A-67072, JUNE 18, 1936, 15 COMP. GEN. 1109

A-67072: Jun 18, 1936

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STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT - EXTENSIONS OF TIME THERE IS NO AUTHORITY FOR AN EXTENSION OF TIME FOR PERFORMANCE UNDER THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT. THE EXTENT TO WHICH DELAYS FOR WHICH DEDUCTION HAS BEEN MADE FROM PAYMENTS DUE THE CONTRACTOR ARE EXCUSABLE BEING FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE AFTER THE CONTRACT HAS BEEN COMPLETED. 1936: THERE WAS RECEIVED FROM THE CHIEF OF ENGINEERS. THE CONTRACT WAS EXECUTED ON THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT AND REQUIRED COMPLETION OF THE WORK ON OR BEFORE MAY 31. VARIOUS CAUSES OF DELAYS CLAIMED TO HAVE BEEN UNFORSEEABLE. ARE SET OUT AND AN EXTENSION OF TIME FOR COMPLETION IS REQUESTED BECAUSE THEREOF.

A-67072, JUNE 18, 1936, 15 COMP. GEN. 1109

STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT - EXTENSIONS OF TIME THERE IS NO AUTHORITY FOR AN EXTENSION OF TIME FOR PERFORMANCE UNDER THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT, THE EXTENT TO WHICH DELAYS FOR WHICH DEDUCTION HAS BEEN MADE FROM PAYMENTS DUE THE CONTRACTOR ARE EXCUSABLE BEING FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE AFTER THE CONTRACT HAS BEEN COMPLETED, AND UPON SUBMISSION OF THE FINAL PAYMENT VOUCHER OR A VOUCHER REPRESENTING DEDUCTIONS MADE IN FULL SATISFACTION OF ALL DELAYS, TOGETHER WITH THE CONTRACTING OFFICER'S FINDINGS IN THE MATTER, AND THE ADMINISTRATIVE RECOMMENDATION THEREON.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, JUNE 18, 1936:

THERE WAS RECEIVED FROM THE CHIEF OF ENGINEERS, WAR DEPARTMENT, BY SECOND ENDORSEMENT DATED MAY 26, 1936, A REQUEST OF THE ARUNDEL CORPORATION FOR EXTENSION OF TIME FOR COMPLETION OF WORK REQUIRED UNDER CONTRACT W-272- ENG.-175, DATED MAY 21, 1932, COVERING THE DREDGING OF CERTAIN SECTIONS OF LIVINGSTONE CHANNEL, DETROIT RIVER.

THE CONTRACT WAS EXECUTED ON THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT AND REQUIRED COMPLETION OF THE WORK ON OR BEFORE MAY 31, 1936. VARIOUS CAUSES OF DELAYS CLAIMED TO HAVE BEEN UNFORSEEABLE, AND BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, WITHIN THE MEANING OF ARTICLE 9 OF THE CONTRACT, ARE SET OUT AND AN EXTENSION OF TIME FOR COMPLETION IS REQUESTED BECAUSE THEREOF.

ON THE BASIS OF A REPORT OF THE DISTRICT ENGINEER, DATED MAY 22, 1936, RECOMMENDING AN EXTENSION OF TIME OF 94 DAYS, THE CHIEF OF ENGINEERS HAS RECOMMENDED THAT THE CONTRACTING OFFICER BE AUTHORIZED TO MAKE PAYMENTS TO THE CONTRACTOR IN ACCORDANCE WITH MONTHLY ESTIMATES WITHOUT DEDUCTION OF LIQUIDATED DAMAGES DURING THE PERIOD JUNE 1, 1936, TO SEPTEMBER 2, 1936, BOTH DATES INCLUSIVE.

ARTICLE 9 OF THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT IS CLEAR AND UNAMBIGUOUS, AND DOES NOT PROVIDE FOR AN EXTENSION OF TIME FOR COMPLETION IN ANY CASE. IF THE RIGHT OF THE CONTRACTOR TO PROCEED WITH THE WORK IS NOT TERMINATED, HE SHALL CONTINUE THE WORK, IN WHICH EVENT LIQUIDATED DAMAGES AS SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS SHALL BE DEDUCTED FOR EACH CALENDAR DAY OF DELAY UNTIL THE WORK HAS BEEN COMPLETED OR ACCEPTED. THERE ARE CERTAIN CONDITIONS UNDER WHICH THE RIGHT OF THE CONTRACTOR TO PROCEED WITH THE WORK SHALL NOT BE TERMINATED OR THE CONTRACTOR CHARGED WITH LIQUIDATED DAMAGES, BUT THERE IS NO PROVISION FOR AN EXTENSION OF TIME FOR COMPLETION. WHERE THE CONTRACT IS NOT TERMINATED, THE DETERMINATION AS TO THE EXTENT, IF ANY, TO WHICH THE DELAYS WERE EXCUSABLE UNDER THE PROVISIONS OF ARTICLE 9 OF THE CONTRACT IS FOR MAKING AFTER THE WORK IS COMPLETED. (SEE 7 COMP. GEN. 534; 8 ID. 623.)

IF THERE BE DELAY IN COMPLETION, ANY PAYMENTS DUE THE CONTRACTOR AFTER EXPIRATION OF THE CONTRACT PERIOD MAY BE MADE BY THE DISBURSING OFFICER ONLY AFTER DEDUCTING LIQUIDATED DAMAGES AS SET FORTH IN THE CONTRACT. WHEN THE CONTRACT HAS BEEN COMPLETED, VOUCHER FOR FINAL PAYMENT WITH REPORT OF THE FACTS AS TO THE CAUSES AND EXTENT OF DELAY, TOGETHER WITH ADMINISTRATIVE RECOMMENDATION IN THE MATTER, MAY BE SUBMITTED TO THIS OFFICE FOR SETTLEMENT, OR, IF THE CONTRACTOR SHOULD REQUEST IT, THE DISBURSING OFFICER MAY PAY THE CONTRACT PRICE LESS LIQUIDATED DAMAGES FOR ALL DELAY IN COMPLETION AND ANY OTHER AMOUNTS PROPERLY DEDUCTIBLE, AND SUBMIT TO THIS OFFICE FOR SETTLEMENT A SEPARATE VOUCHER FOR THE AMOUNT WITHHELD. SUCH VOUCHER SHOULD BE ACCOMPANIED BY THE CONTRACTING OFFICER'S FINDING OF FACTS AS TO THE CAUSES AND EXTENT OF THE DELAYS AND AN ADMINISTRATIVE RECOMMENDATION THEREON. (SEE 6 COMP. GEN. 650; 7 ID. 505; AND 8 ID. 13.)

ALSO, THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 10, 1936, AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF MAY 14, 1936, FILE A-67072, IN WHICH YOU INFORMED THE DEPARTMENT THAT APPROPRIATED FUNDS ARE NOT AVAILABLE FOR PAYMENTS UNDER SUPPLEMENTAL AGREEMENT WITH THE ARUNDEL CORPORATION DATED AUGUST 12, 1935, MODIFYING ITS CONTRACT W-272-ENG. 175 FOR DREDGING IN LIVINGSTONE CHANNEL, DETROIT RIVER.

THE CHIEF OF ENGINEERS ADVISES ME THAT, PURSUANT TO YOUR DECISION, THE CONTRACTING OFFICER, THE DISTRICT ENGINEER, DETROIT, MICHIGAN, HAS NOTIFIED THE ARUNDEL CORPORATION AND ITS SURETIES THAT THE SUPPLEMENTAL AGREEMENT IS VOID AND THAT NO PAYMENTS WILL BE MADE THEREUNDER. HE ALSO STATES THAT THE DISTRICT ENGINEER HAS ADVERTISED THE WORK CONTEMPLATED BY THE SUPPLEMENTAL AGREEMENT FOR PROSECUTION BY SEPARATE CONTRACT, BIDS THEREFOR TO BE OPENED JUNE 19, 1936.

THE DEEPENING OF THE LIVINGSTONE CHANNEL TO PROJECT DEPTH OF 25 FEET AT AN ESTIMATED COST OF APPROXIMATELY $7,700,000 WAS AUTHORIZED BY THE ACT OF JULY 3, 1930 (HOUSE DOCUMENT NO. 253, 70TH CONGRESS, FIRST SESSION). UNDER THAT AUTHORIZATION, WORK HAS PROGRESSED TO THE POINT WHERE IT WAS ANTICIPATED THAT IT WOULD BE COMPLETED BY AUGUST 15, 1936, UNDER THE CONTRACT WITH THE ARUNDEL CORPORATION AS MODIFIED BY THE SUPPLEMENTAL AGREEMENT OF AUGUST 12, 1935. HOWEVER, ABROGATION OF THAT AGREEMENT HAS THROWN THE CONTEMPLATED TIME OF COMPLETION TO SOME LATER, AS YET UNDETERMINED DATE. CONTRACT OPERATIONS IN THE CHANNEL HAVE NECESSITATED THE DIVERSION OF ALL TRAFFIC TO THE RELATIVELY INADEQUATE AMHERSTBURG CHANNEL. THIS TRAFFIC HAS AVERAGED ANNUALLY ABOUT 84 MILLION TONS, HAVING AN ESTIMATED VALUE SLIGHTLY IN EXCESS OF ONE BILLION DOLLARS OVER THE PAST TEN YEARS, AND IT WILL BE SEEN THAT PROMPT COMPLETION OF THE LIVINGSTONE CHANNEL IS OF PRIMARY IMPORTANCE TO THE COMMERCE OF THE GREAT LAKES.

THE ARUNDEL CORPORATION HAS NOW FILED A STATEMENT WITH THE COMPTROLLER GENERAL, IN WHICH IT STATES ITS BELIEF THAT THE SUPPLEMENTAL AGREEMENT IS A LEGAL DOCUMENT, BINDING BOTH IT AND THE UNITED STATES TO CERTAIN OBLIGATIONS. UNDER THIS CIRCUMSTANCE AND IN VIEW OF THE PROBABILITY THAT THE LOW BID AND THE TIME REQUIRED FOR PERFORMANCE UNDER SEPARATE CONTRACT WILL BOTH BE GREATER THAN WERE PROVIDED FOR IN THE SUPPLEMENTAL AGREEMENT, THE DEPARTMENT HESITATES TO EXPOSE ITSELF TO SUIT BY THE PRESENT CONTRACTOR THROUGH CONTRACTING FOR THE PERFORMANCE OF THIS WORK WITH ANOTHER PARTY AND UNDER TERMS LESS ADVANTAGEOUS THAN ARE NOW AVAILABLE.

YOUR EARLY ADVICE AS TO WHETHER BIDS SHOULD BE OPENED ON JUNE 19 IS RESPECTFULLY REQUESTED.

THE MATTER OF THE ADDITIONAL WORK CONTEMPLATED BY THE SUPPLEMENTAL AGREEMENT OF AUGUST 12, 1935, WHICH WAS THE SUBJECT OF MY DECISIONS OF MARCH 31 AND MAY 14, 1936, APPEARS TO HAVE BEEN ADVERTISED AS SUGGESTED THEREIN, BIDS UNDER THE ADVERTISEMENT TO BE OPENED JUNE 19, 1936. THERE APPEARS NOTHING IN THE LETTERS OF MAY 20 AND MAY 30, 1936, FROM THE CONTRACTOR TO WARRANT ANY DIFFERENT CONCLUSION FROM THAT ANNOUNCED IN DECISIONS OF MARCH 31 AND MAY 14, 1936, IN THIS MATTER. ACCORDINGLY,ANSWERING YOUR QUESTION SPECIFICALLY, YOU ARE ADVISED THAT NO REASON APPEARS WHY THE BIDS SHOULD NOT BE OPENED IN THE USUAL MANNER ON THE DATE SET THEREFOR.