B-149860, OCT. 12, 1962

B-149860: Oct 12, 1962

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YOU REPORT THAT THE PARTIES INADVERTENTLY OMITTED FROM THE WRITTEN CONTRACT A PROVISION MUTUALLY INTENDED TO BE INSERTED THEREIN TO THE EFFECT THAT BIDS WERE TO BE INVITED AND SUBMITTED ON THE BASIS OF 1:1:4 DESIGN MIX FOR INTRUSION GROUT (ONE PART "PORTLAND CEMENT. UNDER THESE CIRCUMSTANCES THIS OFFICE IS NOT REQUIRED TO OBJECT TO AN ADDENDUM TO THE CONTRACT TO SHOW THE PROVISION OMITTED FROM THE ORIGINAL CONTRACT DUR TO MUTUAL MISTAKE. AFTER THE CONTRACT WAS EXECUTED THE CONTRACTING OFFICER DETERMINED. WAS CONTAINED IN THE GROUT. PAYMENT WAS ERRONEOUSLY LEFT INDEPENDENT OF THE GROUT'S QUALITY. IT IS CLEAR THAT THE PARTIES INTENDED THAT THE PROPORTIONS OF THE GROUT WOULD BE 1:1:4. IT WAS MUTUAL ERROR NOT ONLY TO HAVE OMITTED THE CLAUSE ESTABLISHING THE DESIGN MIX ORIGINALLY INTENDED AT THE TIME OF CONTRACTING.

B-149860, OCT. 12, 1962

TO THE SECRETARY OF THE ARMY:

A LETTER DATED SEPTEMBER 5, 1962, FROM THE CHIEF, PROCUREMENT DIVISION, OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS), SUBMITS FOR OUR CONSIDERATION A REQUEST BY THE CHICAGO BRIDGE AND IRON COMPANY, FOR REFORMATION OF CONTRACT DA-32-015-CIVENG 59-116 FOR CONSTRUCTION OF PENSTOCKS, TUNNEL LINER AND SURGE TANKS, FORT PECK DAM AND RESERVOIR, FORT PECK, MONTANA. ITEM 6 OF THE SUBJECT CONTRACT CALLED FOR THE USE OF AN ESTIMATED QUANTITY OF "PORTLAND CEMENT," A COMPONENT PART OF THE INTRUSION GROUT WHICH WOULD BE USED FOR THE TUNNEL LINER.

YOU REPORT THAT THE PARTIES INADVERTENTLY OMITTED FROM THE WRITTEN CONTRACT A PROVISION MUTUALLY INTENDED TO BE INSERTED THEREIN TO THE EFFECT THAT BIDS WERE TO BE INVITED AND SUBMITTED ON THE BASIS OF 1:1:4 DESIGN MIX FOR INTRUSION GROUT (ONE PART "PORTLAND CEMENT," ONE PART MINERAL FILL, FOUR PARTS SAND). UNDER THESE CIRCUMSTANCES THIS OFFICE IS NOT REQUIRED TO OBJECT TO AN ADDENDUM TO THE CONTRACT TO SHOW THE PROVISION OMITTED FROM THE ORIGINAL CONTRACT DUR TO MUTUAL MISTAKE. COMP. GEN. 782, 785.

AFTER THE CONTRACT WAS EXECUTED THE CONTRACTING OFFICER DETERMINED, PURSUANT TO SECTIONS 3B-02 AND 04A OF THE SPECIFICATIONS, THAT THE REQUIREMENTS OF THE WORK NECESSITATED A MORE EXPENSIVE RATIO OF 2:1:4. ORDINARILY SUCH A CHANGE FROM THE CONTRACTUAL INTENT OF THE PARTIES WOULD INCREASE COMPENSATION DUE BECAUSE OF THE INCREASED AMOUNT OF "PORTLAND CEMENT," AND THE CONTRACT WOULD BE EQUITABLY ADJUSTED UNDER THE CHANGES CLAUSE OF THE GENERAL PROVISIONS. HOWEVER, BOTH PARTIES TO THE CONTRACT, AS WELL AS THE SUBCONTRACTOR, INTERPRETED SECTION 3B-10 OF THE SPECIFICATIONS, TITLED "MEASUREMENT AND PAYMENT," TO REQUIRE A COMPOSITE PAYMENT FOR BOTH CEMENT AND MINERAL FILL, THE ONLY "PAY ITEMS" OF THE ITEMS MAKING UP THE GROUT, REGARDLESS OF HOW MUCH OF THE MORE EXPENSIVE ELEMENT, THE CEMENT, WAS CONTAINED IN THE GROUT. CONSEQUENTLY, PAYMENT WAS ERRONEOUSLY LEFT INDEPENDENT OF THE GROUT'S QUALITY. THE INCREASE IN THE QUALITY OF BARRELS OF CEMENT AND FILL USED COULD BE PAID FOR ONLY UNDER SECTION 3 OF THE SPECIAL CONDITIONS OF THE CONTRACT, WHICH LEGALLY SUPERSEDES THE STANDARD CHANGES CLAUSE OF THE GENERAL PROVISIONS. SEE 19 COMP. GEN. 440 AND CASES CITED THEREIN. THE SAID SECTION 3 PERMITS COMPENSATION ONLY FOR THAT PART OF THE QUANTITY ACTUALLY SUPPLIED WHICH EXCEEDS THE ESTIMATED QUANTITY BY 115 PERCENT.

WE AGREE WITH THE CONTRACTING OFFICER THAT THE WRITTEN CONTRACT DID NOT CONTAIN THE FULL AGREEMENT OF THE PARTIES. IT IS CLEAR THAT THE PARTIES INTENDED THAT THE PROPORTIONS OF THE GROUT WOULD BE 1:1:4, AND THAT ANY NECESSARY BUT UNANTICIPATED INCREASE IN THE PERCENT OF CEMENT USED IN THE GROUT WOULD BE PAID FOR. THUS, IT WAS MUTUAL ERROR NOT ONLY TO HAVE OMITTED THE CLAUSE ESTABLISHING THE DESIGN MIX ORIGINALLY INTENDED AT THE TIME OF CONTRACTING, BUT ALSO TO HAVE FAILED TO PROVIDE IN THE "MEASUREMENT AND PAYMENT" CLAUSE THAT THE CONTRACTOR WOULD BE COMPENSATED FOR ANY UNANTICIPATED IMPROVEMENT IN THE QUALITY OF THE GROUT. ACCORDINGLY, THE CONTRACT MAY BE REFORMED AND PAYMENT MADE AS RECOMMENDED BY THE DEPUTY DIVISION ENGINEER, APPLYING 19.52 PERCENT MARKUP FOR PROFIT AND OVERHEAD. IT SHOULD BE NOTED THAT THE REFORMATION IN EFFECT NULLIFIES THE EFFICACY OF THE INITIAL QUANTITY ESTIMATE OF "PORTLAND CEMENT," WHICH OTHERWISE COULD HAVE BEEN THE BASIS FOR A CLAIM UNDER SECTION 3 OF THE SPECIAL CONDITIONS, PERMITTING ..END :