B-123633, JUN. 2, 1955

B-123633: Jun 2, 1955

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF APRIL 14. ON THE GROUND THAT THE ASSESSMENT THEREOF WAS BASED ON A MISCONSTRUCTION OF THE CONTRACT TERMS BY THE CONTRACTING OFFICER OR. LIQUIDATED DAMAGES AT THE RATE OF $25 PER CALENDAR DAY OF DELAY IN COMPLETION WERE SPECIFIED. THE QUANTITY OF ROCK EXCAVATION INVOLVED WAS ESTIMATED AT 156 CUBIC YARDS AND PARAGRAPH 1-8 OF THE SPECIFICATIONS PROVIDED: "* * * SHOULD A GREATER OR LESS AMOUNT OF SUCH ROCK IN PLACE BE ENCOUNTERED THAN THE TOTAL ESTIMATED AMOUNT INDICATED ON THE DRAWINGS. PARAGRAPH 4 OF THE CONTRACT PROVIDED FOR ADJUSTMENT IF SUBSURFACE OR LATENT PHYSICAL CONDITIONS DIFFERENT FROM THOSE INDICATED IN THE CONTRACT WERE ENCOUNTERED.

B-123633, JUN. 2, 1955

TO THE HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 14, 1955, WITH ENCLOSURES, RELATIVE TO THE LIQUIDATED DAMAGES ASSESSED AND WITHHELD UNDER CONTRACT NO. V1001C-471 DATED SEPTEMBER 30, 1953, WITH WILSON AND COMPANY. YOU RECOMMEND THAT THIS OFFICE AUTHORIZE REMISSION OF THE LIQUIDATED DAMAGES IN THE AMOUNT OF $550, ON THE GROUND THAT THE ASSESSMENT THEREOF WAS BASED ON A MISCONSTRUCTION OF THE CONTRACT TERMS BY THE CONTRACTING OFFICER OR, IN THE ALTERNATIVE, UNDER AUTHORITY OF SECTION 10 (A) OF THE ACT OF SEPTEMBER 5, 1950, 64 STAT. 591.

THE CONTRACT COVERED CONSTRUCTION OF A SEWER LINE AND PUMP HOUSE FOR THE LUMP-SUM PRICE OF $25,975. LIQUIDATED DAMAGES AT THE RATE OF $25 PER CALENDAR DAY OF DELAY IN COMPLETION WERE SPECIFIED. THE QUANTITY OF ROCK EXCAVATION INVOLVED WAS ESTIMATED AT 156 CUBIC YARDS AND PARAGRAPH 1-8 OF THE SPECIFICATIONS PROVIDED:

"* * * SHOULD A GREATER OR LESS AMOUNT OF SUCH ROCK IN PLACE BE ENCOUNTERED THAN THE TOTAL ESTIMATED AMOUNT INDICATED ON THE DRAWINGS, PAYMENT FOR ANY SUCH GREATER AMOUNT OR CREDIT FOR ANY SUCH LESS AMOUNT OF SUCH ROCK TO BE EXCAVATED, SHALL BE MADE, SUBJECT TO SUCH ADJUSTMENT AS PROVIDED BY ARTICLES 3 AND 4 OF THE CONTRACT.'

PARAGRAPH 3 OF THE CONTRACT PROVIDED THAT THE CONTRACTING OFFICER COULD MAKE NECESSARY CHANGES AND SPECIFIED THAT IF SUCH CHANGE CAUSED AN INCREASE OR DECREASE IN AMOUNT DUE UNDER THE CONTRACT ,OR IN THE TIME REQUIRED FOR ITS PERFORMANCE, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY.'

PARAGRAPH 4 OF THE CONTRACT PROVIDED FOR ADJUSTMENT IF SUBSURFACE OR LATENT PHYSICAL CONDITIONS DIFFERENT FROM THOSE INDICATED IN THE CONTRACT WERE ENCOUNTERED, AND SPECIFIED THAT UPON RECEIPT OF NOTICE THEREOF, AS REQUIRED---

"* * * THE CONTRACTING OFFICER SHALL PROMPTLY INVESTIGATE THE CONDITIONS, AND IF HE FINDS THAT SUCH CONDITIONS DO SO MATERIALLY DIFFER AND CAUSE AN INCREASE OR DECREASE IN THE COST OF, OR THE TIME REQUIRED FOR, PERFORMANCE OF THIS CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT MODIFIED IN WRITING ACCORDINGLY. * * *"

THE RECORD SHOWS THAT THE CONTRACTOR ENCOUNTERED AND EXCAVATED 397.4 CUBIC YARDS OF ROCK IN THE PERFORMANCE OF THE CONTRACT; THAT THERE WAS A DELAY OF 22 DAYS IN COMPLETING THE CONTRACT; AND THAT CHANGE ORDER "C" WAS ISSUED BY THE CONTRACTING OFFICER AUTHORIZING AN INCREASE OF $2,595.05 IN THE CONTRACT PRICE ON ACCOUNT OF THE INCREASE OF 241.4 CUBIC YARDS OF ROCK EXCAVATION REQUIRED. THE CHANGE ORDER SPECIFIED:

"* * * THIS CHANGE IN CONTRACT WORK WARRANTS NO CHANGE IN TIME FOR COMPLETION.'

IN A LETTER OF NOVEMBER 17, 1954, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT, SINCE PARAGRAPH 1-8 OF THE SPECIFICATIONS, SUPRA, LIMITED HIS AUTHORITY TO THAT OF AN ADJUSTMENT IN THE PRICE ONLY, THE REQUEST FOR 21 DAYS' ADDITIONAL TIME ON ACCOUNT OF THE OVERRUN IN ROCK EXCAVATION COULD NOT BE FAVORABLY CONSIDERED.

FROM THE ABOVE, IT IS OBVIOUS THAT THE CONTRACT CONTAINED SPECIFIC PROVISION FOR AN ADJUSTMENT IN THE TIME SPECIFIED FOR COMPLETION OF THE WORK THEREUNDER AS WELL AS IN THE CONTRACT CONSIDERATION, ON ACCOUNT OF ANY CHANGED CONDITIONS ENCOUNTERED. ACCORDINGLY, THE CONTRACTING OFFICER SHOULD BE REQUIRED TO DETERMINE THE EXTENT OF THE DELAY CAUSED BY THE OVERRUN IN ROCK EXCAVATION UNDER CONTRACT NO. V1001C-471. THE LIQUIDATED DAMAGES SHOULD BE RECOMPUTED ON THE BASIS OF SUCH DETERMINATION AND THE EXCESS ASSESSED AND WITHHELD, IF ANY, SHOULD BE REFUNDED TO WILSON AND COMPANY.