B-139327, SEP. 25, 1959

B-139327: Sep 25, 1959

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INC.: REFERENCE IS MADE TO A LETTER DATED AUGUST 13. ARE IN FURTHER SUPPORT OF YOUR REQUEST FOR RECONSIDERATION. ARE CONSTRUCTION CONTRACT CASES AND THAT IN SOME OF THE CONTRACTS INVOLVED THERE WAS A SPECIFIC CLAUSE TO COVER DIFFERENT OR CHANGED PHYSICAL CONDITIONS THAT MIGHT BE MET BY THE CONTRACTOR IN THE COURSE OF THE WORK. THE "CHANGES" PROVISION IN THE INSTANT CONTRACT IS BROAD ENOUGH TO COVER AN EQUITABLE ADJUSTMENT IN PRICE DUE TO UNFORESEEN AND UNEXPECTED CHANGED CONDITIONS. IT BEING ALLEGED THAT THE "CHANGED CONDITION" ON WHICH THE CLAIM WAS PREDICATED HAD THE SAME NET EFFECT AS WOULD HAVE RESULTED FROM A "CHANGED PHYSICAL CONDITION.'. IT BEING POINTED OUT BY THE DISTRICT ENGINEER THAT THE CONTRACT IN THIS CASE CONTAINS NO "CHANGED CONDITIONS" CLAUSE SUCH AS IS USUALLY CONTAINED IN GOVERNMENT CONSTRUCTION CONTRACTS.

B-139327, SEP. 25, 1959

TO ALSTER AND ASSOCIATES, INC.:

REFERENCE IS MADE TO A LETTER DATED AUGUST 13, 1959, FROM YOUR ATTORNEYS, IN REPLY TO OUR LETTER OF APRIL 30, 1959, RELATING TO YOUR CLAIM IN THE AMOUNT OF $7,599.30, CLAIMED TO BE DUE AS REIMBURSEMENT OF CERTAIN COSTS ALLEGEDLY INCURRED IN THE PERFORMANCE OF CONTRACT NO. DA-36-058-CIVENG-57- 24, DATED SEPTEMBER 4, 1956, PROVIDING FOR THE SURVEY OF THE PROPOSED ALLEGHENY RIVER RESERVOIR, ETC., IN ACCORDANCE WITH CERTAIN SPECIFICATIONS. ALSO, THERE HAS BEEN RECEIVED YOUR ATTORNEYS' LETTER OF AUGUST 27, 1959, ENCLOSING CLIPPINGS FROM SEVERAL NEWSPAPERS CONCERNING THE CONTROVERSY WITH THE SENECA NATION OF INDIANS IN THIS CASE. OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM BY SETTLEMENT DATED MARCH 9, 1959, AND BY LETTER OF APRIL 6, 1959, YOUR ATTORNEYS REQUESTED RECONSIDERATION OF THE ACTION TAKEN. THE LETTERS OF AUGUST 13 AND AUGUST 27, 1959, ARE IN FURTHER SUPPORT OF YOUR REQUEST FOR RECONSIDERATION.

FOR THE RECORD, IT MAY BE POINTED OUT THAT IN LETTER OF DECEMBER 9, 1958, TO THE CORPS OF ENGINEERS, DEALING WITH THE MATTER OF YOUR CLAIM, YOUR ATTORNEYS REFERRED TO THE FACT THAT MOST OF THE CASES REPORTED IN THE GOVERNMENT CONTRACTS REPORTER, INVOLVING AN EQUITABLE ADJUSTMENT IN PRICE, ARE CONSTRUCTION CONTRACT CASES AND THAT IN SOME OF THE CONTRACTS INVOLVED THERE WAS A SPECIFIC CLAUSE TO COVER DIFFERENT OR CHANGED PHYSICAL CONDITIONS THAT MIGHT BE MET BY THE CONTRACTOR IN THE COURSE OF THE WORK. HOWEVER, YOUR ATTORNEYS CONTENDED THAT, EVEN WITHOUT SUCH A SPECIFIC CLAUSE, THE "CHANGES" PROVISION IN THE INSTANT CONTRACT IS BROAD ENOUGH TO COVER AN EQUITABLE ADJUSTMENT IN PRICE DUE TO UNFORESEEN AND UNEXPECTED CHANGED CONDITIONS, IT BEING ALLEGED THAT THE "CHANGED CONDITION" ON WHICH THE CLAIM WAS PREDICATED HAD THE SAME NET EFFECT AS WOULD HAVE RESULTED FROM A "CHANGED PHYSICAL CONDITION.' IN THE LETTER OF DECEMBER 9 YOUR ATTORNEYS CITED A NUMBER OF CASES APPARENTLY BELIEVED BY THEM TO SUPPORT THE ALLOWANCE OF YOUR CLAIM.

UNDER DATE OF DECEMBER 30, 1958, THE DISTRICT ENGINEER--- THE SUCCESSOR CONTRACTING OFFICER--- REPLIED TO THE LETTER OF DECEMBER 9, 1958, TO THE EFFECT THAT IN NONE OF THE CITED CASES COULD HE FIND A BASIS FOR JURISDICTION BY HIM OF YOUR CLAIM OR BY THE CORPS OF ENGINEERS CLAIMS AND APPEALS BOARD, IT BEING POINTED OUT BY THE DISTRICT ENGINEER THAT THE CONTRACT IN THIS CASE CONTAINS NO "CHANGED CONDITIONS" CLAUSE SUCH AS IS USUALLY CONTAINED IN GOVERNMENT CONSTRUCTION CONTRACTS, AND NO "SUSPENSION OF WORK" PROVISION. THE DISTRICT ENGINEER ADDED THAT EVEN IF THOSE CLAUSES HAD BEEN INCLUDED, THEIR APPLICABILITY TO THE PRESENT SITUATION WAS DOUBTFUL. WE, TOO, HAVE EXAMINED THE CASES CITED IN THE LETTER OF DECEMBER 9, 1958, AND WE ARE OF THE VIEW THAT THEY ARE NOT DECISIVE OF THE PRESENT MATTER.

YOUR CLAIM AS NOW PRESENTED IS BASED ON THE INCREASED COST OF PERFORMING THE SURVEY WORK REQUIRED BY THE INDICATED CONTRACT ON ACCOUNT OF DELAY ATTRIBUTABLE TO THE LACK OF RIGHT-OF-ENTRY ON THE ALLEGHENY RESERVATION OF THE SENECA NATION OF INDIANS. THE SEVERAL ITEMS OF COST INCLUDED IN YOUR CLAIM WERE SET FORTH IN YOUR ATTORNEYS' LETTER OF JUNE 6, 1958, TO THE CONTRACTING OFFICER, AND NEED NOT BE REPEATED HERE. IN THE CONCLUDING PARAGRAPH OF THE LETTER OF AUGUST 13, 1959, YOUR ATTORNEYS CONTEND THAT WHEN THE CONTRACT IN THIS CASE WAS NEGOTIATED NO ONE ANTICIPATED THAT YOUR CONCERN WOULD BE CAUGHT UP IN A MAJOR DISPUTE BETWEEN THE SENECA NATION AND THE UNITED STATES GOVERNMENT; THAT THERE WAS TEMPORARY IMPOSSIBILITY OF PERFORMANCE FOR FOURTEEN WEEKS CAUSED BY UNFORESEEN CIRCUMSTANCES OUTSIDE OF THE CONTROL OF BOTH PARTIES TO THE CONTRACT AND THAT, THEREFORE, YOU ARE ENTITLED TO COMPENSATION AS THE RESULT OF THE DELAY.

THE RECORD IN THIS CASE INDICATES THAT THE DELAY COMMENCED WHEN THE SENECA NATION REFUSED TO GRANT YOU PERMISSION TO ENTER UPON THE ALLEGHENY RESERVATION FOR THE PURPOSE OF MAKING SURVEYS FORMING PART OF THE CONTRACT WORK. THE DELAY, WHICH CONTINUED WHEN THE SENECA NATION REJECTED THE GOVERNMENT'S OFFER TO PURCHASE A PERMIT FOR SURVEYS, EXTENDED TO AT LEAST THE DATE ON WHICH THE GOVERNMENT, BY THE EXERCISE OF EMINENT DOMAIN THROUGH THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK, ACQUIRED THE RIGHT TO MAKE SURVEYS ON THE ALLEGHENY RESERVATION. YOUR ATTORNEYS CONTEND THAT THIS DELAY FORCED THE PERFORMANCE OF THE WORK INTO A PERIOD WHEN YOU HAD OTHER CONTRACTUAL ENGAGEMENTS AND CAUSED EXTRA COSTS WHICH, BUT FOR THE DELAY, WOULD NOT HAVE BEEN INCURRED.

PARAGRAPH SC-5 OF THE SPECIAL CONDITIONS OF THE CONTRACT PROVIDES, IN PART, AS FOLLOWS:

"ATTENTION IS FURTHER DIRECTED TO THE FACT THAT PORTIONS OF THE WORK WILL REQUIRE RIGHT-OF-ENTRY ON TWO INDIAN RESERVATIONS. SUCH RIGHTS OF-ENTRY AND PERMISSION FOR CLEARING SHALL BE NEGOTIATED BY THE CONTRACTOR AT HIS EXPENSE. THE GOVERNMENT WILL COOPERATE WITH THE CONTRACTOR, TO THE FULLEST EXTENT PRACTICABLE, IN OBTAINING SUCH RIGHTS-OF-ENTRY.'

THE QUOTED LANGUAGE EVIDENCES A TOTAL DISCLAIMER OF ANY RESPONSIBILITY BY THE GOVERNMENT FOR OBTAINING SUCH RIGHTS-OF-ENTRY, OTHER THAN TO COOPERATE TO THE FULLEST EXTENT POSSIBLE. IN OUR VIEW, YOUR ATTORNEYS HAVE FAILED TO ESTABLISH A LEGAL BASIS WHEREBY THERE MAY BE IMPOSED UPON THE GOVERNMENT THE OBLIGATION TO REIMBURSE YOU FOR THE INCREASED COSTS ALLEGEDLY INCURRED IN THIS CASE. THE CONTRACT CONTAINS NO PROVISION REQUIRING THE GOVERNMENT TO ASSUME SUCH COSTS IN THE EVENT OF DELAY, AND WE HAVE FOUND NO CASE IN WHICH A COURT HELD THE GOVERNMENT LIABLE UNDER FACTS SIMILAR TO THOSE HERE INVOLVED. IT IS FUNDAMENTAL THAT NO CAUSE OF ACTION CAN ARISE ON THE CONTRACT BEFORE IT IS BROKEN, AND SINCE, IN OUR VIEW, THERE WAS NO BREACH OF THE CONTRACT ON THE PART OF THE GOVERNMENT, IT FOLLOWS THAT THE GOVERNMENT IS WITHOUT LIABILITY FOR THE INCREASED COSTS.

UNDER THE TERMS OF THE CONTRACT YOU WERE REQUIRED TO OBTAIN THE RIGHTS-OF -WAY AT YOUR OWN EXPENSE. THE GOVERNMENT AGREED TO COOPERATE WITH YOU, TO THE FULLEST EXTENT PRACTICABLE, IN OBTAINING SUCH RIGHTS OF-WAY, AND YOUR ATTORNEY CONCEDED THAT THE GOVERNMENT DID FULLY COOPERATE. THE RECORD CLEARLY SHOWS THAT THE GOVERNMENT DID NOTHING TO PREVENT PERFORMANCE OF THE CONTRACT WORK OTHER THAN TO "COOPERATE IN OBTAINING THE RIGHTS-OF- ENTRY--- A REQUIREMENT OF THE CONTRACT. YOUR INABILITY TO PROCEED WAS DUE TO THE ACTS OF A THIRD PARTY. THE SO-CALLED "DISPUTE" BETWEEN THE UNITED STATES AND THE SENECA NATION WAS, IN FACT, BASICALLY YOUR DISPUTE. THE PARTICIPATION BY THE UNITED STATES IN SUCH DISPUTE WAS IN THE NATURE OF COOPERATION ONLY. EVEN IF IT WERE CONCEDED THAT THE UNFORESEEN DIFFICULTIES OVER RIGHTS-OF-ENTRY MIGHT HAVE EXCUSED NON-PERFORMANCE ON YOUR PART, THE FACT REMAINS THAT YOU DID CONTINUE WITH PERFORMANCE UNDER THE CONTRACT. IN ANY EVENT, IT SEEMS CLEAR THAT NO FAULT MAY BE ATTRIBUTED TO THE GOVERNMENT IN THIS CASE AND THAT, THEREFORE, IT IS WITHOUT LIABILITY IN THE MATTER.

ON THE BASIS OF THE RECORD IN THIS CASE, WE CONCLUDE THAT THE ACTION TAKEN IN THE SETTLEMENT OF MARCH 9, 1959, WAS CORRECT, AND IT IS SUSTAINED.