B-145927, JUL. 19, 1961

B-145927: Jul 19, 1961

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THE CONTRACTING OFFICER REPORTED THAT THE ORIGINAL CONTRACT WAS AWARDED TO PAUL HARDEMAN. WAS NEGOTIATED SIMULTANEOUSLY WITH CONTRACT CHANGES FOR SIMILAR MODIFICATIONS AT SIX OTHER AIR FORCE BASES. IT WAS AGREED THAT THE CHANGES RESULTING FROM THE MODIFICATIONS WOULD REQUIRE FIELD INSTALLATION CREWS TO WORK 10 HOURS A DAY. SINCE THE CONTRACTOR IS A UNION CONTRACTOR. IT WAS FURTHER AGREED THAT THE UNION OVERTIME RATES PREVAILING IN EACH AREA WOULD BE USED AS AN EQUITABLE BASIS FOR ADJUSTMENT FOR THE OVERTIME WORK REQUIRED. THE OVERTIME ADJUSTMENT FOR TWO BASES WAS COMPUTED AT A DOUBLE TIME RATE FOR ALL HOURS WORKED IN EXCESS OF 8 HOURS PER DAY OR 40 HOURS PER WEEK. WERE BASED ON A TIME AND ONE- HALF RATE.

B-145927, JUL. 19, 1961

TO THE SECRETARY OF THE ARMY:

WE REFER TO A LETTER OF MAY 19, 1961, ON BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS) REGARDING THE RECOMMENDED REFORMATION OF MODIFICATION NO. 10 TO CONTRACT NO. DA-41 443- ENG-5763 TO CONFORM TO THE INTENTION OF THE PARTIES TO THE CONTRACT.

THE CONTRACTING OFFICER REPORTED THAT THE ORIGINAL CONTRACT WAS AWARDED TO PAUL HARDEMAN, INC., ON FEBRUARY 29, 1960, FOR PROPELLANT LOADING SYSTEM PREFABS AND INTERCONNECTING PIPING FOR BALLISTIC MISSILE OPERATIONAL AND TEST FACILITIES AT DYESS AIR FORCE BASE, TEXAS. MODIFICATION NO. 10, CONSTITUTING SHOP AND FIELD INSTALLATION CHANGES, WAS NEGOTIATED SIMULTANEOUSLY WITH CONTRACT CHANGES FOR SIMILAR MODIFICATIONS AT SIX OTHER AIR FORCE BASES. IT WAS AGREED THAT THE CHANGES RESULTING FROM THE MODIFICATIONS WOULD REQUIRE FIELD INSTALLATION CREWS TO WORK 10 HOURS A DAY, 6 DAYS A WEEK FOR 11 WEEKS TO MAINTAIN THE PLANNED INSTALLATION SCHEDULE. SINCE THE CONTRACTOR IS A UNION CONTRACTOR, IT WAS FURTHER AGREED THAT THE UNION OVERTIME RATES PREVAILING IN EACH AREA WOULD BE USED AS AN EQUITABLE BASIS FOR ADJUSTMENT FOR THE OVERTIME WORK REQUIRED. IN REDUCING THE AGREEMENT TO WRITING, THE OVERTIME ADJUSTMENT FOR TWO BASES WAS COMPUTED AT A DOUBLE TIME RATE FOR ALL HOURS WORKED IN EXCESS OF 8 HOURS PER DAY OR 40 HOURS PER WEEK, WHILE THE COMPUTATIONS FOR THE REMAINING FIVE BASES, INCLUDING DYESS, WERE BASED ON A TIME AND ONE- HALF RATE. THE INFORMATION REGARDING THE OVERTIME RATE AT DYESS AIR FORCE BASE UPON WHICH THE PRICE ADJUSTMENT WAS BASED WAS ERRONEOUS, SINCE THE AREA LABOR AGREEMENT FOR THAT AREA PROVIDED FOR A PREMIUM RATE OF DOUBLE TIME. THE TOTAL INCREASE IN THE CONTRACT AMOUNT SET FORTH IN MODIFICATION NO. 10 TO CONTRACT NO. DA-41-443-ENG-5763 WAS $440,101.44, WHICH INCLUDED $97,738.80 PREMIUM COST COMPUTED AT THE TIME AND ONE HALF RATE. THE CORRECT COMPUTATION AT THE DOUBLE TIME RATE WOULD INCREASE THE PREMIUM COST BY $51,604.80. THE CHIEF OF ENGINEERS RECOMMENDED THAT MODIFICATION NO. 10 BE REFORMED AND INCREASED BY $51,604.80 TO EXPRESS THE INTENTION OF THE PARTIES, SINCE THE MISTAKE IN USING THE TIME AND ONE-HALF RATE WAS MUTUAL AND DID NOT EXPRESS THE TRUE INTENTION OF THE PARTIES WHICH WAS TO USE THE PREVAILING UNION OVERTIME RATE.

IN OUR OPINION, THE RECOMMENDED CONTRACT MODIFICATION IS JUSTIFIED. WRITTEN AGREEMENT NOT CONFORMING TO THE INTENTION OF THE PARTIES MAY BE REFORMED TO BRING IT INTO ACCORD WITH THE ACTUAL INTENTION. OUR OFFICE HAS APPROVED REFORMATION WHEN, BY REASON OF MUTUAL MISTAKE, A CONTRACT AS REDUCED TO WRITING DID NOT REFLECT THE ACTUAL AGREEMENT, PROVIDED IT COULD BE DETERMINED WHAT THE ACTUAL TERMS OF THE AGREEMENT WERE. SEE 36 COMP. GEN. 507; 30 ID. 220; 26 ID. 899; 20 ID. 533 AND CASES CITED THEREIN. THIS CASE, THERE IS NO QUESTION BUT THAT MODIFICATION NO. 10 AS EXECUTED DID NOT EXPRESS THE INTENTION OF THE PARTIES REGARDING OVERTIME. THERE IS NO PROBLEM IN DETERMINING THE ACTUAL AGREEMENT, WHICH WAS TO USE THE PREVAILING UNION RATE FOR OVERTIME. THE CONTRACT MODIFICATION NO. 10 MAY THEREFORE BE REFORMED TO CONFORM TO THE ACTUAL AGREEMENT AND TO INCREASE THE CONTRACT AMOUNT BY AN ADDITIONAL AMOUNT OF $51,604.80. A COPY OF THIS DECISION SHOULD BE ATTACHED TO THE AMENDATORY AGREEMENT OR REFERRED TO THEREIN.