B-151280, MAY 6, 1963

B-151280: May 6, 1963

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THE UNITED STATES WAS OBLIGATED TO COMPENSATE THE STATE FOR ITS COST OF CONSTRUCTING THE RELOCATED PORTION OF THE HIGHWAY. PAYMENTS HEREUNDER WILL CEASE AND BE NO LONGER REQUIRED.'. IT IS STATED THAT THE AMOUNT OF $75. WAS ACCEPTED BY THE STATE AFTER NEGOTIATION AS A REALISTIC FIGURE WHICH INCLUDED LITTLE. WE WISH TO BRING TO YOUR ATTENTION THAT DURING THE CONSTRUCTION THERE WAS EXPOSED UNSATISFACTORY GEOLOGICAL CONDITIONS WHICH WERE NOT FORESEEN AT THE TIME THE CONTRACT BETWEEN THE UNITED STATES AND THE STATE OF IDAHO WAS CONSUMMATED. THIS WAS BORNE OUT BY THE EXTRA WORK ENTAILED IN REMOVING SLIDES WHICH OCCURRED DURING CONSTRUCTION. THERE ARE A NUMBER OF SECTIONS ON THE PROJECT WHERE THE BACKWATER OF THE RESERVOIR EXTENDS TO THE TOE OF THE ROADWAY EMBANKMENTS AND TOGETHER WITH THE AFOREMENTIONED UNSATISFACTORY SOIL CONDITIONS IT IS THE OPINION OF THIS DEPARTMENT THAT THE EXTRAORDINARY MAINTENANCE WILL EXCEED THE AMOUNT SET FORTH IN THE CONTRACT BETWEEN THE UNITED STATES AND THE STATE OF IDAHO DURING THE FIVE YEAR PERIOD SPECIFIED.

B-151280, MAY 6, 1963

TO THE SECRETARY OF THE INTERIOR:

BY LETTER DATED APRIL 10, 1963, WITH ENCLOSURES, THE ADMINISTRATIVE ASSISTANT SECRETARY REQUESTED OUR OPINION AS TO WHETHER WE WOULD BE REQUIRED TO OBJECT TO A PROPOSED AMENDMENT TO A CONTRACT DATED JULY 26, 1949, AS AMENDED (NO. 174R-1130), BETWEEN THE BUREAU OF RECLAMATION AND THE STATE OF IDAHO.

THE CONTRACT COVERED THE RELOCATION OF APPROXIMATELY 15.78 MILES OF STATE HIGHWAY NO. 29 TO ACCOMMODATE A LARGE RESERVOIR FORMING THE MAJOR FEATURE OF THE PALISADES PROJECT DEVELOPMENT. UNDER THE CONTRACT, THE UNITED STATES WAS OBLIGATED TO COMPENSATE THE STATE FOR ITS COST OF CONSTRUCTING THE RELOCATED PORTION OF THE HIGHWAY.

ARTICLE 12 OF THE CONTRACT PROVIDES IN PERTINENT PART:

"/F) THE UNITED STATES RECOGNIZES THAT THE EXPENSE TO THE STATE FOR MAINTAINING THE RELOCATED ROAD FOR A PERIOD OF FIVE (5) YEARS FOLLOWING THE CONSTRUCTION OF EACH PORTION THEREOF MAY INVOLVE MAINTENANCE OVER AND ABOVE ORDINARY MAINTENANCE SHOULD THERE OCCUR SLIDES, CAVING, SLIPPING, SINKING, RAVELLING OR SETTLING DURING SUCH PERIOD. ACCORDINGLY, THE UNITED STATES SHALL PAY FOR THE EXTRAORDINARY MAINTENANCE DUE TO CAVING, SLIDING, SLIPPING, SINKING, RAVELLING AND SETTLING OF THE ROADBED FOR A PERIOD OF FIVE (5) YEARS FOLLOWING THE COMPLETION AND ACCEPTANCE BY THE STATE OF THE RELOCATED HIGHWAY. AT THE END OF EACH OF THE FIRST FIVE (5) CALENDAR YEARS FOLLOWING THE COMPLETION AND ACCEPTANCE BY THE STATE OF THE RELOCATED HIGHWAY, THE STATE SHALL SUBMIT TO THE UNITED STATES A STATEMENT ITEMIZING THE ACTUAL MAINTENANCE EXPENDITURES, INCLUDING SNOW REMOVAL, MADE BY THE STATE DURING THE CALENDAR YEAR JUST ENDED, ON THE SAID RELOCATED HIGHWAY AND SHOWING THE TOTAL THEREOF, FROM WHICH TOTAL THERE SHALL BE DEDUCTED AN AMOUNT EQUAL TO THE NUMBER OF MILES OF THE RELOCATED HIGHWAY MULTIPLIED BY ONE HUNDRED THIRTY DOLLARS ($130.00), THE ESTIMATED COST OF ORDINARY MAINTENANCE. THE BALANCE THUS DETERMINED SHALL BE THE AMOUNT OF THE EXTRAORDINARY MAINTENANCE COSTS FOR WHICH THE UNITED STATES SHALL REIMBURSE THE STATE IN ACCORDANCE WITH ARTICLE 12 (E) ABOVE. NOTWITHSTANDING THE OTHER PROVISIONS OF THIS ARTICLE, HOWEVER, THE UNITED STATES SHALL NOT BE BOUND TO PAY AND SHALL NOT PAY TO THE STATE FOR SUCH EXTRAORDINARY MAINTENANCE FOR ALL OF SAID RELOCATED HIGHWAY, AN AMOUNT IN EXCESS OF SEVENTY-FIVE THOUSAND DOLLARS ($75,000) DURING THE FIVE (5) YEAR PERIOD SPECIFIED ABOVE.

"/G) WHEN THE TOTAL OF THE SUMS DETERMINED AS PROVIDED ABOVE HAS BEEN PAID BY THE UNITED STATES, PAYMENTS HEREUNDER WILL CEASE AND BE NO LONGER REQUIRED.'

IT IS STATED THAT THE AMOUNT OF $75,000, REPRESENTING THE MAXIMUM LIABILITY OF THE UNITED STATES FOR EXTRAORDINARY MAINTENANCE, WAS ACCEPTED BY THE STATE AFTER NEGOTIATION AS A REALISTIC FIGURE WHICH INCLUDED LITTLE, IF ANY, CONTINGENCY FACTOR. THE STATE, AT THE TIME OF NEGOTIATION, EXPRESSED SOME CONCERN AS TO THE LIMITING EFFECTS OF THE ABOVE PROVISION, POINTING OUT THAT THE $75,000 MAXIMUM WOULD BE COMPLETELY INADEQUATE IN THE EVENT OF A MAJOR SLIDE. WHEN THE STATE ACCEPTED THE RELOCATED HIGHWAY BY ITS LETTER OF OCTOBER 4, 1957, IT ADVISED, IN PERTINENT PART, THAT:

"UPON ACCEPTING THIS PROJECT, WE WISH TO BRING TO YOUR ATTENTION THAT DURING THE CONSTRUCTION THERE WAS EXPOSED UNSATISFACTORY GEOLOGICAL CONDITIONS WHICH WERE NOT FORESEEN AT THE TIME THE CONTRACT BETWEEN THE UNITED STATES AND THE STATE OF IDAHO WAS CONSUMMATED. THIS WAS BORNE OUT BY THE EXTRA WORK ENTAILED IN REMOVING SLIDES WHICH OCCURRED DURING CONSTRUCTION. THERE ARE A NUMBER OF SECTIONS ON THE PROJECT WHERE THE BACKWATER OF THE RESERVOIR EXTENDS TO THE TOE OF THE ROADWAY EMBANKMENTS AND TOGETHER WITH THE AFOREMENTIONED UNSATISFACTORY SOIL CONDITIONS IT IS THE OPINION OF THIS DEPARTMENT THAT THE EXTRAORDINARY MAINTENANCE WILL EXCEED THE AMOUNT SET FORTH IN THE CONTRACT BETWEEN THE UNITED STATES AND THE STATE OF IDAHO DURING THE FIVE YEAR PERIOD SPECIFIED.

"SHOULD A MAJOR SLIDE, CAVE IN OR SETTLEMENT OCCUR DURING THE FIVE YEAR PERIOD, WHICH WOULD GREATLY EXCEED THE AMOUNT SET FORTH IN THE CONTRACT, THUS DISRUPTING OUR NORMAL HIGHWAY PROGRAM THROUGHOUT THE STATE, WE FEEL THE UNITED STATES SHOULD ADMIT RESPONSIBILITY AND CONSIDER REASONABLE FEDERAL-AID IN EXTRAORDINARY CONDITIONS.'

THE PAYMENTS TO THE STATE FOR EXTRAORDINARY MAINTENANCE THROUGH DECEMBER 31, 1961--- THAT IS, FOR THE FIRST 4 YEARS OF THE 5 YEAR PERIOD--- TOTALED $49,134.36, WHICH LEFT $25,865.64 OF THE $75,000 LIMITATION AVAILABLE FOR THE REMAINDER OF THE PERIOD.

ON MAY 15, 1962, A 130-FOOT HIGH FILL SECTION OF THE RELOCATED HIGHWAY SLID DOWN THE MOUNTAINSIDE INTO THE RESERVOIR AND COMPLETELY BREACHED THE HIGHWAY. THE TOTAL COST OF EXTRAORDINARY MAINTENANCE TO THE STATE DURING THE PERIOD JANUARY 1, 1962, TO THE END OF THE 5-YEAR PERIOD AMOUNTED TO $43,276.01, MOST OF WHICH WAS ATTRIBUTABLE TO THE SLIDE AND TO THE CONDITIONS MENTIONED IN THE ABOVE-QUOTED LETTER OF OCTOBER 4, 1957. HENCE, THE TOTAL EXPENDITURES BY THE STATE UNDER ARTICLE 12 AMOUNTED TO $92,410.37, OR $17,410.37 IN EXCESS OF THE $75,000 LIMITATION.

THE LETTER FROM THE ADMINISTRATIVE ASSISTANT SECRETARY ADVISES THAT "IT WAS CERTAINLY THE INTENTION OF THE BUREAU TO PROVIDE A REASONABLE AMOUNT FOR COMPENSATION TO THE STATE FOR EXTRAORDINARY MAINTENANCE," AND THAT A MUTUAL MISTAKE OF FACT EXISTED AS TO THE GEOLOGICAL CONDITIONS. THE LETTER FURTHER ADVISES THAT THE PARTIES INTENDED THAT THE UNITED STATES WOULD ASSUME THE FULL AMOUNT OF THE EXTRAORDINARY DEFERRED MAINTENANCE COSTS, AND THAT THE ONLY REASON FOR STATING A MAXIMUM MONETARY LIMITATION WAS TO KEEP THE CONTRACT FROM BEING AN OPEN-END TYPE. HENCE, IT IS PROPOSED TO AMEND THE CONTRACT BY INCREASING THE $75,000 LIMITATION TO $92,410.37.

SINCE THE EVIDENCE BEFORE US REASONABLY ESTABLISHES THAT IT WAS THE INTENTION OF THE PARTIES FOR THE UNITED STATES TO COMPENSATE THE STATE FOR ALL EXTRAORDINARY MAINTENANCE FOR THE 5-YEAR PERIOD AND THAT BOTH PARTIES WERE MUTUALLY MISTAKEN AS TO THE UNUSUAL GEOLOGICAL CONDITIONS WHICH COULD CAUSE SERIOUS SLIDES RESULTING IN SUBSTANTIAL DAMAGES TO THE RELOCATED HIGHWAY, WE WOULD NOT BE REQUIRED TO OBJECT TO AN AMENDMENT OF THE CONTRACT TO ACCOMPLISH FULL COMPENSATION TO THE STATE FOR ALL EXTRAORDINARY MAINTENANCE PERFORMED DURING THE 5-YEAR PERIOD.