B-136786, JUL. 25, 1958

B-136786: Jul 25, 1958

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SO AS TO CORRECT A MUTUAL ERROR ALLEGED TO HAVE BEEN MADE THEREIN. THIS BELIEF WAS CONTRARY TO PARAGRAPH SC-3. AGGREGATES: AGGREGATES WILL BE AVAILABLE WHEN REQUIRED. THE MATERIAL IS EITHER PRESENTLY STORED AT THE LORING AIR FORCE BASE IN STOCKPILES OR WILL BE PROCESSED AND STORED IN ADVANCE OF NEED. THE FOLLOWING LISTED ITEMS ARE THE ONLY USES FOR WHICH AGGREGATES WILL BE FURNISHED BY THE GOVERNMENT. (1) THE GOVERNMENT WILL FURNISH FREE TO THE CONTRACTOR 1500 TONS OF SAND AND 2200 TONS OF 3/4 INCHES TO NO. 4 GRAVEL FOR EACH BATTERY FOR CONCRETE AGGREGATE. AGGREGATES USED IN EXCESS OF THE ABOVE STATED QUANTITIES WILL BE CHARGED TO THE CONTRACTOR AT THE RATE OF $4.50 PER TON. * * * (2) * * * A MAXIMUM OF 3 PERCENT VARIATION FROM QUANTITIES * * * WILL BE CONSIDERED PERMISSIVE * * * TO ALLOW FOR NORMAL WASTES.'.

B-136786, JUL. 25, 1958

TO THE SECRETARY OF THE ARMY:

IN A LETTER DATED JULY 7, 1958, THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTED A DECISION AS TO THE PROPRIETY OF MODIFYING THE TERMS OF CONTRACT NO. DA-19-016-ENG-4450, DATED MARCH 23, 1956, ENTERED INTO WITH ROBERT A. VERRIER CONSTRUCTION COMPANY AND COVERING THE CONSTRUCTION OF SPECIAL AAA FACILITIES FOR THE LORING AIR FORCE BASE AREA AT CASWELL, LIMESTONE, CARIBOU AND CONNOR, MAINE, SO AS TO CORRECT A MUTUAL ERROR ALLEGED TO HAVE BEEN MADE THEREIN.

IT APPEARS THAT THE CONTRACTOR ORIGINALLY BID ON THE WORK OF THIS PROJECT WITHOUT HAVING MADE ANY ALLOWANCE FOR AGGREGATES, CONSISTING OF SAND AND GRAVEL, REQUISITE TO THE PERFORMANCE OF THE SPECIFIED CONCRETE WORK, IT HAVING BEEN ITS IMPRESSION THAT THE GOVERNMENT INTENDED TO FURNISH THE AGGREGATES FREE OF CHARGE FROM ITS HUGE STOCKPILES IN THE AREA. THIS BELIEF WAS CONTRARY TO PARAGRAPH SC-3, PART III, SPECIAL CONDITIONS OF THE CONTRACT, WHICH PROVIDES, IN PERTINENT PART:

"B. AGGREGATES: AGGREGATES WILL BE AVAILABLE WHEN REQUIRED. THE MATERIAL IS EITHER PRESENTLY STORED AT THE LORING AIR FORCE BASE IN STOCKPILES OR WILL BE PROCESSED AND STORED IN ADVANCE OF NEED. THE FOLLOWING LISTED ITEMS ARE THE ONLY USES FOR WHICH AGGREGATES WILL BE FURNISHED BY THE GOVERNMENT.

(1) THE GOVERNMENT WILL FURNISH FREE TO THE CONTRACTOR 1500 TONS OF SAND AND 2200 TONS OF 3/4 INCHES TO NO. 4 GRAVEL FOR EACH BATTERY FOR CONCRETE AGGREGATE. AGGREGATES USED IN EXCESS OF THE ABOVE STATED QUANTITIES WILL BE CHARGED TO THE CONTRACTOR AT THE RATE OF $4.50 PER TON. * * *

(2) * * * A MAXIMUM OF 3 PERCENT VARIATION FROM QUANTITIES * * * WILL BE CONSIDERED PERMISSIVE * * * TO ALLOW FOR NORMAL WASTES.'

INASMUCH AS THE CONTRACT CALLED FOR THE CONSTRUCTION OF FOUR BATTERIES THE CONTRACTING OFFICER COMPUTED THE QUANTITY OF AGGREGATES AUTHORIZED TO BE FURNISHED BY THE GOVERNMENT AS 3,700 TONS PER SITE, PLUS A 3 PERCENT ALLOWANCE FOR WASTE, OR AN AUTHORIZED AGGREGATE ALLOWANCE OF 15,244 TONS. THE TOTAL QUANTITY OF AGGREGATE ACTUALLY USED BY THE CONTRACTOR WAS 21,547 TONS, OR AN EXCESS OF 6,303 TONS OVER THE AUTHORIZED ALLOWANCES, FOR WHICH THE CONTRACTOR HAS BEEN CHARGED $28,363.50.

ADDENDUM NO. 2, DATED FEBRUARY 21, 1956, PAGE 2, ITEM E4, CHANGED THE FOUNDATION WALLS OF ALL BUILDINGS FROM CONCRETE BLOCK CONSTRUCTION, AS ORIGINALLY SPECIFIED, TO POURED CONCRETE, WITHOUT MENTIONING ANY CHANGE IN THE ORIGINAL QUANTITIES OF THE AGGREGATE OFFERED TO BE FURNISHED FREE OF CHARGE BY THE GOVERNMENT. THIS ADDENDUM WAS ISSUED CLOSE TO THE TIME OF OPENING OF THE BIDS ON MARCH 1, 1956, THUS AFFORDING LITTLE TIME FOR THE BIDDERS TO REVIEW AND REVISE THEIR PROPOSALS UPON THE BASIS OF THE NEW SPECIFICATION REQUIREMENTS.

AFTER THE EXCHANGE OF CONSIDERABLE CORRESPONDENCE, AND AT THE CONCLUSION OF SEVERAL CONFERENCES BETWEEN THE CONTRACTOR AND THE GOVERNMENT CONTRACTING OFFICER, THE LATTER OFFICIAL PREPARED A FORMAL STATEMENT WHEREIN IT IS STATED THAT (1) IN COMPUTING THE GOVERNMENT'S ESTIMATES FOR THE ADDITIONAL COST OF THE "POURED CONCRETE" FOUNDATION WALLS REQUIRED UNDER ADDENDUM NO. 2, HE DID NOT INCLUDE THE COST OF THE AGGREGATE, THUS INDICATING AN INTENTION BY THE GOVERNMENT TO FURNISH SUCH AGGREGATE FREE OF CHARGE TO THE CONTRACTOR; (2) THAT THE GOVERNMENT'S ESTIMATED COST OF $13 PER CUBIC YARD FOR POURED CONCRETE FOOTINGS REQUIRED UNDER ADDENDUM NO. 2 WAS BASED UPON A PRICE WHICH DID NOT INCLUDE THE COST OF AGGREGATES; AND (3) THAT HIS ESTIMATING BRANCH "INTENDED" ADDENDUM NO. 2 TO READ THAT "AGGREGATES FOR THE POURED CONCRETE REQUIRED THEREFOR WOULD BE FURNISHED FROM NEARBY GOVERNMENT STOCKPILES FREE OF CHARGE TO THE CONTRACTOR, AND THAT IT INADVERTENTLY FAILED TO EXPRESS THAT INTENTION THEREIN.' FURTHERMORE, IT IS INDICATED IN THE CONTRACTING OFFICER'S REPORT THAT THE GOVERNMENT PREVIOUSLY HAD FURNISHED ALL AGGREGATES FREE OF CHARGE TO ALL CONTRACTORS DOING WORK FOR IT IN THAT AREA, WHICH PROBABLY ACCOUNTED FOR THE CONTRACTOR'S ORIGINAL MISUNDERSTANDING IN THE MATTER.

IN THE LIGHT OF THESE DISCLOSURES, THERE CAN BE LITTLE ROOM FOR DOUBT THAT THE CONTRACT DID NOT EXPRESS THE MUTUAL UNDERSTANDING OF THE PARTIES INSOFAR AS THE MATTER OF AGGREGATES IS CONCERNED, AND YOU ARE ADVISED THAT WE WILL INTERPOSE NO OBJECTION TO THE ISSUANCE OF THE PROPOSED MODIFICATION NO. 52 TO CORRECT THE REPORTED MUTUAL MISTAKE IN CONTRACT NO. DA-19-016-ENG-4450.