B-129260, JAN. 3, 1957

B-129260: Jan 3, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ESQUIRE: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 27. WAS A STATEMENT OF EXPENSES AMOUNTING TO $16. LITTS TO HAVE BEEN INCURRED IN THE PERFORMANCE OF THE INDICATED CONTRACT BUT NOT INCLUDED IN THE CONTRACT PRICE. PARTICULAR REFERENCE BEING MADE TO THE FACT THAT THE CONTRACTOR WAS UNABLE TO MAINTAIN AN ACCURATE ACCOUNTING OF THE EQUIPMENT AND PERSONNEL ON THE JOB. WHICH WERE NOT SUBMITTED DURING THE COURSE OF OPERATIONS UNDER THE CONTRACT. MERVINE HAD BEEN OBTAINED FOR THE DUMPING OF DIRT UPON HIS PROPERTY BUT THAT IN THE CONFUSION AND HASTE AND ALONG WITH GREAT QUANTITIES OF MUD WHICH WERE DUMPED UPON THIS PROPERTY. WAS UNAVOIDABLY INTERMINGLED. THE DISTRICT ENGINEER REPORTS THAT THE RESIDENTIAL AREA OF EAST STROUDSBURG WAS DECLARED A DISASTER AREA DUE TO THE FLOODS WHICH OCCURRED AUGUST 18-19.

B-129260, JAN. 3, 1957

TO CHARLES BENSINGER, ESQUIRE:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 27, 1956, TRANSMITTING A COPY OF YOUR LETTER OF JUNE 25, 1956, CONCERNING THE REOPENING OF CONTRACT NO. DA-36-109-CIV-ENG-56-100 ENTERED INTO BETWEEN THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, AND MR. G. H. LITTS, AS A RESULT OF THE EASTERN STATES FLOOD OF AUGUST 18-19, 1955.

ATTACHED TO THE LETTER OF JUNE 25, WAS A STATEMENT OF EXPENSES AMOUNTING TO $16,970.62, ALLEGED BY MR. LITTS TO HAVE BEEN INCURRED IN THE PERFORMANCE OF THE INDICATED CONTRACT BUT NOT INCLUDED IN THE CONTRACT PRICE, PLUS FIFTEEN PERCENT, OR A TOTAL CLAIM OF $19,516.21. IN SUPPORT OF YOUR REQUEST THAT THE CONTRACT BE REOPENED AND CONSIDERATION GIVEN TO ALLOWANCE OF THE CLAIM, YOU SET FORTH IN SOME DETAIL THE FACTS RELATING TO THE NEGOTIATION OF THE CONTRACT WITH MR. LITTS AND THE DIFFICULTIES EXPERIENCED BY HIM IN CARRYING OUT ITS REQUIREMENTS, PARTICULAR REFERENCE BEING MADE TO THE FACT THAT THE CONTRACTOR WAS UNABLE TO MAINTAIN AN ACCURATE ACCOUNTING OF THE EQUIPMENT AND PERSONNEL ON THE JOB.

AS INSTANCES OF CLAIMS MADE AGAINST MR. LITTS, AND WHICH WERE NOT SUBMITTED DURING THE COURSE OF OPERATIONS UNDER THE CONTRACT, YOU REFER TO CLAIM BY THE MIFFLINBURG BOROUGH IN THE AMOUNT OF $2,419, SUBMITTED AFTER COMPLETION OF THE CONTRACT WORK, AND TO A CLAIM FOR $5,000 SUBMITTED BY MR. R. L. MERVINE ON ACCOUNT OF DUMPING OF DEBRIS ON CERTAIN PROPERTY OWNED BY HIM. RESPECTING THE LATTER CLAIM YOU STATE THAT PERMISSION OF MR. MERVINE HAD BEEN OBTAINED FOR THE DUMPING OF DIRT UPON HIS PROPERTY BUT THAT IN THE CONFUSION AND HASTE AND ALONG WITH GREAT QUANTITIES OF MUD WHICH WERE DUMPED UPON THIS PROPERTY, A LARGE AMOUNT OF DEBRIS, INCLUDING SUCH ITEMS AS PIECES OF BATH TUBS, BED SPRINGS, PIECES OF STOVES, CONSTRUCTION MATERIALS, ETC., WAS UNAVOIDABLY INTERMINGLED, THE AREA COVERED BY THIS DEBRIS BEING APPROXIMATELY THREE TO FOUR ACRES.

THE OFFICE OF THE CHIEF OF ENGINEERS HAS TRANSMITTED HERE AN ADMINISTRATIVE REPORT BY THE DISTRICT ENGINEER, PHILADELPHIA DISTRICT, ON THE CLAIM SUBMITTED BY MR. LITTS. THE DISTRICT ENGINEER REPORTS THAT THE RESIDENTIAL AREA OF EAST STROUDSBURG WAS DECLARED A DISASTER AREA DUE TO THE FLOODS WHICH OCCURRED AUGUST 18-19, 1955. REPRESENTATIVES OF THE CORPS OF ENGINEERS ARRIVED IN THE AREA DURING THE EVENING OF AUGUST 24, 1955, AND CONDUCTED A PRELIMINARY FLOOD DAMAGE SURVEY. MR. LITTS, WHO WAS WORKING IN THE AREA AT THAT TIME, WAS CONTACTED BY REPRESENTATIVES OF THE CORPS OF ENGINEERS ON AUGUST 25, 1955, AND INSTRUCTED TO INCREASE HIS PERSONNEL AND MEET, AT HIS CONVENIENCE, WITH THE AREA ENGINEER FOR THE PURPOSE OF NEGOTIATING A LETTER CONTRACT TO COVER THE WORK BEING ACCOMPLISHED. ON THE SAME DAY A LETTER CONTRACT WAS INITIATED UNDER WHICH MR. LITTS WAS REQUIRED TO FURNISH NECESSARY EARTH MOVING EQUIPMENT COMPLETE WITH OPERATING PERSONNEL, CONSISTING ESSENTIALLY OF BULLDOZERS, SCRAPERS, FRONT END LOADERS, AND DUMP TRUCKS REQUIRED TO REMOVE CONTAMINATED DEBRIS, SOIL, AND HOUSEHOLD EFFECTS FROM STREETS, ALLEYS, SIDEWALKS, LAWNS, GARDEN AREAS, DRIVEWAYS, AND INTERIOR OF HOUSES INCLUDING FIRST FLOOR AND BASEMENT IN CONDEMNED AREAS DESIGNATED BY RESPONSIBLE PUBLIC AND HEALTH AUTHORITIES IN EAST STROUDSBURG, PENNSYLVANIA. THE ESTIMATED CONTRACT PRICE WAS STATED AS $75,000 BUT THE CONTRACTOR WAS ADVISED THAT HE WAS NOT AUTHORIZED TO EXPEND OR OBLIGATE MORE THAN $37,500 PENDING EXECUTION OF A DEFINITIVE CONTRACT.

UNDER DATE OF SEPTEMBER 3, 1955, A SECOND LETTER CONTRACT WAS INITIATED IN THE AMOUNT OF $75,000, COVERING THE SAME WORK REQUIREMENTS AS THE LETTER OF AUGUST 25, 1955, BUT CONTAINING NO LIMITATION ON THE CONTRACTOR'S RIGHT TO PROCEED TO THE FULL EXTENT OF THE AMOUNT FIXED. DEFINITIVE CONTRACT CONFIRMING THE LETTER CONTRACT OF SEPTEMBER 3, 1955, WAS ENTERED INTO AT A LATER DATE AT THE LUMP-SUM PRICE OF $75,000 FOR THE WORK INDICATED IN THE PRECEDING PARAGRAPH. THE LUMP-SUM PRICE OF $75,000 WAS BASED UPON A RATE OF 65 CENTS PER CUBIC YARD FOR THE ESTIMATED QUANTITY OF 115,000 YARDS OF DEBRIS. RESPECTING THIS PRICE, COLONEL ALLEN F. CLARK, JR., CORPS OF ENGINEERS, THE DISTRICT ENGINEER, STATED IN AN ENDORSEMENT DATED DECEMBER 3, 1956, THAT---

"* * * THIS PRICE INCLUDED ALL EQUIPMENT WHETHER CONTRACTOR OWNED OR LEASED. THEREFORE, IT WAS CONTEMPLATED BY THE GOVERNMENT THAT THE CONTRACT PRICE WOULD BE INCREASED ONLY IF THE CONTRACTOR WERE DIRECTED TO DO ADDITIONAL WORK.'

UNDER DATE OF OCTOBER 31, 1955, SUPPLEMENTAL AGREEMENT NO. 1 WAS ENTERED INTO BY WHICH THE FOLLOWING ITEMS WERE ADDED TO AND MADE A PART OF THE BASIC CONTRACT:

TABLE ITEM NO.NOMENCLATURE AMOUNT

2 REMOVAL OF CONTAMINATED DEBRIS TEMPORARILY STOCKPILED

IN THE RECREATIONAL AREA ADJACENT TO THE PUBLIC

SWIMMING POOL AND MATERIAL SHALL BE DISPOSED OF IN AN

AREA DESIGNATED BY RESPONSIBLE HEALTH AUTHORITIES

AND THE BOROUGH OF EAST STROUDSBURG, PENNSYLVANIA.

FOR THE JOB $13,575.00 ITEM NO. NOMENCLATURE AMOUNT

3 OPEN THE DRAINAGE DITCH PARALLELING THE RAILROAD

EMBANKMENT BEGINNING AT GARFIELD AND HANCOCK

STREETS, AND EXTENDING TO THE POINT WHERE THE

DITCH EMPTIES INTO BRODHEAD CREEK BEYOND LEWIS

STREET. THIS WORK SHALL INCLUDE THE CLEANING

OUT OF APPROXIMATELY 20 FEET OF 36 INCH STONE

CULVERT LOCATED IMMEDIATELY NORTH OF HARRISON

STREET, AND MATERIAL SHALL BE DISPOSED OF AS

DIRECTED BY THE CONTRACTING OFFICER.

FOR THE JOB $1,900.00

THE RECORDS SHOW THAT THE CONTRACTOR HAS RECEIVED PAYMENTS AGGREGATING $90,475, THAT IS TO SAY, THE AMOUNT PAID COVERS THE WORK INCLUDED IN THE BASIC CONTRACT AS WELL AS THE ADDITIONAL COMPENSATION AUTHORIZED BY THE SUPPLEMENTAL AGREEMENT. IT IS REPORTED THAT FINAL PAYMENT WAS MADE ON NOVEMBER 23, 1955, AND WAS ACCEPTED WITHOUT PROTEST.

THE CLAIM ASSERTED BY MR. LITTS IS CLEARLY FOR ADDITIONAL AMOUNTS OVER AND ABOVE THE CONTRACT PRICE. IN THIS CONNECTION, YOUR ATTENTION IS INVITED TO PARAGRAPH 3 OF THE GENERAL PROVISIONS OF THE CONTRACT, ENTITLED EXTRAS, PROVIDING AS FOLLOWS:

"EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, NO PAYMENT FOR EXTRAS SHALL BE MADE UNLESS SUCH EXTRAS AND THE PRICE THEREFOR HAVE BEEN AUTHORIZED IN WRITING BY THE CONTRACTING OFFICER.'

UNDER THIS PROVISION IT IS APPARENT THAT NO PART OF THE CLAIM HEREIN MAY BE ALLOWED. SEE THE CASES OF PLUMLEY V. UNITED STATES, 226 U.S. 545, 547; POPE V. UNITED STATES, 76 C.CLS. 64, 97, AND LOUISE HARDWICK, ADMX. UNITED STATES, 95 C.CLS. 336, 342, IN WHICH THE COURT SAID:

"* * * IT HAS ALSO BEEN HELD THAT WHERE A CONTRACT PROVIDES THAT NO PAYMENT SHOULD BE MADE FOR ANY EXTRA WORK OR MATERIAL UNLESS IT IS ORDERED IN THE MANNER PRESCRIBED BY THE CONTRACT, THAT THIS CLAUSE IS FATAL TO ANY RECOVERY BY THE CONTRACTOR FOR THE WORK NOT SO ORDERED.'

IN ADDITION TO THE REASONS SET FORTH ABOVE FOR DENIAL OF THE CLAIM, THERE APPEAR TO BE ADDITIONAL REASONS WHY THE CLAIM OF R. L. MERVINE IN THE AMOUNT OF $5,000--- INCLUDED IN THE TOTAL OF MR. LITT'S CLAIM--- MAY NOT BE ALLOWED. IN CONSIDERING THIS CLAIM THE DISTRICT ENGINEER ADVISED THE CHIEF OF ENGINEERS, IN PART, AS FOLLOWS:

"* * * CONCERNING THE CLAIM ITEM OF R. L. MERVINE, THE FOLLOWING INFORMATION IS FURNISHED. ALL DISPOSAL AREAS INVOLVED WERE DESIGNATED BY RESPONSIBLE PUBLIC AND HEALTH AUTHORITIES IN EAST STROUDSBURG AS WAS NOTED IN THE CONTRACT. PARAGRAPH 5 OF LETTER CONTRACT, * * * AND WHICH WAS CONFINED BY THE DEFINITIVE CONTRACT, STATED: "THE CONTRACTOR SHALL, WITHOUT ADDITIONAL EXPENSE TO THE GOVERNMENT, OBTAIN ALL LICENSES AND PERMITS REQUIRED FOR THE PROSECUTION OF THE WORK. HE SHALL BE RESPONSIBLE FOR ALL DAMAGES TO PERSONS OR PROPERTY THAT OCCUR AS A RESULT OF HIS FAULT OR NEGLIGENCE IN CONNECTION WITH THE PROSECUTION OF THE WORK.' FURTHER, THE ATTACHMENT TO EXHIBIT F OF BASIC CORRESPONDENCE STATED IN PART,"* * * THAT THE BOROUGH OF EAST STROUDSBURG, PENNSYLVANIA, AGREES TO HOLD THE UNITED STATES OF AMERICA, ITS OFFICERS, AGENTS AND EMPLOYEES FREE AND HARMLESS FROM ANY AND ALL CLAIMS FOR DAMAGES ARISING OUT OF THE PERFORMANCE OF THE REQUESTED WORK; * * *" THIS OFFICE HAS NO KNOWLEDGE OF THE EXISTENCE OF ANY PERMIT THAT MAY HAVE BEEN OBTAINED BY THE CONTRACTOR FOR THE USE OF THE DISPOSAL AREA INVOLVED. RECORDS DO SHOW, HOWEVER, THAT THE ASST. ENGINEER AT THE SITE INQUIRED OF THE CONTRACTOR AS TO THE LATTER'S AUTHORIZATION TO USE THE DISPOSAL AREA AND WAS ASSURED BY HIM THAT AUTHORIZATION HAD BEEN GRANTED. * * *"

IT IS FURTHER REPORTED THAT AT THE TIME THE SUPPLEMENTAL AGREEMENT WAS NEGOTIATED THE CONTRACT WORK WAS NEARLY COMPLETION AND THAT MR. LITTS SHOULD BY THEN HAVE BEEN FULLY AWARE OF ALL COSTS AND EXPENSES INVOLVED. SINCE MR. LITTS WAS OBLIGATED TO PERFORM THE WORK SPECIFIED FOR AN AGREED LUMP SUM, AND IT DOES NOT APPEAR THAT THERE WAS ANY MUTUAL MISTAKE INVOLVED, WE HAVE NO ALTERNATIVE BUT TO REFUSE ALLOWANCE OF THE CLAIM AND THE SAME IS HEREBY DENIED.