Lovell, Contractor for Structures.
    
    “(By Herbert Remley, superintendent, Huntley, Montana.)
    “Dear Sir: You are directed to bend reinforcing steel for the first culvert under the C., B. & Q. Ry., No. 352. You will also supply wire for wiring reinforcing steel together, and furnish ruse, dynamite, and primers for use in test pit. A particularly good job is required on the floors for this structure, and you are directed to give them a thorough trowelling. This work will be done by force account in accordance with the terms of paragraph 24 of the specifications.
    “ Very truly, Robert S. Stockton,
    “Engineer.”
    “ Huntley, Montana, December 16, 1905.
    
    “Mr. W. D. Lovell, Contractor for Structures.
    
    “ (By Herbert Remley, superintendent, Huntley, Montana.)
    “ Dear Sir : You are directed to cut and place reinforcing steel, furnish and set galvanized-iron tubes for railings, and furnish and place anchor bolts and plates for steel bridge No. 2 across Pryor Creek; the above to be extra work and material, according to paragraph 24 of the specifications and paid for in accordance therewith.
    “ Very truly,
    “ Robert S. Stockton, Engineer.”
    
      “Huntley, MoNtana, January 12, 1906.
    
    “Mr. W. D. Lovell, Contractor for Structures.
    
    “ (By Herbert Remley, superintendent, Huntley, Montana.)
    “Dear Sir: You are directed to place anchor bolts and plates, furnish and drive sheet piling, and pump water encountered in constructing the abutments for steel bridge No. 1 across the canal. You are directed to increase the depth of these piers, and will be allowed a pro rata extra covering the increased cost due to change in plans.
    “ This labor and material will be extra work, as provided in paragraph 24 of the specifications, and will be paid for as such.
    “Very truly, Robert S. Stockton,
    “ Engineer^
    
    “Huntley, Montana, February 26, 1906.
    
    “ Mr. W. D. Lovell, Contractor for Structures.
    
    “ (By Herbert Remley, superintendent, Huntley, Montana.)
    “Dear Sir: You are directed to move the steel for division I, which can not yet be received by the contractor for that division, into your warehouse and store the same for one month.
    “ You are directed to cut steel for the revised list of structures, and will be allowed extra for same in sizes over one inch square, this being the limiting size in the original contract.
    1 “ You will be allowed payment for rehandling steel for small culverts, due to a delay in receiving the cutting lists, and will be paid extra cost due to change in plans, involving increased weight and thickness of 56 flashboards.
    “ All of the above to be paid for as extra work according to paragraph 24 of the specifications.
    “ Very truly,
    “Robert S. Stockton, EngmeerS
    
    “ DEPARTMENT OE THE INTERIOR,
    “ United States Geological Survey,
    “ Reclamation Service,
    “ Billings, Mont., March 23, 1906.
    
    “ Chief Engineer, U. S. R. S.,
    “ Washington, D. C.
    
    “ Sir : Consequent upon detail location and cross-section • work, with investigation and consideration for taking care of the run-off from natural rainfall, it has been found necessary, as bad been anticipated, to place additional culverts or pipes under tbe main canal. Ordinarily the addition of structures of a standard type is not objectionable on the part of either the United States or the contractor, but in the case of W. D. Lovell, contractor for structures, the addition of any concrete work seems impracticable, primarily for the reason that his bid evidently did not contemplate any structures other than those indicated on the drawings; and again, his price for concrete work is apparently less than he can perform the work for. Consequently, it is probably advisable that these structures be put in as ‘ extra work.’ “
    upon investigation, that vitrified pipe will probably answer the purpose equally well or better than concrete structures for the small drainage. One of the other contractors has had large experience in handling vitrified pipe and the prices he names for furnishing and placing same are materially lower than the work would likely be performed for by Lovell. It is therefore desired to know if it is considered practicable to have performed as ‘extra work’ the placing of these vitrified culverts by one contractor on a divison of work under construction by another contractor where there need be no physical interference with the operations. It is primarily a matter of expense, and it is desired to have an expression from you regarding the policy that is being generally adopted and the legal status of such mixtures if there would be any.
    yours,
    “H. N. Savage,
    
      Supervising Engineer
    
    The extra work indicated in said letter of March 23, 1906, are those set forth in letter of May 2,1906.
    “ Huntley, Montana, March £5, 1906.
    
    “ Mr. W. D. Lovell,
    “ Contractor for Structures.
    
    “ (By Herbert Remley, superintendent, Huntley, Montana.)
    “Dear Sir: You will please prepare a signed statement covering the extra work on the first culvert under the C., B. & Q. Ry. abutments for steel bridge No. 1, across the Huntley Canal; abutments for steel bridge No. 2, across Pryor Creek; and for moving, cutting, and storing steel for Division I, these bills to be in accordance with paragraph 24 of the specifications, and with, the changes on plans, and as authorized and ordered by me during construction.
    “ Very truly,
    “ Robert S. Stockton, Engineer.”
    " Huntley, Montana, April ftnd, 1906.
    
    “ Mr. W. D. Lovell,
    
      “Contractor for Structures.
    
    “(By Herbert Remley, superintendent, Huntley, Montana.)
    “ Dear Sir : You are directed to bend reinforcing steel for the culvert under the new channel of Pryor Creek. Also, to pump water encountered in foundations, and furnish and drive sheet piling for footings of the culvert under the new channel of Pryor Creek.
    “ You are directed to hold steel for Division I in storage for the month of April, and will be allowed an extra for cutting up steel for small culverts under the Northern Pacific Ry. and for handling and loading steel for shipment.
    “ You are directed to begin work on the culvert under the main canal, No. 492, at station 272+30; all work on this structure being extra work, as it was not included in the original plans. You will be paid for all of the above work and materials in accordance with paragraph 24 of the specifications.
    “ Very truly, Robert S. Stockton, Engineer.'1'1
    
    “ Huntley, Montana, April £9,1906.
    
    “Mr. W. D. Lovell, Contractor.
    
    “(By Herbert Remley, superintendent, Huntley, Montana.)
    “ Dear Sir : In response to your inquiries, and after conference on the ground and a careful study of the original plans and specifications, I have decided to have you build, under your contract, the structures listed on the accompanying sheet. The structures marked with a red star correspond to the structures of the original contract and will be built at unit prices, with such allowances for extras as the changes in plans or location may justify. The remaining ten structures will be built on force account under the provisions of paragraph 24, and will be paid for at the actual necessary cost, as determined by the engineer, plus 15 per cent. This arrangement of the work and your considerate action in regard to the pumping plant, puts the structures contract on a fair and definite basis for you and for the United States.
    “ Very truly, H. N. Savage,
    
      “Supervising Engineer A
    
    
      “ Huntley, MONTANA, May 2,1906.
    
    “Mr. W. D. Lovell,
    “ Contractor for Structures.
    
    “(By Herbert Kemley, superintendent, Huntley, Montana.)
    “ Hear Sir : In accordance with Mr. Savage’s instructions of April 29th, you are hereby ordered to build on force account, under the provisions of paragraph 24 of the specifications, the following structures:
    
      
    
    “ Very truly,
    “ Robert S. Stockton, Engineer.”
    “ Huntlet, Montana, May 15,1906. “ Mr. W. D. Lovell, Contractor.
    
    superintendent, Huntley, Montana.)
    “ Dear Sir : You are directed to fix the name plate on the first culvert under the C. B. & Q. Ry., the same to be extra work as per paragraph 24 of the specifications. “Very truly, “ Robert S. Stockton, Engineer.”
    “ Huntley, Montana, May %0,1906. “ Mr. W. D. Lovell, “ Contractor for Structures. “(By Herbert Remley, superintendent, Huntley, Montana.)
    be paid for extra work required by changes in the plans for the flume at Custer Coulee, No. 6.35, under the provisions of paragraph 24 of the specifications. “ Very truly, “ Robert S. Stockton, Engineer.”
    
      “ Mat 25,1906.
    “ Mr. Robert S. STOCKTON,
    “ Engineer, ü. S. Reclamation Service, Huntley, Montana.
    
    “Dear Sir: Your letter of May 19, inclosing estimates of work done in April by W. D. Lovell on ‘ structures,’ Huntley project, amounting to $3,413.05, has been received, with copies of schedule of extra work performed, letters authorizing extra work, and letter from contractor reserving right-to claim additional compensation for certain items connected with the extra work. A report from you relative to this claim of the contractor, explaining the grounds on which such a claim might be made and the reasons why such items were not included in the schedule submitted, should have been inclosed. Will you please forward such a report as soon as possible, for reference in case further information is desired by the Department of the Interior or the Treasury?
    “ The estimates have been office, and duplicate copies thereof have been sent forward this day to the Secretary of the Interior, with recommendation for payment.
    Very
    “ Ghief Engineer.”
    “ Huntley project structures contract.
    
    “ Department oe the Interiok,
    “ United States Geological Survey,
    “ Reclamation Seevice,
    “ Huntley, Montana, Jume ¡8,1906.
    
    “ Mr. D. W. Lovell, Contractor,
    
    
      “ By Herbert Remley,
    
      “Humtley, Montana.
    
    “Dear Sir: I have taken up the subject of fixed charges on the ‘ structures ’ contract, due to the large amount of force account work contemplated under this contract. This was taken up at this time in a preliminary way by Mr. H. N. Savage, supervising engineer, and Mr. A. J. Wiley, consulting engineer, in order that you might go ahead. intelligently in the matter of increasing the force and buying new machinery so as to complete the work this season.
    and equipment to enable you to complete the force account and. other work under the £ structures ’ contract during the present field season.
    “ You are hereby mate proper and equitable consideration will be given and an allowance recommended to cover the liability insurance of laborers, the unloading and storage of construction materials, and the depreciation of machinery.
    your compensation for lumber, and for the expense of cutting steel, etc., will say that these claims will be given careful consideration when final estimate is made up; but I can not say, at this time, what recommendation can be made in regard to them. It is expected that this decision will put your contract on such a basis that the additional plant can be arranged for at once and the work pushed.
    “ Very truly, Robert S. StocktoN,
    “ Engineer.”
    III. May 31, 1907, claimant forwarded his statement for “ structures ” work and with it the statements for all extra work done under said contract, specification 24, and said orders to that date, which statements were each signed by the claimant and certified by the engineer and paid. All said statements for extra work were for the value of labor and material furnished by the claimant and duly itemized, and to the sum total was added 15 per cent, as provided in paragraph 24 of the specifications. No mention was made in said statement of any part of the items of this claim. Each of said statements for changes in original work specified in contract and called “ structures ” and for extra work were signed by the claimant under his certificate as follows:
    “I certify that the above-described claim is correct and payable to me.”
    Each of said claims for changes and extra work were certified by the engineer as follows:
    “ I hereby certify that the above statement of cost of labor and materials is correct, and that the said extra work was performed in accordance with my instructions * * * and that the same has been satisfactorily performed.
    “ Robert S. StocktoN,
    “ Engineer, U. S. B. 8.”
    After claimant had begun performance of the contract and after he received the order for extra work of May 2, 1906, he entered into negotiations with the local engineers at Huntley for a modification of the contract and an explanation of the clause providing for extra work and payment of the “actual necessary cost” thereof, which negotiations respecting the board of the men were substantially as follows:
    There were no boarding houses in the vicinity at which the men employed by the claimant could be boarded, so in order to keep the work going he established boarding camps and boarded the men at about $5 per week, which was less than the actual cost to him, but he deemed it better to lose on the price of board they were paying rather than increase the same, which, he thought, would necessitate an increase of wages.
    The Government had some work on the same-project on its own account, and other contractors were employing a large number of men, and as they were doing considerable work on force account the matter was explained to the Government engineers, the claimant contending that it was cheaper for all concerned to continue the present arrangement, and that unless he was compensated by the Government for the difference between the actual cost to him and the price paid by the men for board he would be compelled to increase the price of board and also the price of labor. The Government engineers appear to have agreed with him that the condition he had made should continue, and at the date of the final settlement before the board hereinbefore referred to the item for loss on account of board of men was approved and recommended for payment.
    IV. Upon completion of the work, and before payment of the retained percentage provided by paragraph 96 of the specifications, the claimant made claim for expenses of the class referred to in Finding III.
    Thereupon, by due authority, a board of engineers of the Reclamation Service was assembled and made the following recommendations:
    “ The undersigned board met with Mr. W. D. Lovell, contractor for structures, Huntley project, Montana, to consider and, if possible, adjust certain claims that the contractor wished to present in connection with the completion of his contract No. 59, sx^ecifications No. 40, dated June 24, 1905, and signed August 8, 1905.
    “It was conceded that owing to the fact that the contractor had been required to build a number of structures not shown on the original plans, which construction involved the placing of about 1,000 cubic yards of concrete and a corresponding increase in the plant and equipment necessary to finish the work, that it would be fair under the specifications for the United States to assume a proper proportion of the depreciations and general charges against the plant.
    “After some general discussion, Mr. Lovell presented a written claim for liability insurance on laborers employed on force account work, for the depreciation of the plant, and a proportion of the fixed charges against the contract, the cost of warehouse, and the loss in boarding men on force account work. Careful consideration was given to Mr. Lovell’s claim, which amounted to $4,712.50 as presented, and the following basis recommended for settlement, subject to the regulations of the department:
    “ First. The liability insurance will be calculated from the rate given by Mr. Lovell’s policy and the amount of wages shown in the force account time books.
    “ Second. The first cost of the plant will be made up from the bills and ledger statements of Mr. Lovell, as presented to the engineer appointed by Mr. LI. N. Savage, supervising engineer, and the difference will represent the depreciation on the whole plant. As the whole plant was used alternately on contract and force account work, it was considered fair to divide the depreciation in the ratio of the concrete yardage on contract work to the concrete yardage on force account work, the latter portion being paid by the United States.
    “ Third. The fixed charges on the whole work will be determined by the engineer from the bills and books of W. D. Lovell in the same manner as for the plant, and the expense divided in the same proportion as before, or in the ratio of the concrete yardage on contract work to the concrete yardage on force account work.
    “Fourth. The depreciation in the warehouses used for storing steel and cement will be determined by the engineer from the first cost and salvage value. The depreciation will be divided as above in proportion to the concrete yardage. “
    boarding of men on force account work will be determined by the engineer, taking the total cost of supplies, equipment, and labor charged to camp, and substantiated by the contractor’s bills and ledger sheets, and offsetting this against the present value of the equipment and the money collected from the men. The difference will give the total loss to the contractor, which will then be divided as above, in proportion to the concrete yardage. “
    the board has had due regard to the conditions under which the work was awarded and carried on by the contractor, and has given the most careful consideration to the wording and intent of the specifications. It is believed that a final estimate based on the recommendations will be equitable to both the contractor and the United States, but as, in the knowledge of the board, there was no precedent for several of these matters, they are recommended, if not contrary to the legal requirements and regulations of the department.”
    On the recommendation of said board the engineer made the following detailed findings:
    “ In accordance with the decision of the board, which met here June 21, 1907, I have allowed the following claims presented by your superintendent, Mr. E. C. Bowman, subject to the rulings made by the board and submitted to the director for approval in letter of June 21.
    “ The total amount of concrete placed under the structures contract was 2,481.6 cubic yards; the amount of concrete placed by force account was 1,019.3 cubic yards. .
    “Per cent placed under contract, 70.9Í; per cent placed under contract, 29.09, which is the percentage recommended as fair under the specifications for the United States to assume as a proper proportion of depreciation of plant and general charges against the contract.”
    The claims thus recommended, based upon the percentage stated, were made and approved as follows:
    Liability insurance. The rate is If per cent, calculated on
    the total extra work pay-roll charge, $12,567.51'_ $219.93
    Depreciation of plant. 29.09 per cent of work done was on force account, therefore this per cent of depreciation is allowed; total depreciation as shown by ledger, $3,776.14- 1,098.48
    Fixed Charges. Total fixed charges, as shown by ledger account, $2,909.36 ; 29.09 per cent taken_ 846.33
    Depreciation of warehouses. Total depreciation, $297.76;
    29.09 per cent taken_ 86.62
    Loss of boarding men, as shown by ledger account, $3,905.54 ;
    29.09 per cent taken_1,136.12
    3, 387.48
    “I certify that the above-described claim is correct and payable to me, W. D. Lovell, claimant, by E. C. Bowman.
    I certify expense was thorized, that the claim has been examined, and that the records show no evidence of previous payment of any part thereof, and that there is now due three thousand three hundred eighty-seven dollars and forty-eight cents. C. D. Howe, assistant engineer, U. S. It. S.
    
      “ I hereby certify that the above statement of cost of labor is correct, and that the said extra work was performed in accordance with my instructions by letter of July 12, 1907, and that the same has been satisfactorily performed. Eobert S. Stockton, U. S. E. S.”
    Y. Said claim for $3,387.48 was transmitted to the auditor by the Director of the Eeclamation Service, accompanied by a voucher for the retained percentage, $3,376.35, the whole amounting to $6,763.83, as follows:
    “DEPARTMENT OP THE INTERIOR,
    “ United States Geological Survey.
    “ [Reclamation fund (contract claim, charge No. 21.) Act June 17, 1902 (32
    Stat. L., 388).]
    “ The United States to W. D. Lovell, 1415 8th St. SE., Minneapolis, Minn., Dr.
    “For the month of final estimate.
    
    “ For payment in pursuance of contract between the United States of America and W. D. Lovell dated July 24, 1905, for structures, Huntley project, State of Montana, being 100 per cent of the value of work done and material delivered, as provided in paragraphs 26 and 36 of said contract, viz:
    “ [List below details of work done or material delivered to date.]
    Excavation class 1, 16,828.6 cu. yds., at $0.65 cu. yd-$10, 938. 59
    Puddling, 553.1 cu. yds., at $0.50 cu. yd- 276. 55
    Riprap, 415.58 cu. yds., at $3.50 cu. yd- 1,454. 53
    Coarse gravel, 345.6 cu. yds., at $1.00 cu-. yd- 345. 60
    Concrete class 1, 510.1 cu yds., at $3.73 cu. yd- 1, 902. 67
    Concrete class 2, 1,974.47 cu. yds., at $3.98 cu. yd- 7, 858. 39
    Steel bridge No. 1, 42' span complete, at $696 each- 696.00
    Steel bridge No. 2, 60' span complete, at $1,136 each- 1,136. 00
    Gates & guides, 8,656 lbs., at $0,060 lb- 519. 36
    Shafts with stands complete, 4, at $150 each- 600. 00
    Steel for concrete reinforcement, 375,315 lbs., at $0.0288— 10, 809. 07
    Flashboards, 224, at $2.75 each- 016. 00
    Cast-iron valves, 8", 1, at $20- 20. 00
    Cast-iron pipe, 8", 12 lin. ft., at $1.50 lin. ft- 18. 00
    Tile drain pipe, 8", 6 lin. ft., at $0.45 lin. ft- 2. 70
    Extra work as per statement for May- 23, 336. 07
    Extra work as per accompanying statement- 3, 387. 48
    Value of work done or material delivered to date- 63, 917. 01
    Less amount previously paid- 57,153.18
    Total now due_ 6, 763. 83
    
      “ [Issued in duplicate.]
    “ Computed by C. D. H.
    “ Check by E. M. P.
    “ CERTIFICATE OE ENGINEER.
    “ I certify on honor that I have carefully inspected for the Eeclamation Service the work and materials described in the foregoing and find that the same are in conformity with the contract and specifications and are of the value stated. I further certify that the stipulations thereof have been complied with up to the present time.
    “ Eobert S. Stockton,
    “ Engineer, U. 8. B. 8.
    
    “ Dated at Huntley, Montana, July 15, 1907.”
    “[To be signed in duplicate.]
    “ CERTIFICATE OF DISTRICT ENGINEER.
    “ I certify on honor that the foregoing account is correct and just; that the work and materials have been carefully inspected by Eobert S. Stockton, who signed the preceding certificate; that the stipulations of the contract and specifications have been complied with as stated in the foregoing certificate; and that there is now due upon this claim the sum of six thousand seven hundred sixty-three (6,763) dollars ($6,763.83) and eighty-three (83) cents, no part of which has been paid; and that I have issued this account in duplicate only.
    “H. N. Savage,
    “ Supervising Engineer, Ü. 8. R. 8.
    
    “ Dated at Huntley, Montana, July 20, 1907.”
    [To be signed in duplicate.]
    “ H. A. F. J. T. D.
    “Approi^ed August 16, 1907.
    
      U _ ■
    
      “Acting Chief Engineer.
    
    “Approved August 16, 1907.
    “ C. H. Fitch, Acting Director.”
    This was accompanied by the release of the claimant as required by paragraph 36, as follows:
    “ Department of the Interior,
    “ United States Eeclamation Service.
    “Whereas, by the terms of the contract, dated July 24, 1905, entered into between the United States of America, acting in this behalf by Thos. Byan, Acting Secretary of the Interior, party of the first part, and Walter D. Lovell, of 1415 Eighth Street SE., Minneapolis, Minn., party of the second part, for work described under paragraph 37 of the specifications.
    “ P. 37. General purpose. — The general purpose of the work is the construction and completion of a pumping station, concrete culverts, siphons, drops, etc., along the line of the main canal of the Huntley project, near Huntley, Mont. Two steel highway bridges, 4 steel gates with stands, and steel bars for reenforcing concrete, are to be furnished.
    “As described in said contract, it is provided that when the contract is fully completed, and before final payment is made, the party of the second part shall execute a final release to the party of the first part of all claims against the United States on account of said contract:
    “Now, therefore, in consideration of the premises and the sum of six thousand seven hundred and sixty-three dollars and eighty-three cents, the balance of the contract price and amount due for extra work thereunder, to be paid by the United States, the receipt of which is hei'eby acknowledged, the said second party for himself, his successors, heirs, and assigns, and his personal and legal representatives, does hereby remise, release, and forever discharge the United States of and from all manner of debts, dues, sum or sums of money, accounts, claims, and demands whatsoever in law and equity, for or by reason of or on account of the contract before mentioned.
    “ In witness whereof I have hereunto set my hand and seal this 10th day of August, 1907.
    “ Walter D. Lovell, [seal.] ”
    “State or MINNESOTA, County of Ilennefm, ss:
    
    “ Sworn and subscribed to before me this 10th day of August, 1907, by Walter D. Lovell, who signed the above instrument.
    “[seal.] “H. D. Marsh, Notary Public.
    
    “My commission expires June 29, 1914.”
    YI. This claim thus certified and transmitted was disallowed by the Auditor for the Interior Department on September 10, 1907, for the following reasons:
    “ All of the extra work under this contract appears to have been performed prior to June 1, 1907, and the cost thereof to the contractor, plus the 15 per cent provided for in paragraph 24, itemized and determined hv the engineer, approved by the director, and paid for in full upon settlements heretofore made in this office. The Government’s obligation for this extra wort under the terms of this contract has thus been fully discharged.”
    An appeal was taken by the Secretary of the Interior from this decision to the Comptroller of the Treasury by the following letter:
    “DEPARTMENT OP THE INTERIOR,
    “Washington, October 5,1907.
    
    “The Comptroller op the Treasury.
    “Sir: Under date of July 24, 1905, a contract was executed by the United States with W. D. Lovell, of Minneapolis, Minn., for the construction of certain structures under the Huntley project, Montana. It is provided in paragraph 24 of the specifications governing this work that ‘ extra work, or work not provided for in the specifications, if ordered in writing by the engineer, will be paid for at actual necessary cost, as determined by the engineer, plus 15 per cent. Demand for such extra payment must be accompanied by the certificate of the engineer that such work has been satisfactorily performed or the material furnished and stating the amount to be allowed therefor. Such demand must be made before the time of the payment following the completion of said extra work or the furnishing of the material.’
    “ During the progress of the work it became necessary to order the performance of a considerable amount of extra work. These orders were all xiresented in writing by the engineer and have been filed in the office of the auditor with estimates covering the cost of such extra work under the above-quoted provision as such cost was at the time computed. Upon the apx>roach of completion of the work the contractor presented claims for reimbursement of certain expenses incurred by him in carrying on this extra work which had been omitted from the estimates theretofore made during the progress of the work. These items cover a total amount of $3,387.48, which was included in the final estimate presented to the auditor with recommendation for payment.
    “ Under date of Sex>tember 10, 1907, the auditor made settlement of the final estimate, disallowing the items of ‘liability insurance, dex>reciation of plant and warehouses, fixed charges, and loss of boarding men.’
    “ In ordinary cases the amount of extra work performed under construction contracts is a small part of the total; in the present case, hoivever, the amount of extra work comprised 29.09 x>er cent of the total amount of work performed.
    
      “ The items covered by Mr. Lovell’s claim are capable of direct and accurate calculation as shown by the accounts submitted and represent a part of the actual necessary cost to the contractor of this extra work. In performing such work the contractor made use of his usual force of employees and mechanical equipment. All expenses incident to the maintenance of such force and equipment therefore became a part of the actual and necessary cost to the contractor for performing the extra work ordered by the engineer under the provisions of the contract.
    “The auditor’s disallowance is based upon the fact that payment having been made covering the performance of this extra work, further payments to the contractor can not now be made. It is believed, however, that inasmuch as the United States contracted to pay to the contractor the actual and necessary cost of performing this extra work the Government is bound to make payment as agreed upon in the contract.
    “The contractor carried liability insurance on all his employees, and this was properly an item of the cost of the work to. him. The amount in the estimate is derived from the rate stated in the contractor’s policy of insurance applied in proportion to the amount of labor employed on this extra-work.
    “The proportional depreciation of plant is a proper and reasonable charge under the terms of the contract, as it is an element in the cost of his work.
    “The fixed charges are likewise a part of the cost and have been determined in proportion to the amount of the extra work.
    “ The loss of boarding the men is a part of the contractor’s cost of the work and was taken at the proper proportion of the difference between the cost of boarding his laborers on the work and the amounts actually collected from them.
    “All these items were obtained by the engineer from the books of the contractor, and the proper proportion due to the extra work was determined by the engineer.
    “ It will be noted that the auditor states that ‘ all of the extra work under this contract appears to have been performed prior to June 1,1907, and the cost thereof to the contractor, plus the 15 per cent provided for in paragraph 24, itemized and determined by the engineer, approved by the director and paid for in full upon settlements heretofore made in this office. The Government’s obligation for this extra work under the terms of this contract has thus been fully discharged.’
    “Manifestly, these general items could not be accurately determined except by a thorough review of the contractor’s books and after the completion of the extra work. In the progress estimates from month to month the items of cost of labor and materials furnished were included and paid. Upon the completion of the work a board of engineers was convened in June, 1907, to consider and report upon the general claims of the contractor. This demand was made as required by paragraph 24 of the contract, and an estimate, in pursuance of the board report of June 21, 1907, was submitted to the auditor on August 16,1907.
    “ The various requests of the auditor for information and further data were complied with, and on September 10 he made settlement as stated.
    “ The orders of the engineer, the claims of the contractor, full statement and report by the engineer, and also by a board specially convened to consider this matter are on file in the office of the Auditor for the Interior Department.
    “It is respectfully requested that auditor’s settlement be revised by the comptroller and that a decision be made as to the legality of making payment of these items, amounting to $3,887.48.
    “Very respectfully,
    “James Rudolph Garfield, Secretary.
    
    “ G. W. W.”
    The Comptroller of the Treasury affirmed the decision of the auditor, his decision being reported in full in 14 Comp. Dec., 297.
    VII. It is the custom of reputable contractors to carry liabilhy insurance on their men as charged in item 1 of Finding IV, and such insurance was carried by the claimant as charged both on the part of the work in this claim and that covered by the original specifications and drawings.
    A large addition to the claimant’s plant, as set forth in item 2 of Finding IV, was required by reason of the additional work required of him, amounting to nearly double the original equipment, and after use it was all much depreciated in value. ,
    The fixed charges in item 3 of Finding IV represent the cost of administration and incidental expenses such as superintendent’s salary and expenses, telegraph bills, and a large number of items of similar charges.
    The item for depreciation of warehouse (item 4, Finding IV) was caused by the fact that all warehouses for storing supplies, cement, steel, etc., had to be built on the work and were of but little value when the work was over.
    
      Item 5 of Finding IV for loss on boarding men arose because the work was in unoccupied territory where there were no white settlements, and it was necessary to provide tents or buildings for lodging and boarding the men and to provide provisions and cooks. The claimant deemed it better to suffer a loss on the board of the men, as a higher charge for board, he thought, would cause a demand for a higher rate of wages, greater in the aggregate than the loss on the board. The amount charged is correct.
    VIII. The chief engineer of the Eeclamation Service during the period of time covered from July 24, 1905, the date of the contract, until the completion of the contract was Frederick H. Newell until March 9, 1907, and Arthur P. Davis from March 15, 1907, until after the contract was performed by the claimant.
    Until March 9, 1907, the Eeclamation Service had been a branch of the Geological Survey. The chief officer of the Eeclamation Service was a chief engineer and was subordinate to the Director of the Geological Survey. On March 9, 1907, the Eeclamation Service was made independent of the Geological Survey and the designation of the chief engineer was changed to director. Frederick H. Newell, who had been chief engineer, was made director, and Arthur P. Davis, who had been assistant chief engineer, was on March 15, 1907, made chief engineer. On March 7, 1907, the Secretary of the Interior by letter authorized the Director of the Eecla-mation Service “to give administrative examination and approval of the accounts of fiscal officers and claims of creditors submitted for direct settlement in the Treasury Department.”
    IX. The final estimate, including said $3,387.48, was certified by E. S. Stockton, engineer, United States Geological Survey; H. N. Savage, supervising engineer, United States Geological Survey, both located at Huntley, Mont.; and by C. H. Fitch, acting director, but the same was not approved or certified by the chief engineer at Washington, D. C.
    X. “ In making a set of plans and specifications on work it is almost impossible to cover all contingencies arising, and therefore it is customary among railroads and other parties doing work of considerable size to have any extra work or any unforeseen work done on force account. By force account is meant the actual cost of the work and materials, plus a contractor’s profit for supervising it, or a percentage usually of 15 per cent.”
    
      Mr. William B. King for the claimant. King and King were on the brief.
    
      Mr. George E. Boren (with whom was Mr. Assitant Attorney General John Q. Thompson) for the defendants.
   Peelle, Ch. J.,

delivered the opinion of the court:

As the findings disclose, the claimant on July 24, 1905, entered into a contract with the Government, through the Acting Secretary of the Interior, for the erection of certain structures required in connection with the Huntley (Mont.) reclamation project, in accordance with the advertisement, proposal, and specifications made part of the contract set forth in the petition, excepting in so far as the specifications might thereafter be amended or modified by the terms of the contract, as set forth in article 1 thereof.

The contention is that the words “ actual necessary cost ” contained in paragraph 24 of the specifications include liability insurance, depreciation of plant, expenses of superintendents, and loss on account of boarding men.

Paragraph 24 of the specifications provides:

Changes and extra work. — The Secretary of the Interior reserves the right to make such changes in the specifications of work or material at any time as may be deemed advisable, without notice to the surety or sureties on the bond given to secure compliance with the contract, by adding thereto or deducting therefrom, at the unit prices of the contract, or at such allowances for changes of materials as shall be deemed just and reasonable by the engineer, whose decision shall be binding on both parties. The right to make material changes in the quantities listed in the proposal is an essential part of the contract, and bidders must make their estimates accordingly. Should any change be made in a particular piece of work after it has been commenced, so that the contractor is put to extra expense, the engineer shall make reasonable allowance therefor, which action shall be binding on both parties. Extra work or work not provided for in the specifications, if ordered in writing by the engineer, will be paid for at actual necessary cost, as determined by the engineer, plus 15 per cent. Demand for such extra payment must be accompanied by the certificate of the engineer that such work has been satisfactorily performed or the material furnished, and stating the amount to be allowed therefor. Such demand must be made before the time of the payment following the completion of said extra work, or the furnishing of the material.”

Subsequent to the execution of the contract and after the claimant had entered upon the performance thereof he was, on May 2, 1906, directed through the supervising engineer to build, under said paragraph 24, certain structures listed, as set forth in Finding II, on force account under the provisions of said paragraph. That is to say, at “ actual necessary cost,” to be determined by the engineer, plus 15 per cent.

Various other changes were from time to time ordered in the work for which claimant was paid at unit prices, as provided in said paragraph, but no payments were made for the items now claimed for. The engineer, under date of June 2, 1906, as set forth in his letter at the end of Finding II, directed the claimant to assemble the necessary plant and equipment to enable him to complete the work on force account as well as other work under the “ structures ” contract, for which work, as therein provided, he was assured that in making up the final estimate proper and equitable consideration would be given, and an allowance recommended to cover the liability insurance of laborers, the unloading and storage of construction materials, and the depreciation of machinery.

On May 31, 1907, when the “ structures ” work .and extra work so ordered were completed to that date, the claimant forwarded his statement of account for the value of labor and material furnished, adding thereto 15 per cent as provided in said paragraph 24, which he certified was correct and which, after certification by the engineer of the Declamation Service, was paid. No mention was made in said account of the items for which payment is now claimed; but upon completion of the work and before payment of the retained percentages under paragraph 96 of the specifications, the claimant did make claim for expenses of the class referred to in Finding IY, and by reason thereof a board of engineers of the Reclamation Service was assembled without apparent authority but presumably as advisory, and after conferring with the claimant they “recommended for settlement, subject to the regulations of the department,” the claim for liability insurance, depreciation of the plant and storage warehouses upon the basis or ratio of the force work to the other work performed, and also the total loss in the boarding of men on force account; in all, $3,387.48. Thereupon the claim so recommended and certified was presented to the auditor, who disallowed the claim on the ground that “ all of the extra work under this contract appears to have been performed prior to June 1,1907, and the cost thereof to the contractor, plus the 15 per cent provided for in paragraph 24, itemized and determined by the engineer, approved by the director, and paid for in full upon settlements heretofore made in this office. The Government’s obligation for this extra work, under the terms of this contract, has thus been discharged.”

From the decision thus rendered an appeal was taken to the Comptroller of the Treasury for the reasons stated by the Secretary of the Interior in his letter set forth in Finding VI; but the decision of the auditor was affirmed by the assistant comptroller (14 Comp. Dec., 297) on the ground that the items for which claim is here made were not a part of the “ actual necessary cost' ” of such extra work within the meaning of paragraph 24 of the specifications, holding that as the claimant at the end of each month during the progress of the work had made his demand for extra payment based on the cost of work and material, which he certified to be correct, as did the engineer in charge, and settlement was made therefor upon that basis, he was “ estopped from demanding an extra allowance as a part of the cost of the extra work; ” that the Government was not “ responsible for the course of business of the contractor and the performance of the whole contract; ” that if it were it “ would virtually create a partnership between the contractor and the Government as to losses only; ” that if there had been a profit on the boarding of men the same could not have been deducted from the “ extra work as an element of the cost of such work within the meaning of the contract.”

As is apparent from what has been said, the claimant bases his right to recover under paragraph 24 of the specifications on the ground that the language therein respecting “ extra work or work not provided for in the specifications ” embraces the items of the present claim as a part of the actual necessary cost” determined by the engineer, about which there was a difference of opinion between the officers of the Reclamation Service and the accounting officers.

When the claimant from time to time presented his accounts, certifying that they represented the “ actual necessary cost,” the presumption might well be indulged that the items now claimed as a part of such cost were included therein, and upon this theory the claim was disallowed by the accounting officers. However, as the Secretary of the Interior, in his application for an 'appeal from the decision of the auditor to the comptroller, states that “ manifestly these general items could not be accurately determined except by a thorough review of the contractor’s books and after the completion of the extra work,” we are not inclined to hold that the claimant is concluded by reason of having excluded the present items from his monthly estimates, though he might along with such monthly estimates have included, if entitled to recover therefor at all, a pro rata amount of the several items of the claim ejnbraced in this suit.

The views of the Secretary of the Interior that the items could not be accurately determined until after the completion of the extra work are in harmony with the assurances given by Engineer Stockton to the claimant on conference with the supervising and consulting engineers, when the extra work ivas ordered, to the effect “ that in making up the final estimate proper and equitable consideration will be given and an allowance recommended to cover the liability insurance of laborers, the unloading and storage of construction materials, and the depreciation of machinery.” Nothing was said therein about the loss on board of men, if, indeed, the question had then arisen. But, as disclosed in the latter part of Finding III, after the claimant had received the order for the extra work, there was some negotiation with the local engineers as to the meaning of the clause providing for the extra work and payment of the “ actual necessary cost,” the claimant contending that as there were no boarding houses in the vicinity it was necessary for him to establish boarding camps and board the men, which he did at less than the actual cost to him; and this course the claimant deemed best to continue, on the ground that to increase the price of board would, in his opinion, have necessitated an increase in the price of labor. To this arrangement the engineers appear to have agreed, and that item, along with the other items of the claim, was approved by the board of engineers assembled, as stated, to inquire into the expenses incurred by the claimant other than those which he had certified as the “ actual necessary cost,” for which he had been paid.

In view of assurances so thereof by the Secretary of the Interior we must regard such action as a construction of said paragraph 24 embracing said claims as part of the actual necessary cost in so far as the extra work out of which they arose was ordered in writing. Said claims were subsequently approved not only by the board of engineers referred to, whether by authority or as advisory, but were certified as provided in said paragraph and presented by the claimant to the accounting officers along with his claim for retained percentages, which latter was paid under the certification by the accounting officers without controversy.

The loss on the men can work nor an element of the “ actual necessary cost ” of the work performed any more than the profit thereon would have diminished such cost. True, the claimant doubtless acted in good faith in continuing to board the men at a loss rather than to increase the price and thereby take chances on having to increase wages. And although this course of the claimant appears to have been acquiesced in by the Engineer officers, we can not agree that it was within their province so to do under the contract. They were there as the agents of the Government to direct the execution of the contract and the performance of any extra work which they might determine was necessary for the effectual completion of the work covered by tbe specifications; and that there might be no mistake about such extra work they were required to give the directions therefor in writing.

We are inclined to agree with the Secretary of the Interior and the engineer officers having to do with the work in their construction of the contract as embracing these items of the claim, and we do so on the ground, as before stated, that the amount of such claims could not have been definitely ascertained until the completion of the work and the final estimate, of which the claimant was in effect advised by the engineer officer at the times such extra work was directed to be done.

The defendants contend, on the authority of Sweeney v. United States (109 U. S., 618), Railroad Company v. March (114 U. S., 549, 553), Hoffeld (36 C.. Cls., 230, 235), and McIntyre (44 C. Cls., 448), that under paragraphs 24, 36, and 96 of the specifications the certification by the Chief Engineer was a condition precedent to the payment thereof, and that as the 15 per cent was not certified by the engineer nor Chief Engineer, therefore the whole account should be disallowed.

Paragraph 36 of the specifications provides that “ the payments due shall be made to the contractor upon the presentation of proper accounts, prepared by the engineer and approved by the Chief Engineer, in accordance with the provisions made therefor and pertaining to the contract,” while paragraph 96 provides that the work shall be completed to the “ entire satisfaction of the Chief Engineer.” The claim for $3,387.48 was certified both by the engineer and his assistant, as set forth in Finding IY, and also certified with other accounts, as set forth in Finding V, by the engineer and supervising engineer and the Director of the Declamation Service, followed by a release by the claimant, as provided by the contract, of all claims and demands in law and equity on account of said contract. The approval of the account by the director instead of the Chief Engineer was doubtless because prior thereto, as set forth in Finding VIII, the Declamation Service as a branch of the Geological Survey, with a chief engineer at it head, was made independent of the Geological Survey and the designation of “chief engineer” was changed to “director,” which latter, by direction of the Secretary of the Interior, as set forth in said Finding VIII, was directed “ to give administrative examination and approval of the accounts of fiscal officers and claims of creditors submitted for direct settlement in the Treasury Department.” This being true, we must hold that the certification of the account was sufficient and that the additional 15 per cent by way of profit on the work provided for in paragraph 24 was a matter of calculation thereunder to be made by the accounting officers on the sum so certified.

Ordinarily expenses for insurance of men and depreciation of plant are included in a contractor’s bid, and in respect to the items of work expressly provided for in the specifications for which he was paid that was true in this case; but the “ extra work or work not provided for in the specifications ” was to “be paid for at actual necessary cost,” to be determined by the engineer, plus 15 per cent; so that the “actual necessary cost” under the custom prevailing included the liability insurance of men as well as depreciation of plant, which was determined by the engineer to be a part of the actual necessary cost of the extra work, which, as found by the board of engineers, was 29.09 per cent of the total work done.

The percentage of fixed charges for the extra work to the total work done was determined in like manner, as was also the depreciation of warehouses. Therefore, we must hold that as the extra work so ordered in writing was not provided for in the specifications, i. e., was outside the specifications, and was to “be paid for at actual necessary cost,” to be determined by the engineer (which he has done), plus 15 per cent, and as the same could not be determined until the final completion of the work, the claimant is entitled to recover on the items of liability insurance of men, depreciation of plant, fixed charges, and depreciation of warehouses, or $2,251.36, plus 15 per cent, making in all $2,589.06.

The item for the loss on boarding of men is disallowed for the reasons stated.

Howry, J., was not present when this case was tried and took no part in the decision.  