B-126109, JUL. 17, 1956

B-126109: Jul 17, 1956

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INC.: REFERENCE IS MADE TO YOUR LETTER OF JUNE 27. AT LEAST UNTIL YOUR COMPANY'S ADMINISTRATIVE REMEDIES UNDER THE CONTRACTS HAVE BECOME EXHAUSTED. YOU ARE ADVISED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCLOSED IN OUR RECORDS MAY BE SUMMARIZED AS FOLLOWS: THE FINAL PAYMENT VOUCHERS UNDER THE TWO CONTRACTS WERE SUBMITTED TO OUR CLAIMS DIVISION PRIMARILY FOR THE REASON THAT THE CONTRACTOR HAD BEEN REPORTED BY THE INTERNAL REVENUE SERVICE TO BE INDEBTED TO THE UNITED STATES FOR WITHHOLDING. 792.22 WERE ALLOWED. 100.11 IS IN ACCORDANCE WITH THE CONTRACTOR'S FINAL PAYMENT INVOICE FOR $16. THE TOTAL DELAY IN PERFORMANCE WAS 94 DAYS BUT THE CONTRACT PERIOD WAS EXTENDED FOR A PERIOD OF 7 DAYS IN THE CONTRACTING OFFICER'S FINDINGS OF FACT OF MAY 31.

B-126109, JUL. 17, 1956

TO GILA CONSTRUCTION COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 27, 1956, AND SUBSEQUENT DISCUSSION, CONCERNING THE CLAIMS OF GILA CONSTRUCTION COMPANY, INC., UNDER ITS CONTRACTS NOS. 14-20-45O-362 AND 14-20-450-364 WITH THE DEPARTMENT OF THE INTERIOR, BUREAU OF INDIAN AFFAIRS.

IN ACCORDANCE WITH OUR UNDERSTANDING THAT WE WOULD TAKE NO FURTHER ACTION ON THE CLAIMS, AT LEAST UNTIL YOUR COMPANY'S ADMINISTRATIVE REMEDIES UNDER THE CONTRACTS HAVE BECOME EXHAUSTED, AND THAT YOU WOULD BE FURNISHED CERTAIN INFORMATION RELATIVE TO THE ACTION PREVIOUSLY TAKEN ON THE CLAIMS, YOU ARE ADVISED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCLOSED IN OUR RECORDS MAY BE SUMMARIZED AS FOLLOWS:

THE FINAL PAYMENT VOUCHERS UNDER THE TWO CONTRACTS WERE SUBMITTED TO OUR CLAIMS DIVISION PRIMARILY FOR THE REASON THAT THE CONTRACTOR HAD BEEN REPORTED BY THE INTERNAL REVENUE SERVICE TO BE INDEBTED TO THE UNITED STATES FOR WITHHOLDING, FICA AND FEDERAL UNEMPLOYMENT TAX ASSESSMENTS. SETTLEMENT CERTIFICATES DATED MAY 4, 1956, ISSUED IN FAVOR OF THE FIRST NATIONAL BANK OF ARIZONA, ASSIGNEE OF GILA CONSTRUCTION COMPANY, INC., THE ADMINISTRATIVELY APPROVED AMOUNTS OF $10,100.11 AND $13,792.22 WERE ALLOWED, SUBJECT TO SETOFF OF THE TOTAL SUM OF $8,383.89 AGAINST THE CONTRACTOR'S TAX LIABILITY.

IN THE CASE OF CONTRACT NO. 14-20-450-362 THE ALLOWANCE OF $10,100.11 IS IN ACCORDANCE WITH THE CONTRACTOR'S FINAL PAYMENT INVOICE FOR $16,712.12, EXCEPT FOR A $0.01 ERROR ON SUCH INVOICE AND A DEDUCTION OF $6,612 CHARGED AS LIQUIDATED DAMAGES FOR 87 DAYS OF UNEXCUSED DELAY IN PERFORMANCE OF THE CONTRACT. THE TOTAL DELAY IN PERFORMANCE WAS 94 DAYS BUT THE CONTRACT PERIOD WAS EXTENDED FOR A PERIOD OF 7 DAYS IN THE CONTRACTING OFFICER'S FINDINGS OF FACT OF MAY 31, 1955, ADDRESSED TO THE CONTRACTOR, WHEREIN THERE WAS CONSIDERED A REQUESTED EXTENSION OF 34 DAYS DUE TO ADVERSE WEATHER CONDITIONS.

IN THE CASE OF CONTRACT NO. 14-20-450-364 THE FINAL PAYMENT VOUCHER DESIGNATED AS "PAYMENT NO. 6/FINAL)" IS STATED IN THE AMOUNT OF $7,241.04. THAT AMOUNT DID NOT INCLUDE THE SUM OF $5,264.17 WHICH HAD BEEN WITHHELD FROM PREVIOUS PAYMENTS UNDER THE CONTRACT. IT WAS ADMINISTRATIVELY RECOMMENDED THAT THE AMOUNT INDICATED AS BEING CHARGEABLE FOR LIQUIDATED DAMAGES BE REDUCED BY THE AMOUNT OF $480.81. ALSO, IT WAS ADMINISTRATIVELY RECOMMENDED THAT THE SUM OF $806.20 BE ALLOWED IN CONNECTION WITH CERTAIN CLAIMS ASSERTED IN AN ENGINEERING REPORT SUBMITTED BY THE CONTRACTOR TO AN INVESTIGATOR OF OUR OFFICE. THE ABOVE AMOUNTS TOTAL THE SUM OF $13,792.22, WHICH WAS ALLOWED IN THE SETTLEMENT CERTIFICATE RELATING TO THIS CONTRACT. SINCE PREVIOUS PAYMENTS OF $32,030.69 HAD BEEN MADE, THE TOTAL AMOUNT ALLOWED OR PAID UNDER THE CONTRACT IS $45,822.91, WHICH CONSISTS OF THE FOLLOWING ALLOWANCES AND DEDUCTIONS:

CHART CONTRACT ITEMS QUANTITY UNIT PRICE TOTAL

1 193,306 CU. YDS. 0.21$40,594.26

2 12,688 LIN. FT. 0.263 3,336.94

3 5,176 LIN. FT. 0.015 77.64

4 52.46 CU. YDS. 45.00 2,360.70

5 647.56 LBS. 0.20 129.51

6 623 LIN. FT. 0.55 342.65

7 2,481 LIN. FT. 0.45 1,116.45

8 827 LIN. FT. 0.50 413.50

10 106 HRS. 12.00 1,272.00

EXTRA WORK ORDER 1121--- AGREED PRICE 2,998.06

TOTAL VALUE OF WORK PERFORMED AT THE CONTRACT RATES

AND OTHER EXTRA WORK ORDER $52,641.71

OTHER RECOMMENDED ALLOWANCE 806.20

53,447.91

LESS: BOND FORFEITURE $1,000

LIQUIDATED DAMAGES 6,625 7,625.00

BALANCE PAYABLE UNDER CONTRACT $45,822.91

THE CONTRACTING OFFICER REPORTED THAT THE BOND INVOLVED IN THE FORFEITURE OF $1,000 WAS REQUESTED TO COVER A PERIOD OF COMPLETION AFTER THE CONTRACTOR WAS NOTIFIED OF THE TERMINATION OF ITS RIGHT TO PROCEED; THAT IT HAS NOTHING TO DO WITH THE BID BOND, PERFORMANCE BOND, OR THE PAYMENT BOND; AND THAT THE JOB WAS NOT COMPLETED WITHIN THE PERIOD COVERED BY THE ADDITIONAL BOND.

RELATIVE TO THE ASSESSMENT OF $6,625 AS LIQUIDATED DAMAGES, THE RECORD SHOWS THAT THE CONTRACT COMPLETION DATE WAS EXTENDED FROM JANUARY 6, 1955, TO FEBRUARY 7, 1955, AND THAT THE WORK WAS COMPLETED ON JUNE 17, 1955, OR AFTER A DELAY OF 130 DAYS. A CREDIT OF 4 DAYS WAS DETERMINED TO BE PROPER SINCE THE CONTRACT ALLOWS ONE DAY FOR EACH ADDITIONAL 2,000 CUBIC YARDS OF MATERIAL OR FRACTION THEREOF MOVED UNDER ITEM 1. THE CONTRACT PROVIDED FOR 187,000 CUBIC YARDS AND, ACCORDING TO THE ABOVE-STATED QUANTITY FOR SUCH ITEM, 193,306 CUBIC YARDS WERE MOVED. ALTHOUGH IT APPEARS THAT LIQUIDATED DAMAGES SHOULD HAVE BEEN CHARGED FOR 126 DAYS, THE ASSESSMENT OF $6,625 WAS BASED UPON A DAILY RATE OF $53 FOR 125 DAYS OF DELAY IN PERFORMANCE.

THE FOLLOWING IS A SUMMARY OF THE CLAIMS ASSERTED IN THE ENGINEERING REPORT SUBMITTED BY THE CONTRACTOR AND THE SUMS APPARENTLY ALLOWED AND DISALLOWED IN CONNECTION THEREWITH ON THE BASIS OF THE CONTRACTING OFFICER'S FINDINGS IN THE MATTER AS SET FORTH IN LETTER DATED JANUARY 27, 1956, TO OUR PHOENIX, ARIZONA, OFFICE:

CHART CONTRACT ITEMS CLAIMED ALLOWED DISALLOWED

1 $6,859.23 $1,324.26 $5,534.97

2 249.32 249.32

730.04 730.04

3 233.58 233.58

4 616.24 438.77 177.47

1,496.70 470.70 1,026.00

5 360.71 99.51 261.20

7 135.45135.45

2,290.77 2,290.77

8 603.85 175.43 428.42

9 350.00 350.00

10 312.00 312.00

1,165.50 1,165.50

$15,403.39 $3,205.44 $12,197.95

"EXTRA WORK NOT IN CONTRACT" BORROW PITS $ 780.00 $ 192.00 $ 588.00 EXCAVATION 142.49 142.49 MAINTENANCE 386.15 386.15 MAINTENANCE 593.07

593.07 CLEANING BORROW PITS 38.6138.61 MAINTENANCE

386.14 386.14 CONSTRUCTION 1,451.83

1,451.83 PIPE CUTTING 524.66 524.66 GRADING

6,612.48 6,612.48 BOND

1,000.00 1,000.00 ---------

--------- --------- $11,195.43

$ 192.00 $11,723.43 ----------

TOTALS $27,318.82 $3,397.44 $23,921.38

WE HAVE NO RECORD THAT THESE FINDINGS WERE EVER FURNISHED YOUR COMPANY.

IT WILL BE NOTED THAT SEVERAL OF THE CLAIMS UNDER THE CONTRACT ITEMS ARE BASED UPON THE DIFFERENCE BETWEEN THE BID QUANTITIES AND THE ALLEGED QUANTITIES OF WORK PERFORMED INSTEAD OF THE DIFFERENCE BETWEEN THE ALLEGED QUANTITIES OF WORK PERFORMED AND THE QUANTITIES STATED AS HAVING BEEN INCLUDED IN A SETTLEMENT OFFER MADE BY THE CONTRACTING AGENCY. THIS ACCOUNTS IN THE MOST PART FOR THE INDICATED ALLOWANCES OF $1,324.26, $249.32, $470.70, $99.51, $135.45 AND $312, REPRESENTING PAYMENT FOR QUANTITIES OF WORK PERFORMED IN EXCESS OF THE STATED BID QUANTITIES.

THE ALLOWANCE OF $438.77 COVERS FULL PAYMENT ON ITEM 4/2) OF THE CLAIM. THE SUM OF $175.43 COVERS A PARTIAL ALLOWANCE ON THE AMOUNT OF $463.45 CLAIMED AS A PART OF THE ALLEGED ADDITIONAL COST OF PERFORMING CONTRACT ITEM NO. 8; AND THE SUM OF $192 COVERS A PARTIAL ALLOWANCE ON THE EXTRA WORK CLAIM FOR $780.

AS INFORMALLY REQUESTED, THERE IS ENCLOSED A COPY OF THE VOUCHER, AND SUPPORTING TABULATIONS, STATED IN THE AMOUNT OF $7,241.04.