B-150945, MAR. 20, 1963

B-150945, MAR. 20, 1963

TO THE HONORABLE J. GEORGE STEWART, ARCHITECT OF THE CAPITOL:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 26, 1963, REQUESTING A DECISION AS TO THE VALIDITY OF A CLAIM PRESENTED BY BETHLEHEM STEEL COMPANY FOR REIMBURSEMENT OF INCREASED COSTS INCURRED BY IT AS THE RESULT OF CHANGES ORDERED IN THE MANNER AND SEQUENCE OF THE PERFORMANCE OF CONTRACT NO. ACHO-192 FOR THE FURNISHING, DELIVERY AND ERECTION OF STRUCTURAL STEEL FOR AN ADDITIONAL OFFICE BUILDING FOR THE UNITED STATES HOUSE OF REPRESENTATIVES, KNOWN AS THE RAYBURN HOUSE OFFICE BUILDING.

INSOFAR AS MATERIAL TO THE CONSIDERATION OF THE QUESTION PRESENTED THE THREE CONTRACTS--- OUT OF A SERIES OF FOUR CONTRACTS ENTERED INTO FOR THE ENTIRE WORK OF CONSTRUCTION--- COMPRISED (1) A CONTRACT FOR THE FOUNDATIONS OF THE BUILDING WHICH WAS LET TO MCCLOSKEY AND COMPANY; (2) A CONTRACT (THE ONE HERE INVOLVED) LET TO BETHLEHEM STEEL COMPANY FOR FURNISHING, DELIVERY AND ERECTION OF STRUCTURAL STEEL; AND (3) A CONTRACT FOR THE SUPERSTRUCTURE. THE REPORTED PURPOSE FOR DIVISION OF THE WORK WAS TO EXPEDITE COMPLETION OF THE PROJECT AS WELL AS TO REDUCE THE TOTAL COST TO THE GOVERNMENT THROUGH ANTICIPATED SAVING OF SUBSTANTIAL OVERHEAD AND PROFIT CHARGES WHICH WOULD HAVE BEEN REFLECTED IN BIDS FOR ALL WORK UNDER ONE CONTRACT.

THE SIZE OF THE PROJECT AND THE DIVISION OF THE WORK OF THE PROJECT INTO FOUR SEPARATE CONTRACTS ENTAILED VERY DETAILED PLANNING AS TO COORDINATION AND TIME OF THE WORK OF THE DIFFERENT CONTRACTS AND NECESSITATED VERY CLOSE COORDINATION AND ADHERENCE TO ESTABLISHED AND APPROVED WORK SCHEDULES BY THE CONTRACTORS INVOLVED. IT FURTHERMORE REQUIRED CERTAIN INTERCONTRACTUAL INTEGRATION. THE OVER-ALL PLAN OF THE PROJECT CONTEMPLATED THAT A LARGE PART OF THE FOUNDATION CONTRACT WORK WOULD BE PERFORMED BEFORE ANY STEEL WOULD BE ERECTED UNDER THE STRUCTURAL STEEL CONTRACT, AND THAT A LARGE PART OF THE STRUCTURAL STEEL WORK WOULD BE PERFORMED BEFORE ANY WORK WAS STARTED UNDER THE SUPERSTRUCTURE CONTRACT. FOR THESE AND SPECIFICATIONS PURPOSES, THE SITE WAS DIVIDED INTO A "WEST HALF" AND AN "EAST HALF," AND SUBDIVIDED INTO BLOCKS DESIGNATED BLOCKS A TO N.

MORE SPECIFICALLY, THE OVER-ALL PLAN OF THE PROJECT CONTEMPLATED THAT THE STRUCTURAL STEEL WORK IN THE WEST HALF WOULD BE COMMENCED AFTER COMPLETION OF THE FOUNDATION WORK IN THE WEST HALF, THAT THE STRUCTURAL STEEL WORK IN THE EAST HALF WOULD BE COMMENCED AFTER COMPLETION OF THE FOUNDATION WORK IN THE EAST HALF, THAT THE SUPERSTRUCTURE WORK IN THE WEST HALF WOULD BE COMMENCED AFTER COMPLETION OF THE STRUCTURAL STEEL WORK IN THE WEST HALF, AND THAT THE SUPERSTRUCTURE WORK IN THE EAST HALF WOULD BE COMMENCED AFTER COMPLETION OF THE STRUCTURAL STEEL WORK IN THE EAST HALF. EXCEPT AS TO MINOR DEVIATIONS WHICH WERE TECHNICALLY REQUIRED AND ARE NOT MATERIAL IN THE CONTEXT OF THIS CLAIM, THE CONTRACTS SPECIFICALLY OR INFERENTIALLY PRESCRIBED AND/OR DIRECTED THE SUBMISSION OF SCHEDULES FOR SUCH SEQUENCE OF PERFORMANCE.

ARTICLE 2-03 OF THE STRUCTURAL STEEL CONTRACT APPRISED BETHLEHEM THAT THE SEQUENCE OF OPERATIONS UNDER THE FOUNDATION CONTRACT WOULD AFFECT THE SEQUENCE OF OPERATIONS UNDER THE STRUCTURAL STEEL CONTRACT AND THAT THAT SEQUENCE WOULD, IN GENERAL, BE AS SPECIFIED UNDER ARTICLE 2-03 (C) (1) TO (3), INCLUSIVE, OF THE STRUCTURAL STEEL CONTRACT. THE SEQUENCE OF OPERATIONS UNDER THE FOUNDATION CONTRACT, WHICH AT THE TIME OF THE ISSUE OF SPECIFICATIONS FOR THE FOUNDATION CONTRACT WAS SPECIFIED AS BEING SUCH SEQUENCE "IN GENERAL," BECAME DEFINITE UPON APPROVAL OF A PROGRESS SCHEDULE SUBMITTED UNDER THE FOUNDATION CONTRACT PURSUANT TO REQUIREMENTS OF THAT CONTRACT. THE LATTER APPROVAL WAS A LOGICAL CONDITION PRECEDENT TO SUBMISSION AND APPROVAL OF THE PROGRESS SCHEDULE UNDER THE STRUCTURAL STEEL CONTRACT, AS REQUIRED UNDER ARTICLE 2-15 (A) OF THAT CONTRACT. NECESSITY, THE PROGRESS SCHEDULE UNDER THE FOUNDATION CONTRACT HAD TO SERVE AS A GUIDE, TIME WISE, FOR THE PROGRESS SCHEDULE UNDER THE STRUCTURAL STEEL CONTRACT, AND THE SEQUENCE OF THE WORK WAS DETERMINED BY THE PROGRESS SCHEDULES.

DURING THE COURSE OF THE WORK YOU DIRECTED BETHLEHEM ON MAY 20, 1960, TO SUSPEND WORK UNDER THE CONTRACT IN THE EAST HALF OF THE SITE BECAUSE THE FOUNDATION CONTRACT WORK WAS NOT ADVANCED SUFFICIENTLY TO MAKE THE EAST HALF AVAILABLE TO BETHLEHEM. THIS SUSPENSION ORDER REMAINED IN EFFECT UNTIL DECEMBER 7, 1960, WHEN BETHLEHEM WAS ORDERED TO RESUME ITS WORK IN THE EAST HALF. AS EXPECTED, THE PROGRESS OF THE WORK UNDER THE FOUNDATION CONTRACT DID NOT PERMIT BETHLEHEM TO FOLLOW ANY REASONABLE SEQUENCE IN ERECTING STRUCTURAL STEEL IN THE EAST HALF OF THE SITE. BETHLEHEM'S PLANT, EQUIPMENT AND LABOR WERE MOVED FROM AREA TO AREA,FROM BLOCK TO BLOCK, BACK AND FORTH, AS WORKING SPACE BECAME AVAILABLE AND AS NECESSARY TO AVOID INTERFERENCE WITH THE WORK UNDER THE FOUNDATION CONTRACT. BETHLEHEM COMPLETED ITS WORK A SHORT TIME AFTER THE FOUNDATION CONTRACT WORK WAS COMPLETED. IT IS ESTIMATED THAT THE BUILDING WILL BE READY FOR OCCUPANCY SIX MONTHS AHEAD OF THE TIME IT OTHERWISE WOULD HAVE BEEN READY FOR OCCUPANCY.

THE CLAIM IN QUESTION COVERS THE INCREASED COSTS OF PERFORMING WORK IN A DIFFERENT MANNER THAN IT WAS REQUIRED TO BE PERFORMED BY THE CONTRACT. IS STATED THAT THE AMOUNT OF $113,080 NOW CLAIMED AND WHICH YOU HAVE RECOMMENDED FOR PAYMENT DOES NOT COVER INCREASED COSTS RESULTING FROM SUSPENSION OF THE WORK FROM MAY 20 TO DECEMBER 9, 1960.

THIS CASE IS TO BE DISTINGUISHED FROM THE CASE OF UNITED STATES V. RICE, 317 U.S. 61 (1942) IN THAT THE RICE CASE INVOLVED DELAYS INCIDENT TO CHANGES AND THE INCREASED COSTS DURING THE PERIODS OF DELAYS. THE CHANGE HERE INVOLVED CONCERNS THE PERFORMANCE OF THE WORK IN A DIFFERENT WAY THAN THAT REQUIRED BY THE CONTRACT. IT APPEARS FROM THE SUBSEQUENT TURN OF EVENTS THAT BETHLEHEM WOULD HAVE BEEN FULLY JUSTIFIED, UNDER THE TERMS OF THE CONTRACT, IN DELAYING ITS WORK ON THE EASTERN HALF OF THE SITE UNTIL SUCH TIME THAT IT COULD HAVE PROCEEDED UNINTERRUPTEDLY WITH ITS WORK AND AT THE SAME TIME NOT INTERFERE IN ANY SUBSTANTIAL MANNER WITH THE WORK OF THE FOUNDATION CONTRACTOR. CONSEQUENTLY THE INCREASED COSTS OF $113,080 WHICH YOU HAVE FOUND AS RESULTING FROM BETHLEHEM'S WORK IN ADVANCE OF THE REQUIRED TIME MAY BE ALLOWED, IF OTHERWISE PROPER.