B-127197, MAR. 30, 1956

B-127197, MAR. 30, 1956

TO MAJOR M. G. WINSOR, FINANCE AND ACCOUNTING OFFICER, DEPARTMENT OF THE ARMY:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE OFFICE OF THE CHIEF OF FINANCE, FINEY 167-25, YOUR LETTER OF JANUARY 25, 1956, ACCOMPANIED BY BUREAU VOUCHER NO. 1-3, PROPOSING REIMBURSEMENT TO THE CROFT-MULLINS ELECTRIC COMPANY, INC., MACON, GEORGIA, IN THE AMOUNT OF $8,455.85, TO COVER SERVICES PERFORMED IN ADDITION TO THOSE CONTEMPLATED BY THE TERMS OF THE BASIC CONTRACT NO. DA-01-088 AIII-288 DATED JUNE 7, 1955, AS PARTICULARLY DESCRIBED AND SET FORTH IN SUPPLEMENTAL AGREEMENT NO. 3, ISSUED SEPTEMBER 23, 1955.

BY THE TERMS OF THE INSTANT CONTRACT, THE CONTRACTOR AGREED TO CONSTRUCT AND INSTALL AT FORT MCCLELLAN, ALABAMA, A SIGNAL CORPS MANHOLE IN STRICT ACCORDANCE WITH THE DRAWINGS AND SPECIFICATIONS MADE AN ESSENTIAL PART THEREOF. IN ITS ORIGINAL FORM, THE CONTRACT CONTEMPLATED THE COMPLETION OF SEVEN DIFFERENT OPERATIONS, EACH OF WHICH IS DESCRIBED IN THE ITEMIZED ,STATEMENT OF WORK" APPEARING ON PAGE B-1 OF THE BID SHEET. BASED UPON THE ESTIMATED QUANTITIES AND THE UNIT PRICE THEREIN LISTED, THE ORIGINAL CONTRACT CONSIDERATION WAS ESTIMATED AT $12,559.

AS THE WORK PROGRESSED, IT BECAME APPARENT THAT THE ESTIMATED QUANTITIES OF EXCAVATION, REFILL AND RELATED WORK, AS DESCRIBED UNDER ITEMS NOS. 2 THROUGH 7 OF THE WORK SCHEDULE, WOULD EXCEED THE AUTHORIZED INCREASE OF 25 PERCENT ON CERTAIN OF THE ITEMS. IT ALSO BECAME APPARENT THAT THE SUBSURFACE, LATENT AND OTHER WORKING CONDITIONS EXISTING AT THE PROJECT SITE DIFFERED MATERIALLY FROM THOSE REASONABLY TO BE EXPECTED IN THE PERFORMANCE OF A PROJECT OF THIS CHARACTER. THE PRESENCE OF THESE LATENT AND SUBSURFACE CONDITIONS APPEARS TO HAVE BEEN BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER IN DUE TIME AND DURING THE PERFORMANCE OF THE CONTRACT WORK. IN ORDER TO COMPENSATE THE CONTRACTOR FOR THE ADDITIONAL WORK NECESSITATED BY THE CHANGED WORKING CONDITIONS AND THE ENCOUNTERING OF UNFORESEEN SUBSURFACE DIFFICULTIES DURING PERFORMANCE, THE CONTRACTING OFFICER ON SEPTEMBER 23, 1955--- OR PRIOR TO EXPIRATION OF THE CONTRACT PERFORMANCE TIME, AS EXTENDED, ON OCTOBER 15, 1955--- ISSUED SUPPLEMENTAL AGREEMENT NO. 3 WHEREIN THE QUANTITIES OF THE ADDITIONAL SERVICES PERFORMED UNDER ITEMS NOS. 2, 4, 5, 6 AND 7 WERE INCREASED TO CONFORM TO THE QUANTITIES OF EXCAVATION AND OTHER WORK ACTUALLY PERFORMED BY THE CONTRACTOR, AS SHOWN BY THE GOVERNMENT'S RECEIVING REPORT DATED OCTOBER 15, 1955, AND REIMBURSEMENT FOR SUCH EXTRA WORK WAS AUTHORIZED UPON THE BASIS OF THE UNIT PRICES QUOTED FOR THOSE ITEMS IN THE BASIC CONTRACT. THE SAID SUPPLEMENT ALSO AUTHORIZED REIMBURSEMENT TO THE CONTRACTOR FOR THE EXTRA WORK PERFORMED, VALUED AT $3,185, BY REASON OF ENCOUNTERING "SUBSURFACE AND/OR LATENT CONDITIONS" NOT KNOWN TO THE PARTIES AT THE TIME THE CONTRACT WAS EXECUTED.

AS AUTHORITY FOR HIS ACTION IN HAVING AUTHORIZED REIMBURSEMENT TO THE CONTRACTOR FOR THE AUTHORIZED INCREASES IN THE "SCOPE" OF THE WORK, THE CONTRACTING OFFICER HAS CITED ARTICLE 3 OF THE CONTRACT GENERAL CONDITIONS, ENTITLED "CHANGES," AND AS AUTHORITY FOR PROPOSING TO REIMBURSE THE CONTRACTOR FOR THE ADDITIONAL WORK NECESSITATED BY THE "SUBSURFACE AND/OR LATENT" WORKING CONDITIONS ENCOUNTERED, HE WAS CITED ARTICLE 4 THEREOF, ENTITLED "CHANGED CONDITIONS.' IT IS TO BE NOTED THAT ARTICLE 3 AUTHORIZES THE CONTRACTING OFFICER, BY A WRITTEN ORDER, TO MAKE CHANGES IN THE DRAWINGS OR SPECIFICATIONS, WITHIN THE GENERAL SCOPE THEREOF, AND TO MAKE APPROPRIATE ADJUSTMENTS EITHER IN THE CONTRACT TIME, OR IN THE AMOUNT DUE OR PAYABLE UNDER THE CONTRACT WHEN, IN HIS JUDGMENT, THE FACTS OR CIRCUMSTANCES JUSTIFY SUCH ACTION. UNDER ITS TERMS, THERE IS ALSO RESERVED TO THAT OFFICER THE RIGHT TO CONSIDER AND ADJUST ANY SUCH CLAIM ASSERTED "AT ANY TIME PRIOR TO THE DATE OF FINAL SETTLEMENT UNDER THE CONTRACT.' ARTICLE 4, APPLICABLE TO "CHANGED CONDITIONS," LIKEWISE AUTHORIZES THE CONTRACTING OFFICER TO CONSIDER AND ADJUST SUCH CLAIMS AT ANY TIME PRIOR TO THE DATE OF FINAL SETTLEMENT.

THUS, NOTWITHSTANDING THE FACT THAT THE ACTUAL WORK OF THE CONTRACT MIGHT POSSIBLY HAVE BEEN COMPLETED PRIOR TO THE TIME OF EXECUTION OF SUPPLEMENTAL AGREEMENT NO. 3, AS ALLEGED BY YOU, THIS CIRCUMSTANCE, OF AND BY ITSELF, WOULD AFFORD NO LEGAL JUSTIFICATION FOR QUESTIONING THE VALIDITY OF THE SAID SUPPLEMENT, IN VIEW OF THE SPECIFIC WORDING OF THE CONTRACT AUTHORIZING THE CONTRACTING OFFICER TO ADJUST CLAIMS OF THIS NATURE AND TO ISSUE A CHANGE ORDER OR A SUPPLEMENTAL AGREEMENT AT ANY TIME PRIOR TO THE TIME OF FINAL SETTLEMENT, WHICH, OF COURSE, HAS NOT AS YET BEEN EFFECTED.

ACCORDINGLY, YOU ARE ADVISED THAT PAYMENT ON THE INSTANT VOUCHER NEED NOT BE OBJECTED TO BY YOU UPON THE GROUND THAT THE SUPPLEMENTAL AGREEMENT REFERRED TO WAS ISSUED AFTER THE ACTUAL WORK OF THE CONTRACT HAD BEEN PERFORMED.