B-143002, JUL. 11, 1960

B-143002: Jul 11, 1960

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SPAIN: REFERENCE IS MADE TO YOUR LETTER OF MAY 9. IT APPEARS TO BE YOUR POSITION THAT AN INCREASE IN THE CONTRACT PRICE IS JUSTIFIED UNDER THE PROVISIONS OF PARAGRAPH 3 OF STANDARD FORM 32. YOU STATE THAT THE GOVERNMENT TOOK NO ACTION TO STOP THE NON UNION CONTRACTOR FROM PERFORMING EVEN THOUGH THE WORK OF UNION CONTRACTORS WAS PRECLUDED BY THE STRIKE UNTIL HE COMPLETED HIS WORK. THE EMPLOYMENT OF NON-UNION LABOR BY A CONTRACTOR IS NOT A LEGAL JUSTIFICATION FOR TERMINATING THE CONTRACTOR'S RIGHT TO PROCEED. THERE ARE INCLUDED IN GOVERNMENT CONSTRUCTION CONTRACTS LABOR STANDARDS PROVISIONS REQUIRING PAYMENT OF MINIMUM WAGES PRESCRIBED BY THE SECRETARY OF LABOR AND OF OVERTIME PAY FOR WORK IN EXCESS OF EIGHT HOURS A DAY.

B-143002, JUL. 11, 1960

TO MRS. J. B. SPAIN:

REFERENCE IS MADE TO YOUR LETTER OF MAY 9, 1960, AND SUBSEQUENT CONFERENCE WITH YOUR LOCAL REPRESENTATIVE, CONCERNING YOUR REQUEST FOR RECONSIDERATION OF SETTLEMENT DATED APRIL 27, 1960, REPRESENTING COSTS INCURRED AS A RESULT OF YOUR EMPLOYEES' REFUSAL TO CROSS A UNION PICKET LINE SET UP IN PROTEST OF ANOTHER CONTRACTOR'S USE OF NON-UNION LABOR.

IT APPEARS TO BE YOUR POSITION THAT AN INCREASE IN THE CONTRACT PRICE IS JUSTIFIED UNDER THE PROVISIONS OF PARAGRAPH 3 OF STANDARD FORM 32. YOU STATE THAT THE GOVERNMENT TOOK NO ACTION TO STOP THE NON UNION CONTRACTOR FROM PERFORMING EVEN THOUGH THE WORK OF UNION CONTRACTORS WAS PRECLUDED BY THE STRIKE UNTIL HE COMPLETED HIS WORK, AND THAT YOU INCURRED EXTRA EXPENSES BECAUSE OF THESE CIRCUMSTANCES.

HOWEVER, THE EMPLOYMENT OF NON-UNION LABOR BY A CONTRACTOR IS NOT A LEGAL JUSTIFICATION FOR TERMINATING THE CONTRACTOR'S RIGHT TO PROCEED. THERE ARE INCLUDED IN GOVERNMENT CONSTRUCTION CONTRACTS LABOR STANDARDS PROVISIONS REQUIRING PAYMENT OF MINIMUM WAGES PRESCRIBED BY THE SECRETARY OF LABOR AND OF OVERTIME PAY FOR WORK IN EXCESS OF EIGHT HOURS A DAY, AND PROHIBITING THE REBATE OF WAGES BY EMPLOYEES. SEE DAVIS-BACON ACT, 40 U.S.C. 276A ET SEQ., EIGHT HOUR LAWS, 40 U.S.C. 321 ET SEQ., AND ANTI- KICKBACK ACT, 18 U.S.C. 874, 40 U.S.C. 276C. AS LONG AS THE CONTRACTOR IS IN COMPLIANCE WITH THESE LABOR REQUIREMENTS AND IS OTHERWISE DILIGENT IN PERFORMING ACCORDING TO THE TERMS OF THE CONTRACT, THERE IS NO PROPER LEGAL BASIS FOR TERMINATION.

FURTHER, PARAGRAPH 3 OF STANDARD FORM 32, PROVIDES THAT:

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

THIS PROVISION IS INCLUDED IN GOVERNMENT CONTRACTS ONLY FOR THE PURPOSE OF PERMITTING PAYMENT FOR EXTRA WORK AUTHORIZED BY THE CONTRACTING OFFICER OVER AND ABOVE THE ORIGINAL CONTRACT REQUIREMENTS. PERFORMANCE OF WORK ALREADY REQUIRED UNDER THE CONTRACT CANNOT BE REGARDED AS EXTRA WORK.

IT IS WELL SETTLED THAT EVEN THOUGH PERFORMANCE IS RENDERED MORE BURDENSOME OR EXPENSIVE BY SUPERVENING EVENTS NOT ORIGINALLY FORESEEN BY THE CONTRACTOR, IT IS NOT SUFFICIENT TO PERMIT ADJUSTMENT IN THE CONTRACT PRICE. SEE CHOUTEAU V. UNITED STATES, 95 U.S. 61, 68; DAY V. UNITED STATES, 245 U.S. 159, 161; AND 22 COMP. GEN. 260, 261. AND THE OBLIGATIONS OF THE UNITED STATES AS FIXED BY CONTRACT CANNOT BE CHANGED BY A SUBSEQUENT AMENDMENT UNLESS A COMPENSATING BENEFIT OR VALUABLE CONSIDERATION PASSES TO THE GOVERNMENT. SEE J. J. PREIS AND CO. V. UNITED STATES, 58 C.CLS. 81 87; AND VULCANITE CEMENT CO. V. UNITED STATES, 74 C.CLS. 692, 705. ..END :