Full opinion text
OPINION PER CURIAM: This case was referred to then Trial Commissioner Herbert N. Maletz (now a Judge of the United States Customs Court) with directions to make recommendation for conclusions of law under the order of reference and Rule 57(a). The commissioner has done so in an opinion and report filed on June 20, 1967, wherein facts necessary to the opinion and recommended conclusions are stated. Defendant filed exceptions to the commissioner’s recommended conclusions, except as to those conclusions relating to the finished tolerances of the subgrade of the road, and the case has been submitted for review by the court on the briefs of the parties and oral argument of counsel. With respect to the first claim (based on the relocation of the borrow pits), the court stresses, as did the commissioner, the inclusion in this contract of the mandatory standard Changes article with its broad and general reach. We have repeatedly indicated that, where that (or a comparable) clause is contained in a contract, the court will construe the agreement, to the extent it is fairly possible to do so, so as not to eliminate the standard article or deprive it of most of its ordinary coverage. United Contractors v. United States, 368 F.2d 585, 598, 177 Ct.Cl. 151, 165-166 (1966); Thompson Ramo Wooldridge, Inc. v. United States, 361 F.2d 222, 228, 175 Ct. Cl. 527, 536 (1966); Farnsworth & Chambers Co. v. United States, 346 F.2d 577, 580-581, 171 Ct.Cl. 30, 35 (1965); Jack Stone Co. v. United States, 344 F.2d 370, 374-375, 170 Ct.Cl. 281, 288 (1965); Kaiser Industries Corp. v. United States, 340 F.2d 322, 329-330, 169 Ct.Cl. 310, 323-324 (1965); Fehlhaber Corp. v. United States, 151 F.Supp. 817, 825, 138 Ct.Cl. 571, 584 (1957), cert, denied, 355 U.S. 877, 78 S.Ct. 141, 2 L.Ed.2d 108; Loftis v. United States, 76 F.Supp. 816, 825-826, 110 Ct.Cl. 551, 627-629 (1948); Pfotzer v. United States, 77 F.Supp. 390, 399, 400, 111 Ct.Cl. 184, 226, cert, denied, 335 U.S. 885, 69 S.Ct. 237, 93 L.Ed. 424 (1948). The defendant says that here it attempted to cast the whole risk of borrow pit location on the contractor, but if that was its purpose it should have sought permission to delete the mandatory Changes article or to substitute a more limited form of the clause. So long as the Changes article in its normal form is included in a contract, the court is justified in reading the specifications, if reasonably possible, to harmonize and not conflict with that standard clause. That is what the corn-missioner has done in this case, and we think correctly so. Since the court is in agreement with the opinion and recommended conclusions of the trial commissioner, with minor modifications, it hereby adopts the same, as modified and as supplemented by the preceding paragraph, as the basis for its judgment in this, ease, as hereinafter set forth. As to the claim based on relocation of borrow pits (treated as Claim I in the opinion), plaintiff is entitled to an equitable adjustment under the Changes clause (on its own behalf and on behalf of its subcontractor) for all the increased costs resulting from the changes in question, which amount (to prevent double recovery) is to be reduced by $16,097 for the compensation plaintiff has already received for the overrun in overhaul. Judgment to this extent is entered for plaintiff with the amount of recovery to be determined in the first instance (if the parties do not agree) by the Board of Contract Appeals of the Department of the Interior. As to the claim related (in part) to deletion of selected borrow surface course (treated as Claim II, Item 1 in the opinion), plaintiff is entitled to an equitable adjustment under the Changes clause (on its own behalf and on behalf of its subcontractor Edwards) for the additional costs resulting from the directions of the commission which required use of oversized materials in constructing the top 12 inches of the subgrade. Judgment to this extent is entered for plaintiff and in the absence of agreement by the parties, the amount of recovery will be determined in the first instance by the Board of Contract Appeals of the Department of the Interior. As to the aspect of plaintiff’s claim which is treated as Claim II, Item 2 in the opinion, it is concluded that plaintiff is not entitled to recover and the petition relating to recovery therefor is dismissed. As to the claim for increased costs resulting from shut-down for the winter of 1954-55 (treated as Claim III in the opinion), plaintiff is entitled to recover for the salary paid to the project superintendent during the shut-down period (plus payroll taxes and insurance thereon) , the labor and equipment costs it incurred in demobilizing its equipment spread at the end of the 1954 season and remobilizing it at the start of the 1955 construction season, and the ownership expense of maintaining in storage during the shut-down period the specific items of equipment required to complete the project. Judgment to this extent is entered for plaintiff with the amount of recovery to be determined pursuant to Rule 47(c). As to those two portions or aspects of plaintiff’s claims treated as Claim I and Claim II, Item 1 in the opinion, proceedings are suspended for a period of 90 days from the date hereof in order that the case may be returned to the Board of Contract Appeals for the Department of the Interior for determination in the first instance of the amount of recovery (if the parties do not agree thereon). Plaintiff is to comply with appropriate provisions of the General Order of April 1, 1968, implementing Rule 100 in advising the court of the status of such proceedings. Commissioner Maletz’ opinion, with minor modifications by the court, is as follows: OPINION OF COMMISSIONER MALETZ, Commissioner: This is a suit on a contract between plaintiff and the Alaska Road Commission of the Department of the Interior (hereafter referred to as the commission) for the grading, drainage and related construction work required to improve a 45-mile segment of an existing roadway which extended from Valdez to Fairbanks in the then Territory of Alaska. The 45-mile segment, otherwise identified as section G of the Richardson Highway, extended from milepost 35.9 to milepost 82.1 and was located about 250 miles from Anchorage. The consideration for performance of the work was $2,083,853, based upon unit prices for estimated quantities of the various types of required construction work. The contract was signed in April 1953 and was completed in the spring of 1955 within the contractual time limit as extended. It called for the construction of highway improvements from excavated and borrow material and the placing of a subgrade. Suitable material was to be conserved for constructing the top portion of the subgrade and no rocks or hard lumps that could not readily be broken up into pieces not over six inches in diameter were to be placed in the upper 12-inch layer. Originally the contract also called for placing on top of the sub-grade a selected borrow surface course consisting of a six-inch thick layer of finer material not greater than one and one-half inches in diameter.* However, in April 1954, about a year after the contract was signed, the selected borrow surface course was deleted by the commission and all preparatory work incident thereto ordered halted because of serious overruns in probable costs. Under the contract, the contractor was not to be paid directly for preparing the subgrade or the selected borrow surface course. These items, instead, were subsidiary obligations of the contractor who was paid on the basis of the number of units of service or material actually employed by the contractor on the job. This is illustrated by the following excerpts from the contract schedule showing the estimated quantities of major items of work to be performed, their identifying numbers, the unit prices bid thereon by plaintiff, and the estimated cost of each item: Estimated Unit did Amount Item No. quantity Description price did 24(2)-l______ 227,000 Cu. Yds., Unclassified Excavation, $1.40 $317,800.00 Unit A. 24 (2)-2______ 441,000 Cu. Yds., Unclassified Excavation, .70 308,700.00 Unit B. 24(2)-3_____103,000 Cu. Yds., Unclassified Excavation, 1.00 103,000.00 Unit C. 26(1) ______ 742,000 Excavation for Borrow__________ .73 541,660.00 28(2) ______ 345,000 Cu. Yd., Mi. Special Overhaul of .27 93,150.00 Borrow (1000' free haul). 100(1) ______ 175,000 Cu. Yds., Selected Borrow Surface 1.20 210,000.00 Course. 310(1) ______ 11,500 Cu. Yds., Loose Riprap__________ 9.00 103,500.00 Three claims are involved in the present action. In the first claim plaintiff seeks review of a decision by the Interior Department Board of Contract Appeals (IBCA-50) denying (in major part) its request for an equitable adjustment under the Changed Conditions or Changes clause of the contract arising as a result of the relocation of borrow pits. As to this claim, plaintiff contends that during performance of the work it and its subcontractor encountered subsurface and/or latent conditions in borrow pits designated by the commission which differed materially from those shown on the drawings and that the board erred in not granting an adjustment for a changed condition. Alternatively it is contended that the commission (i) designated substitute borrow pits to replace the originally designated pits that failed in whole, or in part, to yield the designated quantities of borrow; (ii) ordered certain of the original borrow pits enlarged; and (iii) ordered plaintiff to perform overhaul of borrow without regard for the fixed station points (or balance points) designated on the drawings and without regard for its effect upon plaintiff’s equipment spreads. Plaintiff argues that such action constituted a compensable change and that the board’s decision denying it a changes adjustment (except in part) was erroneous. Plaintiff’s second claim is related (in part) to the deletion from the contract of Item 100(1) that called for placing on top of the subgrade a six-inch layer of selected borrow surface course composed of fine material. 6 In this claim plaintiff seeks review of the board’s decision (IB CA-36) denying its request for an equitable adjustment under the Changes clause. It contends that the commission (i) both before and after the deletion of the surface course, compelled it to use borrow material containing rocks over six inches in diameter that were unsuitable for use in the top 12 inches of the sub-grade ; and (ii) after deletion of the surface course, required plaintiff to complete the subgrade to lines and grades without reasonable tolerances and in such a manner that the subgrade would accommodate traffic moving at the rate of 50 miles an hour. Plaintiff says that its costs were substantially increased as a result of the asserted additional requirements imposed upon it by the commission, and that the board decision denying an equitable adjustment was arbitrary and capricious, and unsupported by substantial evidence. In its third claim, plaintiff alleges that as a result of the disorganization of its operations and the difficulties caused by the relocation of the borrow pits (Claim 1), plus the additional work the commission required plaintiff to perform in the construction of the subgrade (Claim 2), the job was shutdown for the winter of 1954-1955 and completion of the contract was delayed into the year 1955 to plaintiff’s damage. It is in this setting that we now consider each of these three claims on the basis of the record before the board. I. Claim Based on Relocation of Borrow Pits The facts as developed before the board with respect to this claim were essentially undisputed. The bid proposal for the project indicated that very substantial quantities of borrowed subgrade material and selected borrow surface course material would be required to supplement the excavation available for construction of the highway. Thus information concerning the location and availability of such borrow material was especially important to the plaintiff in preparing its bid. Such information, together with the various details of construction, was contained in a set of 98 contract drawings which were prepared by the commission on the basis of its field engineering surveys and material studies, and furnished to plaintiff and others as part of the bid proposal. Sheet 1 of the drawings set forth two location maps of the project; Sheet 2 of the drawings contained a typical section of the existing roadway and of the improved roadway to be constructed. Sheet 2 stated that the borrow deposits were shown on Sheet 3 of the drawings and that the grading quantities were shown on the Plan-Profile sheets. Sheet 3 of the drawings contained a borrow location sketch which depicted the sites of 38 designated borrow pits spaced along both sides of the highway and fixed the location of each site with respect to both mile-posts and the project station numbers. Sheet 3 also contained a chart which established for bidders (1) the location of each of the 38 pits by project station number; (2) the specific number of feet that each pit was situated to the left or right of the project station; (3) the corresponding milepost number; and (4) the specific number of cubic yards of borrow material to be obtained from each pit. Nineteen of the pits were identified with asterisks to indicate “pits suitable for source of Item 100, Selected Borrow Surface Course.” This data was further supplemented by Sheets 4 through 81 of the contract drawings which contained plan and profile drawings of the several segments of the roadway. Fixed stations were designated and in accordance with the note shown on Sheet 2 of the drawings, the following specific information was given regarding the quantities of work to be performed between such stations: (1) excavation in cubic yards; (2) borrow in cubic yards; (3) embankment in cubic yards; (4) overhaul in station yards; (5) borrow overhaul in cubic-yard miles; (6) the specific borrow pit locations, as designated on Sheet 3, from which the quantities of borrow to be used between the fixed stations were to be obtained; and (7) the quantities of unsuitable excavation material that were to be wasted. All of this information, the record makes apparent, was essential to plaintiff in the preparation and submission of its bid. In advance of bidding, plaintiff’s representatives made a physical examination of the work and a visual inspection of the borrow pit materials which revealed nothing from which it could reasonably be foreseen that the areas designated as borrow pits would fail to produce either the quantities of borrow material that were specified in the drawings to be available in each of the pits or the types of borrow material specified in the contract to be used for the topping layer of the subgrade. From this site inspection and the detailed information furnished on the drawings with respect to the quantities of excavation, borrow, select borrow surface course and waste materials, and overhaul, together with the data relating to the sources of such material for each portion of the work between the indicated stations, plaintiff determined the types of equipment spreads and the size of the work forces that would be required to perform the work most efficiently and economically, and computed its unit prices for each item of the work accordingly. It was important that these determinations be made carefully since the project was 250 miles from Anchorage, the nearest large city, which would serve, as a source of both equipment and labor. The unrefuted testimony before the board established that although the plaintiff placed reliance upon the contract drawings and upon its physical examination of the site, as the work progressed it encountered material variations in the subsurface conditions that had been depicted. Many of the pits, when stripped of top soil and overburden, possessed only a small portion of the quantity of suitable borrow material that the drawings had indicated would be available. Other pits, upon being opened, were ordered abandoned by the commission engineer because they were found to contain material which the engineer classified as unsuitable for borrow. As the board found, of the 29 locations originally designated on the drawings to be used as borrow pits from milepost 51.6 to the north end of the project, 12 pits failed to produce any suitable borrow material; 3 pits failed to yield 30 percent of the quantity designated on the drawings; and 4 pits failed substantially to yield the designated quantities. These deficiencies were overcome in part by the designation of 12 substituted borrow pit locations by the commission engineer, and in part by his directives to enlarge certain of the borrow pits originally designated on the plans which contained a surplus of suitable material. The uncontradicted testimony also showed that while an experienced contractor such as plaintiff should have anticipated the failure of two or three borrow pits on a project of this size (approximately 10 percent), it was extremely unusual to encounter failure in 65 percent of the designated pits. Such testimony also showed that the information contained on virtually every sheet of the drawings for this portion of the roadway with respect to the sources of borrow material and the quantities of excavation, borrow, embankment, overhaul and borrow overhaul was materially altered. The undisputed evidence before the board further established that the conditions encountered in the original borrow pits, coupled with the commission’s directives, to (1) develop new borrow pits, (2) enlarge the existing pits that contained suitable borrow material, and (3) perform quantities of borrow excavation and haul far in excess of the quantities shown on the plans materially increased plaintiff’s and its subcontractor Edwards’ borrow operation costs. This was made clear by the testimony of plaintiff’s chief witness who, by means of schedules, illustrated the substantial extent to which daily borrow production (and corresponding revenue) would be reduced when borrow-haul distances were increased. Thus, for illustrative purposes he assumed that a hypothetical tractor scraper spread was used on the job for a nine-hour day. If the borrow haul for that day was 500 feet, a profit of $150.74 would be earned from the operation of the spread. However, if the borrow haul for that day was 3,600 feet, a loss of $942.93 would result from the operation of the same spread. The contract (Form No. 23) contained standard Changes and Changed Conditions clauses, relevant parts of which are produced below: ARTICLE 3. Changes. — The contracting officer may at any time, by a written order, and without notice to the sureties, make changes in the drawings and/or specifications of this contract and within the general scope thereof. 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 and the contract shall be modified in writing accordingly. No change involving an estimated increase or decrease of more than Five Hundred Dollars shall be ordered unless approved in writing by the head of the department or his duly authorized representative. Any claim for adjustment under this article must be asserted within 10 days from the date the change is ordered: * * *. ARTICLE 4. Changed conditions.— Should the contractor encounter * * * during the progress of the work subsurface and/or latent conditions at the site materially differing from those shown on the drawings or indicated in the specifications, or unknown conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the plans and specifications, the attention of the contracting officer shall be called immediately to such conditions before they are disturbed. The contracting officer shall thereupon promptly investigate the conditions, and if he finds that they do so materially differ the contract shall, with the written approval of the head of the department or his duly authorized representative, be modified to provide for any increase or decrease of cost and/or difference in time resulting from such conditions. Incorporated by reference in the contract were Specifications FP-41 — a 543-page booklet prepared by the Public Roads Administration of the Federal Works Agency and revised as of July 15, 1941, setting out specifications for construction of roads and bridges in national forests and parks. Since various provisions of FP-41 are at the heart of the present controversy, they are (though voluminous) reproduced below, in pertinent part, to assist in a full understanding of the issues: Art. 1.18 Extra Work [Defined].— Work to be performed or labor and materials to be furnished by the contractor in order to complete the project in an acceptable manner, but for which there is no applicable basis of payment either direct or indirect, or contingent fund, provided in the bid schedule. * * * * * * Art. 2.2 Interpretation of Quantities in Bid Schedule. — The quantities appearing in the prepared bid schedule are approximate only and are prepared for the comparison of bids. Payment to the contractor will be made only for the actual quantities of work performed or materials furnished in accordance with the contract, and it is understood that the scheduled quantities of work to be done and materials to be furnished may each be increased or diminished as hereinafter provided. Art. 2.3 Examination of Plans, Specifications, and Site of Work.- — ■* * * the bidder is required to examine carefully the site of the project contemplated, and the bid form, bid schedule, plans, specifications, and contract form prepared for the project contemplated. It is mutually agreed that submission of a bid shall be considered prima facie evidence that the bidder has made such examination and is satisfied as to the conditions to be encountered in performing the work as scheduled, or as at any time altered without resulting in increases or decreases or more than the percentage limits hereinafter stipulated, and as to the character, quality, and quantities of work to be performed and material to be furnished, including said contingent increases of more than the percentage quirements of the specifications, supplemental specifications, special provisions, and contract. ****«• *- Art. 4.2 Subsurface and/or Latent Conditions at the Site. — ■(a) It is mutually agreed that the words “subsurface and/or latent conditions at the site,” as used in article 4 of Form 23 shall be construed to mean and to refer solely to conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the plans and specifications. (6) It is further agreed that any modifications of the contract under articles 3 or 4 shall be made only as herein provided under articles 4.3(c), 9.3(6), and 9.4(c), and any claims must be asserted in writing. Art. 4.3 Changes and Increased or Decreased Quantities of Work. — (a) It is mutually agreed that due to' latent and/or unforeseen conditions, adjustments of plans to field conditions which cannot be foreseen at the time of advertising, will be necessary during construction, and it is therefore of the essence of the contract, to recognize such changes in plans as constituting a normal and expected margin of adjustment, not unusual and not differing materially in the meaning of article 4.2(a) and not involving nor permitting change or modification of contract prices, provided only that resulting overruns or underruns from the quantities in the bid schedule do not exceed reasonable percentages. (6) It is further necessary and expedient that the contract fix within itself reasonable percentage limits (normal and expected) mentioned in 4.3(a), and the percentage limits so fixed are as follows: 1. If any or all items are changed resulting in a sum total change of 25 percent, or less, of the total cost of the contract calculated from the original bid quantities and the original contract unit prices, such change shall not be considered to involve or constitute an increase or decrease in the amount due the contractor, or any adjustment thereof, save the payment for the actual quantities at the original contract prices and save in the case described in article 4.3(e)2 below. 2. Within the above sum total change, any changes involving overruns or under-runs in the case of one or more minor items, regardless of percent, shall not be considered to involve or constitute an increase or decrease in the amount due the contractor, or any adjustment thereof save the payment for the actual quantities at the original contract unit prices. 3. In no case shall a waiver of contract unit price apply to any item the quantity of which is changed less than 25 percent from the quantity appearing in the bid schedule. (c)l. It is mutually agreed that, if demand is made by either party, overruns or underruns in any or all items resulting in a sum total change of more than 25 percent of the total cost of the contract calculated from the original bid quantities and the original contract unit prices, shall require a negotiated change order or supplemental agreement signed by both parties setting forth the necessity for the change and an adjustment of unit prices agreed upon as satisfactory to both parties. 2. It is mutually agreed that, if demand is made by either party, overruns or underruns of more than 25 percent of one or more major items shall require a negotiated change order or supplemental agreement signed by both parties setting forth the necessity for the change and an adjustment of unit price or prices agreed upon as satisfactory to both parties. 3. The contract does not obligate the contractor to perform at original contract unit prices, overruns or underruns generating a total in dollars or in miles of more than 25 percent of the original contract. ****** Art. 6.1 [as revised] Sources of Material. Furnishing Material. Royalties.— (a) The Government does not assume any responsibility as to the quantity of acceptable material available at sources designated in the special provisions or otherwise designated. The contractor shall satisfy himself as to the quantity of acceptable material available at designated sources and as to the amount and nature of work required in producing material complying with specifications for the individual contract item, from the natural material available at such sources. It is to be understood that the engineer may order procurement of material from any portion of any area designated as a pit or quarry site, and may reject portions of the deposit as unacceptable. * * * Information on borrow areas is listed on the Borrow Location Sketch Sheet of the plans. * * * If so directed by the engineer during construction, the contractor shall be required to use borrow deposits other than those shown in their general location on the plans. Material so obtained shall be paid for at the unit prices bid for the governing contract items. * * * ****** Art. 9.2 Scope of Payments. — The quantities listed in the bid schedule do not govern final payment. Payments to the contractor will be made only for the actual quantities of contract items performed in accordance with the plans and specifications and if, upon completion of the construction, these actual quantities show either an increase or decrease from the quantities given in the bid schedule, the contract unit prices will still prevail, except as provided in article 9.3 or 9.4. The contractor shall accept the compensation, as herein provided, in full payment for furnishing all materials, labor, tools, equipment and incidentals necessary to the completed work and for performing all work contemplated and embraced under the contract; also for all loss or damage arising from the nature of the work, or from the action of the elements, or from any unforeseen difficulties which may be encountered during the prosecution of the work and until its final acceptance by the engineer, and for all risks of every description connected with the prosecution of the work; also for all expenses incurred in consequence of the suspension of the work as herein authorized. * *■ * * * •» Art. 9.3 Changes and Altered Quantities and Extra Work.- — (a) When the actual quantities of work ordered and performed vary from the corresponding quantities set out in the bid schedule but such variance is within the percentage limits hereinbefore agreed upon in article 4.3(6) as “normal and expected,” and whether or not there have been any changes in plans the contractor shall accept, as payment in full so far as contract items are concerned, payment at the original contract unit prices for the actual quantities of work done and no allowance or other adjustment will be made for any increased expense, loss of expected reimbursement, or loss of anticipated profits, suffered or claimed by the contractor resulting either directly from such alterations, or indirectly from unbalanced allocation among the contract items of overhead expense on the part of the bidder and subsequent loss of expected reimbursement therefor or from any other cause, save the said payment for the actual quantity done at the original contract unit price. (6) Whenever quantities vary from the original beyond the percentage limits recognized in article 4.3(6), if demand is made by either contracting party, adjusted prices and terms (not more than 15 percent in excess of estimated cost) shall be agreed upon and stated in covering change orders or supplemental agreements, signed by both parties. Art. 9.4 Work Orders, Extra Work Orders, Supplemental Agreements.— •X- * * -X * * (6) Extra Work Orders. — Extra work orders shall be issued for the following cases: 1. For the performance of any required extra work as defined in article 1.18 unless as more expedient the same is included by the engineer in a change order. 'X* # w # # ir (c) Supplemental Agreement. — Whenever the sum total cost of all items exceeds the original total contract cost by the percentage mentioned in article 4.3 (c)-l if demand is made by either contracting party, an agreement shall be reached, establishing modified unit prices for all unconstructed major items whose quantities exceed the original quantities by 25 or more percent, and the contract correspondingly modified by a supplemental agreement which shall be a written agreement executed by the contracting officer or his duly authorized representative and the contractor. Where there are no major items changed more than 25 percent, adjustments shall apply to minor items changed more than 25 percent. Agreed prices for any items in supplemental agreements shall not in any case be more than 15 percent in excess of cost as estimated by the engineer. * * * It is against this background that plaintiff submitted a claim in October 1954 which it later revised in April 1955 for additional compensation under the Changes or Changed Conditions clause for itself and its subcontractor attributable to the changes in the source of borrow material, and the resulting increase in overhaul. The commission’s district engineer denied the revised claim in May 1955. “It is admitted,” he stated, “that there were sources of borrow designated by the engineer other than those designated on the plans with consequent revision of. haul distances and point of material deposit differing from those shown on the plans.” He added: “Your claim that contractor’s costs for borrow and overhaul were more than bid prices for those items of work is not challenged.” He concluded, however, that in light of article 6.1 of FP-41 there was no evidence that sources of borrow were ordered differing from sources of borrow as authorized by the specifications, and that accordingly there were no changes as contemplated by article 3 of the contract. In July 1955 (after plaintiff had filed an appeal to the board) the contracting officer issued findings of fact and a decision denying the revised claim on the ground that there were no “changes in the drawings and/or specifications.” The basis of the decision was that under article 6.1 of the specifications, the borrow pit locations were merely designed to aid prospective bidders, but did not relieve the contractor of his obligation to examine the site and satisfy himself as to conditions to be encountered, or exempt him from the requirement to use borrow deposits other than those shown in their general location on the plans. On appeal, the board (IBCA-50) held first that plaintiff was not entitled to an equitable adjustment under the Changed Conditions clause — notwithstanding the fact (as it indicated) that the locations and yields of the borrow pits indicated on the plans did not reflect the yields of the borrow pits used in construction — for the reasons (1) that articles 6.1 and 26-1.3 of the specifications made clear that the government did not guarantee any of the data indicated on the plans and reserved the right to establish substitute borrow pits when pits indicated on the drawings failed; (2) that in the light of these provisions, together with article 2.3 of the specifications, plaintiff was not justified in regarding the borrow pit' locations and other data on the drawings as positive representations made by the government; and (3) that the first clause of the Changed Conditions article — -authorizing an equitable adjustment if conditions encountered at the site differed materially from those shown on the drawings or indicated in the specifications— had been eliminated from the contract in its entirety by article 4.2(a) of the specifications which provided that the words “subsurface and/or latent conditions at the site,” as used in article 4 of the contract, should be construed to mean and to refer solely to conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the plans and specifications. With respect to plaintiff’s claim under the Changes clause, the board construed articles 4.3(a) and 9.3(a) of the specifications as modifying the Changes clause of the contract (article 3) so as to preclude any equitable adjustment for changes resulting from unforeseen field conditions except for overruns or underruns in excess of 25 percent of estimated quantities. “The fact that such changes may also involve alterations or adjustments in the contractor’s planned mode of operations, which turn out to be more expensive,” the board said, “is no doubt unfortunate but legally immaterial under the terms of the specifications in the present ease.” Finding that the changes in the present case were due to unanticipated field conditions, the board concluded that plaintiff was thus entitled to additional compensation only by reason of overruns or underruns in excess of 25 percent of the estimated bid quantities. Since it found that the overrun in borrow was less than six percent, it held that plaintiff was thus not entitled to any equitable adjustment under the borrow item. The board similarly concluded that plaintiff would be entitled to a changes adjustment for overhaul only if there was an overrun in excess of 25 percent of the estimated bid quantity for this item. Stating that the record did not show the final amount of the overhaul in terms of cubic-yard miles, the board remanded the question to the contracting officer to determine whether there was an excessive overrun in this item and, if so, the amount. Later, plaintiff was allowed a changes adjustment of $16,097 for overruns in excess of 25 percent of the estimated quantity of overhaul. Plaintiff moved for reconsideration contending (among other things) that the board, by giving effect to the modifications made by the specifications to articles 3 and 4 of the standard form construction contract, had disregarded or set aside public policy of the United States as contained in the regulations which provided that “except as otherwise authorized” standard form 23 — the contract used in this case — “shall be used without deviation by all Executive agencies” except that “ [a] dditional stipulations or instructions deemed necessary but not inconsistent with the provisions of the forms prescribed may be incorporated in the specifications, schedules, or other accompanying papers.” 41 U.S.C. App. §§ 54.1(c) (1) and 54.3 (1952 ed.). The argument was rejected on the ground that plaintiff had no standing to raise the question as to whether the deviation wa& permissible, and the motion for reconsideration was denied. The questions involved being ones of law — i. e., interpretation of contract provisions — they are for determination independently by the court unconstrained by the board decision. For the reasons that follow it is concluded (i) that plaintiff is entitled to an equitable adjustment (on its own and its subcontractor’s behalf) as a result of changes in borrow pit locations ordered by the commission; and (ii) that such equitable adjustment, contrary to the board’s decision, is not limited by the provisions of FP-41 to overruns in excess of 25 percent of estimated bid quantities, but rather applies to all the increased costs incurred by plaintiff and its subcontractor as a result of the changes. There can be no doubt, at the outset, that the contract drawings constituted material representations for the guidance of the bidders as to the location of the borrow pits and the quantity of borrow material that was to be obtained from each. (Indeed, without such drawings it is difficult to see how any bid could have been made.) Moreover, plaintiff relied on the relative accuracy of the borrow pit locations and the other data set out in the drawings and was reasonably justified in doing so. For it had made its own site inspection before bidding and that inspection had revealed nothing from which it could reasonably be foreseen that the areas designated as borrow pits would fail to produce the quantities of borrow materials that were specified in the drawings to be available. It is true that article 6.1 of the specifications provided (i) that the “Government does not assume any responsibility as to the quantity of acceptable material available at sources designated in the special provisions or otherwise designated. * * * ” ; and (ii) that “If so directed by the engineer during construction, the contractor shall be required to use borrow deposits other than those shown in their general location on the plans.” It is also true that article 2.3 of the specifications provided that the submission of a bid should be considered prima facie evidence that the bidder had examined the site and the contract documents and was “satisfied as to the conditions to be encountered in performing the work as scheduled, or as at any time altered without resulting in increases or decreases of more than the percentage limits hereinafter stipulated. * * * ” But this court has frequently held in comparable circumstances that broad provisions of this kind — stating that the government does not guarantee the statements of fact contained in the specifications or drawings or requiring the bidder to investigate the site and satisfy himself of conditions, etc. — cannot be given their full literal reach and do not relieve the government from liability. United Contractors v. United States, 368 F.2d 585, 598, 177 Ct.Cl. 151, 165-166 (1966); Flippin Materials Co. v. United States, 312 F.2d 408, 413, 160 Ct.Cl. 357, 365 (1963), and cases cited at note 8; Fehlhaber Corp. v. United States, 151 F. Supp. 817, 825,138 Ct.Cl. 571, 584 (1957), cert, denied, 355 U.S. 877, 78 S.Ct. 141, 2 L.Ed.2d 108. See also e. g., Hirsch v. United States, 94 Ct.Cl. 602, 637 (1941); Ruff v. United States, 96 Ct.Cl. 148, 160, 162-164 (1942); Loftis v. United States, 76 F.Supp. 816, 825-826, 110 Ct.Cl. 551, 627-629 (1948); Peter Kiewit Sons’ Co. v. United States, 74 F.Supp. 165, 167-168, 109 Ct.Cl. 517, 520-523 (1947); H. L. Yoh Co. v. United States, 288 F.2d 493, 153 Ct.Cl. 104 (1961). The short of the matter is that the information contained in the drawings constituted positive representations upon which plaintiff was justified in relying. It follows that the action taken by the commission in (i) designating substitute borrow pits to replace the pits originally designated in the drawings; (ii) ordering certain of the original borrow pits enlarged; and (iii) ordering plaintiff to perform borrow excavation and overhaul far in excess of the quantities shown on the contract drawings constituted compensable changes within the meaning of article 3 of the contract. This brings us to the question of whether an equitable adjustment for such changes — which the board found were due to field conditions not foreseen by the parties — is precluded by the specifications (particularly article 4.3) unless there were an overrun or underrun in excess of 25 percent of estimated bid quantities. We begin with the established principles (i) that an interpretation which gives a reasonable meaning to all parts of a contract will be preferred to one which leaves a portion of it inoperative or superfluous; and (ii) that contract provisions should not be construed as conflicting unless no other reasonable interpretation is possible. Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 979, 169 Ct.Cl. 384, 395-396 (1965), and cases cited. These principles have particular force “when the provision sought to be eliminated, or subordinated, is a standard * mandatory clause of broad application, like the [article 3 Changes provision], * * * Such a standard article, incorporated in the agreement, cannot lightly be read out of it, or deprived of most of its normal substance.” Thompson Ramo Wooldridge Inc. v. United States, 361 F. 2d 222, 228, 175 Ct.Cl. 527, 536 (1966). In this context, a reasonable interpretation of article 4.3 (as supplemented by articles 9.2, 9.3 and 9.4(c) — when considered in conjunction with the article 3 Changes clause of the contract — is (1) that the purpose of these specifications is to provide a ready means for avoiding controversy when, during the course of performance, the contractor is required, because of unforeseen field conditions, to do, within the prescribed percentage limits, a greater or lesser quantity of work than could be originally estimated; and (2) that a change in such circumstances is compensable under the Changes clause if the extra costs so incurred differ materially from the costs reimbursed through unit-price payments. This interpretation is fortified by the language of the specifications themselves. Article 4.3 (a) is the key provision. It emphasizes that “it is * * * of the essence of the contract to recognize * * * changes in plans as constituting a normal and expected margin of adjustment * * * not involving nor permitting change or modification of contract prices, provided only that resulting overruns or underruns from the quantities in the bid schedule do not exceed reasonable percentages.” [Emphasis supplied.] The “contract prices” thus referred to are, obviously, the unit prices set out in the bid schedule, and hence the import of article 4.3(a) is clear that a modification of such prices will not be made except in cases of overruns or underruns exceeding prescribed limits. But this is not to say that there cannot he a modification otherwise — separate and apart from a modification of the unit price — for the costs of extra work greatly differing from those compensable through unit-price payments. Indeed, articles 1.18 and 9.4(b) of the specifications expressly recognize that there may be payment for extra work for which no applicable basis for payment is provided in the bid schedule. Furthermore, article 4.3(a) contains no indication that it is to override the Changes clause or that the provisions of article 4.3(c), 9.3(b), or 9.4(c) of the specifications are to be the exclusive means for obtaining a changes adjustment. Particularly pertinent to the problem here is what this court said in United Contractors v. United States, supra, 368 F.2d at 601, 177 Ct.Cl. at 171, in considering a specification provision (Special Condition 32) that is not unlike article 4.3 and the related provisions of the present specifications; “ [T] here is no merit” (the court said) “to the contention that Special Condition 32 (‘Estimated Quantities’) fixes the unit price for excavation at $3.00 and prevents any added reimbursement. * * * The clause is a ready vehicle for adjusting, with a minimum of haggling, the compensation received by contractors who are called upon in the course of performance to do, within limits, more or less work than could be estimated. But we have held that clauses of this type do not control when the cost of doing the extra work greatly differs from the stated unit-price because of factors not foreseen by either party. In that event, the Changed Conditions clause comes into play and overrides the Special Condition. Peter Kiewit Sons’ Co. v. United States, 74 F.Supp. 165, 168, 109 Ct.Cl. 517, 522-523 (1947); Loftis v. United States, 76 F.Supp. 816, 825-826, 110 Ct.Cl. 551, 627-629 (1948); cf. H. L. Yoh Co. v. United States, 288 F.2d 493, 495, 153 Ct.Cl. 104, 107-108 (1961).” [Emphasis supplied.] On the other hand, to adopt the board’s contrary interpretation — that the contract and specifications preclude an equitable adjustment unless there were an overrun or underrun in excess of 25 percent of estimated bid quantities — would leave a contractor without admin-the intendment of the contract considered as a whole. For such an interpretation would leave a contractor without administrative recourse against any change in the contract drawings or specifications due to unforeseen field conditions which did not result in the prescribed overrun or underrun in quantities, even though the entire contemplated basis for performance of the contract may have been altered at a substantially increased expense to the contractor. For example, if a contract provided that 20,000 cubic yards of cement were to be placed in a location near a source of supply and the location, due to unforeseen field conditions, was changed to a location a mile greater in distance from the source of supply, the contractor, under this interpretation, would be precluded from obtaining any equitable adjustment for the increased costs so incurred unless the quantity of cement required to be placed were also changed by an excess of 25 percent of the initially estimated amount. Nothing in the contract reasonably read in light of established principles of construction requires such a result. It is concluded, in short, that the equitable adjustment for the changes required by the government is not limited by the specifications to overruns or underruns in excess of 25 percent of estimated bid quantities. Instead, plaintiff is entitled to an equitable adjustment under the Changes clause (on its own behalf and on behalf of its subcontractor) for all the increased costs resulting from the changes in question — which amount (to prevent double recovery) is to be reduced by $16,097 for the compensation plaintiff has already received for the overrun in overhaul. See United Contractors v. United States, supra, 368 F. 2d at 600, 177 Ct.Cl. at 169-170. The amount of recovery will be determined in the first instance (if the parties do not agree) by the Board of Contract Appeals of the Department of the Interior. See e. g., United States v. Anthony Grace & Sons, 384 U.S. 424, 86 S.Ct. 1539, 16 L. Ed.2d 662 (1966). II. Claim, Related (In Part) to Deletion of Selected Borrow Surface Course We come now to plaintiff's second claim — consisting of two items — in which review is sought of the board’s decision (IBCA-36) denying in toto its request for an equitable adjustment under the Changes clause. A. Item 1. In this aspect of the claim, plaintiff contends (as previously set out) that the commission, both before and after the elimination of the selected borrow surface course, compelled it to use borrow material containing rocks over six inches in diameter that were unsuitable for use in the top 12 inches of the subgrade. It says that the board’s decision denying it a changes adjustment was arbitrary and legally erroneous. Our starting point is article 29-3.2(b) of the specifications which provided that “Suitable material shall be conserved for constructing the top portions of embankments and no rocks or hard lumps that cannot readily be broken up into pieces not over six inches in diameter shall be placed in the upper .12-ineh layer.” Against the background of this article, the board held (on reconsideration by a 2 to 1 vote) (i) that the specifications did not place upon the commission the obligation to designate materials for the 12 top inches of the subgrade that met specification size requirements; (ii) that the primary requirement under article 29-3.2(b) was that suitable materials, rather than material of any specified maximum size, should be utilized for topping the subgrade; (iii) that the specifications imposed a specific duty upon the plaintiff to conserve suitable material for topping; and (iv) that article 41-3.1 of the specifications made manifest that oversized rocks and boulders in the borrow were to be anticipated so that plaintiff, in the board’s words, “could not validly object to the presence of oversized rock in borrow material so long as sufficient quantities of material suitable for the construction of the upper layer of the embankment were available, nor could it object to having to separate, by blading or otherwise, the suitable from the unsuitable material even though this might involve the windrowing of the oversize material and might increase the labor costs of placement to some extent. * * * ” Indicating that the best guide to the meaning of the contract was the construction the parties themselves had given to it, the board found that plaintiff had not made any demand during the course of construction that it be furnished with six-inch minus material. In addition, it asserted that the government had always denied that it had failed to designate material meeting the specifications for the top 12 inches of the sub-grade — in which connection it emphasized that the testimony of plaintiff’s witnesses established that the commission did, in fact, designate some pits which contained material smaller than six inches in diameter. The board found also that a reasonable amount of overhaul to obtain finishing material had been allowed by the commission and that plaintiff thus had not established that it suffered from lack of proper topping material. The board added that the record was particularly unsatisfactory with respect to the precise quantities and the quality of excavation and borrow material that could be regarded as suitable for topping material ; that plaintiff’s subcontractor Edwards, although it had the worst material, did not file a claim with the plaintiff or the commission, and plaintiff was filing this part of the claim on its own motion and without written authorization; and that plaintiff had not shown it had made a diligent effort to conserve topping material. The board concluded, in summary, that “even assuming an interpretation of the requirements of the specifications most favorable to plaintiff, it has failed to prove that, although it made every effort to conserve suitable material for topping from both excavation and borrow, the Government failed to designate sources of borrow from which deficiencies of suitable borrow material could be made up.” “The actual basis of the * * * [plaintiff’s] complaints,” the board continued, “both prior to and subsequent to the deletion of the select borrow surface course, was that the borrow material contained too much over-sized material that had to be windrowed but the obligation to do this was consistent with the requirements of the specifications.” “The * * * [plaintiff’s] specific demands for 6-inch minus material” (the board stated) “were not made until after the work had been completed, and was then * * * a mere afterthought, conceived in its grand strategy to formulate an allowable claim.” Finally, the board held that the claim, in any event, was barred by plaintiff’s failure to file written notice of the claim within 10 days from the date the change was ordered, as required by article 3 of the contract and article 5.1 of the specifications. For the reasons discussed below, it is concluded (i) that the board’s interpretation of the specification provisions was erroneous; (ii) that its findings of fact disregarded the uncontradicted evidence in the record and were thus arbitrary; (iii) that the uncontradicted evidence before the board established that the commission required plaintiff to use borrow material for the upper 12 inches of the subgrade that contained — contrary to the specification provisions — substantial amounts of oversized rocks and boulders; (iv) that as a result of these requirements, plaintiff and its subcontractor Edwards were compelled to windrow the oversized rocks from the borrow material in order to produce a topping layer for the subgrade that complied with the specifications; (v) that the necessity of thus windrowing the oversized rocks and thereby producing a suitable topping material constituted a material change in the requirements of the contract; and (vi) that plaintiff is entitled to recover on its own behalf and on behalf of its subcontractor Edwards an equitable adjustment for the increased costs that resulted from such change. First the board erred as a matter of law in failing to recognize that the provisions of articles 6.1 (as revised), 24-3.4, 26-2.1, and 29-2.1 of the specifications placed an affirmative obligation on the commission to select and approve the borrow and excavation material that was suitable for use in the embankments, including the 12-inch thick layer of topping material that had to be placed thereon. The provisions of articles 29-2.1 (and 29-1.1) spelled out this requirement by providing that material for embankments “shall consist of suitable material approved by the [commission] engineer.” [Emphasis supplied.] Insofar as borrow was concerned, articles 26-1.1 and 26-2.1 specified that it must consist of approved material excavated from borrow pits “selected by the engineer as meeting the specifications for the particular embankment or backfill for which the material is intended.” [Emphasis supplied.] Similarly, article 24-3.1 relating to roadway and drainage excavation provided that all suitable material removed from the excavations was to be used by plaintiff as far as practicable “in the formation of the embankments * * * and at such other places as directed.” [Emphasis supplied.] Article 24-3.4 contained the further proviso that roadway excavation deemed suitable for the topping layer of the subgrade “shall be saved and utilized for those purposes as directed by the engineer.” [Emphasis supplied.] Finally, the provisions of article 6.1(a) (as revised) and of article 6.1(c) conferred authority upon the commission’s engineer to reject portions of pits “as unacceptable” and to determine when the plaintiff had obtained “all the acceptable material from all the sources designated in the special provisions. * * *» These provisions, it is clear, relieved the plaintiff of any and all responsibility for the selection of suitable excavation and borrow material to be placed in the embankment, including the 12-inch topping layer thereof. Hence the board was in error in absolving the commission of responsibility to select and approve the materials employed by plaintiff in constructing the roadway, and particularly the topping layer of the subgrade. Rather, when all the above-referenced provisions of the specifications are considered in pari materia with the provisions of article 29-3.2 (b), it is apparent that the commission had the duty and responsibility of selecting borrow and excavation materials for use as embankment, and especially as topping material, that met the specified requirements for such use, i. e., were “suitable” within the meaning of the specifications. The requirements for material suitable to be employed in the upper 12-inch layer of the subgrade were set forth in article 29-3.2(b). This article, in specifying that the material must be “suitable” for use as topping material, established a criterion of suitability that the material contain “no rocks or hard lumps that cannot readily be broken up into pieces not over 6 inches in diameter” and, as a corollary, prohibited the placement in the topping layer of any oversized material that could not readily be broken up to the maximum six-inch size. The further conclusion by the board that the provisions of articles 24-3.1, 24-3.4 and 29-3.2(b) of the specifications imposed a “specific duty” upon plaintiff to conserve suitable material for use as topping material is in direct conflict with the terms of these provisions. For article 24-3.1 specifically provided that “All suitable material removed from the excavations shall be used as far as practicable in the formation of the embankment * * * and at such other places as directed.” [Emphasis supplied.] Article 24-3.4, which appeared under the caption “Conserving Cushion and Finishing Material,” specified that excavated material taken from the cuts and deemed suitable for topping “shall be saved and utilized for those purposes as directed by the engineer.” [Emphasis supplied.] While the similar language of article 29-3.2(b) did not expressly specify that the conservation of borrow should be accomplished as directed by the engineer, such a requirement was clearly implied from the fact that the material conserved had to be “suitable material,” and (as set forth previously) the determination of suitability was clearly within the province of the engineer. In view of these provisions, plaintiff had no obligation to undertake to save excavation and borrow material for use in the topping layer until such time as the commission engineer first determined it was suitable for this purpose and then directed its conservation. It is significant in this connection that there is no evidence in the record of any occasion on which plaintiff had been directed by the engineer to conserve material for this purpose. We turn next to the board’s conclusion that the provisions of article 41-3.1 of the specifications (quoted in note 29, supra) were sufficient to put plaintiff on notice (1) of the presence of oversized rocks and boulders in the borrow material; and (2) of the possibility that it might have to windrow such oversize material in order to obtain topping material. This conclusion ignored the fact that in constructing the embankment, plaintiff was permitted by the provisions of articles 29-1.1 and 29-3.3(c) to use straight run excavation and borrow material as long as any boulders and pieces of rock exceeding 24 inches in diameter were removed. Hence, article 41-3.1 was intended to apply chiefly to the oversized rocks and boulders required to be eliminated during construction of portions of the embankment other than the 12-inch topping layer. In addition, the provision was applicable to any isolated rocks and boulders over six inches in diameter which, in a job of this magnitude, obviously would be encountered in the material selected for placement in the topping layer. To conclude, however, as the board did, that these general provisions which, under the terms of article 41-1.1 related to the constructi