B-141058, SEP. 20, 1960

B-141058, SEP. 20, 1960

TO HARSHMAN, YOUNG, COLVIN AND ALEXANDER:

REFERENCE IS MADE TO YOUR LETTER OF MAY 2, 1960, REQUESTING REVIEW OF OUR DECISION OF NOVEMBER 10, 1959, TO THE SECRETARY OF THE ARMY, WHEREIN IT WAS HELD THAT THERE WAS NO LEGAL BASIS FOR THE PAYMENT OF ADDITIONAL COMPENSATION TO PRICE BROTHERS-MCCLUNG, INC., BECAUSE OF THE ALLEGED FAILURE OF MODIFICATION NO. 2 TO CONTRACT NO. DA-20-064 CIVENG-57-131 TO EXPRESS THE INTENTION OF THE PARTIES TO THE CONTRACT.

THE FACTS IN THIS CASE WERE SET OUT IN OUR DECISION OF NOVEMBER 10, 1959, AND NEED NOT BE REPEATED HERE.

BRIEFLY IT IS YOUR CONTENTION THAT WHEN MODIFICATION NO. 2 WAS ENTERED INTO TO PROVIDE ADDITIONAL COMPENSATION BECAUSE OF CHANGED CONDITIONS (CLAUSE 4, GENERAL PROVISIONS OF CONTRACT) THERE WAS A MUTUAL MISTAKE ON THE PART OF THE CONTRACTOR AND GOVERNMENT OFFICIALS THAT THE DRAGLINE CELT WAS CAPABLE OF SATISFACTORILY REMOVING THE INVOLVED MATERIAL. AND SINCE THE DREDGING WORK WAS MORE DIFFICULT THAN IT WAS BELIEVED TO BE, THE DRAGLINE CELT WAS REPLACED BY A DIPPER DREDGE AND THE COST OF DREDGING WAS $41,322 IN EXCESS OF THE PRICE AGREED UPON IN MODIFICATION NO. 2.

IN YOUR LETTER YOU CONTEND THAT WHEN MODIFICATION NO. 2 WAS ENTERED INTO, BOTH PARTIES TO THE CONTRACT WERE OF THE OPINION THAT THE DRAGLINE CELT COULD SATISFACTORILY REMOVE THE 8,800 CUBIC YARDS OF HARD MATERIAL AND THEREFORE, WHEN IT WAS DISCOVERED THAT THE DRAGLINE WAS UNABLE TO DO THE WORK, IT NECESSARILY MUST BE CONCLUDED THAT THE CONDITIONS WERE "CHANGED CONDITIONS" WITHIN THE MEANING OF THE PHRASE OF CLAUSE 4 OF GENERAL PROVISIONS FOR WHICH THE CONTRACTOR WAS ENTITLED TO AN INCREASE IN THE CONTRACT PRICE. IT WAS STATED IN THE NEXT TO THE LAST PARAGRAPH OF OUR DECISION OF NOVEMBER 10, 1959, THAT THERE WAS NO EVIDENCE TO SHOW THAT THE MATERIAL ENCOUNTERED DIFFERED FROM THAT ANTICIPATED UNDER THE MODIFICATION EVEN THOUGH THE CONTRACTOR OR ITS SUBCONTRACTOR HAD SOME DOUBT WHETHER THE WORK COULD BE PERFORMED BY DRAGLINE. IN REGARD TO THIS MATTER THE AREA ENGINEER, IN HIS REPORT OF JUNE 16, 1959, TO THE DISTRICT ENGINEER, STATED THAT THE CONTRACTOR'S STATEMENT THAT THE MATERIALS ENCOUNTERED WERE ENTIRELY DIFFERENT FROM THE INFORMATION SECURED FROM THE TEST PITS WAS NOT CORRECT AND THAT THE SIX TEST PITS WERE BELIEVED TO HAVE BEEN REPRESENTATIVE OF THE MATERIALS ACTUALLY ENCOUNTERED. HE STATED FURTHER THAT:

"* * * THESE MATERIALS RANGED FROM VERY SOFT CLAY THROUGH SAND AND GRAVEL TO BOULDERS UP TO 30 INCHES BY 30 INCHES BY 40 INCHES IN SIZE. THE FACT THAT BOULDERS AS LARGE AS 36 INCHES BY 36 INCHES BY 60 INCHES WERE LATER ENCOUNTERED BY THE CELT DOES NOT INDICATE THAT THE MATERIAL WAS SUBSTANTIALLY DIFFERENT FROM THAT FOUND IN THE TEST PITS; IN FACT, IT WOULD BE EXTREMELY UNLIKELY THAT ANY TEST PIT SURVEY IN A BOULDER AREA WOULD UNCOVER THE LARGEST BOULDER IN THE AREA.'

IN YOUR LETTER YOU CONTEND ALSO THAT THERE WAS A MUTUAL MISTAKE IN THAT BOTH PARTIES TO CONTRACT ASSUMED, PRIOR TO THE EXECUTION OF MODIFICATION NO. 2, THAT A DRAGLINE COULD SATISFACTORILY REMOVE THE 8,800 CUBIC YARDS OF HARD MATERIAL IN QUESTION AND THEREFORE THE CONTRACT SHOULD BE REFORMED. THE GENERAL RULES JUSTIFYING REFORMATION ARE SET OUT IN 26 COMP. GEN. 654. AS POINTED OUT IN OUR DECISION, THERE DOES NOT APPEAR TO HAVE BEEN ANY MISTAKE IN REDUCING THEIR AGREEMENT TO A FORMAL WRITTEN DOCUMENT. THE COURTS HOLD THAT EQUITY WILL NOT REFORM A CONTRACT ON THE ALLEGED GROUND OF MISTAKE WHEN SUBSEQUENT EVENTS SHOW THAT SOMETHING DESIRED WAS OMITTED FROM THE CONTRACT. IT IS IMPLIED IN YOUR LETTER THAT THE AGREEMENT TO USE A DRAGLINE WAS AN ESSENTIAL PROVISION--- THOUGH NOT EXPRESSED--- OF MODIFICATION NO. 2. IN REGARD TO THE MATTER OF EQUIPMENT TO BE USED BY THE CONTRACTOR, IT APPEARS FROM PARAGRAPH SC-11 OF SPECIAL CONDITIONS OF THE CONTRACT THAT WHEN THE CONTRACT WAS EXECUTED, THE CONTRACTOR LISTED THE "MINIMUM PLANT" TO BE USED ON THE WORK AS A HYDRAULIC DREDGE BUT IT WAS SPECIFICALLY PROVIDED THAT THE "LISTING HEREIN IS NOT TO BE CONSTRUED AS AN AGREEMENT ON THE PART OF THE GOVERNMENT THAT IT IS ADEQUATE FOR THE PERFORMANCE OF THE WORK.' IT CLEARLY APPEARS THAT THE GOVERNMENT DID NOT INTEND TO ASSUME THE EXTRA COSTS INVOLVED IF THE EQUIPMENT TO BE USED WAS INADEQUATE TO PERFORM THE WORK AND CONSEQUENTLY THE ONLY BASIS ON WHICH RELIEF COULD BE GIVEN HERE WOULD BE ON THE BASIS OF CHANGED CONDITIONS AS PROVIDED IN CLAUSE 4 OF GENERAL PROVISIONS. AND, AS STATED HEREINABOVE, THE ADMINISTRATIVE OFFICE REPORT DOES NOT SUPPORT THE ALLEGATION OF CHANGED CONDITIONS BEYOND THAT RECOGNIZED IN MODIFICATION NO. 2.