B-139843, JUL. 20, 1959

B-139843: Jul 20, 1959

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER OF JUNE 4. IT IS STATED THAT THE CLAIM HAS BEEN CONSIDERED UNDER SECTION 9 OF THE FLOOD CONTROL ACT OF 1946. WHICH IS IN THE NATURE OF AN EQUITABLE STATUTE. THAT THE CHIEF OF ENGINEERS HAS NOT FOUND THAT THE DAMAGES ARE THE RESULT OF OPERATION OF THE PROJECT. IT IS STATED. AT THE TIME NEGOTIATIONS WERE ENTERED INTO WITH THE CLAIMANT FOR THE RELOCATION OF THE RAILROAD. WHICH WAS USED FOR HAULING TIMBER. AN ATTEMPT WAS MADE TO OBTAIN CLAIMANT'S CONSENT FOR ABANDONMENT. 160 TO THE RAILROAD WAS MUTUALLY AGREED UPON FOR INCREASED OPERATION AND MAINTENANCE BASED ON AN OPERATING LIFE OF 20 YEARS. THIS PAYMENT WAS BASED UPON EXTRA FUEL.

B-139843, JUL. 20, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF JUNE 4, 1959, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (MANPOWER, PERSONNEL AND RESERVE FORCES), REQUESTING A DECISION AS TO WHETHER ANY OR ALL OF THE ITEMS OF THE CLAIM OF THE OREGON, PACIFIC AND EASTERN RAILWAY COMPANY FOR EXTRAORDINARY MAINTENANCE OF 7 1/2 MILES OF RELOCATED TRACKS, PROVIDED FOR BY THE COMPANY UNDER CONTRACT W698ENG-1847, DATED JULY 2, 1941, MAY BE ALLOWED.

IT IS STATED THAT THE CLAIM HAS BEEN CONSIDERED UNDER SECTION 9 OF THE FLOOD CONTROL ACT OF 1946, 33 U.S.C. 701 (Q), WHICH IS IN THE NATURE OF AN EQUITABLE STATUTE, AND THAT THE CHIEF OF ENGINEERS HAS NOT FOUND THAT THE DAMAGES ARE THE RESULT OF OPERATION OF THE PROJECT, PREREQUISITE FOR RELIEF UNDER THIS STATUTE.

THE DISTRICT ENGINEER, THE CONTRACTING OFFICER, RECOMMENDED THAT NO ACTION BE TAKEN WITH RESPECT TO ITEM 1 OF PART I, BUT THAT CASH SETTLEMENTS BE EFFECTED WITH RESPECT TO ITEMS 2 AND 3 THEREOF. ALSO, HE RECOMMENDED ALLOWANCE OF ALL OF THE ITEMS, TOTALING $94,837.04, IN PART II OF THE CLAIM. IT IS STATED, HOWEVER, THAT THE CHIEF OF ENGINEERS DOES NOT OCCUR IN ALL OF THE RECOMMENDATIONS OF THE CONTRACTING OFFICER. SPECIFICALLY, HE PROPOSES DISALLOWANCE OF ITEMS 2, 5, AND 6 OF PART II OF THE CLAIM.

AT THE TIME NEGOTIATIONS WERE ENTERED INTO WITH THE CLAIMANT FOR THE RELOCATION OF THE RAILROAD, WHICH WAS USED FOR HAULING TIMBER, IT HAD AN OVERALL LENGTH OF 20 MILES. ORIGINALLY, AN ATTEMPT WAS MADE TO OBTAIN CLAIMANT'S CONSENT FOR ABANDONMENT, BUT CLAIMANT REFUSED AND REQUESTED NEGOTIATIONS ON THE BASIS OF A LIFE EXPECTANCY OF FROM 10 TO 30 YEARS FOR THE RAILROAD. A PAYMENT OF $20,160 TO THE RAILROAD WAS MUTUALLY AGREED UPON FOR INCREASED OPERATION AND MAINTENANCE BASED ON AN OPERATING LIFE OF 20 YEARS. THIS PAYMENT WAS BASED UPON EXTRA FUEL, EQUIPMENT, AND RIGHT-OF -WAY MAINTENANCE CONSIDERED TO BE REQUIRED FOR THE ADDITIONAL 1.12 MILES OF LINE AND THE INCREASED GRADE AND CURVATURE. FROM THIS AMOUNT, HOWEVER, THERE WAS DEDUCTED AN AMOUNT ESTIMATED BY THE GOVERNMENT AS SAVINGS IN REPLACEMENT OF BALLAST STRUCTURES AND RIGHT-OF-WAY FENCES, WHICH REDUCED THE PROPOSED PAYMENT TO THE RAILROAD TO THE NET AMOUNT OF $3,768, WHICH WAS AGREED TO BY THE RAILROAD AND INCORPORATED IN THE CONTRACT.

THE CITED CONTRACT PROVIDED FOR RELOCATION OF THE RAILROAD PURSUANT TO PLANS AND SPECIFICATIONS APPROVED IN ADVANCE BY THE COMPANY. THE CONTRACT, AMONG OTHER THINGS, OBLIGATED THE GOVERNMENT TO CONSTRUCT THE RELOCATED SECTION IN ACCORDANCE WITH SUCH PLANS AND SPECIFICATIONS AND TO CONVEY SAME TO THE RAILROAD READY FOR OPERATION; TO PAY THE RAILROAD, UPON ACCEPTANCE OF THE RELOCATED LINE, A CAPITALIZED SUM OF $3,768 FOR EXCESS OPERATION AND MAINTENANCE COSTS AS INDICATED ABOVE, TOGETHER WITH A MONTHLY PAYMENT OF $250 TO THE RAILROAD DURING CONSTRUCTION AS COMPENSATION FOR ENGINEERING, INSPECTION, LEGAL, AND ADMINISTRATIVE EXPENSES, THE AGGREGATE PAYMENT FOR THESE EXPENSES, HOWEVER, NOT TO EXCEED $3,000.

ARTICLE III (B) OF THE CONTRACT OBLIGATED THE COMPANY UPON COMPLETION OF THE RELOCATED SECTION TO PERMIT CONNECTION OF SAME WITH THE EXISTING TRACKS AND THEREAFTER TO OPERATE ITS TRAINS OVER THE RELOCATED LINE AND TO MAINTAIN SAME; PROVIDED, HOWEVER, THAT---

"* * * BEFORE THE RELOCATED LINE IS ACCEPTED BY THE RAILROAD FOR OPERATION AND MAINTENANCE A DETAILED INSPECTION SHALL BE MADE JOINTLY BY REPRESENTATIVES OF THE GOVERNMENT AND THE RAILROAD FOR THE PURPOSE OF DETERMINING WHETHER OR NOT THE RELOCATED LINE HAS BEEN COMPLETED IN ACCORDANCE WITH THE PLANS AND SPECIFICATIONS. IF THIS INSPECTION DEVELOPS THAT THE LINE HAS BEEN SO COMPLETED, IT SHALL BE ACCEPTED FORTHWITH BY THE RAILROAD IN WRITING. IF THIS INSPECTION DEVELOPS THAT ANY OF THE WORK HAS NOT BEEN COMPLETED IN ACCORDANCE WITH THE PLANS AND SPECIFICATIONS IT SHALL BE DETERMINED WHAT ITEMS OF WORK STILL REMAIN TO BE DONE OR TO BE CORRECTED, AND SUCH WORK SHALL THEREAFTER BE DONE BY THE GOVERNMENT AT ITS SOLE COST AND EXPENSE, WHEREUPON THE RAILROAD SHALL ACCEPT THE RELOCATED LINE FOR OPERATION AND MAINTENANCE.'

ARTICLE V OF THE CONTRACT PROVIDED THAT:

"IN CONSIDERATION OF THE PAYMENTS AND THE FULFILLMENT OF THE MUTUAL COVENANTS HEREIN SET FORTH THE RAILROAD DOES HEREBY RELEASE AND FOREVER DISCHARGE THE GOVERNMENT FROM ANY AND ALL CLAIMS OR DEMANDS FOR DAMAGES TO OR CAUSES OF ACTION OF EVERY KIND RELATING TO ITS PROPERTIES INVOLVED HEREIN AND THE USE THEREOF WHICH MAY BE CAUSED BY THE CONSTRUCTION, OPERATION OR MAINTENANCE OF THE AFORESAID DORENA DAM AND RESERVOIR, AND/OR FROM ANY AND ALL CLAIMS AND DEMANDS FOR DAMAGES OR CAUSES OF ACTION ARISING OUT OF THE CHANGES AND RELOCATION OF THE RAILROAD'S FACILITIES HEREIN PROVIDED FOR.'

ON AUGUST 28, 1942, CONSTRUCTION OF THE RELOCATED LINE WAS INTERRUPTED BECAUSE OF THE WAR EMERGENCY. WORK WAS RESUMED IN 1946 AND WAS COMPLETED ON AUGUST 4, 1947, WHEN THE RAILROAD STARTED OPERATING THE RELOCATED LINE. PRIOR THERETO THE RESIDENT ENGINEER AND REPRESENTATIVES OF THE RAILROAD INSPECTED THE RELOCATED LINE ON JULY 30, 1947. THE COMPANY DID NOT THEN ACCEPT THE RELOCATED LINE IN WRITING AS PROVIDED IN THE CONTRACT.

BY LETTER DATED AUGUST 1, 1947, THE ATTORNEY FOR THE COMPANY REQUESTED THE DISTRICT ENGINEER TO ENTER INTO A SUPPLEMENTAL AGREEMENT UNDER WHICH THE GOVERNMENT WOULD ASSUME LIABILITY FOR EXTRAORDINARY MAINTENANCE FOR A PERIOD OF ONE YEAR AFTER THE FILLING OF THE RESERVOIR. THIS REQUEST WAS REFUSED IN REPLY OF AUGUST 7, 1947, WHEREIN IT WAS POINTED OUT THAT THE RAILROAD WAS RESPONSIBLE FOR ORDINARY MAINTENANCE AND ORDINARY SLIDES. THE ATTORNEY WAS INFORMED, HOWEVER, THAT IN THE EVENT A MAJOR SLIDE SHOULD OCCUR DURING THE FIRST YEAR OF OPERATION OF THE RESERVOIR A CORRECTION WOULD BE CONSIDERED BY APPLICATION OF SECTION 9 OF THE FLOOD CONTROL ACT OF 1946, 33 U.S.C. 701Q.

THE FIRST FILLING OF THE RESERVOIR OCCURRED ON MAY 27, 1950, WHEN THE POOL WAS FILLED TO AN ELEVATION OF 832.3, AND IT IS REPORTED THAT THE SPILLWAY AT ELEVATION 835 HAS NEVER BEEN OVERTOPPED EXCEPT DURING THE FLOOD OF DECEMBER 1955. IN THE MEANTIME, EFFORTS WERE MADE TO DISCHARGE THE GOVERNMENT'S OBLIGATION TO THE RAILROAD BY PAYMENT OF THE BALANCE DUE UNDER THE CONTRACT WHICH COULD NOT BE DONE UNTIL WRITTEN ACCEPTANCE OF THE RELOCATED LINE AS REQUIRED BY THE CONTRACT. IN A CONFERENCE HELD ON SEPTEMBER 11, 1951, IN THE OFFICE OF THE DISTRICT ENGINEER, THE REPRESENTATIVES OF THE RAILROAD SUBMITTED CLAIMS FOR ADDITIONAL OPERATION AND MAINTENANCE COSTS AND, APPARENTLY, RENEWED THE COMPANY'S REQUEST FOR AMENDING THE CONTRACT FOR THAT PURPOSE. BY LETTER OF THE SAME DATE, HOWEVER, THE RAILROAD'S ATTORNEY WAS INFORMED THAT THE CONTRACT WAS ENTERED INTO AFTER EXTENSIVE STUDIES AND NEGOTIATIONS AND THAT, THEREFORE, THE COMPANY'S REQUEST COULD NOT BE GRANTED. IN URGING FORMAL ACCEPTANCE OF THE RELOCATED LINE WITH DISTRICT ENGINEER'S OFFICE INFORMED THE ATTORNEY THAT, NOTWITHSTANDING THE PROVISIONS OF THE CONTRACT AND THE ACCEPTANCE IN WRITING AS THEREIN REQUIRED, THAT OFFICE WOULD CONSIDER "ANY CLAIMS FOR EXCESSIVE OPERATION AND MAINTENANCE COSTS, NOT PREVIOUSLY ANTICIPATED OR PROVIDED FOR, UNDER THE PROVISIONS OF SECTION 9 OF THE FLOOD CONTROL ACT OF 1946, A COPY OF WHICH IS ATTACHED.' A WRITTEN ACCEPTANCE WAS EXECUTED BY THE RAILROAD OF SEPTEMBER 28, 1951, ACKNOWLEDGING THAT THE RELOCATED LINE HAD NOT BEEN COMPLETED BY THE GOVERNMENT IN A SATISFACTORY AND ACCEPTABLE MANNER.

BY LETTER DATED SEPTEMBER 10, 1956, THE RAILROAD FILED A CLAIM FOR $94,837.04. THE CLAIM AS OUTLINED IN THE RECOMMENDATIONS OF THE OFFICE OF THE DISTRICT ENGINEERS IS AS FOLLOWS:

TABLE

RECOMMENDED PART ITEM

RAILWAY CLAIM GOVERNMENT ACTION

I CERRO GORDO CUT DEFERRED CONSTRUCTION NONE

REQUIRED

SLIDE AREA AT M.P. DEFERRED CONSTRUCTION CASH SETTLEMENT.

5.5 REQUIRED

AREA AT AXIS OF DAM DEFERRED CONSTRUCTION

REQUIRED CASH SETTLEMENT. II EXTRAORDINARY MTNCE

$30,666.32ASSUME PAYMENT

REPLACEMENT OF

PASSING AND SIDE

TRACKS 29,409.50 DO DO

LOSS OF PRESENT SIDE

TRACK 8,482.22 DO DO

COST OF RAIL ANCHORS 6,292.00 DO DO

LEGAL AND ENGINEERING

FEES 2,595.00 DO DO

BETTERMENTS CLAIMED BY

GOVERNMENT 17,392.00 DO DO

PART II TOTALS $94,837.04 $93,837.04

PART II OF THE CLAIM REPRESENTS WORK ALREADY PERFORMED BY THE RAILROAD WHICH IT IS BELIEVED SHOULD HAVE BEEN INCLUDED IN THE CONTRACT UNDER THE HEADING OF DEFERRED MAINTENANCE. PART I OF THE CLAIM CONSISTS OF CORRECTIVE AND REMEDIAL MEASURES TO BE TAKEN TO PREVENT FURTHER DAMAGE.

TO AUTHORIZE THE CORRECTIVE WORK UNDER PART I OF THE CLAIM AND TO AUTHORIZE ALLOWANCE OF ANY OR ALL OF THE WORK UNDER PART II OF THE CLAIM FOR WHICH THE RAILROAD IS SEEKING REIMBURSEMENT WOULD, IN EFFECT, REQUIRE A REFORMATION OR RENEGOTIATION OF THE RELOCATION CONTRACT, NOTWITHSTANDING THAT THE CONTRACT WAS COMPLETED UPON ACCEPTANCE OF THE RELOCATED ROAD ON SEPTEMBER 28, 1951. THIS ACCEPTANCE RECITES THAT, UPON COMPLETION OF THE RELOCATED RAILROAD, A DETAILED JOINT INSPECTION WAS MADE FOR THE PURPOSE OF DETERMINING WHETHER THE RELOCATED LINE HAD BEEN COMPLETED IN ACCORDANCE WITH THE PLANS AND SPECIFICATIONS; THAT IT HAD BEEN DETERMINED THAT THE WORK HAD BEEN COMPLETED BY THE GOVERNMENT IN A SATISFACTORY MANNER; AND THAT, THEREFORE, THE RELOCATED LINE WAS OFFICIALLY ACCEPTED BY THE RAILROAD FOR MAINTENANCE AND OPERATION. WHILE IT MAY BE, AS THE RECORD INDICATES, THAT THE WRITTEN ACCEPTANCE WAS EXECUTED BY THE COMPANY UNDER THE IMPRESSION THAT ITS CLAIM FOR INCREASED MAINTENANCE COSTS WOULD BE ADJUSTED UNDER SECTION 9 OF THE FLOOD CONTROL ACT OF 1946, ANY REPRESENTATION TO THAT EFFECT BY ANY OTHER OFFICIAL THAN THE CHIEF OF ENGINEERS, THE ONLY OFFICIAL AUTHORIZED BY SECTION 9 TO GRANT RELIEF UNDER THIS STATUTORY PROVISION, WAS CLEARLY UNAUTHORIZED AND NOT BINDING UPON THE GOVERNMENT. 18 COMP. GEN. 568. THE COMPANY, IN ANY EVENT, WAS REQUIRED TO ACCEPT THE COMPLETED RELOCATED LINE IF THE CONSTRUCTION MET THE REQUIREMENTS OF THE CONTRACT, WHICH REQUIREMENTS WERE SATISFIED WHEN THE COMPANY IN THE FORMAL ACCEPTANCE OF THE RELOCATED LINE ACKNOWLEDGED THAT IT HAD BEEN COMPLETED BY THE GOVERNMENT IN A SATISFACTORY AND ACCEPTABLE MANNER. HENCE, IT CANNOT BE SAID THAT THE COMPANY, BY ACCEPTING SAME, DID ANY MORE THAN IT WAS OBLIGATED TO DO.

AS TO THE CLAIM FOR $30,666.32 UNDER ITEM (1) PART II OF THE CLAIM FOR EXTRAORDINARY MAINTENANCE OF THE RELOCATED TRACKS, THE RECORD CLEARLY INDICATES THAT THE COST OF OPERATING THE RAILROAD HAS BEEN INCREASED CONSIDERABLY BECAUSE OF RELOCATION OF THE LINE. THE WORK HOWEVER, FOR WHICH REIMBURSEMENT IS CLAIMED, WAS NOT PROVIDED FOR IN THE CONTRACT. ARTICLE II (C) PROVIDED FOR A LUMP-SUM PAYMENT OF $3,768 AS THE AMOUNT AGREED UPON BY THE PARTIES AS REPRESENTING THE EXCESS OPERATION AND MAINTENANCE COSTS FOR THE RELOCATED LINE. SINCE THIS AMOUNT HAS BEEN PAID TO, AND ACCEPTED BY, THE RAILROAD THERE IS NO LEGAL BASIS FOR ANY ADDITIONAL PAYMENT OF THIS ITEM. 34 COMP. GEN. 212.

WITH RESPECT TO ITEMS (2) AND (3), PART II OF THE CLAIM FOR $29,409.50 FOR REPLACEMENT OF THE PASSING AND SIDE TRACKS, NO PROVISION WAS MADE IN THE CONTRACT FOR THE CONSTRUCTION OF THESE TRACKS. THE RECORD INDICATES THAT THESE TRACKS WERE CONSTRUED BY THE COMPANY AT ITS OWN EXPENSE SHORTLY AFTER THE RELOCATED LINE WAS DELIVERED TO THE RAILROAD ON AUGUST 4, 1947, AND AFTER THE COMPANY WAS NOTIFIED THAT THE SITE WHERE IT PROPOSED TO CONSTRUCT SAME WAS IN AN AREA A PORTION OF WHICH WAS LOCATED ON LOOSELY DUMPED SPOIL MATERIAL AND THAT APPRECIABLE SETTLEMENT MIGHT BE EXPECTED. NO SUCH TRACKS HAD EXISTED ON THE REPLACED PORTION OF THE LINE PRIOR TO THE RELOCATION. IN SUCH CIRCUMSTANCES WE SEE NO JUSTIFICATION FOR ANY ALLOWANCE FOR EITHER ITEM (2) OR THE COMPANY'S CLAIM FOR $8,482.22, IN ITEM (3) PART II, FOR THE LOSS OF THE SIDE TRACKS.

AS TO THE CLAIM FOR $6,292 FOR RAIL ANCHORS UNDER ITEM (4) PART II, IT IS UNDERSTOOD THE COMPANY CONTENDS THAT ANCHORS SHOULD HAVE BEEN PROVIDED BECAUSE OF THE STEEP GRADE OF THE RELOCATED LINE, KINKS IN THE RELAY RAIL, AND INCREASED CURVATURE. IN THE ABSENCE OF A PROVISION FOR INSTALLATION OF RAIL ANCHORS IN THE SPECIFICATIONS OF THE RELOCATION CONTRACT WE FAIL TO SEE ANY LEGAL JUSTIFICATION FOR SUCH A CLAIM, PARTICULARLY IN VIEW OF THE GENERAL RELEASE IN ARTICLE V OF THE CONTRACT WHEREIN THE COMPANY, IN CONSIDERATION OF THE PAYMENTS AND THE FULFILLMENT OF THE MUTUAL COVENANTS, RELEASED AND DISCHARGED THE GOVERNMENT FROM ANY AND ALL CLAIMS OR DEMANDS FOR DAMAGES OR CAUSES OF ACTION OF ANY KIND TO THE COMPANY'S PROPERTY CAUSED BY THE CONSTRUCTION, OPERATION OR MAINTENANCE OF THE DAM OR RESERVOIR OR FROM ANY AND ALL CLAIMS AND OR CAUSES OF ACTION ARISING OUT OF THE CHANGES AND RELOCATION OF THE RAILROAD FACILITIES AS PROVIDED IN THE CONTRACT. WITH RESPECT TO ITEM (6), PART II, WHEREIN THE COMPANY CLAIMS $17,392 FOR BETTERMENTS CLAIMED BY THE GOVERNMENT, AS EXPLAINED ABOVE, BOTH THE SUM OF $21,160 AS THE INCREASED OPERATING AND MAINTENANCE COSTS, AND THE CREDIT OF $17,392 AS SAVINGS IN REPLACEMENT OF BALLAST, STRUCTURES, AND RIGHT-OF-WAY FENCES, WERE EXPRESSLY AGREED UPON BY THE PARTIES AND EMBODIED IN THE CONTRACT, AND THE RAILROAD HAS PRESENTED NO ADEQUATE GROUND FOR AVOIDING IT. SINCE THE AGREED AMOUNT HAS BEEN PAID AND ACCEPTED BY THE COMPANY AS THE EXCESS OPERATION AND MAINTENANCE COSTS THERE IS NO LEGAL BASIS FOR ALLOWANCE OF ANY ADDITIONAL AMOUNT. FRAZIER- DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 C.CLS. 120.

EVEN IF THE COMPANY'S CLAIM WAS OTHERWISE PROPER FOR ALLOWANCE, THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061, 31 U.S.C. 71A, WITH CERTAIN EXCEPTIONS NOT HERE MATERIAL, BARS CLAIMS COGNIZABLE BY THE GENERAL ACCOUNTING OFFICE IF NOT RECEIVED WITHIN 10 FULL YEARS AFTER THE DATE SUCH CLAIM FIRST ACCRUED. SINCE THE RECORD SHOWS THAT SOME OF THE WORK FOR WHICH REIMBURSEMENT IS NOW CLAIMED WAS PERFORMED MORE THAN 10 YEARS BEFORE THE CLAIM WAS RECEIVED IN THIS OFFICE (JUNE 8, 1959), REIMBURSEMENT THEREFOR WOULD BE FOREVER BARRED.

IN VIEW OF THE FOREGOING WE FIND NO LEGAL BASIS FOR ALLOWANCE OF ANY PART OF THE CLAIM, UNLESS IT MAY BE BROUGHT UNDER THE PROVISIONS OF SECTION 9 OF THE FLOOD CONTROL ACT, AND JURISDICTION THEREUNDER IS VESTED EXCLUSIVELY IN THE CHIEF OF ENGINEERS.