B-150619, AUG. 17, 1965

B-150619: Aug 17, 1965

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GILDEA: REFERENCE IS MADE TO YOUR LETTER OF APRIL 30. THE TIMBER SALE APPRAISAL REPORT WHICH WAS USED IN CONNECTION WITH THE ADVERTISEMENT FOR BIDS AND AWARD OF THE CONTRACT TO MR. THIS INFORMATION WAS AVAILABLE TO PROSPECTIVE PURCHASERS ON REQUEST. EXAMINATION OF THE APPRAISAL REPORT AND THE CONTRACT PROVISIONS FOR INCREASING OR DECREASING STUMPAGE RATES DURING CUTTING AND LOGGING OPERATIONS INDICATED THAT IT WAS INTENDED TO ALLOW THE PURCHASER CREDIT IN THE NET AMOUNT OF $39. THE GROSS COST ESTIMATE FOR THE PARTICULAR ROAD WAS $50. 668 BUT THAT AMOUNT WAS ADJUSTED TO $39. PROSPECTIVE PURCHASERS WERE ADVISED IN THE TIMBER SALE PROSPECTUS THAT THE PURCHASER WOULD BE REQUIRED TO CONSTRUCT APPROXIMATELY 1.4 MILES OF SL -12 STANDARD ROAD (B-300 AND NO. 149B) AND 0.1 MILE OF TEMPORARY SPUR ROAD IN ORDER TO OPERATE THE SALE.

B-150619, AUG. 17, 1965

TO MR. LARRY O. GILDEA:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 30, 1965, WITH ENCLOSURES, AND TO PREVIOUS CORRESPONDENCE CONCERNING THE ORIGINAL AND AMENDED CLAIMS OF MR. GEORGE BALSIGER, BLUE RIVER, OREGON, IN THE RESPECTIVE AMOUNTS OF $29,355.28 AND $147,436.58, FOR RECOVERY OF ALLEGEDLY EXCESS COSTS INCURRED IN THE CONSTRUCTION OF A PRINCIPAL TRUCK ROAD UNDER DEPARTMENT OF AGRICULTURE, FOREST SERVICE, TIMBER SALE CONTRACT NO. 12-11-0186; 43133, DATED AUGUST 16, 1961.

THE TIMBER SALE APPRAISAL REPORT WHICH WAS USED IN CONNECTION WITH THE ADVERTISEMENT FOR BIDS AND AWARD OF THE CONTRACT TO MR. BALSIGER CONTAINED DETAILED ESTIMATES OF SELLING PRICES OF LUMBER, COST OF LOGGING AND MANUFACTURING, AND ALLOWANCES FOR PROFIT AND LOSS TO DETERMINE THE APPRAISED STUMPAGE RATES AND TO ESTABLISH A MINIMUM ACCEPTABLE BID. THE ESTIMATED LOGGING COST INCLUDED ESTIMATED QUANTITIES AND COSTS OF ROAD CONSTRUCTION AND, ALTHOUGH THE TIMBER SALE ADVERTISEMENT, PROSPECTUS AND CONTRACT DID NOT INCLUDE DETAILED QUANTITIES AND COSTS, THIS INFORMATION WAS AVAILABLE TO PROSPECTIVE PURCHASERS ON REQUEST. EXAMINATION OF THE APPRAISAL REPORT AND THE CONTRACT PROVISIONS FOR INCREASING OR DECREASING STUMPAGE RATES DURING CUTTING AND LOGGING OPERATIONS INDICATED THAT IT WAS INTENDED TO ALLOW THE PURCHASER CREDIT IN THE NET AMOUNT OF $39,639 TO COVER THE ESTIMATED COST OF A 1.4-MILE PRINCIPAL TRUCK ROAD, NOW KNOWN AS THE FLUNKY CREEK ROAD, WHICH WOULD BE REQUIRED FOR REMOVAL OF TIMBER FROM THE SALE AREA (82 ACRES, MORE OR LESS, WITHIN SECTIONS 17 AND 20 T. 15S, R.5E, UNSURVEYED, IN THE WILLIAMETTE NATIONAL FOREST). THE GROSS COST ESTIMATE FOR THE PARTICULAR ROAD WAS $50,668 BUT THAT AMOUNT WAS ADJUSTED TO $39,639 ON ACCOUNT OF PREVIOUS ALLOWANCES IN THE APPRAISAL REPORT FOR CERTAIN RELATED OPERATIONS AND THE PRACTICE OF DEDUCTING 15 PERCENT IN SUCH CASES FOR RISK AND PROFIT.

PROSPECTIVE PURCHASERS WERE ADVISED IN THE TIMBER SALE PROSPECTUS THAT THE PURCHASER WOULD BE REQUIRED TO CONSTRUCT APPROXIMATELY 1.4 MILES OF SL -12 STANDARD ROAD (B-300 AND NO. 149B) AND 0.1 MILE OF TEMPORARY SPUR ROAD IN ORDER TO OPERATE THE SALE; THAT THE SL-12 STANDARD ROAD WAS TO BE SURVEYED AND DESIGNED BY THE PURCHASER; THAT THE PLAN AND PROFILE WAS TO BE APPROVED BY THE FOREST SERVICE BEFORE COMMENCEMENT OF CONSTRUCTION; AND THAT THE PURCHASER WAS TO PERFORM THE CONSTRUCTION STAKING. THE CONTRACT CONTAINED A GENERAL SPECIFICATION FOR THE SL-12 STANDARD ROAD AND IT WAS LISTED IN THE BLOCK UNDER SECTION 10 B. OF THE CONTRACT WHICH STATES: "THE PURCHASER SHALL CONSTRUCT THE ROADS LISTED IN THE TABULATION BELOW IN ACCORDANCE WITH THE APPROVED PLANS, STANDARDS AND SPECIFICATIONS ATTACHED HERETO AND MADE A PART HEREOF.' WITH RESPECT, GENERALLY, TO THE RISKS TO BE TAKEN BY THE PURCHASER REGARDING THE INFORMATION FURNISHED BY THE FOREST SERVICE, THE PROSPECTUS STATED IN PART AS FOLLOWS:

"* * * NO GUARANTEE IS MADE OF ESTIMATED VOLUMES, TIMBER QUALITY OR OTHER COSTS MENTIONED HEREIN. EACH PROSPECTIVE PURCHASER MUST DETERMINE FOR HIMSELF WHETHER OR NOT HE WISHES TO BUY THE TIMBER AT OR ABOVE THE APPRAISED PRICES. BY THE SUBMISSION OF A BID, THE PROSPECTIVE PURCHASER ASSUMES FULL RESPONSIBILITY FOR THE SUCCESS OF THE OPERATION UNDER THE BID PRICES AND OTHER CONDITIONS OF THE CONTRACT IN THE EVENT HE IS AWARDED THE SALE. * * *"

OUR OFFICE WAS ADVISED IN JANUARY 1963 THAT MR. BALSIGER WAS CLAIMING AN ADJUSTMENT IN THE NET ROAD COST ALLOWANCE OF $39,639 IN THE COMPUTATION OF THE SUMS PAYABLE UNDER THE CONTRACT FOR THE TIMBER SOLD. FOLLOWING A DENIAL OF THAT CLAIM BY THE CHIEF, FOREST SERVICE, WE RECEIVED A LETTER DATED SEPTEMBER 10, 1963, FROM YOUR ASSOCIATE, MR. KEITH D. SKELTON, SUBMITTING A PETITION SIGNED BY MR. BALSIGER AND ADDRESSED TO OUR OFFICE, WHEREIN MR. BALSIGER REQUESTED RELIEF IN THE AMOUNT OF $29,355.28 ON THE STATED GROUND THAT MUTUAL MISTAKES OF FACT HAD OCCURRED IN THE QUANTITY ESTIMATES FOR WORK AND MATERIAL NECESSARY FOR THE CONSTRUCTION OF THE 1.4- MILE ROAD. WE WITHHELD ACTION ON THE CLAIM SINCE THERE WAS PENDING BEFORE THE DEPARTMENT OF AGRICULTURE AN APPEAL BY MR. BALSIGER FROM THE DECISION OF THE CHIEF, FOREST SERVICE. THE SECRETARY OF AGRICULTURE DENIED THE APPEAL IN A DECISION RENDERED ON DECEMBER 16, 1963, BASED UPON THE FACT THAT THE CONTRACT CONTAINS NO PROVISION FOR ALLOWANCE OF A GREATER RECOVERY THAN THE ESTIMATED ROAD COST, AND ON THE BASIS THAT ADMINISTRATIVE OFFICERS OF THE GOVERNMENT HAVE NO AUTHORITY TO MODIFY CONTRACTS UNDER WHICH THE UNITED STATES HAS A VESTED INTEREST EXCEPT WHERE THE GOVERNMENT OBTAINS A COMPENSATING BENEFIT AS CONSIDERATION FOR THE MODIFICATION OF A CONTRACT.

WE HAD NOT BEEN FURNISHED A COPY OF THE SECRETARY'S DECISION BEFORE RECEIPT OF MR. SKELTON'S REQUEST BY LETTER DATED JANUARY 7, 1964, FOR LEAVE TO SUBMIT A SUPPLEMENTAL BRIEF IN SUPPORT OF MR. BALSIGER'S CONTENTION THAT THE CONTRACT WAS ENTERED INTO UNDER A MUTUAL MISTAKE OF MATERIAL FACTS. YOU SUBSEQUENTLY REQUESTED AND THERE WAS GRANTED AN OPPORTUNITY TO SUBMIT AN AMENDED STATEMENT OF CLAIM WHICH WOULD SUPERSEDE THE CLAIM FOR $29,355.28. THE AMENDED STATEMENT OF CLAIM, FOR A TOTAL AMOUNT OF $147,436.58, WAS SUBMITTED WITH A LETTER DATED MARCH 2, 1964.

THE AMENDED CLAIM DOES NOT ALLOW CREDIT FOR MOST OF THE SUM OF $43,117, REPRESENTING THE TOTAL OF THE AMOUNTS SHOWN IN MR. BALSIGER'S ORIGINAL CLAIM AS COST ESTIMATES MADE BY THE FOREST SERVICE FOR CLEARING, GRUBBING, EXCAVATION, CRUSHED ROCK, DRAINAGE CULVERTS AND CULVERT HEADWALLS. THE COMPUTATION OF THE AMENDED CLAIM ALSO FAILS TO ALLOW CREDIT OF 15 PERCENT AS PROFIT AND RISK ON THE ALLEGEDLY ADDITIONAL QUANTITIES OF WORK AND MATERIALS, OR TO INCLUDE THE SUM OF $6,516 REFERRED TO AT PAGE 13 OF THE STATEMENT OF CLAIM AS COVERING THE PLACING OF 4,344 CUBIC YARDS OF ROCK FOR SUBGRADE REINFORCEMENT AND FOR RIPRAP. AS AMENDED ON MARCH 2, 1964, MR. BALSIGER'S CLAIM APPEARS TO HAVE BEEN INTENDED TO AMOUNT TO THE SUM OF $126,712.58, COMPUTED AS FOLLOWS:

CHART ROCK EXCAVATION, 65,869 CU. YDS AT $1.80 $118,564.20 COMMON EXCAVATION, 25,006 CU. YDS AT $0.48 12,002.88 SLIDE EXCAVATION, 30,000 CU. YDS AT $0.48 14,400.00 SUBGRADE REINFORCING AND RIPRAP

6,516.00INCREASES IN QUANTITIES OF OTHER WORK AND MATERIALS

CULVERT $1,802.00

CLEARING 388.00

GRUBBING159.50

CULVERT HEADWALLS 120.00 2,469.50

TOTAL $153,952.58 LESS: FOREST SERVICE ESTIMATE FOR EXCAVATION,

UNCLASSIFIED, 56,750 CU. YDS AT $0.48 27,240.00

NET TOTAL CLAIM $126,712.58

THE DIFFERENCE BETWEEN MR. BALSIGER'S ORIGINAL CLAIM AND HIS AMENDED CLAIM CONSISTS PRIMARILY OF AN ADDITIONAL CHARGE OF $1.32 PER CUBIC YARD ($1.80 LESS $0.48) FOR EXCAVATION OF APPROXIMATELY $65,869 CUBIC YARDS OF THE MATERIAL INCLUDED IN HIS APPARENTLY NEW TOTAL ESTIMATE OF 120,875 CUBIC YARDS OF EXCAVATION WORK REQUIRED IN THE CONSTRUCTION OF THE FLUNKY CREEK ROAD.

IN THE PETITION CLAIMING THE AMOUNT OF $147,436.58 IT WAS STATED THAT, BEFORE THE PETITIONER ENTERED INTO THE TIMBER SALE AGREEMENT OF AUGUST 16, 1961, HE EMPLOYED MR. RAY V. VOORHIES OF EUGENE, OREGON, IN THE CAPACITY OF A PROFESSIONAL FOREST ENGINEER, AND ONE OF HIS DUTIES WAS TO INSPECT PROPOSED GOVERNMENT TIMBER SALES, WITH SUCH INSPECTION TO INCLUDE AN EXTENSIVE CONSIDERATION OF ROAD CONSTRUCTION PROBLEMS. IT APPEARS THAT MR. VOORHIES DESIGNED THE FLUNKY CREEK ROAD AND THAT, IN CHECKING ON THE FOREST SERVICE QUANTITY ESTIMATES, MR. VOORHIES AND THE PETITIONER RELIED TO A CONSIDERABLE EXTENT UPON THE ACCURACY OF THE WILLAMETTE ESTIMATING GUIDE, DEVELOPED BY FOREST SERVICE PERSONNEL. IT WAS ALLEGED THAT IT IS THE CUSTOM AND PRACTICE OF THE FOREST SERVICE AND PRIVATE OPERATORS TO USE THE GUIDE FOR QUICK, GENERAL AND RELATIVELY EARLY ESTIMATES, RATHER THAN TO COMPLETE A ROAD DESIGN AND USING CROSS SECTION TO ESTIMATE QUANTITIES; AND THAT, BEFORE THE QUESTION IN THIS CASE AROSE, THE PETITIONER HAD NO PERSONAL KNOWLEDGE OF DEFECTS IN THE GUIDE WHICH, HOWEVER, WERE KNOWN TO THE FOREST SERVICE.

IT WAS ALSO ALLEGED THAT, AFTER COMMENCEMENT OF THE WORK, THE PETITIONER SOON BECAME AWARE OF THE FACT THAT THE FOREST SERVICE ESTIMATE OF ROAD COST WAS INADEQUATE AND DETAILED SURVEYS SHOWED THAT THE COST OF CONSTRUCTION WOULD RUN BETWEEN $75,000 AND $100,000. AT THAT POINT, IT APPEARS THAT CERTAIN ESTIMATES WERE SUBMITTED TO THE FOREST SERVICE AND THAT ITS SURVEY INDICATED THAT APPROXIMATELY 82,900 CUBIC YARDS OF UNCLASSIFIED EXCAVATION WOULD BE REQUIRED. THAT SURVEY ALSO INDICATED THAT "SOMEWHAT LESS THAN 15,600 CUBIC YARDS" OF SLIDE EXCAVATION WOULD BE REQUIRED. ALTHOUGH THE DIFFERENCE BETWEEN THE FOREST SERVICE ESTIMATE PRIOR TO AWARD OF THE CONTRACT TO THE PETITIONER AND THE REVISED QUANTITY ESTIMATES IN THE MATTER MIGHT HAVE BEEN DUE TO A FAILURE OF THE ROAD DESIGN TO TAKE ADVANTAGE OF FAVORABLE CIRCUMSTANCES INHERENT IN THE PROPOSED LOCATION OF THE ROAD, THE PETITIONER QUESTIONED THE ACCURACY OF THE ORIGINAL ESTIMATED QUANTITY FOR UNCLASSIFIED EXCAVATION AND SUBSEQUENTLY RETAINED MR. ALBERT L. HOAG, ASSOCIATE PROFESSOR OF GENERAL ENGINEERING AT THE UNIVERSITY OF WASHINGTON, TO EXAMINE AND COMMENT ON THE WILLIAMETTE ESTIMATING GUIDE. IT WAS PROFESSOR HOAG'S DETERMINATION THAT THE GUIDE IS GROSSLY INACCURATE IN CERTAIN RESPECTS.

THE ALTERNATE CONTENTIONS WERE MADE: (1) THAT THE FOREST SERVICE BY IN FACT HAD ARISEN BETWEEN THE PETITIONER AND THE UNITED STATES; (2) THAT THE FOREST SERVICE WAS CARELESS AND GROSSLY NEGLIGENT IN COMPUTING THE ROAD COST ESTIMATES, AND SUCH ESTIMATES HAVE THEREFORE RESULTED IN MISREPRESENTATIONS OF MATERIAL FACTS; (3) THAT THE MATERIAL FACTS WERE WILFULLY MISREPRESENTED; (4) THAT THE MATERIAL FACTS WERE INNOCENTLY MISREPRESENTED; AND (5) THAT BOTH PARTIES ENTERED INTO THE CONTRACT IN RELIANCE ON A MISTAKE OR MATERIAL FACTS.

THE PETITION THEN SET FORTH AN ANALYSIS OF THE ALLEGED FOREST SERVICE POSITION THAT IT WAS NOT AUTHORIZED TO MODIFY OR REFORM THE CONTRACT TO PERMIT AN ADDITIONAL ALLOWANCE FOR CONSTRUCTION OF THE FLUNKY CREEK ROAD; AND YOUR ANALYSIS OF THE CONTRACT TO THE EFFECT THAT THE GOVERNMENT HAD AGREED TO PAY FOR THE ROAD CONSTRUCTION WORK, NOTWITHSTANDING THE FACT THAT THE SUBJECT MATTER OF THE CONTRACT CONSISTED PRIMARILY OF A SALE OF TIMBER. IT WAS CONTENDED THAT IT MAKES NO DIFFERENCE WHETHER THE CONTRACT IS CONSIDERED IN ITS ENTIRETY OR TREATED AS DIVISIBLE. IT WAS ALSO CONTENDED THAT, IF FOR ONE OR MORE OF THE ABOVE REASONS THE REASONABLE COST OF THE ROAD CONSTRUCTION SUBSTANTIALLY EXCEEDED THE AMOUNT AGREED UPON AS A COST ALLOWANCE, THE PETITIONER IS ENTITLED TO EQUITABLE RELIEF FROM THE UNITED STATES.

THE PETITION CITED COURT DECISIONS AND OTHER LEGAL AUTHORITIES CONCERNING THE PROPOSITIONS THAT THE UNITED STATES AS A PARTY TO A CONTRACT IS SUBJECT TO THE SAME LIABILITIES AS ANY OTHER PERSON WOULD BE UNDER SIMILAR CIRCUMSTANCES; THAT THE LAW OF THE STATE OF OREGON AND NOT FEDERAL LAW SHOULD GOVERN ON THE ISSUE OF THE INTENT OF THE PARTIES BECAUSE THE CONTRACT WAS ENTERED INTO AND PERFORMED IN THE STATE OF OREGON; THAT UNDER EITHER FEDERAL LAW OR THE LAW OF THE STATE OF OREGON RECOVERY MAY BE HAD FOR THE REASONABLE VALUE OF THE WORK PERFORMED WHEN THE ORIGINAL TERMS OF THE CONTRACT HAVE BEEN ABANDONED; THAT IN CASES WHERE THE GOVERNMENT DISCLAIMS LIABILITY FOR MISTAKEN ESTIMATES, SUCH A DISCLAIMER CAN AFFORD THE GOVERNMENT NO PROTECTION AGAINST MISREPRESENTATION; THAT A CONTRACTOR SHOULD BE COMPENSATED FOR ADDITIONAL WORK PERFORMED AT THE REQUEST OF GOVERNMENT AGENTS FOR THE BENEFIT OF THE UNITED STATES; AND THAT EQUITABLE RELIEF IS JUSTIFIED IN EXTRAORDINARY CASES WHERE A CONTRACTOR HAS SUFFERED AN EXTREME HARDSHIP, UNFORESEEN AND NOT CONTEMPLATED BY EITHER PARTY TO THE CONTRACT.

IN A REPORT DATED JUNE 22, 1964, THE DEPARTMENT OF AGRICULTURE RECOMMENDED THAT MR. BALSIGER'S AMENDED CLAIM BE DISAPPROVED IN ITS ENTIRETY. IN VIEW OF THE EXTENSIVE NATURE OF THE REPORT AND INDICATIONS THAT YOU WISHED TO DISCUSS THE ISSUES OF THE CASE WITH OUR REPRESENTATIVES BEFORE FINAL ACTION WAS TAKEN ON THE CLAIM, A COPY OF THE REPORT WAS FURNISHED TO YOU FOR REVIEW AND COMMENT. YOU SUBMITTED A REPLY WITH ACCOMPANYING EXHIBITS AND A SUPPLEMENTAL REPORT WAS THEN REQUESTED FROM THE DEPARTMENT. THE SUPPLEMENTAL REPORT WAS SUBMITTED BY LETTER DATED DECEMBER 16, 1964, AND YOU WERE FURNISHED AN OPPORTUNITY TO COMMENT THEREON. YOUR REPLY WAS SUBMITTED IN THE LETTER DATED APRIL 30, 1965, WHICH WAS ACCOMPANIED BY A DETAILED STATEMENT FROM MR. BALSIGER, CERTAIN AFFIDAVITS AND A LETTER DATED FEBRUARY 23, 1965, FROM PROFESSOR HOAG TO MR. BALSIGER. THE DEPARTMENTAL REPORT OF JUNE 22, 1964, SET FORTH THE DEPARTMENT'S POSITION THAT THE TIMBER SALE CONTRACT SHOULD NOT BE REGARDED AS TWO CONTRACTS, ONE FOR THE SALE OF TIMBER AND ANOTHER FOR THE CONSTRUCTION OF A ROAD, BUT SIMPLY AS A CONTRACT FOR THE SALE OF TIMBER WITH THE ESTIMATED COSTS OF ACCESS ROADS BEING OPERATING COSTS ASSUMED BY THE PURCHASER, EXCEPT FOR THE ROAD COST AMORTIZATION ALLOWABLE IN THE COMPUTATION OF PRICES PAYABLE FOR THE TIMBER AT CERTAIN STAGES OF LOGGING OPERATIONS. IN SUPPORT OF THAT VIEW, THE DEPARTMENT CITED AN OPINION FURNISHED BY OUR OFFICE TO A MEMBER OF CONGRESS, B-130831, FEBRUARY 7, 1958, WHICH QUESTIONED THE PROPRIETY OF BUILDING PERMANENT ROADS IN THE NATIONAL FORESTS WITH FUNDS DERIVED FROM TIMBER SALES IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY TO USE SUCH FUNDS INSTEAD OF APPROPRIATIONS MADE FOR ROAD CONSTRUCTION PURPOSES.

THE REPORT ALSO REJECTED THE CONTENTION THAT THE FOREST SERVICE APPROVAL AND ACCEPTANCE OF THE PETITIONER'S ROAD PLAN CONSTITUTED A CONTRACT MODIFICATION OR ABANDONMENT OF THE ORIGINAL CONTRACT, SINCE THE PETITIONER DID NO MORE THAN HE WAS REQUIRED TO DO UNDER THE TERMS OF THE CONTRACT WITH RESPECT TO THE DESIGN OF THE ROAD AND THE FOREST SERVICE WAS CONCERNED ONLY WITH THE QUESTION OF WHETHER THE ROAD PLAN SUBMITTED BY THE PETITIONER MET THE MINIMUM REQUIREMENTS OF THE CONTRACT. THE OPINION WAS EXPRESSED THAT MUCH OF THE COSTS CLAIMED BY THE PETITIONER CAN BE TRACED TO THE ROAD DESIGN WHICH WAS HIS RESPONSIBILITY, AND TO THE PETITIONER'S INSISTENCE ON CONSTRUCTION OF THE ROAD AND HAULING ON IT DURING THE PERIODS OF ADVERSE WEATHER CONDITIONS. CONSTRUCTION DURING THOSE PERIODS ALSO FURTHER AGGRAVATED SLIDE CONDITIONS WHICH CAUSED ADDITIONAL ROAD CONSTRUCTION PERFORMANCE COSTS.

THE DEPARTMENT DENIED THE ALLEGATIONS MADE IN THE PETITION THAT THE WILLIAMETTE ESTIMATING GUIDE WAS DESIGNED FOR USE OF TIMBER OPERATORS, AS WELL AS FOR THE USE OF THE FOREST SERVICE; THAT THE GUIDE WAS REPRESENTED AS PROVIDING A SIMPLE, QUICK AND EASY METHOD OF ESTIMATING CONSTRUCTION QUANTITIES; THAT THE FOREST SERVICE ENCOURAGES PRIVATE OPERATORS TO USE THE GUIDE IN CHECKING FOREST SERVICE QUANTITY ESTIMATES ON ROAD CONSTRUCTION WORK; AND THAT THE GUIDE IS GROSSLY INACCURATE. IT WAS POINTED OUT THAT THE GUIDE DOES NOT PURPORT TO BE ANYTHING BUT A GUIDE, THAT IT MUST BE USED CORRECTLY AND ADJUSTED TO GROUND CONDITIONS AND THAT THE FOREST SERVICE KNOWS OF ITS LIMITATIONS IN THAT REGARD. IT WAS REPORTED THAT THE USE OF THE GUIDE BY FOREST SERVICE PERSONNEL HAS RESULTED GENERALLY IN OBTAINING ACCEPTABLE DATA AND THAT THERE IS NO SUBSTANTIAL BASIS FOR THE PETITIONER'S CONTENTIONS THAT THE METHOD OF ESTIMATING, IN ROUGH TERRAIN, PRODUCES A FIGURE WHICH IS LESS THAN ACTUAL COST, AND THAT THE FOREST SERVICE IS AWARE OF SUCH RESULT. THE DEPARTMENT RECOGNIZED THAT PROFESSOR HOAG'S ANALYSIS OF THE GUIDE IS CORRECT IN CERTAIN RESPECTS BUT MAINTAINED THAT HE HAD NOT SUPPORTED HIS CONCLUSION THAT THE GUIDE CONTAINS GROSS ERRORS.

THE DEPARTMENT DENIED THAT THERE WAS ANY MISREPRESENTATION OF MATERIAL FACTS, WILFUL OR OTHERWISE, AND STATED THAT THE ALLEGED MISREPRESENTATIONS CONCERNED ESTIMATED FIGURES WHICH CLEARLY WERE NOT GUARANTEED BY THE GOVERNMENT. IT WAS CONTENDED THAT THE CONTRACT WAS ENTERED INTO IN ENTIRE GOOD FAITH ON THE BASIS OF THE ESTIMATES OF BOTH PARTIES, WHICH IS NORMAL PROCEDURE IN SUCH CASES, AND THAT THERE IS NO QUESTION BUT THAT THE ENTIRE AGREEMENT IS BINDING ON THE PETITIONER IN VIEW OF CERTAIN DECISIONS OF THE COURT OF CLAIMS IN WHICH THE PLAINTIFFS WERE HELD NOT ENTITLED TO RELIEF WHERE THE ESTIMATED QUANTITIES IN TIMBER SALE AGREEMENTS PROVED TO BE CONSIDERABLY LESS THAN THE VOLUMES ACTUALLY EXISTING IN THE DESIGNATED SALE AREAS. THE DEPARTMENT ALSO CONTENDED THAT IT WAS NOT AUTHORIZED TO MODIFY THE CONTRACT IN THE MANNER REQUESTED AND IT APPEARS THAT SUCH CONTENTION IS SUBSTANTIALLY CORRECT. IT HAS CONSISTENTLY BEEN THE POSITION OF OUR OFFICE THAT ANY MODIFICATION OF A CONTRACT BASED UPON THE GROUND OF MUTUAL MISTAKE SHOULD NOT BE AFFECTED ADMINISTRATIVELY WITHOUT OUR APPROVAL. SEE 20 COMP. GEN. 782.

THE DEPARTMENT SUGGESTED THAT, IF CONSTRUCTION OF THE FLUNKY CREEK ROAD SHOULD BE CONSIDERED ESSENTIALLY AS THE SUBJECT MATTER OF A SEPARATE CONTRACT, THE GROSS COST ESTIMATE OF $50,668, INSTEAD OF THE NET ESTIMATE OF $39,639, SHOULD BE USED IN THE COMPUTATION OF WHATEVER AMOUNT IS CONSIDERED AS DUE ON THE PETITIONER'S AMENDED CLAIM. APPARENTLY THAT SUGGESTION WOULD BE APPLICABLE AT LEAST TO THE EXTENT OF $43,117, REPRESENTING THE TOTAL OF THE SUMS SHOWN IN THE FOREST SERVICE ESTIMATES FOR THE QUANTITIES OF MATERIAL AND EXCAVATION WORK, GRUBBING, ETC., WHICH WERE LISTED IN MR. BALSIGER'S ORIGINAL CLAIM. THAT CIRCUMSTANCE OF THE CASE WAS CONSIDERED IN THE ABOVE COMPUTATION OF $126,712.58 AS THE APPARENTLY INTENDED AMOUNT OF THE REVISED CLAIM.

SPECIFIC COMMENTS WERE FURNISHED IN THE DEPARTMENTAL REPORT RELATIVE TO SUCH QUESTIONS AS: (1) WHETHER THE NUMBER OF ACRES SET FORTH IN THE FOREST SERVICE ESTIMATE FOR GRUBBING WAS REASONABLY ACCURATE; (2) WHETHER THE INITIAL TAG LINE WAS ESTABLISHED BY COMPETENT EMPLOYEES OF THE GOVERNMENT; (3) WHETHER THE PETITIONER CAN BE CONSIDERED AS HAVING MADE AN ACCURATE CHECK OF THE QUANTITY ESTIMATES MADE BY THE FOREST SERVICE; (4) WHETHER THE PETITIONER'S CONSTRUCTION ENGINEER COULD HAVE VARIED THE GRADIENT OF THE ROAD PROFILE IN ORDER TO REDUCE THE AMOUNT OF EXCAVATION REQUIRED FOR CONSTRUCTION OF THE ROAD WHICH HE DESIGNED; (5) WHETHER THE HORIZONTAL ALIGNMENT COULD ALSO HAVE BEEN ADJUSTED TO REDUCE EXCAVATION QUANTITIES; (6) WHETHER THE ROAD WAS OTHERWISE OVERDESIGNED FROM THE STANDPOINT OF REQUIRING THE USE OF MORE 18-INCH CULVERTS THAN NECESSARY IN SOME AREAS AND THE USE OF 24-INCH CULVERTS IN CERTAIN AREAS WHERE 18-INCH CULVERTS MIGHT HAVE BEEN SATISFACTORY; AND (7) WHETHER A YARDAGE ESTIMATE FURNISHED WITH OR ASCERTAINABLE FROM A REVIEW OF THE APPROVED PLAN AND PROFILE OF THE ROAD SHOULD BE REGARDED AS SIGNIFICANT IN DETERMINING WHETHER IT IS EQUITABLE TO ALLOW AN ADDITIONAL AMOUNT FOR CONSTRUCTION OF THE FLUNKY CREEK ROAD.

THE DEPARTMENT RECOGNIZED THAT NEITHER PARTY TO THE CONTRACT COULD FORESEE THE SLIDE PROBLEM. HOWEVER, THE DEPARTMENT SUGGESTED THAT THE CLAIM FOR SLIDE REMOVAL IS EXCESSIVE AND SHOULD NOT HAVE BEEN BASED UPON A UNIT PRICE OF MORE THAN $0.25 PER CUBIC YARD, SINCE MOST OF THE SLIDE MATERIAL WAS DISPOSED OF WITHOUT HAULING EXPENSE. THE DEPARTMENT ALSO QUESTIONED MR. BALSIGER'S VOLUME ESTIMATE FOR SLIDE REMOVAL INASMUCH AS A CONSIDERABLE AMOUNT OF THE SLIDE MATERIAL APPARENTLY DID NOT REMAIN ON THE ROAD BED AFTER THE SLIDES OCCURRED, AND IT APPEARED THAT MUCH OF THE ACCUMULATION OF THE PARTICULAR MATERIAL COULD HAVE BEEN AVOIDED BY PROPER CONSTRUCTION METHODS IN BUILDING THE BACK SLOPES OF THE ROAD.

IT WAS REPORTED THAT THE PETITIONER HAD NOT INSTALLED ANY OF THE 20 CULVERT HEADWALLS MENTIONED IN THE AMENDED CLAIM AND IT THEREFORE APPEARS THAT THE ITEM OF $120 SHOULD BE ELIMINATED FROM THE REVISED CLAIM. THE PETITIONER REPORTEDLY WAS REQUIRED TO INSTALL PIT-RUN ROCKFOR SUBGRADE REINFORCEMENT BECAUSE THE PETITIONER WISHED TO HAUL LOGS BEFORE THE APPLICATION OF BASE ROCK TO THE ROAD. THE DEPARTMENT CONSIDERED THAT THIS REQUIREMENT WAS REASONABLE IN THE PARTICULAR CIRCUMSTANCES. THE DEPARTMENT DENIED THAT THE PETITIONER WAS ORDERED TO PLACE RIPRAP IN THE SITUATION MENTIONED BY THE PETITIONER, BUT IT WAS ADMITTED THAT A SUGGESTION WAS MADE THAT SUCH WORK BE DONE, SINCE THE PETITIONER WAS ALREADY HAULING PIT-RUN ROCK FOR SUBGRADE REINFORCEMENT AND SUCH MATERIAL COULD BE EXPECTED TO PREVENT A RECURRENCE OF FILL SLUMPING WHICH HAD OCCURRED NEAR STATION 7 PLUS 40. ACCORDING TO THE DEPARTMENTAL REPORT, THE PETITIONER AGREED TO PLACE THE RIPRAP INSTEAD OF USING OTHER MATERIAL TO REMEDY THE FILL SLUMPING INVOLVED.

THE DEPARTMENT FURNISHED CERTAIN INFORMATION SHOWING HOW THE UNIT COST FIGURE OF $0.48 FOR UNCLASSIFIED EXCAVATION WAS DEVELOPED. IT WAS REPORTED THAT PRICES FOR UNCLASSIFIED EXCAVATION IN THE CONSTRUCTION OF SERVICE ROADS IN THE WILLIAMETTE NATIONAL FOREST HAVE VARIED FROM $0.30 TO $1.15 PER CUBIC YARD, INCLUDING PROFIT; THAT THE FOREST SERVICE ESTIMATED THAT THERE WOULD BE APPROXIMATELY 18,000 CUBIC YARDS OF ROCK EXCAVATION IN THE ESTIMATE OF 56,750 CUBIC YARDS FOR UNCLASSIFIED EXCAVATION; AND THAT THE $0.48 RATE WAS A WEIGHTED AVERAGE PRICE FOR BOTH COMMON AND ROCK EXCAVATION, $0.30 AND $0.90 PER CUBIC YARD, RESPECTIVELY. THE DEPARTMENT QUESTIONED THE REASONABLENESS OF THE PRICE LISTED IN THE AMENDED CLAIM FOR 24-INCH CULVERT BECAUSE PRICES FOR THAT SIZE OF CULVERT HAVE IN OTHER CASES RANGED FROM $5.10 TO $8 PER LINEAL FOOT, WITH THE AVERAGE PRICE BEING $6.54 PER LINEAL FOOT, AS COMPARED WITH THE CLAIMED AMOUNT OF $7 PER LINEAL FOOT.

IN THE REPLY BRIEF SUBMITTED WITH YOUR LETTER OF AUGUST 15, 1964, COMMENTING ON THE ADMINISTRATIVE REPORT OF JUNE 22, 1964, YOU QUESTIONED THE VALIDITY OF THE DEPARTMENT'S CONTENTIONS RESPECTING THE ACCURACY OF THE WILLAMETTE ESTIMATING GUIDE; THE DEPARTMENT'S STATEMENTS CONCERNING THE EXTENT, IF ANY, THAT PROSPECTIVE TIMBER SALE PURCHASERS ARE ENCOURAGED TO USE THE GUIDE IN VERIFYING FOREST SERVICE ROAD CONSTRUCTION QUANTITY ESTIMATES, THE DEPARTMENT'S ANALYSIS OF THE DEPARTMENT'S STATEMENTS CONCERNING THE CIRCUMSTANCES UNDER WHICH THE PETITIONER USED ROCK FOR SUBGRADE REINFORCEMENT AND RIPRAP. THE REPLY IN THE MATTER WAS SUPPORTED PRINCIPALLY BY AFFIDAVITS AND LETTERS FROM MR. RAY VOORHIES, PREVIOUSLY REFERRED TO AS THE ENGINEER WHO DESIGNED THE FLUNKY CREEK ROAD; MR. M. S. MCMILLAN, A ROAD CONSTRUCTION SUPERINTENDENT, REPORTING ON HIS EXAMINATION OF THE FLUNKY CREEK ROAD ON AUGUST 9, 1964; AND PROFESSOR HOAG, REGARDING THE CONTROVERSY AS TO THE REASONABLENESS OF ESTIMATES OBTAINABLE WITH THE USE OF THE WILLAMETTE ESTIMATING GUIDE.

THE SUPPLEMENTAL ADMINISTRATIVE REPORT OF DECEMBER 16, 1964, CONTAINED A GENERAL DISCUSSION OF THE CASE IN THE LIGHT OF THE EXHIBITS TO YOUR LETTER OF AUGUST 15, 1964, AND SET FORTH THE DEPARTMENT'S POSITION THAT ITS DETERMINATION ON THE LEGAL AND FACTUAL ISSUES OF THE CASE AS OUTLINED IN ITS PREVIOUS REPORT ARE SUBSTANTIALLY CORRECT.

IT WAS INDICATED THAT, WHILE PROFESSOR HOAG HAD EXPRESSED GRAVE DOUBTS CONCERNING THE APPLICATION OF THE WILLAMETTE ESTIMATING GUIDE IN DETERMINING EXCAVATION QUANTITIES FOR ROAD CONSTRUCTION TO SLOPES OF OVER 70 PERCENT, PROFESSOR HOAG HAD CONCEDED THAT, WITH PROPER APPLICATION, INCLUDING NECESSARY ADJUSTMENTS FOR VARIOUS DESIGN ELEMENTS, THE GUIDE WILL PROVIDE VALID ESTIMATES. PROFESSOR HOAG'S MORE RECENT COMMENTS MERELY EMPHASIZE HIS BELIEF THAT THE GUIDE WILL NOT PROVIDE ADEQUATE DATA FOR SLOPES ABOVE 70 PERCENT.

THE DEPARTMENT QUESTIONED THE AFFIDAVIT OF MR. MCMILLAN INSOFAR AS HIS ANALYSIS OF THE ROAD AFTER ITS COMPLETION COULD NOT HAVE TAKEN INTO CONSIDERATION THE FACT THAT THE ROAD HAD BEEN BUILT FOR THE MOST PART DURING PERIODS OF WET, RAINY WEATHER, AND INSOFAR AS HIS UNIT COST FIGURES FOR EXCAVATION WORK APPARENTLY WERE BASED UPON HIS EXPERIENCE WITH GOVERNMENT CONTRACTS HAVING MORE EXACT SPECIFICATIONS AND INCLUDING LABOR CLAUSES WHICH TENDED TO INCREASE CONSTRUCTION COSTS AND BID PRICES. HOWEVER, REFERENCE WAS MADE TO THE FACT THAT MR. MCMILLAN'S UNIT COST ESTIMATES WERE CONSIDERABLY LESS THAN THE RATES CLAIMED BY THE PETITIONER.

THE DEPARTMENT ARGUED THAT MR. VOORHIES HAD INCORRECTLY CONTENDED THAT THE FINAL PLAN AND PROFILE OF THE ROAD, APPROVED BY THE FOREST SERVICE, DID NOT EXCEED MINIMUM SPECIFICATIONS. THE DEPARTMENT MAINTAINED ITS POSITION THAT A NUMBER OF TURNOUTS WERE NOT NECESSARY OR WERE LONGER THAN NECESSARY, AND THAT CAREFUL DESIGN OF THE ROAD COULD HAVE RESULTED IN THE ELIMINATION OF CERTAIN CULVERTS. ALSO, THE DEPARTMENT DENIED THE CONTENTION THAT A REQUEST WAS MADE FOR A CHANGE IN THE LOCATION OF THE ROAD TO AVOID AN AREA THAT HAD A MAJOR SLIDE, AND TO ELIMINATE 15,000 CUBIC YARDS OF ROCK EXCAVATION. IT WAS REPORTED THAT A FIELD EXAMINATION HAD SHOWN THAT THE ,PROPOSED" RELOCATION WAS WITHIN THE DEVIATION PERMITTED BY THE CONTRACT FOR THE SALE OF TIMBER. THE DEPARTMENT ALSO QUESTIONED THE STATEMENT IN YOUR REPLY TO THE EFFECT THAT FOREST SUPERVISOR GIBNEY HAD STATED IN A LETTER DATED NOVEMBER 15, 1962, TO THE PETITIONER, THAT THERE WERE "AT LEAST 15,600 CUBIC YARDS OF SLIDE EXCAVATION.' AS ABOVE-INDICATED, THE PETITIONER WAS ACTUALLY ADVISED THAT THE SLIDE YARDAGE WAS "SOMEWHAT LESS THAN 15,600 CUBIC YARDS.'

THERE WAS ATTACHED TO THE SUPPLEMENTAL ADMINISTRATIVE REPORT A DOCUMENT ENTITLED "DETAILED COMMENTS ON PETITIONERS EXHIBITS F, H, AND I, AND ADDITIONAL COMMENTS ON PETITIONER'S "REPLY" BRIEF.' THE DETAILED COMMENTS CONCERN PRINCIPALLY THE ENGINEERING ISSUED PRESENTED IN THE STATEMENTS OF MR. VOORHIES AND MR. MCMILLAN, AND PROFESSOR HOAG'S ADDITIONAL STATEMENT CONCERNING THE PROPER USE OF THE WILLAMETTE ESTIMATING GUIDE. IN HIS LETTER OF APRIL 30, 1965, WHICH WAS SUBMITTED WITH YOUR REPLY TO THE SUPPLEMENTAL ADMINISTRATIVE REPORT, MR. BALSIGER TAKES VARIOUS EXCEPTIONS TO THE DETAILED COMMENTS OF THE DEPARTMENT AND CONTENDS THAT THERE IS NO BASIS WHATEVER FOR CONSIDERING THAT HE HAD VOLUNTARILY PERFORMED THE RIPRAP WORK. MR. BALSIGER EMPHASIZED THE DIFFICULTIES WHICH HE EXPERIENCED IN THE CONSTRUCTION OF THE FLUNKY CREEK ROAD AND INDICATED THAT IT WOULD NOT HAVE BEEN PRACTICABLE TO SUSPEND OPERATIONS DURING WINTER MONTHS BECAUSE WEATHER CONDITIONS IN THE AREA ARE GENERALLY UNFAVORABLE FOR CONSTRUCTION ACTIVITIES THROUGHOUT THE ENTIRE YEAR. MR. BALSIGER ARGUED STRENUOUSLY THAT THE EFFECT OF THE WET CONDITION OF THE SLIDE MATERIAL WAS SUCH AS TO REQUIRE A CONCLUSION THAT MOST OF THE MATERIAL HAD IN FACT REMAINED ON THE ROAD BED AFTER THE SLIDES OCCURRED. MR. BALSIGER'S AMENDED CLAIM WAS DISCUSSED WITH HIM IN CONFERENCES AT OUR OFFICE, INCLUDING MEETINGS OF DECEMBER 10 AND 11, 1964, AT WHICH TIME MR. BALSIGER WAS ADVISED THAT WE WERE NOT IN A POSITION TO ADVISE HIM BEFORE RECEIPT OF THE SUPPLEMENTAL ADMINISTRATIVE REPORT WHETHER ANY ADDITIONAL EVIDENCE WOULD BE REQUIRED IN SUPPORT OF HIS CLAIM. HOWEVER, HE WAS ADVISED THAT, SINCE THERE EXISTED A DOUBT AS TO THE REASONABLENESS OF THE CHARGES INCLUDED IN HIS CLAIM, HE MIGHT WELL SUBMIT EVIDENCE CONCERNING HIS ACTUAL CONSTRUCTION COSTS. HE INDICATED THAT IT WOULD BE DIFFICULT TO DETERMINE ACTUAL COSTS AND INQUIRE IF IT WOULD BE SATISFACTORY TO SHOW REASONABLE RENTAL RATES FOR THE TRACTORS WHICH HE OWNED. IN THAT CONNECTION, THERE HAS BEEN SUBMITTED AN AFFIDAVIT FROM THE PETITIONER'S BOOKKEEPER, LISTING SEVERAL ITEMS OF EQUIPMENT RENTAL AT WHAT APPEAR TO BE STANDARD COMMERCIAL RATES, WITH THE TOTAL CHARGES FOR RENTAL EXCEEDING $100,000, TO WHICH CHARGES AMOUNTS WERE ADDED FOR LABOR AND CONSTRUCTION SUPPLIES IN ARRIVING AT THE SUM OF $155,277.08, DESCRIBED AS "TOTAL EXPENDITURES ON FLUNKY CREEK ROAD.'

MR. BALSIGER SUBMITTED A MEMORANDUM IN ANTICIPATION OF A CONTENTION BY THE DEPARTMENT OF AGRICULTURE THAT THE COST OF ROCK EXCAVATION BY ROAD CONSTRUCTION CONTRACTORS USING THE BEST TYPES OF AVAILABLE EQUIPMENT IS NOT CONSIDERABLY HIGHER THAN WHAT THEY WOULD CHARGE FOR UNCLASSIFIED EXCAVATION IN THE BUILDING OF A SERVICE ROAD IN THE WILLAMETTE NATIONAL FOREST. WE WERE REQUESTED TO OBTAIN CONTRACT AND BID PRICES ON CERTAIN CONTRACTS ENTERED INTO BY THE CORPS OF ENGINEERS, UNITED STATES ARMY, COVERING THE CONSTRUCTION OF SERVICE ROADS IN THE WILLAMETTE NATIONAL FOREST NEAR THE BLUE RIVER IN OREGON. MR. BALSIGER WROTE A LETTER TO OUR OFFICE ON MAY 10, 1965, CONCERNING THIS MATTER, AFTER HAVING ASCERTAINED THAT THE CORPS OF ENGINEERS HAD FURNISHED US THE REQUESTED INFORMATION.

ANALYSIS OF THE MATERIAL OBTAINED FROM THE CORPS OF ENGINEERS SHOWS THAT IN 1957 A ROAD CONSTRUCTION CONTRACT WAS AWARDED WHICH LISTED AN ESTIMATE OF 800,000 CUBIC YARDS OF UNCLASSIFIED EXCAVATION FOR WHICH THE THREE LOWEST BIDDERS QUOTED UNIT PRICES OF $1.35, $1.46 AND $1.50. ON ANOTHER CONTRACT AWARDED IN 1957, WHICH LISTED AN ESTIMATE OF 570,000 CUBIC YARDS OF UNCLASSIFIED EXCAVATION, THE UNIT PRICES QUOTED BY THE THREE LOWEST BIDDERS WERE $1.00, $1.02 AND $1.10. IN JUNE 1959 A CONTRACT FOR SLIDE REMOVAL WAS AWARDED AT A RATE OF $0.52 PER CUBIC YARD FOR THE FIRST 75,000 CUBIC YARDS AND AT A RATE OF $0.34 PER CUBIC YARD FOR QUANTITIES OVER 75,000 CUBIC YARDS. DURING THE YEARS 1960 AND 1961 BIDS WERE RECEIVED ON ROAD CONSTRUCTION CONTRACTS WHICH INCLUDED PRICES OF $0.56 AND $0.32 PER CUBIC YARDS FOR UNCLASSIFIED EXCAVATION.

THE FOREGOING FIGURES INDICATE THAT FROM ABOUT JUNE 1959 UNTIL THE TIMBER SALE CONTRACT WAS AWARDED TO MR. BALSIGER, BIDDERS' PRICES FOR UNCLASSIFIED EXCAVATION WORK, INCLUDING BOTH COMMON AND ROCK EXCAVATION, HAVE BEEN REDUCED CONSIDERABLY FROM THE PRICES QUOTED IN PRIOR YEARS. THIS WOULD SEEM TO SUBSTANTIATE THE POSITION OF THE DEPARTMENT OF AGRICULTURE THAT THE RATE OF $0.48 USED IN THE FOREST SERVICE ESTIMATE OF THE COST OF BUILDING THE FLUNKY CREEK ROAD IS A REASONABLE RATE FOR UNCLASSIFIED EXCAVATION AND THAT THERE IS NO REASONABLE BASIS FOR CLAIMED RATE OF $1.80 PER CUBIC YARD FOR ROCK EXCAVATION.

WE ALSO HAVE RESERVATIONS CONCERNING THE VALIDITY OF MR. BALSIGER'S CLAIM FOR $6,516, COVERING THE PLACEMENT OF SUBGRADE REINFORCEMENT AND RIPRAP, REGARDLESS OF THE DISPUTE WHICH HAS ARISEN AS TO WHETHER HE VOLUNTARILY PERFORMED THE RIPRAP WORK. INSOFAR AS THE PLACING OF ROCK FOR SUBGRADE REINFORCEMENT WAS CONCERNED, IT APPEARS THAT THE FOREST SERVICE WAS JUSTIFIED IN REQUIRING THE PERFORMANCE OF THAT WORK IF, IN THE CONSIDERED JUDGMENT OF THE GOVERNMENT INSPECTOR, THE WORK WAS NECESSARY TO PROTECT THE ROAD WHILE LOGGING OPERATIONS WERE BEING PERFORMED. IN REGARD TO THE RIPRAP WORK, THE INSPECTOR APPARENTLY BELIEVED THAT ITS PERFORMANCE WOULD BE CONVENIENT AT THE TIME AND IT APPEARS THAT MR. BALSIGER WOULD HAVE HAD TO PERFORM SOME WORK TO CORRECT THE FILL OF THE ROAD NEAR STATION 7 PLUS 40. ALSO, NO EVIDENCE HAS BEEN FURNISHED TO SHOW THAT ANY APPRECIABLE EXCESS COST WAS INCURRED IN USING ROCK FOR THE PARTICULAR PURPOSE.

WITH RESPECT TO THE REMAINING ITEMS OF THE AMENDED CLAIM, AMOUNTING TO $2,469.50, IT APPEARS THAT THE ONLY REQUIRED EXCEPTION THERETO INSOFAR AS THE COMPUTATION OF THE CLAIM IS CONCERNED WOULD BE THE CHARGE OF $120 FOR CULVERT HEADWALLS WHICH REPORTEDLY WERE NOT USED IN THE CONSTRUCTION OF THE ROAD.

WITH RESPECT TO THE GROUND OF HARDSHIP AS A POSSIBLE BASIS FOR ALLOWANCE OF MR. BALSIGER'S CLAIM, THE RECORD BEFORE US DOES NOT DISCLOSE THAT MR. BALSIGER INCURRED LOSSES IN PERFORMANCE OF THE CONTRACT AS A WHOLE, WHICH WOULD REQUIRE CONSIDERATION OF AMOUNTS RECOVERED BY HIM FROM THE DISPOSITION OF THE TIMBER CUT AND REMOVED FROM THE SALE AREA. ALSO, THE STATEMENT OF HIS ALLEGED EXPENDITURES IN THE CONSTRUCTION OF THE FLUNKY CREEK ROAD APPARENTLY DOES NOT REFLECT HIS ACTUAL COSTS SINCE WE UNDERSTAND THAT HE OWNED ALL OF THE CONSTRUCTION EQUIPMENT LISTED IN THAT STATEMENT AND THE CHARGES FOR RENTAL HAVE NOT BEEN SHOWN TO REPRESENT APPROXIMATE ACTUAL COST FIGURES FOR THE OPERATION AND MAINTENANCE OF SUCH EQUIPMENT, PLUS REASONABLE ALLOWANCES FOR DEPRECIATION. IN ANY EVENT, A CLAIM BASED ON HARDSHIP WOULD BE FOR REJECTION BY OUR OFFICE UNDER THE FUNDAMENTAL RULE THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN, AND THE FACT THAT UNFORSEEN DIFFICULTIES ARE ENCOUNTERED WHICH RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASION A PECUNIARY LOSS, WILL NEITHER EXCUSE A PARTY FROM THE PERFORMANCE OF AN ABSOLUTE AND UNQUALIFIED UNDERTAKING TO DO A THING THAT IS POSSIBLE AND LAWFUL, NOR ENTITLE HIM TO ADDITIONAL COMPENSATION. SEE SIMPSON V. UNITED STATES, 172 U.S. 372; DAY V. UNITED STATES, 245 U.S. 159; AND COLUMBUS RAILWAY, POWER AND LIGHT COMPANY V. COLUMBUS, 249 U.S. 399, 412.

IT IS OUR OPINION THAT THE PETITIONER IN THIS CASE HAS FAILED TO SUBSTANTIATE THE CONTENTIONS THAT THE FOREST SERVICE WAS CARELESS OR GROSSLY NEGLIGENT IN COMPUTING THE ROAD QUANTITY ESTIMATES AND THAT SUCH SITUATION RESULTED IN MISREPRESENTATIONS OF MATERIAL FACTS. WITH ALL DUE RESPECT TO THE FACTS THAT BOTH THE FOREST SERVICE AND THE PETITIONER USED THE WILLAMETTE ESTIMATING GUIDE, AND THAT PROFESSOR HOAG HAS QUESTIONED ITS ACCURACY, IT DOES NOT APPEAR THAT WE WOULD BE WARRANTED IN TAKING EXCEPTION TO THE DEPARTMENTAL STATEMENT THAT THE USE OF THE GUIDE GENERALLY HAS RESULTED IN OBTAINING ACCEPTABLE DATA REGARDING EXCAVATION QUANTITIES FOR ROAD CONSTRUCTION IN THE WILLAMETTE NATIONAL FOREST. ALSO, IN VIEW OF THE FACT THAT WE MUST RELY IN THE USUAL CASE UPON THE OPINIONS OF THE COGNIZANT ADMINISTRATIVE OFFICIALS IN REGARD TO THE TECHNICAL ASPECTS OF PERFORMING A PARTICULAR CONTRACT, IT WOULD APPEAR THAT WE WOULD NOT BE JUSTIFIED ON THE PRESENT RECORD IN TAKING THE POSITION THAT THE DEPARTMENT OF AGRICULTURE HAS ERRONEOUSLY CONCLUDED THAT A MORE CAREFUL DESIGN OF THE ROAD WOULD HAVE MADE IT POSSIBLE TO ELIMINATE A CONSIDERABLE AMOUNT OF EXCAVATION WORK AND EFFECT SAVINGS IN OTHER COSTS RELATED TO THE PLACEMENT OF CULVERTS, AND TO CLEARING AND GRUBBING OPERATIONS.

IT IS ALSO OUR OPINION THAT THERE EXISTS NO SUBSTANTIAL BASIS FOR THE CONTENTION THAT THE FOREST SERVICE, BY ITS ACTIONS IN APPROVING AND ACCEPTING THE ROAD PLAN AND PROFILE SUBMITTED BY THE PETITIONER, HAD ABANDONED THE ORIGINAL CONTRACT. THE PREPARATION OF THE ROAD PLAN AND PROFILE, AND THEIR ACCEPTANCE BY THE FOREST SERVICE, DID NOT CHANGE THE GENERAL SCOPE OF THE CONTRACT AND REPRESENTED NO MORE THAN COMPLIANCE WITH THE TERMS OF THE CONTRACT RESPECTING THE REQUIRED BUILDING OF A PRINCIPAL TRUCK ROAD FOR ACCESS TO THE SALE AREA AND REMOVAL OF TIMBER THEREFROM.

FURTHERMORE, THE RECORD BEFORE US FAILS TO SHOW THAT EITHER PARTY AT ANY TIME INTENDED TO ABANDON THE TIMBER SALE AGREEMENT. AT LEAST THERE IS NO EVIDENCE TO SHOW THAT THE FOREST SERVICE INTENDED TO DO SO AND IT IS AXIOMATIC THAT THE RESCISSION OF A CONTRACT BY ABANDONMENT REQUIRES MUTUAL ASSENT OF THE PARTIES. WHERE CONDUCT IS RELIED UPON TO ESTABLISH ABANDONMENT,"THE ACTS OF THE PARTIES MUST BE POSITIVE, UNEQUIVOCAL AND INCONSISTENT WITH AN INTENT TO BE FURTHER BOUND BY THE CONTRACT.' ARMOUR AND CO. V. CELIC, 294 F.2D 432.

WITH RESPECT TO WHETHER MISTAKES IN THE ROAD CONSTRUCTION QUANTITY ESTIMATES MAY BE REGARDED AS AMOUNTING TO MUTUAL MISTAKES OF FACT WHICH WOULD PERMIT ADDITIONAL "PAYMENT" FOR THE ROAD, IT IS A GENERAL RULE THAT MISTAKES IN QUANTITY ESTIMATES RELATED TO A CONSTRUCTION CONTRACT DO NOT CONSTITUTE MISTAKES GOING TO THE ESSENCE OF THE CONTRACT SO AS TO AFFORD A PROPER BASIS FOR RESCISSION OF THE CONTRACT OR ALLOWANCE OF EXCESS COSTS. SEE STATE HIGHWAY DEPT. V. MACDOUGALD CONSTRUCTION CO., 115 S.E. 2D 863, AND CORBIN ON CONTRACTS, SECTION 598, VOLUME 3, AT PAGES 590 AND 591. INDICATED IN THE MACDOUGALD CASE, IT IS LEGAL AND PROPER FOR A CONTRACT COVERING CONSTRUCTION WORK TO CONTAIN A DISCLAIMER OF ANY GUARANTEE CONCERNING ESTIMATED QUANTITIES OF MATERIAL TO BE ENCOUNTERED DURING EXCAVATION OPERATIONS, AND THE COURTS WILL NOT UNDERTAKE TO REWRITE THE CONTRACT "WHERE IT IS CLEAR AND UNEQUIVOCAL AND VIOLATES NO RULE OF LAW OR PUBLIC POLICY.'

WE ARE ALSO INCLINED TO AGREE WITH THE DEPARTMENT OF AGRICULTURE THAT THE TIMBER SALE AGREEMENT CANNOT BE REGARDED AS TWO CONTRACTS SO AS TO OVERCOME THE EFFECT OF THE RULINGS OF THE COURT OF CLAIMS DENYING RELIEF TO PURCHASERS OF TIMBER WHERE THE ESTIMATED VOLUMES WERE CONSIDERABLY LESS THAN THE ACTUAL VOLUMES OF THE TIMBER OFFERED FOR SALE. THE ROAD CONSTRUCTION PROVISIONS OF MR. BALSIGER'S CONTRACT ARE ONLY INCIDENTAL TO THE PRIMARY PURPOSE OF DISPOSING OF THE TIMBER AT A REASONABLE PRICE, AND PROSPECTIVE PURCHASERS WERE EFFECTIVELY PLACED ON NOTICE THAT NO GUARANTEES WERE MADE AS TO ANY ESTIMATES OF THE FOREST SERVICE CONCERNING THE PROPOSED SALE.

WE DO NOT AGREE WITH YOUR CONTENTION THAT THE LAW OF OREGON AND NOT FEDERAL LAW SHOULD BE APPLIED IN DETERMINING THE INTENTION OF THE PARTIES TO THE CONTRACT HERE INVOLVED. SEE WOODBURY V. UNITED STATES, 313 F.2D 291, 295; AND BLANCHARD V. UNITED STATES, 341 F.2D 351, 358 359. IN ANY EVENT, WE FIND NO BASIS FOR CONCLUDING THAT THE COURTS OF OREGON WOULD ALLOW EXCESS COSTS IN CIRCUMSTANCES SIMILAR TO THOSE INVOLVED IN MR. BALSIGER'S CLAIM. WE NOTE IN THIS CONNECTION THAT THE SUPREME COURT OF OREGON REFUSED IN THE CASE OF MANNING LUMBER CO. V. VOGET, 216 P.2D 674, TO APPROVE THE ACTION OF THE LOWER COURT IN REFORMING A CONTRACT FOR THE SALE OF REAL AND PERSONAL PROPERTY WHICH OSTENSIBLY WAS ENTERED INTO BY THE PURCHASER PRIMARILY ON THE BASIS OF AN ESTIMATED BOARD-FOOT VOLUME OF LOGS "ON HAND IN THE POND AND ON THE PREMISES OF SAID REAL PERTY.'

IN THE CIRCUMSTANCES, MR. BALSIGER'S CLAIM IS CONSIDERED TO BE OF SUCH DOUBTFUL VALIDITY, AND PROBABLY SO EXCESSIVE IN AMOUNT, AS TO REQUIRE ITS REJECTION BY OUR OFFICE, LEAVING HIM TO PURSUE THE MATTER IN THE COURTS IF HE SO DESIRES. SEE LONGWILL V. UNITED STATES, 17 CT.CL. 288, 291; AND CHARLES V. UNITED STATES, 19 CT.CL. 316, 319.

ACCORDINGLY, THE CLAIM MUST BE, AND IS, HEREBY DISALLOWED IN ITS ENTIRETY.