contract contemplates submission of the dispute to the Office of Ship Construction and also contemplates a final decision by that Office within a reasonable time, not to exceed one year. That decision would serve to render the demand "payable" for the first time, even though the decision was subject to appeal. Cf. Weldon & Kelly Co. v. Pavia Co., 354 Pa. 75, 46 A.2d 466 (1946); Lackawanna Iron & Steel Co. v. Lackawanna & Wyoming R.R., 299 Pa. 503, 149 A. 702 (1930). In this case, the decision was not entered until three years and nine months later. This delay, not the "fault" of the plaintiff, was excessive under the contract.
Since the contract contemplated a shorter period, I find that plaintiff's demand should be deemed to have become payable within a reasonable time of Sun's submission of the estimate. In this case, one year would have been the maximum "reasonable" time for the initial administrative decision. Accordingly, interest should be awarded from November 24, 1966.
V. USL'S AFFIRMATIVE DEFENSES TO THE INTEREST AWARD
Defendant raises a number of affirmative defenses to Sun's interest claim. All of these defenses are without merit.
USL contends that Sun raised the interest question in its action in the Court of Claims and that the court decided against such an award by permitting Sun to dismiss the counts demanding interest against USL. USL argues that this decision bars an award of interest at this time. USL further contends that the Maritime Subsidy Board's finding -- that until a final Board decision on Sun's estimate was rendered, Sun's claim was unliquidated and therefore could bear no interest -- should also operate to bar our award under the principles of res judicata.
With respect to the Court of Claims decision, it is significant to realize that the court had no jurisdiction to rule upon Sun's claims against USL and had no jurisdiction to award interest against the United States. 28 U.S.C. § 2516(a). USL was joined as a party in that action only so that it might protect its own interest while aiding the court in ruling upon Sun's claims against the Government. Cf. National Cored Forgings Co. v. United States, 115 F. Supp. 469, 473, 126 Ct.Cl. 250 (1953). As noted above, Count I of Sun's complaint in the Court of Claims had no relevance to the issue of Sun's right to interest against USL; it dealt only with the issue of whether USL had defaulted to the extent that the Government would be required to satisfy USL's obligations. In Count II, Sun sought an increase in the award against the United States. Since the Court of Claims was without jurisdiction to award Sun interest against the United States, it did not with regard to this count decide, nor did it ever hear argument on, the interest issue vis-a-vis USL. While under some circumstances proceedings in the Court of Claims may have a res judicata effect in subsequent district court proceedings, see Petrovich v. United States, 421 F.2d 1364, 190 Ct.Cl. 760 (1970); Bowser, Inc. v. United States, 420 F.2d 1057, 190 Ct.Cl. 441 (1970), and Miller v. United States, 438 F. Supp. 514 at 519-524 (E.D.Pa.1977), the court in this case cannot have intended to rule on the issue and to bar our decision here. See Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840, 844 (3d Cir. 1974) (identical issue must have been decided); Brown v. United States, 508 F.2d 618, 621 (3d Cir. 1974), cert. denied, 422 U.S. 1027, 95 S. Ct. 2621, 45 L. Ed. 2d 684 (1975) (issue must have been actually decided); Lynne Carol Fashions, Inc. v. Cranston Print Works, 453 F.2d 1177, 1183 (3d Cir. 1972) (issue must be necessary to first litigation).
Nor does the Maritime Board's decision that Sun's claim was unliquidated bar our award. The facts regarding the payment procedures that were employed are not disputed. The Board's decision that the claim was unliquidated was a decision of law, not of fact. Furthermore, its determination that a finding of nonliquidation required it to deny interest constituted a second decision of law. Cf. Oxford Manufacturing Co. v. Cliff House, Building Co., supra, 224 Pa.Super. at 390, 307 A.2d 343. My review of these decisions and subsequent determination that Sun should be awarded interest regardless of whether its claim was liquidated or not merely overrules the board on a legal matter with respect to which I may reach my own conclusions. Sea-Land Service, Inc. v. United States, 493 F.2d 1357, 1361, 204 Ct.Cl. 57, cert. denied, 419 U.S. 840, 95 S. Ct. 69, 42 L. Ed. 2d 67 (1975); Moore-McCormack Lines, Inc. v. United States, 413 F.2d 568, 188 Ct.Cl. 644 (1969).
USL next contends that its tender of payment in 1972 should preclude any award of interest at least from that date. Under Pennsylvania law, a sufficient tender may stop the running of interest. Appeal of Vandergrift, 80 Pa. 116, 118 (1875); Beth-June, Inc. v. Wil-Avon Merchandise Mart, Inc., 211 Pa.Super. 5, 11, 233 A.2d 620 (1967); 12 P.S. § 1072. The tender must, however, include interest and must be paid into court if refused. Englehart v. Cassatt, 305 Pa. 117, 120-1, 157 A. 256 (1932); 12 P.S. § 1073. Most important, the tender must be unqualified. See Coleman v. Quaker State Coca-Cola Bottling Co., 331 F. Supp. 785, 787 (E.D.Pa.1971). Here, USL's tender satisfied none of these requirements; it neither included interest, nor was paid into court, nor was unqualified in view of the fact that it required Sun to abandon its contentions that additional payments were owing. Under these circumstances, Sun's tender cannot be deemed "sufficient" to stop the running of interest on its debt.
Finally, USL claims that Sun's action should be dismissed pursuant to Fed.R.Civ.P. 19 for failure to join the United States as an (indispensable) party. This contention borders on the frivolous. The United States has no interest in these proceedings. Following the Court of Claims decision, the United States satisfied its entire obligation to Sun; Sun and the Government have no further quarrel. Joinder of the Government is not necessary to preserve USL's interest vis-a-vis Sun's claims. USL is able to raise in these proceedings any legal defense it deems appropriate. Should USL succeed in any of its legal contentions, its debt to Sun can be appropriately reduced. To the extent that a dispute between USL and the Government exists, the Government is, apparently, satisfied to settle that dispute in a separate action brought by USL in the District of Columbia. That suit, however, has no bearing on the issues before the court here.
VI. DELAY COSTS
Quite apart from the question of interest, USL alleges that the Secretary's final award to Sun was excessive as a matter of law in three regards: first, that Sun is not entitled to recover "delay costs" resulting from USL's change orders; second, that even if Sun may recover some "delay costs" it may not recover those corresponding to delay prior to the final delivery date under the contract; and third, that Sun's final claim unreasonably exceeds Sun's initial estimate of costs and the award must therefore be reduced.
A. Delay Costs Generally
The first allegation presents the court with an extremely difficult task of contractual interpretation. In United States v. Rice, 317 U.S. 61, 63 S. Ct. 120, 87 L. Ed. 53 (1942), the Supreme Court interpreted a government contract with the following clause relating to change costs:
If such changes cause an increase or decrease in the amount due under this contract, or in the time required for its performance, an equitable adjustment shall be made . . . .
The Court held that this language provided alternative but mutually exclusive remedies for the plaintiff subcontractor's damage due to a government-initiated delay in performance; that is, the subcontractor's own time for performance could be extended or delay costs could be recovered, but not both. USL argues that the contract language in Rice is so similar to Articles IV and 4 of the Sun contract as to require a similar interpretation.
The parties correctly have presented this issue of contractual interpretation to me as a question of law. However, in view of the Maritime Administration's experience with the standard contract at issue here, I will give great weight to its decision rejecting USL's contention.
See United States v. American Trucking Assoc., Inc., 310 U.S. 534, 549, 60 S. Ct. 1059, 84 L. Ed. 1345 (1940); Sea-Land Service, Inc. v. United States, supra, at 1361.
I am persuaded that the Maritime Board's interpretation of the contract is correct and that Sun is entitled to be compensated for all costs resulting directly from USL's change orders. Clauses 4(d) and 4(e) specifically provide for recovery costs due to delay. Unlike the terms in the Rice contract, a separate provision deals with time extensions, see Article 5, clearly suggesting that the remedies are not mutually exclusive. The Maritime Subsidy Board correctly determined that Clause 4(d)'s provision for compensation for increases "in the cost of the contract work" should be interpreted to encompass all costs, including those associated with delay.
The facts of Rice as well as the contractual language therein are distinguishable from those in the case at bar. In Rice, the subcontractor was prevented from commencing work at the appointed time because the Government's change order delayed completion of the general contractor's work. Since it had not yet begun, and since no additional work was ultimately required of the subcontractor, the Court specifically held that it was equitable to permit an extension to complete work as the exclusive remedy. Cf. United States v. Foley Co., 329 U.S. 64, 67 S. Ct. 154, 91 L. Ed. 44 (1946), explaining Rice and H.E. Crook Co. v. United States, 270 U.S. 4, 46 S. Ct. 184, 70 L. Ed. 438 (1926). In our case, Sun had already begun work and USL ordered it to change the plans in mid-stream. Sun's delay costs accrued directly from the change orders, and could not have been avoided by any foresight on Sun's part. Under these circumstances, unlike in Rice, it would be inequitable to deny Sun recovery for them.
B. Pre-Deadline Delay Costs
The parties do not seriously contest that, absent USL's change orders, Sun would have delivered the vessels fifteen days prior to the deadline and that because of those orders it was unable to do so. Furthermore, for purposes of these motions, it is uncontested that Sun suffered costs associated with that delay. Since I have determined that the contract entitles Sun to recover delay costs generally, the issue of whether Sun is entitled to recover pre-dead-line delay costs is easily settled.
The only substantive defense which USL has raised is that United States v. Blair, 321 U.S. 730, 64 S. Ct. 820, 88 L. Ed. 1039 (1940), precludes such a recovery. In Blair, the Government contracted with two contractors. The general contractor, Blair, was given four hundred twenty days to complete construction of a building but planned to complete construction within three hundred fourteen days. The other contractor, however, delayed its work and consequently forced Blair to use the entire four hundred twenty days. Blair attempted to hold the Government liable for his delay costs because it failed to terminate the second contractor's contract promptly and to hire a third contractor so as to enable Blair to proceed. The Court denied liability, holding:
[Nothing] in the Government construction contract used in this case imposed an obligation or duty on the Government to aid respondent in completing his contract prior to the stipulated completion date and [that] it was error for the court to award damages to respondent based upon a breach of this non-existent obligation.