A-14247, JULY 12, 1926, 6 COMP. GEN. 24

A-14247, JULY 12, 1926, 6 COMP. GEN. 24

CONTRACTS, DEFAULT - PUBLIC BUILDINGS WHERE SEPARATE CONTRACTS ARE ENTERED INTO FOR THE VARIOUS KINDS OF WORK NECESSARY TO THE COMPLETE CONSTRUCTION OF A GROUP OF BUILDINGS, ALL OF WHICH ARE SATISFACTORILY COMPLETED EXCEPT ONE WHICH WAS DESTROYED BY AN EXPLOSION NOT THE FAULT OF THE GOVERNMENT BEFORE COMPLETION AND ACCEPTANCE, THE GOVERNMENT IS ENTITLED TO HAVE THE DESTROYED BUILDING CONSTRUCTED AND COMPLETED BY THE FOUR CONTRACTORS WHOSE CONTRACTS CALLED FOR WORK ON THAT PARTICULAR BUILDING AND UPON THEIR REFUSAL MAY INVITE BIDS AND AWARD NEW CONTRACTS FOR ITS COMPLETION, THE COST THEREOF TO BE CHARGED TO THE FOUR CONTRACTORS IN QUESTION.

DECISION BY COMPTROLLER GENERAL MCCARL, JULY 12, 1926:

THERE ARE FOR CONSIDERATION THE CLAIMS OF FOUR CONTRACTORS FOR BALANCES ALLEGED TO BE DUE UNDER THEIR RESPECTIVE CONTRACTS FOR CERTAIN STIPULATED PORTIONS OF THE WORK REQUIRED TO CONSTRUCT AND FINISH COMPLETE THE UNITED STATES VETERANS' HOSPITAL NO. 104, LOCATED AT SAN FERNANDO, CALIFORNIA, AS FOLLOWS: (1) NORTH PACIFIC CONSTRUCTION CO., $102,655.72, UNDER CONTRACT NO. 1483-V.B., DATED DECEMBER 31, 1924; (2) JOHN M. EUSTACE, $25,316.35, UNDER CONTRACT NO. 358-V.B., DATED JANUARY 12, 1925; (3) T. E. THOMAS PLUMBING AND HEATING CO., $9,816.39, UNDER CONTRACT NO. 1491-V.B., DATED DECEMBER 30, 1924; AND (4) GANS BROS. (INC.), $6,328.72, UNDER CONTRACT NO. 1482-V.B., DATED DECEMBER 31, 1924.

THE RECORD DISCLOSES THAT THERE WERE TEN SEPARATE CONTRACTS ENTERED INTO WITH VARIOUS CONSTRUCTION CONTRACTORS FOR STIPULATED PORTIONS OF THE WORK REQUIRED BY THE SPECIFICATIONS FOR CONSTRUCTING AND COMPLETING THE NUMEROUS BUILDINGS COMPRISING THE SAID UNITED STATES VETERANS' HOSPITAL, AS FOLLOWS:

CHART

WORK CONTRACTED FOR CONTRACTOR CONSIDERATION

1. GENERAL CONSTRUCTION----- NORTH PACIFIC $755,900.00

CONSTRUCTION CO.

2. PLUMBING, WATER JOHN M. EUSTACE-------- 111,962.00

DISTRIBUTION, SEWERAGE AND

GAS PIPING.

3. HEATING SYSTEM----------- T. E. THOMAS PLUMBING 58,221.00

AND HEATING CO.

4. ELECTRICAL CONSTRUCTION,GAS BROS. (INC./------- 55,730.00

CLINICAL LABORATORY

BUILDING NO. 2.

5. PUMP HOUSE--------------- NORTH PACIFIC 4,960.00

CONSTRUCTION CO.

6. PIPE LINE---------------- THOMAS HARVERTY CO-----

7. STEEL WATER TANK--------- LLEWELLYN IRON WORKS--- 4,990.00

8. AUTOMATIC TELEPHONE NORTH ELECTRIC MFG. CO. 4,902.87

EQUIPMENT.

9. REFRIGERATOR PLANT------- VULCAN IRON WORKS------ 19,900.00

10. ELEVATORS---------------- OTIS ELEVATOR CO------- 16,295.00

IT APPEARS THAT ON DECEMBER 14, 1925, WHILE SAID VETERANS' HOSPITAL NO. 104 WAS IN PROCESS OF CONSTRUCTION, AN EXPLOSION OCCURRED IN AN UNEXCAVATED PORTION OF THE BASEMENT OF BUILDING NO. 6, WOMEN'S GENERAL MEDICAL BUILDING, WHICH HAD ALMOST REACHED COMPLETION, RESULTING IN THE PRACTICAL DESTRUCTION THEREOF. A BOARD OF INQUIRY WAS APPOINTED BY THE DIRECTOR OF THE UNITED STATES VETERANS' BUREAU TO DETERMINE THE RESPONSIBILITY FOR THE EXPLOSION WHICH DESTROYED SAID PARTIALLY COMPLETED BUILDING NO. 6, AND AFTER INVESTIGATION THE BOARD FOUND THAT THE EXPLOSION WAS CAUSED BY A PLUMBER WHO, IN THE LIGHTING OF A MATCH, IGNITED A MIXTURE OF NATURAL GAS AND AIR WHICH HAD ACCUMULATED IN THE UNEXCAVATED PORTION OF THE BASEMENT OF SAID BUILDING. THE BOARD FURTHER FOUND THAT THERE WAS NEGLIGENCE ON THE PART OF THE PLUMBING CONTRACTOR, JOHN M. EUSTACE, AND THE SOUTHERN CALIFORNIA GAS CO., BY REASON OF WHICH SAID BUILDING NO. 6 WAS DESTROYED WHEN ALMOST COMPLETED.

OF THE 10 CONTRACTORS ENGAGED IN THE WORK NECESSARY TO COMPLETE AND FINISH SAID VETERANS' HOSPITAL NO. 104, IT APPEARS THAT ONLY FOUR WERE ENGAGED IN THE WORK OF CONSTRUCTING AND EQUIPPING SAID BUILDING NO. 6, VIZ, NORTH PACIFIC CONSTRUCTION CO., JOHN M. EUSTACE, T. E. THOMAS PLUMBING AND HEATING CO., AND GANS BROS. (INC.).

IT FURTHER APPEARS THAT, WITH THE EXCEPTION OF THE BUILDING NO. 6, ALL THE BUILDINGS COMPRISING THE GROUP OF SAID VETERANS' HOSPITAL NO. 104 HAVE BEEN COMPLETED AND WERE ACCEPTED AS OF JANUARY 4, 1926. HOWEVER, NO EFFORT HAS BEEN MADE BY THE CONTRACTORS TO REPLACE AND COMPLETE THE DESTROYED BUILDING NO. 6 OF SAID HOSPITAL GROUP.

BY CONTRACT NO. 1483-V.B., DATED DECEMBER 31, 1924, THE NORTH PACIFIC CONSTRUCTION CO. OBLIGATED ITSELF TO FURNISH WITHIN THE TIME STIPULATED "ALL NECESSARY LABOR AND MATERIAL REQUIRED TO CONSTRUCT AND FINISH COMPLETE ALL WORK OF "GENERAL CONSTRUCTION" AT UNITED STATES VETERANS' HOSPITAL, SAN FERNANDO, CALIF., AS CONTEMPLATED BY ITEM I, SUBDIVISIONS (A), (B), (C), (D), (E), AND (G) OF THE CONTRACTOR'S PROPOSAL, DATED DECEMBER 10, 1924," IN STRICT ACCORDANCE WITH THE SPECIFICATION THEREFOR ATTACHED TO AND MADE A PART OF THE CONTRACT, FOR THE SPECIFIED SUM OF $755,900. THE "GENERAL CONSTRUCTION" WORK COVERED BY SAID CONTRACT AS SHOWN BY THE CONTRACTOR'S PROPOSAL CONSISTED OF FURNISHING ALL LABOR, EQUIPMENT, AND MATERIAL REQUIRED AND TO CONSTRUCT AND FINISH COMPLETE THE GROUP OF BUILDINGS COMPRISING THE UNITED STATES VETERANS' HOSPITAL, NO. 104, AT SAN FERNANDO, CALIF., AS FOLLOWS:1 SEMIAMBULANT BUILDING, NO. 1; 1 INFIRMARY, NO. 2; 1 MEN'S AMBULANT BUILDING, NO. 3; 1 ADMINISTRATION BUILDING, NO. 4; 1 WOMEN'S T.B. BUILDING, NO. 5; 1 WOMEN-S' GENERAL MEDICAL BUILDING, NO. 6; GARAGE, NO. 8; STOREHOUSE, NO. 9; LAUNDRY, NO. 10; ATTENDANTS' QUARTERS, NO. 11; NURSES' QUARTERS, NO. 12; JUNIOR OFFICERS' QUARTERS, NOS. 13 AND 15; SENIOR OFFICERS' QUARTERS, NO. 17; MEDICAL OFFICER IN CHARGE QUARTERS, NO. 18; SEPTIC TANK AND HOUSE, NO. 21; AND SPRINKLING FILTER, ETC. TO GUARANTEE THE FAITHFUL PERFORMANCE OF THE CONTRACT A PERFORMANCE BOND IN THE SUM OF $380,000, PAYABLE TO THE UNITED STATES, WAS EXECUTED BY CONTRACTOR, NORTH PACIFIC CONSTRUCTION CO., AS PRINCIPAL, AND BY THE FIDELITY AND DEPOSIT CO., OF MARYLAND, A CORPORATION, AS SURETY.

BY CONTRACT NO. 358-V.B., DATED JANUARY 12, 1925, JOHN M. EUSTACE OBLIGATED HIMSELF TO FURNISH WITHIN THE TIME STIPULATED "ALL NECESSARY LABOR, EQUIPMENT, AND MATERIAL REQUIRED TO INSTALL ALL PLUMBING, WATER DISTRIBUTION, SEWERAGE, AND GAS PIPING AT UNITED STATES VETERANS' HOSPITAL, SAN FERNANDO, CALIF., AS CONTEMPLATED BY ITEM II, SUBDIVISIONS (A) TO (F), INCLUSIVE, OF THE CONTRACTOR'S PROPOSAL DATED DECEMBER 9, 1924, AND SPECIFICATIONS MENTIONED THEREIN," FOR THE SPECIFIED SUM OF $111,962. THE WORK COVERED BY SAID CONTRACT AS SHOWN BY THE CONTRACTOR'S PROPOSAL CONSISTED OF FURNISHING ALL LABOR, EQUIPMENT, AND MATERIAL REQUIRED FOR THE COMPLETE INSTALLATION OF PLUMBING, WATER DISTRIBUTION, AND SEWERAGE SYSTEM, INCLUDING ALL INSIDE AND OUTSIDE GAS, WATER AND SEWER PIPING, FIXTURES, SERVICES, ETC., FOR ALL THE BUILDINGS IN THE GROUP COMPRISING SAID HOSPITAL. TO GUARANTEE THE FAITHFUL PERFORMANCE OF THE CONTRACT A PERFORMANCE BOND IN THE SUM OF $60,000, PAYABLE TO THE UNITED STATES, WAS EXECUTED BY CONTRACTOR, JOHN M. EUSTACE, AS PRINCIPAL, AND BY THE HARTFORD ACCIDENT AND INDEMNITY CO., AS SURETY.

BY CONTRACT NO. 1491-V.B., DATED DECEMBER 30, 1924, THE T. E. THOMAS PLUMBING AND HEATING CO. OBLIGATED ITSELF TO FURNISH WITHIN THE TIME STIPULATED "ALL NECESSARY LABOR AND MATERIAL REQUIRED TO INSTALL, COMPLETE, HEATING SYSTEMS AT UNITED STATES VETERANS' HOSPITAL, SAN FERNANDO, CALIF., AS CONTEMPLATED BY ITEM III, SUBDIVISIONS (A) TO (E), INCLUSIVE, OF THE CONTRACTOR'S PROPOSAL, DATED DECEMBER 11, 1924," INSTRICT ACCORDANCE WITH THE SPECIFICATIONS THEREFOR ATTACHED TO AND MADE A PART OF THE CONTRACT, FOR THE SPECIFIED SUM OF $58,221. THE WORK COVERED BY SAID CONTRACT AS SHOWN BY THE CONTRACTOR'S PROPOSAL CONSISTED OF FURNISHING ALL LABOR, EQUIPMENT, AND MATERIAL REQUIRED FOR THE COMPLETE INSTALLATION OF HEATING SYSTEMS, INCLUDING ALL PIPING, RADIATION, CONNECTIONS TO EQUIPMENT, ETC., FOR ALL THE BUILDINGS IN THE GROUP COMPRISING SAID HOSPITAL. TO GUARANTEE THE FAITHFUL PERFORMANCE OF THE CONTRACT A PERFORMANCE BOND IN THE SUM OF $30,000, PAYABLE TO THE UNITED STATES, WAS EXECUTED BY CONTRACTOR, T. E. THOMAS PLUMBING AND HEATING CO., AS PRINCIPAL, AND BY THE UNITED STATES FIDELITY AND GUARANTY CO., AS SURETY.

BY CONTRACT NO. 1482-V.B., DATED DECEMBER 31, 1924, GANS BROS. (INC.) OBLIGATED ITSELF TO FURNISH WITHIN THE TIME STIPULATED "ALL NECESSARY LABOR AND MATERIAL REQUIRED TO INSTALL, COMPLETE, ALL ELECTRICAL WORK, AT UNITED STATES VETERANS' HOSPITAL, SAN FERNANDO, CALIF., AS CONTEMPLATED BY ITEM IV, SUBDIVISIONS (A) TO (E), INCLUSIVE, OF THE CONTRACTOR'S PROPOSAL, DATED DECEMBER 10, 1924, AND SPECIFICATIONS MENTIONED THEREIN," FOR THE SPECIFIED SUM OF $56,730. THE WORK COVERED BY SAID CONTRACT AS SHOWN BY THE CONTRACTOR'S PROPOSAL CONSISTED OF FURNISHING---

ALL LABOR, EQUIPMENT, AND MATERIAL REQUIRED FOR THE COMPLETE INSTALLATION OF AN ELECTRIC SYSTEM INCLUDING OUTSIDE DISTRIBUTION; TRANSFORMERS; GROUND LIGHTING; INSIDE CONDUIT; WIRING; LIGHTING FIXTURES; ELECTRIC BELLS; CONDUITS; WIRING AND CABLES FOR TELEPHONES; CONDUITS, WIRING, AND APPARATUS FOR A COMPLETE NURSES' CALL SYSTEM; COMPLETE TO FIRE-ALARM SYSTEM AND CONDUITS AND WIRING FOR RADIO RECEPTION AND DISTRIBUTION, ETC., AS SPECIFIED, * * *

FOR ALL THE BUILDINGS IN THE GROUP COMPRISING SAID HOSPITAL. GUARANTEE THE FAITHFUL PERFORMANCE OF THE CONTRACT A PERFORMANCE BOND IN THE SUM OF $30,000, PAYABLE TO THE UNITED STATES, WAS EXECUTED BY CONTRACTOR, GANS BROS. (INC.), AS PRINCIPAL, AND BY THE FIDELITY AND DEPOSIT CO. OF MARYLAND, A CORPORATION, AS SURETY.

EACH OF THE SAID FOUR CONTRACTS HERE INVOLVED PROVIDED:

ARTICLE III. * * * ALL WORK WHEN FINISHED SHALL BE DELIVERED IN A COMPLETE AND PERFECT STATE. * * *.

ARTICLE XII. TERMINATION OF RIGHT OF CONTRACTOR TO PROCEED.---IF THE CONTRACTOR FAILS, NEGLECTS, OR REFUSES TO COMMENCE, PROSECUTE, OR COMPLETE THE WORK, OR ANY PART THEREOF, IN ACCORDANCE WITH THE TRUE INTENT AND MEANING OF THIS CONTRACT, THE GOVERNMENT SHALL HAVE THE RIGHT TO TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED EITHER IN WHOLE OR IN PART AND TO COMPLETE THE WORK SO TERMINATED AT THE EXPENSE OF THE CONTRACTOR, EITHER BY CONTRACT OR OTHERWISE, AS THE CONTRACTING OFFICER MAY ELECT. IF THE CONTRACTOR'S RIGHT TO PROCEED IS SO TERMINATED, THE GOVERNMENT SHALL HAVE THE RIGHT TO TAKE POSSESSION OF AND UTILIZE IN COMPLETING THE WORK SUCH MATERIALS, APPLIANCES, AND PLANTS AS MAY BE FOUND ON THE SITE OF THE WORK AND NECESSARY THEREFOR. ANY EXCESS COST OF COMPLETING THE WORK, TOGETHER WITH LIQUIDATED DAMAGES FOR DELAY, SHALL BE CHARGED TO THE CONTRACTOR: PROVIDED, THAT IN THE EVENT THE GOVERNMENT ELECTS NOT TO COMPLETE THE WORK OR DOES NOT COMPLETE THE WORK IN ACCORDANCE WITH THE REQUIREMENTS OF THIS CONTRACT, THE CONTRACTOR AND HIS SURETIES SHALL REMAIN LIABLE FOR ANY AND ALL BREACHES OF THIS CONTRACT NOT COVERED BY THE ABOVE PROVISION.

ARTICLE XIII. LOCAL LAWS AND CARE OR WORK.--- THE CONTRACTOR SHALL, WITHOUT EXPENSE TO THE GOVERNMENT, COMPLY WITH ALL LOCAL STATUTES, ORDINANCES, AND REGULATIONS, IN SO FAR AS THE SAME ARE APPLICABLE TO THE WORK, AND OBTAIN ALL REQUIRED LICENSES AND PERMITS AND BE RESPONSIBLE FOR ALL DAMAGES TO PERSONS OR PROPERTY WHICH MAY OCCUR IN CONNECTION WITH THE PROSECUTION OF THE WORK, AND SHALL BE RESPONSIBLE FOR THE PROPER CARE AND PROTECTION OF ALL MATERIALS DELIVERED AND WORK PERFORMED BY HIM UNTIL THE COMPLETION AND FINAL ACCEPTANCE OF SAME.

ARTICLE XIX. OTHER CONTRACTS.--- THE GOVERNMENT MAY AWARD OTHER CONTRACTS FOR ADDITIONAL WORK AND THE CONTRACTOR OPERATING UNDER THIS SPECIFICATION SHALL NOT PREVENT OR DELAY SUCH OTHER CONTRACTORS FROM ENTERING THE PREMISES AND PERFORMING OTHER WORK, AND HE SHALL FULLY COOPERATE WITH SUCH CONTRACTORS AND CAREFULLY FIT HIS OWN WORK TO THAT PROVIDED UNDER OTHER CONTRACTS, AS MAY BE DIRECTED BY THE CONTRACTING OFFICER.

ARTICLE XXIII. PAYMENTS TO CONTRACTOR.--- AS THE WORK PROGRESSES, PARTIAL PAYMENTS WILL BE MADE AT THE END OF EACH CALENDAR MONTH, OR AS SOON THEREAFTER AS PRACTICABLE.

IN MAKING SUCH PARTIAL PAYMENTS THERE SHALL BE RETAINED TEN PERCENT OF THE ESTIMATED AMOUNT UNTIL FINAL COMPLETION AND ACCEPTANCE OF ALL WORK COVERED BY THE CONTRACT: PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, AT ANY TIME AFTER FIFTY PERCENT OF THE WORK HAS BEEN COMPLETED, IF HE FINDS THAT SATISFACTORY PROGRESS IS BEING MADE, MAY MAKE ANY OF THE REMAINING PARTIAL PAYMENTS IN FULL, AND PROVIDED FURTHER THAT ON COMPLETION AND ACCEPTANCE OF EACH SEPARATE BUILDING, VESSEL, PUBLIC WORK OR OTHER DIVISION OF THE CONTRACT ON WHICH THE CONTRACT PRICE IS STATED SEPARATELY IN THE CONTRACT, PAYMENT MAY BE MADE IN FULL, INCLUDING RETAINED PERCENTAGES THEREON, LESS AUTHORIZED DEDUCTIONS.

ALL MATERIAL AND WORK COVERED BY PARTIAL PAYMENTS MADE SHALL THEREUPON BECOME THE SOLE PROPERTY OF THE GOVERNMENT, BUT THIS PROVISION SHALL NOT BE CONSTRUED AS RELIEVING THE CONTRACTOR FROM THE SOLE RESPONSIBILITY FOR THE CARE AND PROTECTION OF MATERIALS AND WORK UPON WHICH PAYMENTS HAVE BEEN MADE, NOR AS A WAIVER OF THE RIGHT OF THE GOVERNMENT TO REQUIRE THE FULFILLMENT OF ALL OF THE TERMS OF THIS CONTRACT. UPON COMPLETION AND ACCEPTANCE OF ALL WORK REQUIRED HEREUNDER, THE BALANCE OF THE FULL CONTRACT PRICE INCLUDING RETAINED PERCENTAGES LESS AUTHORIZED DEDUCTIONS, WILL BE PAID UPON THE PRESENTATION OF A PROPERLY EXECUTED AND DULY CERTIFIED VOUCHER THEREFOR, AFTER THE CONTRACTOR SHALL HAVE FURNISHED THE GOVERNMENT WITH A RELEASE, IF REQUIRED, CONTAINING SUCH TERMS AND CONDITIONS AS MAY BE PRESCRIBED BY THE CONTRACTING OFFICER, OF ALL CLAIMS AGAINST THE GOVERNMENT ARISING UNDER OR BY VIRTUE OF THIS CONTRACT, OTHER THAN SUCH CLAIMS AS MAY BE SPECIFICALLY EXCEPTED FROM THE OPERATION OF THE RELEASE IN STATED AMOUNTS TO BE SET FORTH IN THE RELEASE. IT APPEARS THAT THE CONTRACTORS WERE PAID MONTHLY PARTIAL PAYMENTS AS THE WORK PROGRESSED, IN ACCORDANCE WITH THE PROVISIONS OF THEIR RESPECTIVE CONTRACTS, AND THAT ALL MONEY DUE TO THE CLAIMANT CONTRACTORS FOR WORK DONE, LABOR AND SERVICES PERFORMED, AND MATERIALS FURNISHED TO COMPLETE THE WORK CONTRACTED FOR BY EACH OF THEM ON THE GROUP OF BUILDINGS COMPRISING SAID VETERANS' HOSPITAL NO. 104 HAVE BEEN PAID TO THEM, EXCEPTING THE FOLLOWING AMOUNTS:

CHART NORTH PACIFIC CONSTRUCTION CO -------------------------- $102,655.72 JOHN M. EUSTACE ---------------------------------------- 25,318.35 T. E. THOMAS PLUMBING AND HEATING CO ------------------- 9,816.39 GANS BROS. (INC.) -------------------------------------- 6,328.72

THE CLAIMS OF THE CONTRACTORS FOR SAID AMOUNTS HAVE BEEN DULY VOUCHERED AND APPROVED BY THE ADMINISTRATIVE OFFICER AND ARE THE ONES HERE FOR CONSIDERATION AS FOLLOWS:

CHART NORTH PACIFIC CONSTRUCTION CO., CONTRACT NO. 1483-V. B.:

VOUCHER--- TENTH PROGRESS PAYMENT ------ $21,339.67

VOUCHER--- ELEVENTH PROGRESS PAYMENT --- 6,104.25

VOUCHER--- TWELFTH AND FINAL PAYMENT --- 75,211.80

TOTAL AMOUNT CLAIMED ------------------------------ $102,655.72 JOHN M. EUSTACE, CONTRACTOR NO. 358-V. B.:

VOUCHER--- TENTH PROGRESS PAYMENT ------ 6,532.46

VOUCHER--- ELEVENTH PROGRESS PAYMENT --- 3,886.95

VOUCHER--- TWELFTH AND FINAL PAYMENT --- 14,896.94

TOTAL AMOUNT CLAIMED ------------------------------ 25,318.35 T. E. THOMAS PLUMBING AND HEATING CO.,

CONTRACT NO. 1491-V. B.:

VOUCHER--- EIGHTH PROGRESS PAYMENT ----- 1,644.40

VOUCHER--- NINTH PROGRESS PAYMENT ------ 1,589.60

VOUCHER--- TENTH AND FINAL PAYMENT ----- 6,582.39

TOTAL AMOUNT CLAIMED ------------------------------ 9,816.39 GANS BROS. (INC.), CONTRACT NO.

1482-V. B.:

VOUCHER--- ELEVENTH PROGRESS PAYMENT --- 311.26

VOUCHER--- TWELFTH AND FINAL PAYMENT --- 6,017.46

TOTAL AMOUNT CLAIMED ------------------------------ 6,328.72

AGGREGATE AMOUNT CLAIMED -------------------------- 144,119.18

IT APPEARS THAT THERE WERE SOME CHANGES IN THE WORK CONTRACTED FOR NECESSITATING CHANGES IN THE LUMP SUM PRICES FIXED BY THE RESPECTIVE CONTRACTS IN ACCORDANCE WITH THE PROVISIONS THEREOF. THE FACTS RELATIVE TO THE ACCOUNTS OF THE CONTRACTORS INVOLVED IN THIS SUBMISSION ARE STATED IN A COMMUNICATION, DATED MAY 13, 1926, FROM THE CHIEF, CONSTRUCTION DIVISION, TO THE DIRECTOR OF THE UNITED STATES VETERANS' BUREAU, AND SAME HAVE BEEN APPROVED BY SAID DIRECTOR AND TRANSMITTED TO THIS OFFICE AND ARE AS FOLLOWS:

THE SUPERINTENDENT OF CONSTRUCTION AT U.S. VETERANS' HOSPITAL, SAN FERNANDO, CALIF., IN RESPONSE TO INSTRUCTIONS GIVEN HIM IN BUREAU LETTER OF MARCH 22ND, HAS SUBMITTED STATEMENTS IN THE FORM OF VOUCHERS DATED JANUARY 4, 1926, WHICH ARE MARKED "FINAL PAYMENT" ALTHOUGH THEY ARE MERELY COMPLETE STATEMENTS OF ACCOUNT, UNDER CONTRACTS WITH THE NORTH PACIFIC CONSTRUCTION COMPANY, T. E. THOMAS PLUMBING AND HEATING COMPANY, GANS BROS. INC., AND JOHN M. EUSTACE. THE VOUCHERS ARE CERTIFIED BY HIM WITH THE QUALIFICATION "FOR PAYMENT IN THE AMOUNT THAT IS LEGALLY FOUND DUE.'

THE CONTRACT DATE FOR COMPLETION WAS JANUARY 4, 1926. BUILDING NO. 6, AFTER BEING NEARLY COMPLETED, WAS ALMOST ENTIRELY DESTROYED BY AN EXPLOSION ON DECEMBER 14, 1925. ALL THE OTHER BUILDINGS AND WORK INCLUDED IN THE CONTRACTS WERE COMPLETED WITHIN THE CONTRACT PERIOD AND ACCEPTED AS OF JANUARY 4, 1926. IT WILL BE NOTED THAT THE VOUCHERS DATED JANUARY 4, 1926, COVER THE FULL VALUE OF ALL THE WORK PERFORMED, INCLUDING THE WORK WHICH HAD BEEN DONE IN BUILDING NO. 6. FROM THIS TOTAL HAS BEEN DEDUCTED ONLY THE AMOUNT OF PREVIOUS VOUCHERS. A BRIEF STATEMENT OF ACCOUNT UNDER EACH CONTRACT FOLLOWS:

CHART

NORTH PACIFIC CONSTRUCTION CO. AMOUNT OF CONTRACT ----------------------- ----------------- $756,075.83 WORK IN BUILDING NO. 6 NOT PERFORMED AND NOT INCLUDED IN

VOUCHERS ------------------------------------------------- 347.00

----------- AMOUNT COMPLETED (INCL. $54,761.00 IN BLD. NO. 6) --------- 755,728.83 VOUCHERS PAID BEFORE DEC. 14, 1926 -------- $653,073.11 VOUCHERS FOR NOVEMBER AND DECEMBER, UNPAID- 227,443.92

----------- 680,517.03

75,211.80

T. E. THOMAS PLUMBING AND HEATING CO. AMOUNT OF CONTRACT ---------------- ------------------------ $59,690.70 WORK IN BUILDING NO. 6 NOT PERFORMED AND NOT INCLUDED IN VOUCHERS ------------ -------------------------------- ----- 133.40

----------- AMOUNT COMPLETED (INCL. $3,201.60 IN BLD. NO. 6) ---------- 59,557.30 VOUCHERS PAID BEFORE DEC. 14, 1926 -------- $49,740.91 VOUCHERS FOR NOVEMBER AND DECEMBER, UNPAID- 3,234.00

----------- 52,974.91

----------- VOUCHER DATED JAN. 4, 1926, HEREWITH ---------------------- 6,582.39

GANS BROS. (INC.) AMOUNT OF CONTRACT --- -------------------------------- ---- $58,434.80 WORK IN BUILDING NO. 6 NOT PERFORMED AND NOT INCLUDED IN VOUCHERS ------------------------- ------------------------ 24.17

----------- AMOUNT COMPLETED (INCL. $2,392.83 IN BLD. NO. 6) ---- ----- 58,410.63 VOUCHERS PAID BEFORE DEC. 14, 1926 -------- $52,081.91 VOUCHER FOR DECEMBER, UNPAID -------------- 311.26

----------- 52,393.17

----------- VOUCHER DATED JAN. 4, 1926, HEREWITH ---------------------- 6,017.46

JOHN M. EUSTACE AMOUNT OF CONTRACT --------------------- ---------------- -- $116,028.46 WORK IN BUILDING NO. 6 NOT PERFORMED AND NOT INCLUDED IN VOUCHERS ----------------------------------------- -------- 129.12

----------- AMOUNT COMPLETED (INCL. $3,894.88 IN BLD. NO. 6) ---------- 115,899.34 VOUCHERS PAID BEFORE DEC. 14, 1926 -------- $90,582.99 VOUCHERS FOR NOVEMBER AND DECEMBER, UNPAID- 10,419.41

----------- 101,002.40

----------- VOUCHERS DATED JAN. 4, 1926, HEREWITH ------------------- - 14,896.94

INASMUCH AS THE CONTRACTS PROVIDE FOR THE CONSTRUCTION OF AN ENTIRE GROUP OF BUILDINGS, FINISHED AND COMPLETE, FOR A STIPULATED FIXED COMPENSATION TO EACH CONTRACTOR FOR THE ENTIRE WORK REQUIRED TO BE PERFORMED BY IT, EACH CONTRACT MUST BE CONSIDERED AS ENTIRE AND NOT DIVISIBLE. WHERE A CONTRACT IS FOR A WORK AS A WHOLE, AS APPEARS TO BE THE CASE HERE, IT WILL NOT BE RENDERED DIVISIBLE BY THE FACT THAT THE COMPENSATION IS PAYABLE IN INSTALLMENTS AS THE WORK PROGRESSES, AS WHERE PAYMENTS ARE MADE PERIODICALLY ON AN ESTIMATE OF THE AMOUNT OF WORK DONE, OR AS THE WORK REACHES CERTAIN STAGES OF COMPLETION. SEE 9 CORPUS JURIS, 713.

IN THE INSTANT CASE THE CLAIMANT CONTRACTORS HAVE WHOLLY FAILED TO CONSTRUCT ONE OF THE BUILDINGS OF THE GROUP CONTRACTED FOR AND TO PERFORM THE LABOR AND FURNISH THE MATERIALS REQUIRED FOR ITS COMPLETION. WHEN ALMOST COMPLETED THE STRUCTURE WAS PRACTICALLY DESTROYED BY AN EXPLOSION. THE CONTRACTORS APPARENTLY HAVE TAKEN NO STEPS TO CONSTRUCT OR RECONSTRUCT THE BUILDING IN ACCORDANCE WITH THE CONTRACTS, BUT CONTINUED TO DISREGARD THEIR CONTRACTUAL OBLIGATIONS RELATIVE THERETO. THE DEFAULT OF SAID CONTRACTORS APPEARS TO BE COMPLETE AS TO THE DESTROYED BUILDING AND UPON THE FACTS SUBMITTED SUCH DEFAULT CAN NOT BE DEEMED TO HAVE RESULTED FROM ANYTHING DONE OR OMITTED BY THE GOVERNMENT. NOR DID THE GOVERNMENT RECEIVE ANYTHING OF VALUE FROM CONTRACTORS OR AS A RESULT OF THEIR WORK ON SAID BUILDING. THE GENERAL RULE, THAT A CONTRACT FOR THE COMPLETE CONSTRUCTION OF A BUILDING FOR AN ENTIRE PRICE, PAYABLE IN INSTALLMENTS AS THE WORK PROGRESSES, IS AN ENTIRE CONTRACT, AND THAT A WILLFUL REFUSAL BY THE CONTRACTOR TO COMPLETE THE BUILDING ENTITLES THE OWNER TO RETURN OF THE INSTALLMENTS PAID, HAS BEEN DECLARED BY THE STATE COURTS IN A NUMBER OF CASES CITED IN UNITED STATES V. UNITED STATES FIDELITY AND GUARANTY COMPANY, 236 U.S. 512. WHERE, AS APPEARS TO BE THE CASE HERE, THE BUILDER DOES NOT SUBSTANTIALLY PERFORM THE CONTRACT, HE IS NOT ENTITLED TO THE COMPENSATION PAYABLE UNDER THE TERMS OF THE CONTRACT ON COMPLETION OF THE WORK. FREEDLY V. WILSON, 136 FED.REP. 586; SIMONDS V. PEARCE, 31 FED.REP. 137. A CONTRACTOR IS NOT ENTITLED TO COMPENSATION FOR HIS LOSS BY THE DESTRUCTION OF HIS WORK BEFORE COMPLETION. SEE 11 COMP. DEC. 93, AND THE COURT DECISIONS THEREIN CITED.

THE WORK PROVIDED FOR IN THE CONTRACTS INVOLVED HERE WAS CLEARLY AT THE RISK OF CONTRACTORS UNTIL COMPLETED AND FINAL ACCEPTANCE THEREOF BY THE GOVERNMENT. THE COMPLETION OF THE BUILDINGS COMPRISING THE GROUP OF SAID VETERANS' HOSPITAL NO. 104, WITH THE EXCEPTION OF SAID PARTIALLY COMPLETED BUILDING NO. 6, IS NOT A COMPLETION OF THE CONTRACTS AS AGREED AND DOES NOT AUTHORIZE THE PAYMENT TO THE CONTRACTORS OF THE STIPULATED CONTRACT PRICE FOR THE COMPLETED WORK.

THE ESTABLISHED RULE IS THAT THE PARTIES TO A CONTRACT ARE BOUND TO PERFORM IT ACCORDING TO ITS TERMS WHERE THEY ARE SUI JURIS, WHERE THE CONTRACT VIOLATES NO RULE OF LAW OR PUBLIC POLICY, AND WHERE NO FRAUD OR IMPOSITION HAS BEEN PRACTICED, NOTWITHSTANDING THE CONTRACT MAY OPERATE HARSHLY OR UNJUSTLY ON ONE OF THE PARTIES. 13 CORPUS JURIS 627.

THE RECORD DISCLOSES THAT THE CONTRACT VALUE OF THE WORK REMAINING UNCOMPLETED UNDER THE RESPECTIVE CONTRACTS OF CLAIMANT CONTRACTORS AMOUNTS TO $64,884, AS FOLLOWS:

TABLE

ON BUILDING NO. 6

ESTIMATED ESTIMATED TOTAL ESTIMATED

VALUE OF VALUE OF WORK CONTRACT VALUE OF

CONTRACTOR COMPLETED UNCOMPLETED, WORK AND MATERIAL TO

WORK, DATE DATE OF COMPLETE BUILDING

OF EXPLOSION EXPLOSION NO. 6 NORTH PACIFIC

CONSTRUCTION CO ------- $54,761.00 $347.00 $55,108.00 JOHN M. EUSTACE --- ----- 3,894.88 129.12 4,024.00T. E. THOMAS PLUMBING

AND HEATING CO -------- 3,201.60 133.40 3,335.00 GANS BROS. (INC.) ------ 2,392.83 24.17 2,417.00

64,884.00

THUS, IT APPEARS THAT EACH OF THE FOUR CLAIMANT CONTRACTORS HAD NOT COMPLETED THEIR WORK ON SAID BUILDING NO. 6 WHEN IT WAS DESTROYED BY THE EXPLOSION.

THE GOVERNMENT IS ENTITLED TO HAVE BUILDING NO. 6 CONSTRUCTED AND COMPLETED IN ACCORDANCE WITH THE ORIGINAL PLANS AND SPECIFICATIONS ATTACHED TO THE CONTRACTS AS A PART THEREOF BEFORE ANY FURTHER OR FINAL PAYMENTS ARE MADE UNDER THE FOUR CONTRACTS HERE INVOLVED.

THE UNITED STATES VETERANS' BUREAU SHOULD CALL UPON THE RESPECTIVE CONTRACTORS AND THEIR SURETIES TO RECONSTRUCT BUILDING NO. 6 TO COMPLETION, AS PROVIDED BY THEIR CONTRACTS, AND, IF THEY REFUSE, THEN SAID BUREAU SHOULD ADVERTISE FOR BIDS, AND AWARD CONTRACTS FOR THE CONSTRUCTION AND COMPLETION OF SAID BUILDING IN STRICT ACCORDANCE WITH THE ORIGINAL PLANS AND SPECIFICATIONS THEREFOR, THE COST THEREOF TO BE CHARGED TO THE FOUR ORIGINAL CONTRACTORS, RESPECTIVELY.

PENDING THE COMPLETION OF ALL THE WORK CONTEMPLATED BY EACH OF THE CONTRACTS HERE INVOLVED, OR A SATISFACTORY ADJUSTMENT WITH REFERENCE THERETO, NO FURTHER PAYMENTS TO THE CONTRACTORS ARE AUTHORIZED THEREUNDER.

THE QUESTION AS TO THE LIABILITY FOR THE ACCIDENT RESULTING IN THE PRACTICAL DESTRUCTION OF BUILDING NO. 6 WOULD APPEAR TO BE FOR ADJUSTMENT AMONG THE CONTRACTORS.