B-145640, JUNE 15, 1961, 40 COMP. GEN. 697

B-145640, JUNE 15, 1961, 40 COMP. GEN. 697

ROADS - RELOCATION ROADS - MODIFICATION IN THE APPLICATION OF THE MORE LIBERAL REPLACEMENT IN KIND PROVISIONS IN SECTION 207 (B) OF THE FLOOD CONTROL ACT OF 1960, 33 U.S.C. 701R-1, FOR HIGHWAYS REQUIRED TO BE RELOCATED AS A RESULT OF THE CONSTRUCTION OF FLOOD CONTROL PROJECTS, THE STATUS OF THE RELOCATION WORK RATHER THAN WHETHER A RELOCATION AGREEMENT HAS BEEN SIGNED IS THE DETERMINATIVE FACTOR, THERE BEING NO INDICATION THAT THE MORE LIBERAL CRITERIA SHOULD BE RESTRICTED TO THOSE HIGHWAYS WHERE RELOCATION AGREEMENTS HAVE NOT BEEN SIGNED; THEREFORE, AGREEMENTS FOR SUBSTITUTE ROADS OR SEGMENTS NOT COMPLETED PRIOR TO JULY 14, 1960--- THE DATE OF APPROVAL OF THE FLOOD CONTROL ACT OF 1960- -- MAY BE MODIFIED TO INCLUDE THE ADDITIONAL BENEFITS.

TO THE SECRETARY OF THE ARMY, JUNE 15, 1961:

BY LETTER OF APRIL 17, 1961, THE ASSISTANT SECRETARY OF THE ARMY (1FINANCIAL MANAGEMENT) SUBMITTED FOR OUR CONSIDERATION A STATEMENT OF FACTS AND DOCUMENTATION PERTINENT TO A DISAGREEMENT BETWEEN THE STATE OF OKLAHOMA AND THE UNITED STATES ARMY CORPS OF ENGINEERS CONCERNING THE APPLICATION OF THE PROVISIONS OF SECTION 207 (B) OF THE FLOOD CONTROL ACT OF 1960, 74 STAT. 501, 33 U.S.C. 701R-1, AS THEY APPLY TO CONTRACT DA-34- 066-CIVENG-60-11 FOR RELOCATION OF OKLAHOMA STATE HIGHWAY 51, NECESSITATED BY DEVELOPMENT OF KEYSTONE DAM AND RESERVOIR, AND CONTRACT DA-34-066- CIVENG-60-1 FOR RELOCATION OF U.S. HIGHWAY 69, EUFAULA DAM AND RESERVOIR.

FROM THE MATERIAL FURNISHED WITH THE ASSISTANT SECRETARY'S LETTER, THE FACTS IN THE MATTER--- AND THERE IS NO DISPUTE AS TO THE FACTS--- MAY BE SUMMARIZED AS FOLLOWS:

PRIOR TO THE ENACTMENT OF THE FLOOD CONTROL ACT OF 1960, THE CORPS OF ENGINEERS EFFECTED RELOCATIONS OF HIGHWAYS NECESSITATED BY THE CONSTRUCTION OF FLOOD CONTROL PROJECTS ON THE BASIS OF A POLICY OF "REPLACEMENT IN KIND.' UNDER THIS POLICY ALTERATION OR RELOCATION OF A HIGHWAY WAS MADE SO AS TO AFFORD A DEGREE OF SERVICEABILITY COMPARABLE TO THAT OF THE EXISTING FACILITIES; EXISTING STANDARDS OF DESIGN AND CONSTRUCTION SUCH AS WIDTH OF ROADBED, WIDTH AND TYPE OF SURFACING, WIDTH AND TYPE OF BRIDGE, LOAD-CARRYING CAPACITY OF BRIDGES AND ROADWAY ETC; WERE RETAINED. WHERE THE HIGHWAYS WERE OF SUCH WIDTH, TYPE, AND CAPACITY AS WERE NOT ADEQUATE FOR CURRENT OR PROJECTED TRAFFIC, THE CORPS OF ENGINEERS, AT THE REQUEST OF THE OWNER, DESIGNED AND CONSTRUCTED THE ALTERED HIGHWAY TO BETTER OR GREATER STANDARDS THAN THOSE OF THE EXISTING HIGHWAY, THE COST OF SUCH IMPROVEMENTS OR "BETTERMENTS" TO THE HIGHWAY TO BE PAID FOR BY THE OWNER.

OKLAHOMA WITH RESPECT TO HIGHWAY RELOCATIONS NECESSITATED BY THE KEYSTONE AND EUFAULA PROJECTS NOW UNDER CONSTRUCTION. ACCORDINGLY, CONTRACTS DA-34 -066-CIVENG-60-1 AND 11 WERE EXECUTED PROVIDING, RESPECTIVELY, FOR RELOCATION AND ALTERATION OF U.S. HIGHWAY 69 AT EUFAULA WITH AN ESTIMATED CONTRIBUTION OF APPROXIMATELY $17,251,000 (AMENDED TO $16,959,000) BY THE STATE (OF WHICH THE BUREAU OF PUBLIC ROADS PAYS HALF) FOR BETTERMENTS REQUESTED BY THE STATE OVER AND ABOVE THE FACILITIES TO BE PROVIDED ON THE BASIS OF "REPLACEMENT IN KIND" AND FOR RELOCATION AND ALTERATION OF STATE HIGHWAY 51 AND CONSTRUCTION OF OKLAHOMA STATE HIGHWAY 51/ALTERNATE AT THE KEYSTONE RESERVOIR WITH AN ESTIMATED CONTRIBUTION OF $2,672,000 (AMENDED TO $2,784,100) BY THE STATE FOR BETTERMENTS. THE EUFAULA CONTRACT WAS EXECUTED BY THE STATE ON NOVEMBER 23, 1959, APPROVED BY THE CORPS OF ENGINEERS ON DECEMBER 11, 1959, AND THE KEYSTONE CONTRACT WAS EXECUTED BY THE STATE ON SEPTEMBER 9, 1959, APPROVED BY THE CORPS OF ENGINEERS ON SEPTEMBER 24, 1959. CONSTRUCTION CONTRACTS FOR A RELATIVELY SMALL PORTION OF THE RELOCATION WORK AT EACH PROJECT HAVE BEEN AWARDED PURSUANT TO THESE RELOCATION AGREEMENTS AND WITH STATE APPROVAL. THERE IS NO DISPUTE AS TO THE FEDERAL-STATE CONTRIBUTIONS UNDER THESE AWARDS.

ON APRIL 29, 1960, THE STATE REQUESTED FURTHER DISCUSSIONS WITH THE CORPS OF ENGINEERS WITH THE VIEW OF AMENDING EXISTING AGREEMENTS TO PROVIDE FOR A MORE LIBERAL "REPLACEMENT IN KIND" FORMULA. THE CORPS OF ENGINEERS ON MAY 6, 1960, INFORMED THE STATE THAT THERE WAS NO CHANGE IN ITS POLICY OF "REPLACEMENT IN KIND" AND THE LACK OF CONSIDERATION FOR MODIFYING THE EXISTING AGREEMENTS. THE STATE, IN REPLY, RESERVED AN OPTION AS TO WHETHER OR NOT THE EUFAULA AGREEMENT ON HIGHWAY 69 COULD BE REVIEWED, AND REFERRED TO CURRENT CONGRESSIONAL HEARINGS IN PROGRESS ON A BILL WHICH WOULD AUTHORIZE A MORE LIBERAL POLICY FOR USE IN RELOCATION AGREEMENTS TO BE CONSUMMATED. ON JULY 14, 1960, SECTION 207 (B) WAS APPROVED PROVIDING AS FOLLOWS:

THAT, FOR SUCH WATER RESOURCES PROJECTS, UNDER CONSTRUCTION OR TO BE CONSTRUCTED, WHEN THE TAKING BY THE FEDERAL GOVERNMENT OF AN EXISTING PUBLIC ROAD NECESSITATES REPLACEMENT, THE SUBSTITUTE PROVIDED WILL AS NEARLY AS PRACTICABLE SERVE IN THE SAME MANNER AND REASONABLY AS WELL AS THE EXISTING ROAD. THE CHIEF OF ENGINEERS IS AUTHORIZED TO CONSTRUCT SUCH SUBSTITUTE ROADS TO DESIGN STANDARDS COMPARABLE TO THOSE OF THE STATE IN WHICH THE ROAD IS LOCATED, FOR ROADS OF THE SAME CLASSIFICATION AS THE ROAD BEING REPLACED. THE TRAFFIC EXISTING AT THE TIME OF THE TAKING SHALL BE USED IN THE DETERMINATION OF THE CLASSIFICATION.

THE STATE'S POSITION IS THAT THE WORDING OF SECTION 207 (B) REFERS TO "PROJECTS UNDER CONSTRUCTION" AND NOT TO THE STATUS OF AGREEMENTS AND THAT IT BELIEVES EXISTING AGREEMENTS AS TO COST SHARING ON ITEMS OF WORK AWAITING CONSTRUCTION CONTRACTS ARE PROPERLY TO BE REVIEWED WHERE SUBSTANTIAL SUMS ARE INVOLVED. THE STATE SEEKS THE APPLICATION OF SECTION 207 (B) TO CONSTRUCTION CONTRACTS STILL TO BE AWARDED ON WORK CONTEMPLATED BY THE RELOCATION AGREEMENTS COVERING STATE HIGHWAY 51 AT KEYSTONE RESERVOIR AND U.S. HIGHWAY 69 AT EUFAULA RESERVOIR.

THE CHIEF OF ENGINEERS RECOGNIZES THAT SECTION 207 (B) OBVIOUSLY AUTHORIZES MORE LIBERAL TREATMENT, UNDER SOME CIRCUMSTANCES, THAN WAS ACCORDED UNDER PAST CORPS OF ENGINEERS POLICY IN CONNECTION WITH THE RELOCATION OF HIGHWAYS NECESSITATED BY THE CONSTRUCTION OF WATER RESOURCES PROJECTS. THE CORPS CONTENDS, HOWEVER, THAT THE REFERENCE IN THE SECTION TO PROJECTS UNDER CONSTRUCTION OR TO BE CONSTRUCTED APPLIES SOLELY TO THE STATUS OF THE WATER RESOURCES PROJECTS AND HAS NO CONNECTION WITH THE STATUS OF HIGHWAY RELOCATION AGREEMENTS; THAT UNLESS OTHERWISE PROVIDED IN ANY GIVEN PIECE OF LEGISLATION, ITS EFFECTIVE DATE IS THE DATE OF ITS APPROVAL; AND THAT ITS PROVISIONS, UNLESS OTHERWISE SPECIFIED, ARE NOT FOR RETROACTIVE APPLICATION. THUS, THE CORPS CONCLUDES THAT IN THE ABSENCE OF ADEQUATE CONSIDERATION THERE WOULD BE NO BASIS FOR MODIFYING AGREEMENTS FORMALLY EXECUTED PRIOR TO JULY 14, 1960, THE DATE OF APPROVAL OF THE ACT CONTAINING SECTION 207.

THE STATE OF OKLAHOMA HAS AGREED TO CONTINUE CONTRIBUTIONS UNDER PROTEST IN ACCORDANCE WITH THE TERMS OF THE AGREEMENTS, AND THE CORPS OF ENGINEERS HAS AGREED TO ACCEPT THESE CONTRIBUTIONS SUBJECT TO A DETERMINATION BY OUR OFFICE OF THE APPLICABILITY OF SECTION 207 (B) TO ITEMS OF CONSTRUCTION UNDER THE RELOCATION AGREEMENTS REFERRED TO WHICH WERE NOT UNDER CONSTRUCTION CONTRACTS ON OR AFTER JANUARY 7, 1961. IT IS ESTIMATED THAT APPLICATION OF THE LAW AS REQUESTED BY THE STATE WOULD RESULT IN A REDUCTION OF $662,200 IN THE CONTRIBUTION FOR BETTERMENTS UNDER CONTRACT 60-1, AND THAT CONTRIBUTIONS BY THE STATE FOR BETTERMENTS UNDER CONTRACT 60-11 WOULD BE REDUCED BY $614,500.

THE RELOCATION AGREEMENTS FOR KEYSTONE AND EUFAULA EACH PROVIDES AS FOLLOWS:

WHEREAS, THE OWNER DESIRES CERTAIN DESIGN CRITERIA FOR THE ALTERED AND RELOCATED FACILITIES THAT ARE IN EXCESS OF THE CRITERIA AND STANDARDS THAT CAN OTHERWISE BE JUSTIFIED BY THE OVERNMENT; AND

WHEREAS, THE OWNER HAS AGREED, AS HEREINAFTER SET FORTH IN ARTICLE 4, TO PARTICIPATE IN THE COST OF CONSTRUCTING THE ALTERED AND RELOCATED FACILITIES TO THE OWNER'S DESIRED CRITERIA AND STANDARDS;

NOW, THEREFORE, IN CONSIDERATION OF THE FAITHFUL PERFORMANCE OF EACH PARTY OF THE MUTUAL COVENANTS AND AGREEMENTS HEREINAFTER SET FORTH, IT IS MUTUALLY AGREED AS FOLLOWS:

ARTICLE 1. OBLIGATIONS OF THE OWNER.

A. (2/B. THE OWNER SHALL PAY ALL COSTS TO THE GOVERNMENT FOR THE PERFORMANCE OF CERTAIN WORK REQUESTED BY THE OWNER TO PROVIDE INCREASED CAPACITIES AND HIGHER STANDARDS AND CRITERIA THAN WOULD OTHERWISE BE PROVIDED IN THE CONSTRUCTION OF THE ALTERED OR RELOCATED HIGHWAYS. * * *

THE EUFAULA AGREEMENT PROVIDES,"* * * OF THE RELOCATED U.S. HIGHWAY NO. 69. * * *)

CLEARLY, IN THE ABSENCE OF ANY APPLICABLE STATUTE PROVISIONS, THE STATE OF OKLAHOMA WOULD BE BOUND BY THE TERMS OF THESE RELOCATION AGREEMENTS; AND THERE WOULD BE NO BASIS UPON WHICH THE GIVING UP, WITHOUT CONSIDERATION, OF GOVERNMENT RIGHTS UNDER THE AGREEMENTS COULD BE JUSTIFIED. BUT THE CONGRESS MAY BE APPROPRIATE LEGISLATION AUTHORIZE MODIFICATION OF GOVERNMENT CONTRACTS WITHOUT CONSIDERATION. THE QUESTIONS FOR RESOLUTION, IN THE INSTANT CASE, THEREFORE IS WHETHER AND TO WHAT EXTENT THESE RELOCATION AGREEMENTS, WHICH WERE ENTERED INTO BUT NOT COMPLETELY PERFORMED BEFORE THE EFFECTIVE DATE OF SECTION 207 (B), SHOULD BE MODIFIED TO CONFORM WITH THE COST-SHARING CRITERIA OF THAT SECTION.

IN DECIDING THE ISSUE PRESENTED, WE DO NOT BELIEVE THAT A RETROACTIVE APPLICATION OF SECTION 207 (B) IS NECESSARILY INVOLVED. SINCE KEYSTONE AND EUFAULA ARE PROJECTS UNDER CONSTRUCTION, RELOCATIONS OF HIGHWAYS NECESSITATED BY TAKINGS OF THE FEDERAL GOVERNMENT CLEARLY FALL WITHIN THE SCOPE OF THE STATUTE AND, AT LEAST AS TO HIGHWAY RELOCATION WORK NOT LET TO CONSTRUCTION CONTRACTS AS OF THE DATE OF APPROVAL OF THE ACT, APPLICATION OF THE PROVISIONS OF SECTION 207 (B) COULD NOT BE SAID TO BE RETROACTIVE. INDEED, IF THE RELOCATION AGREEMENTS HAD NOT BEEN SIGNED THERE WOULD BE NO QUESTION BUT THAT THE IDENTICAL RELOCATION WORK COVERED THEREIN COULD BE EFFECTED UNDER THE CRITERIA SET FORTH IN THE STATUTE.

WE THINK THAT SECTION 207 (B) WAS INTENDED TO PROVIDE CRITERIA TO BE FOLLOWED BY THE CHIEF OF ENGINEERS FOR ALL HIGHWAY RELOCATIONS COVERED IRRESPECTIVE OF WHETHER AGREEMENTS HAD BEEN REACHED TO EFFECT RELOCATIONS ON SOME OTHER BASIS PRIOR TO ENACTMENT OF THE SECTION. THE ACT SPEAKS IN TERMS OF SUBSTITUTE ROADS TO BE PROVIDED AND LAYS DOWN THE CRITERIA TO BE FOLLOWED BY THE CHIEF OF ENGINEERS IN THEIR CONSTRUCTION WITHOUT ANY REFERENCE TO WHETHER OR NOT A COST SHARING AGREEMENT UNDER DIFFERENT CRITERIA MIGHT HAVE PREVIOUSLY BEEN REACHED. AN ESSENTIAL REQUIREMENT FOR APPLICATION OF THE PROVISIONS OF SECTION 207 (B) IS THAT THE SUBSTITUTE ROADS INVOLVED NOT HAVE BEEN PROVIDED PRIOR TO THE EFFECTIVE DATE OF THE ACT. CERTAINLY, ANY RELOCATION AGREEMENT THAT MIGHT HAVE BEEN REACHED PRIOR TO SECTION 207 (B) WOULD NECESSARILY HAVE BEEN UPON TERMS LESS FAVORABLE TO THE OWNERS THAN SECTION 207 (B) AUTHORIZES. WE THINK IT UNREASONABLE TO RESTRICT APPLICATION OF THE SECTION SOLELY BECAUSE AN AGREEMENT, WHICH COULD ONLY HAVE BEEN LESS FAVORABLE TO THE OWNER, HAD BEEN REACHED AND TO ALLOW ITS APPLICATION WHERE AN OWNER MAY HAVE DELAYED NEGOTIATIONS LONG ENOUGH TO HAVE PASSED THE JULY 14, 1960, DEADLINE WITHOUT HAVING SIGNED AN AGREEMENT.

HAVING CONCLUDED THAT THE STATUS OF THE RELOCATION WORK RATHER THAN WHETHER OR NOT A RELOCATION AGREEMENT WAS SIGNED CONTROLS APPLICATION OF SECTION 207 (B), QUESTION ARISES AS TO WHEN A SUBSTITUTE ROAD IS TO BE CONSIDERED AS HAVING BEEN PROVIDED AS OPPOSED TO WHEN IT IS YET TO BE PROVIDED AND, THEREFORE, EMBRACED WITHIN THE TERMS OF THE ACT. IN THE SENSE USED IN SECTION 207 (B) WE BELIEVE THE WORD "PROVIDED" MEANS "FURNISHED" OR "SUPPLIED.' IT WOULD FOLLOW, THEREFORE, THAT A SUBSTITUTE ROAD OR SEGMENT THEREOF COMPLETED OR PARTIALLY COMPLETED BEFORE JULY 14, 1960, SHOULD BE CONSIDERED AS HAVING BEEN PROVIDED TO THE EXTENT OF ITS COMPLETION OR PARTIAL COMPLETION BEFORE THAT DATE AND ANY SUBSTITUTE ROAD OR SEGMENT THEREOF NOT SO COMPLETED ON JULY 14, IS YET TO BE PROVIDED AS OF THAT DATE AND IS WITHIN THE PROVISIONS OF SECTION 207 (B), SO FAR AS CONCERNS THE APPLICATION OF THE BENEFITS CRITERIA TO WORK COVERED BY THE CONSTRUCTION CONTRACT.

ACCORDINGLY, IN ANSWER TO THE QUESTION PRESENTED, IT IS OUR VIEW THAT THE CHIEF OF ENGINEERS IS AUTHORIZED TO MODIFY THE RELOCATION AGREEMENTS WITH THE STATE OF OKLAHOMA TO INCLUDE BENEFITS OF SECTION 207 (B) OF THE FLOOD CONTROL ACT OF 1960, WHERE CONSTRUCTION CONTRACTS ARE STILL TO BE AWARDED ON WORK CONTEMPLATED BY THE RELOCATION AGREEMENTS.