B-153841, DECEMBER 5, 1966, 46 COMP. GEN. 441

B-153841: Dec 5, 1966

Additional Materials:

Contact:

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

 

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

THAT THE CONTRACTOR WAS ENTITLED TO TIME EXTENSIONS. - AND TO PAYMENT OF AMOUNTS WITHHELD AS SET-OFF FOR DEBTS IS A MATTER REVIEWABLE BY THE COMPTROLLER GENERAL OF THE UNITED STATES UNDER AUTHORITY IN THE BUDGET AND ACCOUNTING ACT. WHEN SUCH ADMINISTRATIVE DETERMINATION IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE TO MEET THE STANDARDS OF THE WUNDERLICH ACT. THE CONTRACTOR DOES NOT HAVE A CLAIM AGAINST THE GOVERNMENT AND PAYMENT PURSUANT TO THE ADMINISTRATIVE DETERMINATION MAY NOT BE MADE. ACCOUNTABLE OFFICERS - CERTIFICATION OF DISPUTED PAYMENT - QUESTION OF LAW THE QUESTION OF THE PROPRIETY OF AN ACCOUNTABLE OFFICER CERTIFYING A VOUCHER FOR A CONTRACT PAYMENT ORDERED PURSUANT TO A CONTRACT DISPUTES CLAUSE PROCEDURE IS A QUESTION OF LAW AND.

B-153841, DECEMBER 5, 1966, 46 COMP. GEN. 441

CONTRACTS - DISPUTES - FINALITY OF ADMINISTRATIVE FINDINGS - REVIEW BY GENERAL ACCOUNTING OFFICE A DETERMINATION UNDER A CONTRACT DISPUTES CLAUSE BY A HEARING EXAMINER, AS MODIFIED BY THE ADMINISTRATIVE AGENCY, THAT THE CONTRACTOR WAS ENTITLED TO TIME EXTENSIONS, EQUITABLE ADJUSTMENT OF CERTAIN CLAIMS -- DENIED BY THE CONTRACTING OFFICER--- AND TO PAYMENT OF AMOUNTS WITHHELD AS SET-OFF FOR DEBTS IS A MATTER REVIEWABLE BY THE COMPTROLLER GENERAL OF THE UNITED STATES UNDER AUTHORITY IN THE BUDGET AND ACCOUNTING ACT, 1921, 31 U.S.C. 41, AND WHEN SUCH ADMINISTRATIVE DETERMINATION IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE TO MEET THE STANDARDS OF THE WUNDERLICH ACT, 41 U.S.C. 321-322, AND CONTAINS ERRORS OF LAW, THE CONTRACTOR DOES NOT HAVE A CLAIM AGAINST THE GOVERNMENT AND PAYMENT PURSUANT TO THE ADMINISTRATIVE DETERMINATION MAY NOT BE MADE. ACCOUNTABLE OFFICERS - CERTIFICATION OF DISPUTED PAYMENT - QUESTION OF LAW THE QUESTION OF THE PROPRIETY OF AN ACCOUNTABLE OFFICER CERTIFYING A VOUCHER FOR A CONTRACT PAYMENT ORDERED PURSUANT TO A CONTRACT DISPUTES CLAUSE PROCEDURE IS A QUESTION OF LAW AND, ALTHOUGH UNDER A CONTRACT DISPUTES CLAUSE PROCEDURE AND THE WUNDERLICH ACT OF MAY 11, 1954, 41 U.S.C. 321-322, DETERMINATIONS AS TO DISPUTES OF FACT MUST BE ACCEPTED AS CONCLUSIVE, UNLESS FRADULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, SUCH DETERMINATION BY THE CONTRACTING AGENCY DOES NOT PRECLUDE THE COMPTROLLER GENERAL FROM RENDERING A DECISION AS TO WHETHER PAYMENT TO THE CONTRACTOR IS PROPER. CONTRACTS - PAYMENTS - QUESTIONABLE - REVIEW OF ENTIRE RECORD WHEN THE PAYMENT OF A PARTICULAR CLAIM CALLED TO THE ATTENTION OF THE GENERAL ACCOUNTING OFFICE IS PART OF A TRANSACTION INVOLVING OTHER PAYMENTS TO WHICH EXCEPTION WOULD BE TAKEN IN THE SUBSEQUENT AUDIT BY THE GENERAL ACCOUNTING OFFICE, THE RESPONSIBILITY OF THE GENERAL ACCOUNTING OFFICE FOR THE SETTLEMENT OF ALL CLAIMS AGAINST THE GOVERNMENT AND FOR THE AUDIT OF THE FINANCIAL TRANSACTIONS OF DEPARTMENTS AND AGENCIES IN THE EXECUTIVE BRANCH OF THE GOVERNMENT WOULD NOT JUSTIFY THE SANCTIONING, EVEN BY SILENCE, ANY PAYMENTS INVOLVED IN THE TRANSACTION AND, THEREFORE, NOT ONLY THE VOUCHER COVERING THE PARTICULAR CLAIM BUT THE ENTIRE RECORD WITH RESPECT TO ALL CLAIMS UNDER THE CONTRACT ARE REQUIRED TO BE REVIEWED. GENERAL ACCOUNTING OFFICE - DECISIONS - TENTATIVE CONCLUSIONS - ADMINISTRATIVE COMMENTS LIMITED TO RECORD TENTATIVE CONCLUSIONS REACHED IN CONNECTION WITH A DECISION TO A CERTIFYING OFFICER ON A VOUCHER COVERING A PAYMENT ORDERED PURSUANT TO A HEARING EXAMINER'S FINDINGS UNDER A CONTRACT DISPUTES CLAUSE PROCEEDING, WHICH CONCLUSIONS WOULD REQUIRE DENIAL OF THE CONTRACTOR'S CLAIM WERE SUBMITTED TO THE CONTRACTOR, AT HIS REQUEST, AND TO THE CONTRACTING OFFICER AND THE ADMINISTRATIVE AGENCY BECAUSE OF THEIR INTEREST IN THE OUTCOME; HOWEVER, THE INTERESTED PARTIES WERE ALL REQUESTED TO LIMIT THEIR COMMENTS TO THE RECORD MADE BEFORE THE HEARING EXAMINER SINCE THE COMPTROLLER GENERAL WOULD NOT CONSIDER ANY NEW MATTER NOT PREVIOUSLY RECEIVED IN EVIDENCE BEFORE THE HEARING EXAMINER. GENERAL ACCOUNTING OFFICE - DECISIONS - REQUESTS - ADVANCE - OTHER THAN HEADS OF DEPARTMENTS, ETC. THE FORWARDING BY THE HEAD OF AN AGENCY OF AN ACCOUNTABLE OFFICER'S REQUEST FOR DECISION AS TO THE PROPRIETY OF CERTIFYING A VOUCHER FOR A CONTRACT PAYMENT THAT WAS ORDERED UNDER A CONTRACT DISPUTES CLAUSE PROCEEDING DOES NOT NEED TO BE CONSIDERED AS A REQUEST FOR DECISION BY THE AGENCY NOR A REQUEST FOR CONCURRENCE IN THE AGENCY'S DETERMINATION UNDER THE CONTRACT DISPUTES PROCEDURE. CONTRACTS - DISPUTES - CONTRACT APPEALS BOARD DECISION - REVIEW BY GENERAL ACCOUNTING OFFICE WHILE IN THE DETERMINATION OF CONTRACT DISPUTES BY HEARING EXAMINERS QUESTIONS OF LAW AS WELL AS FACT MAY BE DECIDED, THE JURISDICTION OF THE COMPTROLLER GENERAL TO REVIEW DECISIONS BY CONTRACTING AGENCIES UNDER CONTRACT DISPUTES CLAUSE PROCEDURES IS NOT LIMITED TO THE REVIEW OF LEGAL QUESTIONS ONLY BUT EXTENDS TO THE REVIEW OF QUESTIONS OF FACT AND SO- CALLED MIXED QUESTIONS OF LAW AND FACT. PAYMENTS - FINAL AND CONCLUSIVE - LEGALITY SUBJECT TO REVIEW THE LEGAL PROPRIETY OF PAYMENTS MADE BY PUBLIC OFFICERS IN THE TRANSACTION OF THE GOVERNMENT'S BUSINESS IS SUBJECT TO THE DETERMINATION OF THE COMPTROLLER GENERAL UNDER THE BUDGET AND ACCOUNTING ACT, 1921, 31 U.S.C. 41, AND SUCH PAYMENTS ARE NOT FINAL UNTIL SETTLED BY GENERAL ACCOUNTING OFFICE WHICH MAY DISALLOW CREDIT IN THE ACCOUNTS OF ACCOUNTABLE OFFICERS FOR CERTIFICATION AND DISBURSEMENT OF PUBLIC FUNDS NOT IN ACCORDANCE WITH LAW. CONTRACTS - PAYMENTS - QUESTIONABLE - REVIEW OF ENTIRE RECORD IN TRANSACTIONS INVOLVING AN EXPENDITURE OF PUBLIC FUNDS, CONDITIONS UNDERLYING ANY PAYMENT MADE PURSUANT TO A CONTRACTUAL AGREEMENT ARE FOR REVIEW BY THE COMPTROLLER GENERAL, AND, IF ANY PAYMENT HAS BEEN IMPROPERLY MADE OR A CONTRACTOR HAS BEEN UNJUSTLY ENRICHED AT PUBLIC EXPENSE, ACTION TO RECOVER ANY IMPROPER PAYMENTS IS REQUIRED TO BE TAKEN BY GENERAL ACCOUNTING OFFICE UNDER ITS STATUTORY AUTHORITY. GENERAL ACCOUNTING OFFICE - JURISDICTION - CLAIMS - PAYMENT ADMINISTRATIVELY DENIED CONTRACTORS WHO FEEL THAT THEY ARE ENTITLED TO ADDITIONAL AMOUNTS UNDER CONTRACTUAL AGREEMENTS WITH THE GOVERNMENT MAY PRESENT CLAIMS TO THE GENERAL ACCOUNTING OFFICE FOR SETTLEMENT, REGARDLESS OF THE ADMINISTRATIVE ACTION TAKEN IN THE MATTER. GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - DISPUTES THE JURISDICTION OF THE COMPTROLLER GENERAL TO REVIEW ADMINISTRATIVE DETERMINATIONS UNDER STANDARD DISPUTES CLAUSE PROVISIONS IN GOVERNMENT CONTRACTS ON THE BASIS OF THE STANDARDS PRESCRIBED IN THE WUNDERLICH ACT, 41 U.S.C. 321-322, IS CLEARLY CONFERRED ON THE OFFICE UNDER THE AUTHORITY IN THE BUDGET AND ACCOUNTING ACT, 1921, AND ALTHOUGH THE EXERCISE OF THIS JURISDICTION DOES NOT AFFECT THE RIGHTS OF THE CONTRACTORS TO PURSUE ANY JUDICIAL REMEDIES, THE DETERMINATIONS OF THE COMPTROLLER GENERAL ARE BINDING UPON EXECUTIVE AGENCIES. CONTRACTS - DISPUTES - FINALITY OF ADMINISTRATIVE FINDINGS - "COURT OF COMPETENT JURISDICTION" V. WUNDERLICH ACT ALTHOUGH THE GENERAL ACCOUNTING OFFICE IS NOT A "COURT OF COMPETENT JURISDICTION" WITHIN THE MEANING OF THAT PHRASE AS USED IN THE STANDARD DISPUTES CLAUSE IN GOVERNMENT CONTRACTS SO AS TO REQUIRE ACCEPTANCE OF THE ADMINISTRATIVE DETERMINATIONS AS FINAL AND CONCLUSIVE, IT IS THE WUNDERLICH ACT, 41 U.S.C. 321-322, AND NOT THE LANGUAGE OF THE DISPUTES CLAUSE WHICH GOVERNS THE MATTER. SEE LANGENFELDER AND SON, INC. V. UNITED STATES, 169 CT. CL. 465 (1965). CONTRACTS - DISPUTES - FINALITY OF ADMINISTRATIVE FINDINGS - WUNDERLICH ACT AND DECISION EFFECT BEFORE THE WUNDERLICH DECISION, 342 U.S. 98 (1951), LIMITING REVIEW OF CONTRACT DISPUTE DETERMINATIONS TO A FRAUDULENT STANDARD, ADMINISTRATIVE DETERMINATIONS ON QUESTIONS OF FACT OR LAW UNDER STANDARD DISPUTES CLAUSE PROVISIONS IN GOVERNMENT CONTRACTS HAD BEEN CONSISTENTLY REGARDED AS NOT BINDING ON GENERAL ACCOUNTING OFFICE, IF UNDER JUDICIAL PRECEDENTS, SUCH DETERMINATIONS WERE NOT BINDING ON THE COURTS, AND THAT SUCH DETERMINATIONS WERE REVIEWABLE BY GENERAL ACCOUNTING OFFICE UNDER THE SAME STANDARDS APPLIED BY THE COURTS. CONTRACTS - DISPUTES - FINALITY OF ADMINISTRATIVE FINDINGS - WUNDERLICH ACT AND DECISION EFFECT THE LEGISLATIVE HISTORY OF THE WUNDERLICH ACT, 41 U.S.C. 321-322, NOT ONLY RECOGNIZES THAT THE GENERAL ACCOUNTING OFFICE HAD AUTHORITY TO REVIEW ADMINISTRATIVE DETERMINATIONS ON QUESTIONS OF LAW AND FACT UNDER DISPUTES CLAUSE PROVISIONS IN GOVERNMENT CONTRACTS BOTH PRIOR AND SUBSEQUENT TO THE WUNDERLICH DECISION, 342 U.S. 98 IN 1951, BUT CLEARLY INDICATES THAT SUCH JURISDICTION OF THE GENERAL ACCOUNTING OFFICE WAS NOT TO BE AFFECTED BY THE ACT AND THAT IN EXERCISING JURISDICTION AFTER ENACTMENT, THE SAME STANDARDS FOR REVIEW OF FACTUAL DETERMINATIONS THAT THE COURTS USED WOULD BE APPLIED BY GENERAL ACCOUNTING OFFICE. ADMINISTRATIVE DETERMINATIONS - CONCLUSIVENESS - CONTRACTS - DISPUTES - FACT QUESTIONS THE STANDARDS OF REVIEW OF ADMINISTRATIVE DECISIONS ON CONTRACT DISPUTES WHICH ARE GRANTED TO THE COURTS UNDER THE WUNDERLICH ACT, 41 U.S.C. 321- 322, AND WHICH THE LEGISLATIVE HISTORY MAKES CLEAR ARE TO BE EXERCISED BY THE GENERAL ACCOUNTING OFFICE, ARE FOR APPLICATION SOLELY TO DECISIONS OF FACT, AND, THEREFORE, SUCH STANDARDS (FRAUD, CAPRICIOUSNESS, ARBITRARINESS, GROSSLY ERRONEOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE) ARE THE STANDARDS TO BE APPLIED BY GENERAL ACCOUNTING OFFICE IN REVIEW OF FACTUAL DETERMINATIONS UNDER CONTRACT DISPUTE CLAUSES. CONTRACTS - DISPUTES - FINALITY OF ADMINISTRATIVE FINDINGS - "COURT OF COMPETENT JURISDICTION" V. WUNDERLICH ACT A CONTRACT DISPUTES CLAUSE WHICH PROVIDES THAT DECISIONS OF THE CONTRACTING AGENCY AS TO DISPUTES ARE FINAL AND CONCLUSIVE "UNLESS DETERMINED BY A COURT OF COMPETENT JURISDICTION" NOT ONLY GOES BEYOND THE LITERAL AND GOVERNING PROVISIONS OF THE WUNDERLICH ACT, 41 U.S.C. 321-322, WHICH DOES NOT LIMIT REVIEW TO THE "COURTS," BUT IS ALSO CONTRARY TO THE LEGISLATIVE HISTORY THAT RECOGNIZED THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE WITH RESPECT TO THE REVIEW OF SUCH DETERMINATIONS AND, THEREFORE, THE LANGUAGE "COURT OF COMPETENT JURISDICTION" IN THE CONTRACT DOES NOT AFFECT THE AUTHORITY OF THE COMPTROLLER GENERAL TO REVIEW AND QUESTION DETERMINATIONS OF FACT MADE BY THE CONTRACTING OFFICE. ADMINISTRATIVE DETERMINATIONS - ERRONEOUS - GENERAL ACCOUNTING OFFICE AUTHORITY WHEN AN ERRONEOUS DETERMINATION IN A CONTRACT DISPUTES PROCEEDING HAS BEEN MADE BY A CONTRACTING AGENCY AGAINST THE INTERESTS OF THE GOVERNMENT AND THE ADMINISTRATIVE PROCEEDINGS HAVE BEEN EXHAUSTED, IT IS UNLIKELY THAT THE AGENCY MAKING THE DECISION WOULD APPEAL AND IN THE ABSENCE OF A JUDICIAL PRECEDENT THERE IS A QUESTION AS TO WHETHER THE GOVERNMENT WOULD HAVE A STANDING TO FILE AN APPEAL DIRECTLY WITH THE COURTS CHALLENGING AN ADVERSE DECISION BY ONE OF ITS AGENCIES; THEREFORE, UNLESS GENERAL ACCOUNTING OFFICE ON ITS OWN INITIATIVE OR ON SUBMISSION BY AN ACCOUNTABLE OFFICER HAVING RESPONSIBILITY FOR APPROVAL OR PAYMENT OF THE CONTRACT AWARD DIRECTS THE AGENCY NOT TO MAKE PAYMENT, SUCH ADVERSE DETERMINATIONS WOULD GO UNDETECTED AND UNREMEDIED. ADMINISTRATIVE DETERMINATIONS - ERRONEOUS - GENERAL ACCOUNTING OFFICE AUTHORITY WHEN ADMINISTRATIVE DETERMINATIONS IN CONTRACT DISPUTE PROCEEDINGS ARE BROUGHT TO THE ATTENTION OF THE COMPTROLLER GENERAL WHICH IN HIS OPINION FAIL TO MEET THE STANDARDS IN THE WUNDERLICH ACT, 41 U.S.C. 321 322, THE STATUTORY DUTY WHICH IS VESTED IN THE GENERAL ACCOUNTING OFFICE AS AN AGENCY OUTSIDE OF THE EXECUTIVE BRANCH, RESPONSIBLE TO THE CONGRESS, UNDER THE BUDGET AND ACCOUNTING ACT, 1921, TO QUESTION ADMINISTRATIVE ACTION CONTRARY TO STATUTORY FISCAL LIMITATIONS IMPOSED BY CONGRESS, MAKES IT IMPERATIVE TO TAKE THE NEEDED ACTION TO PROTECT THE GOVERNMENT'S INTEREST. CLAIMS - DOUBTFUL - ACCOUNTING OFFICERS RULE - CONTRACT DISPUTES CLAIMS THE RULE IN THE LONGWILL AND CHARLES CASES, 17 CT. CL. 288 (1881); 19 ID. 316 (1884), THAT CLAIMS OF DOUBTFUL VALIDITY SHOULD BE REFERRED TO THE COURT OF CLAIMS FOR ADJUDICATION OR REJECTED LEAVING THE PARTIES TO PROSECUTE THEM UPON THEIR OWN VOLUNTARY PETITIONS IS APPLICABLE TO CLAIMS PRESENTED UNDER CONTRACT DISPUTES CLAUSE PROCEDURES SINCE UNDER THE WUNDERLICH ACT, 41 U.S.C. 321-322, ADMINISTRATIVE DECISIONS ON QUESTIONS OF LAW ARE NOT FINAL AND DECISIONS ON QUESTIONS OF FACT ARE FINAL ONLY IF THEY MEET THE STANDARDS OF REVIEW UNDER SUCH ACT. GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - DISPUTES THE FACT THAT THE GENERAL ACCOUNTING OFFICE IS NOT EQUIPPED TO CONDUCT ADMINISTRATIVE HEARINGS IN CONTRACT DISPUTES CLAUSE CASES WOULD NOT AFFECT THE AUTHORITY OF GENERAL ACCOUNTING OFFICE TO REVIEW AN ADMINISTRATIVE DETERMINATION OF FACT SINCE UNDER THE RULE IN THE BIANCHI CASE, 373 U.S. 709 (1963), REVIEW OF SUCH ADMINISTRATIVE DETERMINATIONS MUST, UNDER THE WUNDERLICH ACT, 41 U.S.C. 321-322, BE CONFINED TO CONSIDERATION OF THE RECORD AND NO NEW EVIDENCE IS PERMITTED. CONTRACTS - DISPUTES - PERFORMANCE TIME RELIEF IN THE ABSENCE OF ANY PROVISION IN A CONTRACT FOR RELIEF FOR IMPOSSIBILITY OF PERFORMANCE, A CONTRACTOR'S CLAIM FOR TIME EXTENSIONS DUE TO IMPOSSIBILITY OF PERFORMANCE WAS PROPERLY REJECTED AS A MATTER OF LAW ON THE BASIS THAT THE HEARING EXAMINER UNDER A DISPUTES CLAUSE PROCEDURE HAD NO AUTHORITY FOR GRANTING AFFIRMATIVE RELIEF ON SUCH A CLAIM. CONTRACT - DISPUTES - EVIDENCE IN REVIEWING A DETERMINATION OF A HEARING EXAMINER ON QUESTIONS OF FACT UNDER A CONTRACT DISPUTES CLAUSE PROCEEDING, THE ENTIRE RECORD MUST BE CONSIDERED AND THE "SUBSTANTIAL EVIDENCE" RULE REQUIRES THAT THE CONCLUSIONS BE BASED ON SUCH RELEVANT EVIDENCE AS A REASONABLE MIND MIGHT ACCEPT TO SUPPORT SUCH CONCLUSIONS AND IF THERE IS OPPOSING EVIDENCE SO SUBSTANTIAL IN CHARACTER AS TO DETRACT FROM THE WEIGHT OF THE EVIDENCE AND THEREBY MAKE IT LESS THAN SUBSTANTIAL ON THE WHOLE RECORD, THE DETERMINATION DOES NOT MEET THE STANDARDS IN THE WUNDERLICH ACT, 41 U.S.C. 321-322, TO CONFER FINALITY UPON THE DETERMINATION. (EDISON COMPANY V. NATIONAL LABOR RELATIONS BOARD, 305 U.S. 197, 229; RUSSELL H. WILLIAMS, ET AL. V. UNITED STATES, 130 CT. CL. 435). CONTRACTS - DISPUTES - EVIDENCE IN A CONTRACT DISPUTES CLAUSE PROCEEDING, EVIDENCE IN THE FORM OF TESTIMONY, OFFICIAL WEATHER DATA, DAILY LOGS OF THE CONSTRUCTION WORK KEPT BY BOTH THE GOVERNMENT AND THE CONTRACTOR, OFFICIAL MINUTES OF WEEKLY CONSTRUCTION MEETINGS AND CORRESPONDENCE ON THE PROBLEMS ENCOUNTERED WHICH EVIDENCE CONTRADICTS THE TESTIMONY OF THE CONTRACTOR IN CERTAIN VITAL RESPECTS SHOULD HAVE BEEN EVALUATED BY THE HEARING EXAMINER BECAUSE OF ITS SIGNIFICANT PROBATIVE VALUE HAVING BEEN COMPILED OR COMPOSED CONTEMPORANEOUSLY WITH THE CONTRACT WORK AND NOT CHALLENGED BY THE CONTRACTOR'S WITNESSES AS BEING INACCURATE, MISLEADING OR ERRONEOUS. CONTRACTS - DISPUTES - EVIDENCE A CONTRACTING AGENCY'S DETERMINATION IN A DISPUTES CLAUSE PROCEEDING THAT THE CONTRACTOR'S CLAIM FOR COSTS INCIDENT TO DELAY IN HAVING THE CONSTRUCTION SITE MADE AVAILABLE SHOULD BE REMANDED TO THE CONTRACTING OFFICER FOR SETTLEMENT, BECAUSE THE RECORD DID NOT FURNISH A BASIS FOR THE CONCLUSION THAT THE ENTIRE PERIOD OF 1 MONTH WAS THE PERIOD OF DELAY, WAS NOT PROPER SINCE THE CONTRACTING OFFICER WOULD HAVE NO ADDITIONAL OR BETTER EVIDENCE TO DETERMINE THE PROPER TIME OF DELAY THAN THAT BEFORE THE AGENCY, AND THE AGENCY'S REMAND NOT ONLY ACKNOWLEDGES THE LACK OF EVIDENCE TO SUSTAIN A FINDING OF SOME DELAY BUT IMPLIES THAT THE PARTIES BY SOME PROCESS OF NEGOTIATION NOT LIMITED TO THE RECORD COULD DETERMINE THE PERIOD OF DELAY WHICH IS A MATTER FOR DETERMINATION WITH PRECISION. CONTRACTS - INCREASED COSTS - GOVERNMENT ACTIVITIES - DELAY - EVIDENCE SUFFICIENCY A CONTRACTOR WHO, INCIDENT TO A CLAIM FOR ADDITIONAL COSTS BECAUSE OF DELAY IN HAVING THE SITE MADE AVAILABLE FOR COMMENCEMENT OF THE WORK, WAS NOT SHOWN TO BE BEHIND IN THE PROGRESS SCHEDULE FOR THE WORK UNTIL SOMETIME AFTER THE PERIOD OF THE CLAIM AND WHO NOT ONLY DID NOT PROTEST UNAVAILABILITY OF THE SITE UNTIL 4 MONTHS LATER BUT WAS FOUND TO HAVE PERFORMED SIGNIFICANT PORTIONS OF WORK DURING THE PERIOD IN QUESTION HAS NOT PRESENTED EVIDENCE TO SUBSTANTIATE A FINDING OF DELAY. CONTRACTS - INCREASED COSTS - GOVERNMENT ACTIVITIES - DELAY - EVIDENCE SUFFICIENCY EVIDENCE WHICH SHOWS THAT A CONTRACTOR HAD ADEQUATE ACCESS TO A CONSTRUCTION SITE FOR THE ENTIRE PERIOD DURING WHICH A DELAY DUE TO UNAVAILABILITY OF THE SITE IS CLAIMED, THAT HE DID NOT HAVE THE NECESSARY MATERIALS FOR COMMENCEMENT OF WORK AT THE SITE AT THE TERMINAL DATE FOR THE PERIOD IN QUESTION DOES NOT SUPPORT BY SUBSTANTIAL EVIDENCE A DETERMINATION BY THE CONTRACTING AGENCY THAT THE CONTRACTOR IS ENTITLED TO A PRICE ADJUSTMENT FOR A DELAY AND, THEREFORE, SUCH A DETERMINATION UNDER THE DISPUTES CLAUSE DOES NOT MEET THE STANDARDS OF THE WUNDERLICH ACT, 41 U.S.C. 321-322, TO BE REGARDED AS FINAL. CONTRACTS - MODIFICATION - CHANGE ORDERS - LEGALITY A CHANGE ORDER RESULTING FROM NEGOTIATION BETWEEN THE PARTIES TO A CONTRACT PROVIDING FOR CHANGE ORDERS THAT WAS COMPLETE AS TO WORK, TIME EXTENSIONS AND COST, EXCEPT FOR ONE SPECIFIED ITEM THAT WAS TO BE PAID FOR ON THE BASIS OF THE PRICE CHARGED BY THE SUPPLIER, IS A DEFINITE AND CERTAIN AGREEMENT UNDER WHICH THE PARTIES COULD EXPECT TO BE BOUND AND, THE FACT THAT THE COST OF ONE ITEM WAS NOT SPECIFIED, THE AGREEMENT DID CONTAIN THE METHOD OF DETERMINING THE PRICE AND, THEREFORE, THE PARTIES MAY BE CONSIDERED TO HAVE BEEN BOUND BY THE CHANGE ORDER. CONTRACTS - OFFER AND ACCEPTANCE - CHANGE ORDERS - UNSIGNED A CONTRACTOR WHO DID NOT SIGN THE AGREEMENT THAT EMBODIED THE RESULTS OF NEGOTIATIONS AND CORRESPONDENCE LEADING TO A CHANGE ORDER THAT WAS DEFINITE AS TO WORK, TIME EXTENSIONS AND PRICE ADJUSTMENT MAY BE CONSIDERED TO HAVE BEEN BOUND SINCE PARTIES TO A CONTRACT ARE NOT LIMITED TO THE SPECIFIED METHOD FOR MODIFICATIONS PARTICULARLY WHERE A PREPONDERANCE OF EVIDENCE INDICATES ACCEPTANCE OF THE PREVIOUSLY AGREED UPON TERMS. HELSBY V. ST. PAUL HOSPITAL AND CASUALTY CO., 195 F. SUPP. 385; BEATTY V. GUGGENHEIM EXPLORATION CO., 122 N.E. 378. CONTRACTS - MODIFICATIONS - CHANGE ORDERS - MODIFICATION LIMITATION A DETERMINATION BY A HEARING EXAMINER UNDER A CONTRACT DISPUTES CLAUSE PROCEEDING THAT THE CONTRACTOR WAS NOT BOUND BY THE TERMS OF A CHANGE ORDER AND THAT THE CONTRACTOR SHOULD BE ALLOWED A LONGER EXTENSION OF TIME THAN UNDER THE CHANGE ORDER IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND, THEREFORE, THE ALLOWANCE OF TIME EXTENSIONS OR AN EQUITABLE ADJUSTMENT IN EXCESS OF THE TIME AND AMOUNTS AGREED TO AND EMBODIED IN THE CHANGE ORDER MAY NOT BE ALLOWED. ADMINISTRATIVE DETERMINATIONS - RECORD SUFFICIENCY WHERE FINDING BY A HEARING EXAMINER UNDER A CONTRACT DISPUTES CLAUSE PROCEEDING THAT THE CONTRACTOR WAS DELAYED BY THE GOVERNMENT'S FAILURE TO FURNISH STEAM IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND A REVIEW OF THE EVIDENCE OFFERED BY THE CONTRACTOR IN SUPPORT OF THE CLAIM IS SHOWN BY THE RECORD TO BE INCONSISTENT, INACCURATE AND MISLEADING, THE FINDING MUST BE REGARDED AS NOT MEETING THE STANDARDS OF THE WUNDERLICH ACT, 41 U.S.C. 321 -322, TO BE ACCORDED FINALITY. CONTRACTS - DISPUTES FINALITY OF ADMINISTRATIVE FINDINGS - BREACH OF CONTRACT DETERMINATION AN ORDER BY A HEARING EXAMINER IN A CONTRACT DISPUTES PROCEEDING THAT THE CONTRACTOR IS ENTITLED TO AN EQUITABLE ADJUSTMENT FOR A CONSTRUCTIVE CHANGE FOR THE GOVERNMENT'S FAILURE TO FURNISH STEAM IS IN EFFECT THE ALLOWANCE OF DAMAGES FOR BREACH OF CONTRACT WHICH IS AN ACTION OUTSIDE THE PURVIEW OF THE DISPUTES CLAUSE JURISDICTION AND, THEREFORE, THE FINDING IS ERRONEOUS AS A MATTER OF LAW; HOWEVER, IF IN FACT THE GOVERNMENT IS CHARGEABLE WITH A BREACH OF CONTRACT, THE REMEDY LIES IN A SEPARATE CLAIM BEFORE THE GENERAL ACCOUNTING OFFICE OR WITH THE COURTS IN A JUDICIAL PROCEEDING. CONTRACTS - DAMAGES - RES IPSA LOQUITUR DOCTRINE - NEGLIGENCE LACKING THE APPLICATION OF THE DOCTRINE OF RES IPSA LOQUITUR FOR FINDING NEGLIGENCE IN THE GOVERNMENT'S FAILURE TO MAKE REPAIRS AT A PARTICULAR LOCATION FOR STEAM THEREBY MAKING THE GOVERNMENT LIABLE FOR BREACH OF CONTRACT TO FURNISH STEAM IS ERRONEOUS AS A MATTER OF LAW SINCE THE CONTRACT DID NOT SPECIFY THAT THE GOVERNMENT WAS TO FURNISH STEAM AT ANY PARTICULAR TIME OR LOCATION, AND NO EVIDENCE OF ANY LACK OF DILIGENCE TO INFER NEGLIGENCE ON THE PART OF THE GOVERNMENT IS SHOWN; THEREFORE, THE APPLICATION OF THE RES IPSA LOQUITUR DOCTRINE WHICH IS A DOCTRINE IN THE LAW OF TORTS IS NOT PROPER. ADMINISTRATIVE DETERMINATION - CONCLUSIVENESS - CONTRACTS - DISPUTES LAW QUESTIONS A HEARING EXAMINER'S DETERMINATION UNDER A CONTRACT DISPUTES CLAUSE PROCEEDING THAT THE CONTRACTOR IS ENTITLED TO TIME EXTENSIONS FOR WORK DELAYS DUE TO UNUSUALLY SEVERE WEATHER THAT WAS UNFORESEEABLE, WHEN THE EVIDENCE IN THESE RESPECTS WAS ERRONEOUS, AS A MATTER OF LAW, AND WHEN THE EXTENSIONS ALLOWED WERE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE MUST BE REGARDED AS A DETERMINATION THAT DOES NOT MEET THE STANDARDS OF THE WUNDERLICH ACT, 41 U.S.C. 321-322. CONTRACTS - DISPUTES - FINALITY OF ADMINISTRATIVE FINDINGS - WUNDERLICH ACT AND DECISION EFFECT A DETERMINATION BY A HEARING EXAMINER IN A DISPUTES CLAUSE PROCEEDING THAT THE CONTRACTOR IS ENTITLED TO INCREASED COSTS ON THE BASIS OF A CONSTRUCTIVE ACCELERATION CHANGE ORDER WHICH DETERMINATION WAS PREDICATED ON ERRONEOUS DETERMINATIONS, AS A MATTER OF LAW, OF SEVERAL OTHER TIME EXTENSION CLAIMS MUST LIKEWISE BE REGARDED AS ERRONEOUS AND, THEREFORE, DOES NOT MEET THE STANDARDS OF THE WUNDERLICH ACT, 41 U.S.C. 321-322, TO BE ACCORDED FINALITY. CONTRACTS - INCREASED COSTS - GOVERNMENT ACTIVITIES - PERFORMANCE TIME RELIEF A CONTRACTOR WHO WAS ACTUALLY BEHIND IN THE WORK PROGRESS SCHEDULE, BASED ON DETAILED DAILY WORK LOGS, ON THE DATE THE CONTRACTING OFFICER INVOKED A CONTRACT PROVISION DIRECTING THE CONTRACTOR TO TAKE THE NECESSARY STEPS TO IMPROVE THE WORK PROGRESS TO MEET THE PROGRESS SCHEDULE MAY NOT HAVE THE CONTRACTOR'S DIRECTIVE REGARDED AS A CHANGE ORDER FOR ACCELERATION OR AS HAVING BEEN ISSUED IMPROPERLY, THEREBY ENTITLING HIM TO INCREASED COSTS INCIDENT TO THE ATTEMPT TO MEET THE WORK SCHEDULE. CONTRACTS - STATUS - CONSTRUCTION V. SUPPLIES AND SERVICES A FIXED-PRICE CONSTRUCTION CONTRACT IS NOT LIKE A CONTRACT FOR SUPPLIES OR FOR SERVICES OF A SPECIFIED NUMBER OF INDIVIDUALS BUT IS A CONTRACT FOR A FINISHED PROJECT AND THE FACT THAT THE CONTRACTOR HAD TO HIRE ADDITIONAL HELP AND EQUIPMENT AND WORK OVERTIME TO COMPLETE THE PROJECT AT THE TIME SPECIFIED IS NOT OF ANY CONCERN TO THE GOVERNMENT UNDER A FIXED-PRICE CONTRACT WHEN THE EVIDENCE INDICATES THAT THE GOVERNMENT DID NOT DEMAND THAT THE CONTRACTOR USE A SPECIFIED NUMBER OF EMPLOYEES. CONTRACTS - DISPUTES - ADDITIONAL COSTS DETERMINATIONS A HEARING EXAMINER'S FINDING UNDER A DISPUTES CLAUSE PROCEEDING THAT A CLAIM FOR EXTRA WORK WAS ONLY A MATTER OF QUANTUM AND, THEREFORE, NOT WITHIN HIS JURISDICTION, AS HE LIMITED IT, IS NOT A DEFINITE DETERMINATION AS TO WHETHER HE WAS REMANDING THE CLAIM TO THE CONTRACTING OFFICER FOR FURTHER NEGOTIATION OR WHETHER NO FURTHER ACTION WAS TO BE TAKEN AND, THEREFORE, SINCE THE EXAMINER TOOK NO ACTION AND THE RECORD IS INCOMPLETE, THE AMOUNT ALLOWED ON THE CLAIM BY THE CONTRACTING OFFICER MUST BE ACCEPTED AS CORRECT. SET-OFF - CONTRACT PAYMENTS - ASSIGNMENTS - PROPRIETY THREE CLAIMS BY THE GOVERNMENT AGAINST A CONSTRUCTION CONTRACTOR, WHO HAD MADE AN ASSIGNMENT OF HIS CONTRACT RIGHTS, FOR PAYMENT FOR TELEPHONE SERVICES AND CONCRETE AGGREGATE WHICH WERE FURNISHED BY SUPPLIERS OPERATING UNDER COST-TYPE CONTRACTS FOR THE SAME GOVERNMENT AGENCY AS THE CONSTRUCTION CONTRACTOR AND FOR DAMAGES FOR BREACH OF CONTRACT ARE REGARDED AS HAVING ARISEN OUT OF THE SAME TRANSACTION OR CONTRACT FOR WHICH THE ASSIGNMENT WAS MADE RATHER THAN INDEPENDENT OF THE CONTRACT, AND, THEREFORE, THE CLAIMS ARE PROPERLY FOR SET-OFF AGAINST FUNDS DUE THE ASSIGNEE. 30 COMP. GEN. 98.

TO M. A. PALMETER, ATOMIC ENERGY COMMISSION, DECEMBER 5, 1966:

WE REFER TO YOUR LETTER OF MARCH 6, 1964, IN WHICH YOU REQUEST A DECISION AS TO WHETHER AN ATTACHED STANDARD FORM 1166, VOUCHER AND SCHEDULE OF PAYMENTS, NO. 64-274, MAY BE CERTIFIED FOR PAYMENT. YOUR REQUEST FOR A DECISION IS MADE IN ACCORDANCE WITH THE PROVISIONS OF 31 U.S.C. 82D.

THE VOUCHER RELATES TO A DECISION (S AND S CONTRACTORS, INC., DOCKET NOS. CA-161 AND 162, ISSUED ON JUNE 26, 1963) BY MR. E. RIGGS MCCONNEL, HEARING EXAMINER, WHICH WAS REVIEWED BY THE COMMISSION UNDER PROCEDURES APPLICABLE TO THE DETERMINATION OF DISPUTES ARISING UNDER ATOMIC ENERGY COMMISSION (AEC) CONTRACTS. THE TOTAL AMOUNT OF THE VOUCHER IS $32,297.73 AND REPRESENTS SUMS WITHHELD FROM PAYMENT BY THE CONTRACTING OFFICER UNDER CONTRACT AT/30-3/-790 (HEREAFTER ,CONTRACT 790"), WITH S AND E CONTRACTORS, INC., PAYMENT OF WHICH HAS BEEN DIRECTED BY THE DECISION REFERRED TO.

SPECIFICALLY THE VOUCHER LISTS THREE ITEMS: (1) $22,280 REPRESENTING THE AMOUNT ALLEGEDLY OWED BY S AND E TO AN AEC COST-TYPE CONTRACTOR FOR MATERIAL FURNISHED FOR CONTRACT 790 AND WHICH THE COST TYPE CONTRACTOR ASSIGNED TO THE AEC BY INSTRUMENT DATED JUNE 26, 1962; (2) $1,651.54 WHICH REPRESENTS THE AMOUNT ALLEGEDLY OWED BY S AND E TO AN AEC COST-TYPE CONTRACTOR FOR TELEPHONE SERVICES FURNISHED BY AN AEC COST-TYPE CONTRACTOR FOR PERFORMANCE OF WORK UNDER CONTRACT 790 AND WHICH THE COST-TYPE CONTRACTOR ASSIGNED TO THE AEC BY AN INSTRUMENT EFFECTIVE AS OF SEPTEMBER 5, 1962; AND (3) $8,366.19 WHICH, ACCORDING TO THE CONTRACTING OFFICER, REPRESENTS AN ALLEGED DEBT DUE BY S AND E TO THE AEC AS DAMAGES UNDER CONTRACT 790 ON THE BASIS THAT S AND E'S DELAY IN COMPLETING ITS CONTRACT RENDERED THE GOVERNMENT LIABLE FOR DAMAGES TO ANOTHER CONTRACTOR TO WHOM THE SITE WAS TO HAVE BEEN MADE AVAILABLE AT AN EARLIER DATE. ITEMS 1 AND 3 WERE CONSIDERED BY THE HEARING EXAMINER IN THE ABOVE CITED DECISION AND HE CONCLUDED THAT SUCH WITHHELD AMOUNTS SHOULD BE PAID FORTHWITH.

IN REGARD TO THE THIRD ITEM IN THE VOUCHER YOUR LETTER OF MARCH 6 RELATES THE FOLLOWING INFORMATION:

WITH RESPECT TO THE $8,366.19 ITEM, PREVIOUSLY MENTIONED, ON THE MATTER OF CONTRACTOR DEFAULT AT THE TIME OF PERFORMING ITS OBLIGATIONS UNDER CONTRACT NO. AT/30-3/-790, THE FOLLOWING RELATED AND SIGNIFICANT ASPECTS SHOULD BE CONSIDERED INASMUCH AS THE CONTRACTOR HAS SUBMITTED A CLAIM AGAINST THE GOVERNMENT IN WHICH HE IS ASKING FOR $2,127,291 OF ADDITIONAL COSTS.

THE CONTRACTING OFFICER, DURING THE PERFORMANCE OF THE CONTRACT, DESIRED TO MAKE CERTAIN CHANGES IN THE DRAWINGS AND SPECIFICATIONS THAT WOULD INCREASE THE AMOUNT DUE UNDER THE CONTRACT AND THE TIME REQUIRED FOR ITS PERFORMANCE. THE CONTRACTING OFFICER, NOT WISHING TO AVAIL HIMSELF OF HIS UNILATERAL RIGHTS UNDER THE CHANGES ARTICLE, REQUESTED A PROPOSAL FROM THE CONTRACTOR WHICH IT SUBMITTED BY LETTER DATED SEPTEMBER 27, 1961, IN WHICH IT ASKED FOR A NET INCREASE OF $145,704 AND PROPOSED THAT THE ATTENDANT TIME ADDITIVE BE NEGOTIATED AT A LATER DATE. THE CONTRACTING OFFICER INFORMED THE CONTRACTOR ITS QUOTATION WAS UNACCEPTABLE, WHEREUPON THE PARTIES APPARENTLY ENTERED INTO NEGOTIATION TO REACH ACCEPTABLE TERMS. APPEARS THE PARTIES SUCCEEDED. THE CONTRACTOR THEREUPON SUBMITTED ITS REVISED PROPOSAL DATED OCTOBER 2, 1961, FOLLOWED THE NEXT DAY BY THE GOVERNMENT'S CHANGE ORDER NO. 2, WHICH ACCEPTED THE SUBSTANTIVE TERMS PROPOSED BY THE CONTRACTOR AND MADE STIPULATED CHANGES IN THE DRAWINGS AND SPECIFICATIONS. SUBSEQUENTLY, ON OCTOBER 27, 1961, THE CONTRACTING OFFICER FORWARDED TO THE CONTRACTOR FOR SIGNATURE A DOCUMENT ENTITLED AMENDMENT NO. 1 WHICH EMBODIED CHANGE ORDER NO. 2 AND A PREVIOUS CHANGE ORDER. THE CONTRACTOR APPARENTLY DID NOT COMMUNICATE AGAIN WITH THE CONTRACTING OFFICER REGARDING AMENDMENT NO. 1 UNTIL IT SENT THE CONTRACTING OFFICER ITS LETTER DATED NOVEMBER 24, 1961, WHICH REQUESTED EITHER A REVISED CHANGE ORDER FOR $139,807 AND A 60 DAY TIME EXTENSION OR FOR THE CONTRACTING OFFICER TO HANDLE THE CHANGE ORDER ON A UNILATERAL BASIS AND USE THE GOVERNMENT ESTIMATE FOR PAY PURPOSES FOR THE CHANGES.

THE PARTICULAR ITEMS AS TO WHETHER PAYMENTS BASED THEREON WOULD BE LAWFUL OBLIGATIONS OF THE GOVERNMENT ARE:

1. WAS CHANGE ORDER NO. 2 A BINDING CONTRACT?

2. WAS IT PROPER TO ALLOW TIME AND THE AMOUNT OF TIME ALLOWED FOR THE ALLEGED BREACH OF THE GOVERNMENT'S OBLIGATION TO FURNISH STEAM?

3. WAS THE LEGAL STANDARD USED IN COMPUTING THE AMOUNT OF TIME ALLOWED FOR "WEATHER" PROPER? YOUR LETTER ALSO QUESTIONS WHETHER IT WAS PROPER FOR THE HEARING EXAMINER TO ALLOW S AND E 31 DAYS FOR ALLEGED SUSPENSIONS OF WORK DURING THE FIRST PART OF THE CONTRACT PERFORMANCE. AT THE TIME OF YOUR LETTER THIS QUESTION HAD NOT YET BEEN RESOLVED BY THE COMMISSION WHICH HAD THE MATTER BEFORE IT FOR REVIEW UPON APPEAL BY THE CONTRACTING OFFICER FROM THE HEARING EXAMINER'S DECISION.

THE QUESTIONS PRESENTED BY YOUR SUBMISSION AROSE FROM THE FOLLOWING TRANSACTIONS:

ON MAY 15, 1961, THE AEC ISSUED AN INVITATION FOR BIDS FOR CONSTRUCTION OF AN ENCLOSED TESTING BASIN AT A SITE IN THE STATE OF IDAHO. SPECIFICATIONS ACCOMPANYING THE INVITATION FOR BIDS CALLED FOR CONSTRUCTION OF A TEST PLANT BUILDING 320 FEET LONG, 112 FEET WIDE AND 65 FEET HIGH, AND A REINFORCED CONCRETE BASIN WITHIN THE BUILDING MEASURING 250 FEET LONG, 45 FEET WIDE AND 36 FEET DEEP. THE BUILDING WAS TO BE MADE OF STRUCTURAL STEEL WITH ALUMINUM SIDING AND COMPOSITION ROOF. CONCRETE WALLS IN THE BASIN WERE TO BE REINFORCED BY MASSIVE COUNTERFORTS IN ORDER TO WITHSTAND THE WATER PRESSURE WHEN THE BASIN WAS FILLED. THE SPECIFICATIONS ALSO CALLED FOR THE EXTENSION OF STEAM, WATER, POWER, TELEPHONE AND FIRE ALARM UTILITIES TO THE BUILDING FROM EXISTING SERVICES; THE ERECTION AND TEST OF TWO 100 TON, 100 FOOT SPAN GOVERNMENT-FURNISHED BRIDGE CRANES WITHIN THE BUILDING; AND THE EXTENSION OF A RAILROAD SPUR FROM A POINT APPROXIMATELY 100 FEET OUTSIDE THE BUILDING TO WITHIN THE BUILDING. PIPING, PLUMBING, HEATING AND VENTILATION WERE TO BE PROVIDED. BACKFILL WAS TO BE PUT IN PLACE AND COMPACTED AS THE WORK ON THE BASIN PROGRESSED SO THAT WHEN FINISHED THE BASIN WOULD BE COMPLETELY FLUSH WITH THE GROUND. BY THE TERMS OF THE INVITATION FOR BIDS THE ENTIRE PROJECT WAS TO BE COMPLETED WITHIN 180 DAYS AFTER THE NOTICE TO PROCEED.

EXCAVATION OF THE SITE HAD BEEN PREVIOUSLY CONTRACTED FOR WITH NELSON BROS. CONSTRUCTION COMPANY OF SALT LAKE CITY AND WAS NEARING COMPLETION. BIDS WERE OPENED ON JUNE 20, 1961. FOUR BIDS WERE RECEIVED, RANGING FROM A LOW BID OF $1,272,000 BY S AND E CONTRACTORS TO A HIGH BID OF $1,413,600. SIXTY DAYS AFTER THE DATE OF OPENING, UNLESS OTHERWISE STATED BY THE BIDDER, WERE ALLOWED FOR AWARD OF A CONTRACT. S AND E DID NOT RESTRICT THIS TIME IN ITS BID, AND NEITHER S AND E NOR ANY OTHER BIDDER EXCEPTED TO THE INVITATION REQUIREMENT THAT THE CONTRACT WORK BE COMPLETED 180 DAYS AFTER RECEIPT OF NOTICE TO PROCEED.

BECAUSE OF DELAYS IN THE PERFORMANCE OF THE EXCAVATION FOR THE BASIN, DUE TO UNFORESEEN SUBSURFACE CONDITIONS, IT APPEARED THAT IT WOULD NOT BE POSSIBLE FOR THE CONSTRUCTION CONTRACTOR TO BE GIVEN FULL ACCESS TO THE PROJECT SITE UNTIL ABOUT THE END OF AUGUST 1961. THE LOW BIDDER, S AND E, WAS THEREFORE REQUESTED TO CONFER WITH THE CONTRACTING OFFICIALS CONCERNING THE EFFECT OF THIS DELAY, AND A CONFERENCE WAS HELD ON AUGUST 2, 1961, AS A RESULT OF WHICH S AND E AND THE CONTRACTING OFFICER EXECUTED A "MEMORANDUM OF UNDERSTANDING" DATED AUGUST 2, 1961, WHICH RECITED THE ABOVE FACTS, THAT UNLIMITED ACCESS TO THE BASIN FOUNDATION MIGHT NOT BE GRANTED BEFORE SEPTEMBER 10, AND THAT THE CONTRACTING OFFICER INTENDED "TO RELEASE THE BASIN FOUNDATION FOR WORK BY THE CONTRACTOR IN SECTIONS AS IT IS COMPLETED.' S AND E AGREED THAT, SHOULD IT BE AWARDED THE CONTRACT AND SHOULD UNLIMITED ACCESS TO THE BASIN FOUNDATION BE GRANTED ON OR BEFORE SEPTEMBER 10, 1961,"NO CHANGE IN COMPLETION TIME OR CONTRACT PRICE WILL RESULT FROM EITHER THE AWARD OF THIS CONTRACT AT ANY TIME WITHIN 60 DAYS OF JUNE 20, 1961, OR FROM THE ISSUANCE OF PARTIAL NOTICE TO PROCEED AND POSSIBLE JOINT OCCUPANCY PRIOR TO SEPTEMBER 10, 1961, WITH THE UNDERSTANDING THAT S AND E CONTRACTORS, INC., WILL BE ALLOWED TO PROCEED WITH ALL WORK IN THE MAJOR PORTION OF THE WESTERLY HALF OF THE BUILDING.'

IN ACCORDANCE WITH THIS AGREEMENT, THE CONTRACT WAS AWARDED TO S AND E ON AUGUST 4 AND ON AUGUST 10 A NOTICE WAS ISSUED TO THE CONTRACTOR "TO PROCEED WITH ALL WORK IN THE MAJOR PORTION OF THE WESTERLY HALF OF THE BUILDING.' BY TELEGRAM DATED SEPTEMBER 10 THE CONTRACTOR WAS GRANTED ,UNLIMITED ACCESS TO THE TEST PLANT BASIN FOUNDATION" AND "NOTIFIED TO PROCEED WITH ALL WORK UNDER THE SUBJECT CONTRACT.'

DURING PERFORMANCE OF THE WORK SEVERAL CHANGE ORDERS WERE ISSUED, TWO OF WHICH INCLUDED EXTENSIONS OF 30 AND 15 DAYS, RESPECTIVELY, IN THE TIME FOR PERFORMANCE, MAKING A TOTAL PERFORMANCE TIME OF 225 DAYS FROM THE DATE OF RECEIPT OF NOTICE TO PROCEED. THE WORK WAS COMPLETED AND ACCEPTED ON JUNE 29, 1962, OR 323 DAYS AFTER THE INITIAL NOTICE OF AUGUST 10, 1961.

BY VARIOUS LETTERS WRITTEN DURING THE WINTER AND SPRING OF 1962 THE CONTRACTOR PRESENTED A NUMBER OF CLAIMS FOR EXTENSIONS OF TIME FOR ALLEGED EXCUSABLE DELAYS, AND A CLAIM FOR ADDITIONAL COMPENSATION OF $1,415,467.05 BASED ON THE DIFFERENCE BETWEEN ALLEGED "ACTUAL COSTS" OF $2,695,177.18 (INCLUDING OVERHEAD AND PROFIT) AND "REASONABLE COST OF ORIGINAL WORK" OF $1,272,000 (THE AMOUNT OF THE CONTRACTOR'S ACCEPTED BID).

THE CONTRACTING OFFICER RENDERED HIS DECISION ON AUGUST 8, 1962. THE DECISION DISCUSSED AND ANALYZED S AND E'S CLAIMS AT CONSIDERABLE LENGTH AND FOR THE REASONS STATED THEREIN, WHICH WE NEED NOT GO INTO AT THIS POINT, HE DENIED MOST OF THEM, CONCLUDING AS FOLLOWS:

1. THE CONTRACTOR'S CLAIM FOR CONTRACT TIME EXTENSION BASED ON THE CONTRACTOR'S CONTENTION THAT THE CONTRACT PERFORMANCE TIME DID NOT BEGIN UNTIL SEPTEMBER 10, 1961, IS DENIED.

2. TO REFLECT AN EQUITABLE ADJUSTMENT OF THE CONTRACT PRICE RESULTING FROM THE ISSUANCE OF ALL OF THE CHANGE ORDERS ISSUED PURSUANT TO THE PROVISIONS OF CLAUSE 3 OF THE GENERAL PROVISIONS OF THE CONTRACT, THE CONTRACT PRICE SHOULD BE, AND IT HEREBY IS, INCREASED BY $92,794.70 FROM $1,272,000 TO $1,364,794.70. TO REFLECT AN EQUITABLE ADJUSTMENT OF THE CONTRACT PERFORMANCE TIME RESULTING FROM THE ISSUANCE OF SAID CHANGE ORDERS, SAID CONTRACT PERFORMANCE TIME SHOULD BE, AND IT HEREBY IS, EXTENDED BY 45 CALENDAR DAYS FROM 180 CALENDAR DAYS TO 225 CALENDAR DAYS.

3. TO COMPENSATE FOR THE DELAY CAUSED BY THE STRIKE OF LABORERS, WHICH BEGAN ON JANUARY 12, 1962, AND ENDED ON JANUARY 19, 1962, THE CONTRACT PERFORMANCE TIME SHOULD BE, AND IT HEREBY IS EXTENDED BY 7 CALENDAR DAYS FROM 225 CALENDAR DAYS (SEE PARAGRAPH 2, ABOVE) TO 232 CALENDAR DAYS.

4. TO COMPENSATE FOR THE DELAY CAUSED BY THE STRIKE OF CARPENTERS, WHICH BEGAN ON MARCH 14, 1962, AND ENDED ON MARCH 15, 1962, THE CONTRACT PERFORMANCE TIME SHOULD BE, AND IT HEREBY IS, EXTENDED BY 2 CALENDAR DAYS FROM 232 CALENDAR DAYS (SEE PARAGRAPH 3, ABOVE) TO 234 CALENDAR DAYS.

5. THE CONTRACTOR'S CLAIM FOR CONTRACT TIME EXTENSION BASED ON AVAILABILITY OF GOVERNMENT-FURNISHED STEAM, IS DENIED.

6. THE CONTRACTOR'S CLAIM FOR CONTRACT TIME EXTENSION BASED ON ALLEGATIONS OF DELAY IN THE PERFORMANCE OF BACKFILL OPERATIONS, IS DENIED.

7. THE CONTRACTOR'S CLAIM FOR CONTRACT TIME EXTENSION BASED ON ALLEGATIONS OF UNUSUALLY SEVERE WEATHER CONDITIONS IS ALLOWED ONLY TO THE EXTENT THAT THE CONTRACT TIME IS EXTENDED BY 4 CALENDAR DAYS FROM 234 CALENDAR DAYS (SEE PARAGRAPHS 2 AND 3, ABOVE) TO 238 CALENDAR DAYS. ADJUSTED BY THIS AND THE FOREGOING PROVISIONS OF THIS DECISION, THE CONTRACT REQUIRED COMPLETION OF ALL WORK THEREUNDER ON OR BEFORE APRIL 5, 1962.

8. THE CONTRACTOR'S CLAIM FOR CONTRACT TIME EXTENSION BASED ON ALLEGATIONS THAT IT WAS NOT POSSIBLE TO PERFORM THE CONTRACT WORK WITHIN THE TIME PRESCRIBED BY THE CONTRACT IS DENIED.

9. THE CONTRACTOR'S CLAIM FOR ADDITIONAL COMPENSATION IN THE AMOUNT OF $1,415,467.05, BASED ON THE CONTRACTOR'S ALLEGATIONS AS TO THE ACTUAL COSTS WHICH IT INCURRED IN THE PERFORMANCE OF THE CONTRACT WORK IS DENIED.

S AND E FILED ITS NOTICE OF APPEAL FROM THIS DECISION ON SEPTEMBER 4, 1962. THE CONTRACTOR TOOK ISSUE WITH ALL OF THE CONTRACTING OFFICER'S FINDINGS EXCEPT THOSE RELATING TO TIME EXTENSION FOR LABOR DISPUTES. THE APPEAL WAS DOCKETED AS CA-161. DURING A PREHEARING CONFERENCE ON OCTOBER 19, 1962, S AND E REQUESTED LEAVE TO AMEND ITS COMPLAINT TO INCLUDE ADDITIONAL CLAIMS NOT COVERED IN THE CONTRACTING OFFICER'S DECISION OF AUGUST 8. SOME OF THESE CLAIMS HAD NEVER BEEN FORMALLY PRESENTED TO THE CONTRACTING OFFICER AND IT WAS AGREED THAT THESE CLAIMS WOULD BE SUBMITTED FOR DECISION. THIS WAS DONE BY LETTERS TO THE CONTRACTING OFFICER SENT ON OCTOBER 22, WHICH INCORPORATED BY REFERENCE SEVERAL PRECEDING LETTERS. EIGHT NEW CLAIMS WERE ASSERTED: (1) S AND E DEMANDED IMMEDIATE PAYMENT OF $92,794 WHICH REPRESENTED THE AMOUNT FOUND TO BE DUE BY THE CONTRACTING OFFICER FOR THE 6 CHANGE ORDERS IN PARAGRAPH 2 OF HIS AUGUST 8 DECISION. S AND E, HOWEVER, GUARDED ITS RIGHT TO CLAIM MORE FOR CHANGE ORDER NO. 2.

(2) S AND E ASSERTED THAT THE CONTRACTING OFFICER HAD WITHHELD $8,000 ON THE GROUND THAT S AND E'S FAILURE TO HAVE THE BASIN READY AT A CERTAIN TIME GAVE RISE TO A CAUSE OF ACTION FOR BREACH OF CONTRACT ON THE PART OF ELECTRIC BOAT COMPANY IN CONNECTION WITH THE TIMING OF ITS WORK ON THE SUBMARINE HULL INSTALLED IN THE BASIN. THE CONTRACTOR DEMANDED IMMEDIATE PAYMENT OF THIS AMOUNT, CONTENDING THAT THE CONTRACTING OFFICER HAD NO POWER TO ASSESS UNLIQUIDATED DAMAGES.

(3) S AND E DEMANDED IMMEDIATE PAYMENT OF $22,280 WHICH WAS WITHHELD BY THE CONTRACTING OFFICER ON THE BASIS THAT S AND E OWED THIS AMOUNT TO H. K. FERGUSON AND CO. (AN AEC COST-TYPE CONTRACTOR) FOR AGGREGATE MATERIAL FURNISHED S AND E.

(4) THE CONTRACTING OFFICER HAD WITHHELD $1,272 FROM THE PRICE OF THE ORIGINAL CONTRACT UNDER HIS AUTHORITY TO WITHHOLD 10 PERCENT OF PAYMENT AS THE WORK PROGRESSED. S AND E DEMANDED IMMEDIATE PAYMENT OF THIS AMOUNT, LESS $100 TO KEEP THE CONTRACT OPEN.

(5) S AND E CLAIMED AN EQUITABLE ADJUSTMENT IN THE AMOUNT OF $2,323.75 FOR CERTAIN WORK ON THE FOUNDATION OF COLUMN LINE B.

(6) THE SUM OF $1,322.24 WAS CLAIMED FOR THE COSTS OF SHIFTING FROM THE PILE OF AGGREGATE WHICH WAS PROVIDED BY THE GOVERNMENT TO A NEW PILE, WHEN THE AGGREGATE USED WAS FOUND BY THE GOVERNMENT TO BE INADEQUATE.

(7) THE SUM OF $3,197.65 WAS CLAIMED FOR REPAIRS AND MODIFICATION WORK ON THE CRANE OVER AND ABOVE THAT REQUIRED BY THE CONTRACT.

(8) AN EQUITABLE ADJUSTMENT WAS CLAIMED FOR PUTTING FELT IN THE VENTILATORS WHICH WERE INSTALLED FOR AIR CONDITIONING PURPOSES.

ON NOVEMBER 8, 1962, THE CONTRACTING OFFICER ALLOWED THE SUM OF $1,954.41 FOR EXTRA WORK ON THE FOUNDATION OF COLUMN LINE B BUT DENIED ALL OF THE OTHER CLAIMS. S AND E FILED A NOTICE OF APPEAL FROM THIS DECISION ON NOVEMBER 23, 1962, WHICH WAS DOCKETED AS CA-162. THE TWO APPEALS WERE CONSOLIDATED AND HEARINGS WERE HELD BEFORE THE HEARING EXAMINER IN IDAHO AND WASHINGTON, D.C., DURING THE MONTHS OF DECEMBER 1962 AND JANUARY 1963. THE HEARING EXAMINER RENDERED A DECISION ON JUNE 26, 1963, IN WHICH HE SUSTAINED THE APPEAL OF S AND E ON MOST OF ITS MAJOR CLAIMS.

THE UNRESOLVED CLAIMS IN THE TWO APPEALS WERE GROUPED FOR TREATMENT BY THE HEARING EXAMINER AS FOLLOWS:

1. TIME FOR COMMENCEMENT OF PERFORMANCE

2. CHANGE ORDER NO. 2

3. NON-AVAILABILITY OF STEAM

4. EXTENSIONS FOR WEATHER

5. ACCELERATION

6. BACKFILL

7. MISCELLANEOUS CLAIMS

A. COLUMN LINE B

B. CHANGE IN CONNECTION WITH AGGREGATE

C. WORK ON CRANE

D. FELTING OF DAMPERS

8. IMPOSSIBILITY OF PERFORMANCE AT OUTSET

9. MONIES WITHHELD AND MODE OF SETTLEMENT, IF ANY, WILL BE DISCUSSED BRIEFLY, IN THE CONCLUSION.

THE HEARING EXAMINER HELD THAT THE CONTRACTOR WAS ENTITLED TO EQUITABLE ADJUSTMENTS UNDER NOS. 1,2,3,4,5,6 AND 7/D) OF THE ABOVE CLAIMS. CLAIMS 7/B), 7/C) AND 8 WERE DENIED, AND 7/A) WAS HELD TO INVOLVE MERELY A QUESTION OF QUANTUM, WHICH WAS NOT CONSIDERED ON THE APPEAL. UNDER 9 HE HELD THAT THE NET AMOUNT OF $92,794.70 DUE UNDER THE SEVERAL CHANGE ORDERS AS ISSUED BY THE CONTRACTING OFFICER SHOULD BE PAID IMMEDIATELY, TOGETHER WITH ANY AMOUNTS BEING WITHHELD TO COVER THE GOVERNMENT'S POSSIBLE LIABILITY TO ELECTRIC BOAT AND THE CLAIM FOR AGGREGATE FURNISHED BY H. K. FERGUSON, THESE BEING TWO OF THE THREE ITEMS INCLUDED IN THE VOUCHER FORWARDED WITH YOUR SUBMISSION. NO REFERENCE WAS MADE TO THE THIRD ITEM.

HAVING EXCLUDED THE QUESTION OF AMOUNT FROM HIS CONSIDERATION AT THE OUTSET OF THE HEARING, THE EXAMINER MADE NO FINDINGS WITH RESPECT THERETO, BUT ORDERED THAT THE PARTIES PROCEED WITHOUT DELAY TO "NEGOTIATE" A FINAL SETTLEMENT IN ACCORDANCE WITH THE DECISION.

ON JULY 10, 1963, THE CONTRACTING OFFICER PRESENTED A MOTION TO THE ATOMIC ENERGY COMMISSION TO EXTEND THE TIME TO PETITION FOR REVIEW OF THE HEARING EXAMINER'S DECISION. THIS MOTION WAS GRANTED BY COMMISSION ORDER DATED JULY 12, 1963. BY PETITION DATED JULY 30, 1963, WITH SUPPORTING BRIEF ATTACHED, THE CONTRACTING OFFICER REQUESTED THAT THE COMMISSION REVIEW THE EXAMINER'S DECISION. ON NOVEMBER 14, 1963, THE COMMISSION IN A MEMORANDUM AND ORDER GRANTED THE CONTRACTING OFFICER'S PETITION FOR REVIEW WITH RESPECT TO FOUR ISSUES ONLY. THEY WERE LISTED AS FOLLOWS:

A. ALLEGED ARITHMETICAL ERROR IN THE SUMMATION OF DELAYS ATTRIBUTABLE TO UNUSUALLY SEVERE WEATHER AND FAILURE OF THE GOVERNMENT TO FURNISH STEAM FOR CURING CONCRETE, ON THE BASIS OF THE HEARING EXAMINER'S SPECIFIC FINDINGS OF SUCH DELAYS BEFORE AND AFTER DECEMBER 7, 1961;

B. THE PROPRIETY OF THE HEARING EXAMINER'S DECISION THAT AN EQUITABLE ADJUSTMENT OF COSTS AND OF THE 180 DAY PERIOD OF PERFORMANCE SPECIFIED IN THE CONTRACT IS TO BE ALLOWED ON ACCOUNT OF DELAY FROM AUGUST 10, 1961, TO SEPTEMBER 10, 1961, IN MAKING THE SITE AVAILABLE TO S AND E CONTRACTORS, INC.;

C. THE PROPRIETY OF THE HEARING EXAMINER'S CONCLUSION THAT, UNDER THE TERMS OF THE CONTRACT, THE CONTRACTOR WAS NOT REQUIRED TO INSTALL FELTING ON THE BLADES OF THE DAMPERS OF THE VENTILATING UNITS INSTALLED, AND THAT THE CONTRACTOR IS ENTITLED TO ADDITIONAL COMPENSATION FOR THE INSTALLATION OF SUCH FELTING;

D. THE PROPRIETY OF THE HEARING EXAMINER'S ADMISSION IN EVIDENCE OF A TELEGRAM FROM TRANE MANUFACTURING CO. TO S AND E CONTRACTORS, INC., DATED JUNE 6, 1962, DEALING WITH THE NECESSITY AND DESIRABILITY OF INSTALLING FELTING ON THE BLADES OF THE VENTILATING UNITS. THE PETITION OF THE CONTRACTING OFFICER FOR REVIEW OF THE DECISION IN ALL OTHER RESPECTS WAS DENIED. HOWEVER, PENDING THE ULTIMATE DETERMINATION OF THE APPEAL, THE COMMISSION DELETED THE LAST PARAGRAPH OF THE EXAMINER'S DECISION AND SUBSTITUTED IN LIEU THEREOF THE FOLLOWING:

IT IS ORDERED THAT THE APPEAL IS SUSTAINED; THE DECISIONS OF THE CONTRACTING OFFICER HEREIN ARE SET ASIDE TO THE EXTENT SET FORTH IN THIS DECISION; AND THE CONTRACTING OFFICER IS DIRECTED TO EFFECT PROMPTLY EQUITABLE ADJUSTMENTS AND PAYMENTS TO WHICH THE APPELLANT IS ENTITLED. THE EVENT OF DISAGREEMENT CONCERNING THE ADJUSTMENT OR PAYMENT, THE CONTRACTING OFFICER WILL MAKE A DETERMINATION PURSUANT TO THE DISPUTES CLAUSE OF THE CONTRACT, SUBJECT TO APPEAL.

ON NOVEMBER 25, 1963, THE CONTRACTING OFFICER PETITIONED THE COMMISSION TO RECONSIDER ITS MEMORANDUM AND ORDER OF NOVEMBER 14, 1963, ON THE BASIS THAT THE COMMISSION SHOULD HAVE GRANTED REVIEW OF THE HEARING EXAMINER'S DECISION IN TOTO RATHER THAN ON ONLY THE FOUR ISSUES ACTUALLY GRANTED. THIS PETITION WAS DENIED BY THE COMMISSION ON FEBRUARY 11, 1964. HOWEVER, WITH RESPECT TO THE ASSIGNMENTS TO THE AEC OF THE TWO CLAIMS AGAINST S AND E BY H. K. FERGUSON AND PHILLIPS PETROLEUM COMPANY, THE COMMISSION HELD THAT IF AT THE TIME OF PAYMENT WHICH WAS DIRECTED IN ITS ORDER OF NOVEMBER 14, 1963, IT APPEARED THAT THERE WAS A LAWFUL CLAIM OF THE GOVERNMENT AGAINST S AND E THEN THAT FACT COULD BE TAKEN INTO ACCOUNT IN MAKING THE ADJUSTMENT.

AS NOTED EARLIER, YOUR LETTER OF MARCH 6, 1964, WAS FORWARDED TO OUR OFFICE BY LETTER OF MARCH 27, 1964, FROM MR. A. R. LUEDECKE, GENERAL MANAGER OF THE AEC. AT THAT TIME THE APPEAL TO THE COMMISSION WAS STILL PENDING. THE COMMISSION RENDERED ITS DECISION ON MAY 13, 1964, AND A COPY OF THIS DECISION WAS TRANSMITTED TO OUR OFFICE BY LETTER DATED MAY 21, 1964, FROM THE ACTING ASSISTANT GENERAL MANAGER OF THE AEC.

IN ITS DECISION THE COMMISSION CONFINED ITSELF TO CONSIDERATION OF THE LAST THREE ISSUES DESIGNATED IN ITS ORDER OF NOVEMBER 14, 1963, SINCE THE CONTRACTING OFFICER HAD PREVIOUSLY WAIVED HIS RIGHT TO FILE EXCEPTIONS ON THE FIRST ISSUE SPECIFIED. SUCH WAIVER WAS BASED ON THE GROUND THAT THE INTERESTS OF THE GOVERNMENT WOULD NOT BE SERVED BY SEEKING A MODIFICATION LIMITED ONLY TO ARITHMETICAL ERRORS IN THE COMPUTATION OF DELAYS ATTRIBUTABLE TO UNUSUALLY SEVERE WEATHER AND FAILURE TO FURNISH STEAM.

UPON THIS LIMITED REVIEW, THE COMMISSION REVERSED THE HEARING EXAMINER'S DECISION THAT THE CONTRACTOR WAS ENTITLED TO ADJUSTMENT FOR THE FULL 31- DAY PERIOD FROM AUGUST 10 TO SEPTEMBER 10, 1961, RULING THAT THERE SHOULD BE DEDUCTED FROM THAT PERIOD OF TIME SUCH PART OF IT AS WAS IN FACT USEFULLY OCCUPIED BY THE CONTRACTOR, BUT LEAVING THAT FOR DETERMINATION AS A PART OF THE FINAL SETTLEMENT NEGOTIATIONS. THE COMMISSION ALSO REVERSED THE EXAMINER'S ALLOWANCE OF CLAIM 7/D), AND MODIFIED THE FINAL ORDER OF THE EXAMINER AS ABOVE NOTED.

IT IS OUR UNDERSTANDING THAT PAYMENT HAS BEEN MADE OF THE ENTIRE BALANCE OF THE ORIGINAL CONTRACT PRICE, AS MODIFIED BY THE SEVERAL CHANGE ORDERS, LESS THE AMOUNT COVERED BY THE VOUCHER SUBMITTED BY YOUR LETTER OF MARCH 6, 1964.

THE QUESTION INITIALLY PRESENTED BY YOUR SUBMISSION IS, THEREFORE, WHETHER THE HEARING EXAMINER'S DECISION (TO THE EXTENT THAT IT HAS BEEN AFFIRMED BY THE COMMISSION) THAT THE GOVERNMENT'S WITHHOLDING OF THE VOUCHER ITEMS IS IMPROPER, AND THAT THE AMOUNT THEREOF SHOULD BE PAID FORTHWITH, IS A FINAL AND CONCLUSIVE ADJUDICATION WHICH WOULD PRECLUDE ANY EXCEPTION BY OUR OFFICE TO A PAYMENT MADE IN OBEDIENCE THERETO. SINCE THE DECISION IN THAT RESPECT INVOLVES PRIMARILY AND ESSENTIALLY A QUESTION OF LAW, WE HAVE NO HESITANCY IN CONCLUDING THAT THE DECISION IN THAT RESPECT DOES NOT BIND THIS OFFICE, AND THAT WE MUST THEREFORE DETERMINE WHETHER THE DECISION IS CORRECT. IN MAKING THAT DETERMINATION WE RECOGNIZE AND ACKNOWLEDGE THAT UNDER THE STIPULATION OF THE DISPUTES CLAUSE OF THE CONTRACT AND THE PROVISIONS OF THE "WUNDERLICH" ACT OF MAY 11, 1954, 68 STAT. 81 (41 U.S.C. 321 322) WE MUST ACCEPT AS CONCLUSIVE THE DECISION OF THE COMMISSION AND ITS AUTHORIZED REPRESENTATIVE, AS TO DISPUTES OF FACT, UNLESS SUCH DECISION IS ,FRAUDULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.'

IN ORDER TO ENABLE US TO MAKE THIS DETERMINATION WE REQUESTED, AND THE COMMISSION FURNISHED, THE COMPLETE RECORD OF THE APPEAL PROCEEDINGS (WITH THE EXCEPTION OF CERTAIN EXHIBITS HEREINAFTER REFERRED TO). BELIEVING THAT OUR RESPONSIBILITY FOR THE SETTLEMENT OF ALL CLAIMS AGAINST THE GOVERNMENT AND FOR THE AUDITING OF THE FINANCIAL TRANSACTIONS OF THE ADMINISTRATIVE AGENCIES OF THE GOVERNMENT WOULD NOT JUSTIFY US IN SANCTIONING, EVEN BY SILENCE, THE PAYMENT OF ANY CLAIM WHICH WAS BROUGHT TO OUR ATTENTION AND TO WHICH WE WOULD FEEL BOUND TO TAKE EXCEPTION IN OUR SUBSEQUENT AUDIT, WE REVIEWED THE ENTIRE RECORD, NOT ONLY WITH RESPECT TO THE PARTICULAR ITEMS INVOLVED IN THE VOUCHER SUBMITTED BUT ALSO WITH RESPECT TO ALL OF THE CLAIMS CONSIDERED.

UPON OUR INITIAL REVIEW OF THE RECORD WE REACHED CERTAIN TENTATIVE CONCLUSIONS WHICH WERE SET FORTH IN DETAIL IN A DOCUMENT. UPON THE REQUEST OF S AND E'S ATTORNEYS THAT THEY BE PERMITTED TO REVIEW AND FILE A REPLY BRIEF COMMENTING IN DETAIL THEREON, A COPY OF THIS DOCUMENT WAS FORWARDED TO S AND E IN CARE OF ITS ATTORNEYS WITH INSTRUCTIONS THAT THE REPLY BRIEF BE LIMITED TO THE RECORD MADE BEFORE THE HEARING EXAMINER, SINCE WE WOULD NOT CONSIDER ANY NEW MATTER NOT PREVIOUSLY RECEIVED AS EVIDENCE BY THE EXAMINER. SINCE THE CONTRACTING OFFICER AND THE ATOMIC ENERGY COMMISSION ALSO HAD AN INTEREST IN THE OUTCOME OF ANY DECISION OUR OFFICE MIGHT REACH, COPIES OF THE DOCUMENT WERE FURNISHED TO THEM BY LETTER OF FEBRUARY 26, 1965, WITH SIMILAR INSTRUCTIONS TO LIMIT ALL COMMENTS TO THE RECORD MADE BEFORE THE EXAMINER.

BY LETTER OF APRIL 23, 1965, THE CONTRACTING OFFICER'S ATTORNEY SUBMITTED A COMPREHENSIVE (53 PAGE) LEGAL BRIEF COMMENTING ON VARIOUS FACETS OF OUR DRAFT DOCUMENT. BY LETTER DATED JUNE 1, 1965, THE ATTORNEYS FOR S AND E SUBMITTED THEIR LEGAL BRIEF. THIS BRIEF WAS ALSO COMPREHENSIVE (51 PAGES) AND COMMENTED IN DETAIL ON THE INITIAL CONCLUSIONS CONTAINED IN THE DRAFT DOCUMENT. BY LETTER OF AUGUST 6, 1965, THE CHAIRMAN OF THE AEC ADVISED US THAT, UNDER THE CIRCUMSTANCES, HE DID NOT BELIEVE IT WOULD BE APPROPRIATE OR DESIRABLE FOR THE COMMISSION TO COMMENT ON ANY PROPOSED ACTION BY OUR OFFICE BEARING UPON THE CORRECTNESS AND CONCLUSIVENESS OF THE COMMISSION'S DECISION.

THEREAFTER, AT THE REQUEST OF S AND E'S ATTORNEYS CONFERENCES WERE HELD IN OUR OFFICE ON APRIL 15 AND 20, 1966, AT WHICH TIME THE VARIOUS ISSUES IN THE EXAMINER'S DECISION WERE DISCUSSED IN CONSIDERABLE DETAIL. AT THE CONCLUSION OF THE APRIL 20 CONFERENCE A REQUEST WAS MADE THAT S AND E BE ALLOWED TO SUBMIT AN ADDITIONAL BRIEF WHICH WOULD BE PRIMARILY DIRECTED AT SHOWING WHAT ITEMS IN EVIDENCE BEFORE THE EXAMINER WOULD CONSTITUTE "SUBSTANTIAL EVIDENCE" IN SUPPORT OF THE EXAMINER'S DECISION. THIS BRIEF WAS SUBMITTED ON JULY 20, 1966.

OUR DECISION IN THIS CASE HAS BEEN REACHED AFTER A FULL AND CAREFUL CONSIDERATION OF THE BRIEFS SUBMITTED BY THE ATTORNEYS FOR S AND E AND BY THE CONTRACTING OFFICER'S ATTORNEY. HOWEVER, BEFORE WE TURN TO AN EXAMINATION OF THE HEARING EXAMINER'S DECISION, WE SHOULD LIKE TO COMMENT UPON A BASIC QUESTION RAISED IN S AND E'S BRIEFS OF JUNE 1, 1965 AND JULY 20, 1966, CONCERNING THE AUTHORITY AND JURISDICTION OF OUR OFFICE TO REVIEW THE EXAMINER'S DECISION AS MODIFIED BY THE COMMISSION.

S AND E'S BRIEF OF JUNE 1, 1965, TAKES THE POSITION THAT THE INJECTION OF OUR OFFICE INTO A PROCEEDING OF THIS NATURE WHERE THE TERMS PERTAINING TO SETTLEMENT OF DISPUTES ARISING UNDER A GOVERNMENT CONTRACT HAVE BEEN FULLY COMPLIED WITH BY BOTH THE CONTRACTOR AND THE GOVERNMENT AGENCY, AND WHERE FURTHER RECOURSE LIES FOR BOTH IN THE COURTS, IS ENTIRELY IMPROPER. SUCH, S AND E STATES, IT CONSTITUTES A BREACH OF THE CONTRACT BY THE UNITED STATES, IT IS AN UNWARRANED ATTEMPT TO USURP POWER GRANTED BY LAW AND CONTRACT TO THE AEC, AND IT INJECTS OUR OFFICE INTO A PROCEEDING IN WHICH OUR OFFICE HAS NO POSITION. IN SUPPORT OF THESE STATEMENTS, S AND E POINTS OUT THAT AN ORDERLY PROCEDURE HAS BEEN ESTABLISHED AND SUBSTANTIAL TENTATIVE FINALITY HAS BEEN ATTACHED TO FACTUAL DETERMINATIONS IN ADMINISTRATIVE PROCEEDINGS OF THIS NATURE, BY THE DISPUTES CLAUSE OF THE CONTRACT, THE WUNDERLICH ACT, THE DECISION IN UNITED STATES V. BIANCHI, 373 U.S. 709, AND THE DISPUTES PROCEDURES OF THE AEC, INCLUDING A REVIEW BY THE COMMISSION ITSELF. ALSO, ACCORDING TO S AND E, IT CANNOT BE SAID THAT THE INJECTION OF OUR OFFICE INTO THIS SITUATION IS NECESSARY TO PROTECT THE GOVERNMENT'S INTERESTS, SINCE IT HAS BEEN CLEARLY ESTABLISHED THAT UNDER THE WUNDERLICH ACT A JUDICIAL REVIEW IS AVAILABLE IN THE COURTS TO EITHER A CONTRACTOR OR THE GOVERNMENT UNDER THE HOLDING IN C. J. LANGENFELDER AND SON, INC. V. UNITED STATES, 169 CT. CL. 465, 341 F. 2D 600 (1965).

S AND E CONTENDS THAT OUR OFFICE IN PURPORTING TO ACT UNDER THE BUDGET AND ACCOUNTING ACT, 1921, 31 U.S.C. 41, IS PROCEEDING UNDER WHAT IS ONLY THE "COLOR OF AUTHORITY" AND THAT THE TRUE INTENT OF CONGRESS WITH RESPECT TO OUR FUNCTIONS IS THAT WE BE INVOLVED IN THE LEGALITY OF EXPENDITURES, BUT NOT IN DISPUTES CLAUSE PROCEEDINGS. S AND E STATES THAT ANY RIGHT ON OUR PART TO BE INVOLVED IN SUCH PROCEEDINGS CANNOT BE INFERRED FROM THIS "ANCIENT" STATUTE (I.E. BUDGET AND ACCOUNTING ACT, 1921) WHEN AT A LATER DATE, IN PASSING THE WUNDERLICH ACT, 41 U.S.C. 321, 322, POWERS OF THIS NATURE WERE SOUGHT BY OUR OFFICE AND EXPRESSLY REJECTED. IN SUPPORT OF THIS CONTENTION, S AND E CITES A STATEMENT APPEARING IN H. REPT. NO. 1380, 83D CONG. TO THE EFFECT THAT OBJECTIONS WERE RAISED BY THE DEPARTMENT OF DEFENSE AND VARIOUS DEFENSE INDUSTRIES TO THE INCLUSION OF THE COMPTROLLER GENERAL IN THE WORDING OF THE ACT BECAUSE OF THE SUPPOSED FEAR THAT SUCH INCLUSION WOULD DESTROY THE FINALITY WHICH EXISTED UNDER DEFENSE DEPARTMENT PROCEDURES. S AND E CONCEDES THAT THE CONCLUSION OF THE REPORT STATES THAT THERE WAS NO INTENT TO ENLARGE OR CHANGE THE JURISDICTION OF OUR OFFICE; HOWEVER, IT IS ARGUED, THE SUBSEQUENT LOGICAL EVOLUTION OF ORDERLY ADMINISTRATIVE PROCEDURES WHERE BOTH SIDES HAVE A FAIR OPPORTUNITY TO BE HEARD, SUBJECT TO JUDICIAL REVIEW, NEGATIVES THE CONCEPT THAT OUR OFFICE HAS ANY COGNIZANCE OVER SUCH PROCEEDINGS.

S AND E NOTES THAT THE UNITED STATES SUPREME COURT AND OUR OFFICE HAVE RECOGNIZED THE PRINCIPLE OF UNITED STATES V. HOLPUCH, 328 U.S. 234, TO THE EFFECT THAT WHERE A CONTRACT PROVIDES A FACT FINDING AND DISPUTES PROCEDURE THE SAME ARE MANDATORY ON ALL PARTIES. S AND E CONCLUDES THAT:

* * * IT CANNOT BE DENIED THAT THE COMPTROLLER GENERAL HAS AT ALL TIMES UNDERTAKEN TO MAINTAIN SOME ELEMENT OF JURISDICTION IN SUCH MATTERS, BUT HISTORICALLY HE HAS ONLY UNDERTAKEN TO INVOKE IT IN EXTRAORDINARY CIRCUMSTANCES INVOLVING A SITUATION WHERE THERE IS NO OTHER RECOURSE AVAILABLE TO THE GOVERNMENT. THIS IS NOT TRUE IN THE PRESENT CIRCUMSTANCES, PARTICULARLY IN THE LIGHT OF THE RECENTLY RE EMPHASIZED DOCTRINE OF THE RIGHT OF JUDICIAL REVIEW OF A BOARD PROCEEDING.

MOST NOTEWORTHY, ACCORDING TO S AND E, OUR ACTION IN THE INSTANT CASE, WHILE GIVING LIP SERVICE TO RECOGNIZING THE LIMITATIONS ON OUR POWERS AS TO THE REDETERMINATION OF THE FACTS, HAS PROPOSED MORE THAN A 200 PAGE DRAFT REVIEW. S AND E CONTENDS THAT "THE RIGHT NOT TO BE JUDGED, EXCEPT IN AN OPEN PROCEEDING WHERE ALL EVIDENCE, WITNESSES AND PARTIES, CAN BE HEARD, AND WHERE YOUR OPPONENT WAS SEPARATED FROM YOUR JUDGE, IS PARAMOUNT THROUGHOUT ALL CONSIDERATIONS OF APPEALS AND DISPUTES PROCEDURE.' S AND E CONCLUDES THAT BY THE MOST FAVORABLE INTERPRETATION OF ALL THE EXISTING LAW AND DECISIONS, THE MOST THAT COULD BE SAID IS THAT OUR OFFICE MAY HAVE A RIGHT TO CONSIDER SOLELY QUESTIONS OF LAW PERTAINING TO THE DISBURSEMENT ASPECT OF THIS CASE.

IN ITS BRIEF OF JULY 20, 1966, S AND E NOTES THAT THE LANGUAGE OF THE DISPUTES CLAUSE EMBODIED IN THE S AND E CONTRACT STATES THAT THE DECISION OF THE COMMISSION OR ITS DULY AUTHORIZED REPRESENTATIVE FOR THE DETERMINATION OF APPEALS SHALL BE FINAL AND CONCLUSIVE UNLESS DETERMINED BY A "COURT OF COMPETENT JURISDICTION" TO HAVE BEEN FRAUDULENT, OR CAPRICIOUS, OR ARBITRARY, ETC. SINCE THE GENERAL ACCOUNTING OFFICE IS NOT A "COURT OF COMPETENT JURISDICTION" OUR OFFICE, S AND E CONTENDS, IS WITHOUT AUTHORITY TO REVIEW THE EXAMINER'S DECISION, POINTING OUT THAT H. REPT. NO. 1380, 83D CONG., STATES IN PART: "AT THE SAME TIME THERE IS NO INTENTION OF SETTING UP THE GENERAL ACCOUNTING OFFICE AS A -COURT OF CLAIMS.- " S AND E CONTENDS THAT THE EXERCISE OF REVIEW FUNCTIONS IN THIS CASE WOULD MAKE THE GENERAL ACCOUNTING OFFICE ANOTHER COURT OF CLAIMS. ADDITION, S AND E CONTENDS THAT OVER THE PAST 12 YEAR PERIOD BETWEEN 1952 THROUGH 1964 OUR PUBLISHED DECISIONS DO NOT INDICATE THAT WE HAVE EVER REVIEWED ADMINISTRATIVE FINDINGS ON QUESTIONS OF FACT.

IN CONNECTION WITH THE JURISDICTIONAL QUESTIONS RAISED BY S AND E ABOVE, IT IS NOTED THAT YOUR LETTER REQUESTING A DECISION RAISES QUESTIONS AND ISSUES THAT GO TO THE VERY HEART OF THE HEARING EXAMINER'S DECISION. MANY OF THE ISSUES RAISED IN YOUR REQUEST FOR DECISION INVOLVE LEGAL QUESTIONS, BUT THESE ARE, AT TIMES, SO ENMESHED WITH QUESTIONS OF FACT THAT THE STRICT LEGAL QUESTIONS CANNOT BE READILY SEPARATED FROM THOSE OF A FACTUAL CHARACTER. IN SUBMITTING YOUR LETTER OF MARCH 6, 1964, TO OUR OFFICE, THE GENERAL MANAGER, IN HIS LETTER OF MARCH 27, 1964, NOTED THAT YOUR REQUEST FOR DECISION WAS MADE PURSUANT TO 31 U.S.C. 82D WHICH PROVIDES THAT CERTIFYING OFFICERS SHALL HAVE THE RIGHT TO APPLY FOR AND OBTAIN A DECISION BY THE COMPTROLLER GENERAL ON ANY QUESTION OF LAW INVOLVED IN A PAYMENT ON ANY VOUCHERS PRESENTED TO THEM FOR CERTIFICATION. THE GENERAL MANAGER STATED THAT THE FORWARDING OF YOUR REQUEST SHOULD NOT BE CONSTRUED AS A REQUEST BY THE COMMISSION FOR OUR REVIEW OF, OR CONCURRENCE IN, THE DECISION REACHED UNDER THE COMMISSION'S PROCEDURES FOR DECISIONS OF CONTRACT DISPUTES AND HE ADDED: "YOU WILL NOTE THAT THE CERTIFYING OFFICER STATES THE DECISION IN THIS CASE APPEARS TO BE BASED PRIMARILY ON QUESTIONS OF LAW.'

WHILE IT IS TRUE THAT THE QUESTIONS DECIDED BY THE HEARING EXAMINER WERE IN MANY CASES QUESTIONS OF LAW, THE JURISDICTION OF THIS OFFICE TO REVIEW DECISIONS BY CONTRACTING AGENCIES RENDERED UNDER DISPUTES CLAUSES OF GOVERNMENT CONTRACTS IS NOT LIMITED TO REVIEW OF LEGAL QUESTIONS ONLY, BUT EXTENDS, AS WELL, TO REVIEW OF QUESTIONS OF FACT AND SO-CALLED MIXED QUESTIONS OF LAW AND FACT.

UNDER THE BUDGET AND ACCOUNTING ACT, 1921, 42 STAT. 24, 31 U.S.C. 44, AND THE BUDGET AND ACCOUNTING PROCEDURES ACT OF 1950, 64 STAT. 832, 31 U.S.C. 2 NOTE, THE COMPTROLLER GENERAL OF THE UNITED STATES, AS THE AGENT OF THE CONGRESS, IS VESTED WITH AUTHORITY TO EXAMINE AND AUDIT THE FINANCIAL TRANSACTIONS OF THE GOVERNMENT. SECTION 305 OF THE 1921 ACT, 31 U.S.C. 71, PROVIDES THAT ALL CLAIMS AND DEMANDS WHATEVER BY OR AGAINST THE GOVERNMENT AND ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT IS INTERESTED, EITHER AS DEBTOR OR CREDITOR, SHALL BE SETTLED OR ADJUSTED IN THE GENERAL ACCOUNTING OFFICE. SECTION 304 OF THE SAME ACT, 31 U.S.C. 74, AUTHORIZES DISBURSING OFFICERS, AND THE HEADS OF DEPARTMENTS AND ESTABLISHMENTS, TO APPLY TO THE COMPTROLLER GENERAL FOR HIS DECISION UPON ANY QUESTION INVOLVING A PAYMENT TO BE MADE BY THEM OR UNDER THEM. ALSO, AS YOU KNOW, THE PROVISIONS OF 31 U.S.C. 82D UNDER WHICH YOU REQUESTED A DECISION IN THE PRESENT CASE, PROVIDE AUTHORITY TO THE COMPTROLLER GENERAL TO RENDER DECISIONS ON LEGAL QUESTIONS INVOLVED IN VOUCHERS PRESENTED FOR CERTIFICATION.

UNDER THE TERMS OF THESE STATUTES IT IS WELL-ESTABLISHED THAT THE LEGAL PROPRIETY OF PAYMENTS MADE BY PUBLIC OFFICERS IN THE TRANSACTION OF THE GOVERNMENT'S BUSINESS IS SUBJECT TO DETERMINATION BY THE GENERAL ACCOUNTING OFFICE AND THAT SUCH PAYMENTS ARE NOT FINAL UNTIL SETTLED BY THE GENERAL ACCOUNTING OFFICE WHICH MAY DISALLOW CREDIT IN THE ACCOUNTS OF THE FISCAL OFFICERS OF THE GOVERNMENT FOR DISBURSEMENTS NOT MADE IN ACCORDANCE WITH LAW. ACCORDINGLY, IN TRANSACTIONS INVOLVING AN EXPENDITURE OF PUBLIC FUNDS WE HAVE REGULARLY REVIEWED THE CONDITIONS UNDERLYING ANY PAYMENT MADE PURSUANT TO A CONTRACTUAL AGREEMENT AND, IF IT APPEARED THAT ANY PAYMENT HAD BEEN IMPROPERLY MADE OR THAT A CONTRACTOR HAD BEEN UNJUSTLY ENRICHED AT THE PUBLIC EXPENSE, WE HAVE TAKEN WHATEVER ACTION WAS NECESSARY TO RECOVER ANY AMOUNTS IMPROPERLY PAID. IN THAT CONNECTION, SECTION 93, TITLE 31, U.S. CODE, PROVIDES THAT THE GENERAL ACCOUNTING OFFICE SHALL SUPERINTEND THE RECOVERY OF ALL DEBTS FINALLY CERTIFIED BY IT TO BE DUE TO THE UNITED STATES. SEE ALSO THE PROVISIONS OF 31 U.S.C. 82A-2/B). CONVERSELY, A CONTRACTOR WHO FEELS THAT HE IS ENTITLED TO AN ADDITIONAL AMOUNT UNDER A CONTRACT MAY PRESENT A CLAIM TO THE GENERAL ACCOUNTING OFFICE FOR SETTLEMENT, REGARDLESS OF THE ADMINISTRATIVE ACTION TAKEN IN THE MATTER.

WHILE WE HAVE ALWAYS RECOGNIZED THAT IN SETTLING SUCH CLAIMS WE ARE BOUND TO ACCEPT THE ADMINISTRATIVE DETERMINATION OF THE PERTINENT FACTS TO THE EXTENT THAT SUCH DETERMINATIONS ARE ENTITLED TO FINALITY, WE HAVE ALWAYS REVIEWED, AND SOMETIMES QUESTIONED, ADMINISTRATIVE DECISIONS UNDER THE STANDARD "DISPUTES" CLAUSE ON THE BASIS OF THE STANDARDS PRESCRIBED IN THE WUNDERLICH ACT, 41 U.S.C. 321, 322. WE BELIEVE THAT OUR JURISDICTION TO REVIEW DISPUTES CLAUSE DECISIONS ON SUCH BASIS, AS WELL AS ANY OTHER ADMINISTRATIVE DETERMINATIONS, IS CLEARLY CONFERRED BY THE BASIC SETTLEMENT AND AUDIT AUTHORITY GRANTED BY THE BUDGET AND ACCOUNTING ACT, 1921. IN THAT REGARD IT MIGHT BE POINTED OUT THAT THE CLAIMS SETTLEMENT PROVISIONS OF SECTION 305 OF THE BUDGET AND ACCOUNTING ACT, 1921, HAVE A LONG HISTORY, BEING DERIVED FROM THE ACT OF MARCH 3, 1817, 3 STAT. 366. WHILE OUR CLAIMS DETERMINATIONS THEREUNDER HAVE NO EFFECT ON THE RIGHTS OF CONTRACTORS TO PURSUE ANY JUDICIAL REMEDIES WHICH MAY BE AVAILABLE TO THEM AND ARE OF NO BINDING EFFECT IN JUDICIAL PROCEEDINGS, THEY ARE BINDING UPON THE EXECUTIVE AGENCIES.

IN REGARD TO S AND E'S ASSERTION THAT OUR OFFICE IS NOT A "COURT OF COMPETENT JURISDICTION" WITHIN THE MEANING OF THAT PHRASE AS SET FORTH IN THE DISPUTES CLAUSE OF ITS CONTRACT, WE NEED ONLY NOTE THAT IT IS THE WUNDERLICH ACT AND NOT THE DISPUTES CLAUSE WHICH GOVERNS THE MATTER. SEE C. J. LANGENFELDER AND SON, INC. V. UNITED STATES, SUPRA, WHEREIN THE CONTRACTOR ARGUED THAT THE LITERAL LANGUAGE OF THE DISPUTES CLAUSE MADE AN ADMINISTRATIVE DECISION IN ITS FAVOR FINAL AND CONCLUSIVE. THE CONTRACTOR ARGUED THAT THIS CONCLUSION WAS STRENGTHENED BY THE FACT THAT THE DISPUTES CLAUSE DOES NOT SET FORTH ANY RIGHT ON THE PART OF THE GOVERNMENT TO APPEAL AN ADVERSE DECISION AND SETS UP NO PROCEDURE FOR SUCH APPEALS. THE COURT OF CLAIMS REJECTED THIS ARGUMENT STATING (FOOTNOTE 7):

* * * RATHER, IT IS THE WUNDERLICH ACT WHICH IS DETERMINATIVE. THE MINIMAL BOUNDS OF JUDICIAL REVIEW MUST BE DRAWN FROM THE TERMS, HISTORY, AND POLICY OF THAT ACT NOT FROM POLICIES SPECULATIVELY DRAWN FROM THE CONTRACT CLAUSES WHICH ARE THEMSELVES GOVERNED BY THE STATUTE.

OTHER ASPECTS OF THE WUNDERLICH ACT AND THE ROLE OF OUR OFFICE THEREUNDER WERE SET FORTH IN THE LANGENFELDER CASE AS FOLLOWS:

1. PLAINTIFF FIRST ASSERTS BROADLY THAT A FINAL DECISION BY THE HEAD OF A DEPARTMENT FOR THE CONTRACTOR IS CONCLUSIVE AND CANNOT BE REEXAMINED IN ANY WAY BY THIS COURT. THE ARGUMENT IS THAT ONE WHO CONTRACTS WITH THE GOVERNMENT HAS VIRTUALLY NO CHOICE CONCERNING THE CONTRACT'S STANDARD TERMS; NOT THE LEAST RESTRICTIVE PROVISION IS THE DISPUTES CLAUSE SETTING OUT A COMPLETE ARBITRAL SYSTEM TO WHICH THE CONTRACTOR MUST SUBMIT WHENEVER A CONTROVERSY ARISES UNDER THE CONTRACT; THE QUID PRO QUO FOR THESE RESTRICTIONS IS, IN PLAINTIFF'S VIEW, THAT A DECISION IN THE CONTRACTOR'S FAVOR AT EITHER OF THE TWO STAGES OF THIS IMPOSED ARBITRAL PROCESS (BY THE CONTRACTING OFFICER OR THE DEPARTMENT HEAD) MAY NOT BE CHALLENGED BY THE GOVERNMENT.

WHATEVER MAY HAVE BEEN THE RULE OR THE PRACTICE BEFORE THE WUNDERLICH ACT, 68 STAT. 81, 41 U.S.C. SECS. 321-22, THAT STATUTE COMPELS US TO REJECT PLAINTIFF'S SUGGESTION. IT IS IN EFFECT ASKING THAT WE READ INTO ALL GOVERNMENT CONTRACTS (WITH DISPUTES CLAUSES) THE PROVISION THAT A CLAIM OTHERWISE PROPERLY BEFORE THE COURT MAY NOT BE DECIDED ON THE MERITS IF THERE WAS A PRIOR ADMINISTRATIVE DETERMINATION FAVORABLE TO THE CONTRACTOR, I.E. A CLAUSE THAT ADMINISTRATIVE DETERMINATIONS FOR THE CONTRACTOR ARE AUTOMATICALLY CONCLUSIVE. THE STANDARD DISPUTES CLAUSE DOES NOT AND CANNOT NOW CONTAIN SUCH A LIMITATION, BECAUSE THE WUNDERLICH ACT SPECIFICALLY PROHIBITS THE INCLUSION IN A GOVERNMENT CONTRACT OF ANY CLAUSE MAKING THE DECISIONS OF AN ADMINISTRATIVE OFFICIAL ON QUESTIONS OF LAW OR FACT COMPLETELY FINAL AND FREE FROM JUDICIAL REVIEW. 68 STAT. 81, 41 U.S.C. SECS. 321-22. THE ACT, PHRASED IN UNIVERSAL TERMS, MAKES NO QUALIFICATION OR EXCEPTION FOR ADMINISTRATIVE ORDERS SUSTAINING THE CONTRACTOR. (IN AN ATTEMPT TO OVERCOME THE IMPACT OF THE WUNDERLICH ACT, PLAINTIFF EMPHASIZES THE PART OF THE DISPUTES CLAUSE SPECIFYING THE PROCEDURE BY WHICH A CONTRACTOR MAY APPEAL AN ADVERSE DECISION BY THE CONTRACTING OFFICER, BUT OMITTING ANY CORRESPONDING RIGHT ON THE PART OF THE GOVERNMENT. PLAINTIFF ALSO POINTS TO FEDERAL AVIATION AGENCY REGULATIONS TO THE SAME EFFECT. SEE 41 C.F.R. SECS. 2-60.3, 2 60.6. ANALOGY OR IMPLICATION, PLAINTIFF URGES, THE SAME POLICY SHOULD GOVERN DECISIONS BY THE HEAD OF THE DEPARTMENT. BUT THE PROVISIONS RELIED UPON BY PLAINTIFF DO NO MORE THAN OUTLINE THE APPELLATE PROCEDURE TO BE FOLLOWED WITHIN THE AGENCY. THOUGH THEY MAY BE CRUCIAL WHEN THE COURT IS CALLED UPON TO DISMISS A CONTRACTOR'S PETITION FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES, THEY ARE IRRELEVANT IN THE PRESENT CONTEXT. RATHER, IT IS THE WUNDERLICH ACT WHICH IS DETERMINATIVE. THE MINIMAL BOUNDS OF JUDICIAL REVIEW MUST BE DRAWN FROM THE TERMS, HISTORY, AND POLICY OF THAT ACT, NOT FROM POLICIES SPECULATIVELY DRAWN FROM THE CONTRACT CLAUSES WHICH ARE THEMSELVES GOVERNED BY THE STATUTE. WE READ THE STATEMENTS OF COMMENTATORS (CITED BY PLAINTIFF), SAYING OR IMPLYING THAT ONLY THE CONTRACTOR MAY "APPEAL" FROM AN ADVERSE DECISION, AS EITHER REFERRING TO APPEALS WITHIN THE AGENCY OR AS SUGGESTING THE PRACTICAL UNLIKELIHOOD THAT THE GOVERNMENT WILL (OR WILL BE ABLE TO) OBTAIN JUDICIAL REVIEW AS A REGULAR MATTER OF COURSE.) THE OPINIONS WHICH MAY INDICATE A CONTRARY POSITION WERE ALL HANDED DOWN BEFORE THE PASSAGE OF THE WUNDERLICH LEGISLATION. IN CASES DECIDED SUBSEQUENT TO ITS ENACTMENT, THIS COURT HAS NOT HESITATED TO REEXAMINE ADMINISTRATIVE DETERMINATIONS UPHOLDING THE CONTRACTOR, AND TO UPSET THEM IF THE STANDARDS FOR REVIEW SET FORTH IN THE STATUTE CALL UPON US TO CONCLUDE THAT THE DECISION BELOW SHOULD NOT STAND * * *.

THE LEGISLATIVE HISTORY OF THE WUNDERLICH ACT CONFIRMS THE POSITION, IMPLICIT IN THE STATUTORY LANGUAGE, THAT ADMINISTRATIVE RULINGS AGAINST THE GOVERNMENT ARE NOT WHOLLY FREE FROM JUDICIAL REVIEW. THE COMPTROLLER GENERAL HAD LONG ASSERTED AUTHORITY TO EXAMINE SUCH DETERMINATIONS AND TO DENY PAYMENT ON THE BASIS OF ILLEGALITY. WHEN THE SUPREME COURT HELD, IN UNITED STATES V. WUNDERLICH, 342 U.S. 98 (1951), THAT DECISIONS UNDER THE DISPUTES CLAUSE WERE FINAL UNLESS FRAUD WAS ALLEGED AND PROVED, THE COMPTROLLER GENERAL CONCEDED THAT, AS A RESULT, HIS POWERS OF REVIEW HAD BEEN ELIMINATED. SEE HEARINGS ON S. 2487 BEFORE THE SUBCOMMITTEE ON FINALITY CLAUSES IN GOVERNMENT CONTRACTS OF THE SENATE COMMITTEE ON THE JUDICIARY, 82D CONG., 2D ESS. 4-13 (1952). ONE OF THE MAJOR REASONS FOR THE PASSAGE OF THE NEW ACT WAS TO ASSURE TO THE GENERAL ACCOUNTING OFFICE A LIMITED RIGHT OF SCRUTINY COMPARABLE TO (THOUGH PERHAPS NOT PRECISELY THE SAME AS) THAT GIVEN TO THE COURTS. (SEE 1954 U.S.C. CONG. AND ADM-N NEWS 2191, 2196 97; NOTE, 70 HARV. L. REV. 350, 358-59 (1956); SHEDD, DISPUTES AND APPEALS: THE ARMED SERVICES BOARD OF CONTRACT APPEALS, 29 LAW AND CONTEMP. PROB. 39, 81-82 (1964); SPECTOR, IS IT "BIANCHI'S GHOST"-- OR "MUCH ADO ABOUT NOTHING, ? " 29 LAW AND CONTEMP. PROB. 87, 108-11 (1964); SCHULTZ, WUNDERLICH EVISITED: NEW LIMITS ON JUDICIAL REVIEW OF ADMINISTRATIVE DETERMINATION OF GOVERNMENT CONTRACT DISPUTES, 29 LAW CONTEMP. PROB. 115, 117, 132-33 (1964).) THOUGH HIS POWER TO UTILIZE ALL OF THE WUNDERLICH STANDARDS HAS BEEN QUESTIONED BY SOME, THE COMPTROLLER GENERAL HAS ASSERTED, SINCE THE ENACTMENT OF THE STATUTE, THE SAME AUTHORITY AS THE COURTS TO DISALLOW PAYMENT OF A CONTRACTOR'S CLAIMS NOTWITHSTANDING AGENCY DECISIONS IN THE CONTRACTOR'S FAVOR. SEE, E.G., 35 DEC. COMP. GEN-L 63, 70 (1955), AND GAO DECISIONS REFERRED TO IN THE ARTICLES CITED IN FOOTNOTE 8, SUPRA.WHERE THE ISSUE IS ONE OF LAW (E.G., INTERPRETATION OF THE CONTRACT), THIS COURT HAS UPHELD EXERCISES OF THAT POWER. SEE ASSOCIATED TRADERS, INC. V. UNITED STATES, SUPRA, 144 CT. CL. AT 749, 750, 169 F. SUPP. AT 505, 506-07 (1959); NORTHROP AIRCRAFT, INC. V. UNITED STATES, SUPRA, 130 CT. CL. AT 629-33, 127 F. SUPP. AT 599-601 (1955). (THIS AND OTHER COURTS HAVE SOMETIMES OVERTURNED COMPTROLLER GENERAL'S REVERSALS OF ADMINISTRATIVE DECISIONS SUSTAINING CONTRACTORS, BUT THE CASES HAVE INVOLVED ERRORS OF LAW OR THE ABSENCE OF CIRCUMSTANCES SUFFICIENT TO INVALIDATE THE ADMINISTRATIVE DETERMINATION UNDER THE PREVAILING STANDARDS. IN OTHER WORDS, THE COMPTROLLER GENERAL HAS BEEN HELD WRONG IN THE PARTICULAR CIRCUMSTANCES, NOT DEVOID OF ALL POWER OVER SUCH FAVORABLE DECISIONS. SEE, E.G., MCSHAIN CO. V. UNITED STATES, 83 CT. CL. 405, 409-10 (1936); ALBINA MARINE IRON WORKS, INC. V. UNITED STATES, 79 CT. CL. 714, 719-20 (1934).) THE PRESENT CASE DOES NOT, OF COURSE, REQUIRE US TO DEFINE THE FULL SCOPE OF THE COMPTROLLER'S GENERAL'S AUTHORITY, BUT THE FACT THAT HE UNDOUBTEDLY HAS SOME ROLE UNDER THE WUNDERLICH ACT HELPS TO DEMONSTRATE THAT THE STATUTE APPLIES TO ADMINISTRATIVE DECISIONS FAVORING THE CONTRACTOR, AS WELL AS THOSE WHICH ARE ADVERSE. A FAVORABLE DETERMINATION IS NOT REMOVED FROM ALL EXAMINATION BY THE COURTS. ISSUES OF LAW, AT THE VERY LEAST, ARE STILL OPEN.

WE THINK THAT THE CONGRESS, WHEN IT WAS CONSIDERING THE WUNDERLICH ACT, EXPRESSLY RECOGNIZED THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE TO REVIEW DISPUTES CLAUSE DECISIONS ON QUESTIONS OF FACT OR LAW AND, MOREOVER, DEEMED THE EXERCISE OF SUCH JURISDICTION NECESSARY AND DESIRABLE. THIS IS BEST DEMONSTRATED BY A REVIEW OF THE LEGISLATIVE HISTORY OF THE ACT.

THE FIRST SECTION OF THE WUNDERLICH ACT, 41 U.S.C. 321, PROVIDES THAT:

NO PROVISION OF ANY CONTRACT ENTERED INTO BY THE UNITED STATES, RELATING TO THE FINALITY OR CONCLUSIVENESS OF ANY DECISION OF THE HEAD OF ANY DEPARTMENT OR AGENCY OR HIS DULY AUTHORIZED REPRESENTATIVE OR BOARD IN A DISPUTE INVOLVING A QUESTION ARISING UNDER SUCH CONTRACT, SHALL BE PLEADED IN ANY SUIT NOW FILED OR TO BE FILED AS LIMITING JUDICIAL REVIEW OF ANY SUCH DECISION TO CASES WHERE FRAUD BY SUCH OFFICIAL OR HIS SAID REPRESENTATIVE OR BOARD IS ALLEGED: PROVIDED, HOWEVER, THAT ANY SUCH DECISION SHALL BE FINAL AND CONCLUSIVE UNLESS THE SAME IS FRAUDULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

THE WUNDERLICH ACT DOES NOT PROVIDE THAT ADMINISTRATIVE DECISIONS ON DISPUTED QUESTIONS ARE FINAL AND CONCLUSIVE UNLESS DETERMINED BY A "COURT OF COMPETENT JURISDICTION" TO HAVE BEEN FRAUDULENT OR CAPRICIOUS OR ARBITRARY, ETC. ON THE CONTRARY, THE ACT MERELY PROVIDES THAT "ANY SUCH DECISION SHALL BE FINAL AND CONCLUSIVE UNLESS THE SAME IS FRAUDULENT OR CAPRICIOUS OR ARBITRARY," ETC. THE WUNDERLICH ACT DOES NOT IDENTIFY THE FORUM IN WHICH IT IS TO BE DETERMINED THAT A DECISION IS FRAUDULENT OR CAPRICIOUS, ETC. AND THE LEGISLATIVE HISTORY OF THE ACT SHOWS THAT THE CONGRESS DELIBERATELY OMITTED NAMING THE FORUM.

AS H. REPT. NO. 1380, 83D CONG., POINTS OUT, THE SENATE DURING THE 82D CONGRESS PASSED S. 2487 BUT IT WAS TOO LATE IN THE SESSION FOR THE HOUSE TO ACT. SECTION 1 OF S. 2487, AS PASSED BY THE SENATE, PROVIDED:

THAT NO PROVISION OF ANY CONTRACT ENTERED INTO BY THE UNITED STATES, RELATING TO THE FINALITY OR CONCLUSIVENESS, IN A DISPUTE INVOLVING A QUESTION ARISING UNDER SUCH CONTRACT, OF ANY DECISION OF AN ADMINISTRATIVE OFFICIAL, REPRESENTATIVE, OR BOARD, SHALL BE PLEADED AS LIMITING JUDICIAL REVIEW OF ANY SUCH DECISION TO CASES IN WHICH FRAUD BY SUCH OFFICIAL, REPRESENTATIVE, OR BOARD IS ALLEGED; AND ANY SUCH PROVISION SHALL BE VOID WITH RESPECT TO ANY SUCH DECISION WHICH THE GENERAL ACCOUNTING OFFICE OR A COURT, HAVING JURISDICTION, FINDS FRAUDULENT, GROSSLY ERRONEOUS, SO MISTAKEN AS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORTED BY RELIABLE, PROBATIVE, AND SUBSTANTIAL EVIDENCE. SENATE REPT. NO. 1670, 82D CONG., 2D SESS., WHICH ACCOMPANIED S. 2487, STATED:

THE COMMITTEE WISHES TO POINT OUT WITH RESPECT TO THE LANGUAGE CONTAINED IN THE BILL,"IN THE GENERAL ACCOUNTING OFFICE OR A COURT HAVING JURISDICTION," THAT IT IS NOT INTENDED TO NARROW OR RESTRICT OR CHANGE IN ANY WAY THE PRESENT JURISDICTION OF THE GENERAL ACCOUNTING OFFICE, EITHER IN THE COURSE OF A SETTLEMENT OR UPON AUDIT; THAT THE LANGUAGE IN QUESTION IS NOT INTENDED EITHER TO CHANGE THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE OR TO GRANT ANY NEW JURISDICTION, BUT SIMPLY TO RECOGNIZE THE JURISDICTION WHICH THE GENERAL ACCOUNTING OFFICE ALREADY HAS.

IT SHOULD ALSO BE POINTED OUT THAT IN SPEAKING OF A COURT "HAVING JURISDICTION" THE COMMITTEE INTENDS TO NEGATIVE BOTH THE POSSIBILITY OF A CONSTRUCTION WHICH WOULD GIVE BASIS FOR A CONTENTION THAT THIS BILL ITSELF WAS GRANTING A COURT JURISDICTION TO REVIEW GOVERNMENT CONTRACTS; AND ALSO ANY CONSTRUCTION THAT WOULD GIVE A BASIS FOR A COLLATERAL ATTACK ON SUCH CONTRACTS IN A COURT NOT HAVING DIRECT JURISDICTION OF THE CONTRACT ITSELF.

ON JUNE 8, 1953, DURING THE 1ST SESSION OF THE 83D CONGRESS THE SENATE PASSED S. 24 WHICH CONTAINED THE IDENTICAL LANGUAGE OF S. 2487. S. REPT. NO. 32 WHICH ACCOMPANIED S. 24 CONTAINED THE SAME STATEMENTS AS THOSE QUOTED ABOVE FROM S. REPT. NO. 1670.

THEREAFTER, IN THE 83D CONGRESS, 2D SESSION, S. 24 WAS PASSED AND BECAME THE WUNDERLICH ACT IN ITS PRESENT FORM. THIS S. 24 OMITTED THE PHRASEOLOGY "THE GENERAL ACCOUNTING OFFICE OR A COURT, HAVING JURISDICTION" BECAUSE OF THE OBJECTIONS THERETO BY THE DEPARTMENT OF DEFENSE AND VARIOUS DEFENSE INDUSTRIES. SEE H. REPT. NO. 1380. THE PRESENT WUNDERLICH ACT LANGUAGE WAS BASED ON AN AMENDMENT TO THE VARIOUS BILLS THEN BEING CONSIDERED WHICH WAS SUBMITTED BY OUR OFFICE IN THE FORM OF A SUBSTITUTE BY LETTER DATED DECEMBER 30, 1953. SEE HOUSE REPORT NO. 1380. THE OMISSION OF THE WORDS "GENERAL ACCOUNTING OFFICE OR A COURT HAVING JURISDICTION" IN THE SUBSTITUTE DRAFT WAS PREDICATED UPON THE CONCLUSION THAT SPECIFIC MENTION OF OUR OFFICE OR THE COURTS IN THE ACT WAS UNNECESSARY TO CONFER REVIEW JURISDICTION EITHER UPON OUR OFFICE OR UPON THE COURTS. IN THIS CONNECTION IT SHOULD BE NOTED THAT OUR OFFICE HAD NEVER ASKED FOR AUTHORITY IT DID NOT HAVE PRIOR TO THE DECISION IN THE WUNDERLICH CASE. PRIOR TO THAT DECISION WE HAD CONSISTENTLY TAKEN THE POSITION THAT DISPUTES CLAUSE DECISIONS ON QUESTIONS OF FACT OR LAW WERE NOT BINDING ON OUR OFFICE IF UNDER SETTLED JUDICIAL PRECEDENTS THEY WOULD NOT BE BINDING UPON THE COURTS, AND THAT WE HAD FULL AUTHORITY TO REVIEW SUCH DECISIONS UNDER THE SAME STANDARDS APPLIED BY THE COURTS. SINCE, AS INDICATED IN S. REPT. NO. 1670, THE SPECIFIC MENTION OF OUR OFFICE OR THE COURTS IN S. 2487 WAS NOT INTENDED TO CHANGE THE EXISTING AUTHORITY OF EITHER FORUM OR TO GRANT NEW JURISDICTION TO EITHER FORUM, OUR OFFICE DID NOT FEEL THAT THE OMISSION OF SUCH MENTION WOULD OR COULD CHANGE THE RESULT IN S. 24 AS FINALLY ADOPTED. REPRESENTATIVES OF OUR OFFICE TESTIFIED TO THAT EFFECT ON JANUARY 21, 1954, DURING THE HEARINGS ON THE SUBSTITUTE BILL S. 24. SEE PAGES 36-42, HEARINGS BEFORE SUBCOMMITTEE NO. 1 OF THE COMMITTEE ON THE JUDICIARY, HOUSE OF REPRESENTATIVES, 83D CONG., 1ST AND 2D SESSIONS, ON H.R. 1839, S. 24, H.R. 3634 AND H.R. 6946. MOREOVER, H. REPT. NO. 1380, WHICH ACCOMPANIED THE BILL WHICH BECAME LAW SPECIFICALLY STATES THAT:

* * * THE PROPOSED LEGISLATION ALSO PRESCRIBES FAIR AND UNIFORM STANDARDS FOR THE JUDICIAL REVIEW OF SUCH ADMINISTRATIVE DECISIONS IN THE LIGHT OF THE REASONABLE REQUIREMENTS OF THE VARIOUS GOVERNMENT DEPARTMENTS AND AGENCIES, OF THE GENERAL ACCOUNTING OFFICE AND OF GOVERNMENT CONTRACTORS *

THE PROPOSED LEGISLATION, AS AMENDED, WILL NOT ADD TO, NARROW, RESTRICT, OR CHANGE IN ANY WAY THE PRESENT JURISDICTION OF THE GENERAL ACCOUNTING OFFICE EITHER IN THE COURSE OF A SETTLEMENT OR UPON AUDIT, AND THE LANGUAGE USED IS NOT INTENDED EITHER TO CHANGE THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE OR TO GRANT ANY NEW JURISDICTION, BUT SIMPLY TO RECOGNIZE THE JURISDICTION WHICH THE GENERAL ACCOUNTING OFFICE ALREADY HAS.

THE ELIMINATION OF THE SPECIFIC MENTION OF THE GENERAL ACCOUNTING OFFICE FROM THE PROVISIONS OF THE BILL AS AMENDED SHOULD NOT BE CONSTRUED AS TAKING AWAY ANY OF THE JURISDICTION OF THAT OFFICE. IT IS INTENDED THAT THE GENERAL ACCOUNTING OFFICE, AS WAS ITS PRACTICE, IN REVIEWING A CONTRACT AND CHANGE ORDERS FOR THE PURPOSE OF PAYMENT, SHALL APPLY THE STANDARDS OF REVIEW THAT ARE GRANTED TO THE COURTS UNDER THIS BILL. THE SAME TIME THERE IS NO INTENTION OF SETTING UP THE GENERAL ACCOUNTING OFFICE AS A "COURT OF CLAIMS.' NOR SHOULD THE ELIMINATION OF THE SPECIFIC MENTION OF THE GENERAL ACCOUNTING OFFICE IN THE BILL BE CONSTRUED AS LIMITING ITS REVIEW TO THE FRAUDULENT INTENT STANDARD PRESCRIBED BY THE WUNDERLICH DECISION.

FINALLY, SEE 100 CONGRESSIONAL RECORD 5510; 5717-5718 (APRIL 26, 1954; APRIL 29, 1954) WHERE THE FLOOR LEADERS ON THE LEGISLATION ASSURED THE MEMBERS OF THE SENATE AND THE HOUSE THAT THE BILL WAS SATISFACTORY TO THE GENERAL ACCOUNTING OFFICE. SENATOR MCCARRAN, WHO AUTHORED THE SENATE BILL, ALSO STATED:

* * * IT IS MY UNDERSTANDING THE DEPARTMENT OF JUSTICE TAKES THE VIEW THAT THE HOUSE LANGUAGE WILL ACCOMPLISH THE SAME PURPOSE AS THE SENATE LANGUAGE (I.E. S. 24 WHICH PASSED ON JUNE 8, 1953 AND WHICH WAS IDENTICAL TO S. 2487.) IT IS MY FURTHER UNDERSTANDING THAT THE COMPTROLLER GENERAL OF THE UNITED STATES HAS EXPRESSED COMPLETE SATISFACTION WITH THE HOUSE LANGUAGE, AND HAS DECLARED THAT IN HIS OPINION IT WILL ACCOMPLISH THE PURPOSES SOUGHT TO BE SERVED BY THE SENATE LANGUAGE.

MR. CASE. CAN THE SENATOR FROM NEVADA TELL US HOW THE ASSURANCE WAS GIVEN THAT THE BILL WAS SATISFACTORY TO THE GENERAL ACCOUNTING OFFICE? WOULD THE SENATOR KINDLY RESTATE THE ASSURANCE WHICH HE VOICED WITH REFERENCE TO THE OPINION OF THE GENERAL ACCOUNTING OFFICE? MR. MCCARRAN. THE GENERAL ACCOUNTING OFFICE IS SATISFIED WITH THE LANGUAGE OF THE HOUSE BILL. IT HAS ASSURED ME OF THAT.

MR. CASE. THE COMPTROLLER GENERAL HAS ASSURED THE SENATOR FROM NEVADA ON THAT POINT?

MR. MCCARRAN. THAT IS CORRECT; OTHERWISE I WOULD NOT CARE TO GO ALONG.

MR. THYE. AS I UNDERSTAND, THE BILL WAS PASSED BY THE SENATE, AND A SIMILAR BILL WAS PASSED BY THE HOUSE. THE ONLY QUESTION INVOLVED IS A MODIFICATION OF THE LANGUAGE IN THE SENATE BILL, AND THE TWO BILLS AGREE IN THEIR EFFECT, SO TO SPEAK? MR. MCCARRAN. THAT IS CORRECT.

MR. THYE. THERE IS NOTHING ELSE OF A LEGISLATIVE NATURE INVOLVED?

MR. MCCARRAN. THAT IS CORRECT.

IT IS THUS APPARENT THAT IN DRAFTING S-24, AS FINALLY ENACTED, THE CONGRESS INTENTIONALLY REFRAINED FROM MENTIONING BOTH OUR OFFICE AND THE COURTS ON THE ASSUMPTION THAT IT WAS UNNECESSARY TO DO SO SINCE BOTH FORUMS ALREADY POSSESSED THE REQUISITE AUTHORITY AND JURISDICTION TO REVIEW ADMINISTRATIVE DECISIONS ON QUESTIONS OF FACT OR LAW. THE "STANDARDS OF REVIEW THAT ARE GRANTED TO THE COURTS" UNDER THE WUNDERLICH ACT, AND WHICH H. REPT. NO. 1380 MAKES CLEAR ARE TO BE EXERCISED BY THE GENERAL ACCOUNTING OFFICE, ARE STANDARDS RELATING SOLELY TO DECISIONS ON QUESTIONS OF FACT (I.E. FRAUD, ARBITRARINESS, CAPRICIOUSNESS, NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, ETC.). MOREOVER, AS THAT REPORT MAKES CLEAR, THE GENERAL ACCOUNTING OFFICE IS NOT LIMITED IN ITS REVIEW TO THE FRAUDULENT INTENT STANDARD PRESCRIBED BY UNITED STATES V. WUNDERLICH, 342 U.S. 98. THIS FRAUD STANDARD, IT SHOULD BE NOTED, WAS, AND STILL IS, ONE OF THE STANDARDS OF REVIEW APPLICABLE TO DECISIONS ON QUESTIONS OF FACT. THUS, THE CONCLUSION IS INESCAPABLE THAT THE CONGRESS RECOGNIZED THAT OUR OFFICE DID HAVE JURISDICTION TO REVIEW THESE MATTERS BOTH PRIOR AND SUBSEQUENT TO THE WUNDERLICH DECISION, AND THAT THE WUNDERLICH ACT WAS NOT INTENDED TO AFFECT SUCH JURISDICTION. IT IS EQUALLY CLEAR FROM THE LEGISLATIVE HISTORY THAT IN EXERCISING SUCH JURISDICTION AFTER PASSAGE OF THE ACT, IT WAS THE CONGRESSIONAL INTENT THAT OUR OFFICE WOULD APPLY THE SAME STANDARDS IN REVIEWING FACTUAL DETERMINATIONS THAT THE COURTS WOULD APPLY UNDER THE ACT. IN THIS CONNECTION, SEE ALSO THE REPORT PREPARED FOR THE SELECT COMMITTEE ON SMALL BUSINESS, UNITED STATES SENATE, ENTITLED "OPERATION AND EFFECTIVENESS OF GOVERNMENT BOARDS OF CONTRACT APPEALS" BY PROFESSOR HAROLD C. PETROWITZ, 89TH CONG., 2D SESS, JULY 28, 1966, PAGE 29.

THE MINIMAL BOUNDS OF REVIEW BY OUR OFFICE OF ADMINISTRATIVE DISPUTES CLAUSE DECISIONS MUST BE DRAWN FROM THE TERMS, HISTORY AND POLICY OF THE WUNDERLICH ACT,"NOT FROM THE CONTRACT CLAUSES WHICH ARE THEMSELVES GOVERNED BY THE STATUTE.' C.J. LANGENFELDER AND SON, INC. V. UNITED STATES, SUPRA. ACCORDINGLY, IT MUST BE CONCLUDED THAT THE LANGUAGE REGARDING A "COURT OF COMPETENT JURISDICTION" APPEARING IN THE DISPUTES CLAUSE OF THE S AND E CONTRACT CAN HAVE NO EFFECT UPON THE AUTHORITY OF THE GENERAL ACCOUNTING OFFICE TO REVIEW AND QUESTION THEEXAMINER'S AND COMMISSION'S FINDINGS ON QUESTIONS OF FACT IN THIS CASE, SINCE SUCH LANGUAGE GOES BEYOND NOT ONLY THE LITERAL AND GOVERNING PROVISIONS OF THE WUNDERLICH ACT, BUT THE CLEAR LEGISLATIVE HISTORY OF WHAT THOSE PROVISIONS ARE INTENDED TO MEAN AS WELL.

EXPERIENCE IN OUR OFFICE HAS SHOWN THAT ERRONEOUS DECISIONS IN FAVOR OF CONTRACTORS HAVE SOMETIMES BEEN MADE BY ADMINISTRATIVE OFFICIALS UNDER STANDARD DISPUTES CLAUSES. CONTRACTORS, OF COURSE, HAVE A RIGHT TO JUDICIAL REVIEW WHICH SERVES TO PROTECT THEM FROM ADMINISTRATIVE DECISIONS THAT FAIL TO MEET THE MINIMUM STANDARDS SET FORTH IN THE WUNDERLICH ACT. BUT HOW IS THE GOVERNMENT TO BE PROTECTED FROM ERRONEOUS ADVERSE DECISIONS WHICH FAIL TO MEET THE WUNDERLICH STANDARDS? AS THE LANGENFELDER CASE INDICATES, DISPUTES CLAUSE DECISIONS FAVORABLE TO CONTRACTORS ARE REVIEWABLE BY THE COURTS; HOWEVER, THE CRUCIAL QUESTION HERE, WHICH S AND E OVERLOOKS, IS NOT WHETHER THE GOVERNMENT HAS THE RIGHT TO JUDICIAL REVIEW OF ADVERSE DECISIONS BUT IN WHAT MANNER AND UNDER WHAT PROCEDURE CAN THE GOVERNMENT GET TO THE COURTS FOR SUCH A REVIEW? SINCE DISPUTES CLAUSE DECISIONS ARE THOSE OF THE HEAD OF THE DEPARTMENT OR AGENCY INVOLVED APPEAL BY THE AGENCY WOULD BE HIGHLY UNLIKELY. THE COURT OF CLAIMS RECOGNIZED THIS UNLIKELIHOOD IN LANGENFELDER. SEE FOOTNOTE 7 OF THAT DECISION QUOTED ABOVE. MOREOVER, IN VIEW OF THE LACK OF JUDICIAL PRONOUNCEMENT ON THE POINT, THERE MAY BE A QUESTION WHETHER THE GOVERNMENT HAS STANDING TO FILE AN APPEAL DIRECTLY WITH THE COURTS CHALLENGING AN ADVERSE DECISION BY ONE OF ITS AGENCIES UNDER A DISPUTES CLAUSE. IN THAT CONNECTION, SEE REPORT PREPARED FOR THE SELECT COMMITTEE ON SMALL BUSINESS, U.S. SENATE, 89TH CONG., 2D SESS., ENTITLED "OPERATION AND EFFECTIVENESS OF GOVERNMENT BOARD OF CONTRACT APPEALS," BY PROFESSOR HAROLD C. PETROWITZ, JULY 28, 1966, PAGES 29 30. IT IS OBVIOUS, THEREFORE, THAT UNLESS THIS OFFICE RAISES AN OBJECTION, EITHER UPON ITS OWN INITIATIVE OR UPON A SUBMISSION BY AN ACCOUNTABLE OFFICER HAVING RESPONSIBILITY FOR APPROVAL OR PAYMENT OF THE AWARD, AND DIRECTS THE DEPARTMENT HEAD NOT TO MAKE PAYMENT UNDER A PARTICULAR DECISION, ADVERSE DECISIONS THAT FAIL TO MEET THE WUNDERLICH STANDARDS WILL GO UNDETECTED AND UNREMEDIED. THUS, WHILE S AND E CONTENDS THAT THE COMPTROLLER GENERAL SHOULD NOT ASSUME JURISDICTION TO CONSIDER THIS SE,"THEREBY ALLOWING THE APPEAL TO PROCEED THROUGH THE PROPER AND ORDINARY DISPUTES CHANNEL," SUCH CONTENTION IGNORES THE OBVIOUS FACT THAT WHERE, AS HERE, THE DISPUTES PROCEDURE HAS BEEN EXHAUSTED IN THE CONTRACTING AGENCY, THERE WOULD BE NO FURTHER CHANNEL OPEN TO REMEDY AN ERRONEOUS DISPUTES CLAUSE DECISION AGAINST THE GOVERNMENT'S INTEREST UNLESS OUR OFFICE EXERCISED ITS TRADITIONAL JURISDICTION TO QUESTION SUCH A DECISION.

THE ARGUMENT HAS BEEN MADE THAT THE GOVERNMENT IS NOT IN NEED OF THE PROTECTION AFFORDED BY JUDICIAL REVIEW SINCE THE DECISIONS TO BE REVIEWED ARE RENDERED BY GOVERNMENT OFFICIALS. WE THINK THAT SUCH ARGUMENT OVERLOOKS THE OBVIOUS FACT THAT GOVERNMENT OFFICIALS CAN ERR IN FAVOR OF CONTRACTORS AS WELL AS IN FAVOR OF THE GOVERNMENT. THE ARGUMENT ALSO IGNORES THE FACT THAT CONTRACT DISPUTES HEARINGS ARE ADVERSARY PROCEEDINGS IN WHICH THE HEARING TRIBUNAL SHOULD BE IMPARTIAL AND INDEPENDENT. TRIBUNAL'S DECISION MUST MEET THE HIGH STANDARDS OF FINALITY PRESCRIBED IN THE WUNDERLICH ACT. TO VIEW THESE TRIBUNALS PURELY AS AGENTS OF THE GOVERNMENT WOULD REDUCE THEM TO A SUBSERVIENT STATUS WITH THE IMPLICATION THAT THEY ARE NOT IN A POSITION TO EXERCISE INDEPENDENT, FAIR AND IMPARTIAL JUDGMENT. THE CONTRACT APPEAL TRIBUNALS HAVE BECOME INSTITUTIONALIZED AND HAVE A LONG AND HONORABLE HISTORY OF FAIR AND IMPARTIAL ADJUDICATION OF DISPUTES. LIKE ANY TRIBUNAL, JUDICIAL OR ADMINISTRATIVE, THEY MAY COMMIT ERRORS OF LAW OR FACT BUT NO RESPONSIBLE CRITIC TODAY WOULD CONTEND THAT THEY ARE MERE CREATURES OF A DEPARTMENT OR AGENCY AND THAT IN THE HEARING OF A CASE THEY REPRESENT THE DEPARTMENT'S OR AGENCY'S INTEREST. AT THE SAME TIME, IT MUST NOT BE OVERLOOKED THAT THESE DISPUTE-DETERMINING TRIBUNALS OR OFFICERS ARE CREATED SOLELY BY ADMINISTRATIVE ACTION, HAVE NO STATUTORY POWERS, AND CAN EXERCISE ONLY SUCH AUTHORITY AS IS DELEGATED TO THEM BY THE AGENCY OR DEPARTMENT HEADS WHO CREATE THEM. IN THE END, THEIR POWER CAN BE NO GREATER THAN THAT OF THEIR CREATOR AND THEIR ACTIONS CAN HAVE NO GREATER EFFECT THAN WOULD THE ACTION OF THE AGENCY HEAD. SINCE THE PRIMARY OBJECTIVE OF THE BUDGET AND ACCOUNTING ACT, 1921, WAS THE CREATION OF AN AUTHORITY OUTSIDE THE EXECUTIVE, RESPONSIBLE ONLY TO THE CONGRESS, TO CHECK AND PREVENT ADMINISTRATIVE ACTION CONTRARY TO STATUTORY FISCAL LIMITATIONS IMPOSED BY THE CONGRESS, IT SEEMS IMPERATIVE, ESPECIALLY IN VIEW OF THE BILLIONS OF DOLLARS ANNUALLY EXPENDED UNDER FEDERAL CONTRACTS, THAT OUR OFFICE TAKE THE ACTION NEEDED TO PROTECT THE GOVERNMENT'S INTEREST WHENEVER ADMINISTRATIVE DISPUTES CLAUSE DECISIONS ARE BROUGHT TO OUR ATTENTION WHICH, IN OUR OPINION, FAIL TO MEET THE FINALITY STANDARDS OF THE WUNDERLICH ACT. IN THAT CONNECTION, THE DUTY OF OUR OFFICE WAS SPELLED OUT LONG AGO BY THE COURT OF CLAIMS IN LONGWILL V. UNITED STATES, 17 CT. CL. 288 (1881) AND CHARLES V. UNITED STATES, 19 CT. CL. 316 (1884). THE COURT, IN THE LATTER CASE, STATED:

WHEN, IN THE COURSE OF THE EXAMINATION OF ACCOUNTS IN THE DEPARTMENTS, SUSPICIONS ARE AROUSED OR DOUBTS ARE ENTERTAINED AS TO THE VALIDITY OF THE DEMANDS OF CLAIMANTS, THE PARTIES MAY BE SENT TO THIS COURT TO PROVE THEIR CASES UNDER THE RULES AND FORMS OF LAW, UPON LEGAL AND COMPETENT EVIDENCE, OR THEIR DEMANDS MAY BE REJECTED ALTOGETHER, LEAVING THE CLAIMANTS TO PROSECUTE THE HERE UPON THEIR OWN VOLUNTARY PETITIONS, IF THEY SO DESIRE. THAT IS THE MAIN PROTECTION WHICH THE ACCOUNTING OFFICERS CAN SECURE FOR THEMSELVES AND FOR THE GOVERNMENT IN THE CASE OF CLAIMS OF DOUBTFUL VALIDITY IN FACT OR IN LAW, AND ESPECIALLY OF CLAIMS AS TO WHICH THERE IS A REASONABLE SUSPICION OF FRAUD, IRREGULARITY, OR ERROR.

WHILE IT IS RECOGNIZED THAT THE LONGWILL AND CHARLES CASES DID NOT INVOLVE CLAIMS PRESENTED UNDER THE DISPUTES CLAUSE PROCEDURE, NEVERTHELESS, THE COURT'S STATEMENT ON THE DUTY OF THIS OFFICE AS TO THE ACTION TO BE TAKEN WHEN DOUBTFUL CLAIMS ARE BROUGHT TO OUR ATTENTION IS AS SOUND TODAY AS IT WAS THEN, ESPECIALLY WHEN IT IS REMEMBERED THAT, BY ACT OF THE CONGRESS, DISPUTES CLAUSE DECISIONS ON QUESTIONS OF LAW ARE NOT FINAL AND THAT DECISIONS ON QUESTIONS OF FACT ARE FINAL ONLY IF THEY MEET THE WUNDERLICH ACT STANDARDS OF REVIEW.

IN REGARD TO S AND E'S ASSERTION THAT THE EXERCISE OF REVIEW FUNCTIONS IN THIS CASE WOULD MAKE OUR OFFICE ANOTHER "COURT OF CLAIMS" IT NEED ONLY BE NOTED THAT, WHILE OUR DECISION MAKING FUNCTION IS AT LEAST QUASI-JUDICIAL, SUCH A RESULT IS NEITHER INTENDED NOR POSSIBLE. THE COURT OF CLAIMS, LIKE ANY DULY CONSTITUTED COURT, HAS THE AUTHORITY AND POWER TO RENDER DECISIONS AND JUDGMENTS WHICH ARE BINDING AND CONCLUSIVE UPON BOTH PARTIES TO A SUIT PROPERLY BEFORE IT. THE GENERAL ACCOUNTING OFFICE IS NOT A COURT AND ITS DECISIONS UNDER THE BUDGET AND ACCOUNTING ACT, 1921, HAVE NO BINDING EFFECT UPON PRIVATE PARTIES OR IN JUDICIAL PROCEEDINGS. SUCH PARTIES HAVE ALWAYS HAD THE RIGHT TO PURSUE ANY JUDICIAL REMEDIES WHICH MAY BE AVAILABLE TO THEM REGARDLESS OF ANY PREVIOUS DECISIONS RENDERED BY THE COMPTROLLER GENERAL. THIS RIGHT TO A JUDICIAL REMEDY EXISTS WHETHER THE CLAIM WHICH HAS PREVIOUSLY BEEN DENIED BY THE GENERAL ACCOUNTING OFFICE IS ONE ARISING OUTSIDE THE DISPUTES CLAUSE OR UNDER THE DISPUTES CLAUSE. OUR FUNCTION UNDER THE WUNDERLICH ACT THEREFORE IS NOT THAT OF ANOTHER "COURT OF CLAIMS" WHICH HAS POWER TO CONCLUSIVELY BIND THE CONTRACTOR AS WELL AS THE GOVERNMENT. RATHER, AS THE CONGRESS INTENDED, OUR ROLE UNDER THE WUNDERLICH ACT IS PRECISELY WHAT IT HAS ALWAYS BEEN EVEN BEFORE PASSAGE OF THE ACT--- A ROLE, AS SPELLED OUT IN THE LONGWILL AND CHARLES CASES, SUPRA, WHICH, THROUGH INTERVENTION, MAKES IT POSSIBLE FOR THE GOVERNMENT TO RECEIVE THE PROTECTION AFFORDED BY A REVIEW IN THE COURT OF CLAIMS OR ANY OTHER COURT HAVING JURISDICTION.

CONTRARY TO THE ASSERTION IN S AND E'S BRIEF OF JULY 20, 1966, OUR OFFICE HAS EXERCISED ITS JURISDICTION TO REVIEW ADMINISTRATIVE DISPUTES CLAUSE DECISIONS ON QUESTIONS OF FACT ON A NUMBER OF OCCASIONS. FOR EXAMPLE, SEE 43 COMP. GEN. 1; 35 ID. 512; B-142040, AUGUST 27, 1962; 45 COMP. GEN. 693; B-144847 FEBRUARY 14, 1961. SEE ALSO MCSHAIN CO. V. UNITED STATES, 83 CT. CL. 405 AND ALBINA MARINE IRON WORKS, INC. V. UNITED STATES, 79 CT. CL. 714 WHICH ARE CITED IN C.J. LANGENFELDER, INC. V. UNITED STATES, FOOTNOTE 9, SUPRA. BOTH MCSHAIN AND ALBINA MARINE IRON WORKS INVOLVED REVERSALS BY OUR OFFICE OF ADMINISTRATIVE DECISIONS ON QUESTIONS OF FACT. EXPLAINING ITS SUBSEQUENT OVERRULING OF OUR DECISIONS IN THOSE TWO CASES THE COURT OF CLAIMS IN LANGENFELDER STATED: "IN OTHER WORDS, THE COMPTROLLER GENERAL HAS BEEN HELD WRONG IN THE PARTICULAR CIRCUMSTANCES, NOT DEVOID OF ALL POWER OVER SUCH FAVORABLE DECISIONS.'

IN VIEW OF THESE CONSIDERATIONS, WE THINK THAT ACTION BY OUR OFFICE IN THIS CASE NEED NOT BE PREDICATED UPON, OR CIRCUMSCRIBED BY, A "REQUEST" FOR OUR "REVIEW OF, OR CONCURRENCE IN" THE DECISION REACHED BY THE HEARING EXAMINER AS REVIEWED AND MODIFIED BY THE COMMISSION. NOR, FOR THAT MATTER, AS INDICATED ABOVE, WILL OUR DECISION BE LIMITED TO THE THREE ISSUES RAISED BY YOU WITH RESPECT TO THE VOUCHER. YOUR REQUEST FOR DECISION BRINGS INTO ISSUE NEARLY ALL OF THE MORE FUNDAMENTAL QUESTIONS DECIDED BY THE HEARING EXAMINER, BUT EVEN IF IT DID NOT, OUR RESPONSIBILITY UNDER LAW WOULD NOT BE DISCHARGED WERE WE TO IGNORE A QUESTIONABLE CLAIM ALLOWANCE ONCE BROUGHT TO OUR ATTENTION.

WE REALIZE, OF COURSE, THAT THE SCOPE OF OUR REVIEW IN THIS CASE IS BROAD AND FAR REACHING. IN VIEW OF THE FACT THAT OUR DECISION MAY GIVE RISE TO FURTHER LITIGATION ENTAILING FURTHER EFFORT AND EXPENSE TO BOTH PARTIES IN THE DISPUTE, OUR CONCLUSIONS IN THIS CASE WERE NOT REACHED LIGHTLY. RECOGNIZE THAT DUE REGARD MUST BE GIVEN TO THE HEARING EXAMINER'S OPPORTUNITY TO JUDGE THE CREDIBILITY OF THE WITNESSES WHO TESTIFIED AT THE HEARING. THIS FACTOR WAS CAREFULLY CONSIDERED BY OUR OFFICE. HOWEVER, UPON COMPARISON OF THE TESTIMONY OF VARIOUS WITNESSES FROM BOTH SIDES, AS RECORDED IN THE HEARING TRANSCRIPT, WITH THE DOCUMENTARY EVIDENCE (E.G. THE DAILY LOGS OF THE WORK, MINUTES OF THE WEEKLY MEETINGS, CORRESPONDENCE BETWEEN THE PARTIES, PROGRESS PICTURES AND OFFICIAL WEATHER DATA), WE HAVE CONCLUDED THAT ANY POSSIBLE EFFECT OF THE EXAMINER'S OPPORTUNITY TO JUDGE THE CREDIBILITY OF WITNESSES WAS MORE THAN OUTWEIGHED BY THE INCONSISTENCIES AND CONTRADICTIONS REVEALED BY OUR COMPARISON. OUR REVIEW OF THE RECORD REVEALS THAT THESE LAST MENTIONED DOCUMENTS DIRECTLY CONTRADICT THE TESTIMONY OF VARIOUS S AND E WITNESSES DURING THE HEARING IN SEVERAL VITAL AND CONTROLLING AREAS OF THE ISSUES PRESENTED. IT IS IMPORTANT TO NOTE IN THAT CONNECTION, THAT THE DOCUMENTARY EVIDENCE REFERRED TO WAS PREPARED OR COMPILED CONTEMPORANEOUSLY WITH THE EVENTS DESCRIBED THEREIN AND CONTEMPORANEOUSLY WITH THE CONSTRUCTION WORK AS IT PROGRESSED.

IT IS CONTENDED BY S AND E'S COUNSEL THAT OUR OFFICE DOES NOT HAVE THE FACILITIES TO CONDUCT ADMINISTRATIVE HEARINGS IN DISPUTES CLAUSE CASES. IT IS NOTED, HOWEVER, THAT UNDER THE RULE SET FORTH IN THE BIANCHI CASE, SUPRA, THE REVIEW OF A DEPARTMENTAL DECISION ON A QUESTION OF FACT ARISING UNDER A DISPUTES CLAUSE MUST, UNDER THE WUNDERLICH ACT, BE CONFINED TO CONSIDERATION OF THE RECORD BEFORE THE DEPARTMENT AND NO NEW EVIDENCE MAY BE RECEIVED ON SUCH QUESTIONS. THUS, EVEN IF WE WERE EQUIPPED TO CONDUCT HEARINGS AND WISHED TO GRANT A DE NOVO REVIEW ON THIS CASE, THE BIANCHI RULE WOULD NOT PERMITIT. IT SHOULD ALSO BE NOTED THAT S AND E WAS NOT PRECLUDED FROM PRESENTING ANY LEGAL ARGUMENTS PERTAINING TO THIS CASE THAT IT WISHED TO SUBMIT, AS FULLY AS IT COULD HAVE DONE IN A JUDICIAL REVIEW. S AND E AVAILED ITSELF OF THIS OPPORTUNITY AND SUBMITTED LEGAL BRIEFS TO OUR OFFICE BY LETTERS DATED MAY 15, AUGUST 17, SEPTEMBER 17, 1964, JUNE 1, 1965, AND JULY 20, 1966. THE CONTRACTING OFFICER'S ATTORNEY ALSO SUBMITTED SEVERAL LEGAL BRIEFS. ALL OF THESE BRIEFS WERE CAREFULLY CONSIDERED. IT MIGHT ALSO BE MENTIONED THAT THE S AND E JUNE 1, 1965, AND JULY 20, 1966, BRIEFS ARE INDICATIVE OF THE SERIOUSNESS WITH WHICH WE VIEW THIS CASE SINCE THESE BRIEFS ARE IN RESPONSE TO A PROPOSED DRAFT OF DECISION BY THIS OFFICE, AND ITS RELEASE FOR COMMENT TO THE INTERESTED PARTIES IS A PROCEDURE NORMALLY NOT FOLLOWED IN THIS TYPE OF CASE. VIEW OF THE VOLUMINOUS RECORD, AND ALSO THE COMPLEXITIES OF THE ISSUES INVOLVED, TOGETHER WITH THE FACT THAT MANY FACTUAL AS WELL AS LEGAL QUESTIONS ARE INVOLVED, WE FELT THAT WE COULD DO NO LESS THAN OFFER IT FOR COMMENTS OR OBJECTIONS. THE DRAFT DOCUMENT, CONTRARY TO S AND E'S ASSERTION, IS NOT A REDETERMINATION OF THE FACTS BUT A REVIEW OF THE RECORD BEFORE THE HEARING EXAMINER TO DETERMINE WHETHER HIS FINDINGS, AS MODIFIED BY THE COMMISSION, ARE ENTITLED TO FINALITY UNDER THE WUNDERLICH ACT STANDARDS.

THE HEARING BEFORE THE HEARING EXAMINER WAS CONDUCTED OVER A PERIOD OF 13 DAYS IN IDAHO FALLS, IDAHO, AND IN WASHINGTON, D.C., DURING THE MONTHS OF DECEMBER 1962 AND JANUARY 1963. EXTENSIVE TESTIMONY WAS PRESENTED BY WITNESSES FROM BOTH SIDES--- THE HEARING TRANSCRIPT RAN TO A LENGTH OF 2442 PAGES. NUMEROUS DOCUMENTS AND DATA WERE INTRODUCED INTO EVIDENCE--- 25 BY THE GOVERNMENT, DESIGNATED AS 1 THROUGH 25, AND 30 BY S AND E, DESIGNATED AS A THROUGH DD. IN ADDITION, 5 EXHIBITS WERE RECEIVED IN EVIDENCE WHICH WERE DESIGNATED AS EXHIBITS OF THE HEARING EXAMINER. THE EXHIBITS ON BOTH SIDES WERE VARIED AND COMPLETE, COVERING NEARLY EVERY ASPECT OF THE ISSUES INVOLVED. THEY INCLUDED, AMONG OTHER THINGS, PERIODIC PHOTOGRAPHS OF CONSTRUCTION PROGRESS, MINUTES OF WEEKLY CONSTRUCTION MEETINGS, DAILY LOGS OF THE WORK, DEPARTMENT OF COMMERCE LOCAL CLIMATOLOGICAL DATA, CONTRACT DRAWINGS AND CORRESPONDENCE BETWEEN THE PARTIES.

BECAUSE OF THE IMPORT OF THE DECISION OF THE UNITED STATES SUPREME COURT IN UNITED STATES V. CARLO BIANCHI AND COMPANY, INC., 373 U.S. 709 (1963), A FEW COMMENTS ON THE NATURE OF THE EVIDENCE IN THE CASE TRANSMITTED TO THIS OFFICE, AND UPON WHICH OUR REVIEW WAS BASED, APPEAR WARRANTED. THE BIANCHI CASE, THE SUPREME COURT HELD THAT, APART FROM QUESTIONS OF FRAUD, THE REVIEW OF A DEPARTMENTAL DECISION ON A QUESTION OF FACT ARISING UNDER A DISPUTES CLAUSE MUST, UNDER THE WUNDERLICH ACT, BE CONFINED TO CONSIDERATION OF THE RECORD BEFORE THE DEPARTMENT, AND THAT THE REVIEWING COURT MAY NOT RECEIVE NEW EVIDENCE ON SUCH QUESTIONS. SEE ALSO THE RECENT DECISIONS BY THE SUPREME COURT IN UNITED STATES V. UTAH CONSTRUCTION AND MINING CO., 384 U.S. 394 AND UNITED STATES V. ANTHONY GRACE AND SONS, INC., 384 U.S. 424. AT THE OUTSET IT SHOULD BE NOTED THAT NO NEW EVIDENCE, NOT PREVIOUSLY CONSIDERED BY THE HEARING EXAMINER AND/OR COMMISSION, WAS CONSIDERED BY OUR OFFICE IN THE REVIEW OF THIS CASE. HOWEVER, A FEW OF THE EXHIBITS WHICH WERE PRESENTED IN EVIDENCE AT THE HEARING WERE NOT BEFORE US FOR CONSIDERATION. THEY CONSIST OF THE FOLLOWING: CONTRACTING OFFICER'S EXHIBIT 7; S AND E EXHIBITS B, N, O, AND X, AND HEARING EXAMINER EXHIBITS 1, 4 AND 5. HOWEVER, WE DO NOT THINK, FOR THE REASONS STATED BELOW, THAT THEIR ABSENCE FROM THE RECORD BEFORE OUR OFFICE COULD AFFECT, IN ANY WAY, THE COMPLETENESS OF OUR REVIEW OR THE VALIDITY OF OUR CONCLUSIONS.

S AND E EXHIBIT B CONSISTED OF A SCALE MODEL OF THE PROJECT WHICH, DURING THE EARLY PORTION OF THE HEARING, WAS ASSEMBLED, PIECE BY PIECE, BY S AND E WITNESSES TO ILLUSTRATE THE STEPS AND SEQUENCE OF CONSTRUCTION. THE MODEL WAS BUILT BY S AND E AFTER COMPLETION OF THE CONTRACT FOR THE PURPOSES OF THE HEARING AND, IN AND OF ITSELF, HAS NO PROBATIVE VALUE AS EVIDENCE OF WHAT TRANSPIRED BETWEEN THE PARTIES DURING THE COURSE OF THE CONTRACT. WHILE THE MODEL MAY HAVE BEEN USEFUL TO ACQUAINT A PERSON WHO WAS NOT PRESENT AT THE SITE DURING THE CONSTRUCTION PERIOD WITH THE NATURE, SIZE AND ELEMENTS OF THE PROJECT, OTHER EVIDENCE, OF MORE PROBATIVE VALUE, IS AVAILABLE FOR THAT PURPOSE. THIS OTHER EVIDENCE CONSISTS OF PHOTOGRAPHS TAKEN AT REGULAR INTERVALS DURING THE CONSTRUCTION, MINUTES OF WEEKLY MEETINGS, CONTRACT DRAWINGS AND THE DAILY LOGS OF THE WORK. FOR THESE REASONS AND, ALSO, BECAUSE OF THE PRACTICAL DIFFICULTIES INVOLVED IN MOVING THE MODEL FROM THE AEC HEADQUARTERS BUILDING TO THIS OFFICE, WE DID NOT REQUEST SUBMISSION OF THE MODEL HERE.

A LARGE PORTION OF THE HEARING WAS DEVOTED TO THE CLAIM OF IMPOSSIBILITY OF PERFORMANCE. HOST OF THE EVIDENCE ON THIS CLAIM CONSISTED OF EXPERT TESTIMONY BASED ON AN ANALYTICAL SYSTEM, CALLED THE "CRITICAL PATH METHOD," WHICH IS USED TO DETERMINE NECESSARY TIME FOR CONSTRUCTION AND WHICH WE NEED NOT GO INTO HERE. CONTRACTING OFFICER'S EXHIBIT 7, S AND E EXHIBITS N AND O, AND HEARING EXAMINER'S EXHIBITS 1,4 AND 5 ARE RELATED TO THE IMPOSSIBILITY CLAIM. AS THE HEARING EXAMINER RECOGNIZED, HIS AUTHORITY TO GRANT RELIEF ON A CLAIM UNDER THE DISPUTES CLAUSE MUST BE BASED ON SOME PROVISION IN THE CONTRACT PROVIDING FOR SUCH RELIEF. SEE UTAH CONSTRUCTION AND MINING CO. V. UNITED STATES, 168 CT. CL. 522, AFFIRMED ON THIS POINT 384 U.S. 394. WHILE A CLAIM OF IMPOSSIBILITY MAY BE SET UP AS A DEFENSE IN AN ACTION FOR BREACH OF CONTRACT, THERE WAS NO AUTHORITY UNDER THE CONTRACT TO GRANT AFFIRMATIVE RELIEF ON SUCH A CLAIM. THE EXAMINER REJECTED S AND E'S CLAIM FOR TIME EXTENSIONS BECAUSE OF IMPOSSIBILITY OF PERFORMANCE "AS A MATTER OF LAW.' WE ARE IN COMPLETE AGREEMENT WITH THE LEGAL SOUNDNESS OF THE EXAMINER'S CONCLUSION IN THIS REGARD. SINCE THE EVIDENCE AND EXHIBITS CITED ABOVE RELATED TO A CLAIM NOT PROPERLY PRESENTABLE UNDER THE DISPUTES CLAUSE, THEY WERE DEEMED IMMATERIAL FOR CONSIDERATION IN OUR REVIEW.

S AND E EXHIBIT X WAS AN ANALYSIS PREPARED BY S AND E SHOWING THE COST OF PROVIDING 64 CARPENTERS TO MAN THE JOB WHICH THE GOVERNMENT WITNESS, COMMANDER ANDERSON, WHO WAS THE CONTRACTING OFFICER'S REPRESENTATIVE AT THE SITE, HAD EARLIER TESTIFIED WAS THE PROPER SIZE FORCE FOR THE PROJECT. WHEN THIS EXHIBIT WAS OFFERED IN EVIDENCE, THE ATTORNEY FOR THE CONTRACTING OFFICER OBJECTED ON THE GROUND THAT IT WAS IRRELEVANT. THE ISSUE OF THE NUMBER OF CARPENTERS THAT SHOULD HAVE BEEN USED ON THE JOB WILL BE DISCUSSED LATER. IN ANY EVENT, HOWEVER, THE DATA AND COST FIGURES CONTAINED IN EXHIBIT X WERE FULLY DISCLOSED AND DISCUSSED BY MR. ELDER IN HIS TESTIMONY DURING THE HEARING (PP. 2388-2391 OF THE TRANSCRIPT). FOR THESE REASONS IT IS NOT FELT THAT THE PHYSICAL PRESENCE OF EXHIBIT X IS NECESSARY FOR CONSIDERATION IN OUR REVIEW.

OUR REVIEW OF THE EXAMINER'S DECISION, AS MODIFIED BY THE COMMISSION, HAS BEEN MADE ON THE BASIS OF THE ENTIRE RECORD, WITH THE EXCEPTIONS NOTED ABOVE. THE PHRASE "SUBSTANTIAL EVIDENCE" HAS BEEN DEFINED AS "SUCH RELEVANT EVIDENCE AS A REASONABLE MIND MIGHT ACCEPT AS ADEQUATE TO SUPPORT A CONCLUSION.' EDISON COMPANY V. NATIONAL LABOR RELATIONS BOARD, 305 U.S. 197, 229. IN ENACTING THE WUNDERLICH ACT IT IS CLEAR THAT CONGRESS INTENDED TO ADOPT THE EDISON COMPANY CASE DEFINITION OF "SUBSTANTIAL EVIDENCE.' SEE H. REP. NO. 1380, PAGE 4. HOWEVER, IN APPLYING THE ,REASONABLE MIND" CRITERION OF THE EDISON COMPANY CASE IT HAS BEEN HELD THAT THE RECORD MADE BEFORE THE DECIDING OFFICIAL OR BODY MUST BE CONSIDERED AS A WHOLE. SEE LEE HOFFMAN V. UNITED STATES, 166 CT. CL. 39, 51, WHERE THE COURT SAID:

DEFENDANT URGES THAT THE CRITERION SET FORTH IN BATESON CO. V. UNITED STATES, 149 CT. CL. 514, 518 (1960) THAT SUBSTANTIAL EVIDENCE MEANS "SUCH EVIDENCE AS MIGHT CONVINCE A REASONABLE MAN, TO SUPPORT THE CONCLUSION REACHED BY THE AGENCY OFFICIALS," IS FULLY MET IN THIS CASE. EVEN WERE WE TO ASSUME THAT THERE IS SOME EVIDENCE WHICH, STANDING ALONE, MIGHT CONVINCE A REASONABLE MAN TO SUPPORT THE BOARD'S CONCLUSION, THIS, IN AND OF ITSELF WOULD NOT BE SUFFICIENT HERE. AS WE STATED, IN WILLIAMS V. UNITED STATES, 130 CT. CL. 435, 441, 127 F. SUPP. 617, 619, CERT. DENIED, 349 U.S. 938 (1955):

"THE FACT THAT THERE IS EVIDENCE, CONSIDERED OF AND BY ITSELF, TO SUPPORT THE ADMINISTRATIVE DECISION IS NOT SUFFICIENT WHERE THERE IS OPPOSING EVIDENCE SO SUBSTANTIAL IN CHARACTER AS TO DETRACT FROM ITS WEIGHT AND RENDER IT LESS THAN SUBSTANTIAL ON THE RECORD AS A WHOLE.' FOR OTHER CASES IN ACCORD WITH THE ABOVE RULING SEE UNITED STATES V. HAMDEN CO- OPERATIVE CREAMERY COMPANY, INC., 185 F.SUPP. 541, AFFIRMED 297 F.2D 130; RHEEM MANUFACTURING COMPANY V. UNITED STATES, 153 CT. CL. 465; RIVER CONSTRUCTION CORPORATION V. UNITED STATES, 159 CT. CL. 254; FEHLHABER CORPORATION V. UNITED STATES, 138 CT. CL. 571, CERT. DENIED 355 U.S. 877; FOX VALLEY ENGINEERING, INC. V. UNITED STATES, 151 CT. CL. 288; AND RUSSEL H. WILLIAMS, ET. AL. V. UNITED STATES, 130 CT. CL. 435. IN THE LAST CITED CASE THE COURT OF CLAIMS STATED (PP. 440, 441):

WE ARE SATISFIED FROM THE EVIDENCE AND HAVE FOUND AS A FACT THAT THE DECISION OF THE HEAD OF THE DEPARTMENT WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. IN REACHING THIS CONCLUSION WE HAVE CONSIDERED THE EVIDENCE ON BOTH SIDES IN ORDER TO DETERMINE WHETHER IT APPEARS THAT THE EVIDENCE IN SUPPORT OF THE ADMINISTRATIVE DECISION CAN FAIRLY BE SAID TO BE SUBSTANTIAL IN THE FACE OF OPPOSING EVIDENCE. SEE WILLAPOINT OYSTERS V. EWING, 174 F.2D 676, CERTIORARI DENIED 338, U.S. 860. IN A RECENT DECISION BY THE SUPREME COURT, UNIVERSAL CAMERA CORP. V. NATIONAL LABOR RELATIONS BOARD, 340 U.S. 474, 487, THE COURT MADE THE FOLLOWING STATEMENT WITH RESPECT TO THE RULE RELATING TO SUBSTANTIALITY OF EVIDENCE TO SUPPORT AN ADMINISTRATIVE DECISION:

"WHETHER OR NOT IT WAS EVER PERMISSIBLE FOR COURTS TO DETERMINE THE SUBSTANTIALITY OF EVIDENCE SUPPORTING A LABOR BOARD DECISION MERELY ON THE BASIS OF EVIDENCE WHICH IN AND OF ITSELF JUSTIFIED IT, WITHOUT TAKING INTO ACCOUNT CONTRADICTORY EVIDENCE OR EVIDENCE FROM WHICH CONFLICTING INFERENCES COULD BE DRAWN, THE NEW LEGISLATION (ADMINISTRATIVE PROCEDURES ACT AND TAFT-HARTLEY ACT) DEFINITIVELY PRECLUDES SUCH A THEORY OF REVIEW AND BARS ITS PRACTICE. THE SUBSTANTIALITY OF EVIDENCE MUST TAKE INTO ACCOUNT WHATEVER IN THE RECORD FAIRLY DETRACTS FROM ITS WEIGHT. THIS IS CLEARLY THE SIGNIFICANCE OF THE REQUIREMENT IN BOTH STATUTES THAT COURTS CONSIDER THE WHOLE RECORD.'

THE FACT THAT THERE IS EVIDENCE, CONSIDERED OF AND BY ITSELF, TO SUPPORT THE ADMINISTRATIVE DECISION IS NOT SUFFICIENT WHERE THERE IS OPPOSING EVIDENCE SO SUBSTANTIAL IN CHARACTER AS TO DETRACT FROM ITS WEIGHT AND RENDER IT LESS THAN SUBSTANTIAL ON THE RECORD AS A WHOLE.

AS WE VIEW THE EVIDENCE, IT IS DIFFICULT TO SEE HOW IT COULD BE SAID THAT THERE WAS SUBSTANTIAL EVIDENCE TO SUPPORT THE DECISION MADE BY THE CONTRACTING OFFICER AND THE HEAD OF THE DEPARTMENT IN THE FACE OF THE OPPOSING EVIDENCE * * *. SEE, ALSO, THE FEHLHABER CORPORATION CASE, SUPRA, AT PAGE 578, WHERE THE COURT OF CLAIMS OBSERVED:

IN THIS LIGHT, THE DECISION OF THE CORPS OF ENGINEERS CLAIMS AND APPEALS BOARD IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND IS IN FACT CONTRARY TO THE OVERWHELMING WEIGHT OF THE EVIDENCE AS THE ENSUING DISCUSSION HEREIN WILL POINT OUT * * * COMPARE THE STATEMENT IN AN OPINION OF THE TRIAL COMMISSIONER, ADOPTED BY THE COURT OF CLAIMS IN A PER CURIAM OPINION, IN THE FOX VALLEY ENGINEERING, INC. CASE, SUPRA, (P. 241) THAT A DECISION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS WAS "GROSSLY ERRONEOUS, AND IS NOT SUBSTANTIALLY SUPPORTED BY THE CREDIBLE AND PROBATIVE EVIDENCE.'

IN OUR CONSIDERED OPINION, FOR THE REASONS SET FORTH HEREAFTER, THE DECISION RENDERED BY THE HEARING EXAMINER, AS MODIFIED BY THE COMMISSION, FAILS IN SEVERAL VITAL RESPECTS TO MEET THE STANDARDS SET FORTH IN THE WUNDERLICHT ACT AS PREREQUISITE TO CONFERRING FINALITY UPON SUCH DECISION. WITH RESPECT TO THOSE CLAIMS SUBMITTED BY S AND E WHICH INVOLVE QUESTIONS OF FACT, WE THINK THAT THE EXAMINER'S DECISION IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. WE ALSO THINK THE EXAMINER'S DECISION CONTAINED SERIOUS ERRORS OF LAW, AS WILL BE NOTED HEREINAFTER.

IN REGARD TO THE EVIDENCE RELIED UPON BY THE EXAMINER IN SUPPORT OF HIS DECISION, WE BELIEVE, TO BORROW THE WORDS OF THE COURT OF CLAIMS IN THE WILLIAMS CASE, SUPRA, THAT "THERE IS OPPOSING EVIDENCE SO SUBSTANTIAL IN CHARACTER AS TO DETRACT FROM ITS WEIGHT AND RENDER IT LESS THAN SUBSTANTIAL ON THE RECORD AS A WHOLE.' TO PUT IT ANOTHER WAY, WE DO NOT BELIEVE THAT THE EVIDENCE IN SUPPORT OF THE EXAMINER'S CONCLUSIONS WHEN CONSIDERED TOGETHER WITH THE OTHER EVIDENCE OF RECORD, IS "SUCH RELEVANT EVIDENCE AS A REASONABLE MIND MIGHT ACCEPT AS ADEQUATE TO SUPPORT" SUCH CONCLUSIONS. IT IS ON THE BASIS OF THESE CRITERIA THAT WE HAVE REVIEWED THE EXAMINER'S DECISION TO DETERMINE WHETHER IT IS SUPPORTED BY SUBSTANTIAL EVIDENCE. ACCORDINGLY, WHEN S AND E'S INDIVIDUAL CLAIMS ARE DISCUSSED HEREINAFTER AND WE CONCLUDE THAT THE EXAMINER'S FINDINGS ON FACTUAL QUESTIONS ARE NOT SUPPORTED BY "SUBSTANTIAL EVIDENCE" OUR CONCLUSIONS RESULT FROM APPLICATION OF THE ABOVE CRITERIA, AS LAID DOWN IN THE EDISON COMPANY AND WILLIAMS CASES. WE CANNOT HELP BUT FEEL THAT IN REACHING HIS DECISION, THE EXAMINER EITHER IGNORED, OVERLOOKED, OR FAILED TO GIVE PROPER WEIGHT TO THE VAST AMOUNT OF UNCONTROVERTED EVIDENCE INTRODUCED BY THE GOVERNMENT IN THE FORM OF TESTIMONY, OFFICIAL WEATHER DATA, DAILY LOGS OF THE CONSTRUCTION WORK KEPT BY BOTH PARTIES, OFFICIAL MINUTES OF WEEKLY CONSTRUCTION MEETINGS, AND CORRESPONDENCE BETWEEN THE PARTIES ON THE VARIOUS ISSUES WHICH AROSE FROM TIME TO TIME. THE LATTER FOUR CATEGORIES OF EVIDENCE, IN OUR VIEW, HAVE ESPECIALLY SIGNIFICANT PROBATIVE VALUE SINCE THESE DOCUMENTS WERE COMPILED OR COMPOSED CONTEMPORANEOUSLY WITH THE CONSTRUCTION WORK AS IT PROGRESSED AND THEY WERE NOT CHALLENGED BY S AND E DURING THE HEARING AS BEING INACCURATE, MISLEADING OR ERRONEOUS. AS NOTED EARLIER, THE TESTIMONY OF S AND E'S WITNESSES IS CONTRADICTED BY THIS UNCHALLENGED DOCUMENTARY EVIDENCE IN SEVERAL VITAL RESPECTS. IT IS ALSO OUR BELIEF, AS WILL BE DEMONSTRATED HEREAFTER, THAT THE EXAMINER FAILED TO ADEQUATELY EVALUATE THE EVIDENCE INTRODUCED BY S AND E, SINCE A CLOSE INSPECTION AND ANALYSIS OF THAT EVIDENCE INDICATES MUCH OF IT IS VERY GENERAL AND IMPRECISE IN NATURE AND IN SOME IMPORTANT INSTANCES IS INTERNALLY CONTRADICTORY AND INCONSISTENT.

THE CONTRACT INCLUDED THE FOLLOWING PERTINENT PROVISIONS, WHICH, FOR THE SAKE OF READY REFERENCE, WILL ALL BE QUOTED HERE AS FOLLOWS:

GENERAL PROVISIONS 3. CHANGES

THE CONTRACTING OFFICER MAY AT ANY TIME, BY A WRITTEN ORDER, AND WITHOUT NOTICE TO THE SURETIES, MAKE CHANGES IN THE DRAWINGS AND/OR SPECIFICATIONS OF THIS CONTRACT AND WITHIN THE GENERAL SCOPE THEREOF. IF SUCH CHANGES CAUSE AN INCREASE OR DECREASE IN THE AMOUNT DUE UNDER THIS CONTRACT, OR IN THE TIME REQUIRED FOR ITS PERFORMANCE, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY. ANY CLAIM OF THE CONTRACTOR FOR ADJUSTMENT UNDER THIS CLAUSE MUST BE ASSERTED IN WRITING WITHIN 30 DAYS FROM THE DATE OF RECEIPT BY THE CONTRACTOR OF THE NOTIFICATION OF CHANGE: PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, IF HE DETERMINES THAT THE FACTS JUSTIFY SUCH ACTION, MAY RECEIVE AND CONSIDER, AND ADJUST ANY SUCH CLAIM ASSERTED AT ANY TIME PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT. IF THE PARTIES FAIL TO AGREE UPON THE ADJUSTMENT TO BE MADE THE DISPUTE SHALL BE DETERMINED AS PROVIDED IN CLAUSE 6 HEREOF. BUT NOTHING PROVIDED IN THIS CLAUSE SHALL EXCUSE THE CONTRACTOR FROM PROCEEDING WITH THE PROSECUTION OF THE WORK AS CHANGED. EXCEPT AS OTHERWISE HEREIN PROVIDED, NO CHARGE FOR ANY EXTRA WORK OR MATERIAL WILL BE ALLOWED. 4. CHANGED CONDITIONS

THE CONTRACTOR SHALL PROMPTLY, AND BEFORE SUCH CONDITIONS ARE DISTURBED, NOTIFY THE CONTRACTING OFFICER IN WRITING OF: (1) SUBSURFACE OR LATENT PHYSICAL CONDITIONS AT THE SITE DIFFERING MATERIALLY FROM THOSE INDICATED IN THIS CONTRACT, OR (2) UNKNOWN PHYSICAL CONDITIONS AT THE SITE, OF AN UNUSUAL NATURE, DIFFERING MATERIALLY FROM THOSE ORDINARILY ENCOUNTERED AND GENERALLY RECOGNIZED AS INHERING IN WORK OF THE CHARACTER PROVIDED FOR IN THIS CONTRACT. THE CONTRACTING OFFICER SHALL PROMPTLY INVESTIGATE THE CONDITIONS, AND IF HE FINDS THAT SUCH CONDITIONS DO SO MATERIALLY DIFFER AND CAUSE AN INCREASE OR DECREASE IN THE COST OF, OR THE TIME REQUIRED FOR, PERFORMANCE OF THIS CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT MODIFIED IN WRITING ACCORDINGLY. ANY CLAIM OF THE CONTRACTOR FOR ADJUSTMENT HEREUNDER SHALL NOT BE ALLOWED UNLESS HE HAS GIVEN NOTICE AS ABOVE REQUIRED; PROVIDED THAT THE CONTRACTING OFFICER MAY, IF HE DETERMINES THE FACTS SO JUSTIFY, CONSIDER AND ADJUST ANY SUCH CLAIM ASSERTED BEFORE THE DATE OF FINAL SETTLEMENT OF THE CONTRACT. IF THE PARTIES FAIL TO AGREE UPON THE ADJUSTMENT TO BE MADE, THE DISPUTE SHALL BE DETERMINED AS PROVIDED IN CLAUSE 6 HEREOF. 5. TERMINATION FOR DEFAULT--- DAMAGES FOR DELAY--- TIME EXTENSIONS

(A) IF THE CONTRACTOR REFUSES OR FAILS TO PROSECUTE THE WORK, OR ANY SEPARABLE PART THEREOF, WITH SUCH DILIGENCE AS WILL INSURE ITS COMPLETION WITHIN THE TIME SPECIFIED IN THIS CONTRACT, OR ANY EXTENSION THEREOF, OR FAILS TO COMPLETE SAID WORK WITHIN SUCH TIME, THE GOVERNMENT MAY, BY WRITTEN NOTICE TO THE CONTRACTOR, TERMINATE HIS RIGHT TO PROCEED WITH THE WORK OR SUCH PART OF THE WORK AS TO WHICH THERE HAS BEEN DELAY. IN SUCH EVENT THE GOVERNMENT MAY TAKE OVER THE WORK AND PROSECUTE THE SAME TO COMPLETION, BY CONTRACT OR OTHERWISE, AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COST OCCASIONED THE GOVERNMENT THEREBY, AND FOR LIQUIDATED DAMAGES FOR DELAY, AS FIXED IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS, UNTIL SUCH REASONABLE TIME AS MAY BE REQUIRED FOR THE FINAL COMPLETION OF THE WORK, OR IF LIQUIDATED DAMAGES ARE NOT SO FIXED, ANY ACTUAL DAMAGES OCCASIONED BY SUCH DELAY. IF THE CONTRACTOR'S RIGHT TO PROCEED IS SO TERMINATED, THE GOVERNMENT MAY TAKE POSSESSION OF AND UTILIZE IN COMPLETING THE WORK SUCH MATERIALS, APPLIANCES, AND PLANT AS MAY BE ON THE SITE OF THE WORK AND NECESSARY THEREFOR.

(B) IF THE GOVERNMENT DOES NOT TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED, AS PROVIDED IN PARAGRAPH (A) HEREOF, THE CONTRACTOR SHALL CONTINUE THE WORK, IN WHICH EVENT HE AND HIS SURETIES SHALL BE LIABLE TO THE GOVERNMENT, IN THE AMOUNT SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS, FOR FIXED, AGREED, AND LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY UNTIL THE WORK IS COMPLETED OR ACCEPTED, OR IF LIQUIDATED DAMAGES ARE NOT SO FIXED, ANY ACTUAL DAMAGES OCCASIONED BY SUCH DELAY.

(C) THE RIGHT OF THE CONTRACTOR TO PROCEED SHALL NOT BE TERMINATED, AS PROVIDED IN PARAGRAPH (A) HEREOF, NOR THE CONTRACTOR CHARGED WITH LIQUIDATED OR ACTUAL DAMAGES, AS PROVIDED IN PARAGRAPH (B) HEREOF BECAUSE OF ANY DELAYS IN THE COMPLETION OF THE WORK DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD, OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, IN EITHER ITS SOVEREIGN OR CONTRACTUAL CAPACITY, ACTS OF ANOTHER CONTRACTOR IN THE PERFORMANCE OF A CONTRACT WITH THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER, OR DELAYS OF SUBCONTRACTORS OR SUPPLIERS DUE TO SUCH CAUSES: PROVIDED, THAT THE CONTRACTOR SHALL WITHIN 10 DAYS FROM THE BEGINNING OF ANY SUCH DELAY, UNLESS THE CONTRACTING OFFICER SHALL GRANT A FURTHER PERIOD OF TIME PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT, NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSES OF DELAY. THE CONTRACTING OFFICER SHALL ASCERTAIN THE FACTS AND THE EXTENT OF THE DELAY AND EXTEND THE TIME FOR COMPLETING THE WORK WHEN IN HIS JUDGMENT THE FINDINGS OF FACT JUSTIFY SUCH AN EXTENSION, AND HIS FINDINGS OF FACT THEREON SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO, SUBJECT ONLY TO APPEAL AS PROVIDED IN CLAUSE 6 HEREOF. 6. DISPUTES

(A) EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THIS CONTRACT WHICH IS NOT DISPOSED OF BY AGREEMENT SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHO SHALL REDUCE HIS DECISION TO WRITING AND MAIL OR OTHERWISE FURNISH A COPY THEREOF TO THE CONTRACTOR. THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE UNLESS, WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAILS OR OTHERWISE FURNISHES TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE COMMISSION. THE DECISION OF THE COMMISSION OR ITS DULY AUTHORIZED REPRESENTATIVE FOR THE DETERMINATION OF SUCH APPEALS SHALL BE FINAL AND CONCLUSIVE UNLESS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN FRAUDULENT, OR CAPRICIOUS, OR ARBITRARY, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORT BY SUBSTANTIAL EVIDENCE. IN CONNECTION WITH ANY APPEAL PROCEEDING UNDER THIS CLAUSE, THE CONTRACTOR SHALL BE AFFORDED AN OPPORTUNITY TO BE HEARD AND TO OFFER EVIDENCE IN SUPPORT OF ITS APPEAL. PENDING FINAL DECISION OF A DISPUTE HEREUNDER, THE CONTRACTOR SHALL PROCEED DILIGENTLY WITH THE PERFORMANCE OF THE CONTRACT AND IN ACCORDANCE WITH THE CONTRACTING OFFICER'S DECISION.

(B) THIS "DISPUTES" CLAUSE DOES NOT PRECLUDE CONSIDERATION OF LAW QUESTIONS IN CONNECTION WITH DECISIONS PROVIDED FOR IN PARAGRAPH (A) ABOVE; PROVIDED, THAT NOTHING IN THIS CONTRACT SHALL BE CONSTRUED AS MAKING FINAL THE DECISION OF ANY ADMINISTRATIVE OFFICIAL, REPRESENTATIVE, OR BOARD ON A QUESTION OF LAW. 10. SUPERINTENDENCE BY CONTRACTOR

THE CONTRACTOR SHALL GIVE HIS PERSONAL SUPERINTENDENCE TO THE WORK OR HAVE A COMPETENT FOREMAN OR SUPERINTENDENT, SATISFACTORY TO THE CONTRACTING OFFICER, ON THE WORK AT ALL TIMES DURING PROGRESS, WITH AUTHORITY TO ACT FOR HIM. 32. SUSPENSION OF WORK FOR THE CONVENIENCE OF THE GOVERNMENT

THE CONTRACTING OFFICER MAY BY WRITTEN ORDER DIRECT THE CONTRACTOR TO SUSPEND ALL OR ANY PART OF THE WORK FOR SUCH PERIOD OF TIME AS MAY BE DETERMINED BY THE CONTRACTING OFFICER TO BE NECESSARY OR DESIRABLE FOR THE CONVENIENCE OF THE GOVERNMENT. IF SUCH SUSPENSION UNREASONABLY DELAYS THE PROGRESS OF THE WORK AND CAUSE ADDITIONAL EXPENSE OR LESS TO THE CONTRACTOR IN THE PERFORMANCE OF THE WORK, NOT DUE TO THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, AN EQUITABLE ADJUSTMENT IN THE CONTRACT PRICE AND TIME FOR PERFORMANCE SHALL BE MADE IN ACCORDANCE WITH THE AGREEMENT OF THE PARTIES, AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY: PROVIDED, HOWEVER, THAT NO ADJUSTMENT WILL BE MADE UNDER THIS CLAUSE FOR SUSPENSIONS ORDERED UNDER ANY OTHER CLAUSE OF THE CONTRACT OR PROVISION OF THE SPECIFICATIONS; AND PROVIDED FURTHER, THAT ANY CLAIM BY THE CONTRACTOR FOR AN ADJUSTMENT HEREUNDER MUST BE ASSERTED WITHIN 30 DAYS FROM THE DATE SUCH SUSPENSION IS ORDERED. A FAILURE TO AGREE ON AN EQUITABLE ADJUSTMENT UNDER THIS CLAUSE SHALL BE DEEMED TO BE A DISPUTE WITHIN THE MEANING OF THE CLAUSE OF THIS CONTRACT ENTITLED "DISPUTES.'

GENERAL CONDITIONS GC-03 SITE INVESTIGATION AND REPRESENTATIONS--- THE CONTRACTOR ACKNOWLEDGES THAT HE HAS SATISFIED HIMSELF AS TO THE NATURE AND LOCATION OF THE WORK; THE GENERAL AND LOCAL CONDITIONS, PARTICULARLY THOSE BEARING UPON TRANSPORTATION, DISPOSAL, HANDLING AND STORAGE OF MATERIALS; AVAILABILITY OF LABOR, WATER AND ELECTRIC POWER; ROADS; UNCERTAINTIES OF WEATHER; THE CONFORMATION AND CONDITION OF THE GROUND; THE CHARACTER, QUALITY AND QUANTITY OF SURFACE AND SUBSURFACE MATERIALS TO BE ENCOUNTERED; OTHER PHYSICAL CONDITIONS AT THE SITE; THE TYPE OF EQUIPMENT AND FACILITIES NEEDED PRELIMINARY TO AND DURING THE PROSECUTION OF THE WORK; AND ALL OTHER MATTERS WHICH CAN IN ANY WAY AFFECT THE WORK OR THE COST THEREOF. ANY FAILURE BY THE CONTRACTOR TO ACQUAINT HIMSELF WITH ALL THE AVAILABLE INFORMATION CONCERNING THESE CONDITIONS WILL NOT RELIEVE HIM FROM RESPONSIBILITY FOR ESTIMATING PROPERLY THE DIFFICULTY OR COST OF SUCCESSFULLY PERFORMING THE WORK. THE GOVERNMENT ASSUMES NO RESPONSIBILITY FOR ANY UNDERSTANDING OR REPRESENTATIONS MADE BY ANY OF ITS OFFICERS OR AGENTS DURING OR PRIOR TO THE NEGOTIATION OR EXECUTION OF THIS CONTRACT, UNLESS SUCH UNDERSTANDING OR REPRESENTATIONS ARE EXPRESSLY STATED IN THE CONTRACT. REPRESENTATIONS MADE BUT NOT SO EXPRESSLY STATED IN THE CONTRACT SHALL BE DEEMED ONLY FOR THE INFORMATION OF THE CONTRACTOR, AND THE GOVERNMENT WILL NOT BE LIABLE OR RESPONSIBLE THEREFOR. GC-09 PROGRESS CHARTS, AND REQUIREMENTS FOR SUNDAY, HOLIDAY AND NIGHT WORK--- (A) THE CONTRACTOR SHALL WITHIN FIVE (5) DAYS OR WITHIN SUCH ADDITIONAL TIME AS MAY BE DETERMINED BY THE COMMISSION, AFTER DATE OF COMMENCEMENT OF WORK, PREPARE AND SUBMIT TO THE COMMISSION FOR APPROVAL A PRACTICABLE SCHEDULE SHOWING THE ORDER IN WHICH THE CONTRACTOR PROPOSES TO CARRY ON THE WORK, THE DATE ON WHICH HE WILL START THE SEVERAL SALIENT FEATURES (INCLUDING PROCUREMENT OF MATERIALS, PLANT AND EQUIPMENT) AND THE CONTEMPLATED DATES FOR COMPLETING THE SAME. THE SCHEDULE SHALL BE IN THE FORM OF A PROGRESS CHART OF SUITABLE SCALE TO INDICATE APPROPRIATELY THE PERCENTAGE OF WORK SCHEDULED FOR COMPLETION AT ANY GIVEN TIME. THE CONTRACTOR SHALL ENTER ON THE CHART THE ACTUAL PROGRESS AT THE END OF EACH WEEK OR AT SUCH INTERVALS AS DIRECTED BY THE COMMISSION, AND SHALL IMMEDIATELY DELIVER TO THE COMMISSION FIVE (5) COPIES THEREOF. (B) THE CONTRACTOR SHALL FURNISH SUFFICIENT FORCES, CONSTRUCTION PLANT AND EQUIPMENT, AND SHALL WORK SUCH HOURS, INCLUDING NIGHT SHIFTS, OVERTIME OPERATIONS AND SUNDAY AND HOLIDAY WORK, AS MAY BE NECESSARY TO INSURE THE PROSECUTION OF THE WORK IN ACCORDANCE WITH THE APPROVED PROGRESS SCHEDULE. IF, IN THE OPINION OF THE COMMISSION, THE CONTRACTOR FALLS BEHIND THE PROGRESS SCHEDULE, THE CONTRACTOR SHALL TAKE SUCH STEPS AS MAY BE NECESSARY TO IMPROVE HIS PROGRESS AND THE COMMISSION MAY REQUIRE HIM TO INCREASE THE NUMBER OF SHIFTS AND/OR OVERTIME OPERATIONS, DAYS OF WORK AND/OR THE AMOUNT OF CONSTRUCTION PLANT, ALL WITHOUT ADDITIONAL COST TO THE GOVERNMENT.

(C) FAILURE OF THE CONTRACTOR TO COMPLY WITH THE REQUIREMENTS OF THE COMMISSION UNDER THESE PROVISIONS SHALL BE GROUNDS FOR DETERMINATION BY THE COMMISSION THAT THE CONTRACTOR IS NOT PROSECUTING THE WORK WITH SUCH DILIGENCE AS WILL INSURE COMPLETION WITHIN THE TIME SPECIFIED. UPON SUCH DETERMINATION, THE COMMISSION MAY TERMINATE THE CONTRACTOR'S RIGHT TO PROCEED WITH THE WORK, OR ANY SEPARABLE PART THEREOF, IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 5 OF THE GENERAL PROVISIONS. GC-11 PROTECTION OF MATERIAL AND WORK--- THE CONTRACTOR SHALL AT ALL TIMES PROTECT AND PRESERVE AL MATERIALS, SUPPLIES, AND EQUIPMENT OF EVERY DESCRIPTION (INCLUDING PROPERTY WHICH MAY BE GOVERNMENT-FURNISHED OR OWNED), EXISTING STRUCTURES, EXISTING UTILITIES, AND WORK OF ANY KIND AGAINST DAMAGE OR INTERRUPTION OF SERVICE. ALL REASONABLE REQUESTS OF THE COMMISSION TO INCLOSE OR SPECIALLY PROTECT SUCH PROPERTY SHALL BE COMPLIED WITH. DAMAGE OR INTERRUPTION OF SERVICE RESULTING FROM FAILURE TO DO SO SHALL BE REPAIRED OR RESTORED PROMPTLY AT THE EXPENSE OF THE CONTRACTOR. IF, AS DETERMINED BY THE COMMISSION, MATERIAL, EQUIPMENT, SUPPLIES, STRUCTURES, UTILITIES, AND WORK PERFORMED ARE NOT ADEQUATELY PROTECTED BY THE CONTRACTOR, SUCH PROPERTY MAY BE PROTECTED BY THE COMMISSION AND THE COST THEREOF MAY BE CHARGED TO THE CONTRACTOR OR DEDUCTED FROM ANY PAYMENTS DUE.

SPECIAL CONDITIONS SC-01 SEQUENCE OF WORK--- THE WORK SHALL BE COMPLETED IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:

NUMBER OF CALENDAR DAYS AFTER RECEIPT BY

THE CONTRACTOR OF WRITTEN NOTICE TO PROCEED

FOUR WEST BAYS OF REMAINDER OF TEST

ITEM TEST PLANT BUILDING PLANT BUILDING

(A) BUILDING FOOTINGS AND

BASIN SLAB--------------------------------- 45

(B) BUILDING PIERS, BASIN

COUNTERFORTS AND WALLS-- 60 90

(C) PLACE AND COMPACT

BACKFILL---------------- 70 100

(D) ERECT BUILDING AND CRANE

RUNWAYS STEEL----------- 75 100

(E) ASSEMBLE, ERECT AND TEST

FIRST 100-TON CRANE----- 100 ------------------- ---

(F) HULL ERECTION SLAB (2

WEST BAYS) INCLUDING

UTILITY SERVICES-------- 100 ------------------- ---

(G) RAILROAD WORK----------- 110 --------------------- -

(H) ROOF DECK, ROOFING AND

ALUMINUM SIDING;

ENCLOSE BUILDING;

PROVIDE HEAT AND

LIGHTING----------------------------------- 130

(I) ALL WORK NOT INCLUDED IN

ITEMS (A) THROUGH (H)

ABOVE, EXCEPT THE

TEMPORARY ELECTRICAL

SUBSTATION WHICH SHALL

BE COMPLETED IN 35

CALENDAR DAYS AFTER

RECEIPT OF WRITTEN

NOTICE TO PROCEED-------------------------- 180 SC-05 TELEPHONE SERVICE-- - (A) THE CONTRACTOR MAY SECURE TELEPHONE SERVICE ON THE ATOMIC ENERGY COMMISSION SWITCHBOARD BY MAKING WRITTEN APPLICATION TO THE PHILLIPS PETROLEUM COMPANY COMMUNICATIONS COORDINATOR, CENTRAL FACILITIES AREA. FOR THIS SERVICE THE CONTRACTOR WILL BE BILLED A MONTHLY SERVICE CHARGE PER INSTRUMENT (WHICH INCLUDES LINE RENTALS AND OPERATION), PLUS INSTALLATION, CONNECTION AND LONG DISTANCE TELEPHONE CALL CHARGES. THE CONTRACTOR WILL BE REQUIRED TO OBSERVE ALL RULES AND REGULATIONS GOVERNING THE USE OF TELEPHONE FACILITIES AS ESTABLISHED BY THE COMMISSION. THE MONTHLY SERVICE CHARGE TO BE BILLED BY PHILLIPS PETROLEUM COMPANY IS $12.50 PER INSTRUMENT.

(B) TELETYPE FACILITIES WILL BE AVAILABLE TO THE CONTRACTOR IN ACCORDANCE WITH CONDITIONS AND CHARGES AS ESTABLISHED BY THE COMMISSION.

(C) THE CONTRACTOR WILL BE BILLED DIRECTLY BY PHILLIPS PETROLEUM COMPANY FOR ALL CHARGES INCURRED IN CONNECTION WITH TELEPHONE AND TELETYPE SERVICES ON A MONTHLY BASIS. THE CONTRACTOR SHALL MAKE PAYMENT TO PHILLIPS PETROLEUM COMPANY IN FULL AMOUNT OF EACH MONTHLY BILLING WITHIN THIRTY (30) DAYS AFTER RECEIPT OF SUCH BILLING. SC-07 STEAM--- STEAM WILL BE FURNISHED BY THE COMMISSION FOR CONSTRUCTION AND TEMPORARY HEATING PURPOSES AT NO COST TO THE CONTRACTOR PROVIDING THE REQUIREMENTS DO NOT OVERLOAD THE AVAILABLE SERVICE OR INTERFERE WITH COMMISSION OPERATIONS. THE CONTRACTOR SHALL FURNISH, INSTALL, AND REMOVE ALL TEMPORARY PIPING, HOSE, FITTINGS, ETC., NECESSARY TO CONNECT HIS EQUIPMENT TO PERMANENT STEAM SUPPLY LINES. SC-19 MEETINGS- - A REGULARLY SCHEDULED WEEKLY MEETING WILL BE HELD AT THE SITE OF THE WORK FOR THE DISCUSSION AND REVIEW OF PROCUREMENT STATUS, SHOP DRAWING SUBMITTAL AND APPROVAL STATUS, CONSTRUCTION PROGRESS AND OTHER APPROPRIATE ITEMS. THE CONTRACTOR SHALL BE REPRESENTED AT THIS MEETING BY HIS SITE CONSTRUCTION SUPERINTENDENT AND SUCH OTHER KEY PERSONS OF HIS AND HIS SUBCONTRACTORS' ORGANIZATIONS AS APPROPRIATE. WHEN DETERMINED NECESSARY BY THE CONTRACTING OFFICER, AN OFFICER OF THE CONTRACTOR'S ORGANIZATION SHALL ALSO ATTEND. SC-28 TEMPORARY HEAT--- THE CONTRACTOR SHALL PROVIDE AT HIS OWN EXPENSE ALL TEMPORARY HEATING EQUIPMENT REQUIRED FOR HIS USE. THIS INCLUDES FUEL AND ATTENDANCE FOR TEMPORARY HEATING. SITE STEAM MAY BE AVAILABLE AND USED BY THE CONTRACTOR. (SEE PARAGRAPH SC-07 ABOVE.) THE USE OF OPEN-TYPE OR OIL POT SALAMANDERS IS PROHIBITED. ALL COMBUSTION-TYPE HEATERS SHALL BE DIRECTLY VENTED TO THE EXTERIOR OF THE STRUCTURE OR TEMPORARY ENCLOSURE UNLESS SPECIFIC AUTHORIZATION TO THE CONTRARY IS GRANTED BY THE CONTRACTING OFFICER. SC-30 OPTIONAL USE OF MATERIALS PURCHASED FROM THE GOVERNMENT--- (A) UPON AGREEMENT BY THE CONTRACTING OFFICER AND THE CONTRACTOR AS TO THE MATERIALS, QUANTITIES AND APPROPRIATE TERMS AND CONDITIONS, THE GOVERNMENT MAY FURNISH FOR USE IN CONNECTION WITH, AND/OR INCORPORATION IN, THE WORK IN THIS CONTRACT, GOVERNMENT OWNED MATERIALS HELD IN STORAGE BY THE COMMISSION AT THE NATIONAL REACTOR TESTING STATION. IT IS THE INTENT OF THE PARTIES THAT PRIOR TO DELIVERY TO THE CONTRACTOR ALL SUCH MATERIALS WILL BE INSPECTED BY AUTHORIZED REPRESENTATIVES OF BOTH THE COMMISSION AND THE CONTRACTOR. SUBJECT TO THE RIGHT OF THE CONTRACTOR TO INSPECT AND REJECT THE MATERIALS FOR GOOD AND SUFFICIENT REASON PRIOR TO ACCEPTANCE, THE CONTRACTOR SHALL RECEIVE SUCH MATERIALS IN THEIR EXISTING CONDITION, WITHOUT WARRANTY EXPRESSED OR IMPLIED ON THE PART OF THE COMMISSION AS TO SERVICEABILITY OR FITNESS FOR USE.

(B) THE AGREED VALUE OF THE GOVERNMENT-OWNED MATERIALS FURNISHED TO THE CONTRACTOR AS PROVIDED IN THIS PARAGRAPH SHALL BE PAID FOR AS A RESULT OF DIRECT BILLING TO THE CONTRACTOR BY PHILLIPS PETROLEUM COMPANY. THE AGREED VALUE OF SUCH MATERIALS WILL BE BASED UPON EQUITABLE PRICES CONSISTENT WITH THE THEN PREVAILING MARKET PRICES FOR COMPARABLE MATERIALS, TAKING INTO CONSIDERATION THE BENEFITS TO THE CONTRACTOR OF IMMEDIATE AVAILABILITY AT THE NATIONAL REACTOR TESTING STATION AND THE ABSENSE OF THE USUAL PROCUREMENT COSTS. PAYMENT SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER RECEIPT OF BILLINGS. SC-31 CONCRETE AGGREGATE AND CONCRETE--- (A) THE CONTRACTOR IS RESPONSIBLE FOR MAKING HIS OWN ARRANGEMENTS FOR ALL CONCRETE, GROUT, MORTAR, AGGREGATE AND CEMENT AS REQUIRED FOR THE WORK UNDER THIS CONTRACT.

(B) FINE AND COARSE AGGREGATE FOR CONCRETE WILL BE AVAILABLE TO THIS CONTRACTOR AT THE COMMISSION'S BATCH PLANT IN THE CENTRAL FACALITIES AREA IN ACCORDANCE WITH THE BELOW-LISTED PRICES AND TERMS: CONCRETE SAND--- HAULED BY CONTRACTOR---------------------- $2.50 PER TON COARSE AGGREGATE- -- 3/4 INCH--- HAULED BY CONTRACTOR------- $2.50 PER TON COARSE AGGREGATE- -- 2 INCHES (SCREENS 1-1/2 INCHES MAXIMUM) TO 3/4 INCH--- HAULED BY CONTRACTOR------------------------ $2.50 PER TON THE CONTRACTOR SHALL ARRANGE TO TRANSPORT THE CONCRETE AGGREGATE AND DO ALL NECESSARY HANDLING AT HIS OWN EXPENSE. THESE PRICES AND THE AVAILABILITY OF CONCRETE AGGREGATE ARE APPLICABLE ONLY DURING REGULAR WORKING HOURS. AGGREGATE REQUIREMENTS SHALL BE REQUISITIONED FROM THE COMMISSION'S DESIGNATED REPRESENTATIVES IN THE CENTRAL FACILITIES AREA.

IF THE CONTRACTOR ELECTS TO USE CONCRETE AGGREGATE FROM THE COMMISSION'S AGGREGATE STOCKPILES, HE SHALL BE REQUIRED TO PROCURE ALL SIZES OF THE AGGREGATE SPECIFIED FROM THIS SOURCE. PROCUREMENT OF ONE SIZE OF AGGREGATE FROM THE COMMISSION'S SOURCE AND PROCUREMENT OF OTHER SIZES FROM AN OUTSIDE SOURCE WILL NOT BE PERMITTED; HOWEVER, PROCUREMENT OF ALL SIZES OF AGGREGATE FROM A SOURCE OUTSIDE THE NATIONAL REACTOR TESTING STATION WILL BE AT THE CONTRACTOR'S OPTION.

TECHNICAL PROVISIONS TP-04 EXCAVATING, FILLING BACKFILLING AND GRADING--- (A) THE WORK CONSISTS OF FURNISHING ALL LABOR, MATERIALS AND EQUIPMENT REQUIRED TO PERFORM ALL EXCAVATING, FILLING, BACKFILLING, AND GRADING AS SHOWN ON DRAWINGS.

(B) EXCAVATING AND BACKFILLING FOR WATER LINES, STEAM AND CONDENSATE, MANHOLES, FIRE PROTECTION LOOP, SANITARY SEWER AND FOUNDATIONS AS REQUIRED SHALL BE PERFORMED AS PART OF THIS CONTRACT.

(C) STORE ON THE SITE AS DIRECTED BY THE CONTRACTING OFFICER, EXCAVATED MATERIALS SUITABLE FOR FILL AND BACKFILL. ANY EXCESS MATERIAL SHALL BE DISPOSED OF ON THE NRTS SITE AS DIRECTED BY THE CONTRACTING OFFICER.

(D) GRADING SHALL BE COMPLETED TO THE ELEVATIONS SHOWN ON DRAWINGS.

(E) ALL FILL AND BACKFILL INSIDE BUILDINGS, UNDER RAILROAD TRACK MAT, AND IN THE AREAS INDICATED ON DRAWING FOR THE FUTURE CONSTRUCTION OF BUILDINGS ADJACENT TO THE TEST PLANT BUILDING, SHALL BE MADE WITH MATERIAL APPROVED BY CONTRACTING OFFICER, DEPOSITED IN LAYERS APPROXIMATELY 6 INCHES THICK, LOOSE MEASURE. EACH LAYER SHALL BE COMPACTED TO 95 PERCENT OPTIMUM COMPACTION AS SPECIFIED BELOW.

(F) ANY OTHER FILLS OR BACKFILLS SHALL BE DEPOSITED IN LAYERS APPROXIMATELY 8 INCHES THICK, LOOSE MEASURE. TAMP EACH LAYER TO A FIRM, UNYEILDING CONDITION OF 80 PERCENT OR BETTER OF OPTIMUM COMPACTION AS SPECIFIED BELOW.

(G) COMPACTED FILL: ALL AREAS UPON WHICH COMPACTED FILLS ARE TO BE CONSTRUCTED SHALL BE STRIPPED TO REMOVE ANY TOPSOIL OR ORGANIC MATTER. COMPACTED FILL BETWEEN THE BASIN BOTTOM AND THE SUBGRADE PREPARED UNDER A PREVIOUS CONTRACT SHALL BE AS INDICATED ON THE DRAWINGS.

(H) MOISTURE CONTROL: THE MAXIMUM ALLOWABLE MOISTURE CONTENT OF UNPLACED FILL MATERIAL SHALL BE OF 20 PERCENT OF THE DRY WEIGHT OF THE MATERIAL. WHENEVER THE MOISTURE CONTENT OF MATERIAL EXCEEDS THIS LIMIT, DRY THE MATERIAL TO ACCEPTABLE MOISTURE CONTENT BEFORE DEPOSITING. WHENEVER MOISTURE CONTENT OF PLACED MATERIAL IS RAISED, BY RAIN OR OTHERWISE, ABOVE THE SPECIFIED LIMIT, SUSPEND COMPACTION OPERATIONS UNTIL FILL HAS DRIED TO ACCEPTABLE MOISTURE CONTENT. IF FILL MATERIAL IS TOO DRY, LIGHT SPRINKLING WILL BE PERMITTED TO AID IN COMPACTION; FLOODING OR INUNDATING WILL NOT BE PERMITTED. AS DIRECTED HEREIN, COMPACT FILL TO AT LEAST 95 PERCENT OF MAXIMUM DENSITY AT OPTIMUM MOISTURE CONTENT (SUBJECT TO TOLERANCE OF PLUS OR MINUS 2 PERCENT IN MOISTURE CONTENT) IN ACCORDANCE WITH A.A.S.H.O. METHOD T 99. THE GOVERNMENT WILL PROVIDE AND PAY FOR THE SERVICES OF A TESTING LABORATORY FOR MAKING COMPACTION TESTS AS CONTRACTING OFFICER DEEMS NECESSARY. CONTRACTOR SHALL COOPERATE AS REQUIRED. TP-07 CONCRETE--- MATERIALS

(B) AGGREGATE:

2. APPROVED SOURCES OF AGGREGATE--- SAND AND COARSE AGGREGATE FOR CONCRETE, AND SAND FOR MORTAR AND GROUT MAY BE OBTAINED, IF AVAILABLE, BY THE CONTRACTOR FROM COMMISSION STOCKPILES AND AT THE COST OF AS STATED IN THE "SPECIAL CONDITIONS.' THESE STOCKPILES CONTAIN AGGREGATE MEETING THE REQUIREMENTS OF THESE SPECIFICATIONS. THE GOVERNMENT HAS WITHIN THE PROJECT SITE AREA, APPROVED AGGREGATE DEPOSITS THAT CONTAIN MATERIALS OF SUITABLE QUALITY THAT CAN BE PROCESSED BY THE CONTRACTOR TO MEET THE REQUIREMENTS OF THESE SPECIFICATIONS FOR SAND AND COARSE AGGREGATE. CHARGE WILL BE MADE TO THE CONTRACTOR FOR MATERIALS TAKEN FROM THESE APPROVED DEPOSITS, AND USED IN THE WORK COVERED BY THESE SPECIFICATIONS. APPROVAL OF THE DEPOSIT SHALL NOT BE CONSTRUED AS CONSTITUTING APPROVAL OF ALL MATERIALS TAKEN FROM THE DEPOSIT, AND THE CONTRACTOR WILL BE HELD RESPONSIBLE FOR THE SPECIFIED QUALITY OF ALL SUCH MATERIALS USED IN THE WORK.

3. OTHER SOURCES OF AGGREGATE--- IF THE CONTRACTOR PROPOSES TO FURNISH AGGREGATE FROM A SOURCE OTHER THAN THE APPROVED SOURCES, THE CONTRACTOR AT HIS OWN EXPENSE WILL BE REQUIRED TO PROVIDE SUCH TEST AND INVESTIGATION DATA AS NECESSARY TO DETERMINE WHETHER OR NOT THE PROPOSED AGGREGATE WILL PRODUCE CONCRETE OF ACCEPTABLE QUALITY AND DURABILITY, AND MEET THE REQUIREMENTS OF THESE SPECIFICATIONS. * * * THE SEVERAL CLAIMS WILL BE REVIEWED IN THE ORDER IN WHICH THEY WERE TREATED IN THE HEARING EXAMINER'S DECISION.

TIME FOR COMMENCEMENT OF PERFORMANCE

THE CONTRACTOR CLAIMED AN EXTENSION OF 31 DAYS ON THE GROUNDS THAT THE TIME FOR STARTING THE COMPUTATION OF ITS TIME FOR COMPLETION SHOULD BE SEPTEMBER 10, 1961, (AFTER WHICH DATE IT ADMITTEDLY HAD FULL ACCESS TO THE ENTIRE SITE) INSTEAD OF AUGUST 10, 1961, BECAUSE THE ORDER TO PROCEED ISSUED ON THE LATTER DATE WAS INEFFECTIVE BY REASON OF THE GOVERNMENT'S FAILURE TO FURNISH ACCESS TO ENOUGH OF THE SITE TO ENABLE IT TO PERFORM ANY WORK. IN THE ALTERNATIVE IT WAS CLAIMED THAT THE GOVERNMENT'S FAILURE TO PERMIT EFFECTIVE ACCESS TO THE SITE UNTIL SEPTEMBER 10 WAS A SUSPENSION OF THE WORK FOR WHICH IT WAS ENTITLED TO AN EQUITABLE ADJUSTMENT UNDER ARTICLE 32 OF THE GENERAL PROVISIONS OF THE CONTRACT. AS TO THE "MEMORANDUM OF UNDERSTANDING" DATED AUGUST 2, 1961, WHEREBY THE CONTRACTOR SPECIFICALLY AGREED THAT DATED AUGUST 2, 1961, WHEREBY THE CONTRACTOR SPECIFICALLY AGREED THAT NO CHANGE IN COMPLETION TIME OR CONTRACT PRICE COULD RESULT FROM THE ISSUANCE OF A PARTIAL NOTICE TO PROCEED AND POSSIBLE JOINT OCCUPANCY PRIOR TO SEPTMEBER 10, S AND E'S ATTORNEYS TAKE THE POSITION (1) THAT THE AGREEMENT IS IRRELEVANT AND INADMISSIBLE SINCE IT WAS NO MORE THAN A PART OF THE NEGOTIATIONS LEADING UP TO THE CONTRACT AND WAS MERGED IN THE CONTRACT THEREAFTER AWARDED, AND (2) THAT IT WAS CONDITIONED UPON THE CONTRACTOR'S BEING ALLOWED TO PROCEED WITH ALL WORK IN THE MAJOR PORTION OF THE WESTERLY HALF OF THE BUILDING.

THE MEMORANDUM OF UNDERSTANDING WAS IN FULL AS FOLLOWS:

ALTHOUGH IT WAS ORIGINALLY EXPECTED THAT THE CONTRACT WOULD BE AWARDED AND WORK STARTED IN MID JULY, 1961, TECHNICAL PROBLEMS INVOLVING THE FOUNDATION OF THE TEST PLANT BUILDING AND BASIN HAVE PREVENTED AWARD OF THE CONTRACT. WORK BY OTHERS TO CORRECT THIS PROBLEM IS NOW PROCEEDING, AND IT IS EXPECTED THAT THIS WORK WILL BE COMPLETE AND THE PRESENT CONTRACTOR OFF THE SITE BY THE END OF AUGUST, 1961. IT IS THE INTENTION OF THE CONTRACTING OFFICER TO RELEASE THE BASIN FOUNDATION FOR WORK BY THE CONTRACTOR IN SECTIONS AS IT IS COMPLETED. HOWEVER, IT IS CONCEIVABLE THAT RELEASE BY THE CONTRACTING OFFICER GRANTING THE CONTRACTOR UNLIMITED ACCESS TO THE BASIN FOUNDATION COULD OCCUR AS LATE AS SEPTEMBER 10, 1961.

S AND E CONTRACTORS, INC. AGREE THAT, SHOULD THEY BE AWARDED THE CONTRACT FOR THE WORK DESCRIBED ABOVE AND SHOULD THE RELEASE GRANTING THE CONTRACTOR UNLIMITED ACCESS TO THE BASIN FOUNDATION BE ISSUED BY THE CONTRACTING OFFICER ON OR BEFORE SEPTEMBER 10, 1961, NO CHANGE IN COMPLETION TIME OR CONTRACT PRICE WILL RESULT FROM EITHER THE AWARD OF THIS CONTRACT AT ANY TIME WITHIN 60 DAYS OF JUNE 20, 1961, OR FROM THE ISSUANCE OF PARTIAL NOTICE TO PROCEED AND POSSIBLE JOINT OCCUPANCY PRIOR TO SEPTEMBER 10, 1961, WITH THE UNDERSTANDING THAT S AND E CONTRACTORS, INC. WILL BE ALLOWED TO PROCEED WITH ALL WORK IN THE MAJOR PORTION OF THE WESTERLY HALF OF THE BUILDING. THIS MEMORANDUM OF UNDERSTANDING DOES NOT AND CANNOT AFFECT THE TERMS, GENERAL PROVISIONS, GENERAL CONDITIONS, SPECIAL CONDITIONS, OR TECHNICAL PROVISIONS OF THE CONTRACT.

IT IS FURTHER UNDERSTOOD THAT S AND E CONTRACTORS INC. WILL RECEIVE TELEGRAPHIC NOTICE OF AWARD 4 AUGUST 1961, AND TELEGRAPHIC NOTICE TO PROCEED AUGUST 10TH, 1961.

THE CONTRACTING OFFICER DENIED THIS CLAIM IN FULL ON THE GROUND THAT THE CONTRACTOR WAS NOT IN FACT DELAYED BECAUSE IT USED UP THE ENTIRE PERIOD BETWEEN AUGUST 10 AND SEPTEMBER 10 IN PRELIMINARY PREPARATIONS, AND IN PERFORMING SIGNIFICANT PORTIONS OF WORK. THE CONTRACTING OFFICER ALSO FOUND THAT DUE TO THE LACK OF MATERIALS S AND E WOULD NOT HAVE BEEN ABLE TO ACCOMPLISH ANY MORE WORK DURING THE PERIOD IF IT HAD HAD FULL ACCESS TO THE SITE. THE EXAMINER ALLOWED THE FULL 31 DAYS.

THE EXAMINER FOUND THAT THE CONTRACTING OFFICER BREACHED HIS PROMISE IN THE MEMORANDUM OF UNDERSTANDING OF AUGUST 2 TO MAKE THE MAJOR PORTION OF THE WESTERLY HALF OF THE BASIN AVAILABLE FOR ALL WORK PRIOR TO SEPTEMBER 10. HE THEREFORE CONCLUDED THAT THE WORK WAS SUSPENDED FROM AUGUST 10 TO SEPTEMBER 10 UNDER CLAUSE 32 OF THE GENERAL PROVISIONS. HE FOUND THAT THE SUSPENSION WAS FOR THE "BENEFIT" OF THE GOVERNMENT UNDER THE TEST SET FORTH IN OZARK DAM CONTRACTORS V. UNITED STATES, 153 CT. CL. 120, 288 F.2D 913, AND THAT "AS SUBSEQUENT EVENTS ESTABLISH, ANY DELAY IN THE WORK IN AUGUST AND SEPTEMBER WAS UNREASONABLE- WITHIN THE INTENT OF THE -DELAY FOR THE CONVENIENCE OF THE GOVERNMENT- CLAUSE.' ACCORDINGLY, THE EXAMINER CONCLUDED THAT THE COMPLETION DATE HAD TO BE RECKONED FROM SEPTEMBER 10, AND THAT S AND E WAS ENTITLED TO AN EQUITABLE ADJUSTMENT FOR THE COSTS ENTAILED BY THE DELAY.

AS INDICATED PREVIOUSLY, THE EXAMINER'S FINDING ON THIS CLAIM WAS MODIFIED ON REVIEW BY THE COMMISSION'S DECISION OF MAY 13, 1964. THE COMMISSION FOUND THAT IT WAS IMPROPER TO AWARD S AND E THE FULL PERIOD FROM AUGUST 10 TO SEPTEMBER 10 FOR DELAY IN COMMENCEMENT, BUT MADE NO FINDING AS TO THE NUMBER OF DAYS S AND E SHOULD HAVE BEEN GRANTED. THE COMMISSION MERELY RULED THAT THE ADJUSTMENT SHOULD BE CONFINED TO THE EXTENT OF NELSON'S ACTUAL INTERFERENCE WITH S AND E'S WORK. IT CONCLUDED THAT THE DETERMINATION OF A PROPER ALLOWANCE FOR INITIAL MOBILIZATION AND OF THE EXTENT OF INTERFERENCE RESULTING FROM JOINT OCCUPANCY NECESSARILY PRESENTED DIFFICULTIES AND THAT THE RECORD BEFORE IT DID NOT FURNISH AN ADEQUATE BASIS FOR ITS QUANTITATIVE DETERMINATION OF THOSE FACTORS. THE COMMISSION, THEREFORE, ALLOWED THE EXAMINER'S REMAND OF THE CASE TO THE CONTRACTING OFFICER FOR FINAL SETTLEMENT OR DECISION TO STAND WHICH, IN EFFECT, LEFT THE DETERMINATION OF ACTUAL SUSPENSION TO THE PARTIES OR, IF THEY COULD NOT AGREE, TO THE CONTRACTING OFFICER UNDER THE DISPUTES CLAUSE PROCEDURE.

IN ITS CONSIDERATION OF THIS CLAIM, THE COMMISSION NOTED THAT THE HEARING EXAMINER HAD FOUND THAT THE GOVERNMENT WAS "NEGLIGENT" IN THE SELECTION OF THE SITE FOR THE FACILITY; THAT THIS FINDING WAS BASED ON THE FACT THAT ONLY A LIMITED AMOUNT OF SUBSURFACE BORING WAS PERFORMED BEFORE NELSON BEGAN ITS EXCAVATION; AND THAT THERE WAS SOME RELIANCE ON COMPARATIVELY FAVORABLE EXPERIENCE WITH EXCAVATION AT A NEARBY LOCATION. THE COMMISSION STATED THAT THERE WAS NO FACTUAL BASIS FOR THE FINDING THAT THE GOVERNMENT WAS NEGLIGENT IN CHOOSING THE SITE SINCE THE EVIDENCE DID NOT PURPORT TO REFLECT ALL THE CONSIDERATIONS ON WHICH IT WAS DECIDED THAT THE FACILITY SHOULD BE LOCATED AT THIS PLACE. IT WAS NOTED THAT WHETHER OR NOT THE SITE WAS WELL OR POORLY CHOSEN WAS IMMATERIAL BECAUSE, AS THE EXAMINER HIMSELF RECOGNIZED, THERE WAS NO QUESTION IN THE CASE OF ANY EQUITABLE ADJUSTMENT FOR CHANGED SUBSURFACE CONDITIONS.

THE COMMISSION STATED THAT THE MEMORANDUM OF UNDERSTANDING DATED AUGUST 2, 1961, CONTEMPLATED JOINT OCCUPANCY WITH NELSON UNTIL THAT FIRM'S WORK WAS COMPLETED,"BUT WE FIND THAT THE CONTRACTING OFFICER WARRANTED BY THE MEMORANDUM OF UNDERSTANDING THAT THE CONDITIONS OF JOINT OCCUPANCY WOULD BE SUCH THAT THE WORK OF S AND E WOULD NOT BE IMPEDED. THE CASE IS THUS ESSENTIALLY GOVERNED BY THE REASONING OF T.C. BATESON CONSTRUCTION CO., ASBCA NO. 5985, 60-2 BCA 2767, AND S AND E IS ENTITLED TO AN EQUITABLE ADJUSTMENT OF TIME AND COSTS BY REASON OF ANY UNREASONABLE DELAYS RESULTING FROM NELSON'S OCCUPANCY OF THE SITE.' HOWEVER, THE COMMISSION CONCLUDED THAT THE RECORD DID NOT SUPPORT THE ASSUMPTION THAT, BUT FOR THE DELAYS IN THE AVAILABILITY OF THE SITE, S AND E WOULD HAVE BEEN READY TO COMMENCE CONSTRUCTION AT FULL SPEED ON AUGUST 10, WHEN THE LIMITED NOTICE TO PROCEED WAS ISSUED, AND TO WORK CONTINUALLY AT FULL SPEED THEREAFTER. IT WAS POINTED OUT THAT THE TESTIMONY OF BOONE, S AND E'S ASSISTANT PROJECT MANAGER, AND DEWITT, ITS VICE-PRESIDENT, WERE PERSUASIVE THAT THE PROCESS OF MOBILIZING ITS MEN AND MATERIALS WAS NOT COMPLETE ON AUGUST 10 BUT WAS STILL CONTINUING:

SOME OF ITS SUPERVISORY PERSONNEL DID NOT ARRIVE AT THE SITE UNTIL DAYS LATER, AND ITS MATERIALS AND EQUIPMENT WERE IN THE PROCESS OF GRADUAL ACCUMULATION. THERE WAS EVIDENCE THAT MOBILIZATION FOR SIMILAR WORK IN THIS AREA WOULD REQUIRE FROM ONE TO FOUR WEEKS BEFORE THE FIRST CONCRETE WAS POURED.

IT WAS FURTHER NOTED BY THE COMMISSION THAT THE EXTENT OF THE CONSTRUCTIVE SUSPENSION OF WORK DEPENDED ON THE EXTENT TO WHICH S AND E WAS ACTUALLY AND UNREASONABLY DELAYED BY THE UNAVAILABILITY OF THE SITE AND THAT SINCE THE EXTENT OF ACTUAL DELAY BY NELSON'S OCCUPANCY WAS THE CONTROLLING FACTOR IN DETERMINING THE AMOUNT OF ANY EQUITABLE ADJUSTMENT,"AN APPROPRIATE INITIAL PERIOD SHOULD BE ALLOWED FOR MOBILIZATION OF MEN AND MATERIALS BY S AND E, DUE CONSIDERATION SHOULD BE GIVEN TO THE STATE OF READINESS OF S AND E TO PROCEED WITH THE WORK, AND THE ADJUSTMENT SHOULD BE CONFINED TO THE EXTENT OF NELSON'S ACTUAL INTERFERENCE WITH S AND E'S WORK.' THE COMMISSION ALSO DETERMINED THAT AN ALLOWANCE SHOULD BE MADE FOR SUCH WORK AS S AND E WAS ABLE TO PERFORM DURING THE PERIOD WITHOUT PERMITTING IT TO TAKE ADVANTAGE OF ANY LACK OF DILIGENCE ON ITS OWN PART WHICH MIGHT HAVE HAD A CAUSAL EFFECT IN DELAYING ITS PROGRESS. THE COMMISSION CONCLUDED ITS ANALYSIS OF THIS ASPECT OF THE CASE AS FOLLOWS:

IN ANY EVENT, IN FINDING THAT THE ENTIRE PERIOD BETWEEN AUGUST 10 AND SEPTEMBER 10 AMOUNTED TO AN "UNREASONABLE" DELAY WHICH GAVE RISE TO A CONSTRUCTIVE SUSPENSION OF WORK FOR THAT ENTIRE PERIOD, THE HEARING EXAMINER SEEMS TO HAVE BASED THE FINDING OF UNREASONABLENESS ON "SUBSEQUENT EVENTS," APPARENTLY INCLUDING SUCH FACTORS AS THE UNUSUALLY SEVERE WINTER WEATHER WHICH LATER AFFLICTED THE PROJECT AND WHICH HE FOUND WAS UNFORSEEABLE. THE UNREASONABLENESS OF ANY DELAY CAN BE ASCERTAINED ONLY ON THE BASIS OF THE FACTS APPARENT AT THE TIME.

IN A CASE INVOLVING JOINT OCCUPANCY AS THIS ONE DOES, THE DETERMINATION OF A PROPER ALLOWANCE FOR INITIAL MOBILIZATION AND OF THE EXTENT OF INTERFERENCE RESULTING FROM THE JOINT OCCUPANCY NECESSARILY PRESENTS DIFFICULTIES. THE RECORD BEFORE US DOES NOT FURNISH AN ADEQUATE BASIS FOR OUR QUANTITATIVE DETERMINATION OF THOSE FACTORS. THE DECISION OF THE HEARING EXAMINER HAS REMANDED THE CASE TO THE CONTRACTING OFFICER FOR FINAL SETTLEMENT OR DECISION ON THE BASIS OF THE PRINCIPLES LAID DOWN IN THE HEARING EXAMINER'S DECISION. * * * THE SETTLEMENT OR DECISION SHOULD GO FORWARD ON THE BASIS OF THOSE PRINCIPLES AS WE HAVE MODIFIED THEM BY OUR ORDER OF NOVEMBER 14, 1963, AND BY THIS DECISION.

WE SEE NO BASIS FOR QUESTIONING THE COMMISSION'S STATEMENT OF THE LAW GENERALLY APPLICABLE TO DELAY CLAIMS. HOWEVER, IN VIEW OF THE FACT, SHOWN BY THE RECORD, THAT THE CONTRACTOR, PURSUANT TO GENERAL CONDITION GC-09 OF THE CONTRACT, SUBMITTED AFTER SEPTEMBER 10 A WORK SCHEDULE CALLING FOR COMPLETION OF THE WORK 180 DAYS AFTER AUGUST 10, WHICH WAS APPROVED ON SEPTEMBER 29, AND THAT THE WORK WAS IN FACT UP TO SCHEDULE AS LATE AS OCTOBER 31, WE BELIEVE THAT THE CONCLUSION IS JUSTIFIED THAT AS A MATTER OF LAW THERE IS NO BASIS FOR ALLOWING ANY PART OF THE TIME CLAIMED IN THIS PERIOD. EVEN WITHOUT THIS FACT, INSOFAR AS THE COMMISSION'S FINDING INDICATES THAT DELAY IN MAKING THE SITE AVAILABLE TO S AND E WAS ATTRIBUTABLE TO THE GOVERNMENT, AND THUS COUNTENANCES THE ALLOWANCE OF TIME EXTENSIONS AND AN EQUITABLE ADJUSTMENT FOR SUCH DELAY, WE THINK SUCH FINDING IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. ON THE CONTRARY, WE THINK THAT A CAREFUL AND THOROUGH REVIEW OF THE EVIDENCE BEFORE THE COMMISSION CLEARLY DEMONSTRATES THAT NO ACTUAL DELAY, NOR SUSPENSION OF WORK, OCCURRED DURING THE PERIOD AUGUST 10 THROUGH SEPTEMBER 10, 1961. NOR CAN WE SEE ANY LEGITIMATE BASIS FOR THE COMMISSION'S DETERMINATION TO REMAND THE CASE TO THE CONTRACTING OFFICER FOR A "MUTUAL SETTLEMENT" OR "UNILATERAL DECISION" ON THE QUANTITATIVE QUESTION, SINCE THE CONTRACTING OFFICER WOULD HAVE NO ADDITIONAL OR BETTER EVIDENCE ON WHICH TO DETERMINE SUCH QUESTION THAN THAT WHICH WAS BEFORE THE COMMISSION. THE COMMISSION'S REMAND SEEMS TO ACKNOWLEDGE THE PAUCITY OF EVIDENCE TO SUSTAIN ITS FINDING OF "SOME" SUSPENSION AND, ALSO, WOULD SEEM TO IMPLY THAT THE PARTIES COULD REACH SOME AGREEMENT ON THE NUMBER OF DAYS THE WORK WAS SUSPENDED BY SOME PROCESS OF NEGOTIATION NOT LIMITED TO THE RECORD. THE NUMBER OF DAYS EXTENSION, IF ANY, THAT S AND E WAS PROPERLY ENTITLED TO UNDER CLAUSE GP- 32 PRIOR TO THE DECEMBER 7 ORDER TO MAINTAIN SCHEDULE IS CRUCIAL TO A DECISION ON THE SO-CALLED ACCELERATION CLAIM WHICH, ADMITTEDLY, IN TERMS OF MONEY REPRESENTS THE LARGEST CLAIM SUBMITTED BY S AND E. BECAUSE OF THIS FACT, IF ANY EXTENSION IS PROPERLY ALLOWABLE PRIOR TO DECEMBER 7 THE NUMBER OF DAYS MUST BE DETERMINED WITH PRECISION ON THE BASIS OF THE RECORD AVAILABLE TO THE COMMISSION, AND NOT BE LEFT TO THE GIVE AND TAKE OF A NEGOTIATION SESSION.

THE CORRESPONDENCE BETWEEN THE PARTIES DURING THE PERIOD AUGUST 10 THROUGH SEPTEMBER 10 IS VALUABLE AS BACKGROUND ON THE OFFICIAL ATTITUDE OF THE PARTIES DURING THIS PERIOD. THAT CORRESPONDENCE MAY BE SUMMARIZED AS FOLLOWS.

ON AUGUST 10 THE CONTRACTING OFFICER, MR. STANLEY W. NITZMAN, SENT S AND E A TELEGRAPHIC NOTICE TO PROCEED WHICH STATED, IN PERTINENT PART:

YOU ARE HEREBY NOTIFIED TO PROCEED WITH ALL WORK IN THE MAJOR PORTION OF THE WESTERLY HALF OF THE BUILDING.

ON AUGUST 14 S AND E FIRST WIRED THE CONTRACTING OFFICER REQUESTING CLARIFICATION OF THE NOTICE TO PROCEED AND A DESIGNATION OF THE AREA AVAILABLE. IN ADDITION, A LETTER DATED AUGUST 15 WAS SENT TO MR. NITZMAN BY MR. ELDER OF S AND E STATING, IN EFFECT, THAT THE NOTICE TO PROCEED WAS UNREASONABLE AND COULD NOT BE COMPLIED WITH. THE LETTER ALSO STATED THAT S AND E'S FIELD PERSONNEL ARRIVED AT IDAHO FALLS PRIOR TO AUGUST 12TH AND THAT "WE HAVE AT THIS TIME RECEIVED THE MAJOR PORTION OF OUR CONSTRUCTION EQUIPMENT AT THE JOB SITE AND WE ARE IN THE PROCESS OF MOVING OUR FIELD OFFICE INTO ITS LOCATION ON THE JOB SITE.' THE LETTER CONCLUDED BY REQUESTING THE CONTRACTING OFFICER TO STATE WHAT HIS OPINION WAS OF THE ACTUAL DATE THAT S AND E COULD COMMENCE OPERATIONS ON THE PROJECT AND, ALSO, WHAT EFFECT THIS DELAY, AFTER AUGUST 10TH, HAD ON THE MEMORANDUM OF UNDERSTANDING. BY TELEGRAM OF AUGUST 18, MR. NITZMAN INFORMED S AND E THAT THE MAJOR PORTION OF THE WESTERLY HALF OF THE BUILDING AREA WAS COMPLETED FOR JOINT OCCUPANCY. THE FOLLOWING AREAS WERE DESIGNATED AS AVAILABLE: "8100 SQUARE FEET BETWEEN COLUMN LINES A AND C AT THE FAR WESTERLY END OF THE BUILDING" AND "A STRIP OF 4500 SQUARE FEET ABOUT 28 FEET WIDE BETWEEN COLUMN LINES C AND K IN THE REGION OF THE COUNTERFORTS IN THE NORTHWEST SECTION OF THE BASIN.' THE TELEGRAM REQUESTED ADVICE FROM S AND E AS TO ITS ANTICIPATED DATE FOR BEGINNING WORK IN THE BUILDING AND, IN ADDITION, NOTED THAT S AND E HAD FAILED TO SUBMIT TWO DOCUMENTS (SCHEDULE OF SOURCES OF MATERIAL ITEMS AND EQUIPMENT, AND WRITTEN DESIGNATION OF SITE CONSTRUCTION SUPERINTENDENT) REQUIRED UNDER THE CONTRACT WITHIN 7 AND 3 DAYS, RESPECTIVELY, AFTER NOTICE TO PROCEED.

THE ABOVE TELEGRAM WAS FOLLOWED BY A TELEGRAM AND A LETTER TO MR. ELDER FROM MR. NITZMAN, BOTH DATED AUGUST 22, AND IDENTICAL IN CONTENT. THEY STATED THAT, CONTRARY TO S AND E'S ASSERTION THAT THE MAJOR PORTION OF CONSTRUCTION EQUIPMENT HAD ARRIVED AT THE JOB SITE BY AUGUST 15, AN AEC SITE REPRESENTATIVE INFORMED HIM (NITZMAN) THAT ONLY 2 TRUCKS HAD ARRIVED, AND THAT SOME ADDITIONAL EQUIPMENT HAD ARRIVED BY RAIL ON AUGUST 21. THE CONTRACTING OFFICER FURTHER ADVISED MR. ELDER THAT, CONTRARY TO S AND E'S ASSERTIONS, THE AEC REPRESENTATIVE HAD INDICATED THAT AS OF AUGUST 22 NO S AND E FIELD OFFICE WAS BEING MOVED ONTO THE SITE AND THAT REINFORCING STEEL AND FORM LUMBER WAS NOT YET AVAILABLE AT THE SITE. ACCORDINGLY, HE QUESTIONED WHETHER S AND E WAS IN A POSITION TO DO SIGNIFICANT WORK IN THE BASIN AS OF AUGUST 22. HE ALSO ADVISED MR. ELDER THAT HE DID NOT CONCUR IN THE ASSERTION THAT THE NOTICE TO PROCEED WAS UNREASONABLE AND COULD NOT BE COMPLIED WITH, AND HE STATED THAT SINCE S AND E HAD SUBMITTED SHOP DRAWINGS FOR APPROVAL ON AUGUST 16 AND HAD MOVED EQUIPMENT ONTO THE JOB SITE ON AUGUST 15, HE CONSIDERED THAT S AND E HAD COMMENCED WORK ON THE JOB ABOUT AUGUST 10. THE RATHER LENGTHY TELEGRAM AND LETTER DATED AUGUST 22 CONCLUDED AS FOLLOWS:

IN ADDITION TO THE TWO (2) SECTIONS OF THE BUILDING RELEASED TO YOU IN MY TELEGRAM OF AUGUST 18, 1961, THE REMAINDER OF THE BUILDING HAS BEEN COMPLETED FOR YOUR JOINT OCCUPANCY. ALL CONCRETE BACKFILL HAS BEEN COMPLETED AND THE REMEDIAL WORK REMAINING IS LOCALIZED PRESSURE GROUTING WHICH I CONSIDER WILL NOT INTERFER WITH YOUR WORK.

IT APPEARS FROM YOUR ACTION THAT IT IS THE INTENT OF S AND E CONTRACTORS, INC., TO BUILD UP A CASE FOR A CLAIM AGAINST THE GOVERNMENT FROM THE OUTSET OF THIS CONTRACT; THE CONDUCT OF THIS CONTRACT IN SUCH AN ATMOSPHERE IS UNACCEPTABLE TO THIS OFFICE. PERHAPS S AND E CONTRACTORS, INC. WOULD PREFER TO BE RELEASED AT THIS TIME FROM THIS CONTRACT WITHOUT COST TO THE GOVERNMENT. IF THIS IS THE CASE, IT IS REQUESTED THAT THIS OFFICE BE ADVISED PROMPTLY SO THAT OTHER ARRANGEMENTS CAN BE MADE TO GET THIS IMPORTANT WORK ACCOMPLISHED WITHOUT DELAY.

ON AUGUST 30, 1961, MR. DEWITT OF S AND E SENT THE CONTRACTING OFFICER A LETTER WHICH READ, IN PERTINENT PART, AS FOLLOWS:

THIS IS TO ADVISE YOU AGAIN THAT AT THIS TIME, WE DO NOT HAVE ANY CLAIM AGAINST THE GOVERNMENT NOR DO WE ANTICIPATE MAKING A CLAIM AGAINST THE UNITED STATES ATOMIC ENERGY COMMISSION FOR GOVERNMENT CAUSED DELAYS TO DATE. WE DESIRE TO PERFORM OUR WORK IN THE REALM OF THE MEMORANDUM OF UNDERSTANDING AND OTHER CONTRACTUAL DOCUMENTS.

FOR RECORD PURPOSES ONLY, WE WOULD LIKE TO STATE THE FOLLOWING FACTS:

OUR MISCELLANEOUS MINOR CONSTRUCTION EQUIPMENT ARRIVED AT THE JOB SITE ON AUGUST 15TH IN TWO (2) TRUCKS. ONE (1) CRANE WHICH WILL BE USED IN THE CONSTRUCTION WAS RENTED AND ON THE SITE ON AUGUST THE 10TH. THE SECOND CRANE ARRIVED ON A RAILROAD CAR AT THE SITE ON AUGUST THE 21ST. THE BUILDING WHICH WE ANTICIPATED USING FOR AN OFFICE BUILDING, AND WHICH WAS TO BE DELIVERED TO THE SITE ON OR AROUND THE 16TH OF AUGUST, FELL APART WHILE BEING MOVED. THIS WAS BEYOND OUR CONTROL, AND FURTHER ARRANGEMENTS FOR AN ADDITIONAL BUILDING COULD NOT BE MADE BY THE WRITER UNTIL A LATER DATE. OUR OFFICE WAS, CONSEQUENTLY, SET UP AT THE FLAMINGO MOTEL ON THE 16TH OF AUGUST. REINFORCING STEEL DRAWINGS WERE SUBMITTED FOR APPROVAL ON THE 16TH OF AUGUST--- SIX (6) DAYS AFTER THE NOTICE TO PROCEED. THE FIRST CAR LOAD OF FORM LUMBER ARRIVED AT THE JOB SITE AROUND AUGUST 25TH. THE WAY OF PERSONNEL, THE OFFICE MANAGER ARRIVED AT IDAHO FALLS ON AUGUST 10TH AND OUR ASSISTANT PROJECT MANAGER REPORTED ON AUGUST 12TH. ON AUGUST 10TH, THE GRADE IN THE WEST END OF THE BASIN WAS SOME 18 INCHES TO SEVERAL FEET BELOW GRADE, THEREFORE, NO LAYOUT WORK IN THE BASIN COULD BE PERFORMED. YOUR STATEMENT IN THE TELEGRAM CONCERNING THE FORTY-FIVE HUNDRED SQUARE FEET WAS TRUE. IT WOULD BE POSSIBLE BUT NOT FEASIBLE, CONSTRUCTION-WISE, TO WORK IN THIS AREA UNTIL THE SLOPED AREA ON THE NORTH SIDE OF THE BASIN WAS COMPLETE. ALTHOUGH, WE COULD HAVE WORKED ON SOME PIERS IN THE EIGHTY-ONE HUNDRED SQUARE FEET AREA MENTIONED IN YOUR TELEGRAM, NORMALLY THIS WORK WOULD NOT HAVE BEEN PERFORMED UNTIL THE BASIN WAS BROUGHT UP TO GRADE AND THE EIGHTY-ONE HUNDRED SQUARE FEET PREPARED FOR THE PIERS.

WE ARE PROCEEDING WITH THE CONTRACT AS EXPEDITIOUSLY AS POSSIBLE TO FULFILL OUR TIME REQUIREMENTS IN ACCORDANCE WITH THE CONTRACT DOCUMENTS AND WITH THE NOTICE TO PROCEED DATED 10 AUGUST 1961. IT IS NOT UNREASONABLE TO EXPECT FUTURE PROBLEMS ARISING ON THIS PROJECT AND WE ANTICIPATE YOUR COOPERATIVE AND UNDERSTANDING ATTITUDE ON THESE MATTERS.

THE ABOVE-QUOTED LETTERS AND TELEGRAMS CONSTITUTE THE BULK OF THE SIGNIFICANT CORRESPONDENCE WHICH PASSED BETWEEN THE PARTIES IN REGARD TO THE CLAIM ON COMMENCEMENT OF PERFORMANCE DURING THE PERIOD COVERED BY THE CLAIM. MORE SIGNIFICANT THAN THESE DOCUMENTS, HOWEVER, WAS EVIDENCE INTRODUCED IN THE FORM OF TESTIMONY BY WITNESSES WHO WERE AT THE JOB SITE DURING THE TIME THE EVENTS TOOK PLACE. IN S AND E'S EXHIBIT C,"APPELLANT'S PREPARED DIRECT TESTIMONY," MR. ELDER WAS ASKED (QUESTION 21) TO DESCRIBE IN WHAT WAY, OR WAYS, THE FAILURE OF THE GOVERNMENT TO PROVIDE USEABLE AREAS, AS PROMISED IN THE MEMORANDUM OF UNDERSTANDING, PREVENTED S AND E FROM PROCEEDING IN AN ORDERLY FASHION WITH THE CONTRACT WORK. MR. ELDER STATED THAT HAD THE GOVERNMENT MET ALL THE REQUIREMENTS OF THE MEMORANDUM OF UNDERSTANDING AND THE NOTICE TO PROCEED, S AND E COULD HAVE PROCEEDED WITH EXTENSIVE ENGINEERING LAYOUT AND CONCRETE FORMING. THE CONCRETE FORMING, ACCORDING TO MR. ELDER, WOULD HAVE CONSISTED, PRIOR TO THE RECEIPT OF THE REINFORCING STEEL, OF THE LOWER PORTION OF THE COUNTERFORT FOOTING FORMS, AND THE COMPLETE SIDES AND BACKS OF THE TEE SECTIONS OF ALL AVAILABLE COUNTERFORT FOOTINGS TO THE FULL FOUR FOOT HEIGHT. HE ALSO STATED THAT S AND E COULD HAVE DELIVERED TO THE IMMEDIATE WORK AREA ALL NECESSARY FORMS FOR RAPID PLACEMENT UPON RECEIPT AND INSTALLATION OF THE MAIN REINFORCING STEEL. MR. ELDER WAS ASKED (QUESTION 22): "WAS THE CONTRACTOR'S WORK SUSPENDED BY THE GOVERNMENT FAILURE TO COMPLY WITH THE MEMORANDUM OF UNDERSTANDING? " HE ANSWERED, (AND WE QUOTE IN FULL) "YES.' IN ANSWER TO QUESTION 23, MR. ELDER ASSERTED THAT THE EFFECT OF THIS WORK SUSPENSION WAS TO MOVE THE CONSTRUCTION PERIOD INTO WINTER WEATHER WHICH LED TO AN EXTREME LOSS OF EFFICIENCY, BOTH OF THE MEN ON THE JOB AND IN THE EQUIPMENT REQUIRED TO SUPPORT THIS MANPOWER. FURTHERMORE, IT ALSO BROUGHT ON A GREAT INCREASE IN THE MANPOWER REQUIRED, THE SCOPE OF THE WINTER PROTECTION, AND THE EQUIPMENT REQUIRED FOR THIS PROTECTION.

MR. DEWITT OF S AND E WAS ASKED (QUESTION 4, S AND E EXHIBIT C) WHETHER THE GOVERNMENT PROVIDED, PRIOR TO SEPTEMBER 11, 1961, SUFFICIENT ACCESS TO THE SITE TO ENABLE THE CONTRACTOR TO PERFORM THE CONTRACT, AS REQUIRED. HE ANSWERED:

NO. THERE WAS CERTAIN WORK WHICH POSSIBLY COULD HAVE BEEN DONE PRIOR TO SEPTEMBER 11TH; HOWEVER, IT WAS NOT FEASIBLE OR EFFICIENT TO COMMENCE ANY REAL WORK IN THE BASIN UNTIL THE WHOLE AREA WAS GIVEN TO US ON SEPTEMBER 11TH, BECAUSE OF THE GROUTING OPERATIONS, BEING PERFORMED BY THE PRIOR CONTRACTOR. IF WE HAD HAD COMPLETE ACCESS TO THE BASIN SLAB ON AUGUST 10TH, WE COULD HAVE PROCEEDED IN AN ORDERLY AND RESTRICTED MANNER TO MAKE OUR LAYOUTS AND PROCEED WITH CONSTRUCTION OF FORMS, AND ALL OTHER RELATED ITEMS OF WORK.

MR. BOONE, S AND E'S ASSISTANT PROJECT MANAGER, WAS ASKED (QUESTION 3, S AND E EXHIBIT C) IF HE COULD APPROXIMATE THE FIRST DATE ON WHICH SUFFICIENT ACCESS TO THE SITE WAS PHYSICALLY AVAILABLE FOR THE CONTRACTOR TO PROCEED WITH ITS WORK IN A REASONABLE MANNER UNDER THE CONTRACT SPECIFICATIONS. HE ANSWERED:

SEPTEMBER 11TH WAS THE FIRST DATE THAT WE HAD COMPLTE ACCESS TO THE BASIN AREA. WE BEGAN MOVING FORMING MATERIALS INTO THE BASIN ON THE 5TH OF SEPTEMBER. AT THAT TIME WE WERE MAKING ENGINEERING LAYOUTS AND DID BEGIN SOME FORM ERECTION. HOWEVER, NO SUBSTANTIAL WORK ON THE CONCRETE WHICH WAS THE FIRST WORK OF SUBSTANCE COULD BE DONE UNTIL THE 11TH OF SEPTEMBER. ON THE LAST DAY OF THE HEARINGS, HOWEVER, MR. BOONE WAS ASKED (P. 2360, TRANSCRIPT):

Q. WHAT WAS THE FIRST TIME, MR. BOONE, IT WAS PRACTICAL FOR YOU TO DO ANY OF THESE FORMING OPERATIONS IN THE WEST END OF THE BASIN?

A. WE WERE ABLE TO BEGIN FORM OPERATIONS RIGHT AROUND THE FIRST OF SEPTEMBER. I BELIEVE WE BROUGHT THIS OUT BY PICTURES, THAT WE STARTED OUR FORM MATERIALS INTO THE BASIN AND BEGAN SOME ERECTION. MR. BOONE TESTIFIED ALSO THAT ALTHOUGH S AND E BEGAN ITS FORMING OPERATIONS IN THE BASIN ON SEPTEMBER 1, ON THE 5TH OF SEPTEMBER A SILL PLATE OR PLATES USED TO FACILITATE AN EASY AND EXPEDIENT METHOD OF ERECTING THE FORM PANELS WAS REMOVED AT THE GOVERNMENT'S REQUEST BECAUSE IT PLANNED TO BRING A CORE DRILLING RIG INTO THE AREA OF THE SOUTH D FOOTING. MR. BOONE STATED: ,THIS WAS NOT ANY GREAT PROBLEM, AND THEREFORE WE COMPLIED AND REMOVED THEM, AND I THINK SUBSEQUENT PHOTOS ABOUT THIS TIME, WE HAVE SEEN THE DRILLING RIG IN THIS AREA WORKING IN THE SOUTHWEST CORNER.' (PP. 2360, 2361, TRANSCRIPT).

DURING THE COURSE OF THE HEARING (PP. 105-107, TRANSCRIPT) MR. DEWITT, IN AN EXCHANGE WITH THE HEARING EXAMINER, TESTIFIED THAT BETWEEN AUGUST 10TH AND SEPTEMBER 10TH S AND E WAS MOBILIZING, MOVING IN ITS MEN AND MATERIALS. THE DISCUSSION CONTINUED AS FOLLOWS:

Q. IN THE EVENT THAT ON AUGUST 10TH, THE NOTICE TO PROCEED, YOU HAD HAD AVAILABLE TO YOU THE AREA BOTH MARKED IN THE ORANGE AND GREEN (COLORED AREAS ON THE MODEL, S AND E EXHIBIT B, WHICH IN THE OPINION OF DEWITT WERE NECESSARY FOR S AND E TO PROCEED WITH THE WORK). WHAT ACTUALLY IN YOUR OPINION COULD YOU ACCOMPLISH BY SEPTEMBER 10TH?

A. WE COULD HAVE DONE WHAT WE DID ON SEPTEMBER THE 10TH, AS SHOWN BY THE DRAWING, AS SHOWN BY THE PICTURES.

THE REASONING HAS BEEN PROJECTED THAT YOU DIDN-T DO IT. THE FACT REMAINS THAT WE COULD HAVE DONE IT HAD WE HAD THE AREA AVAILABLE TO US. WE COULD HAVE GOTTEN MATERIALS, THERE WAS NOTHING THAT WE COULD NOT HAVE DONE HAD THE AREA BEEN AVAILABLE.

Q. IF THAT AREA HAD BEEN AVAILABLE, THE GREEN AND ORANGE ON AUGUST 10TH, IN YOUR OPINION WOULD THERE HAVE BEEN POURS MADE IN THAT AREA BETWEEN AUGUST 10TH AND SEPTEMBER 10TH?

A. I WOULD SAY THAT--- I WOULD HAVE TO CHECK THE DETAILS OF IT--- HAD THE MATERIALS ARRIVED I WOULD SAY THAT THEY COULD HAVE BEEN MADE.

Q. THOSE BASE POURS WERE REINFORCED CONCRETE, OF COURSE?

A. YES SIR. THEY DID HAVE REBAR. THERE WAS SOME REBAR THAT DID NOT ARRIVE. IT WAS OBTAINABLE LOCALLY. IT WAS OBTAINED LOCALLY WHEN THE POURS WERE MADE. WE STILL DID NOT WAIT ON THE SUPPLIER TO SEND IT. WE BOUGHT THE SMALL BARS LOCALLY WHEN WE NEEDED IT. WE COULD HAVE DONE IT A MONTH EARLIER, COMING IN TOWN TO PICK UP THE BARS.

COMMANDER ANDERSON WAS THE GOVERNMENT'S CHIEF WITNESS ON THIS ASPECT OF THE CASE. IT IS IMPORTANT TO NOTE THAT HIS TESTIMONY (PP. 1399 1443, TRANSCRIPT) IS CORROBORATED BY OTHER CONTEMPORANEOUS RECORDS AND DOCUMENTS SUCH AS THE DAILY LOGS OF THE WORK, PHOTOGRAPHS AND MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS.

WHEN HE ARRIVED ON THE SITE ON AUGUST 18TH, S AND E, ACCORDING TO ANDERSON, WAS IN THE PROCESS OF RECEIVING EQUIPMENT AND MOBILIZING. THAT CONNECTION, THE DAILY LOGS OF GIFFELS AND ROSSETTI (G AND R), THE ARCHITECT ENGINEERS EMPLOYED BY THE GOVERNMENT IN SUPERVISING THE WORK (CONTRACTING OFFICER'S EXHIBIT 21), INDICATE THE FOLLOWING MATERIAL DELIVERIES FOR THIS PERIOD: AUGUST 15--- ONE TRUCK LOAD OF HEATERS (CEMENT), ONE TRUCK LOAD OF SCAFFOLDING; AUGUST 16--- MISCELLANEOUS MATERIAL FOR CONTRACTOR'S "SHACK; " AUGUST 18--- VARIOUS MATERIALS FOR OFFICE BUILDING; AUGUST 21--- CRANE RECEIVED ON SITE BUT NOT UNLOADED; AUGUST 22--- UNLOADED CRANE AND MOVED IT INTO THE CONSTRUCTION AREA; AND AUGUST 23--- ONE 24 FEET X 60 FEET RILCO TIMBER RIB QUONSET HUT. AUGUST 24TH, ACCORDING TO ANDERSON, S AND E WAS WORKING ON GETTING ELECTRICAL POWER IN AND ALSO ON THAT DATE SHOP DRAWINGS FOR THE REINFORCING STEEL WERE APPROVED BY GIFFELS AND ROSSETTI. A CARLOAD OF TWO BY FOUR LUMBER WHICH WAS TO BE USED TO CONSTRUCT FORMS FOR CONCRETE ARRIVED AT THE SITE ON AUGUST 26 AND S AND E BEGAN UNLOADING IT ON THAT DATE. (G AND R DAILY LOGS SHOW THAT THE LUMBER ARRIVED ON AUGUST 25.) THE 26TH AND 27TH OF AUGUST FELL ON A WEEKEND AND ON THE 28TH ANDERSON STATED THAT THE CONTRACTOR PURCHASED PLYWOOD LOCALLY IN ORDER TO HAVE EVERYTHING NEEDED BY S AND E TO BEGIN BUILDINGS FORMS. ON AUGUST 29TH A CARPENTER SHOP WAS PUT INTO OPERATION AND CERTAIN WATER STOP MATERIAL ALSO ARRIVED ON THAT DATE. S AND E BEGAN BUILDING FORMS ON AUGUST 30TH AND THE NEXT DAY BEGAN MOVING THE FORMS INTO THE BASIN. BECAUSE OF ITS SIGNIFICANCE, WE WILL QUOTE ANDERSON'S RECITAL OF EVENTS THEREAFTER IN FULL:

THEY STARTED PUTTING UP THE FORMS, AS SHOWN ON THE PHOTOGRAPH DATED SEPTEMBER 6TH, IN THE NORTHWEST CORNER OF THE BASIN. THE FIRST LOAD OF REINFORCING STEEL ARRIVED THE NEXT DAY, SEPTEMBER 7TH, AND THIS REINFORCING STEEL WAS THE LARGE BARS, THE 18 S AND 12 S BARS.

THESE BARS ARE NOT NORMALLY STOCKED; IN OTHER WORDS, YOU CAN-T GO AND PLACE AN ORDER IN THE NEAREST BUILDING SUPPLY HOUSE FOR THOSE BARS. THEY REQUIRE A SPECIAL ROLL OUT OF A MILL AND A MILL MAY ONLY ROLL THOSE ONE WEEK OUT OF A MONTH, SO IF ANY OF THE REINFORCING STEEL WAS A LONG LEAD TIME ITEM THIS HAD THE GREATEST POTENTIALITY OF SLOWING DOWN THE PROCUREMENT, BUT THE SPECIAL RUN OF REINFORCING STEEL ARRIVED, THESE LARGER BARS ARRIVED ON SEPTEMBER 7TH.

HEARING EXAMINER MCCONNELL. ARE YOU REFERRING TO SOMETHING ON THE PHOTOGRAPHS?

THE WITNESS. NO, SIR. THIS IS THE DAILY LOGS AND MY RECOLLECTION, TOO, SIR, THAT THE THREE CARLOADS, AND AS I RECALL THERE WERE THREE CARLOADS, THAT CAME IN ON THE 7TH OF SEPTEMBER AND IT HAD THE BIG BARS THAT WENT INTO THE SLABS.

THIS WAS THE 7TH OF SEPTEMBER. THE CORRECTIVE WORK WHICH IS SHOWN ON THE PHOTOGRAPHS DATED SEPTEMBER 7TH WERE THE LARGE DRILL RIG DOWN IN THE SOUTHWEST CORNER OF THE BASIN, AND ALSO SHOWN AGAIN ON SEPTEMBER 8TH.

ALL THAT WORK WAS COMPLETED AND THE WHOLE BASIN AREA CLEARED OF ALL OTHER CONTRACTORS' MATERIAL ON THE 10TH--- I HAVE TO CORRECT THAT. THE PILE OF ALUMINUM PIPE THAT YOU SEE IN THE SOUTHWEST CORNER WAS MOVED OUT OF THE BASIN APPROXIMATELY SIX O-CLOCK IN THE MORNING OF THE 11TH.

HEARING EXAMINER MCCONNELL. WHAT WAS THAT PIPE?

THE WITNESS. THAT PIPE WAS INTENDED TO BE CASING FOR THE LARGE HOLES THAT WERE BEING DRILLED. IT WAS NEVER USED, BUT IT WAS THERE IN CASE IT WAS NEEDED. IN OTHER WORDS, WHEN S AND E CAME TO WORK THE MORNING OF SEPTEMBER 11TH, THE ENTIRE BASIN WAS THEIRS AND, OF COURSE, WE SEE FROM THE PHOTOGRAPH OF THE 8TH, THIS IS THE FRIDAY BEFORE, THAT THEY HAD FOUR SETS OF FORMS IN PROGRESS WHEN WE LOOK AT THE PHOTOGRAPH OF THE 11TH, ALL SIX SETS OF FORMS ARE IN THE PROCESS OF BEING ERECTED, AND ALSO ON THE PHOTOGRAPH OF THE 11TH WE SEE MR. JARMAN'S TRUCK DOWN THERE WITH REINFORCING STEEL ON IT AND ALSO WE SEE THAT THEY ARE IN THE PROCESS OF LAYING THE LARGE REINFORCING BARS IN THE MOST NORTHWESTERLY FORM.

HEARING EXAMINER MCCONNELL. THAT'S A GROUP OF MEN IN THERE, ISN-T IT?

THE WITNESS. I SEE TWO MEN SITTING ON A BOX AND ARE--- WELL, I-M NOT SURE, BUT THERE'S A BUNDLE OF LARGE REINFORCING RODS ON MR. JARMAN'S TRUCK. I DON-T KNOW WHETHER THAT'S A SHADOW OF REINFORCING BARS, THAT FIRST FORM ON THE NORTH SIDE, BUT ANYWAY THEY STARTED SETTING OFF STEEL.

THEIR DAILY LOGS INDICATE THEY STARTED PUTTING IN THESE LARGE REINFORCING BARS ON THE 11TH. NOW, I SEE NO PARTICULAR REASON WHY THIS COULD NOT HAVE BEEN DONE ON THE 8TH IF THEY SO ELECTED TO DO IT.

THERE IS SPACE IN THERE. THE FORMS ARE READY TO RECEIVE IT. IN OTHER WORDS, THE CONDITION OF THE FORMS BETWEEN--- OF THE FIRST FORM BETWEEN THE 8TH AND THE 11TH SHOWS NO DIFFERENCE. QUITE LIKELY THEY WERE UNLOADING THE REINFORCING STEEL AND SHAKING IT OUT ON THE 8TH.

IN OTHER WORDS, IT CAME IN ON THE 7TH; THEY UNDOUBTEDLY UNLOADED ON THE 8TH.

MR. HUDSON (ATTORNEY FOR S AND E). JUST A MINUTE; WHEN YOU SAY "UNDOUBTEDLY," I WANT TO KNOW DO YOU KNOW OF YOUR OWN KNOWLEDGE?

HEARING EXAMINER MCCONNELL. WELL, HE IS JUST TALKING. IF WE GET TOO SPECIFIC, WE-LL LOSE A LITTLE TIME.

MR. HUDSON: ALL RIGHT.

THE WITNESS. * * * NOW, ON THE 12TH OF SEPTEMBER, THE BATCH PLANT WAS SET UP ON THE SITE. THIS WAS THE PLANT WHICH WAS USED TO MIX THE CONCRETE THERE. THERE WAS A BATCH PLANT THERE THAT NELSON HAD UTILIZED, BUT THEY CHANGED OUT THE SILO. A PORTION OF IT REMAINED THERE, BUT THE SILO WAS CHANGED OUT.

WHEN THIS BATCH PLANT WAS BROUGHT ON AND SET UPON THE 12TH OF SEPTEMBER, THEN I MUST AGAIN REFER TO THE DAILY LOGS. ON THE 14TH OF SEPTEMBER, NOW YOU WILL RECALL THAT WE HAD THE BIG REINFORCING STEEL BARS THERE AND THEY WERE IN THE PROCESS OF BEING PUT IN PLACE BEFORE THEY COULD CLOSE UP THE FORMS, THE LOWER PORTIONS OF THE FORMS, THEY HAD TO HAVE THE TEMPERATURE STEEL WHICH RUN IN THE 90 DEGREES FROM THE BIG BARS WHICH WERE THE STRUCTURAL MEMBERS FROM THIS CONCRETE POUR.

THEY NEEDED THESE NO. 11 BARS AND THEY HAD NOT ARRIVED, SO THEY WENT OUT OF TOWN AND THE DAILY LOG STATES ON SEPTEMBER 14TH A SMALL AMOUNT OF TEMPERATURE STEEL ARRIVED ON THE JOB. THIS WAS A LOCAL PURCHASE, AND THIS THEY DID IN ORDER TO EXPEDITE THE CLOSING UP OF THE FIRST FORM, SO THEY COULD GET MOVING.

THEY HAD EVERYTHING ELSE. THEY HAD THE WATER STOP. OF COURSE, THEY HAD FORM MATERIALS THERE. THEY HAD THE BIG BARS, SO THEY WENT OUT AND BOUGHT THESE NO. 11 BARS, WHICH WERE JUST STRAIGHT BARS BUT FOR A CERTAIN LENGTH, AND PUT THESE IN IN ORDER TO EXPEDITE THE CLOSING UP OF THE FORMS.

NOW, THE FIRST--- THIS BIGGER SHIPMENT OF REINFORCING STEEL ARRIVED ON MONDAY, THE 18TH OF SEPTEMBER, FROM THE FABRICATOR UP IN PORTLAND, OREGON. THEY HAD BEEN UP TO WASHINGTON, BUT THEY HAD GONE OUT AND BOUGHT THIS LOCAL STUFF IN ORDER TO CLOSE UP THE FIRST FEW FORMS TO EXPEDITE THE FIRST POUR.

NOW, WHEN THEY GOT THIS FIRST SHIPMENT OF REINFORCING STEEL, IT CONTAINED THE TEMPERATURE STEEL AND ALSO THE DOWELS WHICH WERE TO PROTRUDE UP THROUGH THE TOP OF THE POURS INTO THE BOTTOM OF THE COUNTERFORTS.

THEY GOT THIS SHIPMENT OF STEEL ON THE 18TH AND THE (SIC) SO THE FIRST POUR WAS MADE ON THE 21ST. IN OTHER WORDS, THEY HAD TO UNLOAD THE STEEL, SET IT OUT, BRING IT DOWN, PUT IT IN THE FORMS, AND THEY DID DO THIS IN TWO DAYS, THE 19TH AND 20TH, AND THEY MADE THEIR FIRST POUR ON THE 21ST DAY OF SEPTEMBER.

FROM THEN ON--- THEY POURED IT ON THE 21ST, 22ND AND 23RD. THE 23RD WAS A SATURDAY. THEY DID NOT POUR ON THE 24TH.

THEN THE NEXT WEEK, THEY MADE THREE POURS AND THEN THE TEN-DAY CURING REQUIREMENT BETWEEN ADJACENT POURS TOOK OVER AND DID NOT PERMIT THEM TO POUR AGAIN UNTIL THE 2ND DAY OF OCTOBER, AND THERE THEY POURED EVERY DAY OF THAT WEEK, THE 2ND, THE 3RD, 4TH, 5TH, 6TH AND 7TH, SUNDAY, AND THE PHOTOGRAPHS SHOW THEY WERE GOING LIKE CLOCKWORK.

THIS WAS THEIR SCHEDULE AND THEY WERE POURING THEM RIGHT ON SCHEDULE. A MATTER OF FACT, THEY HAD A POUR SCHEDULE FOR THE NEXT SATURDAY, THE 14TH, AND THEY WERE ABLE TO PICK UP DURING THE WEEK OF THE 9TH THROUGH THE 14TH SO THAT THEY DID NOT HAVE TO WORK ON SATURDAY; IN OTHER WORDS THEY WERE A DAY AHEAD OF SCHEDULE AS OF THE 14TH OF SEPTEMBER.

MR. HUDSON. THE 14TH OF---

THE WITNESS. 14TH OF OCTOBER, I BEG YOUR PARDON, AS OF THE 15TH OF OCTOBER.

THE WITNESS. WE PRETTY MUCH GOT UP TO OCTOBER 14 AND I THINK FOR THIS--- THIS SHOWS THAT THEY GOT STARTED JUST AS QUICKLY AS THEY COULD COMMENSURATE WITH THE ARRIVAL OF MATERIALS AND THEY GAVE US A POUR SCHEDULE FOR THE SLAB AND THE WALLS. THEY FOLLOWED THE POUR SCHEDULE AND AT ONE TIME WAS AHEAD OF THE POUR SCHEDULE SO THEY DID NOT HAVE TO WORK ON A SATURDAY WHICH THEY HAD SCHEDULED FOR WORK.

IN SUMMARY, THIS SCHEDULE STARTED JUST THE SAME AS THE OTHER JOBS WE HAD OUT THERE WITH RESPECT TO CONCRETE WORK IT JUST TAKES YOU A CERTAIN PERIOD OF TIME TO MOBILIZE AND GET YOUR MATERIAL IN BEFORE YOU CAN MAKE YOUR FIRST CONCRETE POUR.

NONE OF THE CONTRACTORS HAD MOVED ON THIS SITE AND STARTED POURING CONCRETE THE DAY AFTER THE DAY OF NOTICE TO PROCEED. IN REGARD TO THIS LATTER ASSERTION COMMANDER ANDERSON TESTIFIED THAT WHEN NELSON BROS. ARRIVED ON THE SITE FOR ITS PART OF THE WORK IT WAS A WEEK OR TWO AFTER THE NOTICE TO PROCEED BEFORE THE FIRST CUBIC YARD WAS MOVED, AND "OF COURSE, ALL HE HAD TO DO WAS TO START DIGGING A HOLE.' (P. 1409, TRANSCRIPT). ON THE CONTRACT SUBSEQUENT TO THE S AND E CONTRACT, ANDERSON STATED: "HALVERSON SPENT, I THINK, THREE OR FOUR WEEKS BEFORE HE MADE HIS FIRST POUR OF A COMPARABLE NATURE TO THEIR FIRST POUR WITH STEEL WATER STOPS AND EVERYTHING ELSE.' (P. 1409, TRANSCRIPT.) "IN THE CASE OF THE STEARNS ROGERS CONTRACT, THERE, AND THIS WAS FOR A REINFORCED CONCRETE COOLING TOWER BASIN, IT WASN-T NEARLY AS COMPLEX OR AS LARGE AS THIS PROTOTYPE BASIN, BUT I DON-T BELIEVE--- THEY DIDN-T MAKE THEIR FIRST CONCRETE POUR UNTIL APPROXIMATELY SIX WEEKS AFTER NOTICE TO PROCEED.' (P. 1410, TRANSCRIPT).

THE ATTORNEY FOR THE CONTRACTING OFFICER DIRECTED COMMANDER ANDERSON'S ATTENTION TO THE PREVIOUS TESTIMONY OF MR. ELDER (PP. 1429 1433, TRANSCRIPT):

Q. AGAIN DIRECTING YOUR ATTENTION TO MR. ELDER'S TESTIMONY, MR. ANDERSON, AND SPECIFICALLY TO HIS ANSWER NO. 21, MR. ELDER STATED, QUOTE "HAD THE GOVERNMENT MET ALL OF THE REQUIREMENTS OF THE MEMORANDUM OF UNDERSTANDING AND THE NOTICE TO PROCEED OF AUGUST 10TH, THE CONTRACTOR COULD HAVE PROCEEDED WITH EXTENSIVE ENGINEERING LAYOUT AND THE CONCRETE FORMING.' THAT AN ACCURATE STATEMENT?

A. NO, IT ISN-T.

Q. EXPLAIN.

A. THERE WAS NOTHING.

Q. FIRST LETS TALK ABOUT ENGINEERING LAYOUT.

A. THEY STARTED THEIR ENGINEERING LAYOUT APPROXIMATELY--- AUGUST 31ST, SEPTEMBER 1, AND THERE WAS NOTHING PRIOR TO THAT THAT PREVENTED THEM FROM TAPING OFF THEIR BASE LINES FROM THE OTHERS UP TO, ADJACENT TO THE FENCE, THE NFR (SIC) FENCE, AND CARRYING THEM OVER TO THE BASIN BECAUSE ALL THE CONCRETE WAS PLACED IN THE BASIN AREA AND THEY DID MAKE BENCH MARKS IN THESE VARIOUS CORNERS OF THE BASIN.

Q. WHEN DID THEY START THE SURVEYING WORK, IF THAT IS THE CORRECT DESCRIPTION OF IT?

A. EITHER ON AUGUST 31ST OR SEPTEMBER 1, BUT AS I SAID BEFORE THERE WAS NOTHING IN THOSE PARTICULAR AREAS THAT PREVENTED THEM FROM DOING THIS EARLIER HAD THEY WANTED TO DO THIS EARLIER.

OTHER PEOPLE WERE DOWN IN THERE SURVEYING AND CHECKING GRADES. THEN WITH RESPECT TO THE STOP OF WORK---

Q. ADDRESS YOURSELF TO CONCRETE FORMING. THAT'S WHAT HE WAS TALKING ABOUT.

A. RIGHT. THE DAY AFTER THEY STARTED MOVING FORMS, THEY MOVED INTO THE BASIN. THERE WAS NOTHING TO SLOW THEM UP THERE.

Q. QUESTION NO. 22. MR. ELDER WAS ASKED--- "MR. ELDER, WAS THE CONTRACTOR'S WORK SUSPENDED BY THE GOVERNMENT'S FAILURE TO COMPLY WITH A MEMORANDUM OF UNDERSTANDING?

MR. ELDER'S ANSWER WAS,"YES.' IS THAT A TRUE ANSWER?

A. NO, IT ISN-T.

Q. EXPLAIN.

A. THERE WAS NOTHING SUSPENDED. THEY DID EVERYTHING THEY HAD TO DO DURING THIS PERIOD TO MOBILIZE AND IN NOT ONE OF THE MEETINGS, EITHER THE INITIAL ONE OR ANY OF THE WEEKLY CONSTRUCTION MEETINGS WHICH WERE ALREADY IN SCHEDULE, WOULD YOU FIND ONE MENTION BY PEOPLE AT THE JOB SITE OF ANYTHING DELAYING THEM.

THEY WEREN-T BEING DELAYED OUT THERE. THEY WERE TRYING TO GET THINGS GOING AND MOVING AS FAST AS THEY COULD. THERE WAS NO DELAYS. IF THERE HAD BEEN, I-M SURE THEY WOULD HAVE PUT THEM IN THE MINUTES OF THE MEETINGS.

ALL THIS DELAY STUFF WAS BETWEEN SCHENECTADY AND DALLAS.

Q. IN THE LAST QUESTION WHICH WAS ASKED OF MR. ELDER, IN HIS PREPARED TESTIMONY, QUESTION NO. 25, THE QUESTION WAS--- "WHEN WAS SUFFICIENT ACCESS TO THE SITE GIVEN THE CONTRACTOR TO ENABLE HIM TO PERFORM A USEFUL AND EFFICIENT OPERATION?

AND HIS ANSWER WAS,"SEPTEMBER 11TH, 1961.' IS THAT A CORRECT ANSWER?

A. THE PHOTOGRAPHS SHOW THAT THEY WENT IN ON, I THINK, AUGUST 30TH. THEY PUT THE FORMS IN THERE, THE DAY BEFORE THEY PUT IN THEIR TOOL BOX.

Q. WAS THAT A USEFUL AND EFFICIENT OPERATION?

MR. HUDSON. JUST A MINUTE, SIR. THE WITNESS IS OBVIOUSLY MISTAKEN. SUGGEST HE REFER TO THOSE PICTURES. AS I RECALL IT'S CONTRARY TO HIS PREVIOUS TESTIMONY.

(THE WITNESS COMPLIED AS REQUESTED)

THE WITNESS. I-M LOOKING AT A PHOTOGRAPH DATED AUGUST 30TH. I SEE THE TOOL BOX.

MR. HUDSON. THAT'S WHAT I RECALL YOU TESTIFIED BEFORE.

THE WITNESS. I SEE THE TOOL BOX DOWN THERE. THAT WAS THE FIRST THING THEY MOVED IN. ON THE 30TH OF AUGUST THEY STARTED BUILDING FORMS. THE NEXT DAY THEY HAULED THOSE FORMS IN AS IS SHOWN ON THE PHOTOGRAPH DATED AUGUST 31ST.

BY MR. RHODES.

Q. NOW, I-M ASKING YOU WHETHER THOSE OPERATIONS WERE USEFUL AND EFFICIENT OPERATIONS?

A. THIS WAS THE ONLY WORK THAT THEY HAD GOING ON.

Q. WOULD YOU ANSWER MY QUESTION DIRECTLY?

A. YES.

Q. NOW EXPLAIN.

A. THIS WAS THE ONLY THING THEY HAD GOING ON AND UNTIL THEY BUILT FORMS THEY COULDN-T PUT THEM IN THE BASIN AREA, UNTIL THEY WERE READY TO START WORK DOWN THERE, THERE WAS NO SENSE PUTTING A TOOL BOX IN.

COMMANDER ANDERSON'S ASSERTIONS OF FACT AND RECITAL OF EVENTS IN HIS TESTIMONY AT THE HEARING ARE CORROBORATED BY CONTEMPORANEOUS AND INDEPENDENT EVIDENCE (I.E., DAILY LOGS OF THE WORK, PHOTOGRAPHS AND MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS). HIS TESTIMONY WAS NOT WEAKENED ON CROSS-EXAMINATION, AND NO SERIOUS ATTEMPT WAS MADE TO REBUT THE ESSENTIAL ELEMENTS THEREOF. IN CONTRAST, THE TESTIMONY OF MESSRS. ELDER, DEWITT AND BOONE WAS VERY GENERAL IN CHARACTER WITH NO ATTEMPT MADE TO DETAIL THE NATURE AND EXTENT OF THE ALLEGED SUSPENSION OF WORK. IT IS WORTH NOTING, ALSO, WITH RESPECT TO THE OPPORTUNITY THAT THE VARIOUS WITNESSES HAD TO GAIN KNOWLEDGE OF THE FACTS CONCERNING WHICH THEY TESTIFIED, THAT MESSRS. ELDER AND DEWITT WERE NOT EMPLOYED AT THE SITE OF THE WORK. ACCORDING TO THE UNCHALLENGED TESTIMONY OF COMMANDER ANDERSON (P. 1386, TRANSCRIPT), MR. DEWITT VISITED THE CONSTRUCTION SITE APPROXIMATELY ONCE A MONTH THROUGHOUT THE PERIOD OF THE JOB AND MR. ELDER WAS THERE ABOUT FOUR OR FIVE TIMES THROUGHOUT THE ENTIRE PERIOD. THE ONE MAN ON THE CONTRACTOR'S SIDE WHO PROBABLY HAD THE MOST INTIMATE KNOWLEDGE OF THE DAY-TO-DAY OCCURRENCES AT THE SITE WAS MR. JAMES DOWNIE WHO, UNTIL MARCH OR APRIL, 1962, WAS S AND E'S SUPERINTENDENT AND WAS IN CHARGE OF OPERATIONS. MR. DOWNIE WAS NOT CALLED TO TESTIFY DURING THE HEARINGS. MOREOVER, IT IS SIGNIFICANT THAT THE RECORD DOES NOT INDICATE THAT SITE REPRESENTATIVES OF THE CONTRACTOR LODGED ANY COMPLAINTS ABOUT SITE UNAVAILABILITY DURING THE PERIOD IN QUESTION. WEEKLY CONSTRUCTION MEETINGS WERE HELD DURING THE COURSE OF THE WORK AND THE DISCUSSIONS IN THESE MEETINGS COVERED ALL ASPECTS OF THE WORK. IT IS HARDLY CREDIBLE THAT HAD S AND E ACTUALLY BEEN OBSTRUCTED BY THE WORK OF NELSON BROTHERS, THAT FACT WOULD NOT HAVE BEEN BROUGHT TO THE ATTENTION OF THE GOVERNMENT'S SITE REPRESENTATIVES DURING THESE MEETINGS, YET THE MINUTES OF THESE MEETINGS (DATED AUGUST 21 AND 30 AND SEPTEMBER 6 AND 13), ARE DEVOID OF ANY MENTION OF ANY DIFFICULTIES IN THIS REGARD. ON THE OTHER HAND THESE MINUTES RECORD NUMEROUS REQUESTS BY THE GOVERNMENT REPRESENTATIVES THAT S AND E EXPEDITE THE SUBMISSION OF VARIOUS SCHEDULES AND DOCUMENTS REQUIRED BY THE CONTRACT. IN ADDITION, THE MINUTES, WHICH AFTER THE FIRST ONE OF AUGUST 21 AND THROUGH DECEMBER 6 WERE INITIALED OR SIGNED BY MR. DOWNIE, CONTAIN A NUMBER OF PERTINENT REFERENCES TO THE PROGRESS OF THE WORK DURING THIS PERIOD AND APPEAR TO BE INVALUABLE IN RELATING THE DETAILS OF THE MOBILIZATION PROCESS. FOR EXAMPLE, THE AUGUST 21 MINUTES SHOW THAT THE CONTRACTOR WAS REQUESTED TO PREPARE AND SUBMIT A LAYOUT OF ITS PROPOSED OPERATING AREA AND IT WAS POINTED OUT THAT OTHER CONTRACTORS WOULD BE OPERATING IN THE GENERAL WORK AREA. THE CONTRACTOR'S REPRESENTATIVE DURING THIS MEETING INDICATED THAT "HE WOULD UNDERTAKE TWO- SHIFT CONSTRUCTION OPERATIONS IMMEDIATELY UPON ARRIVAL OF THE INITIAL SHIPMENT OF FORM LUMBER WHICH IS CURRENTLY AWAITED.'

THE AUGUST 30 MINUTES CONTAIN A NOTATION THAT WORK WAS UNDERWAY IN FABRICATING FORMS FOR THE COUNTERFORT FOOTINGS AND THE FIELD OFFICE CONSTRUCTION WAS NEARING COMPLETION. UNDER THE HEADING ,PROCUREMENT PROGRESS" IT WAS STATED THAT FORM LUMBER, INCLUDING PLYWOOD, HAD BEEN RECEIVED; THAT PARTIAL DELIVERY OF WATER STOP ACCESSORIES HAD BEEN RECEIVED; AND THAT THE CONTRACTOR INDICATED HE WOULD CHECK ON THE SHIPPING STATUS OF REINFORCING STEEL. UNDER THE HEADING "WORK PLANNED FOR THE NEXT WEEK" IT WAS STATED THAT WORK ON SETTING OF FORMS IN THE BASIN WOULD BE STARTED; THAT STEEL SETTING WOULD BE STARTED IF A SHIPMENT OF "RE-BAR" ARRIVED; THAT WORK WOULD BE STARTED ON POLE LINE INSTALLATION AND THE TEMPORARY SUBSTATION REQUIRED FOR CONSTRUCTION POWER; AND, FINALLY, THAT WORK WOULD BE STARTED ON THE SEWER LINE IF MATERIALS WERE RECEIVED.

IN THE SEPTEMBER 6 MINUTES, UNDER THE HEADING "PROGRESS OF THE WORK," IT WAS RECORDED THAT ,WORK CONTINUES UNDER WAY ON THE PREFABRICATION OF FORMS FOR THE CONCRETE WORK IN THE BASIN TOM.' UNDER "PROCUREMENT PROGRESS" WE FIND THE NOTATION: "IT IS ANTICIPATED THAT A RAIL SHIPMENT OF 3 CARS, APPROXIMATELY 180 TONS OF REINFORCING STEEL WILL BE DELIVERED TO THE WORK SITE TODAY.' UNDER "WORK PLANNED FOR THE NEXT WEEK" IT WAS NOTED THAT THE CONTRACTOR WOULD START THE WORK OF SETTING FORMS, PLACING REINFORCING STEEL AND MAKING THE INITIAL CONCRETE POUR. ALSO, THAT A DOUBLE SHIFT WORK OPERATION WOULD BE STARTED.

THE MINUTES OF THE SEPTEMBER 13 MEETING CONTAIN THE FOLLOWING SIGNIFICANT ENTRIES:

(A)PROGRESS OF THE WORK

WORK CONTINUES UNDER WAY ON THE PREFABRICATION OF FORMS FOR THE CONCRETE WORK IN THE BASIN, TRENCHING FOR THE SEWER LINES AND BACKFILLING FOR THE TEMPORARY SUB-STATION SLAB. THE CONTRACTOR'S ATTENTION WAS CALLED TO THE FACT THAT THE CONCRETE POUR IN THE BASIN WAS BEHIND SCHEDULE. THE CONTRACTOR INDICATED THAT THIS LOST TIME WOULD BE PICKED UP CONTINGENT HOWEVER UPON THE ARRIVAL OF REINFORCING STEEL. THE CONTRACTOR, IN ANSWER TO A QUESTION CONCERNING THE COMPLETION OF THE TEMPORARY SUB-STATION WITHIN THE 35 DAY TIME SCHEDULE, INDICATED THAT THE CONCRETE SUB-STATION SLAB WOULD BE COMPLETE BUT THAT HE COULD NOT STATE AS TO WHETHER THE WIRING WOULD BE COMPLETE BY THAT TIME. THE CONTRACTOR ADVISED THAT HEATING REQUIRED FOR THE OFFICE SPACE PROVIDED FOR USE BY THE CONTRACTING OFFICER'S STAFF WOULD BE INSTALLED BY FRIDAY, SEPTEMBER 15TH.

(B) PROCUREMENT PROGRESS

(3) DELIVERY OF MATERIAL

THE CONTRACTOR INDICATED THAT A SHIPMENT OF 48 TONS OF REINFORCING STEEL, ESSENTIAL TO USE IN WORK CURRENTLY UNDERWAY, IS PRESENTLY ENROUTE TO THE JOB SITE. IT WAS INDICATED THAT ALL BASE SLAB STEEL WOULD BE SHIPPED THIS WEEK. IT WAS SUGGESTED TO THE CONTRACTOR THAT HE INVESTIGATE THE ADVISABILITY OF USING EXPEDITING SERVICES IN SHIPMENT OF MATERIALS CRITICAL TO WORK SCHEDULES.

(C) WORK PLANNED FOR THE NEXT WEEK

WORK WILL BE UNDERWAY ON POURING THE CONCRETE SLAB FOR THE TEMPORARY SUB- STATION, PREFABRICATION OF CONCRETE FORMS WILL CONTINUE, AND FORMS AND RE- STEEL WILL BE SET FOR THE INITIAL CONCRETE POUR IN THE BASIN BOTTOM. CONCRETE WILL BE POURED PROVIDING THAT OUTSTANDING REINFORCING STEEL ARRIVES AND IS INSTALLED. HAULING OF CONCRETE AGGREGATES TO THE WORK SITE WILL BE STARTED. THE MECHANICAL SUBCONTRACTOR WILL START LAYING SEWER PIPE IN PREPARED TRENCHING. THE CONTRACTOR WILL START A DOUBLE SHIFT WORK OPERATION AS SOON AS AN OUTSTANDING SHIPMENT OF REINFORCING STEEL ARRIVES ON THE JOB SITE.

THE ABOVE MINUTES OF THE FOUR MEETINGS, WHICH TOOK PLACE DURING AND SOON AFTER THE PERIOD IN QUESTION, CAN HARDLY BE SAID TO INDICATE OR REFLECT A CONCERN BY S AND E SITE REPRESENTATIVES ABOUT LACK OF ACCESS TO THE BASIN OR OBSTRUCTION BY NELSON'S OPERATIONS. IN THAT CONNECTION, MR. DOWNIE, S AND E'S CONSTRUCTION SUPERINTENDENT, HAD FULL AUTHORITY TO ACT FOR S AND E IN THE MATTER. (SEE CONTRACTING OFFICER'S EXHIBITS C-13, 14 AND 15.) THE ABOVE MINUTES, AND ALL OTHER AVAILABLE EVIDENCE OF RECORD, LEND SUPPORT TO COMMANDER ANDERSON'S OBSERVATION THAT "ALL THIS DELAY STUFF WAS BETWEEN SCHENECTADY AND DALLAS.'

IN THEIR BRIEF OF JULY 20, 1966, THE ATTORNEYS FOR S AND E CONTEND THAT EVIDENCE IN THE RECORD SUPPORTS A FINDING THAT S AND E COULD HAVE MOBILIZED AND BEGUN WORK BEFORE SEPTEMBER 10 IF THE GOVERNMENT HAD MADE THE SITE AVAILABLE BY AUGUST 10. THE BRIEF LISTS THE FOLLOWING ITEMS:

1. MR. DEWITT STATED THAT HAD THE BASIN BEEN AVAILABLE BY AUGUST 10, S AND E COULD HAVE PROCEEDED FROM THAT DATE TO DO THE SAME WORK THEY ACTUALLY PROCEEDED TO DO ON SEPTEMBER 10. IN OTHER WORDS, THEY COULD HAVE MOBILIZED BY AUGUST 10. (TR. P. 105, ET SEQ.)

2. MR. BOONE, ASSISTANT PROJECT MANAGER OF THE CONTRACTOR STATED THAT HAD THE CONTRACTOR HAD THE BASIN AVAILABLE BY AUGUST 10, HE COULD HAVE POURED SEVERAL SLABS BY SEPTEMBER 10.

3. THE MANAGER OF THE PROJECT WAS ON THE JOB AUGUST 10, THE ASSISTANT MANAGER ON AUGUST 12, THE CRANE AND VARIOUS OTHER MATERIALS BEFORE THEY COULD BE USED AND ALL MATERIALS BY THE TIME THEY COULD BE USED, (DEWITT LETTER, 8/30/61, APPT'S EXH. D). THE FORMING LUMBER WAS ON HAND AUGUST 25, THE DAY AFTER THE PRIOR CONTRACTOR COMPLETED LAYING LEAN CONCRETE, AND LUMBER, NOT A DIFFICULT MATERIAL TO OBTAIN, PRESUMABLY COULD HAVE BEEN ON HAND EARLIER, HAD IT BEEN NEEDED. ALSO REINFORCING STEEL WAS ON HAND AS SOON AS IT COULD BE USED, AND PRESUMABLY COULD HAVE BEEN OBTAINED LOCALLY (TESTIMONY OF DEWITT, TR. P. 105) AND INDEED SOME WAS OBTAINED LOCALLY AS NEEDED (TESTIMONY OF DEWITT, TR. P. 105). THUS IT IS UNDISPUTED THAT CONTRACTOR WAS MOBILIZED TO PERFORM EACH JOB AS SOON AS THE SITE WAS AVAILABLE TO DO THAT JOB.

4. THE GOVERNMENT PREPARED THE PROGRESS CHARTS ON THE PROJECT, DISKIN, TR. P. 2349 AND 2353. THESE INDICATE A STARTING DATE OF AUGUST 10, 1961. THEY PROVIDE FOR NO MOBILIZATION PERIOD (CONTRACTING OFFICER'S FINAL DECISION) THUS DISCREDITING THE CONTRACTING OFFICER'S TESTIMONY THAT A MOBILIZATION PERIOD WAS NECESSARY.

5. IN CONTRACTOR'S EXHIBIT D ARE TWO TELEGRAMS FROM THE GOVERNMENT SIGNED BY MR. DISKIN AND MR. CALDWELL, DATED SEPTEMBER 13 AND 14 RESPECTIVELY. BOTH OF THESE TELEGRAMS ALLEGE THE CONTRACTOR WAS BEHIND SCHEDULE 20 DAYS, IF IT TOOK THE CONTRACTOR ONE MONTH (AUGUST 10 TO SEPTEMBER 10) TO MOBILIZE, HOW COULD HE BE 20 DAYS BEHIND SCHEDULE ON SEPTEMBER 13?

AT THE OUTSET IT SHOULD BE NOTED THAT IT WAS NOT THE GOVERNMENT'S POSITION THAT IT TOOK S AND E 1 MONTH (AUGUST 10 TO SEPTEMBER 10) TO MOBILIZE. IT WAS THE GOVERNMENT'S POSITION THAT THE CONTRACTOR WAS NOT ONLY MOBILIZING BUT IN FACT ALSO ACCOMPLISHED SIGNIFICANT CONSTRUCTION WORK DURING THE PERIOD AUGUST 10 TO SEPTEMBER 10. THE CONTRACTING OFFICER'S FINDING OF FACT AND DECISION OF AUGUST 8, 1962, STATED ON THIS ASPECT OF THE CASE:

4. PURSUANT TO THE NOTICE TO PROCEED AND THE ABOVE-MENTIONED MEMORANDUM OF UNDERSTANDING, CONTRACT WORK WAS COMMENCED ON OR ABOUT AUGUST 10, 1961. DURING THE PERIOD OF ONE MONTH THEREAFTER THE CONTRACTOR PERFORMED SIGNIFICANT PORTIONS OF WORK REQUIRED BY THE CONTRACT, INCLUDING PROCUREMENT OF MATERIALS, ERECTION OF FIELD OFFICE AND OTHER NECESSARY FACILITIES AT THE CONSTRUCTION SITE, NEGOTIATING AND AWARDING SUBCONTRACTS, PREFABRICATING AND ERECTING FORMS FOR CONCRETE, PREPARING SHOP DRAWINGS AND PRESENTING THEM FOR APPROVAL BY THE CONTRACTING OFFICER, PERFORMING ENGINEERING LAYOUTS AND SURVEYS, ERECTING ELECTRIC POWER POLES, UNLOADING MATERIALS AND INSTALLING ELECTRICAL DUCT WORK.

6. THE FAILURE OF THE CONTRACTOR TO COMPLETE THE CONTRACT WORK WITHIN THE PERIOD PRESCRIBED BY THE CONTRACT WAS NOT THE RESULT, IN WHOLE OR IN PART, OF THE INABILITY OF THE CONTRACTOR TO HAVE UNLIMITED, UNRESTRICTED AND EXCLUSIVE ACCESS TO THE CONSTRUCTION SITE DURING THE PERIOD BEGINNING AUGUST 10, 1961 AND ENDING SEPTEMBER 10, 1961. IN FACT, AS OF NOVEMBER 1, 1961, THE CONTRACTOR WAS ACTUALLY ON SCHEDULE AS SHOWN BY A PROGRESS PAYMENT STATEMENT FORMALLY CERTIFIED BY IT AND AGREED TO BY THE GOVERNMENT AS A BASIS FOR PROGRESS PAYMENTS.

THE CONTRACTING OFFICER'S FINDINGS OF FACT AND DECISION IN REGARD TO S AND E'S ACCOMPLISHMENT OF SIGNIFICANT CONSTRUCTION WORK PRIOR TO SEPTEMBER 10 IS AMPLY SUPPORTED BY THE EVIDENCE IN THE RECORD. THE FIRST G AND R LOG ENTRY ON THE S AND E JOB IS DATED AUGUST 9, 1961. THE S AND E LOGS COMMENCE ON AUGUST 14. DURING THE PERIOD AUGUST 9 THROUGH AUGUST 14, THE G AND R LOGS RECORD NO ACTIVITY ON THE SITE BUT DO INDICATE THAT MESSRS. ELDER AND DEWITT WERE PRESENT. ON AUGUST 15 THE LOGS (ALL REFERENCES ARE TO THE G AND R LOGS UNLESS OTHERWISE INDICATED) RECORD THAT ONE TRUCKLOAD OF HEATERS (CEMENT) AND ONE TRUCKLOAD OF SCAFFOLDING WERE DELIVERED. MISCELLANEOUS MATERIAL FOR THE CONTRACTOR'S "SHACK" ARRIVED ON AUGUST 16. ON AUGUST 17, THE S AND E LOGS INDICATE THAT "DOWNIE, BOONE AND GUNTER MET WITH UNION REP. POCATELLO--- PRE JOB CONFERENCE.' VARIOUS MATERIALS FOR THE OFFICE BUILDING WERE RECEIVED ON AUGUST 18. AUGUST 19 AND 20 FELL ON SATURDAY AND SUNDAY AND THE LOGS CONTAIN NO ENTRIES FOR THOSE DATES. AUGUST 21 A CRANE WAS RECEIVED BUT NOT UNLOADED. ON AUGUST 22 THE CRANE WAS UNLOADED AND TWO 4 INCH CONCRETE SLABS WERE POURED "FOR PLACEMENT OF TEMPORARY CONSTRUCTION BUILDING.' THEREAFTER, THE G AND R LOGS SHOW A QUICKENING PACE OF CONSTRUCTION ACTIVITY:

AUGUST 23--- SETTING QUONSET ON PAD. CHECKING ON LAYOUT OF SUB STATION

AUGUST 24--- CONTINUED REPAIR AND REMODEL OF QUONSET HUT FOR TEMPORARY CONSTRUCTION OFFICES. LAYOUT FOR TEMPORARY SUB-STATION MADE AND CONDUIT READY TO PLACE. GAVE MR. DOWNIE A PRELIMINARY ISSUE OF DRAWING E51 SHOWING LOCATION OF ELECTRIC POLE FOR HIS INFORMATION.

AUGUST 25--- CONTINUED REMODELING AND REPAIRING THE QUONSET HUT FOR OFFICE USE. LAYED CONDUIT AND PREPARED TO POUR CONCRETE ON THE DUCT WORK BEFORE POURING SLAB.

AUGUST 26--- SATURDAY. NO ENTIRES.

AUGUST 27--- SUNDAY. NO ENTRIES.

AUGUST 28--- REMODEL AND REPAIR OF OFFICE QUONSET CONTINUED. UNLOADING OF LUMBER CAR IS ABOUT 3/4 COMPLETE. CLEAN UP AND SEGREGATION OF TOOLS AND EQUIPMENT STARTED. JARMAN STEEL MOVED IN AN A FRAME TRUCK AND A FLAT BED TRUCK WITH A CONSTRUCTION SHACK ON IT.

AUGUST 29--- REMODEL AND REPAIR OF QUONSET CONTINUED. SET FORMS AND WAITING FOR RED CONCRETE OVER DUCT UNDER TEMPORARY SUB-STATION PAD. CONTINUED UNLOADING CAR OF LUMBER. SET UP DEWALT SAW TABLE.

AUGUST 30--- * * * SET UP TEMPORARY BUILDING FOR DEWALT SAW AND BUILT A LAYOUT PLATFORM AND STARTED BUILDING FORMS. CAR OF LUMBER UNLOADED AND CAR RETURNED TO PHILIPS AT 1:00 PM. BUILT TEMPORARY TOILET OVER SEWER MANHOLE.

AUGUST 31--- CONTINUED BUILDING FORMS--- REBUILT A TOOL SHACK AND BUILDING A LUNCH ROOM. STARTED MOVING FORMS DOWN INTO THE BOTTOM OF THE BASIN. POURED PART OF THE RED CONCRETE AROUND THE DUCT OF THE TEMPORARY SUB-STATION. SEPTEMBER 1--- CONTINUED BUILDING FORMS AND CHECKING FOR LAYOUT IN THE BASIN. ALSO BUILDING A LUNCH ROOM.

SEPTEMBER 2--- SATURDAY. NO ENTRIES.

SEPTEMBER 3--- SUNDAY. NO ENTRIES.

SEPTEMBER 4--- LABOR DAY. NO ENTRIES.

SEPTEMBER 5--- LAYOUT OF CONTROL LINES IN BASIN. ELECTRICIAN DRAGGING POLES IN POSITION FOR INSTALLATIONS. SEPTEMBER 6--- MR. JARMAN (IRON WORKER SUPT.) ON JOB TODAY. ELECTRICIANS SET ONE POWER POLE TODAY. SETTING BASE PLATES IN BASIN FOR LAYOUTS AND PLACING OF FORMS FOR POURING BASEMENT FLOOR.

SEPTEMBER 7--- CONTINUED SETTING UP FORMS IN THE BASIN IN PREPARATION FOR PLACING REBAR. CONTINUED SETTING ELECTRICAL POLES TO TEMPORARY SUB- STATION. JARMAN STEEL COMPANY CAME IN FOR UNLOADING THE THREE BOX CARS OF REBAR.

SEPTEMBER 8--- CONTINUED BUILDING FORMS AND SETTING THEM UP IN THE BOTTOM OF THE BASIN IN PREPARATION OF CONCRETE POUR. POURED RED CONCRETE OVER THE REST OF THE DUCT WORK AND SET POLE NO. 2 AT SUBSTATION. LAYED OUT THE SEWER TRENCH IN PREPARATION FOR DIGGING.

SEPTEMBER 9--- SATURDAY. NO ENTRIES.

SEPTEMBER 10--- SUNDAY. NO ENTRIES.

THE ABOVE EXCERPTS FROM THE G AND R DAILY LOGS, WHICH ARE IN ESSENTIAL AGREEMENT WITH S AND E'S DAILY LOGS, SUPPORT IN DETAIL THE CONTRACTING OFFICERS FINDINGS THAT S AND E PERFORMED SIGNIFICANT PORTIONS OF WORK NECESSARY TO PERFORMANCE OF THE CONTRACT DURING THE PERIOD IN QUESTION. THIS CONCLUSION IS ALSO CORROBORATED BY THE OFFICIAL PHOTOGRAPH OF SEPTEMBER 11 THE CONTENTS OF WHICH ARE DESCRIBED BY COMMANDER ANDERSON'S TESTIMONY ABOVE.

NOR IS THERE ANY SUBSTANTIAL EVIDENCE IN THE RECORD TO SUPPORT THE CONTENTIONS IN S AND E'S BRIEF OF JULY 20, 1966, THAT CONSTRUCTION MATERIALS WERE ON HAND AS SOON AS THEY WERE NEEDED AND THAT THE WORK COULD AND WOULD HAVE PROGRESSED FROM AUGUST 10 JUST AS IT DID FROM SEPTEMBER 10 HAD THE SITE BEEN AVAILABLE. THIS CONTENTION PRESUPPOSES THAT S AND E WOULD HAVE COMMENCED MOBILIZATION PRIOR TO RECEIPT OF THE NOTICE TO PROCEED ON AUGUST 10. INITIALLY IT SHOULD BE NOTED THAT A CONTRACTOR WHO PROCEEDS TO MOBILIZE AND INCURS EXPENSES BEFORE HE RECEIVES A NOTICE TO PROCEED DOES SO AT HIS OWN RISK. ABSENT A SHOWING THAT THE NOTICE TO PROCEED IS WITHHELD WITHOUT CAUSE FOR AN UNREASONABLE PERIOD, ROSS ENGINEERING CO., INC. V. UNITED STATES, 92 CT. CL. 253, A CONTRACTOR MAY NOT RECOVER MOBILIZATION LOSSES SUSTAINED BY REASON OF THE GOVERNMENT'S DELAY IN ISSUANCE OF A NOTICE TO PROCEED. MICHAEL H. PARIS V. UNITED STATES, 120 CT. CL. 100. SEE ALSO WARREN BROS. ROADS CO. V. UNITED STATES, 123 CT. CL. 48, 105 F. SUPP. 826. S AND E WAS AN EXPERIENCED CONTRACTOR ON GOVERNMENT CONSTRUCTION WORK. (SEE TRANSCRIPT P. 271 ET SEQ.) IN VIEW OF THIS FACT IT DOES NOT SEEM LIKELY THAT S AND E WOULD HAVE RUN THE RISK OF MOBILIZING PRIOR TO RECEIPT OF A NOTICE TO PROCEED. FACT, ACCORDING TO MR. NITZMAN, THE CONTRACTING OFFICER, THE VERY PURPOSE OF THE MEMORANDUM OF UNDERSTANDING WAS TO PERMIT S AND E TO BEGIN MOBILIZING MEN, EQUIPMENT AND MATERIALS BEFORE COMPLETE ACCESS COULD BE GIVEN TO S AND E. OTHERWISE, THE GOVERNMENT COULD PROPERLY HAVE WAIVED UNTIL AUGUST 19 TO AWARD THE CONTRACT AND THEN HAVE GIVEN A NOTICE TO PROCEED WITHIN A REASONABLE TIME THEREAFTER. ON PAGE 1272 ET SEQ. OF THE TRANSCRIPT MR. NITZMAN IN DESCRIBING THE EVENTS AND CONSIDERATIONS LEADING UP TO THE MEMORANDUM OF UNDERSTANDING STATED:

THE WITNESS. AND AS I WOULD EXPECT, I BELIEVE MR. ELDER CALLED MR. ANDERSON SEVERAL TIMES TO ASK WHAT THE STATUS WAS. AND MR. ANDERSON, IN EFFECT, TOLD HIM THE AWARD WAS BEING HELD UP FOR--- DON-T THINK HE GAVE TOO MANY DEFINITE REASONS BECAUSE WE WEREN-T SURE OURSELVES.

IN THE MEANTIME, WE REALIZED THAT TECHNICALLY, WE HAD A BID WHICH WAS GOOD FOR 60 DAYS BECAUSE ON THE BID FORM ITSELF, I BELIEVE, THERE ARE WORDS SOMETHING TO THE EFFECT THAT THIS BID IS GOOD FOR 60 DAYS UNLESS OTHERWISE INDICATED. AND IN THIS CASE, THERE WAS NOTHING INDICATED.

IN THE LAST WEEK IN JULY, I BELIEVE I CALLED--- I THINK IT WAS MR. ELDER.

BY MR. RHODES:

Q. WHO?

A. MR. ELDER, I BELIEVE. I WASN-T SURE WHETHER MR. ESTES OR MR. ELDER. I THINK IT WAS---

Q. YOU CALLED MR. ESTES OR MR. ELDER?

A. YES.

Q. ALL RIGHT, GO ON.

A. I SUGGESTED IT WOULD BE A GOOD IDEA FOR HIM OR SOMEBODY FROM THE CONTRACTOR TO COME UP AND VISIT US TO DISCUSS THE POSSIBILITY OF EITHER US WITHHOLDING AN AWARD UNTIL THE VERY LAST DAY OF THE 60-DAY PERIOD, SOMEWHAT SOONER IF OUR PROBLEM WERE RESOLVED, OR POSSIBLY AWARDING IT AT AN EARLIER TIME BEFORE THE CONTRACTIVE (SIC) WORK, THE FOUNDATION, WAS COMPLETELY SETTLED, THE REASON FOR IT BEING THAT THIS WOULD GIVE AN OPPORTUNITY FOR THE INITIAL PHASE OF THE WORK WHICH IS PRIMARILY ONE OF THE ORGANIZATION AND PROCUREMENT TO GET STARTED--- ESPECIALLY THE PROCUREMENT ASPECT.

THERE WERE ADVANTAGES, OF COURSE, TO BOTH OF US. TO S AND E, THE ADVANTAGE WAS TO MINIMIZE THE WINTER IMPACT. TO US, THERE WAS AN ADVANTAGE OF GETTING THE JOB STARTED SOONER AND ITS ULTIMATE COMPLETION SOONER. BUT THERE WAS A CERTAIN RISK INVOLVED TO US, TOO, ON THAT BASIS, IF THE CORRECTIVE ACTION COULDN-T BE COMPLETELY TAKEN CARE OF. BUT THIS WAS A RISK AT THAT TIME WE DIDN-T THINK WAS TOO GREAT BECAUSE IT LOOKED LIKE IT WAS JUST A QUESTION OF TIME BEFORE THE CORRECTION WAS COMPLETED.

WELL, MR. ELDER CAME UP ON AUGUST 2ND. WE DISCUSSED THIS AND SOME OTHER THINGS * * *

WE ENDED UP IN AGREEMENT WHICH WAS REFLECTED IN A STATEMENT WHICH WE AT THAT TIME LABELED AND SINCE HAVE REFERRED TO AS A MEMORANDUM OF UNDERSTANDING, BOTH PARTIES OF US REALIZING, AND WE--- I THINK WE INCLUDED --- I KNOW WE INCLUDED--- SUCH A STATEMENT ON THE END OF THE MEMORANDUM OF UNDERSTANDING THAT NATURALLY SUCH A DOCUMENT COULD NOT WAIVE OR CHANGE ANY OF THE CONTRACT TERMS, CONDITIONS, RESPONSIBILITIES, AND SO FORTH.

IN AN ENSUING DISCUSSION THE HEARING EXAMINER, APPARENTLY WITH REFERENCE TO THE CONTRACTING OFFICER'S TELEGRAM OF AUGUST 18 TO S AND E DESIGNATING CERTAIN AREAS AS AVAILABLE, ASKED THE CONTRACTING OFFICER HOW HE ARRIVED AT A SPECIFIC AREA IN GRANTING S AND E ACCESS TO THE BASIN. THE CONTRACTING OFFICER RESPONDED AS FOLLOWS (P. 1285, TRANSCRIPT):

THE WITNESS. THIS WAS THE AREA WHICH THERE WAS NO QUESTION ABOUT ANY SINGLE OCCUPANCY. THE OTHER AREAS WERE ALMOST FINISHED, BUT THEY WERE ANXIOUS TO GET AREAS WHICH THERE WAS NO PARTIAL OCCUPANCY.

SO IN ORDER TO PERMIT THE START OF PROCUREMENT, OF ORGANIZATION AND SO FORTH, WHICH IS OBVIOUSLY NECESSARY TO IMPLEMENT BY AN ISSUANCE OF A NOTICE TO PROCEED, THIS WAS THE WAY WE WERE ABLE TO TAKE CARE OF THAT.

THE ENTIRE INTENT OF THIS MEMORANDUM OF UNDERSTANDING AND MEETING WAS TO PERMIT S AND E TO GET STARTED AS EARLY DURING THE SUMMER WEATHER AS POSSIBLE. WITHOUT A NOTICE TO PROCEED, I DON-T THINK IT WOULD BE POSSIBLE TO LEGALLY GO AHEAD WITH ANY OF THESE EXPENDITURES.

THE CONTRACTING OFFICER'S STATEMENTS WITH RESPECT TO THE BASIC PURPOSE AND INTENT OF THE MEMORANDUM OF UNDERSTANDING HAS NOT BEEN QUESTIONED. VIEW OF THE FACT THAT THE PARTIES APPARENTLY FELT IT NECESSARY TO EXECUTE SUCH AN INSTRUMENT SO THAT A NOTICE TO PROCEED COULD BE ISSUED AND S AND E WOULD BE JUSTIFIED IN INCURRING MOBILIZATION EXPENSES, AND SINCE THE MEMORANDUM DID NOT PROVIDE FOR ISSUANCE OF A NOTICE TO PROCEED UNTIL AUGUST 10, THE CONTENTION BY S AND E'S ATTORNEY THAT THE CONTRACTOR COULD HAVE MOBILIZED BY AUGUST 10 IF THE BASIN HAD BEEN AVAILABLE ON THAT DATE WOULD APPEAR TO BE CONTRADICTED BY THE ACTION OF THE PARTIES IN EXECUTING THE MEMORANDUM.

WE ALSO THINK IT SIGNIFICANT TO NOTE THAT IN ITS LETTER OF AUGUST 30, 1961, TO THE CONTRACTING OFFICER S AND E STATED INTER ALIA, THAT "WE ARE PROCEEDING WITH THE CONTRACT AS EXPEDITIOUSLY AS POSSIBLE TO FULFILL OUR TIME REQUIREMENTS IN ACCORDANCE WITH THE CONTRACT DOCUMENTS AND WITH THE NOTICE TO PROCEED DATED 10 AUGUST 1961.' IT SHOULD BE REMEMBERED THAT THIS LETTER FROM S AND E WAS IN RESPONSE TO THE CONTRACTING OFFICER'S LETTER OF AUGUST 22, 1961, WHICH ADVISED S AND E THAT HE CONSTRUED S AND E'S ACTION AS AN INTENTION TO BUILD UP A CASE FOR A CLAIM AGAINST THE GOVERNMENT FROM THE OUTSET OF THE CONTRACT AND THAT THE CONDUCT OF THE CONTRACT IN SUCH AN ATMOSPHERE WAS UNACCEPTABLE TO HIS OFFICE. THE CONTRACTING OFFICER'S LETTER ENDED WITH THE REQUEST THAT IF S AND E PREFERRED TO BE RELEASED FROM THE CONTRACT WITHOUT COST TO THE GOVERNMENT HIS OFFICE BE ADVISED PROMPTLY SO THAT OTHER ARRANGEMENTS COULD BE MADE. IN CONTEXT, THEREFORE, IT IS REASONABLE TO CONCLUDE THAT IN ITS LETTER OF AUGUST 30 S AND E ACKNOWLEDGED THAT IT HAD RECEIVED AN EFFECTIVE NOTICE TO PROCEED ON AUGUST 10 AND THAT THE CONTRACT PERFORMANCE PERIOD WOULD BE MEASURED FROM THE DATE OF THAT NOTICE. MOREOVER, PURSUANT TO GENERAL CONDITION GC-09 OF THE CONTRACT S AND E SUBMITTED A WORK OR PROGRESS SCHEDULE FOR COMPLETION OF THE WORK 180 DAYS AFTER AUGUST 10 WHICH WAS APPROVED ON SEPTEMBER 29, AND IT IS CLEAR FROM THE RECORD THAT THE WORK WAS UP TO SCHEDULE AS LATE AS OCTOBER 31. S AND E HAS NOT CONTENDED THAT IT ACCELERATED ITS WORK PRIOR TO OCTOBER 31 IN ORDER TO MAKE UP FOR ANY SO CALLED DELAY OR SUSPENSION DURING THE PERIOD AUGUST 10 TO SEPTEMBER 10. MUCH CONTROVERSY WAS GENERATED AT THE HEARING AS TO WHO ACTUALLY PREPARED THE VARIOUS PROGRESS SCHEDULES. HOWEVER, FROM THE PRESENT RECORD THERE CAN BE NO QUESTION BUT THAT THE ORIGINAL PROGRESS SCHEDULE WHICH WAS APPROVED ON SEPTEMBER 29 WAS PREPARED AND SUBMITTED BY MR. DEWITT OF S AND E. SEE DEWITT'S TESTIMONY, PAGE 1984 ET SEQ., TRANSCRIPT.

FINALLY, WE BELIEVE IT SIGNIFICANT TO POINT OUT THAT THE RECORD DOES NOT INDICATE THAT S AND E MADE ANY CLAIM FOR A TIME ADJUSTMENT BECAUSE OF SITE UNAVAILABILITY UNTIL JANUARY 4, 1962, DURING A MEETING ATTENDED BY REPRESENTATIVES OF S AND E AND THE GOVERNMENT. THE MINUTES OF THIS MEETING APPEAR IN S AND E EXHIBIT D. SEE ALSO, PAGES 1278-1280, TRANSCRIPT. BY THAT DATE THE SO CALLED ACCELERATION DIRECTIVE HAD BEEN ISSUED AND THE PARTIES WERE EMBROILED IN CONTROVERSY OVER BEEN ISSUED AND THE PARTIES WERE EMBROILED IN CONTROVERSY OVERWHETHER S AND E WAS BEHIND SCHEDULE ON DECEMBER 7, 1961, WHEN THE DIRECTIVE WAS ISSUED. S AND E OFFERED NO EXPLANATION OF WHY IT WAITED APPROXIMATELY 4 MONTHS AFTER THE COMPLAINED OF EVENTS OCCURRED BEFORE FILING A CLAIM FOR A TIME EXTENSION ON THIS PARTICULAR CLAIM. AS NOTED ABOVE, IN REGARD TO AN ABSENCE OF PROTEST ON SITE UNAVAILABILITY BY S AND E DURING THE WEEKLY CONSTRUCTION MEETINGS, IT IS HARDLY CREDIBLE THAT HAD S AND E ACTUALLY BEEN OBSTRUCTED OR DELAYED BY THE REMEDIAL WORK IN THE BASIN IT WOULD HAVE WAITED APPROXIMATELY 4 MONTHS TO FILE A CLAIM FOR RELIEF.

WE TURN NOW TO THE CONTENTIONS MADE IN THE BRIEF OF JULY 20, 1966, THAT THE MATERIALS NECESSARY FOR THE WORK DURING THE PERIOD AUGUST 10 TO SEPTEMBER 10 WERE AVAILABLE AT THE SITE BY THE TIME THEY COULD BE USED AND THAT S AND E WAS MOBILIZED TO PERFORM EACH JOB AS SOON AS THE SITE WAS AVAILABLE TO DO THAT JOB. THE BRIEF OF JULY 20, 1966, STATES THAT THE FORMING LUMBER WAS ON HAND AUGUST 25, THE DAY AFTER THE PRIOR CONTRACTOR COMPLETED LAYING LEAN CONCRETE, AND THAT LUMBER, WHICH WAS NOT A DIFFICULT MATERIAL TO OBTAIN, PRESUMABLY COULD HAVE BEEN ON HAND EARLIER AS IT WAS OBTAINABLE LOCALLY, CITING MR. DEWITT'S TESTIMONY ON PAGE 105 OF THE TRANSCRIPT. THE BRIEF ALSO STATES THAT REINFORCING STEEL WAS ON HAND AS SOON AS IT COULD BE USED AND PRESUMABLY COULD HAVE BEEN OBTAINED EARLIER AS IT WAS OBTAINABLE LOCALLY AND INDEED SOME WAS ACTUALLY OBTAINED LOCALLY AS NEEDED, AGAIN CITING MR. DEWITT'S TESTIMONY ON PAGE 105 OF THE TRANSCRIPT. THE TESTIMONY REFERRED TO HAS BEEN QUOTED IN FULL PREVIOUSLY ABOVE.

THE S AND E DAILY LOGS OF THE WORK DO NOT SHOW RECEIPT OF ANY LUMBER UNTIL AUGUST 25. ON THAT DATE THE LOGS SHOWS THAT ONE LOT "2X LUMBER, R.R. CARLOAD" ARRIVED AT THE SITE. HOWEVER, THE SAME LOGS INDICATE THAT 3/4 INCH PLYWOOD FOR "FORM SHEETING" DID NOT ARRIVE UNTIL AUGUST 28 AT WHICH TIME A QUANTITY OF "4480 S.F.' ARRIVED. ON AUGUST 29 THE S AND E LOG CONTAINS THE ENTRY "UNLOADING CAR LOAD OF LUMBER," AND ON AUGUST 30 THE LOGS STATE "UNLOADING CAR OF LUMBER--- COMPLETED P.M.' THEREAFTER, ON SEPTEMBER 5, THE S AND E LOGS INDICATE THAT ONE "R.R. CAR, 3/4 PLYFORM, DALLAS O.' ARRIVED. THESE ENTRIES HARDLY SUPPORT THE FLAT ASSERTION IN THE JULY 20 BRIEF THAT "THE FORMING LUMBER WAS ON HAND AUGUST 25 * * *.' IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE FORMS WERE BUILT OUTSIDE OF THE BASIN, THEN TRANSPORTED DOWN INTO THE BASIN FOR ERECTION. SEE DEWITT'S TESTIMONY AT PAGE 113, TRANSCRIPT. WHETHER ANY OR ALL OF THE BASIN WAS UNAVAILABLE TO S AND E PRIOR TO AUGUST 25 WOULD THEREFORE NOT HAVE PRECLUDED S AND E FROM DELIVERING ALL TYPES OF FORM LUMBER TO THE JOB SITE AND COMMENCING FORM FABRICATION AT ANY TIME AFTER AUGUST 10.

WITH RESPECT TO THE REINFORCING BARS (REBAR) IT WILL BE RECALLED THAT COMMANDER ANDERSON'S TESTIMONY, WHICH IS QUOTED AT LENGTH ABOVE, WAS TO THE EFFECT THAT THE FIRST LOAD OF REINFORCING STEEL ARRIVED ON SEPTEMBER 7 AND THIS REINFORCING STEEL CONSISTED OF LARGE 18S AND 12S BARS. HE STATED THAT THESE LARGE BARS ARE NOT NORMALLY STOCKED AND CANNOT BE PURCHASED LOCALLY SINCE THEY REQUIRE A SPECIAL ROLL OUT OF A MILL AND A MILL MAY ONLY ROLL THOSE 1 WEEK OUT OF A MONTH. COMMANDER ANDERSON FURTHER TESTIFIED THAT THE DAILY LOGS INDICATED THAT S AND E BEGAN PLACING THESE LARGE REINFORCING BARS IN THE FORMS ON SEPTEMBER 11 AND THAT HE COULD SEE NO REASON WHY THIS COULD NOT HAVE BEEN COMMENCED ON SEPTEMBER 8 SINCE THE FORMS WERE READY TO RECEIVE IT AND THE CONDITION OF THE FORMS HAD NOT CHANGED BETWEEN SEPTEMBER 8 AND SEPTEMBER 11. COMMANDER ANDERSON FURTHER TESTIFIED THAT S AND E HAD TO HAVE WHAT HE CALLED "TEMPERATURE STEEL" OR "NO. 11 BARS," WHICH WERE "JUST STRAIGHT BARS BUT FOR A CERTAIN LENGTH," AND THEY HAD NOT ARRIVED ON THE SITE WHEN THE LARGE BARS WERE DELIVERED, SO S AND E PURCHASED A SMALL AMOUNT LOCALLY AND THESE BARS ARRIVED ON SEPTEMBER 14. THESE WERE PURCHASED LOCALLY HE STATED IN ORDER TO "CLOSE UP THE FIRST FEW FORMS TO EXPEDITE THE FIRST POUR.' FINALLY, COMMANDER ANDERSON TESTIFIED THAT "THIS BIGGER SHIPMENT OF REINFORCING STEEL ARRIVED ON MONDAY, THE 18TH OF SEPTEMBER, FROM THE FABRICATOR UP IN PORTLAND, OREGON" AND THIS SHIPMENT "CONTAINED THE TEMPERATURE STEEL AND ALSO THE DOWELS WHICH WERE TO PROTRUDE UP THROUGH THE TOP OF THE POURS INTO THE BOTTOM OF THE COUNTERFORTS.' THE FIRST CONCRETE POUR WAS MADE ON SEPTEMBER 21.

THE DAILY LOGS OF THE WORK FULLY CONFIRM ANDERSON'S TESTIMONY. THE S AND E LOG FOR SEPTEMBER 6 STATES THAT "3 CARS OF NO. 18 AND NO. 14, 183.54 TON REINFORCING" ARRIVED FROM "GILMORE-SKOUBYE.' THE G AND R LOGS INDICATE THAT "3 CAR LOADS OF REBAR 180 TONS" ARRIVED ON SEPTEMBER 7. THE G AND R LOG FOR SEPTEMBER 7 ALSO CARRIES THE REMARK: "DID NOT RECEIVE THE STARTING TYPE OF REBAR.' AT THIS POINT, IT WOULD BE REVEALING TO QUOTE A PORTION OF THE TRANSCRIPT WHICH RECORDS THE TESTIMONY OF MR. CHARLES JARMAN, WHO WAS S AND E'S STEEL CONTRACTOR ON THE JOB AND TESTIFIED IN BEHALF OF S AND E. UNDER CROSS EXAMINATION (PP. 468-469) MR. JARMAN TESTIFIED AS FOLLOWS:

Q. WAS THIS REBAR WE-RE TALKING ABOUT---

A. REBAR.

Q. A SPECIALLY FABRICATED REBAR?

A. YES.

Q. WAS ALL THE REBAR YOU USED SPECIALLY FABRICATED?

A. YES.

Q. NONE COULD BE PURCHASED LOCALLY?

A. WE HAD TO PURCHASE SOME LOCALLY. THERE IS TIMES WHEN HE HAD TO BUY A FEW BARS LOCALLY; I REMEMBER ONE TIME THERE WAS AROUND 2 OR 3 TON OF INCH- ROUND BARS THAT WE HAD TO BUY LOCALLY.

Q. WAS THAT SPECIALLY FABRICATED?

A. IT WASN-T BENT, IT WAS JUST STRAIGHT STUFF, STEEL, CUT INTO SHEETS.

Q. WAS ALL THE REST OF IT SPECIALLY FABRICATED REBAR?

A. YES.

Q. YOU ARE SURE OF THAT?

A. YES, SIR, IT WAS ALL. ON REDIRECT EXAMINATION (P. 471 ET SEQ., TRANSCRIPT) MR. JARMAN TESTIFIED AS FOLLOWS:

Q. MR. JARMAN, WHO FURNISHED THE REBAR?

A. GILMORE-SKOUBY OUT OF OREGON, COME MOSTLY OUT OF OREGON MILL. COMPARE THE ENTRY FROM THE S AND E DAILY LOG FOR SEPTEMBER 6 ABOVE.

Q. DID THEY SUPPLY IT TO S AND E?

A. YES.

Q. IT WAS S AND E CONTRACTORS, THEN, THAT FURNISHED THE REBAR TO YOU?

A. RIGHT.

Q. MR. JARMAN, YOU USED THE TERM "FABRICATED STEEL BARS; " WILL YOU DEFINE FOR US WHAT THOSE ARE?

A. THEY ARE BENT, SOMETIMES INTO PECULIAR SHAPES, TO REINFORCE THE CONCRETE.

Q. MAY THOSE BARS BE BENT EITHER IN THE SHOP OR ON THE JOB?

A. IF THE JOB IS BIG ENOUGH YOU CAN FABRICATE IT ON THE JOB BUT THIS JOB WASN-T BIG ENOUGH. YOU MOVE THE BENDER AND THE SHEARS RIGHT ON THE JOB. YOU HAVE TO HAVE AT LEAST 1000 TONS OR MORE, DEPENDING ON THE KIND OF FABRICATION BEFORE IT'S WORTHWHILE.

THE G AND R LOG FOR SEPTEMBER 11 STATES "STARTED PLACING SOME REBAR IN THE BASIN.' FOR SEPTEMBER 13 THE G AND R LOG CONTAINS THE ENTRY: "NO TEMPERATURE STEEL ON THE JOB AS YET FOR COLUMN LINE FOOTING POURS.' FOR SEPTEMBER 14 THE G AND R LOG STATES: "A SMALL AMOUNT OF TEMPERATURE STEEL ARRIVED ON JOB, THIS WAS A LOCAL PURCHASE.' (COMPARE COMMANDER ANDERSON'S TESTIMONY ABOVE.) APPARENTLY THIS LOCAL PURCHASE OF TEMPERATURE STEEL WAS NOT OF A LARGE ENOUGH QUANTITY TO KEEP THE JOB MOVING BECAUSE THE G AND R LOG FOR THE VERY NEXT DAY, SEPTEMBER 15, UNDER A COLUMN ENTITLED "DELAYS" APPEARS THE FOLLOWING REMARK: "NO TEMPERATURE STEEL ON JOB.' THIS DELAY IS ALSO CONFIRMED BY THE S AND E LOG FOR SEPTEMBER 15 WHICH STATES: "JARMAN--- NO PROGRESS--- NO REBAR.' ON SEPTEMBER 18, AS COMMANDER ANDERSON TESTIFIED, ONE CAR OF REBAR ARRIVED. THE S AND E LOG FOR THAT DATE STATES THAT "1 CAR RE-STEEL * * * COUNTERFORT SLAB STEEL" ARRIVED FROM "GILMORE--- SKOUBY.'

ON THE BASIS OF DATA IN THE DAILY WORK LOGS, WHICH NEITHER PARTY HAS EVER CHALLENGED AS BEING INACCURATE, IT CAN HARDLY BE SAID THAT "REINFORCING STEEL WAS ON HAND AS SOON AS IT COULD BE USED" OR THAT IT "COULD HAVE BEEN OBTAINED EARLIER AS IT WAS OBTAINABLE LOCALLY.' S AND E'S OWN WITNESS, MR. JARMAN, IMPEACHED THIS LATTER CONTENTION, AND THE RECORD ESTABLISHES THAT THE SMALL AMOUNT OF TEMPERATURE STEEL WHICH WAS ACTUALLY PURCHASED LOCALLY WAS NOT ENOUGH TO KEEP THE JOB MOVING FOR MORE THAN 1 DAY, AND A DELAY OCCURRED FOR WANT OF IT THE NEXT DAY.

ONE OTHER ITEM OF EVIDENCE IN THE RECORD IS HIGHLY SIGNIFICANT INREGARD TO THE STATUS OF S AND E'S MOBILIZATION DURING THE PERIOD AUGUST 10 TO SEPTEMBER 10. THIS MATTER HAS TO DO WITH THE READINESS OF S AND E'S EQUIPMENT FOR MAKING CONCRETE. IN THIS CONNECTION, THE HEARING EXAMINER FOUND (P. 34 OF HIS DECISION):

* * * MR. BOONE, WHO WAS ASSISTANT PROJECT MANAGER FOR S AND E, STATED THAT IF IT HAD BEEN POSSIBLE FOR HIM TO OPERATE FREELY IN ALL AREAS OF THE WESTERLY END OF THE BASIN, IT WOULD HAVE BEEN PRACTICAL FOR HIM TO HAVE MADE CERTAIN BASIN SLABS BETWEEN AUGUST 10 AND SEPTEMBER 10. IT SEEMS REASONABLE THAT HE COULD HAVE DONE THIS. IT IS A COMPARATIVELY SIMPLE OPERATION. THE EQUIPMENT FOR MAKING CONCRETE WAS AT HAND. IN FACT, THE EVIDENCE SHOWS THAT DURING THIS PERIOD S AND E FURNISHED CONCRETE FROM ITS MIXING MACHINES TO NELSON BROS. FOR ITS WORK. A CRANE FOR POURING COULD HAVE BEEN RENTED.

THERE IS NO SUBSTANTIAL EVIDENCE TO SUPPORT THE EXAMINER'S FINDING THAT THE EQUIPMENT FOR MAKING CONCRETE WAS AT HAND DURING THE PERIOD AUGUST 10 TO SEPTEMBER 10. ON THE CONTRARY, S AND E'S OWN EVIDENCE, ITS DAILY WORK LOGS, SHOW THAT S AND E'S CONCRETE SUBCONTRACTOR, TITUS HARP, WAS IN THE PROCESS OF READYING THE BATCH PLANT UP TO THE DATE OF THE FIRST POUR WHICH OCCURRED ON SEPTEMBER 21. THE AVAILABLE EVIDENCE IN THE RECORD ON THIS MATTER MAY BE SUMMARIZED AS FOLLOWS. DURING CROSS-EXAMINATION COMMANDER ANDERSON WAS ASKED (PP. 1976-1977, TRANSCRIPT):

Q. MR. ANDERSON, ISN-T IT TRUE THAT AS OF THE DATE YOU ARRIVED ON THE JOB, AUGUST 18, THE CONTRACTOR HAD ON THE JOB CITE (SIC) ALL OF THE EQUIPMENT HE NEEDED FOR HIS CONCRETE OPERATIONS?

A. NO.

Q. OUTSIDE OF A CRANE THAT WAS RENTED AND AVAILABLE, WASN-T IT ALL THERE?

A. HE DIDN-T HAVE THE BATCH PLANT?

Q. WASN-T THE BATCH PLANT IN EXISTENCE AND HAD ALREADY FURNISHED CONCRETE FOR SOME 10 OR 15 THOUSAND YARDS FOR THE NELSON CONTRACT?

A. YES, IT WAS THERE, BUT NEGOTIATIONS WERE IN PROGRESS WITH MR. SIMS AND THIS DIDN-T GO THROUGH AND EVENTUALLY MR. HARP WAS HIRED TO DO THE CONCRETE WORK AND HE BROUGHT IN A BIGGER SILO AND I THINK THERE WERE OTHER MINOR MODIFICATIONS THAT WERE MADE TO (SIC) CONCRETE BATCH PLANT IN THIS SWITCHOVER FROM SIMS TO HARP.

MR. HUDSON. MR. EXAMINER, I THINK THIS IS A GOOD TIME TO BREAK FOR LUNCH. THE FOLLOWING RELEVANT EXCERPTS ARE TAKEN FROM THE S AND E DAILY LOGS AND FROM THE MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS WHERE INDICATED:

AUGUST 21--- RECEIVED "1 LIMA CRANE" FROM "DALLAS YARD VIA R.R. W/4 CONC. BUCKETS, 1 CLAM BUCKET AND CRANE EQUIP.'

AUGUST 22--- SIMMS POURED 15 C.Y. FINISHED FOR TEMPORARY OFFICE (1500/CY IN PLACE).

AUGUST 30--- (MINUTES OF WEEKLY MEETING.) THE CONTRACTOR'S CONCRETE BATCH PLANT IS PRESENTLY PARTIALLY LOCATED OVER A TEE ON AN EXISTING 10 INCH FIRE MAIN AT WHICH POINT A TIE-IN MUST BE MADE. THE CONTRACTOR STATED THAT THIS CONFLICT WILL BE RESOLVED BY REMOVING THE SKIP FROM THE BATCH PLANT AND MAKING THE TIE-IN OVER SOME WEEK END.

SEPTEMBER 6--- (MINUTES OF WEEKLY MEETING.) THE CONTRACTOR INDICATED THAT IT WAS NOT HIS INTENTION TO UTILIZE THE CONCRETE BATCH PLANT PRESENTLY OCCUPYING THE WORK AREA.

SEPTEMBER 12--- TITUS-HARP--- BEGAN EXCAV. FOR STEAM LINES AGGRE. BINS

SEPTEMBER 13--- TITUS-HARP--- EXCAV. FOR STEAM PIPE-REC-D 350 BBL. SILO

SEPTEMBER 14--- TITUS-HARP--- INSTALLING BATCH PLANT AND AGGRE. BINS. INSTALLED STEAM LINES AGGRE. BINS.

SEPTEMBER 15--- TITUS-HARP--- INSTALLING BATCH PLANT AND AGGRE. BINS.

SEPTEMBER 18--- RECEIVED "77 TON SAND" FROM "FERGUSON-CONC. MAT L.'"144 (TON) GRAVEL" FROM ,/FERGUSON/--- " (CONC. MAT-L). "1 TANK CEMENT.' "TITUS-HARP--- SETTING UP BATCH PLANT.'

SEPTEMBER 19--- RECEIVED "21 TON 3/4 INCH GRAVEL" FROM "FERGUSON CONC. AGGRE.'"17-1/2 (TON) 1-1 1/2 INCH (GRAVEL)" FROM "/FERGUSON) (CON. AGGRE)" "TITUS-HARP--- READYING BATCH PLANT FOR R.'

SEPTEMBER 20--- TITUS-HARP--- READYING PLANT FOR POUR TOMORROW

SEPTEMBER 21--- COMPLETED POUR--- G. F. SLAB,"D" LINE NORTH. HARP BATCHING CONC.

THE ABOVE ENTRIES ARE THE ONLY ONES IN THE S AND E LOGS WHICH HAVE A BEARING ON THE MOBILIZATION STATUS OF THE BATCH PLANT DURING THE PERIOD IN QUESTION. WHILE LESS DETAILED ON THIS PARTICULAR ITEM, THE G AND R LOGS ARE IN AGREEMENT WITH THE ABOVE ENTRIES. UNFORTUNATELY THE RECORD IS NOT COMPLETE ON THE IDENTITY OF MR.'SIMS" OR "SIMMS.' NOR IS IT COMPLETE ON THE QUESTION OF WHO OWNED THE EXISTING BATCH PLANT WHICH WAS APPARENTLY ON THE SITE. THE CONTRACT HOWEVER (T.P.-06) IMPOSED UPON THE CONTRACTOR THE OBLIGATION TO FURNISH "ALL LABOR, MATERIALS, EQUIPMENT AND SERVICES AND PLACE ALL CONCRETE * * *.' IN ANY EVENT, IT IS KNOWN THAT ON SEPTEMBER 6 S AND E INFORMED THE GOVERNMENT THAT IT DID NOT INTEND TO UTILIZE THE CONCRETE BATCH PLANT THEN OCCUPYING THE WORK AREA; THAT A "350 BBL. SILO" WAS RECEIVED ON SEPTEMBER 13; THAT SAND, GRAVEL, CEMENT AND AGGREGATES WERE RECEIVED ON SEPTEMBER 18 AND 19; AND THAT UP TO THE DATE OF THE FIRST POUR ON SEPTEMBER 21 S AND E'S CONCRETE SUBCONTRACTOR WAS IN THE PROCESS OF READYING THE BATCH PLANT FOR USE. ON THIS RECORD, THERE IS NO SUBSTANTIAL EVIDENCE TO SUPPORT THE EXAMINER'S FINDING THAT DURING THE PERIOD AUGUST 10 TO SEPTEMBER 10 "THE EQUIPMENT FOR MAKING CONCRETE WAS AT HAND.' MOREOVER THE RECORD DOES NOT SHOW THAT "DURING THIS PERIOD S AND E FURNISHED CONCRETE FROM ITS MIXING MACHINES TO NELSON BROS. FOR ITS WORK.' WE HAVE BEEN UNABLE TO LOCATE ANY EVIDENCE IN THE RECORD TO SUPPORT THIS FINDING. THE ONLY EVIDENCE TOUCHING ON THIS QUESTION WOULD INFERENTIALLY, AT LEAST, SUPPORT AN OPPOSITE CONCLUSION. ON PAGE 1419 OF THE TRANSCRIPT IN DESCRIBING S AND E'S MOBILIZATION PROCESS COMMANDER ANDERSON IS RECORDED AS STATING:

NOW, ON THE 12TH OF SEPTEMBER, THE BATCH PLANT WAS SET UP ON THE SITE. THIS WAS THE PLANT WHICH WAS USED TO MIX THE CONCRETE THERE. THERE WAS A BATCH PLANT THERE THAT NELSON HAD UTILIZED, BUT THEY CHANGED OUT THE SILO. A PORTION OF IT REMAINED THERE, BUT THE SILO WAS CHANGED OUT. SEE, ALSO, THE TESTIMONY OF COMMANDER ANDERSON DURING CROSS-EXAMINATION QUOTED ABOVE IN WHICH HE WAS ASKED WHETHER THE BATCH PLANT WAS IN EXISTENCE WHEN HE (ANDERSON) ARRIVED AT THE SITE. COMMANDER ANDERSON'S ANSWER APPEARS TO INDICATE THAT THIS PLANT WAS EITHER OWNED OR OPERATED BY MR. SIMS WHO APPARENTLY WAS NOT A SUBCONTRACTOR OF S AND E SINCE ANDERSON'S RESPONSE WAS THAT NEGOTIATIONS WITH MR. SIMS "DIDN-T GO THROUGH AND EVENTUALLY MR. HARP WAS HIRED TO DO THE CONCRETE WORK.' IN ANY EVENT THERE IS NO SHOWING IN THE RECORD THAT THIS EXISTING BATCH PLANT EITHER BELONGED OR WAS LEASED TO S AND E. PERHAPS S AND E LATER WAS GIVEN AN OPTION TO USE THIS OR SOME OTHER BATCH PLANT (SEE MINUTES FOR WEEKLY MEETING OF SEPTEMBER 6, ABOVE), BUT AT WHAT POINT IN TIME THIS OPTION, IF THAT IS WHAT IT WAS, COULD BE EXERCISED IS NOT KNOWN. WHAT IS KNOWN IS THAT FOR REASONS OF ITS OWN S AND E'S BATCH PLANT WAS BEING READIED FOR OPERATION RIGHT UP TO THE DAY BEFORE THE FIRST CONCRETE POUR WAS MADE, AND THERE HAS BEEN NO CONTENTION OR SHOWING MADE THAT BASIN SITE AVAILABILITY WAS NECESSARY BEFORE THIS PLANT COULD BE PUT INTO OPERATION.

AS PREVIOUSLY INDICATED, THE GOVERNMENT TOOK THE POSITION BEFORE THE EXAMINER THAT S AND E WAS IN THE PROCESS OF MOBILIZING AND WAS NOT IN A POSITION TO UTILIZE THE BASIN FOR MORE WORK THAN IT ACTUALLY PERFORMED DURING THE PERIOD AUGUST 10 TO SEPTEMBER 10. IN REGARD TO THIS ASSERTION, THE EXAMINER STATED (P. 35 OF HIS DECISION):

* * * OF COURSE THIS IS SPECULATIVE. MR. BOONE SAID THAT HAD THE FLOOR BEEN AVAILABLE, HE COULD HAVE LAID SEVERAL BASIN SLABS WHICH WOULD HAVE HELPED A LOT AS THINGS WORKED OUT. IN ANY EVENT THE CONTENTION GOES TO THE QUANTUM OF DAMAGES IN AN ACTION FOR BREACH. IT HAS NO BEARING ON THE OPERATION OF THE SUSPENSION CLAUSE FOR THE REASON STATED. THE EXAMINER'S RULING ON THE OPERATION OF THE SUSPENSION CLAUSE WAS REVERSED BY THE COMMISSION ON REVIEW. IT IS OUR OPINION THAT THE COMMISSION'S VIEW IS CORRECT, SINCE THE CLAUSE CLEARLY CONTEMPLATES THAT TIME AND PRICE ADJUSTMENTS CAN BE GRANTED ONLY WHEN THE SUSPENSION "UNREASONABLY DELAYS" THE PROGRESS OF THE WORK AND CAUSES ADDITIONAL EXPENSE OR LOSS THAT IS NOT DUE TO THE "FAULT OR NEGLIGENCE" OF THE CONTRACTOR. IN THIS CASE, THE EVIDENCE OF RECORD SHOWS THAT S AND E HAD ADEQUATE ACCESS TO THE BASIN SITE AT THE VERY EARLIEST MOMENT IT COULD BE UTILIZED, CONSISTENT WITH ITS MOBILIZATION OF MEN, PLANT AND EQUIPMENT AND THE DELIVERY OF NECESSARY CONSTRUCTION MATERIALS. WE THINK THAT THE RECORD MORE THAN AMPLY SUPPORTS THE GOVERNMENT'S POSITION, AND IF "SPECULATION" ENTERS INTO THE PICTURE AT ALL IT ATTACHES ITSELF TO MR. BOONE'S ASSERTION THAT SEVERAL BASIN SLABS COULD HAVE BEEN LAID PRIOR TO SEPTEMBER 10TH HAD THE FLOOR BEEN AVAILABLE. OBVIOUSLY, THIS COULD NOT HAVE BEEN DONE WHEN NECESSARY MATERIALS WERE NOT EVEN ON THE SITE PRIOR TO THAT DATE AND THERE HAS BEEN NO SHOWING THAT SUCH MATERIALS EITHER COULD OR WOULD HAVE BEEN THERE HAD UNRESTRICTED ACCESS TO THE BASIN BEEN GIVEN EARLIER. THE BURDEN RESTED WITH S AND E TO PROVE THE ELEMENTS OF ITS CLAIM. S AND E FAILED TO MEET THAT BURDEN EVEN TO THE EXTENT OF PROVING ONE DAY'S SUSPENSION OF WORK PRIOR TO SEPTEMBER 10TH. ACCORDINGLY, THE DECISION OF THE EXAMINER, AS MODIFIED ON REVIEW BY THE COMMISSION, IS NOT IN OUR OPINION SUPPORTED BY SUBSTANTIAL EVIDENCE AND THEREFORE MAY NOT BE REGARDED AS FINAL.

CHANGE ORDER NO. 2

THIS CLAIM IS FOR A PRICE INCREASE AND TIME EXTENSION, OVER AND ABOVE THOSE SPECIFIED IN THE CHANGE ORDER ITSELF. THE BASIC FACTS GIVING RISE TO THE CLAIM ARE AS FOLLOWS:

ON SEPTEMBER 20, 1961, THE CONTRACTING OFFICER SUBMITTED ADDENDUM NO. 3 AND REQUESTED A PROPOSAL FROM S AND E. THE ADDENDUM CALLED FOR CHANGES IN THE FOUNDATIONS SO AS TO PROVIDE FOR CERTAIN CHAMBERS BETWEEN A NUMBER OF THE COUNTERFORTS. A PROPOSAL, WHICH INCLUDED A PRICE QUOTATION AND OTHER CONDITIONS, WAS SUBMITTED BY S AND E ON SEPTEMBER 27. THIS INITIAL PROPOSAL WAS NOT ACCEPTABLE TO THE GOVERNMENT AND AFTER SUBSEQUENT NEGOTIATIONS BETWEEN REPRESENTATIVES OF THE CONTRACTING PARTIES, S AND E SUBMITTED A REVISED PROPOSAL BY A LETTER DATED OCTOBER 2, 1961. THE REVISED PROPOSAL CALLED FOR A CONTRACT PRICE INCREASE OF $90,429, AN EXTENSION OF 30 DAYS IN THE FINAL COMPLETION DATE, AND VARIOUS EXTENSIONS OF THE INTERIM COMPLETION DATES. AN UNRESOLVED CLAIM OF THE CONTRACTOR RELATING TO REINFORCING STEEL WAS LEFT OPEN. ON OCTOBER 3, CHANGE ORDER NO. 2 WAS ISSUED, EMBODYING ALL THE SUBSTANTIAL TERMS OF THE REVISED PROPOSAL. THE UNRESOLVED QUESTION CONCERNING REINFORCING STEEL WAS RESOLVED WHEN ON OR ABOUT OCTOBER 22 S AND E WITHDREW ANY CLAIM FOR PRICE ADJUSTMENT ON THAT ACCOUNT. ON OCTOBER 27, THE CONTRACTING OFFICER SENT S AND E AMENDMENT NO. 1, WHICH WAS DESIGNED TO FORMALLY INCORPORATE INTO THE CONTRACT THE CHANGES EFFECTED BY THIS CHANGE AS WELL AS BY A PRIOR CHANGE ORDER, NO. 1, ISSUED AND SIGNED BY COMMANDER ANDERSON ON SEPTEMBER 22, AS TO WHICH NO CONTROVERSY HAS ARISEN. HOWEVER, THIS AMENDMENT WAS NEVER SIGNED BY THE CONTRACTOR AND THE ISSUES CONCERNING IT BECAME ONE OF THE PRIMARY DISPUTES IN THE CASE.

THE CONTRACTOR'S SUBSEQUENT CLAIM FOR A PRICE INCREASE AND TIME EXTENSION OVER AND ABOVE THOSE SPECIFIED IN CHANGE ORDER NO. 2 WAS DENIED BY THE CONTRACTING OFFICER, WHO HELD THAT THE ADJUSTMENTS ALLOWED IN THE CHANGE ORDER WERE EQUITABLE BOTH AS TO TIME AND AMOUNT. THE HEARING EXAMINER HELD THAT THE CONTRACTOR WAS NOT BOUND BY THE TERMS OF THE CHANGE ORDER, AND THAT THE CONTRACTOR SHOULD HAVE BEEN ALLOWED "AT LEAST 60 DAYS" AND MAY BE ENTITLED TO MORE. HE MADE NO DECISION AS TO PRICE EXCEPT TO INDICATE THAT THE AMOUNT ALLOWED WAS INADEQUATE. THE EXAMINER'S DECISION ON THIS CLAIM WAS NOT REVIEWED BY THE COMMISSION.

THE EXAMINER NOTED THAT ALTHOUGH THE WORK INVOLVED IN CHANGE ORDER NO. 2 HAD BEEN THE SUBJECT OF FREQUENT DISCUSSION BY THE PLANNERS IN WASHINGTON AND SCHENECTADY ALL DURING THE SUMMER, NO ONE IN THE GOVERNMENT ADVISED S AND E OF THE THINKING, EVEN THOUGH IT TOOK PLACE BEFORE THE AWARD. ,ALTHOUGH THERE WAS AN INKLING OF A CHANGE IN THE OFFING IN EARLY SEPTEMBER, FOR PRACTICAL PURPOSES ADDENDUM NO. 3 (CHANGE ORDER NO. 2) CAME FULL BLOWN FROM THE HEAD OF JOVE ON SEPTEMBER 20.' (P. 37, EXAMINER'S DECISION.)

IN FINDING THAT S AND E WAS NOT BOUND BY THE TERMS OF CHANGE ORDER NO. 2, THE EXAMINER REASONED AS FOLLOWS:

* * * THERE ARE MANY CASES DEALING WITH SITUATIONS IN WHICH PARTIES HAVE NEGOTIATED TO A PRELIMINARY CONCLUSION OF SUBSTANTIAL AGREEMENT WITH THE UNDERSTANDING THAT THE AGREEMENT WILL LATER BE FORMALLY DRAWN UP AND EXECUTED. THE RULE IS RATHER SIMPLE. IT IS PURELY A QUESTION OF WHEN THE PARTIES INTENDED TO BE BOUND UNDER ALL THE CIRCUMSTANCES OF THE CASE. THIS IS A QUESTION OF FACT WHICH IN A COURT IS NORMALLY SUBMITTED TO THE JURY" (CITING AUTHORITIES). IN THE INSTANT CASE SEVERAL FACTORS OF RECORD ARE DETERMINATIVE OF THE ISSUE---

(1) IN THE FIRST PLACE CLAUSE 3 OF THE CONTRACT VERY EXPRESSLY PROVIDES THAT ALL CHANGES SHALL BE FORMALLY INCORPORATED INTO THE CONTRACT BY AMENDMENT.

(2) THE LETTER OF OCTOBER 3 CONCLUDES WITH THE STATEMENT THAT THE AMENDMENT IS FORTHCOMING.

(3) IN SOME DETAIL THE AMENDMENT DIFFERED FROM THE LETTER.

(4) THE COURSE OF CONDUCT OF THE PARTIES SHOWS THAT IN ALL MAJOR MATTERS THE INSTRUMENTS INVOLVED WERE SIGNED BY THE CONTRACTING OFFICER AND THE PRESIDENT OR EXECUTIVE VICE-PRESIDENT OF S AND E, MR. ELDER. OF COURSE, THE ORIGINAL CONTRACT WAS SIGNED BY THE CONTRACTING OFFICER AND MR. ESTES AS PRESIDENT. THE MEMORANDUM OF UNDERSTANDING OF AUGUST 2 WAS SIGNED BY THE CONTRACTING OFFICER AND MR. ELDER, WHO FLEW BACK TO DALLAS AND DISCUSSED IT WITH MR. ESTES BEFORE SIGNING; THE NOTICE TO PROCEED WAS SIGNED BY THE CONTRACTING OFFICER. MR. ELDER ACKNOWLEDGED RECEIPT. MR. ELDER WAS THE NUMBER TWO MAN OF S AND E. HE IS NOW PRESIDENT.

(5) MOST IMPORTANT OF ALL, THE COURSE OF CONDUCT OF THE CONTRACTING OFFICER SHOWS THAT HE CONSIDERED THE EXECUTION OF THE AMENDMENT AS THE OPERATIVE ACT. HE HAD NOT SIGNED THE AMENDMENT WHEN HE SENT IT TO MR. ESTES ON OCTOBER 27 AND DID NOT SIGN IT WHEN IT WAS SENT BACK. NOVEMBER 22 AMENDMENT NO. 2 INCORPORATING CHANGE ORDER NO. 3 WAS SENT TO MR. ESTES. HE SIGNED IT ON NOVEMBER 29 WITH A TYPE-WRITTEN NOTE BESIDE HIS SIGNATURE--- "EXECUTION OF THIS AMENDMENT BY S AND CONTRACTORS DOES NOT ACKNOWLEDGE ACCEPTANCE OF TIME AND AMOUNT INCLUDED IN ABOVE FOR AMENDMENT NO. 1.' THE CONTRACTING OFFICER DID NOT SIGN AMENDMENT NO. 2 NOR HAS HE SIGNED ANY AMENDMENT. FINALLY AND ALMOST DETERMINATIVE, THE CONTRACTING OFFICER HAS NEVER MADE ANY PAYMENT WHATSOEVER FOR WORK ENTAILED BY CHANGE ORDER NO. 2 OR ANY OTHER CHANGE ORDER.

IN CONCLUSION IT IS FOUND AS A FACT THAT THE PARTIES DID NOT INTEND TO BE BOUND UNTIL THE FORMAL AMENDMENT WAS EXECUTED. IT FOLLOWS THAT CHANGE ORDER NO. 2 IS A UNILATERAL CHANGE ORDER WHICH UNDER ESTABLISHED PRINCIPLES IS OPEN TO ADJUSTMENT BOTH WITH RESPECT TO TIME AND AMOUNT OF PAYMENT.

WITH RESPECT TO THE ADJUSTMENT TO WHICH S AND E WAS ENTITLED, THE EXAMINER FIRST NOTED THAT CHANGE ORDER NO. 2 HAD A GREAT IMPACT ON THE WORK. HE STATED THAT "USING HINDSIGHT" THE WEATHER UP TO OCTOBER 27, THE DATE FOR THE FINAL WALL POURS, WAS GENERALLY SUITABLE FOR CONCRETE WORK. IN THAT CONNECTION HE NOTED THAT THE TEMPERATURES AVERAGED ABOVE 40 DEGREES AND THAT THERE WERE TWO THUNDERSTORMS AND A 3-INCH SNOW WHICH DID NOT STAY ON THE GROUND VERY LONG. "OTHERWISE THERE WAS LITTLE PRECIPITATION. THE CONCRETE WORK COULD HAVE BEEN DONE THEN. THUS, THE CONCLUSION SEEMS INESCAPABLE THAT IN A SINE QUA NON SENSE, MOST OF THE DELAY AND INCREASED COST WAS CAUSED BY CHANGE ORDER NO. 2. IT THREW THE WORK INTO THE WINTER MONTHS.'

THE EXAMINER ALSO STATED THAT A DETERMINATION OF WHAT SPECIFIC DELAYS AND EXPENSES COULD BE TRACED "DIRECTLY" TO THE ORDER UNDER A STRICT APPLICATION OF THE RULE IN HADLEY V. BAXENDAL, 9 EXCH. 345, WAS VERY DIFFICULT IF NOT IMPOSSIBLE UNDER THE CIRCUMSTANCES, SINCE THE CASE INVOLVED ,A CONCATENATION OF FACTORS, WITH A PLURALITY OF CAUSES BOTH CONCURRENT AND INTERVENING, INTERPLAYING THROUGHOUT THE LIFE OF THE UNDERTAKING; THE WEATHER; LACK OF STEAM, ETC., ALL PLAYED PART.' HE FOUND THAT A TIME REQUIREMENT OF MUCH MORE THAN THE 30 DAYS ALLOWED FLOWED "NATURALLY" FROM THE ORDER AND THAT AN EXTENSION OF AT LEAST 60 DAYS SHOULD HAVE BEEN GRANTED.

IN OUR CONSIDERED OPINION, THE FINDING OF THE EXAMINER ON THIS CLAIM, FOR THE REASONS SET FORTH BELOW, IS ERRONEOUS AS A MATTER OF LAW, AND IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

AT THE OUTSET AN OBSERVATION MADE BY THE EXAMINER IN HIS DECISION MERITS SPECIAL COMMENT. WE REFER TO THE EXAMINER'S STATEMENT CONCERNING THE FAILURE OF THE GOVERNMENT TO ADVISE S AND E OF THE CONTEMPLATED CHANGE PRIOR TO SEPTEMBER 20. THE OBSERVATION WAS NOT ESSENTIAL TO THE FINDING HE MADE RELATIVE TO THE BINDING NATURE OF CHANGE ORDER NO. 2, BUT IT APPEARS TO HAVE INFLUENCED THAT FINDING. IN REGARD TO THIS STATEMENT, WE NOTE THAT THE EXAMINER'S DECISION IS ABSOLUTELY DEVOID OF ANY DISCUSSION OF RELEVANT BACKGROUND FACTS RELATING TO THE ORIGIN OF, OR CONSIDERATIONS INVOLVED IN, THE ISSUANCE OF ADDENDUM NO. 3. THE RECORD SHOWS THAT AT THE TIME THE CONTRACT WAS AWARDED THE CHANGE INVOLVED IN ADDENDUM NO. 3 WAS STILL BEING STUDIED AND EVALUATED BY GOVERNMENT REPRESENTATIVES. (SEE THE TESTIMONY OF COMMANDER ANDERSON, P. 1244 ET SEQ., TRANSCRIPT; AND OF MR. NITZMAN, P. 1293 ET SEQ., TRANSCRIPT.) COMMANDER ANDERSON TESTIFIED THAT THE STUDY AND EVALUATION OF THE PROPOSED CHANGE WAS BEING PUSHED "REAL HARD" ON AN "OVERTIME BASIS.' (P. 1249, TRANSCRIPT.) ON THE OTHER HAND THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE GOVERNMENT WAS LAX IN THIS REGARD OR THAT THE GOVERNMENT FAILED TO ISSUE THE ADDENDUM AT THE EARLIEST PRACTICABLE TIME AFTER A FIRM DECISION HAD BEEN REACHED.

THE CONTRACT IMPOSED NO DUTY UPON THE GOVERNMENT TO ADVISE S AND E OF PRELIMINARY STUDIES ON CHANGES THAT MIGHT, OR MIGHT NOT, BE ADOPTED AND WE FAIL TO SEE HOW SUCH ADVICE, UNCERTAIN AS IT WOULD HAVE BEEN AT THAT TIME, WOULD HAVE BENEFITED S AND E. MOREOVER, THE EXAMINER'S STATEMENT APPEARS TO IGNORE THE CONTRACTUAL RIGHT OF THE GOVERNMENT TO MAKE CHANGES WITHIN THE GENERAL SCOPE OF THE CONTRACT AFTER AWARD. THE "CHANGES" CLAUSE WAS INCLUDED IN THE CONTRACT FOR THIS VERY PURPOSE, AND IT THEREFORE MUST BE CONSIDERED AS A RIGHT BARGAINED AND PAID FOR BY THE GOVERNMENT. IN ANY EVENT, CHANGE ORDER NO. 2 DID NOT COME "FULL BLOWN FROM THE HEAD OF JOVE ON SEPTEMBER 20," AS FOUND BY THE EXAMINER. MR. ELDER OF S AND E TESTIFIED (P. 669, TRANSCRIPT) THAT "WE HEARD OF THAT CHANGE IN MIDDLE AUGUST JUST AS, YOU MIGHT SAY, A JOB SITE RUMOR THAT A MAJOR STRUCTURAL CHANGE WAS IN PROGRESS.' MR. ELDER FURTHER TESTIFIED THAT STEEL DOWELS THAT WOULD LATER BE REQUIRED FOR THE WORK UNDER CHANGE ORDER NO. 2 WERE PLACED IN THE CONCRETE FORMS BY S AND E BEFORE CHANGE ORDER NO. 2 WAS EVEN ISSUED. SEE PAGE 670, TRANSCRIPT.

THE ESSENTIAL AND DETERMINATIVE FACTS, RELATING TO WHETHER THE TERMS OF CHANGE ORDER NO. 2 ARE BINDING ON S AND E, ARE NOT IN DISPUTE.

BY LETTER TO S AND E DATED SEPTEMBER 20, 1961, THE CONTRACTING OFFICER ENCLOSED THREE COPIES OF ADDENDUM NO. 3 AND REQUESTED THAT S AND E FURNISH, NOT LATER THAN SEPTEMBER 27, A QUOTATION FOR THE CHANGED WORK,"BASED ON NO TIME EXTENSION TO THE CONTRACT.' THE LETTER CAUTIONED S AND E THAT THE REQUEST FOR QUOTATION WAS NOT AN AUTHORIZATION TO PERFORM ANY OF THE WORK INCLUDED IN THE ADDENDUM OR TO SUSPEND ANY WORK THEN IN PROGRESS.

THE CONTRACTOR, BY LETTER DATED SEPTEMBER 27, FURNISHED A QUOTATION IN THE AMOUNT OF $145,704, WITH A COST BREAKDOWN SHOWING THE ITEMS OF COST WHICH MADE UP THAT FIGURE. THE LETTER ALSO STATED THAT IT WAS IMPOSSIBLE TO PERFORM THE WORK IN THE EXISTING CONTRACT SCHEDULE AND PROPOSED THAT THE ADDITIONAL TIME REQUIRED WOULD BE NEGOTIATED AT A LATER DATE. S AND E CONCLUDED WITH A STATEMENT THAT THE FOREGOING COST BREAKDOWN WAS BASED ON THE NET CHANGE TO THE ORIGINAL CONTRACT PLANS AND SPECIFICATIONS WITH NO CONSIDERATION GIVEN TO WORK IN PLACE, AND THAT ANY REMEDIAL WORK REQUIRED WOULD HAVE TO BE DETERMINED AFTER S AND E WAS ADVISED OF THE DATE TO PROCEED WITH THE CHANGE.

S AND E'S PROPOSAL WAS NOT ACCEPTABLE TO THE CONTRACTING OFFICER. THE PARTIES THEN ENTERED INTO NEGOTIATIONS LASTING THREE DAYS WHICH CULMINATED IN A WRITTEN PROPOSAL BY S AND E DATED OCTOBER 2, WITH AN ATTACHED COST BREAKDOWN. THE PROPOSAL WHICH WAS SIGNED BY MR. DEWITT READS AS FOLLOWS:

PLEASE REFERENCE YOUR ADDENDUM NO. 3, DATED SEPTEMBER 14, 1961, AND THE NEGOTIATIONS CONCERNING THIS ADDENDUM WHICH TOOK PLACE FROM SEPTEMBER 29TH THROUGH OCTOBER 2, 1961.

THE ENCLOSED COST BREAKDOWN IS IN ACCORDANCE WITH THE FINAL NEGOTIATIONS ON THIS ADDENDUM.

IT IS UNDERSTOOD THAT THE FOLLOWING CONDITIONS WERE AGREED ON IN CONNECTION WITH OUR NET INCREASED PRICE OF $90,429:

(1) THE INTERIM CONTRACT COMPLETION DATES AS SET FORTH IN PARAGRAPH SC-01 OF THE SPECIFICATIONS ARE EXTENDED AS FOLLOWS: ITEMS (B) 20 DAYS, (C) 4 WEST BAYS 20 DAYS, REMAINDER OF BUILDING 30 DAYS, (D) 30 DAYS, (E) 30 DAYS, (F) 20 DAYS, (G) 20 DAYS, (H) 30 DAYS, (I) 30 DAYS.

(2) THE PRIME CONTRACTOR'S MARK-UP PERCENTAGES ON SUB-CONTRACTORS' WORK OF 10 PERCENT FOR OVERHEAD, 5 PERCENT FOR PROFIT, AND 1 PERCENT FOR BOND WERE AGREED ON ONLY BECAUSE YOUR OFFICE HAD NOT HAD SUFFICIENT TIME TO APPRAISE OUR LETTER DATED 26 SEPTEMBER 1961 CONCERNING OUR JUSTIFICATION FOR HIGHER OVERHEAD PERCENTAGES. WE ANTICIPATE YOUR CONCURRING WITH OUR AUDITED PERCENTAGES AND APPLYING OUR REQUESTED PERCENTAGES ON FUTURE CHANGE ORDERS.

(3) ALL CHANGED REINFORCING STEEL FABRICATED ON OCTOBER 2, 1961 WILL BE PURCHASED SEPARATELY BY THE GOVERNMENT WITH THE PRICE TO BE DETERMINED AT A FUTURE DATE. THIS STEEL WILL BE DELIVERED TO THE SITE.

(4) THIS PRICE IS PREDICATED ON THE CAST IRON SLEEVES REMAINING 24 INCHES IN LENGTH AS PER THE ORIGINAL CONTRACT DRAWINGS.

YOUR EARLY APPROVAL OF THE FOREGOING AND ISSUANCE OF A CONTRACT MODIFICATION WILL BE APPRECIATED.

PURSUANT TO A SPECIFIC DELEGATION OF AUTHORITY FROM THE CONTRACTING OFFICER (P. 1294, TRANSCRIPT), COMMANDER ANDERSON ISSUED CHANGE ORDER NO. 2 DATED OCTOBER 3 WHICH READS AS FOLLOWS: IN ACCORDANCE WITH CLAUSE 3 OF THE ABOVE NUMBERED CONTRACT THE SPECIFICATIONS AND DRAWINGS ARE HEREBY CHANGED AS STATED IN THE ENCLOSED ADDENDUM NO. 3 DATED SEPTEMBER 14, 1961.

THIS CHANGE ORDER MAKES CERTAIN REVISIONS TO THE FOUNDATIONS OF THE TEST PLANT BUILDING.

YOU ARE HEREBY DIRECTED TO PROCEED WITH AND COMPLETE THE WORK AS PROVIDED BY THIS CHANGE. AS AGREED, TO COMPENSATE FOR THIS CHANGE THE CONTRACT PRICE WILL BE INCREASED IN THE AMOUNT OF $90,429.00 PLUS THE COST OF REINFORCING STEEL FABRICATED ON OCTOBER 2 AND 3, 1961 AND THE CONTRACT COMPLETION DATE IS EXTENDED BY 30 CALENDAR DAYS. THE INTERIM CONTRACT COMPLETION DATES AS DEFINED IN PARAGRAPH SC-01 OF THE SPECIFICATIONS ARE EXTENDED AS FOLLOWS. ITEMS (B) 20 DAYS, (C) 4 WEST BOYS (SIC) 20 DAYS, REMAINDER OF BUILDING 30 DAYS, (D) 30 DAYS, (E) 30 DAYS, (F) 20 DAYS, (G) 20 DAYS, (H) 30 DAYS, (I) 30 DAYS.

A CONTRACT MODIFICATION WILL BE EXECUTED TO FORMALIZE THIS CHANGE IN CONTRACT PRICE AND TIME.

COMMANDER ANDERSON DESCRIBED THE EVENTS WHICH TOOK PLACE AFTER ISSUANCE OF THE CHANGE ORDER IN REGARD TO THE UNRESOLVED QUESTION ON THE COST OF REINFORCING STEEL AS FOLLOWS (PP. 1448, 1449, TRANSCRIPT):

* * * THE WALL STEEL WAS CHANGED BY THE CHANGE ORDER AND I WENT TO PORTLAND OR TO VANCOUVER, WASHINGTON, WHICH IS ACROSS THE RIVER FROM PORTLAND, THE DAY THE CHANGE ORDER WAS ISSUED.

I WROTE THE CHANGE ORDER IN THE MORNING AND I IMMEDIATELY WENT INTO TOWN, GOT ON AN AIRPLANE AND I VISITED THE REINFORCING STEEL FABRICATING IN GILMORE SCOVILLE--- IN VANCOUVER, WASHINGTON, WAS LOCATED IN THE OLD KAISER SHIPYARD, AND THEY HAD THE STOP ORDER AND REINFORCING STEEL FABRICATION. THEY HAD STARTED THE REINFORCING STEEL FABRICATION FOR THE ORIGINAL WALLS ON THE 2ND OF OCTOBER, AND THEY HAD CUT PORTIONS OF THE FIRST POUR WHEN THE TELEPHONE CALL CAME IN SAYING STOP.

SO HERE IS THE AFTERNOON OF THE 3RD. WE WENT OUT AND WE COUNTED THE NUMBER OF BARS THAT THEY HAD CUT. I HAD A COPY OF THE SHOP DRAWINGS, THE NEW SHOP DRAWINGS FOR THE WALL STEEL WITH ME. WE CHECKED THE STEEL THAT HAD BEEN CUT TO SEE IF ANY OF IT HAD BEEN FABRICATED IN ERROR.

THERE WAS NOT ONE PIECE OF THAT STEEL THAT HAD BEEN FABRICATED IN ERROR AND HAD TO BE DISPOSED OF. SOME OF THESE PIECES OF STEEL, THE SIZE HAD CHANGED, BUT THAT SAME BAR LENGTH AND SIZE COULD BE USED IN ANOTHER PLACE, SO IT WAS MERELY SHIFTED FROM THIS POUR TO THE POUR IT COULD BE USED, WITHOUT HAVING TO THROW IT AWAY.

IN A ONE SENTENCE LETTER DATED OCTOBER 23, 1961, S AND E INFORMED THE GOVERNMENT: "PLEASE BE ADVISED THAT NO EXTRA CHARGE FOR REINFORCING STEEL WILL BE ASKED FOR ADDENDUM NO. 3 ON ABOVE REFERENCED CONTRACT.'

BY LETTER DATED OCTOBER 27 THE CONTRACTING OFFICER SENT S AND E, FOR SIGNATURE, AMENDMENT NO. 1 WHICH EMBODIED CHANGE ORDER NO. 2 AND, ALSO, CHANGE ORDER NO. 1 WHICH HAD BEEN ISSUED ON SEPTEMBER 22.

THE LETTER OF OCTOBER 27 IN ITS ENTIRETY IS AS FOLLOWS:

ENCLOSED ARE TWO SIGNED COPIES OF THE SUBJECT DOCUMENT. IF THE TERMS OF THIS AGREEMENT ARE ACCEPTABLE TO YOU, KINDLY EXECUTE AND RETURN ONE COPY TO THIS OFFICE. ONE COPY MAY BE RETAINED FOR YOUR FILES.

DURING THE HEARING S AND E TOOK THE POSITION THAT THE ABOVE LETTER EVIDENCED AN INTENTION BY THE PARTIES THAT THEY WOULD NOT BE BOUND UNTIL THE AMENDMENT WAS EXECUTED. ON CROSS-EXAMINATION (PP. 1346 1348, TRANSCRIPT) THE CONTRACTING OFFICER WAS ASKED:

Q. * * * NOW GOING BACK AGAIN TO CHANGE ORDER NUMBER 2, I SHOW YOU A COPY OF A LETTER DATED AUGUST 27, 1962 FROM YOU TO S AND E CONTRACTORS. THAT THE LETTER THAT YOU SENT?

A. YES, SIR.

Q. NOW WOULD YOU READ THAT LETTER. YOU CAN SKIP THE ADDRESS AND EVERYTHING. JUST READ WHAT THE LETTER SAYS

A. * * * (THE CONTRACTING OFFICER READ THE LETTER.)

Q. WHAT DOES THAT LETTER REFER TO?

A. TO THE TRANSMITTAL OF AMENDMENT NUMBER 1 TO THE CONTRACT. AMENDMENT NUMBER 1 INCLUDED CHANGE ORDER NUMBER 2.

HEARING EXAMINER MCCONNELL. WHAT WAS THE DATE OF THAT?

MR. HUDSON. OCTOBER 27.

BY MR. HUDSON:

Q. YOU WERE ASKING WHETHER THE TERMS OF THIS AGREEMENT WERE ACCEPTABLE TO S AND E CONTRACTORS?

A. MAY I COMMENT ON THAT?

Q. YES, SIR. JUST ANSWER THE QUESTION.

A. I THINK I SHOULD COMMENT ON IT TOO.

Q. WILL YOU ANSWER IT FIRST.

A. THATS' WHAT I READ. THIS WAS THE VERY WORDS I READ.

HEARING EXAMINER MCCONNELL. DO YOU HAVE ANY COMMENT TO MAKE?

THE WITNESS. YES. THIS IS THE FORM LETTER WE HAVE USED ON EVERY SINGLE AMENDMENT AT THE TIME WE WERE ISSUING.

THE WORD "IF THE TERMS ARE AGREEABLE TO YOU" ARE JUST AS STANDARD AS THE OPENING "GENTLEMEN" AND THE CLOSING "VERY TRULY YOURS.' THIS IS JUST A FORMAT.

THE PRESUMPTION IS THAT THE MEANING OF IT IS "IF THIS IS IN AGREEMENT WITH THE PROPOSAL THAT YOU SENT US.' THIS WAS THE INTENT OF IT.

BY MR. HUDSON.

Q. ISN-T THE BASIC INTENT THAT NO CONTRACTOR IS BOUND WHEN (SIC) HE SIGNS THE CONTRACT AMENDMENT?

MR. RHODES. I THINK THIS IS A QUESTION OF LAW TO WHICH THE CONTRACT ITSELF SPEAKS.

HEARING EXAMINER MCCONNELL. THE OBJECTION IS SUSTAINED.

THE CONTRACTING OFFICER'S STATEMENT AS TO WHAT HE INTENDED BY THE LANGUAGE USED IN HIS TRANSMITTAL LETTER OF OCTOBER 27, IS ON ITS FACE, REASONABLE. S AND E DID NOT REBUT THIS LINE OF TESTIMONY. APPARENTLY, THE HEARING EXAMINER GAVE FULL CREDENCE TO THE CONTRACTING OFFICER'S STATEMENT SINCE HIS DECISION DOES NOT CITE THE LANGUAGE OF THAT LETTER AS ONE OF THE ITEMS IN SUPPORT OF HIS DECISION. THE RECORD PRESENTS NO REASON TO QUESTION THE CONTRACTING OFFICER'S STATEMENT AS TO THE INTENT OF THE OCTOBER 27 LETTER.

THE PERTINENT PROVISIONS OF AMENDMENT NO. 1 READ AS FOLLOWS:

WHEREAS, THERE IS NOW IN FULL FORCE AND EFFECT BETWEEN THE PARTIES HERETO CONTRACT NO. AT/30-3/-790 DATED THE FOURTH DAY OF AUGUST 1961; AND

WHEREAS, PURSUANT TO THE PROVISIONS OF CLAUSE 3 OF THE GENERAL PROVISIONS OF SAID CONTRACT, CERTAIN CHANGES IN THE SPECIFICATIONS AND DRAWINGS WHICH FORM A PART OF SAID CONTRACT HAVE BEEN MADE BY WRITTEN ORDERS DESIGNATED AS CHANGE ORDER NO. 1 DATED SEPTEMBER 22, 1961, AND CHANGE ORDER NO. 2 DATED OCTOBER 3, 1961; AND

WHEREAS, PURSUANT TO THE PROVISIONS OF SAID CLAUSE 3, THE PARTIES HERETO HAVE AGREED UPON ADJUSTMENTS IN THE CONTRACT PRICE WHICH WILL REFLECT INCREASES IN THE COST OF PERFORMING THE WORK IN COMPLIANCE WITH SAID CHANGE ORDERS, AS FOLLOWS:

CHANGE ORDER NO. 1-------------------------------------------- $387.53

CHANGE ORDER NO. 2-------------------------------------------- 90,429.00 AND AN EXTENSION OF THIRTY CALENDAR DAYS IN THE TIME ALLOWED FOR PERFORMING THE CONTRACT WORK;

NOW, THEREFORE, THE PARTIES HERETO DO AGREE THAT SAID CONTRACT NO. AT/30- 3/-790, BE, AND THE SAME HEREBY IS, AMENDED IN THE FOLLOWING RESPECTS:

1. THAT PART OF THE CONTRACT WHICH APPEARS ON THE FIRST PAGE THEREOF UNDER THE HEADING "AMOUNT OF CONTRACT," IS AMENDED BY DELETING THE WORDS AND FIGURES "ONE MILLION, TWO HUNDRED SEVENTY-TWO THOUSAND DOLLARS ($1,272,000)" AND BY INSERTING IN LIEU THEREOF THE WORDS AND FIGURES "ONE MILLION, THREE HUNDRED SIXTY-TWO THOUSAND, EIGHT HUNDRED SIXTEEN DOLLARS AND FIFTY-THREE CENTS ($1,362,816.53).'

2. THAT PART OF THE CONTRACT WHICH APPEARS ON THE FIRST PAGE THEREOF UNDER THE HEADING "WORK SHALL BE COMPLETED" IS AMENDED TO READ AS FOLLOWS:

"WORK SHALL BE COMPLETED WITHIN TWO HUNDRED TEN (210) CALENDAR DAYS AFTER RECEIPT BY THE CONTRACTOR OF WRITTEN NOTICE TO PROCEED.'

S AND E DID NOT SIGN THE AMENDMENT BUT, CONTRARY TO THE EXAMINER'S FINDING (P. 40, EXAMINER'S DECISION), THE RECORD INDICATES THAT THE AMENDMENT WAS NOT RETURNED TO THE CONTRACTING OFFICER. ON NOVEMBER 21 THE CONTRACTING OFFICER SENT MR. ESTES, THE COMPANY'S PRESIDENT, A TELEGRAM STATING THAT HE HAD BEEN INFORMED OVER THE TELEPHONE BY MR. DEWITT THAT THE AMENDMENT HAD NOT BEEN SIGNED AND WOULD NOT BE SIGNED UNTIL "ADDITIONAL RETURNED COSTS FOR THE WORK COVERED BY THE AMENDMENT ARE AVAILABLE" AND THAT S AND E "MAY DECIDE TO REOPEN NEGOTIATIONS ON THE PRICE OF THE AMENDMENT.' THE TELEGRAM INFORMED MR. ESTES THAT THE COMMISSION WOULD NOT CONSIDER ANY RENEGOTIATION OF A PRICE INCREASE OR TIME EXTENSION FOR THE WORK COVERED BY THE AMENDMENT AND REQUESTED THAT S AND E FORMALIZE THE AMENDMENT BY PROMPTLY SIGNING IT. THE TELEGRAM FURTHER STATED THAT NO PROGRESS PAYMENT WOULD BE MADE FOR THIS WORK UNTIL THE SIGNED AMENDMENT WAS RECEIVED AND CONCLUDED WITH THE FOLLOWING PARAGRAPH:

PLEASE ADVISE ME BY NOVEMBER 22, 1961 AS O (SIC) YOUR INTENTIONS IN REGARD TO SIGNING THE AMENDMENT. I CONSIDER IT UNSATISFACTORY TO TO (SIC) BUSINESS IN AN ATMOSPHERE OF A POTENTIAL CLAIM BY YOU WITH RESPECT TO WORK WHICH WAS FORMALLY PROPOSED BY YOUR COMPANY AT A FIXED PRICE AND TIME EXTENSION AND ACCEPTED BY THE COMMISSION IN GOOD FAITH. END

ON NOVEMBER 24, 1961, MR. ESTES SENT THE CONTRACTING OFFICER THE FOLLOWING LETTER:

CONCERNING BILL DEWITT'S AND MY TELEPHONE CONVERSATION WITH YOU TODAY,WE RESPECTFULLY SUBMIT FOR YOUR CONSIDERATION THE REVISED PROPOSAL FOR CHANGE ORDER NO. 2 TO THE REFERENCED CONTRACT. IN THE FIRST COLUMN YOU WILL FIND ESTIMATED AMOUNTS OF MONEY ALLOWED IN THE ORIGINAL NEGOTIATION, AND IN THE SECOND COLUMN YOU WILL FIND THE REVISED AMOUNTS OF MONEY FOR THE RESPECTIVE ITEMS OF WORK, BASED ON ACTUAL FIELD COSTS.

AN ANALYSIS OF THESE TWO COLUMNS WILL SHOW YOU READILY THAT THE ORIGINAL ESTIMATED COSTS WERE WHOLLY INADEQUATE AND INSUFFICIENT. THIS, IN MY JUDGMENT, WAS OCCASIONED BY SEVERAL FACTORS, SOME OF WHICH AREAS FOLLOWS:

1. THE SHORT PERIOD OF TIME ALLOWED BY THE AEC FOR THE PREPARATION AND NEGOTIATION OF THIS CHANGE.

2. BILL DEWITT WAS IN THE PROCESS OF GETTING MARRIED, AND IT WAS NOT FEASIBLE OR PRACTICAL OR REASONABLE TO EXPECT HIM TO HANDLE THE NEGOTIATIONS, AND THE NEGOTIATIONS WERE CARRIED ON BY W. R. WOODARD WHO WAS COMPLETELY UNFAMILIAR WITH THIS PARTICULAR JOB AND THE JOB CONDITIONS.

IT WAS ANTICIPATED THAT THIRTY (30) DAYS TIME EXTENSION WOULD BE AMPLE WHEN THE ORIGINAL CHANGE ORDER WAS NEGOTIATED. THE AFTER-THE FACT CONDITIONS PROVE THAT THIS THIRTY DAYS IS INADEQUATE, AND IT IS OUR BEST JUDGMENT THAT A SIXY (60) DAY TIME EXTENSION IS MORE REALISTIC.

WE ASK THAT YOU REVIEW THE REVISED COST AS SUBMITTED HEREIN, AND THAT THIS CHANGE ORDER BE PREPARED IN THE AMOUNT OF $139,807, AND THAT A SIXTY (60) DAY TIME EXTENSION BE PROVIDED IN THIS CHANGE.

THIS CONTRACTOR HAS SUCCESSFULLY COMPLETED MANY PROJECTS FOR THE ATOMIC ENERGY COMMISSION HERETOFORE, AND IT HAS NEVER BEEN OUR EXPERIENCE THAT THE AEC COULD EXPECT, NOR COULD DEMAND THAT A CONTRACTOR ACCOMPLISH CHANGED WORK AT A LOSS.

AS YOU ARE WELL AWARE, THE JOB SITE CONDITIONS LEAVE A LOT TO BE DESIRED, AND WE ARE FULLY AWARE THAT THE CONTRACT DOCUMENT PROVIDE FOR TIME EXTENSIONS DUE TO ADVERSE WEATHER AND OTHER CAUSES; HOWEVER, IT HAS NEVER BEEN THE POLICY OF THIS COMPANY TO USE THESE GENERAL PROVISIONS FOR TIME EXTENSIONS SPECIFICALLY FOR CHANGED WORK. IT IS OUR FEELING THAT THE ITEMS OF WORK CHANGED SHOULD CARRY THE TIME EXTENSION FOR THIS CHANGED WORK IN THE BODY OF THE CHANGE ORDER PERTAINING TO THE CHANGED WORK. WOULD APPRECIATE REVIEWING THESE FACTS AND ISSUING A CHANGE ORDER FOR $139,807, AND A SIXTY (60) DAY TIME EXTENSION AT YOUR EARLIEST CONVENIENCE; HOWEVER, IN THE EVENT YOU WOULD PREFER TO HANDLE THIS CHANGE ORDER ON A UNILATERAL BASIS, USING THE GOVERNMENT ESTIMATE FOR PAY ESTIMATE PURPOSES FOR THIS CHANGE, IT WOULD BE AGREEABLE TO US.

OUR DETAILED FIELD COST RECORDS, BOTH AT THE JOB SITE AND IN OUR DALLAS OFFICES, ARE OPEN FOR YOUR INSPECTION AND PERUSAL.

ON THE BASIS OF THE ABOVE FACTS AND CORRESPONDENCE THE EXAMINER CONCLUDED THAT ALTHOUGH THE PARTIES HAD REACHED "SUBSTANTIAL" AGREEMENT DURING THE NEGOTIATIONS LEADING UP TO CHANGE ORDER NO. 2, THEY, NEVERTHELESS, DID NOT INTEND TO BE BOUND UNTIL THE FORMAL AMENDMENT WAS EXECUTED. WE THINK THE EVIDENCE OF RECORD CLEARLY ESTABLISHES THAT THE PARTIES HAD REACHED COMPLETE AGREEMENT PRIOR TO THE ISSUANCE OF CHANGE ORDER NO. 2, AND THAT ORDER WAS INTENDED TO BE AND WAS IN FACT AND LAW BINDING, DESPITE THE SUBSEQUENT ATTEMPT TO INCORPORATE ITS TERMS INTO A BILATERAL AMENDMENT. FURTHERMORE, AS WILL APPEAR LATER, THE FACT THAT S AND E DID NOT SIGN THE AMENDMENT CANNOT, IN OUR OPINION, OPERATE TO DEFEAT THE VALID CONTRACT PREVIOUSLY MADE.

IN REGARD TO THE QUESTION OF WHETHER THE PARTIES REACHED "SUBSTANTIAL" OR "COMPLETE" AGREEMENT DURING THE NEGOTIATIONS OF SEPTEMBER 29 THROUGH OCTOBER 2, THE EXAMINER'S DECISION DOES NOT DISCLOSE PRECISELY WHAT IT WAS THAT WAS NOT AGREED UPON SO AS TO RENDER THE AGREEMENT ,SUBSTANTIAL" RATHER THAN "COMPLETE.' APPARENTLY, HE WAS MAKING REFERENCES TO THE FACT THAT THE COST OF THE REINFORCING STEEL THAT HAD BEEN FABRICATED ON OCTOBER 2 AND 3 IN ACCORDANCE WITH THE PREVIOUS UNCHANGED SPECIFICATIONS WAS NOT KNOWN. ALL OTHER MATTERS CERTAINLY HAD BEEN AGREED UPON. S AND E TOOK THE POSITION DURING THE HEARING THAT ITS PROPOSAL OF OCTOBER 2 AND THE RESULTING AGREEMENT WERE CONDITIONAL AND NOT BINDING BECAUSE THE AGREEMENT WAS SUBJECT TO PRICE ADJUSTMENT UPWARD BECAUSE OF THE REINFORCING STEEL ITEM. SEE PAGE 1344, TRANSCRIPT. THE CONTRACTING OFFICER TESTIFIED DURING CROSS-EXAMINATION ON THIS POINT AS FOLLOWS (P. 1344, TRANSCRIPT):

Q. * * * NOW THE PROPOSAL MADE BY THE CONTRACTOR ON OCTOBER 2NDWAS A CONDITIONAL PROPOSAL, WAS IT NOT?

A. I THINK THE ONLY CONDITIONAL ONE, THE CONDITION IN IT WAS THE QUESTION OF THE COST OF CHANGES FOR THE REINFORCING STEEL AND IT SEEMS TO ME THE WAY OF SOLUTION. THAT WAS OUTLINED. IT WOULD BE WHATEVER IT TURNED OUT TO BE. Q. IT WAS SUBJECT TO ADJUSTMENT UPWARDS?

A. FOR THAT ITEM ONLY.

Q. FOR THAT ITEM?

A. I BELIEVE SO.

Q. IT WAS NOT A FINAL PRICE?

A. IN THAT--- IT WAS FINAL IN THAT---

Q. EXCEPT FOR ADJUSTMENT. A. IT INDICATED HOW THE ADJUSTMENTS WOULD BE DETERMINED AND IF THERE WERE NO COSTS, THERE WOULD BE NO ADJUSTMENTS.

IT IS A FUNDAMENTAL RULE OF LAW THAT NO PERSON MAY BE SUBJECTED TO A CONTRACTURAL OBLIGATION UNLESS THE CHARACTER OF THE OBLIGATION IS DEFINITELY FIXED BY AN EXPRESS OR IMPLIED AGREEMENT OF THE PARTIES. ORDER TO BE BINDING AN AGREEMENT MUST BE DEFINITE AND CERTAIN AS TO ITS TERMS AND REQUIREMENTS. 17 AM JUR 2D, CONTRACTS SEC. 75. AS A GENERAL PRINCIPLE, A CONTRACT IS SUFFICIENTLY DEFINITE AND CERTAIN IF IT CONTAINS MATTER WHICH WILL ENABLE THE COURT UNDER PROPER RULES OF CONSTRUCTION TO ASCERTAIN THE TERMS AND CONDITIONS ON WHICH PARTIES INTENDED TO BE BOUND EVEN THOUGH THERE ARE SOME FORMAL IMPERFECTIONS IN THE CONTRACT. 17 AM JUR 2D, CONTRACTS SEC. 77. SEE, ALSO, THE AUTHORITIES CITED AT 17 AM JUR 2D, CONTRACTS SEC. 82, WHERE IT IS STATED:

THE GENERAL RULE IS THAT PRICE OR COMPENSATION IS AN ESSENTIAL INGREDIENT OF EVERY CONTRACT FOR THE TRANSFER OF PROPERTY OR RIGHTS THEREIN OR FOR THE RENDERING OF SERVICES AND MUST BE DEFINITE AND CERTAIN OR CAPABLE OF BEING ASCERTAINED FROM THE CONTRACTS ITSELF. BY THIS IS NOT MEANT THAT THE EXACT AMOUNT IN FIGURES MUST BE STATED IN THE AGREEMENT; HOWEVER, WHERE THAT IS NOT THE CASE, THE PRICE MUST, BY THE TERMS OF THE AGREEMENT, BE CAPABLE OF BEING DEFINITELY ASCERTAINED. WHERE THE CONTRACT APPOINTS THE MODE OF DETERMINING THE PRICE, AND THE PRICE IS DETERMINED ACCORDING TO THAT MODE, THE CONTRACT BECOMES PERFECT AND COMPLETE IN THAT RESPECT, AS IF IT HAD BEEN ORIGINALLY FIXED IN THE WRITING * * *

WE BELIEVE THAT THERE IS NO BASIS FOR CONCLUDING, AS CONTENDED BY S AND E, THAT THE AGREEMENT OF OCTOBER 3, AS EVIDENCED BY THE CONTRACTOR'S PROPOSAL OF OCTOBER 2 AND CHANGE ORDER NO. 2, WAS CONDITIONAL BECAUSE OF THE REINFORCING STEEL ITEM. CHANGE ORDER NO. 2 CAN IN NO WAY BE CONSTRUED AS MAKING THE PRICE OF $90,429, WHICH APPLIED TO ALL ITEMS IN THE ORDER OTHER THAN THE REINFORCING STEEL, CONDITIONED ON, OR SUBJECT TO ADJUSTMENT BY, THE COST OF THE REINFORCING STEEL. THE RELEVANT LANGUAGE OF THE CHANGE ORDER READS: "AS AGREED, TO COMPENSATE FOR THIS CHANGE THE CONTRACT PRICE WILL BE INCREASED IN THE AMOUNT OF $90,429.00 PLUS THE COST OF REINFORCING STEEL FABRICATED ON OCTOBER 2 AND 3, 1961 * * *.' THIS LANGUAGE CLEARLY INDICATES THAT S AND E WAS TO RECEIVE $90,429 UNCONDITIONALLY AND REGARDLESS OF WHAT THE COST OF THE REINFORCING STEEL TURNED OUT TO BE. S AND E WOULD ALSO RECEIVE THE COST OF THE REINFORCING STEEL WHICH HAD BEEN FABRICATED ON OCTOBER 2 AND 3. THE $90,429 AND THE COST OF REINFORCING STEEL WERE COMPLETELY INDEPENDENT OF EACH OTHER. THE COST OF REINFORCING STEEL WAS MEANT TO BE IN ADDITION TO THE $90,429. CHANGE ORDER NO. 2 EXPRESSED THIS INTENTION IN CLEAR AND UNAMBIGUOUS LANGUAGE.

MOREOVER, THE AGREEMENT REACHED BY THE PARTIES "APPOINT/ED) THE MODE OF DETERMINING THE PRICE" OF THE REINFORCING STEEL I.E., THE COST, WHATEVER IT MIGHT BE, OF THE STEEL FABRICATED ON OCTOBER 2 AND 3. THIS COST WAS NOT SUBJECT TO NEGOTIATION OR FUTURE AGREEMENT OF THE PARTIES. IT WOULD BE WHATEVER GILMORE-SKOUBY, S AND E'S SUPPLIER, WAS CHARGING S AND E FOR THE STEEL. THIS COST LATER TURNED OUT TO BE NOTHING AND S AND E INFORMED THE GOVERNMENT OF THIS FACT IN ITS LETTER OF OCTOBER 23, 1961.

FINALLY, EVEN IF IT IS ASSUMED FOR THE SAKE OF DISCUSSION THAT THE REINFORCING STEEL ITEM HAD THE EFFECT CONTENDED FOR BY S AND E, THIS FACT WOULD NOT BE DISPOSITIVE OF THE MATTER. IN THAT EVENT, THE PRINCIPLES AND AUTHORITIES CITED AND DISCUSSED IN SECTION 48, WILLISTON ON CONTRACTS, 3RD ED., WOULD BE APPLICABLE. IN THAT SECTION WILLISTON STATES:

IT HAPPENS AT TIMES IN ELABORATE CONTRACTS THAT CERTAIN MINOR MATTERS ARE EXPRESSLY LEFT FOR FUTURE AGREEMENT, OR ARE LEFT IN SUCH AN INDEFINITE WAY AS TO BE INCAPABLE OF ENFORCEMENT. A BUILDING CONTRACT MAY PROVIDE THAT THE FORM OF WINDOW FASTENINGS SHALL BE AFTERWARDS AGREED UPON BY THE PARTIES. THIS WOULD NOT MAKE THE ENTIRE BUILDING CONTRACT UNENFORCEABLE, THOUGH IF THE NATURE OF THE WINDOW FASTENINGS WAS FIXED BY THE AGREEMENT WHILE THE DIMENSIONS OF THE BUILDING WERE LEFT TO FUTURE AGREEMENT, THERE WOULD BE NO ENFORCEABLE OBLIGATION. IT IS EVIDENT THAT THE QUESTION MUST BE ONE OF DEGREE: IS THE INDEFINITE PROMISE SO ESSENTIAL TO THE BARGAIN THAT INABILITY TO ENFORCE THAT PROMISE STRICTLY ACCORDING TO ITS TERMS WOULD MAKE IT UNFAIR TO ENFORCE THE REMAINDER OF THE AGREEMENT? IF THE CONTRACT CANNOT BE PERFORMED WITHOUT SETTLEMENT OF THE UNDETERMINED POINT, EACH PARTY WILL BE BOUND TO AGREE TO A REASONABLE DETERMINATION OF THE UNSETTLED POINT IN ORDER THAT THE MAIN PROMISE MAY BE ENFORCED. IF THE UNDETERMINED MATTER DOES NOT PRECLUDE PERFORMANCE OF THE REMAINDER OF THE CONTRACT AND IS OF COMPARATIVELY LITTLE IMPORTANCE, THE UNCERTAIN PROMISE MAY BE LEFT UNPERFORMED AND THE REMAINDER OF THE CONTRACT ENFORCED.

THE RULE OF LAW APPLICABLE TO A SITUATION WHEREIN ONE PARTY TO AN AGREEMENT PREVIOUSLY REACHED REFUSES TO SIGN A FORMAL DOCUMENT WHICH EVIDENCES THE AGREEMENT, AS IN THIS CASE, WAS SET FORTH IN UNITED STATES, V. P.J. CARLIN CONSTRUCTION COMPANY, 224 F. 859, 862:

(1) WHEN PARTIES ENTER INTO A MERE VERBAL AGREEMENT, WITH THE UNDERSTANDING THAT IT SHALL BE FINALLY REDUCED TO WRITING AS THE EVIDENCE OF THE TERMS OF THE CONTRACT, IT MAY BE THAT NOTHING IS BINDING UPON EITHER PARTY UNTIL THE WRITING IS EXECUTED. BUT WHERE THE PARTIES REACH AN AGREEMENT THROUGH CORRESPONDENCE, INTENDING THAT THE AGREEMENT SHALL BE SUBSEQUENTLY EXPRESSED FORMALLY IN A SINGLE PAPER OR DOCUMENT, WHICH, THEN SIGNED, SHOULD BE THE EVIDENCE OF WHAT HAD BEEN AGREED UPON, THE OBLIGATORY CHARACTER OF THE AGREEMENT CANNOT ORDINARILY BE DEFEATED BY THE FAILURE OF EITHER PARTY TO SIGN THE FORMAL CONTRACT. IF THE COURT CAN SEE FROM THE WRITINGS OR CORRESPONDENCE THAT THE MINDS OF THE PARTIES HAVE MET, THAT A PROPOSAL HAS BEEN SUBMITTED BY ONE PARTY WHICH HAS BEEN ACCEPTED BY THE OTHER, AND THAT THE TERMS OF THE CONTRACT HAVE BEEN IN ALL RESPECTS DEFINITELY AGREED UPON, ONE OF THE PARTIES CANNOT EVADE OR ESCAPE FROM HIS OBLIGATION BY REFUSING TO SIGN THE FORMAL CONTRACT, WHICH THE PARTIES UNDERSOOD WAS SUBSEQUENTLY TO BE DRAWN AND EXECUTED. AS SAID BY THE NEW YORK COURT OF APPEALS IN SANDERS V. POTTLITZER BROS. FRUIT CO., 144 N.Y. 209 * * *:

"ANY OTHER RULE WOULD ALWAYS PERMIT A PARTY WHO HAS ENTERED INTO A CONTRACT LIKE THIS THROUGH LETTERS AND TELEGRAPHIC MESSAGES TO VIOLATE IT WHENEVER THE UNDERSTANDING WAS THAT IT SHOULD BE REDUCED TO ANOTHER WRITTEN FORM BY SIMPLY SUGGESTING OTHER AND ADDITIONAL TERMS AND CONDITIONS. IF THIS WERE THE RULE, THE CONTRACT WOULD NEVER BE COMPLETED IN CASES WHERE BY CHANGES IN THE MARKET OR OTHER EVENTS OCCURRING SUBSEQUENT TO THE WRITTEN NEGOTIATIONS IT BECAME THE INTEREST OF EITHER PARTY TO ADOPT THAT COURSE IN ORDER TO ESCAPE OR EVADE OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF COMMERCIAL BUSINESS.'

AS THE EXAMINER NOTED, THE BASIC ISSUE INVOLVED HERE IS "PURELY A QUESTION OF WHEN THE PARTIES INTENDED TO BE BOUND UNDER ALL THE CIRCUMSTANCES OF THE CASE.' THE EXAMINER CITED FIVE FACTORS AS DETERMINATIVE OF THE ISSUE. THESE FACTORS WILL BE DISCUSSED IN THE ORDER LISTED BY THE EXAMINER.

(1) THE EXAMINER'S STATEMENT THAT CLAUSE 3 OF THE CONTRACT "VERY EXPRESSLY PROVIDES THAT ALL CHANGES SHALL BE FORMALLY INCORPORATED INTO THE CONTRACT BY AMENDMENT" IS NOT ACCURATE. CLAUSE 3 OF THE GENERAL PROVISIONS (CHANGES) PROVIDES THAT IF THE CHANGE CAUSES AN INCREASE OR DECREASE IN THE AMOUNT DUE UNDER THE CONTRACT, OR IN THE TIME REQUIRED FOR ITS PERFORMANCE,"AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY.' THIS LANGUAGE CLEARLY DOES NOT REQUIRE FORMAL INCORPORATION BY AMENDMENT AS FOUND BY THE EXAMINER. CLAUSE 3 DOES NOT SPELL OUT THE METHOD OR FORM OF MODIFICATION OTHER THAN THAT IT MUST BE IN WRITING. SECTION 1-1.219 OF THE FEDERAL PROCUREMENT REGULATIONS DEFINES "CONTRACT MODIFICATION" AS MEANING "ANY WRITTEN ALTERATION * * * OF AN EXISTING CONTRACT, WHETHER ACCOMPLISHED BY UNILATERAL ACTION IN ACCORDANCE WITH A CONTRACT PROVISION OR BY MUTUAL ACTION OF THE PARTIES * * " IN THIS CONNECTION, IT IS INFORMATIVE TO NOTE THAT THE QUESTION OF WHAT ACTIONS OR SITUATIONS WILL BE HELD TO CONSTITUTE A CONTRACT MODIFICATION HAS BEEN BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA) ON A NUMBER OF OCCASIONS. IN COLLINS RADIO COMPANY, ASBCA NO. 4487, AUGUST 18, 1959, 59-2 BCA 2313, THE BOARD IN REVIEWING THE PRECEDENTS ON THE QUESTION STATED:

120. IN SO FINDING WE NOTE FIRST THE ABSENCE OF ANY PRESCRIBED FORM FOR A CONTRACT MODIFICATION, BE IT A CHANGE ORDER (I.E., A MODIFICATION THAT THE CONTRACTING OFFICER CAN MAKE UNILATERALLY) OR A SUPPLEMENTAL AGREEMENT (I.E., A MODIFICATION REQUIRING THE AGREEMENT OF THE PARTIES). PAST CASES, BOTH COURT AND BOARD, SHOW THAT CONTRACTS HAVE ON OCCASION BEEN MODIFIED (BOTH IN THE CASE OF CHANGE ORDERS AND SUPPLEMENTAL AGREEMENTS) BY ONE DOCUMENT SIGNED BY BOTH PARTIES (SUCH DOCUMENTS VARYING IN FORMALITY AND COMPLEXITY), BY EXCHANGES OF CORRESPONDENCE, BY TELEGRAMS, BY ORAL INSTRUCTIONS AND BY ACTIONS OF THE PARTIES. IN L.B. SMITH, INC., ASBCA NO. 5776, MARCH 30, 1961, 61-1 BCA 2993, THE PARTIES REACHED AN AGREEMENT ON PRICE REDETERMINATION WHICH WAS LATER EVIDENCED BY THE EXCHANGE OF CORRESPONDENCE. THE PRICE REDETERMINATION ARTICLE OF THE CONTRACT REQUIRED THAT "THE REDETERMINED PRICE SHALL BE EVIDENCED BY A SUPPLEMENTAL AGREEMENT TO THIS CONTRACT.' THE GOVERNMENT NEVER SUCCEEDED IN GETTING THE CONTRACTOR TO SIGN A FORMAL DOCUMENT EVIDENCING THE AGREEMENT. IN HOLDING THAT THE PARTIES HAD EFFECTED A BINDING AGREEMENT, THE BOARD STATED:

IT IS, OF COURSE, TRUE THAT THE CONTRACTOR HAS NOT EXECUTED A FORMAL SUPPLEMENTAL AGREEMENT WHICH THE CONTRACT CONTEMPLATES. IT IS ALSO THE FACT THAT THE GOVERNMENT EXPENDED EVERY REASONABLE EFFORT TO GET A FORMAL DOCUMENT SIGNED UP. THE CONTRACTOR WOULD HAVE US RULE THAT THE CONTRACT SHOULD BE INTERPRETED AS INDICATING IT WAS THE CONTRACTUAL INTENTION OF THE PARTIES THAT ABSENT A FORMAL MEMORIAL NOTHING BOUND ANYBODY. WE DO NOT FIND THE CONTRACTUAL INTENT TO BE AS SUGGESTED BY THE CONTRACTOR. MAY WELL BE IN SOME CASES THAT THE PARTIES INTEND TO BE FREE AGENTS UNTIL SIGNING AN INTEGRATED MEMORIAL, BUT THE EVIDENCE SUPPORTS NO SUCH FINDING IN THIS CASE. THE PARTIES ARE NOT ACTUALLY AT ODDS ON THE LAW BUT RATHER DISAGREE AS TO RESULT BECAUSE OF CONTROVERSY OVER A FINDING WITH RESPECT TO CONTRACTUAL INTENT. THE OPERATION OF THE REDETERMINATION ARTICLE CALLS FOR SIMPLY DRAWING A LINE THROUGH THE TARGET PRICE AND, IN EFFECT, SUBSTITUTING A FIGURE MUTUALLY SATISFACTORY ON A NEGOTIATED BASIS. FLOOR AND/OR CEILING STIPULATIONS MUST, OF COURSE, BE OBSERVED. IT IS HARD TO ENVISION ANY REASONABLE BASIS OR REASON WHY EITHER OF THE PARTIES WOULD HAVE ANY INTEREST OR DESIRE TO HAVE LEGAL SIGNIFICANCE POSTPONED ONCE IN FACT THEIR MINDS HAD MET ON THE SUBSTITUTE DOLLAR FIGURE. IN OUR OPINION THE PROVISION MERELY MADE IT THE DUTY OF THE PARTIES TO COMPLY WITH STANDARD GOVERNMENT CONTRACT PRACTICE. ARTICLE 29/C), IN ITS VERY LANGUAGE, PRESCRIBES THAT THE PARTIES WERE TO "PROMPTLY NEGOTIATE IN GOOD FAITH TO AGREE UPON A REASONABLE REDETERMINED PRICE * * *" WHICH WAS TO BE "EVIDENCED" BY A FORMAL AGREEMENT. THERE IS NO BASIS FOR SUGGESTING THAT LACK OF FORMAL EVIDENCE IS FATAL TO EFFECTIVENESS OF THE AGREEMENT WHICH WE HAVE FOUND WAS A FACT. IN OUR OPINION THE LETTER OF ACCEPTANCE, DATED 5 NOVEMBER 1953, FROM THE CONTRACTING OFFICER TO THE CONTRACTOR LEGALLY SET AT REST THE ISSUE AS TO THE REDETERMINED PRICE. IN FENSKE, FEDRICK AND MILLER, INC., ASBCA NO. 7855, FEBRUARY 27, 1964, 1964 BCA 4130, THE DECISION SUSTAINED A GOVERNMENT POSITION THAT THE CONTRACTUALLY SPECIFIED PERIOD FOR AN EXERCISE OF AN OPTION, RELIED UPON AS LIMITING THE GOVERNMENT'S ACQUISITION COST OF EQUIPMENT, WAS EFFECTIVELY EXTENDED BY INFORMAL COMMUNICATIONS AND CONDUCT OF THE PARTIES WITHOUT THE FURTHER EXECUTION OF A FORMAL SUPPLEMENTAL AGREEMENT. IN THIS CONNECTION, THE CONTRACT PROVIDED THAT:

THIS CONTRACT WILL COMMENCE THREE DAYS AFTER ACCEPTANCE OF WRITTEN NOTICE TO PROCEED AND REMAIN IN EFFECT UNTIL 30 JUNE 1960, UNLESS TERMINATED UNDER THE TERMS OF THE CONTRACT. THIS CONTRACT WILL BE RENEWABLE AT THE OPTION OF THE GOVERNMENT FOR FOUR CONSECUTIVE ONE YEAR TERMS AT THE RATES SET FORTH IN THE SCHEDULE. RENEWAL SHALL BE ACCOMPLISHED BY A SUPPLEMENTAL AGREEMENT ENTERED INTO PRIOR TO THE EXPIRATION OF THE PREVIOUS TERM * * * THE CONTRACTOR-APPELLANT ARGUED, AMONG OTHER THINGS, THAT THE GOVERNMENT DID NOT EXERCISE ITS "OPTION TO PURCHASE" DURING THE PERIOD FROM THE INCEPTION OF THE CONTRACT THROUGH JUNE 30, 1960, AND THAT THIS PERIOD WAS NOT EXTENDED BY "SUPPLEMENTAL AGREEMENT" EXECUTED BY THE PARTIES. THE BOARD ANSWERED THIS ARGUMENT AS FOLLOWS: APPELLANT'S POSITION STATED ABOVE INFERS THAT THE INITIAL CONTRACT PERIOD EXTENDING TO 30 JUNE 1960 COULD BE EXTENDED BY THE PARTIES ONLY THROUGH THE EXECUTION OF FORMAL, BILATERAL ,SUPPLEMENTAL AGREEMENT" DOCUMENTS. WE DO NOT FIND IN THE QUOTED PROVISIONS A REQUIREMENT SO RESTRICTIVE AS THIS.

APPELLANT HAS CITED NO PRECEDENT AND WE ARE AWARE OF NONE WHICH SUPPORTS THAT PROPOSITION, WHEREAS NUMBEROUS DECISIONS OF THE BOARD UNDER VARIOUS CIRCUMSTANCES ARE TO THE EFFECT THAT COMPETENT AGREEMENTS OF THE PARTIES MAY BE ACHIEVED BY LESS FORMAL MEANS. * * * THE CITED DECISIONS, AMONG OTHERS, MAKE IT CLEAR THAT IN CASES OF RELIANCE BY EITHER CONTRACTUAL PARTY UPON AN ALLEGED CONTRACT--- RELATED AGREEMENT, THE DISPOSITIVE FACTOR USUALLY IS NOT THE FORMALITY OF THE EVIDENCE OF SUCH AGREEMENT, BUT IS INSTEAD A PREPONDERANCE OF ALL EVIDENCE CONCERNING THE ALLEGED AGREEMENT AND THE AUTHORITY AND COMPETENCE OF THE AGREEING REPRESENTATIVES OF THE PARTIES. SUCH CONSIDERATIONS INCLUDE, AS APPROPRIATE, THE CONDUCT OF THE PARTIES AND OTHER SURROUNDING CIRCUMSTANCES, AND THE FACTUAL INFERENCES MOST REASONABLY TO BE DRAWN THEREFROM.

IN THE LIGHT OF SUCH PRECEDENT, AND THE MATTERS OF EVIDENCE CONCERNING THE CONDUCT OF THE PARTIES DURING THE PERIOD OF INSTALLATION AND CERTIFICATION OF THE EQUIPMENT WE CONCLUDE THAT AFTER THE EXECUTION OF S.A. NO. 2 THE PARTIES, BY CLEAR AGREEMENTS EVIDENCED IN WRITTEN DOCUMENTS, EXTENDED TO 1 APRIL 1961 THE CONTRACT PERIOD INITIALLY ENDING 30 JUNE 1960. THIS WAS ACCOMPLISHED IN PART BY CHANGE ORDER NO. 3 DATED 19 JULY 1960, ISSUED IN RESPONSE TO APPELLANT'S LETTER REQUESTS OF 1 APRIL AND 22 JUNE 1960, WHICH EXTENDED THE PERIOD 51 CALENDER DAYS AND THE FINAL COMPLETION DATE TO NOT LATER THAN 15 AUGUST 1960. IT WAS FURTHER ACCOMPLISHED BY CHANGE ORDER NO. 4 DATED 14 AUGUST 1960 AND ISSUED AFTER APPELLANT'S LETTER REQUEST OF 7 JANUARY 1961, ON 3 FEBRUARY 1961, BACK DATED TO PROVIDE A CONTINUITY IN THE EXTENSION DOCUMENTS. * * * SEE, ALSO, THE BARRISTER CORPORATION, ASBCA NO. 1036, OCTOBER 6, 1952; AMERICAN SPORTSWEAR CO., INC., ASBCA NO. 2750, DECEMBER 29, 1955; VINELAND SPORTSWEAR CO., ASBCA NOS. 2745 AND 2746, DECEMBER 29, 1955; P.L.S. COAT AND SUIT CORP., ASBCA NO. 4185, SEPTEMBER 9, 1957, 57-2 BCA 1439; SADDLER TEXTILES, INC., ASBCA NO. 6554, DECEMBER 15, 1961, 61-2 BCA 3249; BOSTON PNEUMATIC, INC., ASBCA NO. 8142, FEBRUARY 5, 1963, 1963 BCA 3667; AND WARREN BROS. ROADS CO. V. UNITED STATES, 123 CT. CL. 48, 105 F.SUPP. 826 (1952). IN THE WARREN BROS. ROADS CO. CASE THE COURT OF CLAIMS FOUND THAT THE PARTIES HAD EFFECTED AN ORAL MODIFICATION TO THE CONTRACT SPECIFICATIONS BY AN AGREEMENT REACHED DURING A CONFERENCE AND BY SUBSEQUENT ACTION OF THE PARTIES.

THE ASBCA DECISIONS DISCUSSED ABOVE DEMONSTRATE THAT CONTRACT PROVISIONS REQUIRING MODIFICATIONS TO THE CONTRACT TO BE IN WRITING OR TO BE IN A PARTICULAR FORM ARE GENERALLY THOUGHT OF AS BEING FOR THE PURPOSE OF SUPPLYING EVIDENCE, OR A MEMORIAL, OF AN AGREEMENT REACHED BY THE PARTIES. OF COURSE, A FORMAL DOCUMENT SIGNED BY BOTH PARTIES IS PERHAPS THE BEST EVIDENCE THAT A BINDING AGREEMENT HAS BEEN REACHED. HOWEVER, AS PROPERLY OBSERVED IN THE FENSKE, FEDRICK AND MILLER, INC. CASE THE DISPOSITIVE FACTOR IS USUALLY NOT THE FORMALITY OF THE EVIDENCE OF SUCH AGREEMENT, BUT IS INSTEAD A PREPONDERANCE OF ALL EVIDENCE CONCERNING THE ALLEGED AGREEMENT AND THE AUTHORITY AND COMPETENCE OF THE AGREEING REPRESENTATIVES OF THE PARTIES. IT IS ALSO SIGNIFICANT TO NOTE THAT, AS IN THE PRESENT CASE, THE EFFECTIVE MODIFICATIONS TO THE CONTRACT IN THE FENSKE, FEDRICK AND MILLER, INC. CASE WERE ACCOMPLISHED AND EVIDENCED BY LETTERS FROM THE CONTRACTOR AND ACCEPTANCE OF THE TERMS OF SUCH LETTERS BY ISSUANCE OF CHANGE ORDERS PLUS SUBSEQUENT RELIANCE ON THE AGREEMENTS THUS MADE.

IN ANY EVENT, IN VIEW OF THE PRIOR NEGOTIATIONS BETWEEN THE REPRESENTATIVES OF S AND E AND THE GOVERNMENT IN THE INSTANT CASE, AND IN VIEW OF THE CONTENTS AND WORDING OF CHANGE ORDER NO. 2, WE DO NOT BELIEVE THAT THERE IS ANY BASIS FOR DOUBT THAT THE ORDER, IN-AND-OF ITSELF, SATISFIED THE LITERAL LANGUAGE OF CLAUSE 3. CHANGE ORDER NO. 2 WAS NOT MERELY AN "ORDER" DIRECTING A CHANGE, BUT WAS A COMPREHENSIVE DOCUMENT WHICH EMBODIED, IN SUBSTANTIALLY THE EXACT LANGUAGE OF THE CONTRACTOR'S PROPOSAL, THE TERMS PREVIOUSLY AGREED UPON. IT, IN EFFECT, CONTAINED THE EQUITABLE ADJUSTMENT WITHIN ITS FOUR CORNERS AND CONSTITUTED ALL OF THE WRITTEN MODIFICATION OF THE CONTRACT REQUIRED. THE ORDER WAS AN ACCEPTANCE OF S AND E'S OFFER OF OCTOBER 2 AND RESULTED IN A BINDING CONTRACT, CERTAINLY AT LEAST AS TO THE WORK COVERED BY THE $90,429 AND THE 30-DAY TIME EXTENSION. THE STEEL ITEM WAS LATER RESOLVED BY S AND E'S LETTER OF OCTOBER 23.

EVEN IF CLAUSE 3 SHOULD BE INTERPRETED AS CONTEMPLATING EXECUTION OF A FORMAL CONTRACT AMENDMENT, THE FAILURE OF THE PARTIES TO FOLLOW SUCH A PROCEDURE WOULD NOT BE DETERMINATIVE OF THE QUESTION WHETHER A LEGALLY VALID BILATERAL MODIFICATION WAS ACCOMPLISHED. A WRITTEN CONTRACT MAY BE MODIFIED BY THE PARTIES IN ANY MANNER THEY CHOOSE NOTWITHSTANDING AGREEMENTS PROHIBITING ITS ALTERATION EXCEPT IN A PARTICULAR MANNER. SEE 17A C.J.S., CONTRACTS SEC. 377C, AND AUTHORITIES CITED THEREIN. THE METHOD OF CHANGE PROVIDED FOR IN A CONTRACT MAY BE EMPLOYED BY THE PARTIES, BUT SUCH METHOD IS NOT EXCLUSIVE OF OTHER METHODS OF MODIFICATION. 17A C.J.S., CONTRACTS SEC. 374. SEE, ALSO, HELSBY V. ST. PAUL HOSPITAL AND CASUALTY COMPANY, 195 F.SUPP. 385, AFFIRMED 304 F.2D 758 AND BEATTY V. GUGGENHEIM EXPLORATION CO., 122 N.E. 378. IN THE BEATTY CASE, JUDGE CARDOZO, SPEAKING FOR THE COURT OF APPEALS OF NEW YORK, INDICATED THAT THIS RULE WAS PREDICATED UPON THE INHERENT POWER OF THE PARTIES TO MAKE OR CHANGE CONTRACTS UNFETTERED BY SELF-IMPOSED LIMITATIONS PREVIOUSLY AGREED UPON. HE STATED THAT:

* * * THOSE WHO MAKE A CONTRACT MAY UNMAKE IT. THE CLAUSE WHICH FORBIDS A CHANGE MAY BE CHANGED LIKE ANY OTHER. THE PROHIBITION OF ORAL WAIVER MAY ITSELF BE WAIVED. * * * WHAT IS EXCLUDED BY ONE ACT IS RESTORED BY ANOTHER. YOU MAY PUT IT OUT BY THE DOOR; IT IS BACK THROUGH THE WINDOW. WHENEVER TWO MEN CONTRACT, NO LIMITATION SELF IMPOSED CAN DESTROY THEIR POWER TO CONTRACT AGAIN.

(2) WITH RESPECT TO THE EXAMINER'S STATEMENT THAT THE LETTER OF OCTOBER 3 (CHANGE ORDER NO. 2) CONCLUDES WITH THE STATEMENT THAT "THE AMENDMENT IS FORTHCOMING" WE NOTE, AGAIN, THAT THE EXAMINER IS INACCURATE IN DESCRIBING THE LANGUAGE USED. THE ACTUAL WORDING WAS THAT "A CONTRACT MODIFICATION WILL BE EXECUTED TO FORMALIZE THIS CHANGE IN CONTRACT PRICE AND TIME.' THIS SENTENCE DOES NOT, IN OUR OPINION, INDICATE AN INTENTION ON THE PART OF THE GOVERNMENT THAT IT WOULD NOT BE BOUND UNTIL A FORMAL CONTRACT AMENDMENT WAS EXECUTED. WHEN READ IN CONTEXT WITH THE REST OF THE LANGUAGE IN THE ORDER, THE SENTENCE MERELY CONVEYS THE INFORMATION THAT A MORE FORMAL DOCUMENT WAS TO BE EXECUTED IN THE FUTURE TO MEMORIALIZE (FORMALIZE) THE AGREEMENT PREVIOUSLY REACHED. IN NO WAY DOES THE SENTENCE INDICATE THAT THE PREVIOUS AGREEMENT WOULD BE CONTINGENT UPON, OR SUBJECT TO, THE EXECUTION OF A FORMAL CONTRACT AMENDMENT, OR TO FURTHER NEGOTIATIONS AS TO THE PRICE OR TIME FACTORS. HAD SUCH A MEANING BEEN INTENDED IT WOULD HAVE BEEN AN EASY MATTER TO HAVE STATED SUCH AN INTENTION IN SIMPLE LANGUAGE. IN THE CIRCUMSTANCES OF THIS CASE IT IS DIFFICULT TO ENVISION ANY REASONABLE BASIS OR REASON WHY EITHER OF THE PARTIES WOULD HAVE ANY INTEREST OR DESIRE TO HAVE LEGAL SIGNIFICANCE POSTPONED ONCE IN FACT THEIR MINDS HAD MET ON ALL THE TERMS EMBODIED IN THEIR AGREEMENT. CF. L.B. SMITH, INC., SUPRA.

(3) THE EXAMINER FOUND THAT IN "SOME DETAIL THE AMENDMENT DIFFERED FROM THE LETTER" BUT HE DID NOT INDICATE WHAT THE DIFFERENCES WERE. THE ONLY APPARENT DIFFERENCES WERE (1) THE LETTER, OR CHANGE ORDER NO. 2, WAS CONCERNED ONLY WITH ADDENDUM NO. 3 WHEREAS THE AMENDMENT INCORPORATED ADDENDUM NO. 2 AS WELL AS NO. 3; (2) THE AMENDMENT MADE NO MENTION OF THE COST OF REINFORCING STEEL; AND (3) THE AMENDMENT DID NOT SPECIFICALLY ITEMIZE THE EXTENSIONS GRANTED ON THE INTERIM COMPLETION DATES BUT ONLY REFERRED TO THE 30 DAYS EXTENSION GRANTED ON THE OVERALL COMPLETION DATE.

IN OUR VIEW OF THE CASE, THE CONTRACT MODIFICATION WAS COMPLETE AND BINDING AS OF OCTOBER 3 WHEN THE ORDER WAS ISSUED OR, AT THE VERY LATEST (NO MATTER WHAT VIEW ONE TAKES OF THE REINFORCING STEEL ITEM), BY OCTOBER 23 WHEN THE UNRESOLVED STEEL QUESTION WAS SETTLED. THE AMENDMENT WAS THEREFORE UNNECESSARY TO EFFECT ANY OF THE MODIFICATIONS CONTAINED IN CHANGE ORDER NO. 2. HOWEVER, WE DO NOT THINK THAT THE AMENDMENT WAS INCONSISTENT WITH, OR CONTRADICTED, THE ORDER. THE FACT THAT THE AMENDMENT INCORPORATED ADDENDUM NO. 2, WHICH ALSO HAD BEEN PREVIOUSLY AGREED TO BY THE CONTRACTOR, IS NOT MATERIAL TO THE ISSUE OF WHETHER THE ADDENDUM NO. 3 PORTION OF THE AMENDMENT CONTRADICTED THE PROVISIONS OF CHANGE ORDER NO. 2. AS TO THE FAILURE OF THE AMENDMENT TO MENTION REINFORCING STEEL, IT SHOULD BE NOTED THAT BY THE TIME THE AMENDMENT WAS SENT TO THE CONTRACTOR (ON OCTOBER 27) THE STEEL QUESTION HAD ALREADY BEEN SETTLED BY ELIMINATION AND, OBVIOUSLY, THERE WAS NO NEED TO MENTION IT. IN REGARD TO THE LAST "DIFFERENCE IN DETAIL," WE FAIL TO SEE ANY JUSTIFICATION TO SUPPORT AN INFERENCE THAT THE FAILURE TO ITEMIZE THE EXTENSIONS TO THE INTERIM COMPLETION DATES REFLECTED AN INTENTION TO CHANGE, OR TO DISHONOR, THE SPECIFIC EXTENSIONS ITEMIZED IN THE CHANGE ORDER. THE OVERALL 30 DAY EXTENSION WAS MENTIONED AND THE EXTENSIONS ON THE INTERIM COMPLETION DATES WERE MADE IN THE SPECIFICATION CHANGES. THE AMENDMENT WAS NOT SILENT ON THE INTERIM COMPLETION DATES, BUT CLEARLY REFERRED TO THE SPECIFICATION CHANGES BY THE FOLLOWING LANGUAGE:

WHEREAS, PURSUANT TO THE PROVISIONS OF CLAUSE 3 OF THE GENERAL PROVISIONS OF SAID CONTRACT, CERTAIN CHANGES IN THE SPECIFICATIONS AND DRAWINGS WHICH FORM A PART OF SAID CONTRACT HAVE BEEN MADE BY WRITTEN ORDERS DESIGNATED AS CHANGE ORDER NO. 1 DATED SEPTEMBER 22, 1961, AND CHANGE ORDER NO. 2 DATED OCTOBER 3, 1961 * * *

(4) WITH RESPECT TO WHETHER IT IS IMPORTANT THAT THE CONTRACT WAS SIGNED BY THE CONTRACTING OFFICER AND BY THE PRESIDENT OF S AND E, WHILE THE MEMORANDUM OF UNDERSTANDING WAS SIGNED BY THE CONTRACTING OFFICER AND THE EXECUTIVE VICE-PRESIDENT OF S AND E, WE DO NOT THINK THAT THOSE EVENTS HAVE ANY MATERIAL SIGNIFICANCE IN DETERMINING WHEN THE PARTIES INTENDED TO BE BOUND ON CHANGE ORDER NO. 2. THE RECORD INDICATES THAT MR. DEWITT, WHO SIGNED THE PROPOSAL OF OCTOBER 2, TOOK AN ACTIVE PART IN ADMINISTERING THE CONTRACT ON BEHALF OF S AND E. A NUMBER OF LETTERS TO THE CONTRACTING OFFICER ON VARIOUS PROBLEMS WHICH AROSE DURING THE COURSE OF THE CONTRACT BEAR HIS SIGNATURE, AND THE CONTRACT FOR AGGREGATE WITH H.K. FERGUSON COMPANY ALSO BEARS HIS SIGNATURE. HE WAS A VICE-PRESIDENT OF S AND E AND NOT A MINOR OFFICIAL LACKING IN RESPONSIBLE DUTIES. CONTRARY TO THE ASSERTION IN S AND E'S LETTER OF NOVEMBER 24, AND, AS THE EXAMINER FOUND, HE TOOK AN ACTIVE PART IN THE NEGOTIATIONS LEADING UP TO THE CHANGE ORDER. (THE EXAMINER'S FINDING IN THIS REGARD--- P. 37 OF THE DECISION--- IS SUPPORTED BY MR. DEWITT'S OWN TESTIMONY. SEE S AND E EXHIBIT C, ANSWER TO QUESTION 3 ON THE CHANGE ORDER CLAIM.)

THE OTHER REPRESENTATIVE OF S AND E AT THE NEGOTIATIONS WAS MR. W. R. WOODARD WHOSE OFFICIAL POSITION WITH THE CONTRACTOR WAS THAT OF "CHIEF ESTIMATOR.' ACCORDING TO THE TESTIMONY OF MR. ELDER, MR. WOODARD AND HE (MR. ELDER) PREPARED S AND E'S ORIGINAL BID ESTIMATE FOR THE CONTRACT WORK. (P. 1111, TRANSCRIPT.) ALSO, IT IS SIGNIFICANT TO NOTE THAT THE RECORD SHOWS MR. WOODARD WAS CHOSEN AND DIRECTED BY THE PRESIDENT OF S AND E (MR. ESTES) TO GO TO IDAHO FALLS AND NEGOTIATE WITH THE GOVERNMENT ON CHANGE ORDER NO. 2. SEE AFFIDAVIT DATED JUNE 9, 1962, BY MR. WOODARD APPEARING IN S AND E EXHIBIT D UNDER ITS "STEAM" CLAIM.

S AND E MAKES NO CLAIM THAT MESSRS. DEWITT AND WOODARD WERE NOT AUTHORIZED TO NEGOTIATE ON ITS BEHALF, OR THAT MR. DEWITT HAD NO AUTHORITY TO SIGN THE PROPOSAL OF OCTOBER 2. THE MEN PICKED TO REPRESENT S AND E AT THE NEGOTIATIONS WERE CHOSEN BY S AND E AND NOT BY THE GOVERNMENT. IT IS NO ANSWER TO SAY AT A LATER DATE, AS WAS STATED IN S AND E'S LETTER OF NOVEMBER 24, THAT MR. DEWITT ,WAS IN THE PROCESS OF GETTING MARRIED, AND IT WAS NOT FEASIBLE OR PRACTICAL OR REASONABLE TO EXPECT HIM TO HANDLE THE NEGOTIATIONS.' THAT BEING THE CASE THERE WAS NOTHING TO PREVENT THE CONTRACTOR FROM SENDING ITS PRESIDENT OR EXECUTIVE VICE-PRESIDENT TO REPRESENT IT.

MOREOVER, IT IS SIGNIFICANT TO TAKE NOTE OF TWO LETTERS FROM S AND E WHICH WERE INTRODUCED INTO EVIDENCE AS CONTRACTING OFFICER'S EXHIBITS C-13 AND C-14. EXHIBIT C-13 IS DATED AUGUST 16, 1961, AND WAS ADDRESSED TO GIFFELS AND ROSSETTI AND READS IN PERTINENT PART AS FOLLOWS:

IN ACCORDANCE WITH PARAGRAPH SC-18, DESIGNATION OF CONSTRUCTION SUPERINTENDENT, OF THE SPECIAL CONDITIONS OF THE CONTRACT, THIS IS TO ADVISE YOU THAT THE UNDERSIGNED IS ASSIGNED TO THIS PROJECT FOR THE PURPOSES OF MANAGEMENT AND ADMINISTRATION. THIS LETTER IN ADDITION WENT ON TO DELEGATE TO MR. JAMES D. DOWNIE AUTHORITY TO MANAGE THE ACTUAL JOB SITE AND TO PERFORM RELATED DUTIES. THE INDIVIDUAL WHO SIGNED THIS LETTER (I.E. THE "UNDERSIGNED") WAS MR. DEWITT, VICE PRESIDENT.

EXHIBIT C-14 IS A LETTER DATED SEPTEMBER 19, 1961, TO GIFFELS AND ROSSETTI WHICH WAS SIGNED BY MR. DEWITT AS VICE PRESIDENT AND READS AS FOLLOWS: PLEASE REFERENCE OUR LETTER DATED AUGUST 16, 1961 CONCERNING THE ABOVE SUBJECT.

THIS IS TO ADVISE YOU THAT MR. JAMES D. DOWNIE IS ALSO DELEGATED THE AUTHORITY TO PREPARE, SIGN AND DELIVER PRIME CONTRACTOR COST PROPOSALS FOR CONTRACT ADDENDUMS ISSUED BY YOUR OFFICE.

FROM THE FOREGOING IT WOULD APPEAR THAT MR. DEWITT WAS A RESPONSIBLE OFFICIAL OF S AND E WHO HAD AUTHORITY TO DELEGATE RESPONSIBILITIES TO SUBORDINATES WITHIN THE S AND E ORGANIZATION AND TO APPOINT THE SUBORDINATES WHO WOULD EXERCISE SUCH RESPONSIBILITIES. MR. DEWITT PARTICIPATED ACTIVELY IN THE NEGOTIATIONS LEADING UP TO THE AGREEMENT OF OCTOBER 3, AND THE EARLIER PROPOSAL OF SEPTEMBER 27, 1961, WHICH WAS REJECTED BY THE GOVERNMENT, BORE MR. DEWITT'S SIGNATURE, AS DID THE PROPOSAL DATED SEPTEMBER 19, 1961, FOR ADDENDUM NO. 2. IT IS THEREFORE DIFFICULT TO SEE HOW IMPORTANCE CAN BE ATTACHED TO THE FACT THAT THE PROPOSAL OF OCTOBER 2 WAS NOT SIGNED BY THE PRESIDENT OR EXECUTIVE VICE PRESIDENT OF S AND E WHEN THE INDIVIDUAL WHO DID SIGN IT HAD APPARENT AUTHORITY NOT ONLY TO SIGN COST PROPOSALS BUT ALSO TO DELEGATE SUCH AUTHORITY TO AN EMPLOYEE (MR. DOWNIE) WHO WAS EVEN MORE SUBORDINATE IN RANK WITHIN THE S AND E ORGANIZATION THAN ITS VICE PRESIDENT, MR. DEWITT.

(5) THE EXAMINER FOUND THAT "MOST IMPORTANT OF ALL, THE COURSE OF CONDUCT OF THE CONTRACTING OFFICER SHOWS THAT HE CONSIDERED THE EXECUTION OF THE AMENDMENT AS THE OPERATIVE ACT," NOTING, AMONG OTHER THINGS, THAT THE CONTRACTING OFFICER DID NOT SIGN THE AMENDMENT WHEN HE SENT IT TO MR. ESTES AND DID NOT SIGN IT WHEN IT WAS SENT BACK. AS PREVIOUSLY INDICATED THE RECORD SHOWS THAT THE AMENDMENT WAS NEVER RETURNED TO THE CONTRACTING OFFICER AND WE FAIL TO SEE THE SIGNIFICANCE OF HIS FAILURE TO SIGN IT BEFORE SENDING IT TO MR. ESTES.

THE EXAMINER ALSO NOTED THAT WHEN MR. ESTES SIGNED AMENDMENT NO. 2, INCORPORATING CHANGE ORDER NO. 3, ON NOVEMBER 29 HE DID SO WITH A TYPEWRITTEN NOTE BESIDE HIS SIGNATURE WHICH INDICATED THAT EXECUTION OF THAT AMENDMENT COULD NOT BE CONSTRUED AS ACKNOWLEDGING ACCEPTANCE OF TIME OR AMOUNT INCLUDED IN AMENDMENT NO. 1. WE FAIL TO SEE THAT ANY EVIDENTIARY SIGNIFICANCE CAN PROPERLY BE ATTACHED TO THIS ACT. THE ACT OCCURRED SUBSEQUENT TO S AND E'S NOVEMBER 24 LETTER AND MERELY REITERATES THE ADVICE GIVEN IN THAT LETTER TO THE EFFECT THAT S AND E DID NOT CONSIDER ITSELF BOUND TO THE TERMS OF THE OCTOBER 3 CHANGE ORDER. MOREOVER, IT IS A SELF-SERVING ACT WHICH OCCURRED LONG AFTER THE REALLY CRUCIAL AND DETERMINATIVE EVENTS CONCERNING THIS ISSUE TOOK PLACE.

FINALLY, THE EXAMINER NOTED THAT "THE CONTRACTING OFFICER DID NOT SIGN AMENDMENT NO. 2, (SIC) NOR HAS HE SIGNED ANY AMENDMENT," AND FOUND AS "ALMOST DETERMINATIVE THAT THE CONTRACTING OFFICER ,HAS NEVER MADE ANY PAYMENT WHATSOEVER FOR WORK ENTAILED BY CHANGE ORDER NO. 2 OR ANY OTHER CHANGE ORDER.' THE REASONS FOR NONPAYMENT APPEAR TO BE SET OUT AS FOLLOWS IN THE EXAMINER'S OWN WORDS (P. 9 OF HIS DECISION):

HOWEVER, IN THE MIDDLE OF NOVEMBER THE PARTIES BECAME INEXTRICABLY AT LOGGERHEADS, PARTICULARLY OVER CHANGE ORDER NO. 2 AND THEREAFTER DEALT AT SWORDS' POINTS WITH BOTH HAVING ADVICE OF COUNSEL ALL ALONG THE WAY TO THE END.

ON PAGE 77 OF HIS DECISION, THE EXAMINER STATED:

2. THE SAME INSISTENCE ON THE LETTER OF THE CONTRACT THAT TOOK PLACE AT THE OUTSET PERVADED ALL PHASES OF THE UNDERTAKING, E.G., THE INSISTENCE ON THE FELTING OF DAMPERS AT NO EXTRA COST UNDER THE AMBIGUOUS SPECIFICATIONS. THIS CAME AT THE VERY END. LIKEWISE, IN AREAS OF DISCRETION, THE CONTRACT WAS ADMINISTERED IN A VERY STRICT AND TECHNICAL WAY THROUGHOUT, E.G., THE CRITERIA FOR ALLOWANCES FOR WEATHER; THE REFUSAL TO PAY MATERIAL JOB-SITE; THE WITHHOLDING OF MONEY FOR CHANGE ORDER WORK, ETC.

THE ABOVE COMMENTS SHED SOME LIGHT ON THE REASON WHY PAYMENTS FOR CHANGE ORDER WORK WERE NOT MADE. APPARENTLY, THE CONTRACTING OFFICER FELT, AND THERE APPEARS TO BE SOME BASIS FOR HIS FEELING, THAT S AND E WAS RENEGING ON ITS AGREEMENT, AND IN THE FACE OF THAT FACT HE DECIDED THAT HE WOULD NOT PAY FOR THE CHANGED WORK UNTIL S AND E SIGNED AMENDMENT NO. 1. HE SO INFORMED S AND E IN HIS TELEGRAM OF NOVEMBER 21. MOREOVER, THE MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS INDICATE THAT S AND E ITSELF REQUESTED, OR AT LEAST ACQUIESCED IN, THIS PROCEDURE. FOR EXAMPLE, THE MINUTES OF THE NOVEMBER 15, 1961, MEETING, WHICH WAS ATTENDED BY MR. DEWITT, CONTAINS THE FOLLOWING NOTATION:

THE CONTRACTOR ASKED THE QUESTION AS TO WHETHER IT WOULD BE SATISFACTORY IF A NEW PAYMENT ESTIMATE DELETING AMENDMENT NO. 1 BE SUBMITTED. IN REPLY THE CONTRACTOR WAS INFORMED THAT SUCH A REVISED ESTIMATE WOULD BE PROCESSED WITHOUT OBJECTION FROM THE JOB-SITE. THE CONTRACTOR WAS FURTHER INFORMED THAT THE PROCESSING OF A REVISED ESTIMATE IN NO WAY WAS INTENDED TO CONDONE THE FAILURE TO SIGN AMENDMENT NO. 1 AND THAT IT WAS ESSENTIAL THAT THIS AMENDMENT BE SIGNED AND MADE AN OPERATIVE PART OF THE CONTRACT. AS THE EXAMINER NOTED, PAYMENT FOR THE CHANGED WORK AT THE TIME WAS DISCRETIONARY WITH THE CONTRACTING OFFICER. PERHAPS THE CONTRACTING OFFICER SHOULD HAVE PAID THE AMOUNT CONCEDEDLY DUE FOR CHANGE ORDER NO. 2, BUT THE FACT THAT HE DID NOT, WHEN CONSIDERED IN CONJUNCTION WITH THE ATTENDANT CIRCUMSTANCES, CAN HARDLY BE VIEWED AS MEANINGFUL EVIDENCE THAT HE DID NOT CONSIDER THE AGREEMENT OF OCTOBER 3 BINDING. IN ANY EVENT, WHEN A CONTRACTING OFFICER HAS TAKEN EFFECTIVE ACTION WHICH LEGALLY CREATES DEFINITE RIGHTS AND OBLIGATIONS, HIS ERRONEOUS UNDERSTANDING OR MISCONCEPTION OF THE LEGAL EFFECTS OF WHAT HAS BEEN DONE CANNOT AFFECT THE GOVERNMENT'S RIGHTS, SINCE NO OFFICER OR AGENT OF THE GOVERNMENT HAS POWER OR AUTHORITY TO WAIVE OR FOREGO ANY RIGHT WHICH HAS VESTED IN THE GOVERNMENT.

WE TURN NOW TO A NUMBER OF FACTORS WHICH APPARENTLY WERE IGNORED BY THE EXAMINER, BUT WHICH, IN OUR OPINION, HAVE A DIRECT AND IMPORTANT BEARING ON THE ISSUE AT HAND.

FIRST, THE CONTRACTING OFFICER TESTIFIED, WITHOUT SUBSEQUENT CONTRADICTION, THAT THE NORMAL PRACTICE IN HIS OFFICE DID NOT CONTEMPLATE THE ISSUANCE OF UNPRICED CHANGE ORDERS IN ADVANCE OF THE START OF THE WORK (P. 1294, TRANSCRIPT). HE ALSO STATED THAT IN THIS PARTICULAR CASE,"IT WAS VERY SERIOUSLY CONSIDERED THAT IF THE PRICE WAS NOT ACCEPTABLE TO US THAT WE WOULD NOT AWARD THE CHANGE ORDER," IN WHICH CASE, THE CHANGE WOULD BE ABANDONED OR INCLUDED AS A CHANGE IN THE FOLLOW-UP PHASE II CONTRACT. IN THE LATTER EVENT THE WORK WOULD BE PRICED ON A COMPETITIVE BID BASIS. (PP. 1294, 1295, TRANSCRIPT.) IN ANSWER TO A QUESTION BY GOVERNMENT COUNSEL, THE CONTRACTING OFFICER STATED UNEQUIVOCALLY THAT HAD AN AGREEMENT NOT BEEN REACHED IN ADVANCE AS TO PRICE AND TIME EXTENSION HE WOULD NOT HAVE AUTHORIZED ISSUANCE OF THE ORDER AND THAT HE HAD DONE SO IN RELIANCE ON THE AGREEMENT. (P. 1299, TRANSCRIPT.) IN THIS CONNECTION, THE RECORD SHOWS THAT EACH OF THE OTHER FIVE CHANGE ORDERS ISSUED DURING THE LIFE OF THE CONTRACT (I.E. NOS. 1, 3, 4, 5 AND 6), WERE ALSO ACCOMPLISHED ON A NEGOTIATED BILATERAL BASIS. EACH OF THESE FIVE OTHER CHANGE ORDERS WERE ISSUED IN RESPONSE TO COST AND TIME (WHEN INVOLVED) PROPOSALS SUBMITTED BY S AND E. THE RECORD FAILS TO SHOW THAT AT ANY TIME DURING THE LIFE OF THE CONTRACT DID THE CONTRACTING OFFICER ISSUE A UNILATERAL UNPRICED CHANGE ORDER.

SECOND, THE RECORD INDICATES THAT THE CONTRACTOR PROMPTLY ACCEPTED THE CHANGED WORK, BEGAN TO PERFORM ACCORDINGLY, AND GAVE NO NOTICE AS TO ITS INTENTIONS TO REPUDIATE THE PRICE AND TIME PROVISIONS UNTIL THE NOVEMBER 24 LETTER. IN THE INTERIM S AND E INFORMED THE GOVERNMENT ON OCTOBER 23 THAT NO EXTRA CHARGE FOR REINFORCING STEEL WOULD BE ASKED FOR THE CHANGED WORK, THEREBY IMPLICITLY INDICATING THAT IT WAS PROCEEDING ON THE AGREED BASIS. MORE THAN 30 DAYS PASSED AFTER THIS LETTER BEFORE THE CONTRACTOR ATTEMPTED TO WITHDRAW FROM ITS AGREEMENT AND AT NO TIME DURING THE PERIOD OCTOBER 3 THROUGH NOVEMBER 23 DID S AND E OFFICIALLY INFORM THE CONTRACTING OFFICER THAT IT DID NOT CONSIDER THE AGREEMENT BINDING.

FINALLY, IT IS IMPORTANT TO NOTE THAT THE REASONS GIVEN IN S AND E'S LETTER OF NOVEMBER 24 FOR NOT CONSIDERING ITSELF BOUND TO THE TERMS OF THE ORDER DO NOT RELATE TO THE PARTIES' INTENTIONS AS OF THE DATE THAT THE AGREEMENT WAS CONSUMMATED. S AND E DID NOT CLAIM THAT THE PARTIES HAD FAILED TO REACH COMPLETE AGREEMENT; IT CLAIMED THAT THE PRICE WAS INADEQUATE AND THAT THE ,AFTER-THE-FACT CONDITIONS" PROVED THAT THE 30 DAYS TIME EXTENSION WAS INADEQUATE. SEE, ALSO, MR. WOODWARD'S ANSWER TO QUESTION NO. 9 (S AND E EXHIBIT C) WHEREIN HE STATED THAT "WE DID NOT SIGN THE CHANGE BECAUSE WE WISHED TO SEE IF THE TREND ON THE PRICES WOULD REMAIN THE SAME, OR WOULD BECOME LOWER. AFTER SEVERAL WEEKS, THE COSTS WERE NOT REDUCED, FOR REASONS BEYOND OUR CONTROL, AND, ON NOVEMBER 24TH, MR. ESTES WROTE A LETTER REFUSING TO SIGN THE CHANGE ORDER AND REQUESTING ITS RENEGOTIATION.' TO THE SAME GENERAL EFFECT, SEE MR. DEWITT'S ANSWER TO QUESTION NO. 6 (S AND E EXHIBIT C). IT IS PRECISELY THIS KIND OF AFTER -THE-FACT REAPPRAISAL AND WITHDRAWAL THAT THE COURT WAS REFERRING TO IN SANDERS V. POTTLITZER BROS. FRUIT CO., WHICH WAS CITED AS THE BASIS OF THE RULE IN THE P.J. CARLIN CONSTRUCTION COMPANY CASE, SUPRA. NO WITHDRAWAL FROM THE AGREEMENT WAS ATTEMPTED BY S AND E UNTIL AFTER THE GOVERNMENT HAD COMMITTED ITSELF AND ISSUED THE CHANGE ORDER; UNTIL AFTER S AND E BEGAN AND PROSECUTED THE WORK WITHOUT QUESTION; UNTIL A LONG PERIOD OF SILENCE (WITH AN INTERVENING CONFIRMING LETTER) HAD ELAPSED; AND UNTIL AFTER-THE- FACT CONDITIONS PROVED UNFAVORABLE. THESE CIRCUMSTANCES SHOW CONCLUSIVELY THAT THE PARTIES INTENDED TO BE BOUND BY THE AGREEMENT REACHED ON OCTOBER 3--- NO BETTER EVIDENCE EXISTS TO SHOW THIS THAN THE FACT THAT THE PARTIES RELIED UPON, AND PERFORMED UNDER, THE TERMS OF THAT AGREEMENT. SEE CORBIN ON CONTRACTS, SECTION 30:

THE SUBSEQUENT CONDUCT AND INTERPRETATION OF THE PARTIES THEMSELVES MAY BE DECISIVE OF THE QUESTION AS TO WHETHER A CONTRACT HAS BEEN MADE EVEN THOUGH A DOCUMENT WAS CONTEMPLATED AND HAS NEVER BEEN EXECUTED. THEY MAY BOTH HAVE ALREADY BEGUN PERFORMANCE AND MAY HAVE MADE STATEMENTS THAT ARE STRONGLY EVIDENTIAL. OF COURSE, THE SUBSEQUENT CONDUCT OF THE PARTIES MAY CONSTITUTE A TACIT CONTRACT ON THE TERMS PREVIOUSLY AGREED UPON, EVEN THOUGH THE UNDERSTANDING HAD AT FIRST BEEN THAT THE EXECUTION OF A FORMAL DOCUMENT WAS NECESSARY.

IN VIEW OF THE ABOVE CONSIDERATIONS, WE CONCLUDE AS A MATTER OF LAW THAT S AND E IS ENTITLED TO NOTHING MORE IN THE WAY OF A PRICE OR TIME ADJUSTMENT THAN THAT WHICH WAS FIRMLY AGREED TO BY THE PARTIES AND EMBODIED IN CHANGE ORDER NO. 2.

IN ITS BRIEF OF JUNE 1, 1965, S AND E ASSERTS THAT EVEN IF THE PARTIES HAD REACHED COMPLETE AGREEMENT ON THE TERMS OF THE CHANGE ORDER THERE WERE A NUMBER OF MUTUAL MISTAKES OF FACT WHICH WOULD HAVE RENDERED IT VOIDABLE AT THE OPTION OF S AND E AND THAT S AND E EXERCISED THAT OPTION. ACCORDING TO S AND E THE TESTIMONY OF MESSRS. WOODARD AND DEWITT SHOWED THAT "BOTH THE GOVERNMENT AND THE CONTRACTOR FULLY CONDITIONED THEIR CHANGE ORDER ESTIMATES ON THE AVAILABILITY OF STEAM FOR USE IN HEATING AND CURING CONCRETE" AND THAT THIS "TESTIMONY WAS FULLY CORROBORATED BY MR. ANDERSON (TR. P. 1996) AND MR. DISKIN (TR. P. 2348). BOTH OF THESE GOVERNMENT WITNESSES TESTIFIED THAT ALL PARTIES TO THE NEGOTIATIONS EXPECTED THAT STEAM WOULD BE AVAILABLE FOR THE CHANGED RK.'

ANOTHER MUTUAL MISTAKE OF FACT, ACCORDING TO S AND E, INVOLVED THE DELETION OF THE SUBSURFACE DRAINAGE SYSTEM ORIGINALLY CONTEMPLATED FOR THE BASIN AND "AS MR. MASON, THE CONTRACTOR'S EXPERT ON SOILS, TESTIFIED, THIS DELETION HAD A PROFOUND EFFECT ON THE FROST HEAVE CONDITION SUBSEQUENTLY ENCOUNTERED IN THE BACKFILL OPERATION.'

ALSO, ACCORDING TO THE BRIEF, THE FACT THAT S AND E DID NOT OFFICIALLY INFORM THE CONTRACTING OFFICER UNTIL NOVEMBER 23 THAT IT DID NOT CONSIDER THE AGREEMENT BINDING SHOULD NOT BE TAKEN AS EVIDENCE TO IMPLY "THAT THE CONTRACTOR DELIBERATELY LED AEC TO DIRECT PERFORMANCE OF THE CHANGED WORK, THEN ALMOST TWO MONTHS LATER RENEGED ON THEIR AGREEMENT AFTER COMMITTING THE GOVERNMENT TO CONTINUE THE CHANGE TO COMPLETION.' ON THIS POINT S AND E ASSERTS:

* * * THE FACT IS THAT BY THE GOVERNMENT'S OWN ADMISSION (THEIR UNILATERAL PROGRESS DETERMINATIONS CONTAINED IN THE WEEKLY CONSTRUCTION MEETINGS) THE WORK ON CHANGE ORDER NO. 2 WAS ONLY EIGHT PERCENT COMPLETE AT THE TIME THE CONTRACTING OFFICER WAS NOTIFIED OF THE MUTUAL MISTAKES. AFTER ALL, THE CONTRACTOR DID NOT EXPECT THE PROMISED STEAM UNTIL NOVEMBER. THE CONTRACT CONTAINED BOTH TERMINATION FOR CONVENIENCE AND TERMINATION FOR DEFAULT CLAUSES.

IT SHOULD BE NOTED AT THE OUTSET THAT ALTHOUGH THE CLAIM OF MUTUAL MISTAKE HAD BEEN PRESENTED TO HIM, THE HEARING EXAMINER'S DECISION DID NOT CONSIDER THIS CLAIM.

APPARENTLY THE NOTIFICATION OF MUTUAL MISTAKE WHICH THE ABOVE QUOTATION REFERS TO IS S AND E'S LETTER OF NOVEMBER 24, 1961, SINCE THE MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS SHOW THAT ON NOVEMBER 22, 1961, THE WORK ON AMENDMENT NO. 1 (WHICH EMBODIED CHANGE ORDER NO. 2), WAS 8 PERCENT COMPLETE AT THAT TIME AS AGAINST A SCHEDULED PROGRESS OF 65.4 PERCENT. HOWEVER, WAS THE CONTRACTING OFFICER NOTIFIED OF A MUTUAL MISTAKE ON NOVEMBER 24? WE THINK NOT. CONTRARY TO THE ASSERTION IN ITS BRIEF S AND E'S LETTER OF NOVEMBER 24 MADE NO MENTION OF STEAM OR OF MUTUAL MISTAKE. THE LETTER STATED THAT THE ORIGINAL ESTIMATED COSTS WERE INADEQUATE BECAUSE OF "SEVERAL" FACTORS "SOME OF WHICH ARE AS FOLLOWS.' THE LETTER THEN LISTS THE SHORT PERIOD OF TIME ALLOWED FOR THE NEGOTIATION OF THE CHANGE AND MR. DEWITT'S IMPENDING MARRIAGE. AN EXAMINATION OF THE RECORD REVEALS, INSOFAR AS WE HAVE BEEN ABLE TO DETERMINE, THAT THE EARLIEST DATE ON WHICH ANY KIND OF CLAIM FOR MISTAKE WAS MADE BY S AND E WAS DURING A WEEKLY CONSTRUCTION MEETING HELD ON DECEMBER 19, 1961. THE MINUTES OF THAT MEETING CONTAIN THE FOLLOWING ENTRY UNDER "/I) OTHER TEMS:" * * * THE CONTRACTOR STATED THAT A MINIMUM OF 60 DAYS EXTENSION SHOULD APPLY TO AMENDMENT NO. 1. THE CONTRACTOR FURTHER STATED THAT THE ORIGINAL 30 DAYS ESTABLISHED BY THIS AMENDMENT WAS INADEQUATE AND THAT HE HAS ASKED FOR A 60 DAY EXTENSION. THE CONTRACTOR WAS INFORMED THAT THE BASIS OF THE ORIGINAL 30 DAYS CAME ABOUT BY REASON OF A PROPOSAL FROM THE CONTRACTOR FOR THE PERFORMANCE OF WORK INVOLVED IN CHANGE ORDER NO. 2 AND THAT SAID PROPOSAL WAS ACCEPTED BY THE COMMISSION. THE CONTRACTOR STATED HE HAS NOT FORMALLY ACCEPTED CHANGE ORDER NO. 2 ON THE BASIS OF MISTAKE. THE CONTRACTOR WAS ASKED IF THE MISTAKE WAS CLAIMED IN HIS ORIGINAL BID. THE CONTRACTOR ANSWERED -NO- THAT THE MISTAKE WAS CLAIMED IN CHANGE ORDER NO. 2 AND THAT IT WAS HIS UNDERSTANDING THAT UP UNTIL THE FORMAL ACCEPTANCE OF AN AMENDMENT, A CLAIM COULD BE MADE FOR ERROR. THE CONTRACTOR WAS ASKED IF HIS WORK SCHEDULE DID NOT INCLUDE ALL AMENDMENTS TO DATE. THE CONTRACTOR REPLIED THAT IT DID, BUT THAT A MISTAKE HAD BEEN MADE. THE CONTRACTOR FURTHER STATED THAT THE WORK SCHEDULE WAS BASED ON SUMMER WORK. IT WAS POINTED OUT TO THE CONTRACTOR THAT HIS WORK SCHEDULE WAS SIGNED BY HIM ON SEPTEMBER 29 AND ON THIS BASIS WHERE DID THE SUMMER WORK COME IN. THE CONTRACTOR REPLIED THAT THE SCHEDULE INCLUDED SOME SUMMER, FALL, AND WINTER WORK.

THE ABOVE EXCEPT, IT IS NOTED, DOES NOT REVEAL THE NATURE OF THE MISTAKE CLAIMED BY S AND E. IT DOES NOT MENTION STEAM, AND IT APPEARS TO RELATE TO AN ERROR IN S AND E'S COMPUTATION OF TIME NECESSARY TO ACCOMPLISH THE CHANGED WORK CALLED FOR IN CHANGE ORDER NO. 2.

INSOFAR AS WE HAVE BEEN ABLE TO DETERMINE FROM THE RECORD, THE FIRST TIME THAT S AND E RAISED THE STEAM ISSUE IN CONJUNCTION WITH THE NEGOTIATIONS ON CHANGE ORDER NO. 2 WAS DURING A MEETING HELD ON JANUARY 4, 1962, THE MINUTES OF WHICH ARE FOUND IN S AND E EXHIBIT D. PARAGRAPH 3 OF THESE MINUTES CONTAIN THE FOLLOWING PERTINENT ENTRIES:

(3) S AND E CONTRACTORS, INC., STATED THAT THEY NOW INTEND TO SUBMIT THE FOLLOWING CLAIMS FOR TIME ADJUSTMENTS UNDER THIS CONTRACT:

(B) AN ADDITIONAL 30-DAY EXTRA TIME EXTENSION FOR CHANGE ORDER NO. 2 AS A RESULT OF NONAVAILABILITY OF STEAM AND SIGNIFICANT ADDED FORM WORK REQUIRED. S AND E CONTRACTORS, INC., HAD NEVER BEEN INFORMED OF ANY AUTHORITY DELEGATED TO G. A. ANDERSON TO SIGN THIS CHANGE ORDER AND STATE THAT NO BINDING AGREEMENT FOR TIME AND MONEY FOR THIS WORK HAS BEEN REACHED. S AND E REQUESTED THAT THE C.O. EITHER ISSUE A CHANGE ORDER BASED ON LACK OF STEAM ON THIS CHANGED WORK OR NEGOTIATE A NEW PRICE AND TIME EXTENSION FOR CHANGE ORDER NO. 2.

TWENTY-SEVEN DAYS LATER (JANUARY 31) MR. ESTES OF S AND E SENT THE CONTRACTING OFFICER A LETTER DETAILING THE BASES FOR VARIOUS CLAIMS. REFERENCE TO CHANGE ORDER NO. 2, THAT LETTER SETS FORTH THE FOLLOWING ASSERTIONS:

THE ADDITIONAL SIXTY (60) DAYS DUE TO UNILATERAL CHANGE ORDER NO. 2 ARE NECESSARY BECAUSE OF THE COMPLEXITY AND LACK OF SYMMETRY CAUSED BY THE REVISIONS TO THE BLOCK-OUTS AND ADDITIONAL HAUNCHES IN THE WALLS, THE EXTRA TIME REQUIRED FOR WINTER PROTECTION, NECESSITY OF NEW DRAWINGS, INTERRUPTING THE WORK FLOW OF BACKFILLING OPERATIONS, RESTRICTED ACCESS AND CONSEQUENT ADDITIONAL DIRT REMOVAL. WORK HAS BEEN GOING FORWARD ON CHANGE ORDER NO. 2 SINCE OCTOBER 3, 1961, AND SINCE DECEMBER 7TH, 1961, HAS BEEN ON AN ACCELERATED BASIS. SINCE THE WORK ADDED BY THIS CHANGE ORDER IS NOW ONLY APPROXIMATELY TWENTY-SEVEN (27 PERCENT) PERCENT COMPLETED, IT IS OBVIOUS THAT THE THIRTY (30) DAYS TIME EXTENSION UNILATERALLY GRANTED BY THE GOVERNMENT WAS INSUFFICIENT. THE TIME DELAY CAUSED THE CONTRACTOR BY THIS CHANGE ORDER CAN BE COMPUTED VERY SIMPLY. THE BASIN CONCRETE WORK WOULD HAVE BEEN COMPLETED ON NOVEMBER 8TH, 1961, AND ALL OTHER CONCRETE WORK IN THE ORIGINAL PLANS WOULD HAVE BEEN FINISHED BY NOVEMBER 28TH, 1961. DUE TO CHANGE ORDER NO. 2, THE CONTRACTOR HAS BEEN PREVENTED FROM COMPLETING THE BASIN CONCRETE WORK BEFORE APPROXIMATELY FEBRUARY 8TH, 1962, AND ALL OTHER CONCRETE WORK BY APPROXIMATELY MARCH 18TH, 1962. THUS, AS A DIRECT RESULT OF UNILATERAL CHANGE ORDER NO. 2, THE ADDITIONAL BASIN WORK IS TAKING EXACTLY THREE (3) MONTHS LONGER, AND THE OVERALL CONCRETE WORK TAKING NEARLY FOUR (4) MONTHS LONGER THAN WOULD HAVE BEEN REQUIRED OTHERWISE.

THE CONTRACTOR IS REQUESTING A TOTAL OF NINETY (90) DAYS TIME EXTENSION FOR THIS ITEM, SIXTY (60) DAYS MORE THAN HAS ALREADY BEEN GRANTED UNILATERALLY BY THE GOVERNMENT. THE ABOVE LETTER SET FORTH AN INDEPENDENT CLAIM FOR A TIME EXTENSION OF 37 DAYS DUE TO LACK OF STEAM. HOWEVER, AS THE ABOVE EXCERPT INDICATES, MUTUAL MISTAKE OF FACT WITH REGARD TO STEAM WAS NOT MENTIONED IN CONJUNCTION WITH CHANGE ORDER NO. 2 OR AS A BASIS FOR ADDITIONAL TIME FOR ACCOMPLISHING THE CHANGE ORDER NO. 2 WORK. IN ANOTHER LETTER OF THE SAME DATE (JANUARY 31, 1962) TO MR. DISKIN OF GIFFELS AND ROSSETTI, MR. DEWITT STATED THAT:

IN THE NEGOTIATIONS LEADING UP TO OUR PROPOSAL FOR THE MAJOR STRUCTURAL CHANGE ORDER INCLUDED IN AMENDMENT NO. 1, WE WERE ADVISED THAT WE SHOULD KEEP ANY WINTERIZATION COST TO A MINIMUM SINCE STEAM WOULD BE AVAILABLE FOR OUR CONCRETE OPERATIONS. WE RELIED UPON THIS REPRESENTATION IN PREPARING ESTIMATES OF THE COST AND TIME TO PERFORM THIS ADDITIONAL WORK. THE RECORD SHOWS THAT DURING THE NEGOTIATIONS FOR CHANGE ORDER NO. 2 MR. DISKIN GAVE NO ASSURANCE TO S AND E THAT STEAM WOULD BE AVAILABLE, AND HE DID NOT RECALL THAT THERE WERE ANY SPECIFIC DISCUSSIONS ON STEAM AT THAT TIME. (SEE THE DISCUSSION ON THE STEAM CLAIM BELOW.) ALSO, MR. DEWITT'S ASSERTIONS ARE DIRECTLY CONTRADICTED BY MR. WOODARD OF S AND E WHO CATEGORICALLY STATED THAT STEAM WAS NEVER MENTIONED DURING THE NEGOTIATIONS. (ANSWER TO QUESTION NO. 14 UNDER CHANGE ORDER NO. 2, S AND E EXHIBIT C.)

IT IS WELL ESTABLISHED THAT IN ORDER TO AFFECT THE BINDING FORCE OF A CONTRACT, THE MISTAKE COMPLAINED OF MUST BE OF AN EXISTING OR PAST FACT WHICH IS MATERIAL--- MATERIAL IN THE SENSE THAT IT IS THE EFFICIENT CAUSE OF THE AGREEMENT SUCH THAT IT ANIMATES AND CONTROLS THE CONDUCT OF THE PARTIES. SEE 17 AM. JUR. 2D, CONTRACTS SEC. 143. SEE, ALSO, PROFESSOR WILLISTON'S STATEMENT, IN HIS ANALYSIS OF KINDS OF MISTAKES WHICH RENDER CONTRACTUAL TRANSACTIONS VOIDABLE: "IN THE FIRST PLACE THERE MUST BE EXCLUDED FROM CONSIDERATION MISTAKES AS TO MATTERS WHICH THE CONTRACTING PARTIES HAD IN MIND AS POSSIBILITIES AND AS TO THE EXISTENCE OF WHICH THEY TOOK THE RISK.' WILLISTON ON CONTRACTS, REV. ED., SEC. 1543.

THE RECORD SHOWS (AS WILL BE DISCUSSED IN DETAIL BELOW ON THE STEAM CLAIM) THAT WHILE THE NEGOTIATORS OF CHANGE ORDER NO. 2 MAY HAVE ASSUMED THAT STEAM WOULD BE AVAILABLE SHORTLY, THE GOVERNMENT REPRESENTATIVE (MR. DISKIN) MADE NO ASSURANCE TO S AND E DURING THE NEGOTIATIONS THAT STEAM WOULD BE AVAILABLE. MR. DISKIN'S TESTIMONY IS CORROBORATED BY MR. WOODARD OF S AND E WHO HAS STATED CATEGORICALLY THAT STEAM WAS NEVER MENTIONED DURING THE NEGOTIATIONS. IT IS CLEAR THAT IN NO SINGLE WORD OF THE CONTRACT BETWEEN THE PARTIES DID THE GOVERNMENT PROMISE TO MAKE STEAM AVAILABLE AT ANY SPECIFIC TIME. IN FACT THERE WAS NO ABSOLUTE COMMITMENT TO MAKE STEAM AVAILABLE AT ALL-- THE GOVERNMENT'S PROMISE BEING EXPRESSLY CONDITIONED ON FURNISHING SUCH STEAM ONLY "WHEN ENOUGH WAS AVAILABLE" AND ONLY IF S AND E'S REQUIREMENTS DID NOT OVERLOAD THE AVAILABLE SERVICE OR INTERFERE WITH THE COMMISSION'S OPERATIONS. ALSO, DURING THE FEW DISCUSSIONS ON STEAM, AS RECORDED IN THE MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS, IT APPEARS THAT THE GOVERNMENT'S REPRESENTATIVES WERE VERY CAREFUL NOT TO MAKE A COMMITMENT OR REPRESENTATION THAT STEAM WOULD BE FURNISHED BY A CERTAIN DATE.

THE UNCONTRADICTED EVIDENCE (PP. 1484-85, 1998, 2063-65, TRANSCRIPT) SHOWS THAT THE EARLIEST DATE ON WHICH THERE WAS SUFFICIENT STEAM AVAILABLE WAS NOVEMBER 20, 1961, WHEN THE NEW 40,000 POUND BOILER WAS ACCEPTED BY THE GOVERNMENT AND PUT INTO OPERATING USE, AFTER RELIABILITY TESTS HAD BEEN PERFORMED. BY THAT TIME, ACCORDING TO S AND E'S REVISED WALL POUR SCHEDULE (WHICH WAS PREPARED WITH CHANGE ORDER NO. 2 IN MIND AND WHICH WAS SUBMITTED BY S AND E ON OCTOBER 18, 1961), S AND E SHOULD HAVE BEEN WELL ALONG TO COMPLETION SINCE THAT SCHEDULE SHOWED THAT THE FIRST WALL POUR WAS TO BE MADE ON OCTOBER 24 AND THE LAST ONE ON NOVEMBER 30. IN THAT CONNECTION, IT IS INTERESTING TO NOTE THAT BY LETTER DATED JUNE 9, 1962, FROM MR. WOODARD (WHO BY THAT TIME HAD BECOME A VICE PRESIDENT OF S AND E) TO THE CONTRACTING OFFICER, A SCHEDULE SHOWING POUR CANCELLATIONS DUE TO LACK OF STEAM WAS SUBMITTED. THIS SCHEDULE CLAIMED THAT THE FIRST CONCRETE POUR WHICH WAS CANCELED FOR LACK OF STEAM WAS ON OCTOBER 23, 1961, AND THE SECOND CANCELLATION OCCURRED ON DECEMBER 7, 1961.

DURING THE TIME THAT CHANGE ORDER NO. 2 WAS BEING NEGOTIATED, WE THINK THE RECORD INDICATES THAT LITTLE THOUGHT WAS GIVEN BY THE PARTIES TO THE AVAILABILITY OF STEAM. WE THINK IT REASONABLE TO OBSERVE THAT, HAD S AND E MET AND MAINTAINED ITS REVISED WALL POUR SCHEDULE DURING OCTOBER AND NOVEMBER, THE AVAILABILITY OR LACK OF STEAM WOULD NOT HAVE GENERATED THE CONTROVERSY BETWEEN THE PARTIES THAT IT LATER DID. THE GOVERNMENT DURING THIS PERIOD INDICATED AN AWARENESS OF THE DIFFICULTIES THAT COULD LATER RESULT IF THE CONTRACTOR FAILED TO MAINTAIN SCHEDULE. BY LETTER OF OCTOBER 24, 1961, MR. DISKIN ADVISED MR. DOWNIE AS FOLLOWS:

RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF OCTOBER 18TH TRANSMITTING FOR OUR APPROVAL, YOUR CONCRETE WALL POUR SCHEDULE FOR THE ABOVE CONTRACT.

THE SCHEDULE AS SUBMITTED IS APPROVED. IT IS FELT THAT THE FOLLOWING COMMENTS ARE WORTHY OF YOUR CONSIDERATION IN MAINTAINING AND/OR IMPROVING THE SCHEDULE YOU HAVE ESTABLISHED:

1. WHILE IT IS APPARENT THAT YOUR SCHEDULE DOES NOT CONTEMPLATE MAKING ANY POURS ON SATURDAYS OR SUNDAYS, IT WOULD APPEAR THAT IN ORDER TO MAINTAIN YOUR SCHEDULE IT MAY BECOME NECESSARY TO GIVE CONSIDERATION TO THE PERFORMANCE OF SOME WORK ON WEEKENDS.

2. YOUR ATTENTION IS DIRECTED TO THE FACT THAT YOUR INITIAL WALL POUR SCHEDULE FOR THE CURRENT DATE, OCTOBER 24TH, HAS NOT BEEN MET.

3. IN ORDER TO MAINTAIN THE SEQUENCE OF WORK ESTABLISHED BY SECTION SC- 01/B) OF THE SPECIFICATIONS, IT IS IMPERATIVE THAT ANY TIME LOST SHOULD BE MADE UP THROUGH THE MEDIUM OF THE USE OF OVERTIME OR INCREASED MANPOWER.

WE THINK THE ONLY REASONABLE CONCLUSION THAT CAN BE DRAWN FROM THE RECORD IS THAT THE ALLEGED MUTUAL MISTAKE COMPLAINED OF IS ONE CONCERNING A MATTER WHICH THE CONTRACTING PARTIES HAD IN MIND AS A "POSSIBILITY" AND, IN OUR OPINION, AS TO THE EXISTENCE OF WHICH THEY TOOK THE RISK. WE ALSO THINK THAT THE RECORD THROWS CONSIDERABLE DOUBT ON THE MATERIALITY OF THE ALLEGED MISTAKE AS WELL. IN A LEADING CASE ON THIS SUBJECT, GRYMES V. SANDERS, 93 U.S. 55, 60-62, THE UNITED STATES SUPREME COURT STATED:

A MISTAKE AS TO A MATTER OF FACT, TO WARRANT RELIEF IN EQUITY, MUST BE MATERIAL, AND THE FACT MUST BE SUCH THAT IT ANIMATED AND CONTROLLED THE CONDUCT OF THE PARTY. IT MUST GO TO THE ESSENCE OF THE OBJECT IN VIEW, AND NOT BE MERELY INCIDENTAL. THE COURT MUST BE SATISFIED, THAT BUT FOR THE MISTAKE THE COMPLAINANT WOULD NOT HAVE ASSUMED THE OBLIGATION FROM WHICH HE SEEKS TO BE RELIEVED. * * *

THE SUBSEQUENT CONDUCT OF THE APPELLEES SHOWS THAT THE MISTAKE HAD NO EFFECT UPON THEIR MINDS FOR A CONSIDERABLE PERIOD AFTER ITS DISCOVERY, AND THEN IT SEEMS TO HAVE BEEN RATHER A PRETEXT THAN A CAUSE.

WHERE A PARTY DESIRES TO RESCIND UPON THE GROUND OF MISTAKE OR FRAUD, HE MUST, UPON THE DISCOVERY OF THE FACTS, AT ONCE ANNOUNCE HIS PURPOSE, AND ADHERE TO IT. IF HE BE SILENT, AND CONTINUE TO TREAT THE PROPERTY AS HIS OWN, HE WILL BE HELD TO HAVE WAIVED THE OBJECTION, AND WILL BE CONCLUSIVELY BOUND BY THE CONTRACT, AS IF THE MISTAKE OR FRAUD HAD NOT OCCURRED. HE IS NOT PERMITTED TO PLAY FAST AND LOOSE. DELAY AND VACILLATION ARE FATAL TO THE RIGHT WHICH HAD BEFORE SUBSISTED. * * *

IN THE INSTANT CASE IT CANNOT BE SAID THAT S AND E'S CONDUCT AT THE TIME IT DISAVOWED THE BINDING NATURE OF CHANGE ORDER NO. 2 IS CONSISTENT WITH ITS LATER CLAIM OF MUTUAL MISTAKE. THE REASONS GIVEN BY S AND E IN ITS NOVEMBER 24 LETTER FOR CONSIDERING ITSELF NOT BOUND TO THE CHANGE ORDER CAN HARDLY BE SAID TO CONSTITUTE A CLAIM OF MUTUAL MISTAKE CONCERNING A MATERIAL FACT. MISTAKE WAS CLAIMED BY S AND E ON DECEMBER 19 BUT IT DOES NOT APPEAR THAT THE CLAIMED MISTAKE WAS ONE INVOLVING STEAM. IT WAS JANUARY BEFORE S AND E RAISED THE STEAM ISSUE WITH SPECIFIC REFERENCE TO CHANGE ORDER NO. 2. THE SUBSEQUENT CONDUCT OF S AND E REPRESENTATIVES, TO BORROW THE WORDS OF THE SUPREME COURT IN THE GRYMES CASE,"SHOWS THAT THE MISTAKE HAD NO EFFECT UPON THEIR MINDS FOR A CONSIDERABLE PERIOD AFTER ITS DISCOVERY, AND THEN IT SEEMS TO HAVE BEEN RATHER A PRETEXT THAN A CAUSE.'

IN REGARD TO THE CLAIM OF MUTUAL MISTAKE ON THE DELETION OF THE SUBSURFACE DRAINAGE SYSTEM, APPARENTLY S AND E'S CONTENTION IS THAT SUCH DELETION WAS THE CAUSE OF THE SUBSEQUENT SATURATION OF THE BACKFILL WITH WATER AND FROST HEAVE CONDITION WHICH NECESSITATED THE REMOVEL OF THE BACKFILL AND THAT DURING THE NEGOTIATIONS ON CHANGE ORDER NO. 2 THE PARTIES FAILED TO TAKE SUCH DELETION INTO ACCOUNT. WE SEE NO MERIT IN THIS CONTENTION. THE EXAMINER IN HIS CONSIDERATION OF S AND E'S BACKFILL CLAIM STATED (PP. 67 AND 68) THAT IN THE LIGHT OF HIS FINDINGS WITH RESPECT TO CHANGE ORDER NO. 2 AND ACCELERATION HE FELT IT WAS UNNECESSARY TO ANALYZE THE EVIDENCE WITH RESPECT TO CAUSES AND THAT, IN THE END, THE CONDITION RESULTED FROM THE IMPACT OF THE IDAHO WINTER. AS DISCUSSED IN DETAIL BELOW UNDER THE BACKFILL CLAIM, WE BELIEVE THE RECORD AMPLY DEMONSTRATES THAT THE FROST HEAVE CONDITION WAS THE RESULT OF S AND E'S TARDY PERFORMANCE IN PLACING THE BACKFILL WHICH PROJECTED THE BACKFILL WORK INTO THE WINTER MONTHS. MOREOVER, THE RECORD SHOWS THAT S AND E WAS AWARE OF THE DELETION OF THE SUBSURFACE DRAINAGE SYSTEM AT THE TIME THAT CHANGE ORDER NO. 2 WAS NEGOTIATED.

BY LETTER OF JANUARY 9, 1962 (S AND E EXHIBIT D), MR. DOWNIE INFORMED MR. DISKIN, IN PERTINENT PART, THAT:

IT IS OBVIOUS FOR THE FIRST TIME OF THE RESULTS OF THE SUBSURFACE AND LATENT CONDITIONS WHICH NOW ARE DIFFERENT THAN SHOWN ON THE PLANS AND SPECIFICATIONS BY WHICH WE BID THIS CONTRACT.

IN ACCORDANCE WITH THE TERMS OF THE CHANGE CONDITION ARTICLE, WE CALL TO YOUR ATTENTION THE FACT THAT ALL SUB-SURFACE DRAINAGE, AS SHOWN ON THE CONTRACT REFERENCE DRAWINGS, HAVE BEEN ELIMINATED, AND NOW AN IMPERVIOUS SURFACE IN FOR OF (SIC) THE LEAN CONCRETE MAT WILL NOT ALLOW MOISTURE TO DRAIN FROM THE BACKFILL.

IN RESPONSE TO THE ABOVE LETTER, MR. DISKIN ADVISED MR. DOWNIE BY LETTER OF JANUARY 12, 1962 (S AND E EXHIBIT D), THAT HE WAS UNABLE TO ACCEPT MR. DOWNIE'S CONCLUSION THAT THE CONDITION DESCRIBED MET THE CRITERIA SET FORTH IN CLAUSE 4 OF THE GENERAL PROVISIONS (CHANGED CONDITIONS) AND "THAT THE CONTRACT DRAWINGS REFLECT THE EXISTING CONDITIONS OF THE CONTRACT * * *.' THEREAFTER, BY LETTER DATED JANUARY 15, 1962 (S AND E EXHIBIT D), MR. ESTES RESPONDED TO MR. DISKIN'S JANUARY 12 LETTER, IN PERTINENT PART, AS FOLLOWS:

S AND E CONTRACTORS, INC. REFUTES THE STATEMENT IN YOUR LETTER OF 12 JANUARY THAT THE CONTRACT DRAWINGS REFLECT THE EXISTING CONDITIONS OF THE CONTRACT. THE ONLY DRAWINGS THAT INDICATE THE EXTENT OF THE LEAN CONCRETE AND PRESSURE GROUTING ARE MERELY REFERENCE DRAWINGS, NOT CONTRACT DRAWINGS, AND THEY DO NOT COVER THIS PROBLEM IN ANY EVENT. WE RECEIVED NO DRAWINGS SHOWING THE EXISTENCE AND EXTENT OF THE LEAN CONCRETE AND ELIMINATION OF THE ORIGIONAL PROPOSED DRAINAGE SYSTEM UNTIL LATE IN SEPTEMBER, LONG AFTER THE BID WAS ACCEPTED, THE CONTRACT WAS ENTERED INTO AND THE POURING OF THE CONCRETE WAS UNDER WAY. FURTHERMORE, SAID DRAWINGS ARE NOT A PART OF THE CONTRACT AND WILL NOT BE UNTIL SUCH TIME AS AN AGREEMENT IS REACHED ON AMENDMENT NO. 1 AND IS SIGNED BY THE CONTRACTING OFFICER AND THE CONTRACTOR.

DURING THE CROSS-EXAMINATION OF COMMANDER ANDERSON AT THE HEARING, THE FOLLOWING EXCHANGE TOOK PLACE (PP. 2001-2003, TRANSCRIPT):

HEARING EXAMINER MCCONNELL. LET ME ASK YOU SOMETHING TO CLEAR THIS UP, BECAUSE I AM TRYING TO GET THE PURPOSE OF THIS REFERENTIAL DRAWING TO CHANGE ORDER NO. 2. IT IS NOT DISPUTED THAT S AND E HAD KNOWLEDGE OF REFERENTIAL DRAWINGS AND THE LEAN CONCRETE AND THE DRAINAGE THING PRIOR TO CHANGE ORDER NO. 2, IS THERE?

MR. HUDSON. AS A REFERENTIAL DRAWING, THAT IS RIGHT, SIR. BUT NEITHER THE GOVERNMENT NOR S AND E REALIZED AT THE TIME THAT THOSE CHANGES WOULD HAVE DRASTIC EFFECTS LATER. ACTUALLY THERE WAS NO CONSIDERATION BASED AT ALL---

HEARING EXAMINER MCCONNELL. WHY WOULD THE FOUNDATION WORK AND SO FORTH SHOWN BY THE REFERENTIAL DRAWINGS, DATING BACK TO THE NELSON CONTRACT, HOW WOULD THAT HAVE BEARING ON THE CHANGES FIXED BY CHANGE ORDER NO. 2, WHICH AFTER ALL DEALT WITH SOMETHING THAT WAS QUITE ABOVE THAT ELEVATION?

MR. HUDSON. I WILL TIE THAT IN MR. MCCONNELL. I JUST WANT TO SHOW NEITHER PARTY CONSIDERED AT THIS TIME THAT THERE WAS ANY, THERE WAS NO NEGOTIATION OR AGREEMENT THAT THIS REFERENTIAL DRAWING SHOULD BE PRICED.

MR. RHODES. JUST A MOMENT. THIS IS MR. HUDSON'S STATEMENT. HE HAS NOT PRODUCED THAT INFORMATION BY THE WITNESS.

MR. HUDSON. THAT IS RIGHT.

BY MR. HUDSON.

Q. NOW, MR. ANDERSON, THE REFERENTIAL DRAWING INDICATED THAT THE SUBSURFACE, OR SUBFOUNDATION GRADE DRAINAGE, HAD BEEN ELIMINATED, THAT THE ORIGIONAL BID DRAWINGS HAD SHOWN WOULD BE EXISTING AT THE TIME S AND E STARTED, IS THAT RIGHT?

A. THE REFERENTIAL DRAWINGS SHOWED THIS?

Q. YES.

A. AND ALSO THE CONSTRUCTION DRAWINGS SHOWED THIS. THE CONSTRUCTION DRAWINGS SHOWED THAT THE DRAINS HAD BEEN ELIMINATED, TOO.

Q. SUBSEQUENTLY, YOU TESTIFIED THAT YOU PUT IN DRAINS BY A LATER AMENDMENT.

A. BY CHANGE ORDER NO. 2.

Q. CHANGE ORDER NO. 2 OR CHANGE ORDER NO. 3?

A. NO. 2 PUT IN THE DRAINAGE SYSTEM, NO. 3 PUT IN THE DETECTOR PIPES, WHICH WOULD ENABLE YOU TO DROP A SOUNDING LINE DOWN THERE TO TELL IF THERE WAS WATER IN THE DRAINAGE SYSTEM. BUT THE DRAINS THEMSELVES WERE PUT IN AS A PART OF CHANGE ORDER NO. 2.

Q. ALL RIGHT. SO WAS THE RESULT THAT NOW YOU HAD DRAINS AT APPROXIMATELY THE TOP OF FOUNDATION SLAB, IN PLACE OF THE PREVIOUS SITUATION, WHERE THE DRAINS WERE AT THE BOTTOM OF THE BACKFILL, THE FOUNDATION DRAINS, OR BELOW FOUNDATION DRAINS.

A. EXACTLY RIGHT.

Q. WITH THE RESULT THAT THERE WAS NO DRAINAGE PROVIDED FOR ANY MOISTURE IN THE BACKFILL BELOW THE TOP OF THE SLAB.

A. THAT IS CORRECT.

Q. THERE WAS NO PLACE FOR THAT WATER TO ESCAPE?

A. EXCEPT TO GO DOWN INTO THE GROUND.

Q. WELL, YOU MEAN TO GO INTO THE LEAN CONCRETE?

A. AND AROUND THE LEAN CONCRETE.

Q. WASN-T THE BASIN FOUNDATION COMPLETELY COVERED WITH LEAN CONCRETE?

A. THE MOST PART OF IT WAS.

SUBSEQUENT QUESTIONING BROUGHT OUT THAT THERE WAS NOTHING IN THE GOVERNMENT ESTIMATE ON CHANGE ORDER NO. 2 TO COVER THE "INCREASED COSTS OF BACKFILL, BECAUSE OF THIS CHANGE IN DRAINAGE" AND THAT THE GOVERNMENT ESTIMATE CONTAINED A REDUCTION FOR THE BACKFILL THAT HAD BEEN ELIMINATED BY THE WELLS WHICH WERE ADDED ALONG THE NORTH SIDE.

WHILE THE ABOVE LINE OF QUESTIONING ELICTED VALUABLE BACKGROUND INFORMATION ON THE PROBLEM OF PRICING CHANGE ORDER NO. 2, IT DID NOT BRING OUT THE CRUCIAL QUESTION INVOLVED, THAT IS, WHY SHOULD THE GOVERNMENT HAVE HAD ANYTHING IN ITS ESTIMATE TO COVER A CONTINGENCY SITUATION WHICH AROSE ONLY BECAUSE OF S AND E'S FAILURE TO MAINTAIN THE BACKFILL SCHEDULE, THUS THROWING THE WORK INTO THE SEVERE WINTER WEATHER? S AND E KNEW THAT THE DRAINS HAD BEEN DELETED BEFORE THE NEGOTIATIONS ON CHANGE ORDER NO. 2--- THERE WAS NO MISTAKE OR MISUNDERSTANDING AS TO THAT FACT. THE BACKFILL SATURATION AND FROST HEAVE CONDITION OCCURRED MUCH LATER AND THE RECORD FAILS TO SUPPORT S AND E'S CONTENTION THAT DELETION OF THE DRAINS CAUSED THAT CONDITION--- THE CAUSE, IN LIGHT OF THE EVIDENCE, WAS (AS THE EXAMINER FOUND), THE IMPACT OF THE IDAHO WINTER.

IN VIEW OF THE FOREGOING WE CONCLUDE THAT S AND E'S CLAIM ON CHANGE ORDER NO. 2 IS FOR DENIAL AS A MATTER OF LAW. WE FURTHER FIND THAT THE EXAMINER'S DECISION IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. ACCORDINGLY, THERE IS NO BASIS FOR THE ALLOWANCE OF EITHER TIME EXTENSIONS OR AN EQUITABLE ADJUSTMENT IN EXCESS OF THE TIME AND MONEY AMOUNTS AGREED TO BY THE PARTIES AND EMBODIED IN THE TERMS OF CHANGE ORDER NO. 2.

NONAVAILABILITY OF STEAM

THE CONTRACTOR'S CLAIM IN THIS RESPECT IS THAT THE GOVERNMENT WAS OBLIGATED BY THE TERMS OF THE CONTRACT TO FURNISH STEAM TO THE CONTRACTOR AT THE SITE OF THE WORK; THAT THE BID (AS WELL AS THE ESTIMATE FOR CHANGE ORDER NO. 2), WAS BASED ON THE USE OF SUCH STEAM (PRINCIPALLY FOR CURING CONCRETE AND FOR WINTER PROTECTION) AND THAT THE WORK WAS PLANNED AND THE PROGRESS SCHEDULES MADE UP IN RELIANCE UPON THE AVAILABILITY OF STEAM; THAT THE GOVERNMENT FAILED TO PROVIDE STEAM FOR SOME 2 MONTHS AFTER IT WAS POSSIBLE TO DO SO, AND THAT THE CONTRACTOR'S WORK WAS SERIOUSLY DELAYED AND ITS COST SUBSTANTIALLY INCREASED AS A RESULT OF SUCH FAILURE, AGGRAVATED BY REPEATED REPRESENTATIONS BY GOVERNMENT REPRESENTATIVES THAT STEAM WOULD BE AVAILABLE MOMENTARILY.

THE PERTINENT CONTRACT PROVISIONS ARE AS FOLLOWS: SC-07 STEAM--- STEAM WILL BE FURNISHED BY THE COMMISSION FOR CONSTRUCTION AND TEMPORARY HEATING PURPOSES AT NO-COST TO THE CONTRACTOR PROVIDING THE REQUIREMENTS DO NOT OVERLOAD THE AVAILABLE SERVICE OR INTERFERE WITH COMMISSION OPERATIONS. THE CONTRACTOR SHALL FURNISH, INSTALL AND REMOVE ALL TEMPORARY PIPING, HOSE, FITTINGS, ETC., NECESSARY TO CONNECT HIS EQUIPMENT TO PERMANENT STEAM SUPPLY LINES. SC-28 TEMPORARY HEAT--- THE CONTRACTOR SHALL PROVIDE AT HIS OWN EXPENSE ALL TEMPORARY HEATING EQUIPMENT REQUIRED FOR HIS USE. THIS INCLUDES FUEL AND ATTENDANCE FOR TEMPORARY HEATING. SITE STEAM MAY BE AVAILABLE AND USED BY THE CONTRACTOR. (SEE PARAGRAPH SC-07 ABOVE.) THE USE OF OPEN TYPE OR OIL-POT SALAMANDERS IS PROHIBITED. ALL COMBUSTION -TYPE HEATERS SHALL BE DIRECTLY VENTED TO THE EXTERIOR OF THE STRUCTURE OR TEMPORARY ENCLOSURE UNLESS SPECIFIC AUTHORIZATION TO THE CONTRARY IS GRANTED BY THE CONTRACTING OFFICER.

THE CONTRACTING OFFICER HELD THAT UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR WAS AWARE OF THE POSSIBILITY THAT STEAM MIGHT NOT BECOME AVAILABLE AND WAS RESPONSIBLE FOR PROVIDING SUCH EQUIPMENT OF ITS OWN AS MIGHT BE NECESSARY IN THAT EVENT. HE FOUND ALSO THAT NO DELAY IN POURING AND CURING CONCRETE WAS OCCASIONED BY LACK OF STEAM PRIOR TO DECEMBER 7, 1961; THAT AFTER THAT DATE STEAM WAS AVAILABLE FROM THE GOVERNMENT, ALTHOUGH THE CONTRACTOR DID NOT ELECT TO USE IT UNTIL JANUARY 15, 1962; AND THAT THE CONTRACTOR WAS ITSELF RESPONSIBLE FOR ANY DELAY.

THE HEARING EXAMINER ALLOWED A TIME EXTENSION OF 25 DAYS FOR THE DELAY OCCASIONED BY THE GOVERNMENT'S FAILURE TO FURNISH STEAM WHEN IT WAS FOUND BY THE EXAMINER TO BE AVAILABLE; HE HELD THAT THE CONTRACTOR WAS ENTITLED TO AN EQUITABLE ADJUSTMENT AS FOR A "CONSTRUCTIVE CHANGE" BY REASON OF HAVING HAD TO CONNECT TO A SOURCE OF GOVERNMENT STEAM DIFFERENT FROM THE ONE ORIGINALLY CONTEMPLATED; AND HELD THAT THE CONTRACTOR'S CLAIM FOR INCREASED COSTS DUE TO THE GOVERNMENT'S FAILURE WAS FOUNDED ON BREACH OF CONTRACT AND THEREFORE NOT WITHIN HIS JURISDICTION. THE COMMISSION REFUSED TO REVIEW THE DECISION ON THIS CLAIM.

WE CONCLUDE FROM THE RECORD THAT THERE IS NO SUBSTANTIAL EVIDENCE TO SUPPORT THE FINDING THAT THE WORK WAS DELAYED BY FAILURE OF THE GOVERNMENT WITH RESPECT TO FURNISHING STEAM. WE ALSO FIND THAT THE ALLOWANCE OF AN EQUITABLE ADJUSTMENT FOR CHANGING THE POINT FOR FURNISHING STEAM WAS ERRONEOUS AS A MATTER OF LAW.

THE EXAMINER FOUND THAT THIS CLAIM WAS CLOSELY ASSOCIATED WITH CHANGE ORDER NO. 2, BECAUSE NEGOTIATION OF THE TERMS OF THE CHANGE ORDER WERE POSTULATED ON THE ASSUMPTION THAT STEAM WOULD BE AVAILABLE THE LATTER PART OF OCTOBER. IN SUPPORT OF THIS FINDING THE EXAMINER STATED THAT:

* * * IT IS A MATTER OF PRIME IMPORTANCE IN THE CASE THAT DURING THE NEGOTIATION RELATING TO CHANGE ORDER NO. 2 IN OCTOBER MR. DISKIN STATED THAT STEAM WOULD BE AVAILABLE FOR CONCRETE CURING AT THE END OF OCTOBER. THE ESTIMATE FOR THE COST OF WINTERING IN THE NEGOTIATIONS WAS BASED ON THIS REPRESENTATION. AGAIN TOWARD THE LAST OF OCTOBER S AND E WAS TOLD THAT STEAM WOULD BE AVAILABLE AT MANHOLE NO. 3 SHORTLY * * *.

ACCORDING TO THE EXAMINER IT WAS CLEAR THAT IN PARAGRAPH SC-07 OF THE SPECIAL CONDITIONS THE GOVERNMENT BOUND ITSELF TO FURNISH STEAM WHEN ENOUGH WAS AVAILABLE AND UNDOUBTEDLY WHEN THE CONTRACT WAS EXECUTED IN AUGUST ALL CONCERNED THOUGHT THAT STEAM WOULD BE AVAILABLE BY LATE OCTOBER AT MANHOLE NO. 3, WHICH WAS WITHIN THE SITE. HE POINTED OUT THAT A STEAM PIPELINE, WHICH WAS EVIDENTLY LAID IN CONNECTION WITH THE NELSON BROTHERS' WORK, RAN FROM THE WESTINGHOUSE INSTALLATION (WHERE THE PRIMARY BOILERS USED FOR THE NRTS OPERATIONS WERE LOCATED) TO THIS MANHOLE. THE LINE HAD BEEN IN EXISTENCE FOR SOME TIME AND FOR SOME MONTHS PRIOR TO NOVEMBER 1961 WORK HAD BEEN UNDERWAY TO REPLACE THE EXISTING BOILERS AT THE WESTINGHOUSE FACILITY, WHICH HAD A LIMITED CAPACITY, WITH A BOILER HAVING A CAPACITY OF 40,000 POUNDS. THIS BOILER, IT WAS NOTED, COULD PROVIDE AMPLE STEAM FOR PHASE 1 OF THE S5G PROGRAM, AS WELL AS THE OTHER ACTIVITIES WHICH HAD TO BE SERVED.

THE FIRST WALL POUR UNDER THE SCHEDULE, AS REVISED BY CHANGE ORDER NO. 2, THE EXAMINER STATED, WAS TO TAKE PLACE ON NOVEMBER 3 BUT IT IS NOTED THE REVISED POUR SCHEDULE SUBMITTED BY S AND E'S LETTER DATED OCTOBER 18, 1961, PROVIDES FOR THE FIRST POUR TO BE MADE ON OCTOBER 24. S AND E RAN OUT A LINE ON NOVEMBER 3 WHICH TIED INTO MANHOLE NO. 3, AND CONSTRUCTED A DISTRIBUTION SYSTEM FOR THE STEAM IN THE BASIN. THE WORK ON THE BOILERS AT WESTINGHOUSE HAD APPARENTLY REACHED THE FINAL STAGES. ON NOVEMBER 11 STEAM WAS SENT THROUGH THE LINE FROM THE BOILERS TO MANHOLE NO. 3, BUT ALMOST IMMEDIATELY AFTER THE STEAM WAS TURNED ON AN ANCHOR BLOCK AND EXPANSION JOINT BROKE DOWN IN THE MANHOLE AND THE STEAM WAS CONSEQUENTLY TURNED OFF. THE EXAMINER FOUND, AS A FACT, THAT THERE WAS SUFFICIENT STEAM AVAILABLE UNDER THE TERMS OF THE CONTRACT ON NOVEMBER 11, AND AS OF THAT DATE, THE GOVERNMENT WAS UNDER A DUTY TO FURNISH IT TO S AND E FOR CONSTRUCTION PURPOSES.

THEREAFTER, THE GOVERNMENT PROCEEDED WITH REPAIR WORK AT THE MANHOLE. THE EXAMINER STATED THAT EVERYONE EXPECTED THIS WORK WOULD BE COMPLETED SHORTLY, AND "S AND E WAS ASSURED A NUMBER OF TIMES IN THE FOLLOWING SIX WEEKS THAT STEAM WOULD BE AVAILABLE AT ANY MOMENT FROM NO. 3. THE FACT IS THAT THE JOINTS WERE NOT REPAIRED UNTIL APRIL.' IT WAS NOTED THAT MR. BRYAN, WHO WAS THE PIPING SUPERINTENDENT FOR THE SUBCONTRACTOR OF S AND E WHO TIED IN THE STEAM LINES AT MANHOLE NO. 3, PUT IN ANCHOR BLOCKS AT AN ALTERNATE SOURCE WHICH WAS EVENTUALLY USED. HE DID THE WORK INVOLVED ,QUICKLY AND EFFECTIVELY" AND THE EXAMINER CONCLUDED THAT "IT IS FOUND AS A FACT THAT THE GOVERNMENT WAS NEGLIGENT IN CONDUCTING ITS REPAIRS AT NO. 3. IN TRUTH, THE UNDERLYING PRINCIPLE OF THE MAXIM RES IPSA LOQUITUR APPLIED TO THE SITUATION.' THE EXAMINER FURTHER FOUND THAT IN JANUARY S AND E ABANDONED HOPE OF STEAM FROM MANHOLE NO. 3 AND TIED INTO A MANHOLE ON THE OTHER SIDE OF THE BASIN. STEAM FROM THIS SOURCE WAS USED FROM JANUARY 15 ON. HIS DECISION ON THIS CLAIM CONCLUDES, IN PART, AS FOLLOWS:

UNDER THE FACTS THERE SEEMS TO BE LITTLE DOUBT THAT S AND E HAS AN ACTION FOR BREACH OF CONTRACT BECAUSE OF THE GOVERNMENT'S FAILURE TO PROVIDE STEAM AS PROMISED. THE DATE OF THE BREACH SHOULD BE FIXED AT NOVEMBER 11 WHEN IT IS BEYOND DISPUTE THAT THE 40,000-POUND BOILER HAD BEEN PUT INTO OPERATION AND ENOUGH STEAM WAS AVAILABLE FOR GOVERNMENT AND S AND E USE. DURING THE PERIOD WHEN THERE WAS NO STEAM, S AND E WAS USING DRY HEATERS. THE WEATHER BECAME VERY COLD AND IT WAS NECESSARY TO BUY ADDITIONAL HEATERS TO CARRY ON THIS WORK. THIS AND OTHER EXTRA COSTS WOULD BE ELEMENTS IN THE PROOF OF DAMAGES IN AN ACTION FOR BREACH, WHICH OF COURSE IS OUTSIDE THE JURISDICTION INVOKED IN THIS APPEAL. SEE, ARCOLE MIDWEST CORP. V. THE UNITED STATES, 125 CT. CL. 818.

IT IS CLEAR THAT DELAYS AND ADDITIONAL WORK TIME THAT RESULTED FROM THE LACK OF STEAM WERE CAUSED BY THE GOVERNMENT'S FAILURE TO LIVE UPTO ITS PROMISE. THEREFORE, THE DELAYS ARE EXCUSABLE UNDER THE "DELAYS DAMAGES" CLAUSE. THE FIRST WALL POUR WAS MADE ON NOVEMBER 4. IN THE LIGHT OF THE GOVERNMENT'S REPRESENTATION, PARTICULARLY THOSE MADE AT THE NEGOTIATIONS ON OCTOBER 2 OF CHANGE ORDER NO. 2, CLAUSE 4 (SIC) WILL BE APPLIED AS OF THAT DATE. SIXTY-NINE DAYS FELL BETWEEN NOVEMBER 4 AND JANUARY 11 (SIC). THE EVIDENCE SHOWS THAT 20 POURS WERE MADE DURING THIS PERIOD IN WHICH STEAM IF AVAILABLE WOULD HAVE BEEN USED. MR. BOONE, THE ASSISTANT PROJECT MANAGER WHO SUPERVISED THE WORK, TOOK THE STAND AND SUBMITTED CERTAIN SCHEDULES WHICH HE HAD PREPARED WHICH WERE DESIGNED TO DEMONSTRATE THAT THE USE OF STEAM WOULD HAVE SHORTENED THE WORK ON EACH POUR BY FIVE DAYS. TWENTY-TWO POURS WERE MADE AFTER THE STEAM WAS AVAILABLE ON JANUARY 15. THE TIME REQUIRED TO MAKE THESE WAS COMPARED WITH THE POURS MADE BEFORE JANUARY 15. MR. BOONE CONCLUDED THAT THERE WERE 72 DAYS OF DELAY IN FORM STRIPPING DUE TO THE LACK OF STEAM. HE REDUCED THIS ON ACCOUNT OF CONCURRENCY TO 35 DAYS. HE ADDED 9 DAYS ON ACCOUNT OF WEATHER CONDITIONS WHICH CAUSED CANCELLATION OF CERTAIN POUR DATES. FINALLY A TOTAL OF 44 DAYS EXTENSION WAS ASKED FOR THE NON-AVAILABILITY OF STEAM.

MR. BOONE'S PRESENTATION WAS VERY EFFECTIVE. HOWEVER, IT IS CLEAR THAT THERE WERE MANY VARIABLES INVOLVED AND FROM THE ENTIRE IMPACT OF THE EVIDENCE, INCLUDING COMMANDER ANDERSON'S REBUTTAL WHICH WAS LIKEWISE EFFECTIVE, IT IS CONCLUDED THAT THE 44 DAYS' CLAIM IS EXTRAVAGANT. THAT THE LACK OF STEAM CAUSED SOME DELAY CANNOT BE DENIED. AS THE COURTS HAVE FREQUENTLY POINTED OUT IN ASSESSING DAMAGES OR DETERMINING EXCUSABLE DELAY, IT IS OFTEN NECESSARY TO ADOPT A JURY APPROACH. FROM ALL THE EVIDENCE OF RECORD, IT IS FOUND THAT 25 DAYS OF DELAY RESULTED DIRECTLY FROM THE LACK OF STEAM. TEN OF THESE DAYS FELL BEFORE DECEMBER 7; 15 BETWEEN DECEMBER 7 AND JANUARY 15.

AS THE EXAMINER NOTED, AN ACTION FOR BREACH OF CONTRACT IS OUTSIDE THE JURISDICTION OF THE DISPUTES CLAUSE. THE CONTRACTOR'S REMEDY, IF IN FACT THE GOVERNMENT IS CHARGEABLE WITH A BREACH OF CONTRACT, LIES WITH OUT OFFICE OR WITH THE COURTS IN A SEPARATE PROCEEDING. UTAH CONSTRUCTION AND MINING CO. V. UNITED STATES, SUPRA. ANY REMEDY, OF COURSE, MUST BE PREDICATED UPON A FINDING OF LIABILITY AND THE POWER OR AUTHORITY TO MAKE SUCH A FINDING ALSO RESTS WITH THE JUDICIARY.

IN OUR OPINION, WHETHER THE GOVERNMENT WAS GUILTY OF A BREACH OF CONTRACT IS NOT AS SIMPLE, OR AS CLEAR, AS THE EXAMINER APPARENTLY FELT IT WAS. ARE UNABLE TO DETERMINE WITH ANY CERTAINTY WHETHER THE EXAMINER'S CONCLUSION WAS PREDICATED UPON A PROMISE TO SUPPLY STEAM IN THE CONTRACT ITSELF OR WHETHER IT WAS PREDICATED UPON PROMISES BY GOVERNMENT REPRESENTATIVES DURING THE COURSE OF CONSTRUCTION. IF IT IS TO BE FOUND IN THE FORMER IT IS NOT "CLEAR" TO US THAT IN SC-07 THE GOVERNMENT BOUND ITSELF TO FURNISH STEAM "WHEN ENOUGH WAS AVAILABLE.' SC-07 DOES NOT SPECIFY THE TIME WHEN STEAM WILL BE FURNISHED, NOR DOES IT CALL FOR IT TO BE FURNISHED AT ANY PARTICULAR PLACE, EXCEPT ON THE SITE. IN NO SINGLE WORD, CLAUSE, OR SENTENCE IN THE CONTRACT DID THE GOVERNMENT EXPRESSLY PROMISE TO MAKE STEAM AVAILABLE AT ANY PARTICULAR TIME OR AT ANY PRECISELY DEFINED POINT ON THE SITE. SEE UNITED STATES V. HOWARD P. FOLEY CO., INC. 329 U.S. 64, 66. IN SC-07 THE GOVERNMENT OBLIGATED ITSELF TO FURNISH STEAM ONLY IF THE CONTRACTOR'S REQUIREMENTS DID NOT OVERLOAD THE AVAILABLE SERVICE OR INTERFERE WITH THE COMMISSION'S OPERATIONS. THIS OBLIGATION WAS NOT ABSOLUTE. IN THAT CONNECTION, SC-28, WHICH MUST READ IN CONJUNCTION WITH SC-07, PROVIDES THAT "SITE STEAM MAY BE AVAILABLE AND USED BY THE CONTRACTOR (SEE PARAGRAPH SC-07 ABOVE).' MOREOVER, THE TERMS OF SC-28 IMPOSED UPON THE CONTRACTOR THE OBLIGATION OF PROVIDING "AT HIS OWN EXPENSE ALL TEMPORARY HEATING EQUIPMENT REQUIRED FOR HIS OWN USE" INCLUDING "FUEL AND ATTENDANCE FOR TEMPORARY HEATING.' WHEN READ TOGETHER, SC 07 AND SC-28 REASONABLY LEAD TO THE CONCLUSION THAT THE CONTRACTOR WAS REQUIRED TO FURNISH HIS OWN TEMPORARY HEAT UNTIL SUCH TIME AS THE GOVERNMENT COULD FURNISH STEAM WITHOUT OVERLOADING AVAILABLE SERVICES OR INTERFERING WITH THE COMMISSION'S OPERATIONS. THE EXAMINER FOUND THAT THE OBLIGATION TO FURNISH AROSE WHEN STEAM WAS SENT THROUGH THE LINE TO MANHOLE NO. 3 ON NOVEMBER 11.

HIS FINDING DISREGARDED THE EVIDENCE IN THE RECORD WHICH SHOWS THERE WAS NOT SUFFICIENT REGULAR AND UNINTERRUPTED STEAM CAPACITY BEFORE NOVEMBER 20, 1961, BECAUSE UP TO THAT DATE THE NEW BOILER WAS UNDERGOING TESTING. (PP. 1484-85, 1998, 2063-65, TRANSCRIPT.) THE UNCONTRADICTED TESTIMONY OF COMMANDER ANDERSON SHOWS THAT THE NEW 40,000 POUND BOILER WAS ACCEPTED BY THE GOVERNMENT AND PUT INTO OPERATING USE, AFTER RELIABILITY TESTS HAD BEEN PERFORMED, ON NOVEMBER 20. BUT, EVEN UNDER THE EXAMINER'S CRITERIA, WAS STEAM FOR THE CONTRACTOR'S REQUIREMENTS AVAILABLE WHEN STEAM WAS SENT THROUGH THE LINE TO MANHOLE NO. 3? THERE CAN BE AN AFFIRMATIVE ANSWER TO THAT QUESTION ONLY IF IT IS REASONABLE TO IGNORE THE TRANSMISSION REQUIREMENTS FOR THAT STEAM. AS THE EXAMINER HIMSELF FOUND, ALL PARTIES CONCERNED CONTEMPLATED THAT STEAM, WHEN FURNISHED, WOULD BE FURNISHED FROM MANHOLE NO. 3--- NOT FROM AN IMMEDIATE TAKEOFF AT THE WESTINGHOUSE BOILER. THERE WAS NO ASSERTION OR SHOWING THAT THE GOVERNMENT WAS AT "FAULT" OR NEGLIGENT IN THE FAILURE OF THE ANCHOR BLOCK AND EXPANSION JOINT. AND, AS WILL BE SHOWN LATER, THERE WAS NOTHING TO SUBSTANTIATE THE EXAMINER'S FINDING THAT THE GOVERNMENT WAS NEGLIGENT IN CONDUCTING ITS REPAIRS AT MANHOLE NO. 3.

IF ANY PROMISE TO FURNISH STEAM AT A CERTAIN TIME IS TO BE FOUND IN REPRESENTATIONS BY THE GOVERNMENT DURING THE COURSE OF CONSTRUCTION, THEN THE REPRESENTATIONS MUST BE FOUND OUTSIDE THE RECORD MADE BEFORE THE EXAMINER. THE RECORD CONCLUSIVELY SHOWS, FOR EXAMPLE, THAT DURING THE NEGOTIATIONS FOR CHANGE ORDER NO. 2 MR. DISKIN DID NOT STATE THAT STEAM WOULD BE AVAILABLE AT THE END OF OCTOBER. ON CROSS-EXAMINATION DURING THE HEARING MR. DISKIN TESTIFIED THAT, WHILE EVERYONE FELT, OR ASSUMED, THAT STEAM WOULD BE AVAILABLE SHORTLY, HE GAVE NO ASSURANCE TO S AND E DURING THE NEGOTIATIONS FOR CHANGE ORDER NO. 2 THAT STEAM WOULD BE AVAILABLE AND HE DID NOT RECALL THAT THERE WERE ANY SPECIFIC DISCUSSIONS ON STEAM AT THAT TIME. (P 2348, TRANSCRIPT.) MOREOVER, AND MORE SIGNIFICANTLY, MR. WOODARD WHO, ALONG WITH MR. DEWITT, NEGOTIATED THE CHANGE ORDER ON BEHALF OF S AND E STATED CATEGORICALLY THAT STEAM WAS NEVER MENTIONED DURING THE NEGOTIATIONS. (ANSWER TO QUESTION NO. 14 UNDER CHANGE ORDER NO. 2, S AND E EXHIBIT C.) WE ARE UNABLE TO FIND IN THE RECORD ANY SUPPORT FOR THE EXAMINER'S FINDING THAT MR. DISKIN "STATED THAT STEAM WOULD BE AVAILABLE FOR CONCRETE CURING AT THE END OF OCTOBER.'

SOME DISCUSSIONS ON STEAM WERE HELD DURING THE COURSE OF THE WORK AND THESE WERE RECORDED IN THE MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS. AND E RELIED ON THESE MINUTES AS EVIDENCE TO SHOW THAT PROMISES OF STEAM WERE MADE. HOWEVER, THESE MINUTES DO NOT SHOW THAT DEFINITE COMMITMENTS WERE MADE. ON SEPTEMBER 13 THE CONTRACTOR WAS INFORMED BY THE GOVERNMENT THAT IT ,APPEARED POSSIBLE" THAT A QUANTITY OF USABLE STEAM WOULD BE AVAILABLE IN THE LATTER PART OF OCTOBER. ON OCTOBER 25 THE CONTRACTOR WAS INFORMED THAT LIVE STEAM COULD BE USED AS A CONCRETE CURING METHOD AND THAT STEAM FOR THIS PURPOSE "MIGHT BE MADE AVAILABLE" AND THAT IT WOULD BE THE CONTRACTOR'S OBLIGATION TO INVESTIGATE HIS REQUIREMENTS FOR CARRYING THE STEAM SUPPLY TO HIS WORKSITE. DURING THIS TIME S AND E WAS USING HEATERS TO CURE CONCRETE AND THE MINUTES CONTAIN REFERENCES TO SAFETY DISCUSSIONS IN CONNECTION WITH THEIR USE. ON NOVEMBER 1 THE GOVERNMENT SUGGESTED THAT THE CONTRACTOR IMMEDIATELY INVESTIGATE THE POSSIBILITY OF MAKING A TEMPORARY TIE-IN WITH EXISTING STEAM FACILITIES--- APPARENTLY AT MANHOLE NO. 3.

PRIOR TO NOVEMBER 11 THE ABOVE ENTRIES WERE THE ONLY REFERENCES IN THE MINUTES CONCERNING THE QUESTION OF STEAM. NONE OF THE MINUTES RECORD THAT THE GOVERNMENT COMMITTED ITSELF TO FURNISH STEAM AT A TIME CERTAIN. FACT THE MINUTES INDICATE THAT THE GOVERNMENT WAS CAREFUL NOT TO MAKE A DEFINITE COMMITMENT AND IT DOES NOT APPEAR THAT THE CONTRACTOR WAS UNDULY CONCERNED ABOUT THE LACK OF STEAM DURING THIS PERIOD.

THE EXAMINER FOUND THAT AFTER MANHOLE NO. 3 BECAME INOPERABLE "S AND E WAS ASSURED A NUMBER OF TIMES IN THE FOLLOWING SIX WEEKS THAT STEAM WOULD BE AVAILABLE AT ANY MOMENT FROM MANHOLE NO. 3.' THE RECORD IS COMPLETELY BARE OF ANY EVIDENCE TO SUPPORT SUCH A FINDING, SO FAR AS WE HAVE BEEN ABLE TO FIND.

ON DECEMBER 7, MR. DISKIN INFORMED S AND E BY LETTER OF AN ALTERNATE SOURCE OF STEAM AND ADVISED IT TO INVESTIGATE THIS SOURCE WITH THE VIEW OF DETERMINING WHETHER IT COULD BE UTILIZED TO ITS ADVANTAGE. S AND E TIED INTO THIS SOURCE AND BEGAN UTILIZING STEAM ON JANUARY 15, 1962. THE EXAMINER STATED THAT THE EVIDENCE SHOWED THAT AFTER DECEMBER 7 THE CONTRACTING OFFICER, THROUGH THE REPRESENTATIVE OF THE ARCHITECT ENGINEER (APPARENTLY MR. DISKIN), CONTINUED TO LEAD S AND E TO BELIEVE THAT STEAM WOULD BE AVAILABLE AT MANHOLE NO. 3 AND, DUE TO THE EXTRA EXPENSE INVOLVED, IT WAS REASONABLE UNDER THE CIRCUMSTANCES FOR S AND E TO WAIT. THE ONLY EVIDENCE IN THE RECORD, OTHER THAN UNCORROBORATED ASSERTIONS BY S AND E AND "-SCUTTLEBUTT- RECEIVED THROUGH WORKMEN" (P. 186, TRANSCRIPT) TO THE EFFECT THAT THE GOVERNMENT CONTINUED TO LEAD S AND E TO BELIEVE THAT STEAM WOULD BE AVAILABLE FROM MANHOLE NO. 3, IS A LETTER DATED DECEMBER 22 FROM MR. DISKIN TO S AND E. THIS LETTER WAS A REPLY TO A LETTER FROM S AND E DATED DECEMBER 17 WHICH ASSERTED THAT S AND E'S FAILURE TO COMPLY WITH SPECIFICATIONS WITH RESPECT TO MAINTAINING PROPER TEMPERATURES FOR CONCRETE CURES WAS A DIRECT RESULT OF THE GOVERNMENT'S FAILURE TO PROVIDE STEAM. MR. DISKIN REPLIED, IN PERTINENT PART AS FOLLOWS:

* * * YOU REFER TO THIS MATTER AS A "PROMISE" OR COMMITMENT ON THE PART OF THE GOVERNMENT TO FURNISH STEAM.

WE DIRECT YOUR ATTENTION TO PARAGRAPH SC-07 OF THE SPECIAL CONDITIONS OF THE CONTRACT WHICH ARE QUOTED AS FOLLOWS:

YOU WILL NOTE THAT THE USE OF ANY STEAM FOR CONSTRUCTION OR TEMPORARY HEATING PURPOSES IS CONDITIONAL UPON THE PROVISION THAT "THE REQUIREMENTS DO NOT OVERLOAD THE AVAILABLE SERVICE OR INTERFERE WITH COMMISSION OPERATIONS.' AS YOU KNOW SINCE THE START OF YOUR CONSTRUCTION ACTIVITIES, COMMISSION CONSTRUCTION WORK ON STEAM FACILITIES HAS BEEN GOING ON AND IS STILL IN PROGRESS WITH RESPECT TO ACTIVATING A STEAM SUPPLY TO STEAM MANHOLE NO. 3. AT SUCH TIME AS COMMISSION CONSTRUCTION ACTIVITIES MAKE STEAM AVAILABLE AT THIS POINT AND THE ELEMENT OF INTERFERENCE WITH THE COMMISSION ACTIVITIES IS REMOVED, STEAM MAY BECOME AVAILABLE TO YOU FOR YOUR USE FROM THIS SOURCE IN ACCORDANCE WITH THE TERMS OF THE CONTRACT. IT IS NOT REASONABLE, IN OUR OPINION, TO READ THE ABOVE LETTER AS IMPLYING THAT STEAM WOULD BE AVAILABLE AT MANHOLE NO. 3 IN THE NEAR FUTURE, OR EVEN THAT THE GOVERNMENT UNDERTOOK TO MAKE SPECIAL EFFORTS TO EXPEDITE ITS AVAILABILITY. THIS IS ESPECIALLY TRUE WHEN THAT LETTER IS READ IN CONTEXT WITH OTHER SURROUNDING CIRCUMSTANCES. FOR EXAMPLE, THE MINUTES OF THE MEETING ON DECEMBER 15, (7 DAYS PRIOR TO MR. DISKIN'S LETTER) CONTAIN THIS ENTRY:

THE CONTRACTOR WAS ASKED AS TO WHAT HIS INTENTIONS WERE TOWARDS DEVELOPING THE USE OF STEAM FOR HEATING PURPOSES FROM THE SOURCE OF SUPPLY PREVIOUSLY INDICATED AS BEING AVAILABLE. (REF. G AND R LETTERDEC. 7 TO S AND E CONTRACTORS). THE CONTRACTOR ADVISED THAT HE WAS CONSIDERING THE MATERIALS REQUIRED, COST, ETC. FOR OBTAINING STEAM FROM THIS SOURCE. THE CONTRACTOR STATED THAT THEY HAD PLANNED ORIGINALLY TO OBTAIN STEAM FROM MANHOLE NO. 3 AND THAT THEY HAD GONE TO CONSIDERABLE EXPENSE TO DEVELOP STEAM FROM THIS SOURCE AND IT STILL WAS NOT AVAILABLE. IT WAS STATED THAT MR. DEWITT WOULD SHED FURTHER LIGHT ON THIS SUBJECT. IN ITS LETTER OF DECEMBER 17 TO MR. DISKIN, PREVIOUSLY NOTED, MR. DEWITT STATED IN PART: SINCE THE FRIDAY, 15 DECEMBER, TESTING OF THE GOVERNMENT STEAM LINE TO MANHOLE NO. 3 IN OUR WORK AREA NOW INDICATES THAT THE POSSIBILITY OF USE OF THIS LINE CONTINUES TO BE DOUBTFUL FOR THE NEAR FUTURE, WE ARE PROCEEDING TO CONNECT IN WITH THE STEAM LINE IMMEDIATELY EAST OF THE SWITCHGEAR BUILDING WHICH YOU ADVISED US BY YOUR LETTER OF 7 DECEMBER MIGHT BE AVAILABLE FOR OUR USE. WE DID NOT DO SO LAST WEEK BECAUSE IT APPEARED THAT STEAM TO MANHOLE NO. 3 WOULD BECOME AVAILABLE SOMETIME DURING THAT WEEK. THE USE OF THE ALTERNATE MANHOLE WILL, OF COURSE, BE FAR MORE EXPENSIVE AND WILL NECESSARILY ENTAIL A SUBSTANTIAL LOSS IN TEMPERATURE AND PRESSURE. AT THE WEEKLY CONSTRUCTION MEETING OF DECEMBER 19 (3 DAYS BEFORE MR. DISKIN'S LETTER TO S AND E), WHICH WAS ATTENDED BY MR. DEWITT, THE FOLLOWING CONVERSATION TOOK PLACE, AS RECORDED IN THE MINUTES:

THE CONTRACTOR ASKED WHEN STEAM FOR HEATING PURPOSES COULD BE OBTAINED FROM MANHOLE NO. 3. THE CONTRACTOR WAS INFORMED THAT NO RELIABLE ESTIMATE COULD BE MADE. THE CONTRACTOR STATED THAT SINCE THERE APPEARED TO BE NO POSSIBILITY OF USING STEAM FROM THE MANHOLE NO. 3 SOURCE, HE WOULD GO AHEAD NEXT WEEK ON THE DEVELOPMENT OF STEAM FROM THE ALTERNATE SOURCE DESIGNATED AS BEING ADJACENT TO THE MAIN SUBSTATION. * * * THE MINUTES FOR THE DECEMBER 27 MEETING (5 DAYS AFTER MR. DISKIN'S LETTER) STATE THAT THE CONTRACTOR INDICATED THAT IT WAS HIS INTENTION TO UTILIZE THE SOURCE OF STEAM INDICATED AS BEING AVAILABLE FROM THE MANHOLE NEAR THE SUBSTATION AND THAT "HE WOULD UNDERTAKE THIS TEMPORARY TIE-IN AS SOON AS THE MECHANICAL SUBCONTRACTOR'S SUPERINTENDENT RETURNS TO THE JOB-SITE AFTER NEW YEARS.' IN THE MINUTES FOR JANUARY 3, 1962, THE CONTRACTOR INDICATED, REFERRING TO TEMPORARY STEAM FOR HEATING, THAT THE MECHANICAL SUBCONTRACTOR WAS THEN REVIEWING THE MATERIAL REQUIREMENTS FOR THIS WORK AND INTENDED TO MAKE AN IMMEDIATE START ON THE INSTALLATION OF THIS FACILITY. ON JANUARY 10 THE CONTRACTOR "ADVISED THAT A TEMPORARY STEAM LINE HAS BEEN RUN IN BUT THAT SO FAR NO STEAM HAD BEEN TURNED ON," AND, FINALLY, FOR JANUARY 17, THE MINUTES STATE THAT THE STEAM SYSTEM HAD BEEN RUN INTO THE BASIN BOTTOM AND WAS PLACED IN OPERATION ON JANUARY 15 AND THAT THE "CONTRACTOR INDICATED THAT THE SYSTEM AS INSTALLED WOULD BE FURTHER EXPANDED TO PERMIT A MORE EXTENDED USAGE.'

WITH RESPECT TO THE EXTRA EXPENSE INVOLVED IN TYPING INTO THE ALTERNATE SOURCE, MR. JOHN W. BRYAN, WHO WAS THE PIPING SUPERINTENDENT OF EPCO MECHANICAL CONTRACTORS (SUBCONTRACTOR TO S AND E) AND ACTUALLY PERFORMED THE WORK OF TYING INTO THE STEAM LINES, TESTIFIED THAT THE COST OF TYING INTO MANHOLE NO. 3 WAS APPROXIMATELY $350 FOR LABOR AND MATERIALS AND THAT THE COST OF TYING INTO THE ALTERNATE SOURCE WAS ALSO APPROXIMATELY $350 (P. 542, TRANSCRIPT). COMMANDER ANDERSON, WHO HAD NO IMMEDIATE KNOWLEDGE OF THE COSTS, ESTIMATED THAT THE COST OF RUNNING THE LINE TO MANHOLE NO. 3 WOULD BE BETWEEN $600 AND $900 AND TO THE ALTERNATE SOURCE $1,000. (PP. 1508, 1509, TRANSCRIPT.)

WITH RESPECT TO THE ASSERTION OF MR. DEWITT THAT TYING INTO THE ALTERNATE SOURCE WOULD "ENTAIL A SUBSTANTIAL LOSS IN TEMPERATURE AND PRESSURE," THE RECORD SHOWS THAT WITH THE NEW 40,000 POUND BOILER MANHOLE NO. 3 WOULD APPARENTLY HAVE SUPPLIED MORE THAN A SUFFICIENT AMOUNT OF USABLE STEAM. MR. DISKIN'S LETTER OF DECEMBER 7 STATED THAT THE ALTERNATE SOURCE CONSISTED OF "A 1 1/2 INCH SUPPLY LINE FURNISHING 125 POUND PRESSURE.' HOWEVER, IT APPEARS THAT 125 POUNDS PRESSURE WAS, IN FACT, ADEQUATE FOR S AND E'S REQUIREMENTS. MR. BRYAN TESTIFIED IN REGARD TO MANHOLE NO. 3 ,WE HAD IN THAT LINE APPROXIMATELY 200, 250 POUNDS OF STEAM AND WE HAD TO REDUCE DOWN TO ABOUT 100 POUNDS THROUGH A REDUCING VALVE THAT WAS LOANED TO US FROM WESTINGHOUSE * * *" (P. 512, TRANSCRIPT). ON PAGE 513 OF THE TRANSCRIPT THE FOLLOWING EXCHANGE IS RECORDED:

HEARING EXAMINER MCCONNELL. DID YOU PLACE, IF I MAY ASK, DID YOU PLACE THE REDUCING VALVE THERE FOR THE PURPOSE OF REDUCING THE PRESSURE BECAUSE OF THE REQUIREMENTS OF THE JOB OR WAS THAT TO LIMIT THE AMOUNT OF STEAM THAT YOU TOOK OUT OF THE GENERAL LINE?

THE WITNESS (MR. BRYAN). WELL IT WAS NOT NECESSARY TO HAVE THE AMOUNT OF STEAM THAT WAS TO BE TURNED INTO THE EXISTING LINES AND IT WAS DECIDED TO REDUCE IT DOWN. THAT ELIMINATED SOME DANGER OF PIPES BURSTING AND SO FORTH AND SO ON. 250 POUNDS OF STEAM IS QUITE---

HEARING EXAMINER MCCONNELL. QUITE A LOT OF PRESSURE.

THE WITNESS. QUITE A LOT OF PRESSURE IF IT SHOULD GET AWAY FROM YOU.

THE PROVISIONS OF SC-07 PLACED THE OBLIGATION OF TYING INTO GOVERNMENT STEAM LINES UPON THE CONTRACTOR. SEE ALSO IN THAT CONNECTION THE PROVISIONS OF GC-03 WHICH IMPOSED UPON THE CONTRACTOR THE OBLIGATION OF SATISFYING ITSELF AS TO, AMONG OTHER THINGS, THE TYPE OF EQUIPMENT AND FACILITIES NEEDED PRELIMINARY TO AND DURING THE PROSECUTION OF THE WORK AND ALL OTHER MATTERS WHICH CAN IN ANY WAY AFFECT THE WORK OR THE COST THEREOF. THAT CLAUSE ALSO STATES THAT ANY FAILURE BY THE CONTRACTOR TO ACQUAINT ITSELF WITH ALL THE AVAILABLE INFORMATION CONCERNING THESE CONDITIONS WILL NOT RELIEVE IT FROM RESPONSIBILITY FOR ESTIMATING PROPERLY THE DIFFICULTY OR COST OF SUCCESSFULLY PERFORMING THE WORK. THE PROVISIONS OF THESE CLAUSES WOULD SEEM TO CONTEMPLATE, AT THE VERY LEAST, THAT THE CONTRACTOR WILL EXERT SOME INITIATIVE IN ITS OWN BEHALF TO SOLVE SERIOUS PROBLEMS AFFECTING THE COST OF THE WORK. WE THINK THAT IT WAS UNREASONABLE FOR THE CONTRACTOR, IF IT CONSIDERED STEAM ESSENTIAL, TO WAIT PASSIVELY FOR STEAM TO BECOME AVAILABLE FROM MANHOLE NO. 3 WHEN IT HAD AMPLE REASON TO KNOW, AS REFLECTED BY THE ABOVE QUOTED MINUTES, THAT STEAM FROM THAT SOURCE WOULD PROBABLY NOT BE AVAILABLE IN THE NEAR FUTURE. THE EXTRA EXPENSE ENTAILED IN TYING INTO THE ALTERNATE SOURCE APPEARS INSIGNIFICANT WHEN COMPARED TO THE ALLEGED ENORMOUS LOSSES SUSTAINED BY S AND E AS THE RESULT OF DELAY IN OBTAINING STEAM. THE RECORD IS BARE OF EVIDENCE SHOWING THAT S AND E, AFTER NOVEMBER 11, MADE ANY ATTEMPTS ON ITS OWN TO FIND SOLUTIONS WHICH WOULD ALLEVIATE THE SITUATION. IT WOULD APPEAR THAT ORDINARY BUSINESS PRUDENCE WOULD HAVE DICTATED VIGOROUS ACTION BY S AND E TO AT LEAST MINIMIZE THE SUBSTANTIAL LOSSES IT NOW ALLEGES IT WAS SUSTAINING FOR LACK OF STEAM. EVEN IF THE GOVERNMENT CAN BE CHARGED WITH BREACH OF CONTRACT, IT IS CLEAR THAT S AND E, AS THE INJURED PARTY, WAS UNDER A DUTY TO MINIMIZE ITS DAMAGES. AN OBSERVATION BY THE COURT OF CLAIMS IN OZARK DAM CONSTRUCTORS V. UNITED STATES, 153 CT. CL. 120, 288 F.2D 913, 918, IS ESPECIALLY PERTINENT HERE:

THE OFT-REPEATED ARGUMENT OF THE PLAINTIFFS THAT THE REASON THE PLAINTIFFS DID NOT URGE THE GOVERNMENT TO ARRANGE FOR TRUCKING CEMENT WAS THAT THE GOVERNMENT HAD THE RESPONSIBILITY FOR DELIVERING THE CEMENT, AND DID NOT ASK THE PLAINTIFFS FOR SUGGESTIONS, WILL NOT DO. THE DAMAGE FROM NONDELIVERY WOULD FALL UPON THE PLAINTIFFS, THE CONTRACTING OFFICER HAD REPEATEDLY REFUSED TO GRANT A SUSPENSION ORDER, AND THE PROBABILITY WAS THAT THE EXTRA COSTS WOULD REMAIN WHERE THEY FELL, I.E., ON THE PLAINTIFFS. THE PLAINTIFFS DID NOT ACHIEVE THEIR POSITION OF HIGH LEVEL CONTRACTORS BY MODESTLY REFRAINING FROM VOLUNTEERING A SUGGESTION WHICH WOULD SAVE THEM SOME THOUSANDS OF DOLLARS A DAY, BECAUSE THEY HAD NOT BEEN ASKED FOR SUGGESTIONS.

ON THE OTHER HAND, IT DOES NOT APPEAR THAT THE GOVERNMENT WAS UNCONCERNED ABOUT, OR LAX IN, FINDING A SOLUTION TO THE STEAM PROBLEM. COMMANDER ANDERSON TESTIFIED, WITHOUT CONTRADICTION (PP. 1503, 1504, TRANSCRIPT) THAT, WHEN MR. DISKIN SENT S AND E THE DECEMBER 7 LETTER ABOUT LOOKING INTO THE ALTERNATE SOURCE, THE GOVERNMENT HAD TESTED THE LINE IN MANHOLE NO. 3 AND IT DID NOT LOOK PROMISING. THEREFORE, A SEARCH WAS CONDUCTED "WHERE WE COULD LET THEM TIE IN AND THIS PLACE OVER THERE CLOSE TO THE SUBSTATION WAS THE MOST FEASIBLE AND EASIEST PLACE OF ALLOWING THEM TO TAKE STEAM FROM GOVERNMENT SOURCES.' ACCORDING TO ANDERSON STEAM WAS AVAILABLE FROM THE ALTERNATE SOURCE AFTER NOVEMBER 20TH (P. 1501, TRANSCRIPT).

THE DOCTRINE OF RES IPSA LOQUITUR, TO WHICH THE EXAMINER'S DECISION REFERS, IS A DOCTRINE IN THE LAW OF TORTS TO THE EFFECT THAT, WHERE THE THING WHICH CAUSED AN INJURY IS SHOWN TO BE UNDER THE SOLE AND EXCLUSIVE MANAGEMENT OF THE DEFENDANT AND THE ACCIDENT IS SUCH AS IN THE ORDINARY COURSE OF THINGS DOES NOT HAPPEN IF THOSE WHO HAVE ITS MANAGEMENT OR CONTROL USE PROPER CARE, THE OCCURRENCE OF THE ACCIDENT ITSELF AFFORDS REASONABLE EVIDENCE, IN THE ABSENCE OF EXPLANATION BY THE DEFENDANT, THAT THE ACCIDENT AROSE FROM WANT OF CARE. SEE 65 C.J.S., NEGLIGENCE, SEC. 220 (2) ET SEQ. THE DOCTRINE HAS BEEN APPLIED TO SUCH OCCURRENCES AS FALLING OR COLLAPSING STRUCTURES OR BUILDINGS, AND TO INJURIES CAUSED BY DANGEROUS APPLIANCES OR MACHINERY OR BY DEFECTIVE OR DANGEROUS CONDITIONS OF PREMISES, OR PARTS THEREOF, SUCH AS STAIRS, DOORS, TRAPDOORS OR RAILINGS. 65 C.J.S., NEGLIGENCE, SEC. 220 (12). THE EXAMINER'S APPLICATION OF THE DOCTRINE FOR THE PURPOSE OF FINDING NEGLIGENCE IN THE GOVERNMENT'S FAILURE TO FIND AN EFFECTIVE SOLUTION TO THE PROBLEMS IN MANHOLE NO. 3 (IN EFFECT TO FIND A BREACH OF CONTRACT) IS, TO SAY THE LEAST, LEGAL ERROR.

THE HEARINGS DID NOT REVEAL THE REASONS WHY THE REPAIRS AT MANHOLE NO. 3 WERE NOT ACCOMPLISHED PROMPTLY, BUT THERE WAS NO EVIDENCE OF ANY LACK OF DILIGENCE AND TO INFER NEGLIGENCE ON THE PART OF THE GOVERNMENT IN THE ABSENCE OF ANY MEANINGFUL EVIDENCE ON THIS POINT IS NOT WARRANTED. ANY ONE OF SEVERAL REASONS, OTHER THAN NEGLIGENCE, COULD POSSIBLY EXPLAIN THE HOLD-UP. IT WAS BROUGHT OUT IN THE HEARINGS THAT THE GOVERNMENT WAS VITALLY INTERESTED IN GETTING THE STEAM LINE IN MANHOLE NO. 3 IN OPERATION BECAUSE THE LINE IN THAT MANHOLE WAS THE MEANS OF PROVIDING STEAM TO ANOTHER GOVERNMENT FACILITY WHICH WAS OPERATING ON AN UNRELIABLE BOILER. (P. 1503, ET SEQ., TRANSCRIPT.) IT WAS ALSO BROUGHT OUT THAT, UNLIKE MANHOLE NO. 4 IN WHICH MR. BRYAN INSTALLED AN ANCHOR AND BELLOWS TYPE EXPANSION JOINT RATHER QUICKLY, MANHOLE NO. 3 DID NOT CONTAIN A DIRECT THROUGH-LINE. APPARENTLY THERE WAS AN ADDITIONAL PROBLEM IN NO. 3 IN REGARD TO A TAKEOFF OR CONNECTION FOR THE OTHER GOVERNMENT FACILITY PREVIOUSLY MENTIONED WHICH WAS TO BE SERVICED BY THAT MANHOLE. (P. 2044, TRANSCRIPT.) ALSO, UNLIKE THE BELLOWS TYPE EXPANSION JOINT IN NO. 4, THE GOVERNMENT APPARENTLY FOUND IT NECESSARY TO INSTALL A DIFFERENT LOOP-TYPE EXPANSION JOINT IN NO. 3. OTHER THAN THE ABOVE, THE ONLY OTHER SIGNIFICANT PIECE OF EVIDENCE BEARING ON THE QUESTION AT HAND, IS AN ENTRY IN THE G AND R DAILY LOGS FOR JANUARY 17 WHICH READS AS FOLLOWS:

CLIFFORD CUMMINGS, FITTER FOREMAN, PUT IN HOSPITAL FOR OBSERVATION AND TREATMENT FROM BREATHING GAS FUMES.

MECHANICAL CONTRACTOR WORKED IN MH NO. 3 INSTALLING EXPANSION JOINTS--- BOTH FITTERS GOT SICK AGAIN TODAY AT NOON AND WERE TAKEN TO CENTRAL FACILITIES MEDICAL FOR CHECK UP. THE WELDER WAS SENT BACK TO WORK AND THE FITTER FOREMAN WAS PUT IN THE HOSPITAL--- X-RAYS SHOWED BLISTERS ON HIS LUNGS. * * *

THE RECORD DOES NOT INDICATE THAT S AND E WAS PROCEEDING ON A TORT THEORY OF LIABILITY AND, ASIDE FROM THE QUESTION OF PROPER FORUM (WHETHER RECOVERY IS SOUGHT FOR BREACH OF CONTRACT OR FOR NEGLIGENCE) "THE NECESSITY OF PROVING A VIOLATION OF THE CONTRACT CANNOT BE AVOIDED BY REFERRING TO THE CONDUCT OF THE GOVERNMENT AS BEING NEGLIGENT AND LACKING IN DUE CARE.' UNITED STATES V. CROFT-MULLINS ELECTRIC COMPANY, 333 F.2D 772, 777. THE FIFTH CIRCUIT COURT OF APPEALS IN THAT CASE WENT ON TO SAY THAT "WHETHER WE DEAL WITH A SIMPLE BREACH OF CONTRACT OR WITH A NEGLIGENT BREACH OF CONTRACT THERE MUST BE SHOWN A VIOLATION OF SOME TERM OF THE CONTRACT OR SOME PROMISE EXPRESSED OR IMPLIED THEREIN.' SEE, ALSO "DELAYS -DAMAGES ON GOVERNMENT CONTRACTS: CONSTRUCTIVE CONDITIONS AND ADMINISTRATIVE REMEDIES" BY WILLIAM H. SPECK, 26 GEORGE WASHINGTON LAW REVIEW 505, 542 ET SEQ. (1958). WE THEREFORE SEE NO BASIS FOR APPLYING THE DOCTRINE OF RES IPSA LOQUITUR IN CONSIDERATION OF THIS CLAIM.

IT SHOULD BE NOTED THAT IN ASSESSING THE NUMBER OF DAYS DELAY CAUSED BY THE LACK OF STEAM, THE EXAMINER'S DECISION IS INTERNALLY INCONSISTENT. FIRST HE FINDS (P. 46) THAT THE DATE OF THE GOVERNMENT'S BREACH "SHOULD BE FIXED AT NOVEMBER 11 WHEN IT IS BEYOND DISPUTE THAT THE 40,000-POUND BOILER HAD BEEN PUT INTO SAME PAGE, HOWEVER, HE FINDS THAT THE FIRST WALL POUR WAS MADE ON NOVEMBER 4 OPERATION AND ENOUGH STEAM WAS AVAILABLE FOR GOVERNMENT AND S AND E USE.' ON THE AND "IN THE LIGHT OF THE GOVERNMENT'S REPRESENTATION, PARTICULARLY THOSE MADE AT THE NEGOTIATIONS ON OCTOBER 2 OF CHANGE ORDER NO. 2, CLAUSE 4 (SIC) WILL BE APPLIED AS OF THAT DATE.' HIS COMPUTATIONS FOR DETERMINING ALLOWABLE DAYS OF DELAY ARE, THEREFORE, MEASURED FROM A DATE WHICH IS PRIOR TO THE DATE THAT THE GOVERNMENT WAS FOUND TO HAVE BREACHED ITS CONTRACT (I.E. NOVEMBER 11, WHICH DATE ITSELF IS INCORRECT SINCE THE RECORD SHOWS, AS NOTED ABOVE, THAT THERE WAS NOT SUFFICIENT STEAM CAPACITY BEFORE NOBEMBER 20.) MOREOVER, THE EXAMINER APPARENTLY SAW NO DIFFICULTY PRESENTED IN MR. BOON'S CALCULATIONS WHICH ADDED 9 DAYS ON ACCOUNT OF WEATHER CONDITIONS TO 35 DAYS CAUSED BY LACK OF STEAM. S AND E SUBMITTED AN INDEPENDENT CLAIM FOR WEATHER DELAYS AND IT IS NOT EXPLAINED WHY DELAYS FOR WEATHER CONDITIONS SHOULD BE CONSIDERED IN DETERMINING DELAYS FOR LACK OF STEAM. S AND E PLACED PRIMARY RELIANCE FOR PROVING DELAYS CAUSED BY LACK OF STEAM ON CERTAIN SCHEDULES (S AND E EXHIBIT I) WHICH WERE DESIGNED TO SHOW THAT THE USE OF STEAM WOULD HAVE SHORTENED THE WORK ON EACH POUR BY 5 DAYS ON THE BASIS THAT WITH THE USE OF STEAM THE CONCRETE FORMS COULD BE STRIPPED EARLIER AND REUSED RATHER THAN LEFT ON THE CONCRETE FOR ADDED HEAT PROTECTION. THE SCHEDULES WERE NOT PREPARED BY MR. BOONE, AS FOUND BY THE EXAMINER, BUT WERE PREPARED BY, OR UNDER THE DIRECTION OF, MR. WOODARD (SEE P. 340, TRANSCRIPT). ALSO, IT WAS MR. WOODARD, AND NOT BOONE, WHO MADE THE PRESENTATION IN THE HEARING WITH THE USE OF THE SCHEDULES ON BEHALF OF S AND E (PP. 340-350, TRANSCRIPT). MR. WOODARD WAS NOT EMPLOYED ON THE SITE AS WAS MR. BOONE. COMMANDER ANDERSON TESTIFIED IN REBUTTAL TO THE TESTIMONY OF MR. WOODARD AND THE SCHEDULES PREPARED BY HIM. HE SHOWED QUITE EFFECTIVELY THAT THE CHARTS WERE INCONSISTENT, AND IN SOME CASES GLARINGLY INACCURATE AND MISLEADING. FOR EXAMPLE, THE STEAM CHARTS INDICATED THAT POURS 22, 34, 36 AND 37 WERE STEAM CURED AND STRIPPED OF FORMS RATHER QUICKLY. HOWEVER, ANDERSON TESTIFIED UNEQUIVOCALLY FROM HIS PERSONAL OBSERVATION THAT THESE POURS WERE NOT STEAM CURED BUT WERE CURED WITH HEATERS BECAUSE BACKFILLING AROUND THESE POURS WOULD HAVE INTERFERED WITH UTILIZATION OF STEAM LINES. IN THAT CONNECTION, THE G AND R DAILY LOGS SHOW THAT HEATERS WERE USED IN CURING OPERATIONS ALL DURING THE PERIOD AFTER JANUARY 15 UNTIL MARCH 28. THE NUMBER OF HEATERS UTILIZED DURING THIS PERIOD ON VARIOUS SHIFTS FLUCTUATED UP AND DOWN FROM 24 TO 2. IN REBUTTAL TO THIS LINE OF TESTIMONY, MR. BOONE (PP. 2375 ET SEQ., TRANSCRIPT), CONFIRMED THAT BACKFILL OPERATIONS DID INTERFERE WITH THE STEAM HOSES, BUT THAT "THERE WERE TIMES, AS I RECALL, THAT THESE PARTICULAR POURS DIDN-T HAVE STEAM ON THEM" AND "WHEN WE WERE UTILIZING THIS EQUIPMENT IN THE BACKFILL OPERATION IN THE IMMEDIATE AREA OF THESE POURS, WE WOULD PULL THE STEAM OFF.'

POUR 10, WHICH WAS SHOWN ON SCHEDULE 1 OF EXHIBIT I AS POURED ON DECEMBER 26 AND JANUARY 5 AND STRIPPED ON JANUARY 18, WAS SHOWN ON SCHEDULE 3 OF EXHIBIT I AS BEING CURED FOR 7 DAYS BEFORE STEAM (I.E. JANUARY 15) AND 1 DAY AFTER STEAM.

SCHEDULE 1 SHOWED THAT THE LAST POURS ON POURS 18 AND 9 WERE MADE ON THE SAME DAY (NOVEMBER 27), YET THE SAME SCHEDULE SHOWS THAT POUR 18 WAS STRIPPED NOVEMBER 30 AND POUR 9 ON DECEMBER 7. NO EXPLANATION WAS GIVEN BY S AND E AS TO WHY ONE POUR WAS STRIPPED SO MUCH LATER THAN THE OTHER WHEN BOTH WERE POURED ON THE SAME DAY. COMMANDER ANDERSON EXPLAINED IT THIS WAY (PP. 1513, 1514, TRANSCRIPT):

HERE, THESE POURS MADE THE SAME DAYS; ONE THEY LET SIT FOR 10 DAYS BECAUSE THEY DIDN-T HAVE ENOUGH PEOPLE THERE TO START STRIPPING. ON THE OTHER ONES THEY NEEDED THE FORMS, REAL QUICK SO THEY WENT BACK AND STRIPPED IN 3 DAYS. THERE IS NO CONSISTENCY IN THIS AT ALL.

SCHEDULES 1 AND 3 SHOW THAT POUR 8 WAS STRIPPED ON FEBRUARY 3, ONE DAY AFTER THE LAST POUR. ANDERSON TESTIFIED THAT S AND E STRIPPED ONLY THE LOWER POUR ON FEBRUARY 3 BECAUSE THEY WERE INTERESTED IN GETTING IN THERE FOR BACKFILL. THIS TESTIMONY IS CORROBORATED BY THE G AND R DAILY LOGS. AN ENTRY ON THE FEBRUARY 3 LOG READS: "CARPENTERS, LABORERS, AND CRANE OPERATOR WERE CONCENTRATED ON REMOVING FORMS FROM THE BACK OF POUR NO. 8 SO THAT THE AREA CAN BE CLEARED FOR THE BACKFILL OPERATION.' THREE DAYS LATER, ON FEBRUARY 6, WE FIND THIS ENTRY: "CARPENTERS AND LABORERS STRIPPING FORMS FROM POURS 8 AND 22 AND BREAKING THEM DOWN FOR REUSE, ETC.'

COMMANDER ANDERSON TESTIFIED FROM PERSONAL OBSERVATION THAT THE REASON THE FORMS STAYED ON THE CONCRETE AS LONG AS THEY DID BEFORE STEAM WAS USED FOR CURING WAS THAT S AND E DID NOT HAVE SUFFICIENT MANPOWER TO PUT ON THE POURS AND THERE PING OPERATIONS. ALL AVAILABLE MANPOWER WAS INVOLVED IN NEW POURS AND THERE WAS NONE LEFT OVER TO STRIP FORMS FROM THE OLD POURS (P. 1512, TRANSCRIPT). HE FURTHER TESTIFIED THAT STEAM FOR CURING, WHILE IT HAD CERTAIN ADVANTAGES, ALSO HAD DISADVANTAGES SUCH AS ICE FORMATION BETWEEN THE COUNTERFORTS WHICH ACCUMULATED UP TO A THICKNESS OF ONE FOOT (P. 1524, TRANSCRIPT). IT WAS NOTED, IN THAT CONNECTION, THAT DRY HEATERS CONTINUED TO BE USED EVEN AFTER STEAM BECAME AVAILABLE ESPECIALLY IN PREHEATING THE FORMS PRIOR TO CONCRETE POURS AND ALSO PRIOR TO REMOVING THE PROTECTIVE COVERING AND EXPOSING THE CONCRETE TO FREEZING WEATHER. STEAM HAD BEEN USED TO PREHEAT THE FORMS, THEY WOULD HAVE FROZEN WHEN THE PROTECTIVE COVERING WAS OPENED TO RECEIVE THE CONCRETE, AND IF DRY HEATERS HAD NOT BEEN USED AT THE END OF THE CURING PERIOD TO DRY THE EXCESS MOISTURE CAUSED BY STEAM, THE CONCRETE WOULD HAVE FROZEN AND "SPOILED" (SIC,"SPALLED") AFTER THE PROTECTIVE COVERING HAD BEEN REMOVED. (P. 1522, ET SEQ., TRANSCRIPT.) THIS LINE OF TESTIMONY APPEARS SUPPORTED BY THE FACT (1) THAT S AND E CONTINUED TO USE DRY HEATERS EVEN AFTER STEAM BECAME AVAILABLE, AND (2) THERE WAS NO PROOF OFFERED THAT THE SUPPLY OF STEAM AVAILABLE FROM THE ALTERNATE SOURCE WAS INADEQUATE.

THE EXAMINER'S DECISION, THAT S AND E WAS DELAYED BY LACK OF STEAM FOR WHICH THE GOVERNMENT CAN BE HELD RESPONSIBLE, WAS BASED ON THREE IMPORTANT CONCLUSIONS: (1) THAT THE GOVERNMENT, ESPECIALLY DURING THE NEGOTIATIONS FOR CHANGE ORDER NO. 2, STATED THAT STEAM WOULD BE AVAILABLE AT THE END OF OCTOBER, (2) THAT THE GOVERNMENT WAS NEGLIGENT IN CONDUCTING REPAIRS AT MANHOLE NO. 3, AND (3) THAT THE EVIDENCE SHOWED THAT WHEN STEAM FINALLY BECAME AVAILABLE THE CONCRETE CURING PERIOD WAS SHORTENED CONSIDERABLY. ON THE BASIS OF THE ENTIRE RECORD, AS OUTLINED ABOVE, IT IS OUR OPINION THAT NONE OF THESE CONCLUSIONS IS SUPPORTED BY SUBSTANTIAL EVIDENCE.

ON THE OTHER HAND, THERE APPEARS TO BE LITTLE DOUBT THAT IT COSTS MORE TO CURE CONCRETE WITH DRY HEATERS THAN IT DOES WITH FREE STEAM. ON THAT BASIS, IF S AND E CAN SHOW THAT THE GOVERNMENT WAS OBLIGATED TO FURNISH STEAM AT A TIME CERTAIN AND THAT IT BREACHED SUCH OBLIGATION, IT CAN RECOVER DAMAGES IN A SUIT PROSECUTED IN A COURT OF COMPETENT JURISDICTION. HOWEVER, IT DOES NOT FOLLOW THAT, BECAUSE IT COSTS MORE TO DO A PARTICULAR THING ONE WAY, DOING IT THAT WAY ENTAILS MORE TIME AS WELL. S AND E HAD THE BURDEN OF SHOWING THAT LACK OF STEAM ACTUALLY DELAYED THE WORK. THIS IT DID NOT DO. THE GOVERNMENT SHOWED RATHER PERSUASIVELY THAT THE EVIDENCE WHICH S AND E OFFERED TO SUBSTANTIATE ITS CLAIM WAS INCONSISTENT, INACCURATE AND MISLEADING. IN TURN, THE GOVERNMENT PRESENTED OTHER EVIDENCE IN ITS OWN BEHALF WHICH, WHEN CONSIDERED IN THE LIGHT OF SUPPORTING COLLATERAL EVIDENCE, WAS PERSUASIVE IN SHOWING THAT THE PROXIMATE CAUSE OF ANY DELAY ENCOUNTERED BY S AND E WAS NOT LACK OF STEAM BUT INSUFFICIENT MANPOWER EMPLOYED TO CONSTRUCT AND STRIP FORMS. ACCORDINGLY, IT IS CONCLUDED THAT THE EXAMINER'S FINDING WITH RESPECT TO GOVERNMENT CAUSED DELAYS FOR FAILURE TO FURNISH STEAM IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, AND THIS OFFICE THEREFORE CANNOT ACCEPT IT AS BEING FINAL. IN ADDITION, WE BELIEVE IT SHOULD BE POINTED OUT HERE THAT BY DIRECTING THE NEGOTIATION OF AN EQUITABLE ADJUSTMENT FOR ALL THE CONTRACTOR'S INCREASED COSTS RESULTING FROM THE GOVERNMENT'S UNJUSTIFIED "ACCELERATION" OF THE WORK, ON THE GROUND THAT THE GOVERNMENT FAILED TO GRANT PROPER EXTENSIONS OF TIME FOR EXCUSABLE DELAYS, INCLUDING THE FAILURE TO FURNISH STEAM, THE EXAMINER IN EFFECT WOULD ALLOW DAMAGES FOR THE BREACH OF THE GOVERNMENT'S OBLIGATION TO FURNISH STEAM DESPITE HIS STATED CONCLUSION THAT SUCH DAMAGES WERE NOT RECOVERABLE UNDER THE CONTRACT BUT ONLY BY JUDICIAL ACTION.

NOR DO WE THINK THAT THE EXAMINER'S GRANTING OF AN EQUITABLE ADJUSTMENT FOR TYING INTO THE ALTERNATIVE SOURCE IS PROPER. THERE WAS NO DIRECTIVE TO DO SO AND UNDER SC-07 THE OBLIGATION OF INSTALLING PIPING FOR STEAM WAS ON S AND E. WHILE THE PARTIES MAY HAVE CONTEMPLATED THAT STEAM, WHEN FURNISHED, WOULD BE FURNISHED AT MANHOLE NO. 3, THE GOVERNMENT DID NOT BIND ITSELF EXPRESSLY TO FURNISH IT AT MANHOLE NO. 3. IF IT DID, THEN S AND E'S REMEDY IS A SUIT FOR BREACH OF CONTRACT AND THE COST OF TYING INTO THE ALTERNATE SOURCE WOULD BE AN ELEMENT OF DAMAGES. (SEE THE DISCUSSION ON THE CONTRACTOR'S CLAIM FOR "CHANGE IN CONNECTION WITH AGGREGATE," BELOW.)

EXTENSIONS FOR WEATHER

THE CONTRACTOR BY LETTER DATED JUNE 11, 1962 (CONTRACTING OFFICER'S DOCUMENTS OF APPEAL) CLAIMED SOME 129 DAYS TIME EXTENSION FOR DELAYS DUE TO UNUSUALLY SEVERE WEATHER. THE HEARING EXAMINER FOUND THAT EXTENSIONS SHOULD HAVE BEEN ALLOWED FOR 56-3/4 DAYS. (SEE P. 58 OF HIS DECISION). THE COMMISSION DID NOT REVIEW THIS CLAIM.

FROM THE EXAMINER'S DECISION IT IS CLEAR THAT HE ACCEPTED THE CONTRACTOR'S CONTENTION THAT BECAUSE THE WORK WAS BID ON THE BASIS THAT ALL CONCRETE WORK WOULD BE COMPLETED BEFORE WINTER, AND THE ENTIRE JOB COMPLETED NEAR THE FIRST OF THE YEAR 1962, ANY SEVERE WINTER WEATHER WAS UNFORESEEABLE WITHIN THE CONTEMPLATION OF THE CONTRACT AND ALL DELAYS OCCASIONED THEREBY WERE EXCUSABLE DELAYS FOR WHICH TIME SHOULD BE EXTENDED. HE ALSO ALLOWED EXTENSIONS FOR SEVERE WEATHER OCCURRING ON SATURDAYS AND SUNDAYS DURING PERIODS WHEN THE CONTRACTOR WAS WORKING ONLY 5 DAYS OF THE WEEK, AND FOR DAYS OF SEVERE WEATHER ON WHICH THE DAILY LOGS SHOW NO INTERFERENCE WITH WORK. ON THE EVIDENCE WE FIND THAT THE EXAMINER'S DECISION WAS IN THESE RESPECTS ERRONEOUS AS A MATTER OF LAW, AND THAT THE EXTENSIONS ALLOWED ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

ON THIS CLAIM THE EXAMINER NOTED, AS OF "THE UTMOST IMPORTANCE," THAT BUT FOR THE FAULT IN THE SUBSURFACE AND CHANGE ORDER NO. 2, WEATHER WOULD NOT HAVE BEEN A MAJOR PROBLEM. HE STATED THAT S AND E WAS "HELD" TO A BID THAT WAS SUBMITTED WHEN EVERYONE THOUGHT THAT THE WORK WOULD START IN JULY AND IT WAS PLANNED THAT THE CONCRETE WORK WOULD BE FINISHED ABOUT SEPTEMBER 30. "THUS," HE STATES, "THERE IS A BASIC FALLACY IN THE CONTENTION THAT S AND E SHOULD HAVE -FORESEEN- THE SEVERE WEATHER.'

THE EXAMINER FOUND THAT THE STANDARDS AND CRITERIA APPLIED BY THE GOVERNMENT IN GRANTING EXTENSIONS ON ACCOUNT OF WEATHER WERE "VERY STRICT.' HE THEN REFERRED TO A HYPOTHETICAL QUESTION HE ASKED A GOVERNMENT WITNESS (COMMANDER ANDERSON, P. 2133, TRANSCRIPT) WHO HAD AUTHORITY TO GRANT EXTENSIONS: "IF THE WEATHER WERE SO SEVERE THAT NO REASONABLE PERSON WOULD EXPECT ANY WORK TO BE CARRIED ON, AND S AND E WENT OUT AND WORKED ANYWAY AS BEST IT COULD, WOULD ANY ALLOWANCE BE MADE? THE EXAMINER COMMENTED ON THE ANSWER AS FOLLOWS:

IN EFFECT, THE ANSWER WAS THAT A CONTRACT IS A CONTRACT, WHICH IS NOT ONLY UNRESPONSIVE BUT IS IN FACT ILLOGICAL, BECAUSE THE CONTRACT IS VERY EXPRESS IN PROVIDING THAT EXTENSIONS FOR DELAYS CAUSED BY WEATHER SHALL BE GRANTED.

IN DETERMINING WHAT EXTENSIONS SHOULD HAVE BEEN GRANTED UNDER A "MORE EQUITABLE" STANDARD, THE EXAMINER DISCUSSED VARIOUS FACTORS WHICH HAD TO BE CONSIDERED. FIRST, HE INDICATED, IT WAS COMMON KNOWLEDGE THAT COLD WEATHER GREATLY DECREASES THE EFFICIENCY OF THE WORK FORCE AND THE EQUIPMENT. IN THAT CONNECTION, THE EXAMINER STATED THAT THE SITUATION WAS SIMILAR TO THE ONE BEFORE THE COURT OF CLAIMS IN CARLO BIANCHI V. UNITED STATES, 144 CT. CL. 500. THERE, AS IN THE INSTANT CASE, HE NOTED, CONCRETE WORK WHICH HAD BEEN PLANNED FOR THE SUMMER WAS THROWN INTO THE WINTER BY A SUBSURFACE DEFECT AND THE COURT WAS CONCERNED WITH DETERMINING THE EXTRA COST ENTAILED UNDER THE CHANGED CONDITIONS CLAUSE. THE EXAMINER THEN QUOTED FINDING NO. 37 IN BIANCHI TO THE EFFECT THAT AS A RESULT OF PERFORMING CONCRETE OPERATIONS DURING WINTER MONTHS THE PLAINTIFF SUFFERED A LOSS OF EFFICIENCY. HE NOTED THAT THE WORK IN THE BIANCHI CASE WAS IN UPSTATE NEW YORK IN A TUNNEL WHERE IT WAS SHELTERED WHEREAS IN THE INSTANT CASE THE WORK WAS IN AN OPEN DESERT.

THE EXAMINER POINTED OUT THAT THE EVIDENCE INTRODUCED AT THE HEARING WITH RESPECT TO WEATHER WAS VERY COMPLETE. THERE WERE TWO OFFICIAL OBSERVATION POINTS MAINTAINED BY THE DEPARTMENT OF COMMERCE WEATHER BUREAU. ONE, HE STATED, WAS LOCATED AT IDAHO FALLS AND THE OTHER AT CENTRAL FACILITIES, NATIONAL REACTOR TESTING STATION (NRTS) WHICH WAS CLOSER. IT IS ASSUMED THE "IDAHO FALLS" SITE REFERRED TO BY THE EXAMINER IS IN FACT THE ANP SITE WHICH IS APPROXIMATELY 50 MILES FROM IDAHO FALLS. THE ANP SITE IS APPROXIMATELY 25 MILES NORTH OF THE CONSTRUCTION SITE (P. 1597, TRANSCRIPT) WHEREAS IDAHO FALLS IS ABOUT 50 MILES TO THE EAST. THE CENTRAL FACILITIES SITE WAS LOCATED APPROXIMATELY 10 MILES FROM THE CONSTRUCTION SITE (P. 1597, TRANSCRIPT). OFFICIAL MONTHLY REPORTS COMMENCING WITH APRIL 1950 WHICH WERE IN GREAT DETAIL WERE SUBMITTED FROM BOTH STATIONS. IN ADDITION, THE DAILY LOGS OF GIFFELS AND ROSSETTI AND OF S AND E, WHICH CONTAINED DAILY COMMENTS ON THE WEATHER, WERE PUT INTO EVIDENCE. ORAL TESTIMONY OF PEOPLE AT THE SITE FROM DAY TO DAY WAS ALSO ENTERED INTO THE RECORD.

THE EXAMINER FOUND THAT EVEN THOUGH THE WINTER IN THE HIGH DESERT AREA OF IDAHO WAS NORMALLY SEVERE AT BEST, THE EVIDENCE SHOWED THAT THE WINTER OF 1961-1962 WAS UNUSUALLY BAD. THE EXAMINER'S DECISION CONTINUES AS FOLLOWS:

* * * AT THE HEARING AT IDAHO FALLS, A NUMBER OF SUBCONTRACTORS WHO WERE LONGTIME RESIDENTS TOOK THE STAND. MR. HARPER, WHO ATTENDED TO THE BOILER SAID "IT WAS A REAL BAD WINTER.' MR. BABBITT, THE ELECTRICAL SUBCONTRACTOR, A LONGTIME RESIDENT SAID THAT "IT WAS THE WORST IN TEN YEARS.' MR. JARMAN, THE STEEL SUBCONTRACTOR WHO LIVED IN SALT LAKE CITY, SAID THAT IT WAS "* * * AN EXTREMELY COLD WINTER.' MR. BRYAN, THE SUBCONTRACTOR DOING THE PIPING FOR STEAM, SAID THAT IT WAS "* * * A VERY ROUGH WINTER.' MR. DISKIN, THE REPRESENTATIVE OF THE ARCHITECT-ENGINEER AT THE SITE, SAID THE WEATHER CONDITIONS "* * * WERE BAD, THERE IS NO DOUBT ABOUT THIS.' MR. OTT, THE SUBCONTRACTOR FOR THE ROOFING WHO WAS A LONGTIME RESIDENT, TESTIFIED WITH RESPECT TO HIS WORK WHICH CAME AT A LATE STAGE. HE SAID THAT THERE WERE "* * * ABNORMAL WIND AND PRECIPITATION IN MAY AND JUNE.' THE OFFICIAL WEATHER REPORTS HAVE CORROBORATIVE COMMENTS. THE REPORT FOR SEPTEMBER FROM THE CENTRAL FACILITY'S OBSERVATION STATION "/1) THE COLDEST; (2) THE WETTEST; (3) THE GREATEST 24-HOUR FALL; AND (4) THE GREATEST MONTHLY SNOWFALL FOR ANY MONTH OF SEPTEMBER FOR PERIOD OF RECORD 1950-1961.' CENTRAL FACILITY'S STATION, IN THE MONTH OF OCTOBER WITH RESPECT TO SNOW REPORTED "/1) THE GREATEST MONTHLY TOTAL; (2) THE GREATEST FALL IN 24 HOURS; (3) THE GREATEST DEPTH ON GROUND FOR ANY MONTH OF OCTOBER FOR PERIOD OF RECORD 1950-61.' IDAHO FALLS (SIC) STATION, THE SAME. FOR DECEMBER FROM IDAHO FALLS (SIC) STATION, "THE COLDEST WEATHER RECORDED FOR ANY DECEMBER FOR PERIOD OF RECORD 1950-1961.' FOR JANUARY FROM BOTH STATIONS "* * * THE LOWEST TEMPERATIVE EVER RECORDED.' FOR FEBRUARY FROM BOTH STATIONS "* * * THE WETTEST EVER RECORDED.' BOTH STATIONS FOR MARCH "* * * EXCESSIVE PRECIPITATION DURING FEBRUARY 1961 AND HARDER FREEZE-THAW CYCLE RESULTED IN EXTENSIVE BREAKING-UP OF ROAD SURFACES.' IN FACT, IT WAS AN UNUSUALLY HARD WINTER EVEN FOR IDAHO.

IN DETERMINING THE DAYS OF EXTENSION THAT SHOULD HAVE BEEN GRANTED, UNDER A MORE EQUITABLE STANDARD, AGAIN A JURY APPROACH MUST BE USED. THE DETERMINATIONS BY THE DAY WERE MADE ON THE ENTIRE RECORD. REFERENCE TO TEMPERATURE RANGES AND WIND VELOCITIES IS MERELY FOR THE PURPOSE OF GIVING AN ELLIPTICAL DESCRIPTION OF THE DAY. OTHER FACTORS WERE CONSIDERED AS WELL. THE EXAMINER'S DECISION THEN WENT ON TO LIST THE TIME EXTENSIONS WHICH SHOULD HAVE BEEN GRANTED BEGINNING WITH SEPTEMBER 19, 1961, AND ENDING WITH MAY 18, 1962. AS INDICATED EARLIER, THE CONTRACTOR WAS NOT ASSESSED LIQUIDATED DAMAGES FOR DELAY SINCE THE CONTRACT CONTAINED NO CLAUSE AUTHORIZING SUCH ASSESSMENTS. EXTENSIONS FOR WEATHER ARE PRIMARILY IMPORTANT BECAUSE OF THE BEARING THEY HAVE ON S AND E'S ACCELERATION CLAIM. FOR THIS REASON, ONLY THAT PORTION OF THE EXAMINER'S DECISION WHICH GRANTED EXTENSIONS FOR DELAYS PRIOR TO DECEMBER 7, 1961, IS QUOTED ELOW:

SEPTEMBER 19TH, THUNDERSTORM, 1/2 DAY; SEPTEMBER 20, THUNDERSTORM, 1/2 DAY; SEPTEMBER 21, SNOW AND SLEET, 1/2 DAY; SEPTEMBER 23, RAIN, RAMPS BECAME TO SLICK FOR USE, CONCRETE POUR CANCELLED, 3/4 DAY. TOTAL DAY EXTENSION FOR SEPTEMBER 2-1/4 DAYS.

OCTOBER 6, WIND REACHING 36 MILES PER HOUR, 1/2 DAY; OCTOBER 7, 3 INCHES OF SNOW, 1 DAY; OCTOBER 23, THUNDERSTORM, 25-MILE WIND, CONCRETE POUR CANCELLED, 1 DAY; TOTAL FOR OCTOBER 2-1/2 DAYS.

NOVEMBER 1, TEMPERATURE RANGE 43 DEGREES TO 24 DEGREES, WINDS OF OVER 28 MILES PER HOUR, 3/4 DAY; NOVEMBER 3, TEMPERATURE RANGE 45 DEGREES TO 25 DEGREES, WIND OF 40 MILES WITH GUSTS OF 55, POUR DELAYED, 1 DAY; NOVEMBER 10, TEMPERATURE RANGE 54 DEGREES TO 14 DEGREES, GUSTS OF WINDS OF 27 MILES PER HOUR, DOING DAMAGE TO CURING COVERS, 3/4 DAY; NOVEMBER 12, TEMPERATURE RANGE 40 DEGREES TO 14 DEGREES, 23-MILE WINDS DAMAGING COVERS, 3/4 DAY; NOVEMBER 20, SNOW, POUR CANCELLED, 1 DAY; NOVEMBER 21, TEMPERATURE RANGE 27 DEGREES TO 9 DEGREES, WINDS OF 25 MILES PER HOUR DAMAGING CURING COVERS, 3/4 DAY; NOVEMBER 24, TIME SPENT PATCHING COVERS, 1/2 DAY; A TOTAL OF 5-1/2 DAYS SHOULD BE ALLOWED FOR NOVEMBER.

DECEMBER 2, TEMPERATURE RANGE 35 DEGREES TO 29 DEGREES, SNOW AND SLEET, 3/4 DAY; DECEMBER 3, TEMPERATURE RANGE 38 DEGREES TO 26 DEGREES, SNOW, WINDS TO 29 MILES PER HOUR, 1 DAY; DECEMBER 4, TEMPERATURE RANGE 35 DEGREES TO 17 DEGREES, WINDS OF 17 MILES, TIME SPENT PATCHING COVERS, 3/4 DAY; DECEMBER 7, TEMPERATURE RANGE 25 DEGREES TO 10 DEGREES, WIND 17 MILES PER HOUR, 1 DAY * * *

CLAUSE 5 OF THE GENERAL PROVISIONS SETS UP THREE REQUIREMENTS THAT MUST BE MET BEFORE TIME EXTENSIONS CAN BE GRANTED ON ACCOUNT OF WEATHER CONDITIONS. FIRST, THERE MUST BE ACTUAL DELAY IN THE WORK. SECOND, THE DELAY MUST BE CAUSED BY UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR. THIRD, THE WEATHER COMPLAINED OF MUST BE UNUSUALLY SEVERE WEATHER. THE LATTER TWO REQUIREMENTS ARE RELATED--- THE UNITED STATES SUPREME COURT HAS HELD THAT THE "UNUSUALLY SEVERE WEATHER" MUST BE SUCH AS TO HAVE BEEN "UNFORESEEABLE.' SEE UNITED STATES V. BROOKS-CALL AWAY COMPANY, 318 U.S. 120, 122, 123, WHERE THE COURT STATED:

TO AVOID A NARROW CONSTRUCTION OF THE TERM,"UNFORESEEABLE CAUSES," LIMITING IT PERHAPS TO ACTS OF GOD, THE PROVISO SETS FORTH SOME ILLUSTRATIONS OF UNFORESEEABLE INTERFERENCES. THESE IT DESCRIBES AS "INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD, OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER, OR DELAYS OF SUBCONTRACTORS DUE TO SUCH CAUSES.' THE PURPOSE OF THE PROVISO TO PROTECT THE CONTRACTOR AGAINST THE UNEXPECTED, AND ITS GRAMMATICAL SENSE, BOTH MILITATE AGAINST HOLDING THAT THE LISTED EVENTS ARE ALWAYS TO BE REGARDED AS UNFORESEEABLE, NO MATTER WHAT THE ATTENDANT CIRCUMSTANCES ARE. RATHER, THE ADJECTIVE "UNFORESEEABLE" MUST MODIFY EACH EVENT SET OUT IN THE "INCLUDING" PHRASE. OTHERWISE, ABSURD RESULTS ARE PRODUCED * * *

THE TERM "UNUSUALLY SEVERE WEATHER" DOES NOT INCLUDE ANY AND ALL WEATHER WHICH PREVENTS WORK UNDER THE CONTRACT BUT MEANS ONLY WEATHER SURPASSING IN SEVERITY THE WEATHER USUALLY ENCOUNTERED OR REASONABLY TO BE EXPECTED IN THE PARTICULAR LOCALITY AND DURING THE PARTICULAR TIME OF THE YEAR INVOLVED IN THE CONTRACT. A MERE SHOWING THAT THERE WAS RAIN OR WIND OR SNOW OR FREEZING TEMPERATURE ON CERTAIN DAYS DURING A MONTH WHEN SUCH WEATHER IS TO BE EXPECTED IS NOT SUFFICIENT TO BRING THE WEATHER WITHIN THE TERM "UNUSUALLY SEVERE.' 11 COMP. GEN. 442, 23 ID. 25. SEE, ALSO, E.J. ALBRECHT COMPANY V. UNITED STATES, 146 CT. CL. 299, 304, WHERE THE COURT OF CLAIMS STATED:

AS TO THE FLOODS, OF COURSE THE GOVERNMENT IS NOT CHARGEABLE WITH BREACH OF CONTRACT BECAUSE THEY OCCURRED. THE PLAINTIFF SAYS THAT, UNDER ARTICLE 9/C) (DELAYS--- DAMAGES CLAUSE) OF THE CONTRACT, IT WAS ENTITLED TO AN EXTENSION OF TIME BECAUSE OF THE UNANTICIPATED OCCURRENCE OF THE SECOND FLOOD. THE EVIDENCE SHOWS THAT THE OCCURRENCE OF TWO FLOODS IN ONE WINTER WAS NOT UNUSUAL ON THE CUMBERLAND RIVER. IN SUPPORT OF THIS CONCLUSION THE COURT OF CLAIMS NOTED, IN FINDING NO. 9/B) (P. 314) THAT:

* * * THE TWO FLOODS WOULD NOT HAVE JUSTIFIED A TIME EXTENSION TO JONES- WRIGHT BECAUSE THEIR OCCURRENCE WAS NOT AN ABNORMAL PHENOMENON DURING THE WINTER MONTHS ON THE CUMBERLAND RIVER, AND AVAILABLE HYDROGRAPHIC RECORDS WOULD HAVE CAUSED ONE TO ANTICIPATE FROM ONE TO FOUR FLOODS OF COMPARABLE PROPORTIONS DURING THE WINTER MONTHS * * *

THE EXAMINER'S DECISION APPEARS TO GIVE INSUFFICIENT CONSIDERATION TO THE REQUIREMENTS OF CLAUSE 5 THAT THE WEATHER BE "UNFORESEEABLE" AND "UNUSUALLY SEVERE.' INSTEAD, HIS DECISION APPEARS TO ALLOW TIME FOR ANY WEATHER THAT MAY HAVE HAD AN UNFAVORABLE IMPACT ON THE PROGRESS OF THE WORK, WITHOUT FIRST DETERMINING WHETHER THE WEATHER DURING A PARTICULAR PERIOD WAS UNUSUALLY SEVERE AND UNFORESEEABLE. MUCH OF HIS DECISION RELATING TO THE WEATHER CLAIM IS DEVOTED TO A DISCUSSION OF THE ADVERSE EFFECTS OF WINTER WEATHER ON CONSTRUCTION WORK--- DISCUSSION ON A SUBJECT AS TO WHICH THERE CAN BE NO DISPUTE. IT IS CERTAINLY EASIER AND MORE ECONOMICAL TO PROSECUTE CONSTRUCTION WORK, ESPECIALLY CONCRETE WORK, IN GOOD, RATHER THAN BAD, WEATHER. HOWEVER, IT IS ALSO A WELL-KNOWN FACT THAT NEARLY EVERY CONSTRUCTION JOB WHICH PROGRESSES OVER A PERIOD OF MONTHS IS DELAYED TO SOME EXTENT BY INCLEMENT WEATHER. CLAUSE 5 DOES NOT CONTEMPLATE THE GRANTING OF TIME EXTENSIONS "FOR DELAYS CAUSED BY WEATHER" AS THE EXAMINER STATED IN REBUTTAL TO COMMANDER ANDERSON'S ANSWER--- IT CONTEMPLATES THE GRANTING OF EXTENSIONS ONLY FOR DELAYS CAUSED BY UNFORESEEABLE AND UNUSUALLY SEVERE WEATHER. IN THAT CONNECTION, WE NOTE THAT COMMANDER ANDERSON'S ANSWER TO THE EXAMINER'S HYPOTHETICAL QUESTION WAS NOT, IN FACT,"THAT A CONTRACT IS A CONTRACT.' HIS ANSWER WAS THAT UNDER A LUMP-SUM TYPE CONTRACT, THE WEATHER DID NOT BELONG TO THE GOVERNMENT ANY MORE THAN IT BELONGED TO THE CONTRACTOR, THAT IT JUST EXISTS, AND TO SAY THAT THE GOVERNMENT IS RESPONSIBLE FOR ANY DAY THAT IT SNOWED "DID NOT MAKE SENSE" (P. 2133, TRANSCRIPT).

THE EXAMINER'S CONCLUSIONS REST HEAVILY ON THE "FAULT IN THE SUBSURFACE AND CHANGE ORDER NO. "FOR WHICH HE EVIDENTLY FELT THE GOVERNMENT SHOULD BE HELD RESPONSIBLE. HE FOUND THAT, IF IT HAD NOT BEEN FOR THESE CONDITIONS,"WEATHER WOULD NOT HAVE BEEN A MAJOR PROBLEM.' MOREOVER, S AND E WAS FOUND TO HAVE BEEN "HELD" TO A BID THAT WAS SUBMITTED WHEN EVERYONE THOUGHT THAT THE WORK WOULD START IN JULY AND THE CONCRETE WORK WOULD BE FINISHED ABOUT SEPTEMBER 30. THUS, ACCORDING TO THE EXAMINER, THERE WAS A BASIC FALLACY IN THE CONTENTION THAT S AND E SHOULD HAVE FORESEEN THE SEVERE WEATHER.

IT IS INTERESTING TO NOTE, IN CONNECTION WITH THE ABOVE STATEMENTS, THAT ON PAGE 72 OF HIS DECISION, WHEREIN THE IMPOSSIBILITY CLAIM IS BEING DISCUSSED, THE EXAMINER STATES:

IT SHOULD BE BORNE IN MIND THAT IT SHOULD HAVE BEEN CLEAR TO ALL THAT THE BIDS WERE IRREVOCABLE FOR 60 DAYS SO THAT THE WORK MIGHT HAVE STARTED AS LATE AS AUGUST 10 (SIC).

SEE ALSO PAGE 29 OF THE EXAMINER'S DECISION WHERE HE STATES:

* * * IN THE FIRST PLACE IT SHOULD BE BORNE IN MIND THROUGHOUT THAT AFTER THE BID OPENING ON JUNE 20, S AND E'S BID WAS IRREVOCABLE FOR 60 DAYS, THAT IS UNTIL AUGUST 19 * * *

S AND E HAD THE OPPORTUNITY, AS WELL AS THE LEGAL RIGHT, TO PROTECT ITSELF AGAINST THE AWARD OF A CONTRACT WHICH COULD HAVE BEEN MADE AS LATE AS AUGUST 19, BUT IT DID NOT DO SO; IT CHOSE TO LEAVE THE SPACE PROVIDED IN THE INVITATION FOR SHORTENING THE AWARD PERIOD BLANK. THUS IT WOULD BE MORE ACCURATE TO SAY THAT S AND E WAS MERELY REQUIRED TO LIVE UP TO AN OBLIGATION SELF-IMPOSED, RATHER THAN TO SAY THAT IT WAS "HELD" TO ITS BID UNDER CIRCUMSTANCES WHICH THE EXAMINER IMPLIES WERE UNFAIR. THE RECORD INDICATES THAT THE GOVERNMENT MUST BE CONSIDERED TO HAVE ACTED FAIRLY, RATHER THAN UNFAIRLY, IN THE SITUATION. IT AWARDED THE CONTRACT ON AUGUST 4 RATHER THAN ON AUGUST 19TH. IT ISSUED A NOTICE TO PROCEED ON AUGUST 10 RATHER THAN SOMETIME AFTER AUGUST 19. THUS, S AND E WAS GIVEN AT LEAST 9 ADDITIONAL DAYS WITHIN WHICH TO MOBILIZE AND COMMENCE WORK, AND AS THE RECORD CLEARLY DEMONSTRATES, IT MADE USE OF THESE DAYS UP TO ITS FULL CAPACITY TO DO SO CONSISTENT WITH THE MOBILIZATION OF MEN, PLANT AND EQUIPMENT AND THE DELIVERY OF NECESSARY CONSTRUCTION MATERIALS.

AS TO CHANGE ORDER NO. 2, WE NEED ONLY POINT OUT THAT S AND E KNEW THE CONTRACT WHICH IT BID ON WOULD CONTAIN A CHANGES CLAUSE AND IT ALSO SHOULD HAVE KNOWN, IF IT DID NOT IN FACT KNOW, THAT SUCH CLAUSES IN GOVERNMENT CONSTRUCTION CONTRACTS ARE FREQUENTLY INVOKED. CHANGE ORDER NO. 2 WAS NOT ISSUED AS A UNILATERAL ACTION WITHOUT PRIOR NOTICE TO THE CONTRACTOR, BUT ONLY AFTER S AND E HAD HAD EVERY OPPORTUNITY TO BARGAIN FOR AND RECEIVE THE TIME EXTENSIONS WHICH IT CONSIDERED NECESSERY. THIS IT DID. THE FACT THAT S AND E MAY HAVE UNDERESTIMATED ITS TIME REQUIREMENTS FOR ACCOMPLISHING THE WORK CALLED FOR BY THE ORDER AFFORDS NO GROUND FOR SHIFTING THE BURDEN FOR DELAY TO THE GOVERNMENT.

NOR DO WE SEE HOW THE COURT OF CLAIMS DECISION IN THE BIANCHI CASE CAN BE OF ANY HELP TO THE CONTRACTOR IN THIS CASE. IN THE BIANCHI CASE THE PLANTIFF CLAIMED THAT IT WAS PUT TO EXTRA EXPENSE BY BEING DELAYED BY THE CONTRACTING OFFICER'S REFUSAL FOR A CONSIDERABLE TIME TO AUTHORIZE INSTALLATION OF PERMANENT PRETECTION IN THE TUNNEL INVOLVED, WHICH WAS NECESSITATED BY THE DISCOVERY OF UNFORESEEN SUBSURFACE CONDITIONS. THE COURT FOUND THAT THERE WAS DELAY AND EXPENSE RESULTING FROM THE CAUSE ALLEGED BY THE PLAINTIFF, I.E., THE CONTRACTING OFFICER'S REFUSAL TO TIMELY ISSUE A CHANGE ORDER. IN THE INSTANT CASE, WE THINK THAT THE EVIDENCE CLEARLY DEMONSTRATES THAT THE GOVERNMENT WAS NOT RESPONSIBLE FOR DELAYING THE CONCRETE WORK UNTIL WINTER WEATHER, EXCEPT INSOFAR AS IT CAN BE SAID THAT CHANGE ORDER NO. 2 HAD THAT EFFECT. HOWEVER, S AND E MADE ITS OWN PROPOSAL FOR THE TIME EXTENSION FOR CHANGE ORDER NO. 2 AND THE ORDER ALLOWED ALL THAT S AND E ASKED FOR. EVEN UNDER THE ORDER THE GREAT BULK OF THE CONCRETE WORK SHOULD HAVE BEEN FINISHED PRIOR TO THE ONSET OF THE SEVERE WINTER WEATHER IN DECEMBER, AS SHOWN BY THE REVISED WORK SCHEDULE AGREED ON AFTER ISSUANCE OF THE CHANGE ORDER. THE FACT THAT IT WAS NOT COMPLETED BEFORE THAT TIME CANNOT BE ATTRIBUTED TO ACTION BY THE GOVERNMENT, AS IN BIANCHI.

THE PROVISIONS OF CLAUSE 03 OF THE GENERAL CONDITIONS CAUTION THE CONTRACTOR TO SATISFY HIMSELF AS TO THE NATURE AND LOCATION OF THE WORK AND, AMONG OTHER THINGS, THE UNCERTAINTIES OF WEATHER. S AND E DID NOT INVESTIGATE THE SITE PRIOR TO SUBMITTING ITS BID ON JUNE 20. (SEE P. 277, TRANSCRIPT). NOR DID IT EXAMINE AVAILABLE METEROLOGICAL DATA OF THE TYPE WHICH IT LATER PRESENTED TO SUBSTANTIATE ITS CLAIMS FOR WEATHER EXTENSIONS. (P. 354, TRANSCRIPT). MOREOVER, IN ANSWER TO A QUESTION BY THE GOVERNMENT'S ATTORNEY, MR. WOODARD OF S AND E STATED THAT, ALTHOUGH HE NOTICED UNDER THE INVITATION FOR BIDS THAT THE GOVERNMENT HAD 60 DAYS WITHIN WHICH TO ACCEPT THE OPENED BID, HE DID NOT TAKE THE POSSIBILITY OF A 60 DAY DELAY INTO CONSIDERATION IN PREPARING THE ESTIMATE.

THE EXAMINER'S DECISION WITH RESPECT TO SEVERITY OF THE WEATHER APPEARS TO PLACE CONSIDERABLE EMPHASIS UPON THE TESTIMONY OF A NUMBER OF SUBCONTRACTORS WHO, IN HIS WORDS, WERE "LONGTIME RESIDENTS.' MR. BRYAN IS QUOTED AS TESTIFYING THAT IT WAS "A VERY ROUGH WINTER.' ON PAGE 543 OF THE TRANSCRIPT (UNDER CROSS-EXAMINATION), IT WAS BROUGHT OUT THAT MR. BRYAN HAD LIVED IN ARCO, IDAHO, A TOTAL OF 13 MONTHS AND THAT THE WINTER OF 1961-1962 WAS THE ONLY ONE HE HAD SPENT IN IDAHO. MR. OTTS, THE ROOFING SUBCONTRACTOR WHO WAS CHARACTERIZED BY THE EXAMINER AS "A LONG TIME RESIDENT," TESTIFIED THAT HE HAD DONE CONSTRUCTION WORK IN THE AREA "SINCE 1956" (P. 407, TRANSCRIPT), OR FOR APPROXIMATELY 5 YEARS PRIOR TO THE S AND E WORK. MOREOVER, IT WAS BROUGHT OUT THAT MR. OTTS, WHO TESTIFIED THERE HAD BEEN ABNORMAL WIND AND PRECIPITATION IN MAY AND JUNE WHEN HIS WORK WAS BEING ACCOMPLISHED, WAS ORIGINALLY SCHEDULED TO PERFORM HIS WORK DURING THE MONTH OF DECEMBER. (P. 413, TRANSCRIPT). MR. DISKIN WAS QUOTED BY THE EXAMINER AS TESTIFYING THAT THE WEATHER CONDITIONS "WERE BAD, THERE IS NO DOUBT ABOUT THIS.' HOWEVER, IT ALSO APPEARS THAT MR. DISKIN TESTIFIED (P. 2350, TRANSCRIPT):

A. THERE AGAIN, THERE HAS BEEN A LOT OF STUDY MADE OF WEATHER, AND WHETHER THE WEATHER WAS UNUSUAL OR NOT, AND I DON-T THINK I AM IN A POSITION TO SPECULATE, BECAUSE I HAVEN-T MADE THESE STUDIES. SEE, ALSO PAGE 2341 OF THE TRANSCRIPT WHERE MR. DISKIN STATED:

A. WELL, I HAVE HEARD A LOT ABOUT WEATHER IN THE PAST MONTH, WEATHER THAT I DIDN-T EVEN KNOW ABOUT, AS FAR AS WEATHER IS CONCERNED. I AM NOT IN A POSITION TO SAY WHETHER IT WAS UNUSUAL OR NOT UNUSUAL. MR. DISKIN CORRECTLY ASSESSED HIS QUALIFICATIONS FOR TESTIFYING AS TO THE SEVERITY OF THE IDAHO WINTER OF 1961-1962, SINCE HIS PERMANENT RESIDENCE "IS WHERE I STAY. I MOVE QUITE A .' THESE NUMEROUS MOVES TO VARIOUS PARTS OF THE COUNTRY WERE COVERED IN DETAIL DURING THE HEARING (PP. 2333-2336). ARRIVED AT IDAHO FALLS IN APRIL OF 1961 (P. 2336, TRANSCRIPT) AND IT WAS NOT SHOWN THAT MR. DISKIN HAD SPENT ANY TIME IN IDAHO PRIOR TO APRIL 1961. MR. JARMAN WHO TESTIFIED THAT IT WAS "AN EXTREMELY COLD WINTER" ADMITTEDLY WAS NOT A RESIDENT OF IDAHO. HE DETAILED THE JOBS THAT HE HELD SINCE 1932 IN VARIOUS PARTS OF THE COUNTRY AND TESTIFIED THAT HE HAD BEEN IN BUSINESS IN SALT LAKE CITY, UTAH, SINCE 1952. (PP. 451-452, TRANSCRIPT.) MR. BABBITT WHO WAS DESCRIBED BY THE EXAMINER AS "A LONGTIME RESIDENT" DID NOT ESTABLISH HIS "LONGTIME RESIDENCE" BY ANYTHING THAT HE HIMSELF SAID DURING THE HEARING. THE ONLY TESTIMONY IN THE RECORD ON THIS POINT, THAT WE HAVE BEEN ABLE TO FIND, IS THE FOLLOWING EXCHANGE BETWEEN S AND E'S ATTORNEY AND MR. BABBITT (P. 444, TRANSCRIPT):

Q. MR. BABBITT, AS A LOCAL RESIDENT OF IDAHO FALLS, HOW WOULD YOU DESCRIBE THE WEATHER IN THE WINTER OF 1961 AND 1962?

A. IT WAS THE WORST ONE WE HAD IN ABOUT 10 YEARS; IT WAS 50 BELOW ZERO, EVEN 54 OUT ON THE JOB.

THE LOWEST TEMPERATURES RECORDED IN THE G AND R AND S AND E DAILY LOGS WERE FOR THE PERIOD JANUARY 21 THROUGH JANUARY 25. A LOW OF MINUS 48 DEGREES WAS REACHED ON JANUARY 22. THE CONTRACTING OFFICER GRANTED TIME EXTENSIONS FOR THE FOUR DAYS IN THAT PERIOD.

WITH RESPECT TO THE EXAMINER'S QUOTATION FROM MR.'HARPER-S" TESTIMONY, WE HAVE BEEN UNABLE TO LOCATE HIS NAME IN THE HEARING TRANSCRIPT. BELIEVE, THEREFORE, THAT THE EXAMINER WAS REFERRING TO MR. MARVIN E. HARP WHO FURNISHED THE CONCRETE FOR THE S AND E JOB. MR. HARP TESTIFIED THAT HE HAD BEEN IN THE CONCRETE BUSINESS IN IDAHO FOR "ABOUT 17 YEARS" (P. 448, TRANSCRIPT) AND HE DESCRIBED THE 1961-1962 WINTER AS: "IT WAS A REAL BAD ONE, I THINK PROBABLY THE WORST WE-VE HAD IN THE LAST 10 YEARS" (P. 448, TRANSCRIPT).

ONE OTHER INDIVIDUAL TESTIFIED ON WEATHER CONDITIONS. THE EXAMINER'S DECISION DID NOT INCLUDE HIM IN ITS LIST. HE WAS ROBERT W. POIRIER, PRESIDENT OF EPCO CONTRACTORS AND ENGINEERS, INC., WHO GAVE HIS ADDRESS AS PANORAMA CITY, CALIFORNIA. HE TESTIFIED (P. 418, TRANSCRIPT) THAT THERE WERE "EXCESSIVELY STRONG WINDS" DURING MARCH AND APRIL, 1962 (P. 423, TRANSCRIPT) WHEN HIS WORK WAS PERFORMED. HOWEVER, IT APPEARS THAT MR. POIRIER ALSO WAS NOT QUALIFIED TO GIVE A COMPARATIVE STATEMENT AS TO THE SEVERITY OF THE WINDS. HIS COMPANY WAS INCORPORATED ON JANUARY 4, 1960, IN CALIFORNIA (PP. 422-423, TRANSCRIPT) AND PRIOR TO THAT TIME HE WAS WORKING IN DENVER, COLORADO (P. 427, TRANSCRIPT). ALSO, IT WAS BROUGHT OUT THAT THE WORK WITH WHICH THE STRONG WINDS ALLEGEDLY INTERFERED IN MARCH AND APRIL WAS ORIGINALLY ANTICIPATED TO BE PERFORMED DURING THE MONTHS OF NOVEMBER, DECEMBER, JANUARY, AND POSSIBLY IN FEBRUARY (PP. 425- 426, TRANSCRIPT).

THE OFFICIAL WEATHER BUREAU REPORTS, ESPECIALLY THOSE FROM THE CENTRAL FACILITIES STATION WHICH WAS NEAREST TO THE WORKSITE, SHED CONSIDERABLE LIGHT ON WHETHER THE CONDITIONS ENCOUNTERED DURING THE CONTRACT PERFORMANCE PERIOD WERE UNUSUALLY SEVERE AND UNFORESEEABLE WITHIN THE MEANING OF CLAUSE 5 OF THE GENERAL PROVISIONS. WE DO NOT AGREE THAT THOSE REPORTS HAVE "CORROBORATIVE COMMENTS" AS ASSERTED BY THE EXAMINER. THE EXAMINER'S TREATMENT OF THOSE REPORTS REQUIRES SPECIFIC CONSIDERATION. HIS DECISION CONTAINS A NUMBER OF QUOTATIONS FROM THE REPORTS. THESE QUOTATIONS ARE FOOTNOTES WHICH RELATE TO SPECIFIC OCCURRENCES RECORDED IN THE REPORTS. IT IS OUR BELIEF THAT, WITHOUT DISCLOSURE OF THE SPECIFIC OCCURRENCES TO WHICH THEY RELATE, THESE FOOTNOTES TEND TO BE MISLEADING.

IN REGARD TO THE EXAMINER'S RECAPITULATION OF THE REPORT FROM CENTRAL FACILITIES FOR SEPTEMBER (GOVERNMENT'S EXHIBIT C-20),"THE COLDEST" REFERS TO THE AVERAGE MONTHLY TEMPERATURE OF 50.8 DEGREES WHICH WAS 5.2 DEGREES BELOW NORMAL SEPTEMBER TEMPERATURES (PERIOD OF RECORD 1950-1961). THE "WETTEST" REFERS TO A PRECIPITATION TOTAL OF 3.52 INCHES, A DEPARTURE FROM NORMAL OF PLUS 3.16. (IN THAT CONNECTION THE REPORT SHOWS THAT THE BULK OF THE TOTAL PRECIPITATION FELL ON THREE DAYS: SEPTEMBER 9--- 1.09 INCHES; SEPTEMBER 17--- .45 INCHES, AND SEPTEMBER 18--- 1.55 INCHES.) THE "GREATEST 24 HOUR FALL" REFERS TO THE 1.55 INCHES WHICH FELL ON SEPTEMBER 18 AND THE "GREATEST MONTHLY SNOWFALL FOR ANY MONTH OF SEPTEMBER" REFERS TO A TOTAL OF 1 INCH WHICH FELL ON ONE DAY, SEPTEMBER 21, THE RESULT OF WHICH AT 8:00 A.M. ON SEPTEMBER 21 WAS MEASURED AS A "TRACE" REMAINING ON THE GROUND.

FOR OCTOBER THE STATEMENT (WITH RESPECT TO SNOW) "GREATEST MONTHLY TOTAL" REFERS TO A TOTAL FOR THE MONTH OF 3.7 INCHES. THE REPORT FROM CENTRAL FACILITIES SHOWS THAT 3 INCHES FELL ON OCTOBER 7 AND THAT THERE WAS NOTHING ON THE GROUND AT 8:00 A.M. ON OCTOBER 8, AND THAT THE REMAINDER OF 0.7 INCHES FELL ON OCTOBER 27 WITH JUST A "TRACE" MEASURED ON THE GROUND AT 8:00 A.M. ON OCTOBER 28. IN THAT CONNECTION, IT SHOULD BE NOTED THAT THE S AND E DAILY LOG FOR OCTOBER 7 CONTAINS THE FOLLOWING NOTATION ON WEATHER CONDITIONS: "OVERCAST-COLD O LITE SNOW," WHILE THE G AND R DAILY LOG FOR THAT DAY RECORDS THAT THE TOTAL MEASURABLE AMOUNT OF SNOW WAS 2 INCHES. THE "GREATEST FALL IN 24 HOURS" REFERS TO THE 3 INCHES THAT FELL ON OCTOBER 7, AND THE "GREATEST DEPTH ON GROUND FOR ANY MONTH OF OCTOBER" ALSO REFERS TO THE 3 INCHES ON OCTOBER 7. (SNOW IN OCTOBER AT THE CENTRAL FACILITIES' STATION IS NOT UNCOMMON--- THE RECORDS SHOW THAT 1.3 INCHES FELL IN OCTOBER OF 1957 AND 2.4 INCHES IN OCTOBER OF 1956 WITH TRACES AND MINOR AMOUNTS IN A FEW OF THE YEARS BETWEEN 1950-1961.) ALSO FOR OCTOBER, THE EXAMINER STATES THAT THE IDAHO FALLS (SIC) STATION REPORTED "THE SAME" AS THE CENTRAL FACILITIES' STATION. THE ONLY ENTRY FOR THAT STATION IS: "THE GREATEST 24 HOURS FALL OF PRECIPITATION FOR ANY MONTH OF OCTOBER FOR PERIOD OF RECORD 1950-1961" WHICH REFERS TO THE FACT THAT 0.50 INCHES OF RAIN FELL ON OCTOBER 21.

NO REFERENCE IS MADE BY THE EXAMINER TO THE REPORTS FOR THE MONTH OF NOVEMBER.

FOR DECEMBER THE EXAMINER STATES: "FROM IDAHO FALLS (SIC) STATION, -THE COLDEST WEATHER RECORDED FOR ANY DECEMER FOR PERIOD OF RECORD 1950-1961- .' THE EXAMINER'S QUOTATION IS NOT AN ACCURATE ONE, AND IT ALSO APPEARS TO IMPLY THAT THE WHOLE MONTH OF DECEMBER WAS THE COLDEST FOR ANY DECEMBER FOR THE PERIOD OF RECORD. ACTUALLY, THE NOTE IN THE REPORT READS: "COLDEST TEMPERATURE RECORDED FOR ANY DECEMBER MONTH FOR PERIOD OF RECORD 1950-1961," AND IT REFERS TO THE FACT THAT A LOW TEMPERATURE READING OF MINUS 27 DEGREES WAS RECORDED ON ONE DECEMBER DAY--- THE 11TH. MOREOVER, USE OF THE WEATHER REPORT FROM IDAHO FALLS (ANP) RATHER THAN THE CENTRAL FACILITIES' REPORT, TO INDICATE THE TEMPERATURE AT THE CONSTRUCTION SITE CAN BE MISLEADING. FOR ONE THING THE CENTRAL FACILITIES' STATION IS CLOSER TO THE SITE. ALSO, IT APPEARS THAT THE WEATHER AT ANP IN TERMS OF TEMPERATURE IS USUALLY MORE SEVERE THAN AT CENTRAL FACILITIES. (FOR DECEMBER 11 CENTRAL FACILITIES REPORTED A LOW OF MINUS 13 DEGREES.)

FOR JANUARY THE EXAMINER'S QUOTATION FROM BOTH REPORTS IS "THE LOWEST TEMPERATURE EVER ORDED," WHICH APPARENTLY REFERS TO JANUARY 21 WHEN A LOW OF MINUS 40 DEGREES WAS REACHED AT CENTRAL FACILITIES STATION. A LOW OF MINUS 42 DEGREES WAS RECORDED ON JANUARY 23 AT THE ANP STATION BUT NO NOTATION INDICATING A RECORD IS SET FORTH IN THAT REPORT. IT MUST BE KEPT IN MIND, ALSO THAT THE CONTRACTING OFFICER GRANTED 4 DAYS EXTENSION ON ACCOUNT OF WEATHER FOR THE PERIOD JANUARY 21 THROUGH JANUARY 24.

THE EXAMINER'S NOTATION FOR FEBRUARY FROM BOTH STATIONS "THE WETTEST EVER RECORDED" REFERS TO TOTAL PRECIPITATION FOR THE MONTH OF 2.40 INCHES (DEPARTURE FROM NORMAL OF PLUS 1.63) AT CENTRAL, AND 1.83 INCHES (DEPARTURE FROM NORMAL OF PLUS 1.34) AT ANP.

THE EXAMINER'S STATEMENT AS TO MARCH IS SELF-EXPLANATORY.

S AND E'S CLAIMS FOR WEATHER EXTENSIONS WERE PREDICATED UPON THREE FACTORS AS SET FORTH IN ITS EXHIBIT G. (SEE, ALSO, MR. WOODARD'S DISCUSSION, P. 326, ET SEQ., TRANSCRIPT.) THE THREE FACTORS WERE "PRECIPITATION," "WIND" AND "TEMPERATURE.' FOR PRECIPITATION, S AND E CLAIMED EXTENSIONS ON THE FOLLOWING BASIS, AS SET FORTH IN ITS EXHIBIT G:

1. PRECIPITATION--- BECAUSE OF NORMAL WEATHER CONDITIONS IN THIS ARID, DESERT-LIKE AREA, THIS CONTRACTOR DID NOT ANTICIPATE ANY WORK DELAY FROM PRECIPITATION. ACCORDINGLY WE ARE CLAIMING TIME EXTENSIONS FOR DAYS WHERE WORK WAS DELAYED DUE TO PRECIPITATION INCLUDING CLEANUP AFTER. EXTENSIONS FOR WIND WERE CLAIMED IN EXHIBIT G ON THE FOLLOWING BASIS:

2. HIGH WINDS--- FROM THE AVAILABLE CLIMATOLOGICAL DATA WHICH INCLUDES AVERAGE MONTHLY WIND VELOCITIES AND THE EXTREME VELOCITY THAT HAD OCCURRED IN PAST YEARS, THIS CONTRACTOR COULD ONLY CONCLUDE THAT WIND WOULD NOT BE A PROBLEM THAT WOULD INTERFERE WITH CONSTRUCTION OPERATIONS.

FROM OUR EXPERIENCE IN THE FIELD, WE HAVE FOUND THAT WINDS IN EXCESS OF 20 M.P.H. WOULD FORCE SUSPENSION OR DELAY OF FORM ERECTION AND CONCRETE POURING AS WELL AS IN PLACEMENT AND PROTECTION OF PLASTIC COVERS.

WE ARE CLAIMING TIME EXTENSIONS FOR THOSE DAYS THAT WIND VELOCITIES WERE IN EXCESS OF TWENTY (20) MILES PER HOUR FOR A PROLONGED LENGTH OF TIME (3 HOURS AND LONGER) AND/OR GUSTS WERE OF SUCH A VELOCITY AS TO DAMAGE PROTECTIVE COVERING ON CONCRETE POURS, HAMPER FORM ERECTION OR CONCRETE POURS, ENDANGER THE SAFETY OF WORKMEN.

* * * * * * * EXTENSIONS FOR TEMPERATURE WERE CLAIMED IN EXHIBIT G ON THE FOLLOWING BASIS:

3. EXTREME TEMPERATURES--- WE ARE CLAIMING TIME EXTENSIONS FOR THE DAYS OF EXTREME LOW TEMPERATURES WHERE THE TEMPERATURE ARE (SIC) LOWER (MINUS 10 AND LOWER FROM NORMAL EXPECTED) THAN THE NORMAL ANTICIPATED FOR THAT DATE.

OTHER DAYS WERE CLAIMED ON WEATHER DELAYS DUE TO POSTPONEMENT OF CONCRETE POUR BECAUSE OF TEMPERATURES, EVEN THOUGH A MINUS (MINUS 10) DEVIATION FROM NORMAL WAS NOT REACHED.

S AND E CLAIMED A TOTAL OF 129 DAYS EXTENSION ON ACCOUNT OF WEATHER COMMENCING WITH AUGUST 30, 1961, AND ENDING WITH MAY 18, 1962. EACH DAY CLAIMED WAS LISTED IN SCHEDULE W-4, WHICH WAS A PART OF S AND E EXHIBIT G. THE EXAMINER GRANTED S AND E A TOTAL OF 56 3/4 DAYS EXTENSION BEGINNING WITH SEPTEMBER 19 AND ENDING WITH THE FOLLOWING MAY 19. A TOTAL OF 12 3/4 DAYS EXTENSION GRANTED BY THE EXAMINER FELL BEFORE DECEMBER 7 AND THE REMAINDER AFTER THAT DATE.

THE BASES FOR S AND E'S WEATHER CLAIMS, AS SET FORTH IN ITS EXHIBIT G, REQUIRE A FEW PRELIMINARY OBSERVATIONS. FIRST, IT SHOULD BE NOTED THAT S AND E'S CLAIM FOR EXTENSIONS ON ACCOUNT OF PRECIPITATION APPEARS TO BE BASED ON THE ASSERTION THAT SINCE THE CONSTRUCTION SITE WAS LOCATED IN AN ARID, DESERT-LIKE AREA, S AND E DID NOT ANTICIPATE ANY WORK DELAY FROM PRECIPITATION. IT APPEARS THAT S AND E IS BASING ITS CLAIM ON AN ABSOLUTE RATHER THAN A COMPARATIVE STANDARD OF WEATHER CONDITIONS. THAT IS, S AND E IS CLAIMING THAT IF IT WAS DELAYED ON ANY GIVEN DAY BY PRECIPITATION IT IS ENTITLED TO AN EXTENSION REGARDLESS OF WHETHER THE PRECIPITATION ON THAT DAY WAS UNUSUALLY SEVERE AND UNFORESEEABLE. OBVIOUSLY, SUCH A STANDARD IS NOT COUNTENANCED BY THE LANGUAGE OF CLAUSE 5 OF THE GENERAL PROVISIONS. MOREOVER, AS WILL BE BROUGHT OUT LATER, SOME PRECIPITATION WAS TO BE EXPECTED AT THE CONSTRUCTION SITE FOR THAT TIME OF THE YEAR AND, EXCEPT FOR DAYS IN SEPTEMBER, THE PRECIPITATION ACTUALLY ENCOUNTERED BY S AND E DURING THE CONSTRUCTION PERIOD CANNOT IN ANY WAY BE CONSIDERED UNUSUALLY SEVERE AND UNFORESEEABLE.

IN REGARD TO THE CLAIM FOR EXTENSIONS ON ACCOUNT OF WIND, S AND E APPEARS TO BE ASSERTING THAT, PRIOR TO SUBMITTING ITS BID, S AND E HAD LOOKED AT THE AVAILABLE CLIMATOLOGICAL DATA (WHICH DATA INCLUDED AVERAGE MONTHLY WIND VELOCITIES AND THE EXTREME VELOCITIES THAT HAD OCCURRED IN PAST YEARS) AND COULD ONLY CONCLUDE THEREFROM THAT WIND WOULD NOT BE A PROBLEM. IF THAT BE THE CORRECT READING OF THE LANGUAGE USED BY S AND E IN EXHIBIT G, WE NEED ONLY NOTE THE FOLLOWING EXCHANGE WHICH TOOK PLACE BETWEEN THE EXAMINER AND MR. WOODARD (PP. 354 356, TRANSCRIPT): Q. DID YOU HELP IN PREPARING THE ESTIMATES FOR THE BID ON THE S5G PROJECT?

A. YES, I DID.

Q. IN THAT ESTIMATE DID YOU OR ANYONE IN THE TEAM ANALYZE METEOROLOGICAL DATA OF THE TYPE YOU HAVE PRESENTED HERE IN YOUR TESTIMONY?

A. WE DID NOT ANALYZE A REPORT LIKE THAT. USUALLY WHEN WE GO AND BID A JOB IN A CERTAIN AREA WE TALK TO LOCAL PEPOLE ABOUT WEATHER CONDITIONS, VARIOUS JOB SITE CONDITIONS IN THAT AREA; AVAILABILITY OF LABOR, WEATHER, AND SO FORTH. * * * * * * *

Q. DID YOU WHEN YOU PREPARED AN ESTIMATE FOR THIS BID MAKE ANY INVESTIGATION, EITHER BY INQUIRY OR OTHERWISE AS TO WHAT YOU MIGHT EXPECT WITH RESPECT TO WEATHER?

A. YES, SIR, WE TALKED ABOUT THE WEATHER HERE, VARIOUS SUBS CAME TO OUR ROOM, WE WEREN-T TOO CONCERNED ABOUT THE WEATHER AT THAT TIME.

Q. WHY WERE YOU NOT?

A. THE JOB WAS BID IN JUNE, JUNE 20 WAS BID AND WE ANTICIPATED AT THAT TIME OF THE YEAR NO ADVERSE WEATHER DELAYS.

MR. RHODES. I HAVE A QUESTION ALONG THAT LINE, SIR:

Q. MR. WOODARD, WHEN YOU PREPARED YOUR ESTIMATES DID YOU LOOK AT THE INVITATION TO BID AND THE OTHER BIDDING DOCUMENTS?

A. YES, SIR.

Q. DO YOU RECALL NOTICING THAT UNDER THE TERMS OF THE BID THAT THE GOVERNMENT HAD 60 DAYS WITHIN WHICH TO MAKE THE AWARD AFTER THE BIDS WERE OPENED?

A. YES, SIR.

Q. DID YOU TAKE THAT INTO CONSIDERATION IN THE POSSIBILITY OF A 60-DAY DELAY?

A. NO, SIR. ALSO, ON THE WIND CLAIM, S AND E AGAIN, AS IN THE CASE OF PRECIPITATION, APPEARS TO BASE ITS CLAIM FOR EXTENSIONS ON AN ABSOLUTE STANDARD (I.E., WIND VELOCITIES IN EXCESS OF 20 M.P.H. FOR 3 HOURS OR LONGER) WITHOUT REGARD TO WHETHER 20 M.P.H. WINDS OF 3 HOURS DURATION ARE UNUSUALLY SEVERE AND UNFORESSEABLE AT THAT LOCATION FOR THAT TIME OF THE YEAR. THE RECORD INDICATES, AS WILL BE DEMONSTRATED BELOW, THAT THE WIND DURING THE CONSTRUCTION PERIOD INVOLVED HERE, EXCEPT FOR 1 DAY (NOVEMBER 3), WAS NOT UNUSUALLY SEVERE AND UNFORESEEABLE. IN FACT THE OFFICIAL WEATHER BUREAU DATA (EXHIBIT C 20) SHOWS THAT THE CONSTRUCTION PERIOD (SEPTEMBER THROUGH MAY, 1961 62, HAD FEWER OR AS FEW, DAYS THAT THE WIND BLEW OVER 20 M.P.H. FOR 1 HOUR PERIODS THAN OF THE PRECEDING 7 YEARS HAD FOR THE SAME SEPTEMBER THROUGH MAY PERIOD.

WITH RESPECT TO TEMPERATURE S AND E CLAIMED TIME EXTENSIONS FOR DAYS WHERE THE TEMPERATURE WAS 10 DEGRESS LOWER THAN THE NORMAL ANTICIPATED FOR THE DATE INVOLVED. OTHER DAYS WERE ALSO CLAIMED WHERE CONCRETE POURS WERE POSTPONED BECAUSE OF TEMPERATURE EVEN THOUGH A MINUS 10 DEGREE DEVIATION FROM NORMAL WAS NOT REACHED.

NEITHER THE HEARINGS, NOR THE EVIDENCE INTORDUCED BY S AND E, DISCLOSES THE BASIS FOR S AND E'S CONTENTION THAT A DEVIATION OF MINUS 10 DEGREES FROM NORMAL TEMPERATURES CONSTITUTES A VALID GROUND FOR TIME EXTENSIONS UNDER CLAUSE 5 OF THE GENERAL PROVISIONS. WE ARE UNAWARE OF ANY BASIS UPON WHICH IT CAN BE CONCLUDED THAT A DEPARTURE OF MINUS 10 DEGREES FROM NORMAL IPSO FACTO CONSTITUTES UNUSUALLY SEVERE AND UNFORESEEABLE WEATHER. ON THIS POINT WE BELIEVE THAT THE DECISION BY THE GENERAL SERVICES ADMINISTRATION BOARD OF CONTRACT APPEALS (GSBCA) IN THE APPEAL OF AMERICAN CONSTRUCTION COMPANY, INC. (GSBCA-1097, MARCH 31, 1965) CORRECTLY CONSTRUES THE REQUIREMENTS OF CLAUSE 5 OF THE GENERAL PROVISIONS FOR GRANTING TIME EXTENSIONS:

THE APPELLANT SUBMITTED "LOCAL CLIMATOLOGICAL DATA" CHARTS PUBLISHED BY THE U.S. WEATHER BUREAU FOR THE MONTHS OF FEBRUARY AND MARCH, 1962, COVERING THE WEATHER CONDITIONS THERIN INDICATED AS RECORDED AT THE NATIONAL AIRPORT, WASHINGTON, D.C. THE CHART FOR FEBRUARY INDICATED THAT THERE WERE NINE DAYS OF MEASURABLE PRECIPITATION DURING THE PERIOD FEB. 16 -28, INCLUSIVE, RANGING FROM 0.03 INCHES (3 DAYS) TO 1.07 INCHES (1 DAY), WITH MEASURABLE SNOW OR SLEET ON ONLY 1 DAY, THE VERY FIRST, I.E., 2 INCHES ON FEBRUARY 16; IT SHOWED THAT ON 5 DAYS THE TEMPERATURE WAS BELOW AVERAGE, RANGING FROM MINUS 1 TO MINUS 5 DEGREES OF TEMPERATURE, ON 12 DAYS THE TEMPERATURE WAS ABOVE AVERAGE, RANGING FROM PLUS 2 TO PLUS 7 DEGREES OF TEMPERATURE, WITH ONE DAY BEING AVERAGE. THE CHART FOR MARCH INDICATED THAT BETWEEN MARCH 1 AND MARCH 21, INCLUSIVE, THERE WERE EIGHT DAYS OF MEASURABLE PRECIPITATION, RANGING FROM .03 INCHES (1 DAY) TO ONE INCH (1 DAY), WITH MEASURABLE SNOW OR SLEET ON THREE DAYS (0.7 INCH ON MARCH 5, 3.1 INCHES ON MARCH 6, AND 0.2 INCH ON MARCH 7); IT SHOWED THAT ON 16 DAYS THE TEMPERATURE WAS BELOW AVERAGE, RANGING FROM MINUS 1 TO MINUS 17 DEGREES OF TEMPERATURE, WITH THE MAJORITY SHOWING A MINUS 6 OR LESS DIFFERENCE, AND THAT ON 3 DAYS THE TEMPERATURE WAS ABOVE AVERAGE, RANGING FROM PLUS 2 TO PLUS 6 DEGREES OF TEMPERATURE, WITH TWO DAYS BEING AVERAGE.

APPELLANT APPARENTLY IS OF THE VIEW THAT IF THE WEATHER CHARTS INDICATE THAT ON A GIVEN DAY THE PRECIPITATION IS SOMEWHAT GREATER THAN THE AVERAGE OR THAT IT IS SOMEWHAT COLDER THAN THE AVERAGE, SUCH CONSTITUTES AN EXCUSABLE CAUSE OF DELAY. WE CANNOT AGREE. THE VERY CONCEPT OF "AVERAGE" CONTEMPLATES A MEAN VALUE, MEDIAL SUM OR QUANTITY MADE UP OF UNEQUAL SUMS OR QUANTITIES. MERELY BECAUSE A GIVEN DAY IS A FEW DEGREES COLDER, OR WETTER, THAN THE AVERAGE FOR THAT DATE OVER A NUMBER OF YEARS DOESN-T ESTABLISH THAT UNUSUALLY SEVERE WEATHER OCCURRED THAT DAY WITHIN THE MEANING OF CLAUSE 5 OF THE GENERAL PROVISIONS, SUPRA, AND THUS THAT THE APPLICANT HAS BEEN EXCUSED THEREBY FOR LATE PERFORMANCE. RATHER, SUCH VARIANCES IN WEATHER CONDITIONS ARE THE RULE, RATHER THAN THE EXCEPTION. MUCH MORE IN THE WAY OF DEPARTURE FROM AVERAGE, OR NORMAL, WEATHER CONDITIONS MUST BE ESTABLISHED TO CONSTITUTE "UNUSUALLY SEVERE WEATHER" IN OUR OPINION.

IT SEEMS TO US THAT, AT MOST, APPELLANT HAS MADE OUT A CASE OF NORMALLY SEVERE WEATHER, NOT OF UNUSUALLY SEVERE WEATHER. CLAUSE 5 OF THE GENERAL PROVISIONS DOES NOT, AND WAS NOT INTENDED TO, GRANT A CONTRACTOR RELIEF IN SUCH CIRCUMSTANCES. SEE MCBRIDE AND WACHTEL, GOVERNMENT CONTRACTS, SECTION 39.50 (2) ET SEQ. UNDER THE CIRCUMSTANCES HERE WE CANNOT FIND THAT THE GOVERNMENT WAS UNGENEROUS IN GRANTING A 17-DAY EXTENSION FOR THIS ITEM.

THE GOVERNMENT'S CHIEF WITNESS IN REBUTTAL TO THE EVIDENCE SUBMITTED BY S AND E WAS, AS IN MOST OF THE CLAIMS, COMMANDER ANDERSON. IN THIS INSTANCE, HOWEVER, HIS TESTIMONY WAS NOT BASED ON PERSONAL RECOLLECTION OR KNOWLEDGE DERIVED FROM PERSONAL OBSERVATION OR EXPERIENCE, BUT ON THE OFFICIAL WEATHER RECORDS, INCLUDING THE DAILY WORK LOGS. USING THE CRITERIA SET FORTH BY S AND E AND FROM THE SAME DATA (CENTRAL FACILITIES' MONTHLY WEATHER REPORTS) UTILIZED BY S AND E AS THE BASIS FOR ITS CLAIMS, HE MADE A CONVINCING SHOWING THAT, WHILE THE WEATHER DURING THE CONTRACT PERIOD WAS AT TIMES SEVERE, IT WAS NOT SO SEVERE AS TO HAVE BEEN UNUSUAL AND UNFORSEEABLE.

ON THE TEMPERATURE FACTOR, COMMANDER ANDERSON PRESENTED COMPARATIVE DATA ABSTRACTED BY HIM FROM CENTRAL FACILITIES' REPORTS FOR THE PERIOD 1950- 1961, AND FULLY SUPPORTED BY THOSE RECORDS. FOUR GROUPS OF DATA WERE PRESENTED: (1) THE NUMBER OF DAYS DURING THE PERIOD SEPTEMBER THROUGH MAY FOR EACH SEASON 1950-51 THROUGH 1961-62, WHEN THE MAXIMUM TEMPERATURE WAS 32 DEGREES OR BELOW (DESIGNATED "ICE DAYS"); (2) THE NUMBER OF DAYS FOR THE SAME PERIOD WHEN THE MINIMUM TEMPERATURE OF 32 DEGREES, OR BELOW, WAS REACHED (FROST DAYS); (3) THE NUMBER OF DAYS FOR THE SAME PERIOD WHICH HAD A MINUS 10 DEGREES DEPARTURE FROM NORMAL; AND (4) THE NUMBER OF DEGREE DAYS FOR EACH YEAR. DEGREE DAYS FOR A PARTICULAR MONTH WERE DETERMINED BY THE FORMULA: 65 DEGREES, MINUS AVERAGE TEMPERATURE FOR THE DAY, TIMES THE NUMBER OF DAYS FOR THE MONTH. ACCORDING TO COMMANDER ANDERSON, FUEL COMPANIES UTILIZE THE DEGREE DAY CRITERION FOR PURPOSES OF DETERMINING THE AMOUNT OF FUEL NEEDED FOR HEATING DUE TO TEMPERATURES BELOW THE BASE OF 65 DEGREES. (SEE P. 1601 ET EQ., TRANSCRIPT FOR COMMANDER ANDERSON'S TESTIMONY REGARDING THE DATA WHICH HE PRESENTED.)

ICE DAYS FOR THE PERIOD SEPTEMBER THROUGH MAY WERE COMPUTED BY COMMANDER ANDERSON AS FOLLOWS:

NUMBER OF DAYS NUMBER OF DAYS NUMBER OF DAYS 1950 51 ------ 48 1954-55 -- ---- 81 1958-59 ------ 36 1951-52 --- -- 93 1955-56 ------ 64 1958-60 ---- -- 41 1952-53 ------ 44 1956-57 ------ 61 1960-61 ------ 28 1953-54 ------ 33 1957-58 ------ 35 1961-62 ------ 66

FROST DAYS WERE SHOWN AS FOLLOWS:

NUMBER OF DAYS NUMBER OF DAYS NUMBER OF DAYS 1950 51 ------ 184 1954-55 - ----- 231 1958-59 ------ 212 1951-52 -- --- 191 1955-56 ------ 204 1959-60 ------ 210 1952-53 ------ 213 1956-57 ------ 2061960-61 ------ 207 1953-54 ------ 203 1957-58 ------ 207 1961-62 ------ 209

WITH RESPECT TO THE NUMBER OF DAYS WHERE THE AVERAGE DAILY TEMPERATURE DEPARTED 10 DEGREES OR MORE BELOW NORMAL, COMMANDER ANDERSON NOTED THAT SUCH DATA WAS AVAILABLE ONLY AFTER THE 1954-55 SEASON SINCE THIS PARTICULAR STATISTIC WAS NOT KEPT BY THE WEATHER BUREAU PRIOR TO 1954.

HIS COMPUTATIONS SHOWED THE FOLLOWING ON THIS ITEM:

NUMBER OF DAYS NUMBER OF DAYS NUMBER OF DAYS 1954-55 ------ 58 1957-58 -- ---- 13 1960-61 ------ 11 1955-56 ------ 48 1958-59 ------ 19 1961-62 ---- -- 42 1956-57 ------ 29 1959-60 ------ 48

IN REGARD TO DEGREE DAYS COMMANDER ANDERSON EXPLAINED THAT HIS COMPUTATIONS WERE BASED ON AN 11-MONTH PERIOD (JULY 1 THROUGH MAY 31) BECAUSE THE WEATHER BUREAU DATA SHOWED THIS STATISTIC CUMULATIVELY FROM JULY 1 THROUGH JUNE 30 AND RATHER THAN TAKE THE TROUBLE OF SUBTRACTING THE DEGREE DAYS OF AUGUST FROM THE TOTAL (SINCE THEY WERE RELATIVELY MINOR) HE IGNORED THAT MONTH AND LISTED THE 11-MONTH TOTAL. HOWEVER, FOR THE PURPOSE OF GIVING A MORE ACCURATE PICTURE OF THE WEATHER WHEN TEMPERATURE COULD POSSIBLY BE A PROBLEM, THE CHART BELOW IS NOT BASED ON ANDERSON'S COMPUTATIONS. INSTEAD IT IS BASED ON THE 9-MONTH PERIOD SEPTEMBER THROUGH MAY SINCE IT WAS ONLY DURING THIS PERIOD THAT S AND E CLAIMED TIME EXTENSIONS FOR WEATHER (EXCEPT FOR 1 DAY IN AUGUST WHICH WAS CLAIMED ON THE BASIS OF EXCESSIVE WIND).

NUMBER OF DEGREE DAYS NUMBER OF DEGREE DAYS NUMBER OF DEGREE DAYS 1950-51 ---- 7998 1954-55 ---- 9178 1958-59 ---- 7779 1951-52 --- 9276.5 1955-56 - --- 8235 1959-60 ---- 8881 1952-53 ---- 7889 1956-57 ---- 8442 1960-61 --- - 76641953-54 ---- 7461 1957-58 ---- 7777 1961-62 ---- 8657

COMMANDER ANDERSON'S TESTIMONY IN REGARD TO PRECIPITATION WAS PRESENTED ON THE BASIS OF THE NUMBER OF DAYS ON WHICH PRECIPITATION (RAIN OR SNOW) FELL IN A MEASURABLE AMOUNT DURING THE PERIOD SEPTEMBER THROUGH MAY. HIS COMPUTATIONS FOLLOW:

NUMBER OF DAYS NUMBER OF DAYS NUMBER OF DAYS 1950 51 ------ 56 1954-55 -- ---- 43 1958-59 ------ 39 1951-52 ------ 68 1955-56 ------ 74 1959-60 ---- -- 41 1952-53 ------ 50 1956-57 ------ 65 1960-61 ------ 50 1953-54 ------ 37 1957-58 -- --- 61 1961-62 ------ 65

TOTAL PRECIPITATION (RAIN AND MELTED SNOW) FOR THE SEPTEMBER THROUGH MAY PERIOD WAS INDICATED AS FOLLOWS:

INCHES INCHES INCHES 1950-51 ---- 4.1 1954-55 ---- 3.45

1958-59 ---- 4.35 1951-52 ---- 4.68 1955-56 ---- 6.07 1959-60 ---- 5.77 1952-53 ---- 4.28 1956-57 ---- 11.18 1960 61 ---- 4.67 1953-54 ---- 3.59 1957-58 ---- 6.84 1961-62 ---- 11.15

WITH RESPECT TO SNOWFALL FOR THE PERIOD SEPTEMBER THROUGH MAY THE FOLLOWING DATA WAS NTRODUCED:

INCHES INCHES INCHES 1950-51 ---- 25.2 1954-55 ---- 24.2

1958-59 ---- 15.6 1951-52 ---- 30.5 1955-56 ---- 27.1 1959 60 ---- 39.5 1952-53 ---- 26.2 1956-57 ---- 35.5 1960-61 --- 17.7 1953-54 ---- 19.9 1957-58 ---- 33.7 1961-62 ---- 29.2

FINALLY, WITH RESPECT TO WIND VELOCITIES COMMANDER ANDERSON COMPUTED AND COMPARED THE NUMBER OF DAYS THAT THE WIND BLEW OVER 20 MILES PER HOUR FOR THE PERIOD CONCERNED AS FOLLOWS, BEGINNING WITH THE 1954-55 SEASON SINCE WEATHER BUREAU RECORDS PRIOR TO THAT SEASON DID NOT CONTAIN THAT DATA:

NUMBER OF DAYS NUMBER OF DAYS NUMBER OF DAYS 1954-55 ------ 97 1957-58 -- ---- 60 1960-61 ------ 85 1955-56 --- -- 101 1958-59 ------ 103 1961-62 -- ---- 85 1956-57 ------ 81 1959-60 ------ 93

WE NOTE THAT DURING THE HEARING THE WEATHER BUREAU DATA AND YEARLY COMPARISONS TAKEN THEREFROM ON TEMPERATURE, PRECIPITATION, AND WIND WERE NOT CHALLENGED AS INACCURATE OR MISLEADING BY S AND E. HOWEVER, IN ITS BRIEF OF JUNE 1, 1965, S AND E, AFTER NOTING THE ABOVE CATEGORIES OF DATA ON WEATHER COMPILED BY COMMANDER ANDERSON, ASSERTS THAT THE FACT AN AVERAGE WEATHER CONDITION FOR A GIVEN PERIOD IS NOT UNUSUAL DOES NOT NECESSARILY INDICATE NO DAYS WITHIN THAT PERIOD WERE UNUSUAL. WE DO NOT DISAGREE WITH THIS ASSERTION BUT, AS WILL BE DEMONSTRATED BELOW, AN EXAMINATION OF THE WEATHER DATA INTRODUCED INTO EVIDENCE INCLUDING THE DAILY WORK LOGS SHOWS CONVINCINGLY THAT EVEN ON A DAILY BASIS S AND E DID NOT, EXCEPT FOR ONE DAY (NOVEMBER 3, 1961) ENCOUNTER ANY UNUSUALLY SEVERE AND UNFORESEEABLE WEATHER WHICH CAUSED A DELAY IN THE COMPLETION OF THE WORK WITHIN THE CONTEMPLATION OF CLAUSE 5 OF THE GENERAL PROVISIONS. AND E ALSO ASSERTS THAT IN SEVEN OF THE EIGHT CATEGORIES OF DATA COMPILED BY COMMANDER ANDERSON THE COMPARABLE CONDITIONS WERE LESS SEVERE IN AT LEAST 62 PERCENT OF THE YEARS INCLUDED THAN IN THE YEAR IN QUESTION. WHILE THIS MAY BE TRUE, THE FACT NEVERTHELESS REMAINS THAT THE ACTUAL WEATHER CONDITIONS ENCOUNTERED BY S AND E IN TERMS OF TOTAL LOW TEMPERATURE, PRECIPITATION, SNOW, AND WIND WERE NO MORE SEVERE DURING THE CONSTRUCTION PERIOD THAN THEY HAD BEEN IN THE SAME PERIOD IN THREE OR MORE OF THE PRECEDING 7 TO 12 YEARS AND, THUS, WERE WELL WITHIN THE RANGE OF WHAT COULD BE EXPECTED FOR THAT LOCATION AT THAT TIME OF THE YEAR. VIEW OF THAT FACT, WE DO NOT THINK IT CAN BE CONCLUDED THAT THE WEATHER CONDITIONS DURING THE CONSTRUCTION PERIOD IN QUESTION WERE UNUSUALLY SEVERE AND UNFORESEEABLE.

MOREOVER, WHILE WE BELIEVE THAT THE USE OF AVERAGES IN DEPICTING WEATHER CONDITIONS CAN BE MISLEADING, SINCE THE CONCEPT OF "AVERAGE" CONTEMPLATES A MEAN VALUE, MEDIAL SUM OR QUANTITY MADE UP OF UNEQUAL SUMS, AND VARIANCES FROM THE AVERAGE IN WEATHER CONDITIONS ARE THE RULE RATHER THAN THE EXCEPTION (AMERICAN CONSTRUCTION COMPANY, INC. SUPRA), WE NEVERTHELESS BELIEVE THAT A SURVEY OF AVERAGE WEATHER CONDITIONS IS USEFUL FOR SHOWING, IN A GENERAL WAY, WHAT THE WEATHER CONDITIONS FOR A GIVEN PERIOD WERE AS COMPARED TO PRECEDING COMPARABLE PERIODS. WE HAVE SEEN THAT, ON A 9-MONTH BASIS COINCIDING WITH THE CONSTRUCTION PERIOD, WEATHER CONDITIONS ENCOUNTERED BY S AND E WERE NOT USUALLY SEVERE AND UNFORESEEABLE. BELIEVE THAT A COMPARISON OF WEATHER DATA TAKEN FROM CENTRAL FACILITIES' REPORTS ON A MONTHLY BASIS THROWS ADDITIONAL LIGHT ON THE WEATHER ENCOUNTERED BY S AND E DURING THE CONSTRUCTION PERIOD AND DEMONSTRATES AGAIN THAT, WHILE THE WEATHER WAS SEVERE, IT WAS NO MORE SEVERE AND IN MANY WAYS LESS SEVERE THAN WAS TO BE EXPECTED.

THE AVERAGE MONTHLY TEMPERATURE FOR SEPTEMBER 1961 WAS 50.8 DEGREES WHICH A DEPARTURE OF MINUS 5.2 DEGREES FROM THE NORMAL TEMPERATURE FOR SEPTEMBER DURING THE PERIOD OF RECORD 1950-1961. TOTAL PRECIPITATION FOR SEPTEMBER 1961 WAS 3.52 INCHES, A DEPARTURE OF PLUS 3.16 INCHES FROM NORMAL SEPTEMBER WEATHER. THE PREVIOUS HIGH FOR THAT MONTH OCCURRED IN 1959 WHEN 0.74 INCHES FELL. ALSO, TWO SEPTEMBERS (1952 AND 1953) WERE COMPLETELY DRY. THE AVERAGE WIND IN MILES PER HOUR FOR SEPTEMBER 1961, WAS 7.8. THIS FIGURE WAS EXCEEDED IN 1954, 1955, 1956, 1958 AND 1959.

FOR OCTOBER 1961 THE AVERAGE TEMPERATURE WAS 42.3 DEGREES, A DEPARTURE FROM NORMAL OF MINUS 1.6 DEGREES. COLDER OCTOBERS, HOWEVER, OCCURRED IN 1951 AND 1954. PRECIPITATION FOR OCTOBER 1961 MEASURED 0.96 INCHES, A DEPARTURE FROM NORMAL OF PLUS 0.28 INCHES. "WETTER" OCTOBERS OCCURRED IN 1956 AND 1957. AVERAGE WIND FOR OCTOBER WAS 9.2 MILES PER HOUR AS COMPARED TO 7.3 (1954), 8.2 (1955), 8.8 (1956), 6.3 (1957), 6.3 (1958), 7.9 (1959) AND 6.9 (1960).

FOR NOVEMBER 1961, THE AVERAGE TEMPERATURE WAS 29.8 DEGREES, A DEPARTURE FROM NORMAL OF MINUS 0.2 DEGREES. HOWEVER, LOWER AVERAGE NOVEMBER TEMPERATURES WERE RECORDED IN 1951 (28.5 DEGREES), 1953 (23.9 DEGREES), 1955 (25.9 DEGREES), 1956 (25.6 DEGREES), 1957 (27.3 DEGREES) AND 1959 (28.3 DEGREES). PRECIPITATION FOR NOVEMBER 1961 MEASURED 0.31 INCHES, A DEPARTURE FROM NORMAL OF MINUS 0.25 INCHES. THIS TOTAL WAS EXCEEDED IN SIX NOVEMBERS DURING THE PERIOD 1950-1960. AVERAGE WIND VELOCITY WAS 7.4 MILES PER HOUR, WHICH WAS EXCEEDED IN 1958 (7.7) AND 1955 (9.9).

IN DECEMBER 1961, THE AVERAGE TEMPERATURE WAS 20.1 DEGREES, A DEPARTURE FROM NORMAL OF MINUS 0.2 DEGREES. LOWER AVERAGE TEMPERATURES FOR THIS MONTH WERE RECORDED IN 1951 (14.7 DEGREES), 1952 (18.8 DEGREES), 1953 (17.6 DEGREES), 1954 (16.6 DEGREES) AND 1959 (18.4 DEGREES). IN ADDITION, 1960 RECORDED 20.2 DEGREES AND 1956 RECORDED 20.5 DEGREES. PRECIPITATION FOR THE MONTH MEASURED 0.54 INCHES, A DEPARTURE FROM NORMAL OF MINUS 0.21 INCHES. AVERAGE WIND WAS 7 MILES PER HOUR WHICH WAS EXCEEDED IN THE DECEMBER OF 1955 (9 MILES PER HOUR) DURING THE PERIOD OF RECORD 1954 THROUGH 1960.

JANUARY 1962 RECORDED AN AVERAGE TEMPERATURE OF 10.0 DEGREES, A DEPARTURE FROM NORMAL OF MINUS 5.4. HOWEVER, LOWER AVERAGE TEMPERATURES WERE RECORDED IN JANUARY OF 1954 (8.4 DEGREES) AND 1956 (7.1 DEGREES). SHOULD BE NOTED IN THIS CONNECTION, THAT THE AVERAGE DAILY TEMPERATURES FOR THE 21ST (MINUS 17 DEGREES), 22ND (MINUS 16 DEGREES), 23RD (MINUS 18 DEGREES) AND 24TH (MINUS 1 DEGREE) CONTRIBUTED HEAVILY TO THE LOW MONTHLY AVERAGE TEMPERATURE, AND THE CONTRACTING OFFICER GRANTED EXTENSIONS FOR THOSE DAYS. PRECIPITATION IN JANUARY 1962 TOTALED 0.80 INCHES A DEPARTURE FROM NORMAL OF PLUS 0.07 INCHES. GREATER TOTALS WERE RECORDED IN JANUARY OF 1957 AND 1958 AND THE 1962 TOTAL WAS EQUALED IN 1956. AVERAGE WIND FOR THE MONTH WAS 4.5 MILES PER HOUR WHICH WAS EXCEEDED IN 1956, 1957 AND 1959.

FOR FEBRUARY 1962 THE AVERAGE TEMPERATURE OF 21.6 DEGREES WAS A DEPARTURE FROM NORMAL OF PLUS 12 DEGREES. PRECIPITATION FOR THE MONTH MEASURED 2.40 INCHES, A DEPARTURE FROM NORMAL OF PLUS 1.63 INCHES. FEBRUARY 1962 WAS THE WETTEST FEBRUARY FOR THE PERIOD OF RECORD 1950 1961. AVERAGE WIND FOR THE MONTH WAS 6.7 MILES PER HOUR. THIS AVERAGE VELOCITY WAS EXCEEDED IN FEBRUARY OF 1955 (9.2), 1956 (7.8), 1957 (8.3), 1959 (8.7) AND 1961 (7.8). IT SHOULD BE NOTED THAT THE EXAMINER GRANTED SEVERAL DAYS EXTENSION IN THIS MONTH ON THE BASIS OF TEMPERATURE AND WIND.

MARCH 1962 HAD AN AVERAGE TEMPERATURE OF 26.0 DEGREES, A DEPARTURE FROM NORMAL OF MINUS 4.0 DEGREES. LOWER AVERAGE TEMPERATURES WERE RECORDED IN MARCH OF 1952 (20.2 DEGREES) AND IN 1955 (23.7 DEGREES). IN ADDITION MARCH 1951 RECORDED 27.3 DEGREES AND MARCH 1956 RECORDED 29.0 DEGREES. PRECIPITATION FOR THE MONTH TOTALED 0.58 INCHES, A DEPARTURE FROM NORMAL OF MINUS 0.04 INCHES. AVERAGE WIND FOR THE MONTH WAS 8.1 MILES PER HOUR. THIS AVERAGE WAS EXCEEDED IN ALL BUT TWO OF THE YEARS OF RECORD 1954- 1961. (SEVERAL DAYS EXTENSION WERE GRANTED BY THE EXAMINER DURING MARCH AT LEAST PARTLY DUE TO PRECIPITATION AND WIND.)

APRIL 1962 RECORDED AN AVERAGE TEMPERATURE OF 45.9 DEGREES, A DEPARTURE FROM NORMAL OF PLUS 2.6, AND IT WAS THE WARMEST APRIL FOR THE PERIOD OF RECORD 1950-1962. TOTAL PRECIPITATION FOR THE MONTH WAS 0.23 INCHES, A DEPARTURE FROM NORMAL OF MINUS 0.28 INCHES. THE AVERAGE WIND WAS 8.4 MILES PER HOUR WHICH WAS EXCEEDED IN EVERY APRIL OF RECORD 1954-1961. (THE EXAMINER GRANTED A TOTAL OF 2 1/2 DAYS EXTENSION DURING APRIL.)

FOR MAY 1962 THE AVERAGE TEMPERATURE WAS 51.1 DEGREES, A DEPARTURE FROM NORMAL OF MINUS 1.5 DEGREES. LOWER AVERAGE TEMPERATURES WERE RECORDED FOR THIS MONTH IN 1953, 1955, 1959 AND 1960. TOTAL PRECIPITATION FOR THE MONTH MEASURES D.81 INCHES, A DEPARTURE FROM NORMAL OF PLUS 0.71 INCHES. "WETTER" MAYS WERE RECORDED IN 1957 AND 1959. IN ADDITION, MAY 1953 HAD 1.78 INCHES, MAY 1956 HAD 1.63 INCHES, AND MAY 1961 HAD 1.55 INCHES. THE AVERAGE WIND IN MAY 1962 WAS 9.7 MILES PER HOUR. THIS VELOCITY WAS EXCEEDED OR EQUALED (ONCE) IN ALL BUT TWO MAYS FOR THE PERIOD OR RECORD 1954-1961. (THE EXAMINER GRANTED A TOTAL OF 9 DAYS EXTENSION FOR MAY. WIND, IN WHOLE OR IN PART, APPEARS TO BE THE BASIS UPON WHICH THE EXAMINER GRANTED EXTENSIONS IN 8 OF THE 9 DAYS.)

THE DEPARTMENT OF COMMERCE WEATHER BUREAU ALSO PUBLISHES A YEARLY SUMMARY OF WEATHER DATA ENTITLED "LOCAL CLIMATOLOGICAL DATA" WHICH CONTAINS A NARRATIVE CLIMATOLOGICAL SUMMARY. S AND E'S EXHIBIT G CONTAINED THE 1960 SUMMARY FROM THE CENTRAL FACILITIES STATION. THE FOLLOWING EXCERPTS ARE TAKEN FROM THAT NARRATIVE SUMMARY:

THE DRYNESS AND THE INFREQUENCY OF LOW CLOUDINESS PERMIT INTENSE SOLAR HEATING OF THE GROUND DURING THE DAY, AND RAPID RADIATIONAL COOLING AT NIGHT, WHICH RESULTS IN A VERY LARGE DAILY RANGE OF TEMPERATURE. THE AVERAGE RANGE IS GREATEST (ABOUT 37 DEGREES F.) IN SUMMER AND LEAST (ABOUT 23 DEGREES F.) IN WINTER. SUMMERS ARE ESPECIALLY PLEASANT BECAUSE OF THE DRYNESS AND THE COOL NIGHTS. THE DRYNESS ALSO MAKES MORE BEARABLE THE EXTREME COLD SPELLS IN WINTER, AS DOES THE FACT THAT THESE COLD PERIODS ARE FREQUENTLY ACCOMPANIED BY CLEAR SKIES AND ARE SELDOM ASSOCIATED WITH STRONG WINDS.

THE HEAVIEST PRECIPITATION FALLS AS SCATTERED RAIN SHOWERS DURING THE WARMER MONTHS, AND THE RAIN FROM A SINGLE PASSING SHOWER MAY IN A MATTER OF MINUTES EXCEED CONSIDERABLY THE NORMAL TOTAL FOR THE MONTH IN WHICH IT OCCURS. YET TWO OR THREE MONTHS MAY PASS IN SUMMER WITHOUT A SINGLE SHOWER PASSING THE STATION. DESPITE THIS EXTREME VARIABILITY, ANNUAL TOTALS OVER THE NRTS HAVE NOT VARIED GREATLY FROM YEAR TO YEAR OR FROM PLACE TO PLACE. ONE INCH OF RAINFALL IN AN HOUR IS ABOUT THE MAXIMUM INTENSITY TO BE EXPECTED, AND TWO INCHES IN 24 HOURS ARE NOT LIKELY TO BE EXCEEDED. MAXIMUM WINTER SNOW DEPTH HAS BEEN EXTREMELY VARIABLE DURING THE PERIOD OF RECORD. CONDITIONS HAVE VARIED FROM WINTERS HAVING PRACTICALLY NO SNOW AT ALL TO THE OPPOSITE EXTREME (WINTER OF 1951-52) IN WHICH SNOW REACHED A DEPTH OF ONE TO TWO FEET OVER ALL THE NRTS, CAUSING NEAR PARALYSIS OF CONSTRUCTION ACTIVITIES AND TRANSPORTATION. LARGE EXPENDITURES WERE MADE FOR SNOW REMOVAL, WHICH WAS AN ALMOST DAILY TASK. BLOWING OR DRIFTING SNOW IS BY FAR THE GREATEST HAZARD AND GENERAL NUISANCE OF ANY WEATHER PHENOMENON THAT OCCURS IN THE REGION. * * *

DESTRUCTIVE WINDS HAVE NOT BEEN A PROBLEM. TORNADOES HAVE NEVER BEEN REPORTED IN THE REGION, ALTHOUGH FUNNEL SHAPED CLOUDS HAVE BEEN SIGHTED OVER THE NRTS ON SEVERAL OCCASIONS. STRUCTURES DESIGNED TO WITHSTAND AVERAGE WINDS OF 60 M.P.H. AND PEAK GUSTS TO 80-85 M.P.H. ARE NOT LIKELY TO BE DAMAGED.

THE DUST CONTENT OF THE AIR IS VERY SMALL WHILE THE GROUND IS SNOW COVERED. DUST-FAVORING WINDS (GUSTS OF 20 M.P.H. OR MORE) OCCUR ON THE AVERAGE FOR 6 HOURS DURING 13 WINDY DAYS PER MONTH. * * *

WEATHERING OF CONCRETE AND HARD SURFACE ROADS AND STREETS IS A VERY SERIOUS PROBLEM, MAINLY DUE TO THE LARGE NUMBER OF FREEZE-THAW CYCLES DURING ALL BUT SUMMER MONTHS. PRECAUTIONS MUST BE TAKEN AGAINST ADVERSE EFFECTS OF EXCESSIVE COLD IN WINTER AND EXTREME DRYNESS IN SUMMER WHEN POURING CONCRETE.

AS THE NARRATIVE SUMMARY INDICATES, NORMAL WINTER AT THE WORKSITE IS, AT BEST, SEVERE. THE OFFICIAL WEATHER BUREAU DATA DETAILED ABOVE, IN COMPARATIVE FORM, SHOWS THAT THE WINTER OF 1961-62 HAS BEEN EXCEEDED IN SEVERITY AS TO TEMPERATURE, PRECIPITATION AND WIND BY WINTERS IN THE PREVIOUS 10-YEAR PERIOD. A COMPARISON ON A MONTHLY BASIS SHOWS THAT, EXCEPT FOR SEPTEMBER, THE MONTHS COMPRISING THE PERIOD OF CONSTRUCTION HAVE ALSO BEEN EXCEEDED IN SEVERITY IN PREVIOUS COMPARABLE MONTHS OF RECORD, AND THAT THE ACTUAL WEATHER CONDITIONS IN TERMS OF TOTAL LOW TEMPERATURE, PRECIPITATION, SNOW, AND WIND WERE NO GREATER DURING THE CONSTRUCTION PERIOD THAN THEY HAD BEEN IN THE SAME PERIOD IN 3 OR MORE OF THE PRECEDING 10 YEARS. THE WEATHER ENCOUNTERED BY S AND E DURING 1961 AND 1962 WAS THEREFORE NO MORE SEVERE OVERALL THAN SHOULD HAVE BEEN ANTICIPATED FOR THAT PLACE AND FOR THAT TIME OF THE YEAR. ON THE BASIS OF THE COMPLETE RECORD, IT CANNOT BE CONCLUDED THAT THE WEATHER ENCOUNTERED BY S AND E WAS UNUSUALLY SEVERE AND UNFORESEEABLE IN ANY MONTH EXCEPT SEPTEMBER 1961.

WHILE TOTALLY UNEXPECTED AMOUNTS OF PRECIPITATION FELL IN SEPTEMBER THE TIME EXTENSIONS GRANTED BY THE EXAMINER IN THAT MONTH AND OTHER MONTHS ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

THE EXAMINER'S DECISION IS FAR FROM CLEAR AS TO THE BASIS UPON WHICH EXTENSIONS WERE GRANTED ON ACCOUNT OF WEATHER CONDITIONS. HIS DECISION ON THIS POINT STATES (P. 53):

IN DETERMINING THE DAYS OF EXTENSION THAT SHOULD HAVE BEEN GRANTED, UNDER A MORE EQUITABLE STANDARD, AGAIN A JURY APPROACH MUST BE USED. THE DETERMINATIONS BY THE DAY WERE MADE ON THE ENTIRE RECORD. REFERENCE TO TEMPERATURE RANGES AND WIND VELOCITIES IS MERELY FOR THE PURPOSE OF GIVING AN ELLIPTICAL DESCERPTION OF THE DAY. OTHER FACTORS WERE CONSIDERED AS WELL. ASIDE FROM THE DUBIOUS REFERENCES TO THE TESTIMONY OF SO-CALLED "LONGTIME" RESIDENTS AND TO THE MISLEADING FOOTNOTES IN THE WEATHER BUREAU REPORTS, THE EXAMINER'S DECISION IS DEVOID OF ANY DISCUSSION OR ANALYSIS ON A COMPARATIVE BASIS OF THE VOLUMINOUS WEATHER DATA INTRODUCED INTO EVIDENCE AT THE HEARING. NOR DOES THE EXAMINER'S DECISION DISCUSS OR EXAMINE THE IMPACT OF THE WEATHER CONDITIONS ENCOUNTERED ON THE ACTUAL PROGRESS OF THE WORK--- THAT IS, ON WHETHER THE WORK WAS ACTUALLY DELAYED ON THE DAYS FOR WHICH EXTENSIONS WERE GRANTED. IT SHOULD ALSO BE EMPHASIZED AT THIS POIST THAT UNDER THE RULING OF THE UNITED STATES SUPREME COURT IN UNITED STATES V. BROOKS-CALL AWAY COMPANY, SUPRA, THE OCCURRENCE OF THE LISTED EVENTS IN CLAUSE 5 OF THE GENERAL PROVISIONS (I.E., FIRES, FLOODS, UNUSUALLY SEVERE WEATHER, ETC.) DOES NOT AUTOMATICALLY ENTITLE A CONTRACTOR TO AN EXTENSION OF TIME. RATHER, TO JUSTIFY AN EXTENSION OF TIME THE LISTED EVENTS, INCLUDING ,UNUSUALLY SEVERE WEATHER," MUST ALSO BE UNFORESEEABLE SINCE THE PURPOSE OF THE CLAUSE IS TO PROTECT THE CONTRACTOR AGAINST THE UNEXPECTED. THE ONLY REASONABLE CONCLUSION THAT CAN BE DRAWN FROM THE EXAMINER'S DECISION IS THAT TIME EXTENSIONS WERE GRANTED FOR ANY AND ALL WEATHER THAT MAY HAVE HAD AN ADVERSE IMPACT ON THE WORK, WITHOUT REGARD TO WHETHER THAT WEATHER WAS UNUSUALLY SEVERE AND UNFORESEEABLE AND WITHOUT REGARD TO WHETHER THAT WEATHER RESULTED IN ACTUAL DELAY. IN THESE RESPECTS, THE EXAMINER'S CONSTRUCTION AND APPLICATION OF CLAUSE 5 OF THE GENTRAL PROVISIONS WAS ERRONEOUS AS A MATTER OF LAW. WE TURN NOW TO A DAY BY DAY EXAMINATION OF TIME EXTENSIONS GRANTED BY THE EXAMINER PRIOR TO DECEMBER 7.

THE EXAMINER GRANTED TIME EXTENSIONS OF ONE HALF-DAY EACH FOR SEPTEMBER 19 AND 20 ON THE BASIS OF "THUNDERSTORMS.' THERE IS NO EVIDENCE IN THE RECORD THAT THUNDERSTORMS OCCURRED ON THOSE DATES. THE ONLY EVIDENCE IN THE RECORD OF ANY CAUSE FOR DELAY ON OR ABOUT THOSE DATES IS THE TESTIMONY OF MR. DEWITT, WHO WAS READING CERTAIN PREPARED NOTES INTO THE RECORD. MR. DEWITT STATED THAT "ON THE 18TH OF SEPTEMBER THERE WAS APPROXIMATELY ONE AND ONE-HALF INCHES OF RAIN AT THE JOB SITE IN THE AFTERNOON HAMPERING THE FORMING" (P. 111, TRANSCRIPT). HE ALSO STATED THAT ON "SEPTEMBER THE 20TH, WE HAD SHOWERS ON THIS DATE WHICH HAMPERED FORM ERECTION.' (P. 111, TRANSCRIPT). NO MENTION OF THE WEATHER CONDITIONS ON SEPTEMBER 19TH WAS MADE BY MR. DEWITT. A COMPARISON OF THE TRANSCRIPT WITH THE PREPARED NOTES, WHICH WERE ADMITTED BY THE HEARING EXAMINER AS APPENDIX B TO S AND E'S POST-TRIAL BRIEF BUT WERE EXPRESSLY EXCLUDED AS EVIDENCE, INDICATES MR. DEWITT'S TESTIMONY, INSOFAR AS IT WAS ONLY A READING OF APPENDIX B, SHOULD BE DISREGARDED. SEE F.N. 13, PAGE 29 OF THE EXAMINER'S DECISION WHERE HE STATED:

WITH ITS POST-TRIAL BRIEF, THE APPELLANT SENT IN A CHRONOLOGICAL STATEMENT OF EVENTS IN CONNECTION WITH THE WORK INVOLVED. THE CONTRACTING OFFICER MOVED THAT THIS DOCUMENT BE STRICKEN. THE INSTRUMENT WAS CONSIDERED AS AN ANNEX TO THE BRIEF. IT SERVED A USEFUL PURPOSE AND WAS DEEMED APPROPRIATE SINCE IT WAS A GUIDE TO THE LOGS WHICH WERE IN EVIDENCE. IN THE DETERMINATION OF FACT, IT WAS NOT GIVEN EVIDENTIAL WEIGHT. THE LOGS AND OTHER PERTINENT MATERIAL WERE RELIED UPON. THE MOTION IS DENIED.

NEITHER THE S AND E LOG NOR THE G AND R LOG NOTE THUNDERSTORMS ON SEPTEMBER 19 AND 20. FOR SEPTEMBER 19 THE G AND R LOG STATES: "A.M. CLOUDY NE 15-20 MPH, P.M. PARTY CLOUDY--- CALM," AND UNDER THE HEADING REMARKS "DURING THE PERIOD 8:00 A.M. 9/18 TO 8:00 9/19 1:50" OF RAIN FELL AT THE JOB SITE.' FOR THE SAME DATE (SEPTEMBER 19) THE S AND E LOG NOTES: "CLOUDY AND COOL" AND ,SITE VERY WET.' FOR SEPTEMBER 20 THE G AND R LOG NOTES: "A.M.CLOUDY WIND WSW 8 MPH, P.M. CLOUDY WIND 25 30 WSW," AND UNDER REMARKS "HEAVY RAIN FROM 12 P.M. TO 4:30 P.M.' THE S AND E LOG FOR THAT DATE NOTES: "CLOUDY W/SHOWERS.' ON BOTH DAYS NEITHER THE G AND R LOG NOR THE S AND R LOG SHOW ANY DELAY IN THE WORK. BOTH LOGS SHOW THAT ALL OF S AND E'S MEN WORKED A FULL 8 HOURS ON THOSE DAYS AND THE LOGS RECORDED EXTENSIVE OPERATIONS UNDER THE HEADINGS OF "REMARKS" AND ,DESCRIPTION OF WORK DONE TODAY.' THERE IS NO INDICATION OF ANY DELAY EXCEPT IN THE EXCLUDED APPENDIX B. BECAUSE THERE WAS NO DELAY ON SEPTEMBER 19 OR 20 THE EXTENSIONS GRANTED FOR THOSE ONE-HALF DAYS WERE IMPROPER.

ADDITIONALLY, TIME EXTENSIONS WERE GRANTED FOR SEPTEMBER 21 (1/2 DAY) ON THE BASIS OF "SNOW AND SLEET" AND SEPTEMBER 23 (3/4 DAY) ON THE BASIS OF "RAIN, RAMPS BECAME TOO SLICK FOR USE, CONCRETE POUR CANCELLED.' NOT ONLY IS THERE NO EVIDENCE OF DELAY IN THE RECORD ON THOSE DAYS, THOSE DAYS WERE NOT EVEN CLAIMED BY S AND E. IT IS AGAIN NOTED THAT THE EXAMINER APPARENTLY RELIED UPON S AND E'S APPENDIX B AS EVIDENCE TO SUPPORT HIS FINDING, AT LEAST IN REGARD TO SEPTEMBER 23, IN SPITE OF HIS SPECIFIC RULING EXCLUDING THE DOCUMENT FROM THE RECORD, AS THE RECORD IS DEVOID OF ANY REFERENCE TO SLICK RAMPS OR TO ANY DELAY. A COMPARISON OF THE G AND R AND S AND E LOGS WITH THE CONCRETE POUR SCHEDULE SUBMITTED BY S AND E SHOWS THAT ALL SCHEDULED POURS WERE MADE ON SEPTEMBER 21 AND 23 AND THE ONLY INDICATION OF A CONCRETE POUR BEING CANCELED BECAUSE OF A SLIPPERY RAMP WAS IN S AND E'S APPENDIX B.

A TIME EXTENSION OF 1/2 DAY WAS GRANTED FOR OCTOBER 6 WITH A NOTATION BY THE EXAMINER, THAT THE WIND REACHED 36 MILES PER HOUR. THIS DAY WAS NOT CLAIMED BY S AND E. MOREOVER THE RECORD IS DEVOID OF ANY EVIDENCE OF DELAY. FOR EXAMPLE, THE G AND R LOGS CONTAIN THE FOLLOWING COMMENTS ON THE WORK ACCOMPLISHED THAT DAY (DAY SHIFT):

CONTINUED MOIST CURE OF CONCRETE PREVIOUSLY POURED. CONTINUED PREFABING FORMS AND PLACING THEM IN BASIN. POURED COUNTERFORT FOOTINGS NO. 4 AND 15 ALONG COL LINE -G-. NO ACTIVITY BY MECHANICAL SUBCONTRACTOR. 2 ELECTRIC VIBRATORS WORKED ALL DAY. 1 AIR VIBRATOR AS STANDBY.

BATCHER PLANT CONTINUED PRODUCING CONCRETE AT AN EVEN PAR. CONTINUED PLACING REBAR IN BASIN, COMPLETED FORMS FOR POUR NO. 8 AND 19--- STARTED PLACING STEEL IN POUR NO. 27 ON THE CENTER OF BASIN ALONG COL. LINE "H;, ON THE SWING SHIFT FOR OCTOBER 6 THE FOLLOWING COMMENTS APPEAR ON THE G AND R LOGS:

FORMING POUR NO. 27, COVERED POURS NO. 4 AND 15. GENERAL CLEANUP OF BASIN. IRON WORKER STAYED UNTIL 6 P.M. PLACING STEEL IN BOTTOM MATT OF POUR NO. 27. CONTINUED WET CURING OF CONCRETE. THE S AND E LOGS FOR THAT DAY CONTAIN ESSENTIALLY THE SAME INFORMATION.

ONE DAY WAS GRANTED BY THE EXAMINER FOR OCTOBER 7 WITH A NOTATION OF "3 INCHES OF SNOW.' APPARENTLY THE EXAMINER WAS REFERRING TO THE CENTRAL FACILITIES' REPORT WHEN NOTING A 3 INCH SNOWFALL FOR OCTOBER 7 SINCE THE S AND E LOG FOR THAT DATE NOTES THAT IT WAS "OVERCAST--- COLD AND LITE SNOW" WITH A TEMPERATURE IN THE A.M. OF 30 DEGREES AND IN THE P.M. OF 52 DEGREES. THE G AND R LOG RECORDED A TEMPERATURE RANGE OF 50 DEGREES IN THE A.M., 36 DEGREES AT NOON AND 45 DEGREES AT 3:00 P.M. UNDER THE HEADING "DELAYS" THE G AND R LOG NOTES: "45 MIN. DELAY INSUFFICIENT VIBRATORS IN OPERATING CONDITION," AND UNDER THE HEADING "REMARKS" THE G AND R LOG NOTES:

POURED NO. 17 (SNOW STARTED FALLING ABOUT 10 AM AND TEMPERATURE FELL FROM 50 DEGREES AT 9:15 TO 36 DEGREES AT 10:30 TOTAL MEASURABLE AMOUNT 2 INCHES. DOWNIE SENT WORD NOT TO POUR NO. 6 WHICH WAS SCHEDULED. SNOW QUIT AT 2:00 PM. CONTINUED PLACING FORMS IN BASIN COVERED POUR NO. 17. CONTINUED WET CURING OF PREVIOUSLY POURED CONCRETE. DOWNIE BROUGHT ANOTHER VIBRATOR FROM TOWN. THE S AND E LOG FOR THAT DATE RECORDS: "POURED SOUTH COUNTERFORT SLAB -J- LINE. COLD AND SNOW POSTPONED NO. -J- SLAB TO MONDAY.' ON THE BASIS OF THE DAILY LOG EXCERPTS ABOVE, IT APPEARS THAT SOME DELAY OCCURRED ON OCTOBER 7 DUE TO WEATHER CONDITIONS SINCE THE LOGS INDICATE THAT POUR NO. 6 WAS POSTPONED. HOWEVER, IT DOES NOT APPEAR THAT "LITE SNOW" (S AND E LOG) OR 2 INCHES TOTAL SNOW WHICH FELL BETWEEN 10 A.M. AND 2 P.M. (G AND R LOG) COUPLED WITH A TEMPERATURE RANGE "30 DEGREES A.M. TO 52 DEGREES P.M. CAN BE CONSIDERED UNUSUALLY SEVERE AND UNFORESEEABLE FOR THAT LOCATION AT THAT TIME OF THE YEAR. MOREOVER, EVEN IF IT IS ASSUMED, FOR THE SAKE OF DISCUSSION, THAT SUCH WEATHER CONDITIONS COULD BE CONSIDERED UNUSUALLY SEVERE AND UNFORESEEABLE, IT APPEARS THAT THE EXAMINER WAS WRONG IN GRANTING A FULL DAY EXTENSION SINCE CONSIDERABLE WORK WAS ACCOMPLISHED ON THAT DAY AND ONE POUR WAS MADE.

A 1-DAY EXTENSION WAS GRANTED FOR OCTOBER 23, THE EXAMINER NOTING THAT ON THAT DAY THERE WAS A ,THUNDERSTORM, 25-MILE WIND, CONCRETE POUR CANCELLED.' THE G AND R LOGS FOR THAT DAY MAKE NO MENTION OF "THUNDERSTORMS" NOR OF RAIN OR SNOW FOR THAT MATTER. NEITHER DO THE S AND E LOGS. THE G AND R LOGS CONTAIN THE FOLLOWING ENTRY: "CONCRETE POUR CANCELLED BY THE CONTRACTOR BECAUSE OF COLD WEATHER AND MOIST CONDITIONS.' THE S AND E LOGS MAKE NO MENTION OF A POUR CANCELLATION. WITH RESPECT TO THIS POUR CANCELLATION THE FOLLOWING EXCHANGE TOOK PLACE DURING THE HEARING (P. 1649, ET SEQ., TRANSCRIPT):

MR. HUDSON. YOU INDICATED, I THINK, IN THE FIRST TESTIMONY ON THAT DAY SOMETHING TO THE EFFECT THAT CONCRETE POUR HAD BEEN CANCELLED DUE TO, WHAT WAS IT, COLD AND SNOW, OR---

THE WITNESS (COMMANDER ANDERSON). NO, COLD AND MOIST CONDITIONS. AS I RECALL THEY HAD NOT WET DOWN 24 HOURS IN ADVANCE AS REQUIRED BY THE SPECIFICATIONS. SEE, THE SPECIFICATIONS REQUIRE THAT THEY WET DOWN THE ABUTTING SURFACES, AND KEEP THEM WET FOR 24 HOURS PRIOR TO THE POUR AND THAT REQUIREMENT, AS I RECALL, ON THAT SPECIFIC DAY, HAD NOT BEEN MET. THE CONCRETE WAS ALL DRY THAT MORNING. SO THAT EVEN IF IT HADN-T BEEN COLD, QUITE LIKELY MR. DISKIN WOULDN-T HAVE LET THEM POUR IT ANY WAY, BECAUSE OF THAT REQUIREMENT IN THE SPECIFICATIONS.

MR. HUDSON. IS THIS FROM YOUR RECOLLECTION OR---

THE WITNESS. YES, THIS IS ONE THING I WAS WATCHING. THERE WERE SEVERAL OF THE WALL POURS, WHICH THEY DID NOT POUR, BECAUSE THEY WERE NOT WET DOWN. WHIN I WENT DOWN INTO THOSE FORMS IN THE MORNING, THEY WOULD BE DRY AND I WENT INTO THOSE FORMS EVERY MORNING.

THE LOGS INDICATE THAT THERE IS NO SNOW. THEN I WILL LOOK AT THE WEATHER BUREAU RECORDS FOR THE 32RD (SIC) ALSO. MY RECOLLECTION IS IT DID NOT SNOW THAT DAY.

HEARING EXAMINER MCCONNELL. THE RECORDS WILL SHOW THE TEMPERATURE AND THAT MIGHT BE HELPFUL.

THE WITNESS. YES, THEY DO SHOW THE TEMPERATURE IN THE MORNING 30, NOON 34, AFTERNOON 36. THEN ON THE SWING SHIFT, THEY WERE, AT 4:00 IN THE AFTERNOON, 36, 8:00 AT NIGHT, 33, MIDNIGHT 32. BUT FOR OCTOBER 23, 1961, IT INDICATES A TRACE OF PRECIPITATION AND SNOW, JUST A "T.' THAT MAY MEAN A FEW FLURRIES, BUT NO MEASURABLE QUANTITY. I THINK I HAVE COVERED THE 23RD NOW. IT INDICATED THAT ALL WORK EXCEPT THE POUR WENT ON. THE POUR WAS CANCELLED FOR PRINCIPALLY TWO REASONS, COLD WEATHER AND THEN THIS REQUIREMENT THAT THE CONCRETE BE KEPT WET 24 HOURS PRIOR TO THE PLACEMENT OF ADJACENT CONCRETE.

HEARING EXAMINER MCCONNELL. LET ME GET THIS STRAIGHT. IT MAY BE DIRECTLY PERTINENT HERE, BUT YOU SAY THE WEATHER WAS AROUND 30 DEGREES AND IT WAS TOO COLD TO POUR THE CONCRETE. IS THAT TOO COLD TO POUR CONCRETE?

THE WITNESS. NO, SIR, IF YOU ARE PREPARED FOR IT. SEE THE CONCRETE HAD TO BE 50 DEGREES WHEN IT WENT INTO THE FORMS FROM THE TRANSIT MIXTURE (SIC). AND ON THE 23RD OF OCTOBER, THEY DID NOT HAVE THE BOILER OPERATING IN ORDER TO GIVE THEM HOT WATER, AND THE AGGREGATE, AND THE WATER TEMPERATURE MAY HAVE BEEN SUCH THAT THEY COULD NOT MEET THIS REQUIREMENT.

HEARING EXAMINER MCCONNELL. WHEN YOU REFER TO IT AS BEING TOO COLD TO POUR, YOU MEAN THE MIX WAS NOT THE RIGHT TEMPERATURE?

THE WITNESS. WELL, I WAS READING FROM THE LOG, THAT IS WHAT THE LOG SAID. BUT LATER ON THEY DID POUR IN MUCH COLDER WEATHER. SCHEDULE W-4 OF S AND E EXHIBIT G SHOWS THAT S AND E CLAIMED AN EXTENSION FOR OCTOBER 23 ON THE BASIS OF COLD AND PRECIPITATION. THE EXAMINER APPEARS TO HAVE GRANTED AN EXTENSION ON THE BASIS OF A "THUNDERSTORM," "25 MILE WIND" AND "CONCRETE POUR CELLED.' THE LOGS SHOW THAT THERE WAS NO "THUNDERSTORM" AND NO PRECIPITATION ON THAT DAY. S AND E MADE NO CLAIM ON THE BASIS OF "WIND" FOR THAT DAY. FINALLY, IT DOES NOT APPEAR THAT ANY DELAY THAT MAY HAVE OCCURRED ON OCTOBER 23 WAS DUE TO UNUSUALLY SEVERE AND UNFORSEEABLE WEATHER. ACCORDINGLY, THE EXAMINER'S FINDING ON THAT DAY WAS BOTH WRONG AS A MATTER OF LAW AND UNSUPPORTED BY ANY SUBSTANTIAL EVIDENCE.

A 3/4-DAY EXTENSION WAS GRANTED FOR NOVEMBER 1, THE EXAMINER NOTING A "TEMPERATURE RANGE 45 DEGREES TO 24 DEGREES" AND "WINDS OF OVER 28 MILES PER HOUR.' THE G AND R LOG FOR THAT DAY (BOTH DAY AND SWING SHIFTS) CARRIES THE FOLLOWING INFORMATION:

FINISHED POURING THE BASIN BOTTOM FLOOR. POURED NO. 32 ON THE BASIN BOTTOM, HELD UP FOR 1 HOUR TO COMPLETE THE FINAL CLEANUP. CONTINUED MOIST CURE AND COVERING OF WALL POURS NO. 1 AND 3. PREPARING POURS 5 AND 17 WALL SECTIONS FOR TOMORROW.

BATCHLER PLANT PRODUCED CONCRETE AT AN EVEN PACE ALL DAY. STEEL WORKERS CONTINUED PREFABING THE WALL MATTS. MECHANICAL CONTRACTOR FINISHED LAYING THE DOMESTIC WATER LINE AND IS PREPARING IT FOR BACKFILL AND TESTING.

SWING SHIFT TOOK OVER AND FINISHED POURING NO. 32, COVERED IT AND PATCHED COVERINGS OF WALL POURS 1 AND 3 (HIGH GUSTY NORTHERLY WIND CAME UP AT 8 P.M.).

WETING AND HEATING FOR WALL POURS NO. 5 AND 17 CONTINUING, ALSO MOIST CURING OF CONCRETE CONTINUED. HOURLY AVERAGE OF WIND N. 34 MPH WITH GUSTS UP TO 53 MPH. THE S AND E LOG FOR THAT DAY AGREES WITH THE G AND R LOG. IN ADDITION, HOWEVER, THE S AND E LOG FOR THE SWING SHIFT CONTAINS THE FOLLOWING NOTE:

HEAVY WIND HIT 9:00 P.M.--- GUSTS TO 55 MPH. TRIED TO KEEP JOB FROM BLOWING AWAY--- HEAVY DAMAGE TO WALL COVERS (OUTHOUSE BLEW OVER, BUT NO ONE INJURED).

IT IS DIFFICULT TO DETERMINE WHETHER THE WIND VELOCITY FOR THAT DAY CAN BE CONSIDERED UNUSUALLY SEVERE AND UNFORESEEABLE. FOR EXAMPLE, THE FOLLOWING ENTRIES ARE FOUND IN THE NARRATIVE CLIMATOLOGICAL SUMMARY FOR 1960 (S AND E EXHIBIT G), SUPRA:

DESTRUCTIVE WINDS HAVE NOT BEEN A PROBLEM. TORNADOES HAVE NEVER BEEN REPORTED IN THE REGION, ALTHOUGH FUNNEL-SHAPED CLOUDS HAVE BEEN SIGHTED OVER THE NRTS ON SEVERAL OCCASIONS. STRUCTURES DESIGNED TO WITHSTAND AVERAGE WINDS OF 60 M.P.H. AND PEAK GUSTS TO 80-85 M.P.H. ARE NOT LIKELY TO BE DAMAGED.

THE DUST CONTENT OF THE AIR IS VERY SMALL WHILE THE GROUND IS SNOW COVERED. DUST-FAVORING WINDS (GUSTS OF 20 M.P.H. OR MORE) OCCUR ON THE AVERAGE FOR 6 HOURS DURING 13 WINDY DAYS PER MONTH *. *. *

THE ABOVE EXCERPTS APPEAR TO INDICATE THAT STRONG AND GUSTY WINDS ARE TO BE EXPECTED BUT THEY ARE NOT TOO HELPFUL IN DETERMINING WHETHER 28 M.P.H. OR 34 M.P.H. AVERAGE WINDS WITH GUSTS UP TO 55 M.P.H. ARE UNUSUAL FOR THAT LOCATION AT THAT TIME OF THE YEAR. IN ANY EVENT, HOWEVER, IT APPEARS THAT THE STRONG WINDS AROSE AROUND 8 OR 9 P.M. DURING THE SWING SHIFT. THE LOGS INDICATE THAT THE WORK WENT ON WITHOUT DELAY ON THE DAY SHIFT. DURING THE SWING-SHIFT THE OUTHOUSE BLEW OVER AND WALL COVERS WERE DAMAGED. THESE OCCURENCES DO NOT APPEAR TO HAVE CAUSED ANY SERIOUS DELAY- -- CERTAINLY NOT THREE FOURTHS OF A DAY AS FOUND BY THE EXAMINER. MOREOVER, THE FOLLOWING PERTINENT INFORMATION WAS BROUGHT OUT DURING THE HEARING (P. 1660, TRANSCRIPT): HEARING EXAMINER MCCONNELL. WAS ANY WORK GOING ON OUTSIDE OF THE EXCAVATION AT THAT TIME THAT WOULD BE SERIOUSLY INTERFERED WITH BY THIS ABNORMAL WIND?

THE WITNESS (COMMANDER ANDERSON). OF COURSE THE WIND STARTED AT EIGHT O- CLOCK AT NIGHT, AS THE DAILY LOG (G AND R--- THE S AND E LOG RECORDED AT 9 O-CLOCK START) SAID, AT 8:00 P.M. IT BEGAN GUSTING AND BLOWING. ALL OF THE WORK FORCE ON THE SWING SHIFT AND THE GRAVEYARD SHIFT WERE DOWN IN THE BASIN AREA, THERE WAS UTILITY WORK GOING ON UP ABOVE, BUT THIS WAS DONE DURING THE DAY SHIFT. WATER LINES I BELIEVE THERE WAS AN ENTRY IN THERE FOR THAT * * *

EVEN IF IT IS ASSUMED, ARGUENDO, THAT THE WINDS ON NOVEMBER 1 WERE UNUSUALLY SEVERE AND UNFORESEEABLE, THE EVIDENCE FAILS TO SHOW THAT THEY CAUSED ANY DELAY IN THE CONSTRUCTION WORK. ACCORDINGLY, THE EXAMINER'S FINDING IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

THE EXAMINER GRANTED A 1 DAY EXTENSION FOR NOVEMBER 3 NOTING: "TEMPERATURE RANGE 45 DEGREES TO 25 DEGREES, WIND OF 40 MILES WITH GUSTS OF 55, POUR DELAYED.' THE G AND R LOGS NOTED WINDS AVERAGED 40 45 M.P.H. WITH GUSTS OF 55 M.P.H. UNDER THE HEADING "DELAYS" THE G AND R LOG STATED: "WIND BLEW SO HARD THAT THEY COULDN-T START POURING" AND UNDER "REMARKS" THE LOG STATED: ,PREPARING POURS NO. 3 AND 5 2ND LIFT. THE WIND DELAYED THE POUR THAT WAS SCHEDULED. PLAN TO POUR 3 LIFTS SATURDAY. COVERING AND MOIST CURING OF CONCRETE CONTINUED.' THE S AND E LOGS FOR THAT DAY ARE IN GENERAL AGREEMENT WITH THE ABOVE COMMENTS. IT APPEARS THAT THE EXAMINER'S FINDING FOR NOVEMBER 3 IS SUPPORTED BY SUBSTANTIAL EVIDENCE AND THAT S AND E WAS ENTITLED TO A 1 DAY EXTENSION FOR THAT DATE.

A TIME EXTENSION OF 3/4-DAY WAS GRANTED BY THE EXAMINER FOR NOVEMBER 10 ON THE BASIS OF ,TEMPERATURE RANGE 54 DEGREES TO 14 DEGREES, GUSTS OF WINDS OF 27 MILES PER HOUR, DOING DAMAGE TO CURING COVERS.' THE G AND R LOGS FOR THE DAY SHIFT RECORD THAT IT WAS CLEAR AND CALM WITH A TEMPERATURE RANGE OF 26 DEGREES TO 52 DEGREES. THE LOGS ALSO SHOW THAT S AND E POURED THE FIRST LIFT ON POURS NO. 13 AND 15 AND THAT THE WORKERS CONTINUED STRIPPING FORMS FROM POURS NO. 3 AND 5 AND PLACING THEM ON FUTURE POURS. THE AGGREGATE HAUL CONTINUED AND THE STEEL WORKERS CONTINUED PREFABING REBAR FOR THE WALLS AND UNLOADED ONE CAR OF STEEL. THE SWING SHIFT THE G AND R LOGS SHOW THAT S AND E COMPLETED POUR NO. 15 AT 7 P.M., COVERED POUR NO. 13 AND 15 AND PATCHED OTHERS. THE S AND E LOGS FOR THAT DAY ARE IN GENERAL AGREEMENT WITH THE G AND R LOGS. THE S AND E LOGS ALSO SHOW THAT HEAVY GUSTY WINDS OCCURRED BETWEEN 7 P.M. AND 9 P.M. AND THAT CONSIDERABLE DIFFICULTY WAS ENCOUNTERED IN HOLDING THE COVERS ON THE WALL.

NOT ONLY DOES IT APPEAR THAT NO UNUSUALLY SEVERE AND UNFORESEEABLE WEATHER OCCURRED ON NOVEMBER 10 BUT THE EVIDENCE DOES NOT INDICATE ANY DELAY IN THE WORK. THERE IS NO SUBSTANTIAL EVIDENCE TO SUPPORT THE EXAMINER'S FINDING FOR NOVEMBER 10.

THE EXAMINER GRANTED A 3/4-DAY EXTENSION FOR NOVEMBER 12 NOTING: "TEMPERATURE RANGE 40 DEGREES TO 14 DEGREES, 23-MILE WINDS DAMAGING COVERS.' THIS DAY WAS NOT CLAIMED BY S AND E. MOREOVER, NOVEMBER 12 WAS A SUNDAY AND, AS THE G AND R DAILY LOGS SHOW, AT NO TIME BETWEEN SEPTEMBER AND DECEMBER 7 DID S AND E PERFORM CONSTRUCTION WORK ON A SUNDAY. NOR WAS THERE ANY SHOWING THAT S AND E INTENDED TO DO ANY GENERAL CONSTRUCTION WORK ON THIS SUNDAY BUT WAS PREVENTED FROM DOING SO BY THE WEATHER CONDITIONS. BEGINNING WITH OCTOBER 1 (A SUNDAY) S AND E DID HAVE A SKELETON CREW CONSISTING OF THREE MEN PER SHIFT TO MAINTAIN HEATERS AND MOIST CURE OF CONCRETE PREVIOUSLY POURED. OCCASIONALLY S AND E DID WORK ON A SATURDAY DURING THIS PERIOD, NAMELY ON SEPTEMBER 23, OCTOBER 7, AND NOVEMBER 4 AND A SLIGHT OR MODERATE AMOUNT ON OCTOBER 28 ACCORDING TO THE G AND R LOGS. THE S AND E LOGS DO NOT CONTAIN AN ENTRY FOR OCTOBER 28. NOVEMBER 23 WAS THANKSGIVING DAY AND ONLY A SKELETON CREW WORKED ON THAT DAY. THE EXAMINER'S FINDING FOR NOVEMBER 12 IS WRONG AS A MATTER OF LAW.

A 1 DAY EXTENSION WAS GRANTED FOR NOVEMBER 20. THE EXAMINER NOTED ON THAT DAY THERE WAS "SNOW, POUR CANCELLED.' THE G AND R LOG STATES: "ABOUT 1 INCH OF SNOW ON THE GROUND STOPPED SNOWING ABOUT 11:00 A.M. CONTINUED PLACING FORMS IN THE BASIN--- CANCELED THE SCHEDULE POUR BECAUSE OF SNOW AND THE SLICK RAMP.' WHILE THE G AND RLOG, AS THE FOREGOING INDICATES, DOES SHOW SOME DELAY, A 1-INCH SNOWFALL IN NOVEMBER CAN HARDLY BE CONSIDERED UNUSUALLY SEVERE AND UNFORESEEABLE. MOREOVER, THE LOGS SHOW THAT EVEN THOUGH A CONCRETE POUR WAS CANCELED CONSIDERABLE CONSTRUCTION WORK WAS ACCOMPLISHED ON THAT DAY. FOR EXAMPLE, THE G AND R LOG SHOWS THAT 38 CARPENTERS WORKED 8 HOURS EACH FORMING AND PLACING FORMS IN THE BASIN AND THAT 20 LABORERS WORKED 8 HOURS EACH CLEANING UP AND HANDLING MATERIAL. THE S AND E LOGS ALSO SHOW CONSIDERABLE CONSTRUCTION WORK ON THAT DAY. IT MUST BE CONCLUDED THAT THE EXAMINER'S FINDING FOR NOVEMBER 20 IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

A 1 DAY EXTENSION WAS GRANTED FOR NOVEMBER 21, THE EXAMINER STATING THAT THE TEMPERATURE RANGE WAS 27 DEGREES TO 9 DEGREES WITH WINDS OF 25 MILES PER HOUR DAMAGING CURING COVERS. IT SHOULD BE NOTED THAT S AND E'S CLAIM FOR TIME EXTENSION ON THIS DAY WAS ON THE BASIS OF WIND ALONE. NO CLAIM WAS MADE THAT THE TEMPERATURE WAS UNUSUALLY SEVERE. THE G AND R LOGS, WHILE CONTAINING AN ENTRY STATING THAT SEVERAL COVERS WERE PATCHED ON THE SWING SHIFT, NEVERTHELESS RECORDED A CONSIDERABLE AMOUNT OF CONSTRUCTION ACTIVITY. FOR EXAMPLE, THE FIRST LIFT OF POUR NO. 9 WAS POURED, AND WORKERS CONTINUED PLACING FORMS IN THE BASIN FOR THE NEXT DAY'S POURS. THE MECHANICAL CONTRACTOR CONTINUED ON "STEAM LINE AND FIRE MAIN LINE" AND STEEL WORKERS CONTINUED PLACING REBAR IN WALL MATS. ON THE SWING SHIFT WORKERS PROCEEDED WITH PREPARATION OF POUR "NO. 7 2ND LIFT NO. 19 READY TO RECEIVE CONCRETE.' THE S AND E LOG ALSO RECORDED CONSIDERABLE CONSTRUCTION ACTIVITY BUT MADE NO MENTION THAT ANY TIME WAS SPENT ON "PATCHING COVERS.'

ON THE BASIS OF THE FOREGOING, IT MUST BE CONCLUDED THAT EVEN IF THE WEATHER ON NOVEMBER 21 WAS UNUSUALLY SEVERE AND UNFORESEEABLE (WHICH ASSUMPTION IS NOT SUPPORTED BY THE RECORD), THERE IS NO EVIDENCE INDICATING THAT S AND E WAS DELAYED IN ITS WORK. THERE IS NO SUBSTANTIAL EVIDENCE TO SUPPORT THE EXAMINER'S FINDING FOR NOVEMBER 21.

THE EXAMINER GRANTED A 1/2-DAY EXTENSION FOR NOVEMBER 24 APPARENTLY ON THE BASIS OF "TIME SPENT PATCHING COVERS.' S AND E MADE NO CLAIM THAT UNUSUALLY SEVERE WEATHER OCCURRED ON NOVEMBER 24. ITS CLAIM APPARENTLY WAS THAT HIGH WINDS OCCURRED ON NOVEMBER 23 (THANKSGIVING) WHICH DELAYED THE WORK ON NOVEMBER 24. SINCE THE RECORD IS DEVOID OF EVIDENCE THAT WORK WAS DELAYED ON NOVEMBER 24 IT WAS AN ERROR TO GRANT AN EXTENSION ON THE BASIS OF "TIME SPENT PATCHING COVERS.' IN OUR VIEW OF THE LAW APPLICABLE TO THE EVIDENCE, THE OCCURRENCE OF SOME WINDS SUFFICIENTLY HIGH TO DAMAGE THE VISQUEEN COVERS WAS A READILY FORESEEABLE EVENT, AND IN THE ABSENCE OF ANY SHOWING THAT SUCH WINDS WERE SO EXCEPTIONAL IN FREQUENCY OR SEVERITY AS TO BE UNFORESEEABLE WE CONCLUDE THAT THE REPAIR OF SUCH DAMAGE AS MAY HAVE OCCURRED WAS A MATTER WHICH THE CONTRACTOR WAS BOUND TO ANTICIPATE AND PROVIDE FOR, BOTH IN ITS COSTS AND ITS WORK SCHEDULE.

EXTENSIONS WERE GRANTED BY THE EXAMINER FOR DECEMBER 2 AND DECEMBER 3 WHICH FELL ON SATURDAY AND SUNDAY. THE DAILY LOGS SHOW THAT ONLY SKELETON HEATING CREWS, THREE MEN PER SHIFT, WORKED ON THOSE DAYS. S AND E MADE NO SHOWING THAT WEATHER DELAYED THIS HEATING OPERATION. NOR DID S AND E MAKE ANY SHOWING THAT IT HAD INTENDED TO PERFORM EITHER SIGNIFICANT OR NORMAL CONSTRUCTION WORK ON THE WEEKEND BUT WAS PREVENTED FROM DOING SO BY THE WEATHER. WE THINK THAT IT WAS WRONG AS A MATTER OF LAW TO GRANT EXTENSIONS FOR THOSE DAYS SINCE ANY FAILURE TO MAKE PROGRESS ON THOSE DAYS WAS A MATTER OF CHOICE WITH S AND E AND NOT A MATTER OF WEATHER DELAY.

THE EXAMINER GRANTED A 3/4-DAY EXTENSION FOR DECEMBER 4 ON THE BASIS OF "TEMPERATURE RANGE 35 DEGREES TO 17 DEGREES, WINDS OF 17 MILES, TIME SPENT PATCHING COVERS.' WHILE THE G AND R LOG RECORDS THAT SOME COVERS WERE DAMAGED BY THE WIND THEY DO NOT RECORD THAT ANY DELAYS OCCURRED. OUR COMMENTS WITH RESPECT TO NOVEMBER 24, ABOVE, WOULD APPEAR TO BE EQUALLY APPLICABLE HERE. MOREOVER, THE EXAMINER APPEARS TO HAVE GRANTED AN EXTENSION PARTLY ON THE BASIS OF 17 MILES PER HOUR WINDS, WHICH IS EVEN BELOW THE VELOCITY OF 20 MILES PER HOUR UPON WHICH S AND E PREDICATED ITS CLAIMS FOR EXTENSIONS DUE TO WIND. WE DO NOT BELIEVE THAT THERE IS ANY EVIDENCE TO SUPPORT A FINDING THAT THE WEATHER FOR THIS DAY WAS UNUSUALLY SEVERE AND UNFORESEEABLE, OR THAT DELAY IN THE WORK OCCURRED.

FOR DECEMBER 7, THE DATE OF THE SO-CALLED ACCELERATION DIRECTIVE, THE EXAMINER GRANTED A 1-DAY EXTENSION ON THE BASIS OF "TEMPERATURE RANGE 25 DEGREES TO 10 DEGREES, WIND 17 MILES PER HOUR.' THE DAILY LOGS DO NOT SHOW ANY DELAY IN THE WORK ON THIS DAY EXCEPT THAT ONE POUR WAS CANCELED DUE TO LACK OF HEATERS. ON THIS POINT THE G AND R LOG NOTES: "INSUFFICIENT HEATERS ON THE NEW POUR NO. 4 SO THE POUR WAS CANCELLED.' NOR CAN IT BE SAID, IN OUR OPINION, THAT THE WEATHER ON DECEMBER 7, WAS UNUSUALLY SEVERE AND UNFORESEEABLE.

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

ACCELERATION

THIS CLAIM, WHICH APPEARS TO BE THE KEYSTONE OF THE STRUCTURE UPON WHICH THE CONTRACTOR BASES ITS ASSERTION OF THE RIGHT TO AN OVERALL SETTLEMENT ON AN ACTUAL TOTAL COST BASIS, IS GROUNDED ON THE THEORY THAT THE GOVERNMENT, BY LETTER OF DECEMBER 7, 1961 (S AND E EXHIBIT D), REQUIRED THE CONTRACTOR "TO INCREASE THE NUMBER OF SHIFTS AND/OROVERTIME OPERATIONS, DAYS OF WORK AND/OR THE AMOUNT OF CONSTRUCTION PLANT AS MAY BE NECESSARY TO IMPROVE PROGRESS AND INSURE PROSECUTION OF THE WORK IN ACCORDANCE WITH THE APPROVED PROGRESS SCHEDULE, ALL WITHOUT ADDITIONAL COST TO THE GOVERNMENT," ALTHOUGH THE CONTRACTOR AT THE TIME WAS, WITH DUE ALLOWANCE FOR ITS RIGHTS TO TIME EXTENSIONS FOR PRIOR DELAYS, ACTUALLY AHEAD OF THE PROGRESS SCHEDULE. THE LETTER OF DECEMBER 7, 1961, IS THEREFORE CLAIMED TO AMOUNT TO A CONSTRUCTIVE "CHANGE ORDER FOR ACCELERATION" AND TO ENTITLE THE CONTRACTOR TO ALL INCREASED COSTS INCURRED IN COMPLIANCE THEREWITH.

SINCE THE CONTRACTING OFFICER REJECTED THE BULK OF THE CLAIMS FOR TIME EXTENSIONS ON WHICH THE ACCELERATION CLAIM WAS FOUNDED, HE MADE NO SEPARATE FINDINGS OR DECISION ON THAT CLAIM AS SUCH. THE HEARING EXAMINER, HAVING HELD THAT THE CONTRACTOR WAS ENTITLED TO 31 DAYS ON ITS TIME OF COMMENCEMENT CLAIM, AND 60 DAYS UNDER CHANGE ORDER NO. 2, AS WELL AS 12 DAYS FOR WEATHER, AND 10 DAYS FOR FAILURE TO FURNISH STEAM, PRIOR TO DECEMBER 7, FOUND THAT THE CONTRACTOR WAS NOT BEHIND SCHEDULE ON THAT DATE AND HELD THAT IT WAS ENTITLED TO AN EQUITABLE ADJUSTMENT ON THE CONSTRUCTIVE CHANGE THEORY. THE COMMISSION REFUSED TO REVIEW THE DECISION ON THIS CLAIM.

PURSUANT TO THE TERMS OF CLAUSE 9/A) OF THE GENERAL CONDITIONS, S AND E SUBMITTED ITS INITIAL PROGRESS SCHEDULE AND A DETAILED SCHEDULE ON THE POURING OF CONCRETE, WHICH WAS DESIGNATED A POUR SCHEDULE, ON OR ABOUT SEPTEMBER 15. (CONTRACTING OFFICER'S DOCUMENTS OF APPEAL AND LIST OF DOCUMENTS.) THE SCHEDULES WERE DISAPPROVED BY THE GOVERNMENT (P. 1760, TRANSCRIPT). S AND E REVISED AND RESUBMITTED ITS PROGRESS SCHEDULE ON OR ABOUT SEPTEMBER 29. THE REVISED CONCRETE POUR SCHEDULE, WHICH CALLED FOR COMPLETION OF THE CONCRETE WORK ON NOVEMBER 8, 1961 (ERRONEOUSLY STATED BY THE EXAMINER AS OCTOBER 28), WAS SUBMITTED AND APPROVED ON OR ABOUT SEPTEMBER 30. IT CONFORMED TO THE PROGRESS SCHEDULE APPROVED ON SEPTEMBER 29 (ERRONEOUSLY FOUND BY THE HEARING EXAMINER TO HAVE BEEN APPROVED ON SEPTEMBER 27--- SEE P. 6 OF HIS DECISION).

THE VARIOUS PROGRESS SCHEDULES WERE DRAWN UPON WHAT IS REFERRED TO AS A "STRAIGHT LINE" BASIS WHICH MEANS THAT THE AMOUNT OF CONSTRUCTION ACCOMPLISHED, WHETHER IT BE ON THE BASIN SLAB, WHICH COMPRISED MORE THAN ONE HALF OF THE CONCRETE TO BE POURED, OR ON THE WALLS, WHICH COMPRISED LESS THAN ONE HALF OF THE CONCRETE TO BE POURED, WAS MEASURED BY AN ALLOCATION OF TIME TO WORK WITHOUT TAKING INTO CONSIDERATION THAT THE CONSTRUCTION OF THE WALLS WOULD ACTUALLY TAKE LONGER THAN THE CONSTRUCTION OF THE BASIN SLAB. WHETHER OR NOT S AND E EXERCISED GOOD JUDGMENT IN AGREEING TO AND SUBMITTING ITS SCHEDULES ON SUCH A BASIS IS NOT A MATTER FOR COMMENT HEREIN AS THE VARIOUS PROGRESS SCHEDULES CLEARLY INDICATE S AND E'S KNOWLEDGE OF THE BASIS FOR MEASURING CONTRACT PERFORMANCE.

AFTER THE ISSUANCE OF CHANGE ORDER NO. 2, A NEW PROGRESS SCHEDULE WAS SUBMITTED AND APPROVED ON OCTOBER 19 AND A NEW POUR SCHEDULE WAS SUBMITTED FOR APPROVAL ON OCTOBER 18 AND APPROVED ON OCTOBER 24 (PP. 1474-75, TRANSCRIPT). THE SCHEDULE AS THUS REVISED CALLED FOR COMPLETION OF THE WALL POURS BY NOVEMBER 30. IN THE LATTER PART OF NOVEMBER, THE PROGRESS SCHEDULE WAS AGAIN REVISED TO REFLECT THE TERMS OF CHANGE ORDER NO. 3. THE CONCRETE POUR SCHEDULE WAS NOT AFFECTED BY THE REVISION (P. 1775, TRANSCRIPT). PROGRESS ON THE WORK APPARENTLY PROCEEDED ON SCHEDULE IN SEPTEMBER AND OCTOBER, BUT FELL BEHIND IN NOVEMBER. (EXAMINER'S DECISION, P. 63). ON DECEMBER 5 THE CONTRACTING OFFICER DETERMINED THAT S AND E, UNDER THE SCHEDULE, WAS 50 PERCENT BEHIND ON THE CONCRETE WORK IN THE BASIN AND 18 PERCENT BEHIND ON THE OVERALL WORK. IT IS OBVIOUSLY VERY DIFFICULT TO TRANSLATE THESE PERCENTAGES INTO ACTUAL DAYS. WHAT APPEARS TO BE THE MOST LOGICAL AND UNDERSTANDABLE TRANSLATION WAS MADE BY COMMANDER ANDERSON. AT PAGES 1795 AND 1796 OF THE TRANSCRIPT THE FOLLOWING DISCUSSION IS REPORTED:

HEARING EXAMINER MCCONNELL. YOU TESTIFIED AS OF YOUR CHART OF NOVEMBER 30 THEY WERE APPROXIMATELY 18 PERCENT BEHIND TIME. IS THAT CORRECT?

THE WITNESS. ON NOVEMBER 30, 16 PERCENT.

HEARING EXAMINER MCCONNELL. 16 PERCENT?

THE WITNESS. RIGHT.

HEARING EXAMINER MCCONNELL. IS THERE ANY WAY OF TRANSLATING SOMETHING LIKE THAT INTO DAYS BEHIND TIME?

THE WITNESS. WELL, YES. THE WAY YOU CAN---

HEARING EXAMINER MCCONNELL. DON-T ANSWER WITHOUT THINKING ABOUT IT.

THE WITNESS. NO. THE BEST WAY YOU CAN CONVERT THE 18 PERCENT (AS OF DECEMBER 7) BEHIND SCHEDULE INTO DAYS WOULD BE TO RELATE BACK TO THE WALL POUR SCHEDULE, BECAUSE EVERYTHING--- THIS WAS THE BOTTLENECK. THEY WERE SCHEDULED TO POUR OUT ALL OF THE WALLS IN THE PERIOD 24 OCTOBER THROUGH 30 NOVEMBER. AS OF THE END OF NOVEMBER, OR EARLY DECEMBER, THEY WERE HALF DONE WITH WHAT THEY SHOULD HAVE BEEN ALL DONE WITH.

IN OTHER WORDS, IT HAD TAKEN THEM SOME 35 DAYS TO DO HALF THE WORK. AND JUST EXTENDING THAT, IT WOULD TAKE ANOTHER 35 DAYS TO DO THE OTHER HALF OF THE WORK, WHICH WOULD HAVE PUT COMPLETION OF THESE WALLS, UNDER THE SAME CONDITIONS AS THE PAST 35 DAYS HAD BEEN UNDER, ABOUT THE MIDDLE OF JANUARY. ON DECEMBER 7, AS NOTED EARLIER, THE CONTRACTING OFFICER INVOKED CLAUSE 9/B) OF THE GENERAL CONDITIONS AND DIRECTED S AND E TO TAKE WHATEVER STEPS WERE NECESSARY IN ITS OPERATIONS TO IMPROVE PROGRESS AND INSURE PROSECUTION OF THE WORK IN ACCORDANCE WITH THE PROGRESS SCHEDULE.

THE EXAMINER FOUND "AS THE SALIENT FACT WHICH STANDS OUT AND IS CONTROLLING" THAT THE CONTRACTING OFFICER'S DETERMINATION WAS BASED ON SCHEDULES WHICH DID NOT TAKE INTO ACCOUNT THE EXTENSIONS WHICH HE (THE EXAMINER), HAD PREVIOUSLY FOUND SHOULD HAVE BEEN GRANTED PRIOR TO DECEMBER 7, NAMELY 31 DAYS FOR COMMENCEMENT, AT LEAST 30 ADDITIONAL DAYS FOR CHANGE ORDER NO. 2, 12 DAYS FOR LACK OF STEAM AND 10 DAYS FOR WEATHER. TAKING THESE FACTORS INTO ACCOUNT THE CONTRACTOR, ACCORDING TO THE EXAMINER, WAS AHEAD OF SCHEDULE ON THE CONCRETE WORK BY 59 DAYS ON DECEMBER 7 AND IT WAS WELL AHEAD OF SCHEDULE ON THE WORK AS A WHOLE. THUS, HE CONCLUDED, THE DIRECTIVE OF DECEMBER 7 WAS A CHANGE ORDER FOR ACCELERATION WHICH ENTITLED THE CONTRACTOR TO AN EQUITABLE ADJUSTMENT TO COMPENSATE IT FOR THE EXTRA EXPENSE ENTAILED. AS INDICATED ABOVE, IT IS OUR CONCLUSION THAT THE EXAMINER'S FINDINGS WITH RESPECT TO TIME EXTENSIONS ON THE CLAIMS FOR COMMENCEMENT, CHANGE ORDER NO. 2, STEAM AND WEATHER WERE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND WERE ERRONEOUS AS A MATTER OF LAW. IN VIEW OF THE FACT THAT THE EXAMINER'S FINDING ON THE ACCELERATION CLAIM IS EXPRESSLY PREDICATED UPON HIS PREVIOUS ERRONEOUS DETERMINATIONS ON THE ENUMERATED CLAIMS, IT NECESSARILY FOLLOWS, AS A MATTER OF LAW, THAT HIS FINDING ON THE ACCELERATION CLAIM IS ALSO ERRONEOUS.

OUR CONSIDERATION AND DISCUSSION OF THE EXAMINER'S DECISION HAS, HERETOFORE, BEEN DIRECTED AT A DETAILED ANALYSIS OF THE EVIDENCE RELEVANT TO HIS SPECIFIC FINDINGS AS TO DELAYS AND SUSPENSION OF WORK AND THE TIME EXTENSIONS GRANTED FOR SUCH DELAYS AND SUSPENSIONS. THIS DISCUSSION DEMONSTRATES, WE BELIEVE, THAT THE TIME EXTENSIONS GRANTED BY THE EXAMINER UNDER THE CLAIMS FOR COMMENCEMENT OF PERFORMANCE, CHANGE ORDER NO. 2, STEAM AND WEATHER ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND, IN SOME INSTANCES, ARE BASED ON ERRORS OF LAW. HOWEVER, EVEN IF IT IS ASSUMED FOR THE SAKE OF DISCUSSION THAT THE EXAMINER'S FINDINGS ON TIME EXTENSIONS DO MEET THE WUNDERLICH ACT FINALITY STANDARDS HIS DECISION ON THE ACCELERATION CLAIM WOULD FALL BY THE VERY WEIGHT OF ITS OWN LOGIC. ILLUSTRATE THIS, WE CONSIDER THE FINDING ON PAGE 61 OF THE EXAMINER'S DECISION WHEREIN IT IS STATED:

* * * THE SALIENT FACT WHICH STANDS OUT AND IS CONTROLLING IS THAT THE CALCULATIONS OF DECEMBER 6 WERE BASED ON SCHEDULES WHICH DID NOT TAKE INTO ACCOUNT THE EXTENSIONS WHICH IT IS FOUND SHOULD HAVE BEEN GRANTED PRIOR TO THAT DATE, NAMELY, 31 DAYS FOR COMMENCEMENT, AT LEAST 30 ADDITIONAL DAYS FOR CHANGE ORDER NO. 2, 12 DAYS FOR LACK OF STEAM, 10 DAYS FOR WEATHER. THIS IS A TOTAL OF 83 DAYS. BY THE GOVERNMENT'S TESTIMONY, THE CONCRETE WORK ON THE BASIN WAS 50 PERCENT COMPLETE ON DECEMBER 6. ITS WITNESSES STATED THAT IT WOULD TAKE FROM 35 TO 40 DAYS UNDER NORMAL CONDITIONS TO FINISH THIS WORK. IT WILL BE NOTED THAT IN CHANGE ORDER NO. 2, 30 DAYS WERE ALLOWED FOR THE ENTIRE UNDERTAKING AND THE INTERIM COMPLETION DATE FOR CONCRETE WAS PUSHED BACK 20 DAYS. APPLYING THIS RATIO WHICH SEEMS ARBITRARY, TO 83 DAYS, IT IS CLEAR THAT EVEN UNDER THE GOVERNMENT'S STRICT FORMULA, THERE WOULD BE 59 ADDITIONAL SCHEDULED DAYS AVAILABLE FOR CONCRETE WORK AFTER DECEMBER 7. THUS, S AND E WAS AHEAD OF SCHEDULE WITH RESPECT TO INTERIM DATE FOR BASIN WALLS AND COUNTERFORTS AT THE TIME * *

IN THE PERIOD AUGUST 10 THROUGH DECEMBER 6 THERE ARE A TOTAL OF 119 DAYS INCLUDING SATURDAYS, SUNDAYS AND HOLIDAYS (LABOR DAY AND THANKSGIVING DAY. IN ADDITION VETERANS DAY FELL ON A SATURDAY). AN EXAMINATION OF S AND E'S DAILY LOGS SHOWS THAT BETWEEN AUGUST 10 AND DECEMBER 6 S AND E PERFORMED NO CONSTRUCTION WORK ON 33 DAYS WHICH FELL ON SATURDAYS, SUNDAYS AND HOLIDAYS. UNDER THE TERMS OF THE CONTRACT THERE WAS NOTHING TO PREVENT S AND E FROM WORKING ON WEEKENDS OR HOLIDAYS. ON THE CONTRARY, SEE GENERAL CONDITION 09/B) WHICH OBLIGATED THE CONTRACTOR TO FURNISH SUFFICIENT FORCES, CONSTRUCTION PLANT AND EQUIPMENT AND TO WORK SUCH HOURS INCLUDING NIGHT SHIFTS, OVERTIME OPERATIONS AND SUNDAY AND HOLIDAY WORK AS MAY BE NECESSARY TO INSURE THE PROSECUTION OF THE WORK IN ACCORDANCE WITH THE APPROVED PROGRESS SCHEDULE. THE ONLY CONTRACTURAL RESTRICTION FOR PERFORMANCE OF WORK ON WEEKENDS OR HOLIDAYS WAS THAT THE CONTRACTOR HAD TO NOTIFY THE CONTRACTING OFFICER AT LEAST 24 HOURS IN ADVANCE THAT SUCH WORK WOULD BE PERFORMED. SEE SPECIAL CONDITION 23. IT WAS NOT SHOWN, NOR EVEN CONTENDED BY S AND E, THAT ON THE WEEKEND DAYS AND HOLIDAYS IT DID NOT PERFORM CONSTRUCTION WORK THAT ITS FAILURE TO DO SO WAS THE RESULT OF AN EXCUSABLE CAUSE OF DELAY. THE RECORD IS CLEAR THAT PRIOR TO DECEMBER 6 ANY FAILURE TO PERFORM CONSTRUCTION WORK ON WEEKENDS AND HOLIDAYS WAS DUE SOLELY TO S AND E'S ELECTION NOT TO WORK DURING THOSE PERIODS. IN VIEW THEREOF IT IS NOT ONLY REASONABLE BUT NECESSARY TO CONCLUDE THAT THE NUMBER OF WORKING DAYS WHICH S AND E FREELY ELECTED TO UTILIZE DURING THE PERIOD AUGUST 10 THROUGH DECEMBER 6 TOTALED 86 (119 TOTAL DAYS LESS 33 DAYS WHICH FELL ON SATURDAY, SUNDAY OR WERE HOLIDAYS AND WHICH S AND E ELECTED NOT TO UTILIZE). SINCE THE EXAMINER GRANTED A TOTAL OF 83 FULL DAYS TIME EXTENSIONS FOR SUSPENSIONS AND DELAYS PRIOR TO DECEMBER 6, THE ABSURD CONCLUSION FOLLOWS THAT ALL OF THE WORK ACCOMPLISHED PRIOR TO DECEMBER 6, INCLUDING 50 PERCENT OF THE CONCRETE WORK IN THE BASIN WAS PERFORMED IN 3 DAYS. THIS ABSURDITY IS COMPOUNDED BY THE FACT THAT AS OF OCTOBER 31 S AND E WAS ON SCHEDULE. SEE PAGE 63 OF THE EXAMINER'S DECISION WHERE IT IS CORRECTLY OBSERVED:

ANOTHER LINE OF EVIDENCE WAS DEVELOPED IN CONNECTION WITH THE ACCELERATION CLAIM WHICH IS VERY SIGNIFICANT. ALL AGREE THAT ON OCTOBER 31, S AND E WAS ON TIME AS JUDGED BY THE REVISED SCHEDULE OF OCTOBER 18. IF IT IN FACT WAS OFF SCHEDULE ON DECEMBER 6, IT FELL BEHIND DURING NOVEMBER AND THE FIRST WEEK OF DECEMBER.

THERE ARE A TOTAL OF 36 DAYS (INCLUDING WEEKENDS AND HOLIDAYS) IN THE PERIOD NOVEMBER 1 THROUGH DECEMBER 6. IT WAS NOT CLAIMED BY EITHER SIDE DURING THE HEARING THAT S AND E EXPEDITED OR ACCELERATED ITS WORK PRIOR TO NOVEMBER 1 IN ORDER TO BE ON SCHEDULE ON THAT DATE OR TO MAKE UP TIME FOR PREVIOUS SO-CALLED DELAYS OR SUSPENSIONS, ALTHOUGH THE S AND E DAILY LOGS SHOW THAT S AND E DID PERFORM CONSTRUCTION WORK ON TWO SATURDAYS PRIOR TO NOVEMBER 1 (I.E. SEPTEMBER 23 AND OCTOBER 7. THE G AND R LOGS INDICATE THAT MODERATE CONSTRUCTION ACTIVITY OCCURRED ON OCTOBER 28, WHEREAS THE S AND E LOGS DO NOT CONTAIN AN ENTRY FOR THAT DATE.) THUS, THE 83 FULL DAYS TIME EXTENSION GRANTED BY THE EXAMINER MUST, ON THE RECORD, BE OPPORTIONED TO THE 36 DAYS FALLING BETWEEN NOVEMBER 1 AND DECEMBER 6. MOREOVER, OF THESE 36 DAYS S AND E ELECTED NOT TO PERFORM CONSTRUCTION WORK ON 7 DAYS WHICH FELL ON WEEKENDS AND ONE HOLIDAY (THANKSGIVING). NO AMOUNT OF ARITHMETICAL MANIPULATION CAN SQUEEZE 83 DAYS INTO 29.

IN VIEW OF THE FOREGOING IT MUST BE CONCLUDED THAT THE EXAMINER'S GRANT OF 83 FULL DAYS TIME EXTENSION IS GROSSLY ERRONEOUS SINCE IT IS BEYOND BELIEF THAT S AND E ACCOMPLISHED THE WORK INDICATED PRIOR TO DECEMBER 6 IN 3 DAYS. ON THE CONTRARY, THE CONCLUSION IS INESCAPABLE THAT THESE 83 DAYS, EXCEPT FOR NOVEMBER 3 FOR WHICH AN EXTENSION WAS PROPERLY GRANTED (SEE THE DISCUSSION UNDER THE WEATHER CLAIM) WERE IN FACT UTILIZED BY S AND E TO MAKE THE PROGRESS THAT IT DID MAKE. THIS CONCLUSION IS SUPPORTED IN DETAIL BY THE DAILY WORK LOGS.

S AND E WAS IN FACT BEHIND SCHEDULE ON DECEMBER 6 AND AS WE HAVE SEEN THERE IS NO SUBSTANTIAL EVIDENCE TO INDICATE THAT THE CAUSES OF THIS FAILURE TO MEET THE PROGRESS SCHEDULE IS ATTRIBUTABLE TO EITHER ACTS OF THE GOVERNMENT OR TO EXCUSABLE CAUSES UNDER THE TERMS OF THE CONTRACT. THE CONTRACTING OFFICER WAS FULLY AUTHORIZED TO ISSUE THE SO CALLED ACCELERATION DIRECTIVE OF DECEMBER 7 AND ON THE FACTS OF RECORD IT CANNOT BE CONCLUDED THAT THE DIRECTIVE WAS ISSUED IMPROPERLY OR THAT IT CONSTITUTED A CHANGE ORDER FOR ACCELERATION.

WHILE WE BELIEVE THAT THE FOREGOING DISCUSSION ON THE FIVE MAJOR CLAIMS IS ADEQUATE TO SHOW THAT THE FINDINGS OF THE HEARING EXAMINER DO NOT MEET THE STANDARDS OF FINALITY PRESCRIBED BY THE WUNDERLICH ACT, WE THINK THAT A FULL APPRECIATION OF ALL ASPECTS OF THE CONTROVERSY IS IMPOSSIBLE WITHOUT SOME DISCUSSION OF TWO MATTERS WHICH WERE PRESENTED AND ARGUED DURING THE COURSE OF THE HEARING (I.E. MATERIALS ON THE JOB SITE FOR THE PURPOSE OF DETERMINING CONSTRUCTION PROGRESS AND THE NUMBER OF CARPENTERS WHICH SHOULD HAVE BEEN UTILIZED BY S AND E AND THE COSTS THEREOF). DISCUSSION OF THESE TWO MATTERS, AND ESPECIALLY THE "CARPENTER" ISSUE, WAS INTERSPERSED THROUGHOUT THE HEARINGS IN CONNECTION WITH MOST OF THE FIVE MAJOR CLAIMS. THE "CARPENTERS" CONTROVERSY IS DIRECTLY RELATED TO THE MERITS OF THE MAJOR CLAIMS AND HAS A MATERIAL BEARING ON THE FAILURE OF S AND E TO MEET THE CONSTRUCTION SCHEDULE OF THE CONTRACT.

IN ADDITION TO ITS CLAIMS FOR TIME EXTENSIONS DUE TO THE VARIOUS CAUSES PREVIOUSLY DISCUSSED, S AND E ALSO CONTENDED DURING THE HEARING THAT THE GOVERNMENT, IN DETERMINING ACTUAL PROGRESS, SHOULD HAVE MADE ALLOWANCE FOR MATERIALS ON THE JOB SITE WHICH HAD NOT BEEN INCORPORATED INTO THE WORK. THE EXAMINER HELD THAT THIS CONTENTION WOULD HAVE SOME MERIT DURING THE EARLY PHASES OF THE WORK, BUT THAT AS THE WORK PROGRESSED TO THE STAGE IT HAD ON DECEMBER 7, THE FACT THAT MATERIALS WERE AT HAND HAD LITTLE OR NO BEARING ON THE ACTUAL STATE OF THE WORK AS PROJECTED AGAINST A PROGRESS CHART. WE THINK THAT THIS CONCLUSION BY THE EXAMINER IS SOUND. THE CONTRACT INVOLVED HERE REQUIRED THE FURNISHING OF MATERIALS AND SERVICES, AS DO NEARLY ALL PUBLIC WORKS CONTRACTS. FOR PURPOSES OF ILLUSTRATION, LET US ASUME THAT ON A PARTICULAR PROJECT WITH A 1 YEAR CONSTRUCTION PERIOD THAT MATERIALS COMPRISE ONE HALF OF THE TOTAL CONTRACT PRICE. ASSUME FURTHER THAT BY THE END OF 4 MONTHS THE CONTRACTOR HAD DELIVERED TO THE WORKSITE ALL OF THE MATERIALS WHICH WERE TO BE INCORPORATED INTO THE PROJECT, BUT AT THE END OF THAT PERIOD HAD ONLY INCORPORATED 10 PERCENT OF THE MATERIALS INTO THE STRUCTURE. IT WOULD BE ABSURD TO SAY, AT THAT POINT, THAT PROGRESS UNDER THE CONTRACT WAS 50 PERCENT (OR POSSIBLY 60 PERCENT IF THE SERVICES NEEDED TO INCORPORATE 10 PERCENT OF THE MATERIALS IS ALSO INCLUDED), YET S AND E'S CONTENTION WOULD LEAD LOGICALLY TO SUCH A CONCLUSION. OF COURSE NO PROGRESS CAN BE MADE UNLESS MATERIALS ARE AT HAND, BUT THE FACT THAT THEY ARE AT HAND DOES NOT MEAN THAT PROGRESS SHOULD BE MEASURED BY THEIR VALUE WITHOUT REGARD TO WHETHER THEY HAVE BEEN INCORPORATED INTO THE STRUCTURE. IN THAT CONNECTION THE CONCLUSION, AND THE POSITION TAKEN BY THE CONTRACTING OFFICER ON THIS QUESTION, ARE SUPPORTED BY THE EVIDENCE PRESENTED TO THE HEARING EXAMINER BY S AND E. ONE OF THE PRINCIPAL S AND E WITNESSES, MR. DEWITT, TESTIFIED THAT ROOFING MATERIAL ARRIVED AT THE JOB SITE ON JANUARY 11, 1962, BUT THAT INSTALLATION OF THE MATERIAL DID NOT BEGIN UNTIL APRIL 3, 1962 (PP. 202, 235, TRANSCRIPT). TO THE SAME EFFECT, ALTHOUGH DIFFERING IN DETAIL WAS THE RECOLLECTION OF THE ACTUAL ROOFING SUBCONTRACTOR, WHO TESTIFIED (P. 403, TRANSCRIPT) THAT THE MATERIAL ARRIVED IN DECEMBER AND THAT INSTALLATION OF IT STARTED IN MAY.

ALL PARTIES WERE IN AGREEMENT THAT AS OF OCTOBER 31 S AND E WAS ON TIME BASED ON THE REVISED SCHEDULE OF OCTOBER 19. AS THE EXAMINER STATED, IF IN FACT S AND E WAS BEHIND SCHEDULE ON DECEMBER 6, IT FELL BEHIND DURING NOVEMBER AND THE FIRST WEEK OF DECEMBER. (EXAMINER'S DECISION, P. 63.) GREAT DEAL OF CONTROVERSY WAS GENERATED AT THE HEARING AS TO WHAT OCCURRED DURING THIS PERIOD. THE GOVERNMENT SAID THAT S AND E FELL OFF THE PACE AT A RATE OF 9 PERCENT PER WEEK BECAUSE IT DID NOT MAN THE WORK WITH A SUFFICIENT NUMBER OF CARPENTERS TO DO FORMING WORK EXPEDIOUSLY AND EFFICIENTLY. COMMANDER ANDERSON ESTIMATED THAT DURING THIS PERIOD S AND E SHOULD HAVE UTILIZED A CARPENTER'S FORCE OF 54 MEN ON THE DAY SHIFT AND 10 ON THE SWING SHIFT. HE POINTED OUT THAT THE WALL FORMS WERE APPROXIMATELY 30 FEET HIGH, 30 FEET DEEP AND HAD A 25-FOOT FACE. ON OCTOBER 17 WHEN THE WALL STEEL ARRIVED, S AND E HAD 14 CARPENTERS ON THE DAY SHIFT AND 6 ON THE SWING SHIFT. SINCE S AND E WAS UTILIZING SIX SETS OF FORMS, THE DAY SHIFT NUMBERED A LITTLE OVER TWO MEN PER FORM AND THE SWING SHIFT ONE MAN PER FORM. ON THE 25TH OF OCTOBER THE CARPENTER FORCE WAS BUILT UP TO 18 ON THE DAY AND 6 ON THE SWING SHIFT. ACCORDING TO ANDERSON THIS PERIOD BETWEEN OCTOBER 16 (SIC, 17) AND OCTOBER 25 WAS A VERY CRITICAL ONE SINCE THE STEEL HAD ARRIVED BUT NO SIGNIFICANT PROGRESS ON THE FORMS HAD BEEN MADE. THUS, AS A RESULT, THE FIRST WALL POUR WAS MADE ON OCTOBER 31 INSTEAD OF OCTOBER 24 AS SCHEDULED (P. 1536, TRANSCRIPT).

ON OCTOBER 31, 18 CARPENTERS WERE WORKING ON THE DAY SHIFT AND 6 ON THE SWING (3 PER FORM ON THE DAY AND 1 PER FORM ON THE SWING). ON NOVEMBER 1, THE FORCE WAS BUILT UP TO 23 ON THE DAY AND 9 ON THE SWING SHIFT. BY THE 6TH OF NOVEMBER THE FORCE WAS INCREASED TO 30 ON THE DAY AND 10 ON THE SWING. ON NOVEMBER 7 THE CARPENTER FORCE THAT WAS ACTUALLY UTILIZED FOR BUILDING FORMS WAS DECREASED TO 20 ON THE DAY SHIFT. FIVE CARPENTERS ON THAT DAY, ACCORDING TO THE G AND R LOGS, WERE UTILIZED ON "BUILDING TEMPORARY BUILDINGS FOR FITTERS AND BOILER.' TEN CARPENTERS WERE USED ON THE SWING SHIFT THAT DAY. THE NEXT DAY, NOVEMBER 8, THERE WERE 25 CARPENTERS ON THE DAY SHIFT AND 10 ON THE SWING. THE FORCE REMAINED AT 25 CARPENTERS ON THE DAY SHIFT (A LITTLE OVER 4 PER FORM) AND 10 ON THE SWING UNTIL NOVEMBER 13 WHEN IT WAS INCREASED TO 30 ON THE DAY SHIFT.

ON NOVEMBER 14 OR 15 COMMANDER ANDERSON HAD A CONVERSATION WITH MR. DEWITT DURING WHICH, ACCORDING TO ANDERSON, THE FOLLOWING EXCHANGE TOOK PLACE (PP. 1478, 1479, TRANSCRIPT):

IN THE AFTERNOON OF EITHER THE 14TH OR 15TH, I-M NOT SURE WHICH DAY, MR. DEWITT AND I WENT OUT TO THE NORTHEAST CORNER OF THE BASIN AND WE STOOD THERE AND THEN LOOKED AT WHAT WAS GOING ON DOWN IN THERE.

Q. WHAT WAS GOING ON?

A. THE GENERAL CONSTRUCTION OPERATIONS. I EXPRESSED MY CONCERN TO HIM. I SAID,"YOU-RE IN BIG TROUBLE. YOU ARE NOT MEETING YOUR CONCRETE POUR SCHEDULE, THE WEATHER IS GETTING WORSE, YOUR MANPOWER IS DOWN AND YOU GOT TO GET MOVING OR YOU ARE GOING TO BE IN TREMENDOUS TROUBLE IF YOU DRAG THIS THING OUT ANY LONGER THAN ABSOLUTLY NECESSARY RIGHT NOW.' HE--- HIS ANSWER WAS,"I KNOW EXACTLY WHAT YOU MEAN BUT I WAS SENT HERE TO FIRE PEOPLE AND CUTOUT THE OVERTIME.' "BUT I-M NOT GOING TO DO THAT. I-M GOING TO TAKE IT UPON MYSELF TO HIRE 8 MORE CARPENTERS; I DON-T KNOW WHAT IS GOING TO HAPPEN TO ME. I MAY GET FIRED AS A RESULT OF THIS.' BUT HE SAID,"MY INSTRUCTIONS WERE TO COME UP HERE AND CUT THE COSTS. LAY PEOPLE OFF, CUT OUT THE OVERTIME. BUT AFTER LOOKING THE SITUATION OVER, I-M GOING TO TAKE IT UPON MYSELF TO PUT ON MORE CARPENTERS.'

THE DAY FORCE WAS INCREASED TO 37 ON NOVEMBER 16 AND TO 38 ON NOVEMBER 17. THE NUMBER ON THE SWING SHIFT REMAINED CONSTANT AT 10. THE LATTER NUMBERS WERE MAINTAINED AT APPROXIMATELY THOSE LEVELS UNTIL DECEMBER 15 WHEN, ACCORDING TO THE S AND E LOGS, THE DAY SHIFT WAS DECREASED TO 25 AND THE SWING SHIFT TO 8.

IN REBUTTAL TO THIS LINE OF TESTIMONY, MR. DEWITT STATED (P. 2400, TRANSCRIPT) THAT HE ,MARVELED AT MR. ANDERSON'S MEMORY OF REMEMBERING EXACTLY WHAT CAME OUT OF MY MOUTH.' HE FURTHER TESTIFIED (P. 2401, TRANSCRIPT):

IN ADDITION TO WHAT MR. ANDERSON SAID, THERE WERE OTHER COMMENTS, BUT BASICALLY I REITERATED TO THE GOVERNMENT REPRESENTATIVES THAT IT WAS OUR INTENT, AND MR. DOWNEY'S AND THE JOB SITE PERSONNEL, TO MANAGE THE PROJECT IN AN ECONOMICAL WAY, ADDING OR REDUCING FORCES AS NECESSARY IN ACCORDANCE WITH PAST PRACTICES, AND IN ACCORDANCE WITH THE NECESSITIES OF THIS PROJECT AND FURTHER IN ACCORDANCE WITH CLIMATICAL CONDITIONS AT THE TIME.

THE ADDITION OF THE PARTICULAR EIGHT MEN AT THAT TIME WAS, PERSONALLY I DOUBTED THE FEASIBILITY OF IT, BUT SOME FIVE OR SIX DAYS PRIOR TO MY TRIP TO IDAHO FALLS I HAD A TELEPHONE CONVERSATION WITH MR. NITZMAN, DURING WHICH AN AGREEMENT WAS REACHED WHEREBY IF I WOULD SHOW AN INCREASE OF LABOR FORCES AT THE PROJECT, HE WOULD PAY FOR MATERIALS JOB SITE.

MR. DEWITT TESTIFIED FURTHER AS FOLLOWS (PP. 2423-2425):

HEARING EXAMINER MCCONNELL. I HAVE ONE QUESTION THAT RELATES TO THE SUGGESTION THAT PRECEDED THE BOILER. IN YOUR CONVERSATIONS WITH COMMANDER ANDERSON, IN NOVEMBER, WHERE THE QUESTION CAME UP OF MORE CARPENTERS, AS I RECALL HIS TESTIMONY, HE STATED THAT YOU HAD COME UP FROM DALLAS WITH INSTRUCTIONS TO REDUCE THE CARPENTERS. WAS HE CORRECT IN THAT OR AM I CORRECT IN MY NDERSTANDING?

THE WITNESS. THAT IS QUITE POSSIBLE THAT I DID HAVE THAT THOUGHT. AS I HONESTLY SAY, I DON-T REMEMBER THE CONVERSATION EXACTLY. I DO REMEMBER THAT I HAD A CONVERSATION WITH MR. ANDERSON. I RECALLED IT AS BEING IN THE QUONSET HUT, NOT THE EDGE OF THE BASIN. THIS IS IRREVELANT. I TOLD HIM, I AM SURE I WOULDN-T HAVE TOLD HIM ANYTHING THAT I DID NOT BELIEVE, AND I KNOW THAT I WENT TO THE JOB SITE WITH THE POSSIBILITY OF REDUCING, IF IT WAS ECONOMICALLY FEASIBLE, IF THE PROGRESS OF THE PROJECT WAS NOT HAMPERED OR REDUCED IN ANY WAY. WE NATURALLY WERE TRYING TO GET THIS JOB DONE AS FAST AS POSSIBLE. AS THIS WINTER WEATHER STARTED HITTING US, OUR COSTS WERE RISING TREMENDOUSLY. I WILL BE THE FIRST TO ADMIT IT. AND IF IT WAS NOT ECONOMICALLY FEASIBLE TO HAVE THE NUMBER OF CARPENTERS AT THE JOB SITE, AT THE TIME, I WAS THERE TO REDUCE THEM.

HEARING EXAMINER MCCONNELL. YOU WERE THERE GENERALLY TO TRY TO CUT DOWN THE RISE IN COSTS, IS THAT CORRECT?

THE WITNESS. YES, WELL THAT TOGETHER WITH ASSISTING MR. BOONE AND MR. DOWNEY ON SEEING WHAT WE COULD DO TO GET THE JOB DONE AS FAST AS POSSIBLE AT A MINIMUM COST.

BY MR. BIXLER.

Q. WHAT DO YOU MEAN BY ECONOMICALLY FEASIBLE?

A. I THINK THIS WAS EXPANDED ON BY PREVIOUS TESTIMONY, IN THAT YOU TAKE 60 CARPENTERS AND YOU PUT THEM IN, AS AN EXAMPLE, YOU TAKE A FORM, WITH 2 CARPENTERS ON THE FORM, IT IS NOT ECONOMICAL TO GET, TO LEAVE 2 CARPENTERS ON, IN THAT YOU STRETCH OUT THE OVERALL PROJECT BY NOT GETTING THE FORM BUILT, THE CONCRETE POURED, AND SEQUENTIAL OPERATIONS TAKEN CARE OF. THEN YOU SAY, WELL, LET'S PUT 5 CARPENTERS ON, OR GO TO 10 CARPENTERS. IS THIS A GOOD FACTOR. WITH 10 YOU GET THE JOB DONE EFFICIENTLY FOR THE AREA THAT YOU HAVE, IT COINCIDES WITH YOU/R) ABILITY TO POUR CONCRETE, IT COINCIDES WITH THE ABILITY OF THE IRON WORKERS TO PLACE THE STEEL, AND THAT WOULD BE THE NUMBER OF CARPENTERS YOU WANT WORKING ON THAT FORM AT THAT TIME. WAS MENTIONED PREVIOUSLY IN OTHER TESTIMONY, YOU DON-T HAVE 10 CARPENTERS ON ALL 6 FORMS AROUND THE BASIN, BECAUSE SOME ARE DORMANT, BEING CURED. BUT YOUR POURS ARE CONCENTRATING. IT IS QUITE PROBABLE THAT THE CARPENTERS WHICH WE HAD AT THE JOB SITE WERE WORKING ON ONE AND POSSIBLE 2 FORMS AT A TIME BY VIRTUE OF THE STATUS OF THE OTHER FORMS. BUT YOU GO ON THAT PARTICULAR FORM INTO SAY WELL LET'S GET THE JOB DONE 5 TIMES FASTER, INSTEAD OF HAVING 10 MEN ON THE FORM, LET'S PUT 50 MEN ON THE FORM. YOU CAN-T GET THE CARPENTERS AROUND, IT IS THE SAME THING AS TAKING A 6-FOOT, 2 BY 4 AND TRYING TO BUILD A SHELF IN A CLOSET. YOU CAN-T GET THE WORK DONE. THERE ARE JUST TOO MANY MEN ON IT. YOU ARE SPENDING A LOT MORE MEN, THE EFFICIENCY PER MAN IS RADICALLY REDUCED, IN THAT HE HAS GOT 3 OR 4 BUDDIES AROUND HIM, HELPING HIM, AND HE IS GOING TO START TALKING, FOR ONE THING, THESE ARE ACTUAL CONDITIONS, THIS IS AS IT HAPPENS.

WITH RESPECT TO THIS QUESTION, MR. BOONE STATED (P. 2369), TRANSCRIPT) THAT ON THE JOB, S AND E HAD EMPLOYED AS MANY MEN AS WAS DEEMED NECESSARY TO PERFORM THE OPERATIONS THAT HAD TO BE PERFORMED AND THAT S AND E HAD AN ADEQUATE CREW OF CARPENTERS DURING THE PROJECT. MR. ELDER STATED (P. 2384, TRANSCRIPT) IN ANSWER TO A QUESTION BY S AND E'S ATTORNEY:

AT TIMES ON THE JOB I AM SURE 64 CARPENTERS COULD BE USED. AS I RECALL MR. ANDERSON'S TESTIMONY, IN TWO INSTANCES HE SAID THIS WAS THE NUMBER TO BE MAINTAINED APPROXIMATELY THROUGHOUT THE ENTIRE LENGTH OF THE FORMING OPERATION. THIS SEEMS TO BE GREATLY EXCESSIVE.

HEARING EXAMINER MCCONNELL. WAS IT POSSIBLE TO USE 10 MEN ON A FORM AT ANY STAGE OF THE OPERATION?

THE WITNESS. I AM SURE AT CERTAIN STAGES IT WAS POSSIBLE TO USE 10 MEN ON A FORM.

ON CROSS-EXAMINATION MR. DEWITT WAS ASKED (PP. 2427, 2428, TRANSCRIPT) WHY HE HAD NOT RELATED THE TELEPHONE CONVERSATION WITH MR. NITZMAN (ABOUT THE AGREEMENT TO PUT ON MORE LABOR IF NITZMAN WOULD PAY FOR MATERIAL JOB SITE) EARLIER WHEN HE HAD TESTIFIED PREVIOUSLY. MR. DEWITT STATED ,WHEN I PREVIOUSLY TESTIFIED, I DID NOT THINK IT WAS NECESSARY TO BRING THIS UP UNTIL MR. ANDERSON'S TESTIMONY CAME UP.' THE RECORD SHOWS THAT THE ISSUE OF PAYMENT FOR MATERIALS JOB SITE CAME UP DURING THE HEARINGS ON A NUMBER OF OCCASIONS, YET IT WAS NOT UNTIL THE LAST DAY OF THE HEARINGS THAT MR. DEWITT FELT THAT IT WAS "PERTINENT" TO RELATE THE ALLEGED AGREEMENT. MOREOVER, THE RECORD IS COMPLETELY DEVOID OF ANY EVIDENCE TO SUBSTANTIATE MR. DEWITT'S ASSERTION IN THIS REGARD.

IN REVIEWING THE EVIDENCE ON THIS ASPECT OF THE CASE, THE EXAMINER STATED:

* * * AFTER THE CONCRETE WORK BEGAN, S AND E OPERATED WITH A MAIN DAYTIME SHIFT, A SWING SHIFT AND A GRAVEYARD SHIFT FOR MAINTENANCE. SIX FORMS WERE BEING USED IN A SIMULTANEOUS AND ALTERNATIVE FASHION. WHEN A POUR WAS CURED, THE FORM WAS STRIPPED AND REFORMED FOR THE NEXT POUR. THIS WAS CARPENTRY WORK. CARPENTERS ARE OF COURSE HIGHLY SKILLED AND PAID ACCORDINGLY. IT APPEARS THAT THERE WAS NO SHORTAGE OF THEM IN THE AREA AND THE NUMBER USED VARIED FROM DAY TO DAY TO FIT THE WORK AT HAND. THUS, ON OCTOBER 16 WHEN THE WALL STEEL ARRIVED, THERE WERE 14 CARPENTERS ON THE DAY SHIFT, 6 ON THE SWING; ON OCTOBER 31 THERE WERE 18 ON THE DAY AND 6 ON THE SWING; ON NOVEMBER 1, 23 ON THE DAY, 9 ON THE SWING. BEGINNING WITH NOVEMBER 1, THE FORCE WAS BUILT UP; ON NOVEMBER 16 THERE WERE 37 ON THE DAY, 10 ON THE SWING; THE CONTRACTING OFFICER'S WITNESSES STATED THAT FROM NOVEMBER 1 TO DECEMBER 6 THE FORCE AVERAGED 35 DAY, 10 SWING. IT IS THE CONTENTION THAT IF THE FORCE HAD BEEN INCREASED TO 54 ON THE DAY AND 10 ON THE SWING, THE WALLS WOULD HAVE BEEN UP ON THE DUE DATE, WHICH WAS NOVEMBER 28 UNDER THE REVISED PROGRESS CHART. IN THE FIRST PLACE, IT IS DOUBTFUL FROM THE EVIDENCE THAT A FORCE OF 64 CARPENTERS COULD EVER HAVE BEEN USED ECONOMICALLY. THAT WOULD BE 10 TO A FORM AND AS STATED, IT WAS A STAGGERED OPERATION. FORMS WOULD HAVE TO STAY IN PLACE FOR CURING. THE APPELLANT'S WITNESS TESTIFIED THAT THERE MAY HAVE BEEN TIMES WHEN 10 TO A FORM COULD HAVE BEEN USED, BUT IT IS DOUBTFUL AND CERTAINLY THE OCCASION WOULD BE RARE.

THERE IS A PRACTICAL CONSIDERATION. THE GOVERNMENT'S ORIGINAL ESTIMATE FOR FORMING WAS $57,950. ITS ESTIMATE FOR CHANGE ORDER NO. 2 WAS $10,592, MAKING A TOTAL ESTIMATE OF $68,542 FOR FORMING. S AND E EVIDENTLY MOVED ON THE ASSUMPTION THAT THIS WAS A PROPER ESTIMATE WHEN IT BID.

AT THE HEARING THE APPELLANT INTRODUCED A COST ANALYSIS AND DEMONSTRATED THAT TO MAINTAIN A FORCE OF 64 CARPENTERS IN NOVEMBER, WITH THE NECESSARY HELPERS AND BACKUP FORCE UNDER THE PREVAILING WAGE SCALE IN THE AREA, WOULD HAVE COST NEARLY AS MUCH OR AS MUCH AS THE ESTIMATE FOR ALL FORMING WORK REQUIRED. IT SHOULD BE BORNE IN MIND THAT THE FORMING OPERATIONS STARTED AT LEAST TWO MONTHS BEFORE NOVEMBER. AT TIMES 33 CARPENTERS WERE USED. IF S AND E HAD MET THE STANDARD WHICH THE GOVERNMENT THINKS IT SHOULD HAVE MET IN NOVEMBER, THE TOTAL COST OF FORMING WOULD HAVE BEEN WELL OVER $100,000. THIS IS A CONSERVATIVE ESTIMATE. IN THE END THERE IS A PRACTICAL LIMIT TO THE DEMANDS THAT CAN BE MADE ON CONTRACTORS IN MATTERS OF THIS SORT.

WE ARE UNABLE TO AGREE WITH THE EXAMINER'S CONCLUSION THAT IT WAS DOUBTFUL FROM THE EVIDENCE THAT A FORCE OF 64 CARPENTERS COULD EVER HAVE BEEN USED ECONOMICALLY. COMMANDER ANDERSON TESTIFIED THAT 54 CARPENTERS (9 PER FORM) COULD, AND SHOULD, HAVE BEEN USED ON THE DAY SHIFT AND 10 CARPENTERS (NOT QUITE 2 PER FORM) ON THE SWING SHIFT. THE TESTIMONY OF MESSRS. DEWITT AND ELDER WAS, AT BEST, EQUIVOCAL ON THIS POINT. IN FACT, MR. ELDER STATED THAT HE WAS "SURE" THAT ,AT TIMES" ON THE JOB 64 CARPENTERS COULD BE USED. MOREOVER, WE DO NOT READ COMMANDER ANDERSON'S TESTIMONY AS INDICATING THAT 64 CARPENTERS WERE REQUIRED DURING THE WHOLE PERIOD WHEN CARPENTERS COULD BE USED. HIS TESTIMONY ON THIS ISSUE WAS CONCERNED WITH THE PERIOD OF APPROXIMATELY 1-1/2 MONTHS AFTER THE ISSUANCE OF CHANGE ORDER NO. 2 AND THE ARRIVAL OF STEEL ON OCTOBER 16, WHEN S AND E SHOULD HAVE ACCOMPLISHED ITS WALL POURS. (SEE P. 1535, ET. SEQ. TRANSCRIPT.) THE TESTIMONY OF ELDER AND DEWITT WAS CONCERNED PRIMARILY WITH THE COST INVOLVED IN EMPLOYING 64 CARPENTERS DURING THIS PERIOD RATHER THAN IN THE FEASIBILITY AND EFFICIENCY OF USING THAT NUMBER. THE EXAMINER'S DECISION APPEARS TO RECOGNIZE THE WEAKNESS IN S AND E'S POSITION AS REGARDS COMMANDER ANDERSON'S ASSERTION SINCE IT, TOO, STRESSES THE COST OF FORMING WITH 64 CARPENTERS, STATING THAT SUCH COST WOULD HAVE BEEN WELL OVER $100,000, WHEREAS THE GOVERNMENT'S ESTIMATE FOR ALL FORMING WAS $68,542. INCIDENTALLY, IT SHOULD BE NOTED HERE THAT THE EXAMINER'S ESTIMATE OF THE COST INCREASE WHICH MIGHT HAVE RESULTED REPRESENTS A SMALLER RATIO OF COST TO ORIGINAL ESTIMATE THAN IS REPRESENTED BY THE CONTRACTOR'S CLAIM OF A TOTAL COST OF SOME $2,700,000 FOR THE $1,272,000 JOB. ALSO, IN REGARD TO COSTS, THE EXAMINER STATED THAT S AND EEVIDENTLY MOVED ON THE ASSUMPTION THAT THE GOVERNMENT'S ESTIMATE OF $68,542 (WHICH INCLUDED CHANGE ORDER NO. 2) WAS A PROPER ESTIMATE WHEN IT BID. WE HAVE BEEN UNABLE TO FIND ANY REFERENCE IN THE RECORD TO SHOW THAT S AND E WAS AWARE OF THE GOVERNMENT'S ORIGINAL ESTIMATE OF $57,950 FOR FORMING, AND IT IS FAIRLY CERTAIN THAT S AND E HAD NO KNOWLEDGE OF THE GOVERNMENT'S FORMING ESTIMATE UNDER CHANGE ORDER NO. 2. IN S AND E'S PREPARED TESTIMONY IN ANSWER TO QUESTION 9 UNDER CHANGE ORDER NO. 2 (S AND E EXHIBIT C), MR. DEWITT STATED THAT "THE GOVERNMENT'S ESTIMATE WAS NOT MADE AVAILABLE TO ME DURING OTIATIONS.'

IN ANY EVENT, HOWEVER, IT SHOULD BE BORNE IN MIND THAT UNDER A FIXED PRICE CONSTRUCTION CONTRACT THE GOVERNMENT IS NOT BUYING FORMS, OR THE SERVICES OF A SPECIFIED NUMBER OF MEN. IT IS CONCERNED ONLY WITH THE FINISHED PRODUCT. IT IS THE CONTRACTOR'S RESPONSIBILITY--- EMPHASIZED IN THIS CASE BY THE PROVISIONS OF CLAUSE 09/B) OF THE GENERAL CONDITIONS--- TO SEE TO IT THAT SUFFICIENT MEN AND EQUIPMENT ARE USED TO PRODUCE THAT PRODUCT AT THE AGREED TIME. THE FACT THAT IT MAY COST THE CONTRACTOR MORE TO CONSTRUCT A BUILDING THAN WAS ORIGINALLY CONTEMPLATED IS OF NO CONCERN TO THE GOVERNMENT UNDER A FIXED PRICE CONTRACT, UNLESS THE INCREASE WAS CAUSED BY GOVERNMENT ACTION. THE GOVERNMENT MADE NO "DEMAND" THAT S AND E USE 64 CARPENTERS, OR WHATEVER OTHER NUMBER WAS REQUIRED TO COMPLETE THE CONTRACT ON TIME. THIS WAS S AND E'S SOLE RESPONSIBILITY AND IT IS IMPLICIT IN EVERY CONTRACT OF THIS KIND. IN ADDITION, THE CONTRACT HERE WAS EXPLICIT ON THIS POINT. CLAUSE 09/B) OF THE GENERAL CONDITIONS SPECIFICALLY PROVIDES THAT THE CONTRACTOR SHALL FURNISH SUFFICIENT FORCES, CONSTRUCTION PLANT AND EQUIPMENT, AND SHALL WORK SUCH HOURS, INCLUDING NIGHT SHIFTS, OVERTIME OPERATIONS AND SUNDAY AND HOLIDAY WORK AS MAY BE NECESSARY TO INSURE THE PROSECUTION OF THE WORK IN ACCORDANCE WITH THE APPROVED PROGRESS SCHEDULE. THIS THE CONTRACTOR DID NOT DO.

THE CONTRACTOR HAS CLAIMED THAT ITS FAILURE TO MEET THE PROGRESS SCHEDULE WAS CAUSED IN PART BY THE GOVERNMENT AND IN PART BY UNUSUALLY SEVERE WEATHER. THIS CLAIM, AS THE RECORD AMPLY DEMONSTRATES, CANNOT BE SUPPORTED. SOME OTHER EXPLANATION MUST BE SOUGHT. WHILE THE RECORD IS BY NO MEANS CONCLUSIVE, IT, AT THE VERY LEAST, TENDS TO SUPPORT THE GOVERNMENT'S ASSERTION THAT LACK OF SUFFICIENT MANPOWER AND LACK OF PUSH BY THE S AND E ORGANIZATION WAS THE CAUSE OF ITS TROUBLES. WITH WINTER WEATHER LITERALLY STARING THE CONTRACTOR IN THE FACE, THERE IS A STRONG INDICATION THAT MR. DEWITT WAS SENT TO THE SITE FOR THE EXPRESS PURPOSE OF REDUCING COSTS AND CUTTING DOWN ON THE MANPOWER. MOREOVER, AS PREVIOUSLY INDICATED UNDER THE WEATHER CLAIM, DURING THE CRUCIAL PERIOD OF OCTOBER AND NOVEMBER, S AND E CHOSE TO WORK ON ONLY THREE SATURDAYS AND NO SUNDAYS OR HOLIDAYS. S AND E WAS ON SCHEDULE AT THE END OF OCTOBER AND IT CANNOT BE FAULTED FOR NOT WORKING WEEKENDS PRIOR TO NOVEMBER. HOWEVER, WHEN PROGRESS BEGAN TO FALL BEHIND THE SCHEDULE IN NOVEMBER NO ATTEMPT WAS MADE TO CATCH UP BY USING THE AVAILABLE WEEKENDS. THE EXAMINER FOUND THAT IT WOULD HAVE COST AT LEAST AN ADDITIONAL $32,000 TO HAVE MAINTAINED A CREW OF 64 CARPENTERS IN NOVEMBER AND IN THE END "THERE IS A PRACTICAL LIMIT TO THE DEMANDS THAT CAN BE MADE ON CONTRACTORS IN MATTERS OF THIS SORT.' THE EXAMINER'S METHOD OF COMPUTATION IS NOT CLEAR, BUT IT DOES NOT APPEAR TO HAVE TAKEN INTO ACCOUNT THE FACT THAT 60 CARPENTERS FOR 10 DAYS IS THE SAME DOLLAR WISE AS 10 CARPENTERS FOR 60 DAYS, OR OTHERWISE TO ALLOW FOR ANY SHORTENING OF THE TIME FOR COMPLETION OF THE WORK.

IN YOUR REQUEST FOR A DECISION ON THE VOUCHER SUBMITTED HERE, YOU SAY THAT THE CONTRACTOR (APPARENTLY AFTER THE EXAMINER'S DECISION) HAS SUBMITTED AS A BASIS FOR NEGOTIATION OF THE SETTLEMENT DIRECTED THEREBY A CLAIM AGAINST THE GOVERNMENT IN WHICH HE IS ASKING $2,127,291 OF ADDITIONAL COSTS. WITH SUCH ALLEGEDLY HUGE LOSSES CONFRONTING IT AS THE WORK MOVED INTO THE WINTER, WE THINK THAT IT WAS UNREASONABLE FOR THE CONTRACTOR NOT TO MAKE A DETERMINED AND CONCERTED EFFORT TO FINISH THE CONCRETE BEFORE SEVERE WEATHER SET IN.

BACKFILL

UNDER THE CONTRACT IT WAS CONTEMPLATED THAT AS THE CONCRETE WORK PROGRESSED BACKFILL WOULD BE PUT IN PLACE AS THE FORMS WERE REMOVED, AND THE SEVERAL WORK SCHEDULES WERE SO DRAWN. THE SPECIFICATIONS INCLUDED THE FOLLOWING PROVISIONS: TP-04 EXCAVATING, FILLING, BACKFILLING AND GRADING

(A) THE WORK CONSISTS OF FURNISHING ALL LABOR, MATERIALS AND EQUIPMENT REQUIRED TO PERFORM ALL EXCAVATING, FILLING, BACKFILLING, AND GRADING AS SHOWN ON DRAWINGS.

(B) EXCAVATING AND BACKFILLING FOR WATER LINES, STEAM AND CONDENSATE, MANHOLES, FIRE PROTECTION LOOP, SANITARY SEWER AND FOUNDATIONS AS REQUIRED SHALL BE PERFORMED AS PART OF THIS CONTRACT.

(C) STORE ON THE SITE AS DIRECTED BY THE CONTRACTING OFFICER, EXCAVATED MATERIALS SUITABLE FOR FILL AND BACKFILL. ANY EXCESS MATERIAL SHALL BE DISPOSED OF ON THE NRTS SITE AS DIRECTED BY THE CONTRACTING OFFICER.

(D) GRADING SHALL BE COMPLETED TO THE ELEVATIONS SHOWN ON DRAWINGS.

(E) ALL FILL AND BACKFILL INSIDE BUILDINGS, UNDER RAILROAD TRACK MAT, AND IN THE AREAS INDICATED ON DRAWING FOR THE FUTURE CONSTRUCTION OF BUILDINGS ADJACENT TO THE TEST PLANT BUILDING, SHALL BE MADE WITH MATERIAL APPROVED BY CONTRACTING OFFICER, DEPOSITED IN LAYERS APPROXIMATELY 6 INCHES THICK, LOOSE MEASURE. EACH LAYER SHALL BE COMPACTED TO 95 PERCENT OPTIMUM COMPACTION AS SPECIFIED BELOW.

(F) ANY OTHER FILLS OR BACKFILLS SHALL BE DEPOSITED IN LAYERS APPROXIMATELY 8 INCHES THICK, LOOSE MEASURE. TAMP EACH LAYER TO A FIRM, UNYIELDING CONDITION OF 80 PERCENT OR BETTER OF OPTIMUM COMPACTION AS SPECIFIED BELOW.

(G) COMPACTED FILL: ALL AREAS UPON WHICH COMPACTED FILLS ARE TO BE CONSTRUCTED SHALL BE STRIPPED TO REMOVE ANY TOPSOIL OR ORGANIC MATTER.

(H) MOISTURE CONTROL: THE MAXIMUM ALLOWABLE MOISTURE CONTENT OF UNPLACED FILL MATERIAL SHALL BE 20 PERCENT OF THE DRY WEIGHT OF THE MATERIAL. WHENEVER THE MOISTURE CONTENT OF MATERIAL EXCEEDS THIS LIMIT, DRY THE MATERIAL TO ACCEPTABLE MOISTURE CONTENT BEFORE DEPOSITING. WHENEVER MOISTURE CONTENT OF PLACED MATERIAL IS RAISED, BY RAIN OR OTHERWISE, ABOVE THE SPECIFIED LIMIT, SUSPEND COMPACTION OPERATIONS UNTIL FILL HAS DRIED TO ACCEPTABLE MOISTURE CONTENT. IF FILL MATERIAL IS TOO DRY, LIGHT SPRINKLING WILL BE PERMITTED TO AID IN COMPACTION; FLOODING OR INUNDATING WILL NOT BE PERMITTED. AS DIRECTED HEREIN, COMPACT FILL TO AT LEAST 95 PERCENT OF MAXIUM DENSITY AT OPTIMUM MOISTURE CONTENT (SUBJECT TO A TOLERANCE OF PLUS OR MINUS 2 PERCENT IN MOISTURE CONTENT) IN ACCORDANCE WITH A.A.S.H.O. METHOD T 99. THE GOVERNMENT WILL PROVIDE AND PAY FOR THE SERVICES OF A TESTING LABORATORY FOR MAKING COMPACTION TESTS AS CONTRACTING OFFICER DEEMS NECESSARY. CONTRACTOR SHALL COOPERATE AS REQUIRED.

ABOUT THE MIDDLE OF OCTOBER, WHEN S AND E HAD FINISHED THE CONCRETE BASIN SLABS, BACKFILL WAS PLACED AND COMPACTED TO THE LEVEL OF THE SLABS. THE WEEKLY CONSTRUCTION MEETING MINUTES FOR OCTOBER 25 SHOW THAT AS OF OCTOBER 24 BACKFILL WAS 3 PERCENT COMPLETE, AGAINST 14 PERCENT SCHEDULED. MATERIAL TAKEN FROM THE SPOIL PILE LEFT FROM NELSON BROS.- OPERATION WAS USED FOR THIS PURPOSE. THE GOVERNMENT INSPECTOR APPROVED THIS BACKFILL IN OCTOBER. HOWEVER, ON JANUARY 4, 1962 (AT WHICH TIME THE WEEKLY PROGRESS REPORT STILL SHOWED BACKFILL 3 PERCENT COMPLETE AGAINST 94.8 SCHEDULED), A NEW TEST WAS MADE AND THE BACKFILL PLACED UP TO THAT TIME WAS FOUND TO CONTAIN EXCESSIVE MOISTURE AND HAD, ALSO, LOST COMPACTION. A GREAT DEAL OF EVIDENCE WAS INTRODUCED AT THE HEARING PERTAINING TO THE CAUSE OF THIS CONDITION. THE PARTIES SEEMED TO BE AGREED THAT THE UNACCEPTABLE BACKFILL CONDITION WAS CAUSED BY FREEZING AND "FROST HEAVE.'

THE EXAMINER FOUND THAT REVIEWING THE EVIDENCE AS A WHOLE THE GOVERNMENT, IN PRACTICAL EFFECT, DIRECTED THE REMOVAL OF THE FROZEN MATERIAL, NOTING THAT:

* * * UNDER THESE CIRCUMSTANCES, CERTAIN FACTORS MUST BE REMEMBERED. FIRST, THE SPECIFICATIONS DIRECTED THAT THE WORK BE SUSPENDED WHEN THE MATERIAL DID NOT MEET THE HIGH REQUIREMENTS; SECONDLY, THE MATERIAL HAD BEEN FULLY APPROVED IN OCTOBER; AND THIRDLY, AS PREVIOUSLY FOUND, THE FACT THAT THE WORK RAN OVER INTO THE WINTER RESULTED PRIMARILY FROM ACTS OF THE GOVERNMENT; LASTLY AT THE TIME IN QUESTION S AND E WAS UNDER THE COMPULSION OF THE ACCELERATION ORDER. IT WAS CONCLUDED THAT THE DIRECTION TO REMOVE WAS A CONSTRUCTIVE CHANGE ORDER AND S AND E WAS ENTITLED TO AN EQUITABLE ADJUSTMENT FOR THE COST ENTAILED.

THE SPOILAGE PILE LEFT BY NELSON BROS. HAD ALSO BECOME FROZEN AND THE EXAMINER FOUND THAT S AND E WAS DIRECTED TO GO TO ANOTHER SOURCE NEARBY. SINCE IT WAS "EVIDENT THAT ALL CONCERNED LOOKED ON THE NELSON PILE AS THE SOURCE OF BACKFILL AT THE OUTSET" THE DIRECTION TO CHANGE WAS ALSO HELD TO BE A CONSTRUCTIVE CHANGE ORDER.

THE EXAMINER ALSO FOUND THAT ADDITIONAL REMOVAL OF MATERIAL IN PLACE (FROST HEAVES AND FROZEN AREAS ON THE BANKS), BECAUSE THE SPECIFICATIONS DID NOT PERMIT THE PLACING OF BACKFILL ON FROZEN MATERIAL, WAS A DIRECT RESULT OF CHANGE ORDER NO. 2 AND THE SO-CALLED "ACCELERATION ORDER.' THIS REGARD THE EXAMINER STATED THAT:

* * * IT WOULD BE DIFFICULT TO DETERMINE THE PRECISE CAUSES OF THE CONDITION AND IT MIGHT BE OBSERVED THAT THE THEORY OF S AND E'S CASE IN THIS REGARD SEEMS TO REST ON BREACH OF CONTRACT, WHICH IS OUTSIDE THE JURISDICTION. HOWEVER, IN THE LIGHT OF THE FINDINGS WITH RESPECT TO THE CHANGE ORDER AND ACCELERATION, IT IS FELT THAT IT IS UNNECESSARY TO ANALYZE THE EVIDENCE WITH RESPECT TO CAUSES. IN THE END, THE CONDITION RESULTED FROM THE IMPACT OF THE IDAHO WINTER. ACCORDINGLY, IT IS FOUND THAT THE WORK TO CORRECT THE CONDITION WAS A DIRECT RESULT OF CHANGE ORDER NO. 2 AND THE ACCELERATION ORDER. THUS, THE COSTS ENTAILED ARE ELEMENTS TO BE CONSIDERED IN THE ADJUSTMENTS UNDER THE TWO ORDERS.

WE ARE IN COMPLETE AGREEMENT WITH THE EXAMINER'S FINDING THAT THE UNACCEPTABLE CONDITION OF THE BACKFILL WAS CAUSED BY THE IMPACT OF THE IDAHO WINTER. HOWEVER, HAD S AND E MAINTAINED THE SCHEDULE--- ESTABLISHED AFTER THE CHANGE ORDER--- THE IDAHO WINTER WOULD NOT HAVE BECOME THE PROBLEM IT LATER BECAME. THE BACKFILL COULD NOT BE PLACED UNTIL THE CONCRETE WORK ON THE WALLS HAD BEEN COMPLETED AND THE CONTRACT CONTEMPLATED THAT BACKFILL WOULD BE PLACED IN LAYERS APPROXIMATELY 8 INCHES THICK AS THE STRUCTURE ROSE. THE REVISED SCHEDULE OF OCTOBER 19 CALLED FOR COMPLETION OF THE CONCRETE WALLS BY NOVEMBER 30, AT WHICH TIME CONCRETE WAS 74.5 PERCENT COMPLETE. BUT AT NO TIME DID S AND E MEET THE PROGRESS SCHEDULE ON THE BACKFILL. THE MINUTES OF THE WEEKLY CONSTRUCTION MEETINGS CONTAINED WEEKLY SCHEDULES SHOWING THE COMPLETION STATUS OF THE WORK IN PERCENTAGES. DURING THE MONTH OF OCTOBER, THE SCHEDULES SHOW THAT WHILE CONCRETE WORK MET, AND SOMETIMES EXCEEDED, THE SCHEDULE THE BACKFILL WORK WAS ALWAYS BEHIND. THUS, ON OCTOBER 11 BACKFILL WAS 1 PERCENT COMPLETE VERSUS 5 PERCENT SCHEDULE. ON OCTOBER 18IT WAS 1 PERCENT VERSUS 8 PERCENT SCHEDULE. ON OCTOBER 25 IT WAS 3 PERCENT VERSUS 14 PERCENT SCHEDULE. FROM THEN ON INTO JANUARY THE SCHEDULES SHOW, AS NOTED ABOVE, NO FURTHER BACKFILL PLACED, THE 3 PERCENT FIGURE REMAINING CONSTANT, WHEREAS THE SCHEDULE CALLED FOR 21 PERCENT BY NOVEMBER 1, AND 44 PERCENT BY NOVEMBER 30. AT THAT DATE THE CONCRETE STOOD AT 74.5 PERCENT COMPLETE VERSUS 90 PERCENT SCHEDULE. THE 3 PERCENT COMPLETION FIGURE CONTINUED THROUGH DECEMBER WHEREAS THE SCHEDULE CALLED FOR 85.9 PERCENT COMPLETION ON DECEMBER 27. NO EXPLANATION WAS GIVEN BY S AND E AS TO WHY DURING THE MONTHS OF NOVEMBER AND DECEMBER NO PROGRESS ON BACKFILL HAD BEEN MADE. COMMANDER ANDERSON TESTIFIED (P. 1782, TRANSCRIPT):

* * * THEY HAD 6 SETS OF FORMS THERE AND AS I SAID BEFORE, HAD THE MANPOWER BEEN PROVIDED CONSISTENT WITH THE FORMS, THEY COULD HAVE MET THAT SCHEDULE AND THEN ALL THE CONCRETE WORK WOULD HAVE GONE IN ACCORDANCE WITH THE SCHEDULE AND THE MONTH OF NOVEMBER WOULD HAVE SEEN THE END OF HEATING AND CURING AND THINGS THAT COST SO MUCH IN DECEMBER, JANUARY, FEBRUARY AND MARCH. IT WOULD HAVE BEEN COMPRESSED INTO A ONE MONTH PERIOD.

SURE IT WOULD HAVE TAKEN ADDITIONAL MANPOWER BUT THIS WOULD HAVE PRECLUDED THE LOSS OF EFFICIENCY OF MANPOWER WHICH OCCURRED ON (SIC) DECEMBER, JANUARY AND FEBRUARY, IT WOULD HAVE PRECLUDED THE NEED FOR HEATING AND BOILER TENDERS AND ALL THESE OTHER COSTS, AND IN ADDITION IT WOULD HAVE PRECLUDED THE NEED FOR RIPPING OUT THE BACKFILL. THIS IS THE KEY PERIOD.

ON THE BASIS OF THE RECORD, AND IN THE ABSENCE OF EXPLANATION BY S AND E AS TO ITS FAILURE TO MAKE PROGRESS ON THE BACKFILL, WE THINK THAT COMMANDER ANDERSON'S CONCLUSION MUST BE ACCEPTED AS CORRECT. CONTRARY TO THE EXAMINER'S FINDINGS, THE PROJECTION OF THE CONCRETE WORK INTO THE WINTER CANNOT BE MADE THE RESPONSIBILITY OF THE GOVERNMENT, AND THE CONTRACTOR'S TROUBLE ON BACKFILL MUST BE ATTRIBUTED SOLELY TO ITS OWN TARDY PERFORMANCE. SINCE THE EXAMINER'S DETERMINATIONS ON THIS CLAIM ARE NOT SUPPORTED BY ANY SUBSTANTIAL EVIDENCE IT MUST BE CONCLUDED THAT ANY EXTRA COSTS ENTAILED IN THE REMOVAL AND REPLACEMENT OF BACKFILL MATERIAL, WHETHER FROM THE NELSON PILE OR THE ALTERNATIVE NEARBY SOURCE, MUST BE BORNE BY THE CONTRACTOR. OUR VIEW OF THE CASE MAKES IT UNNECESSARY TO GO INTO THE QUESTION OF WHETHER S AND E SHOULD, AND COULD, HAVE PROTECTED THE BACKFILL, AS ASSERTED BY THE GOVERNMENT, UNDER CLAUSE 11 OF THE GENERAL CONDITIONS OF THE CONTRACT. MISCELLANEOUS CLAIMS A. COLUMN LINE B

AT THE GOVERNMENT'S REQUEST, S AND E PLACED CERTAIN CONCRETE TO BRING THE FOOTING OF A CERTAIN COLUMN UP TO THE REQUIRED ELEVATION. S AND E FILED A CLAIM FOR $2,323.75 FOR THE WORK WHICH IT ASSERTED WAS EXTRA. THE CONTRACTING OFFICER, IN HIS DECISION OF NOVEMBER 8, 1962, ADMITTED THE CONTRACTOR WAS ENTITLED TO AN EQUITABLE ADJUSTMENT AND DETERMINED THAT $1,954.41 WAS DUE. THE EXAMINER, IN DISPOSING OF THIS CLAIM, STATED THAT THIS LEFT ONLY AN ISSUE OF QUANTUM AND, WAS THEREFORE, OUT OF THE SCOPE OF HIS DECISION.

IT IS NOT CLEAR UNDER HIS DECISION WHETHER THE EXAMINER WAS REMANDING THE CLAIM BACK TO THE CONTRACTING OFFICER FOR FURTHER NEGOTIATION OR WHETHER HE WAS INDICATING THAT NO FURTHER ACTION NEED BE TAKEN ON THE CLAIM. THE ISSUE OF QUANTUM WAS THE ONLY ISSUE BEFORE THE EXAMINERON THIS CLAIM. THE REFUSAL TO CONSIDER QUANTUM ISSUES WAS A SELF-IMPOSED LIMITATION ON THE EXAMINER'S JURISDICTION, THERE BEING NO OTHER REASON WHY QUANTUM COULD NOT BE CONSIDERED. SINCE THE EXAMINER TOOK NO ACTION ON THIS CLAIM, AND THE EVIDENCE IN THE RECORD IS INCOMPLETE, WE ARE LEFT WITH NO ALTERNATIVE BUT TO ACCEPT THE CONTRACTING OFFICER'S DETERMINATION AS CORRECT. B. CHANGE IN CONNECTION WITH AGGREGATE

UNDER A COST-PLUS-FIXED FEE CONTRACT WITH H.K. FERGUSON COMPANY, THE AEC MAINTAINED A PILE OF AGGREGATE FOR USE IN CONCRETE IN THE CONSTRUCTION AREA. S AND E ELECTED TO USE THE FERGUSON MAINTAINED PILE AND ON AUGUST 22, 1961, ENTERED INTO A CONTRACT WITH FERGUSON FOR THE NECESSARY AGGREGATE AT A CERTAIN PRICE. THE EXAMINER FOUND THAT FERGUSON WARRANTED THAT THE AGGREGATE WOULD MEET SPECIFICATIONS. S AND E PROCURED AGGREGATE FROM FERGUSON UNTIL MARCH 1962, WHEN IT WAS ADVISED BY THE ARCHITECT- ENGINEER THAT IT DID NOT COME UP TO SPECIFICATIONS. IT WAS DIRECTED, THEREFORE, TO USE ANOTHER SOURCE WHICH IT DID. S AND E CLAIMED THAT THE DECISION TO SHIFT FROM ONE PILE TO ANOTHER WAS A CHANGE ORDER ENTITLING IT TO AN EQUITABLE ADJUSTMENT.

THE EXAMINER DENIED THE CLAIM ON THE BASIS THAT S AND E HAD ASSUMED THE RESPONSIBILITY OF PROCURING AGGREGATE AND ANY CLAIM IT MIGHT HAVE AGAINST THE GOVERNMENT WOULD BE FOR BREACH OF WARRANTY UNDER SUBPARAGRAPH 07/B) (2) OF THE TECHNICAL PROVISIONS, QUOTED ABOVE. WE SEE NO BASIC DISTINCTION BETWEEN THIS CLAIM, WHICH THE EXAMINER DENIED, AND THE CLAIM WITH RESPECT TO TYING INTO THE ALTERNATE SOURCE OF STEAM, FOR WHICH THE EXAMINER GRANTED AN EQUITABLE ADJUSTMENT AND WITH WHICH WE HAVE ALREADY EXPRESSED OUR DISAGREEMENT. BOTH CLAIMS ARE ESSENTIALLY FOR BREACH OF CONTRACT, AND FOR THAT REASON ARE OUTSIDE OF THE EXAMINER'S JURISDICTION. IN ANY EVENT, WE AGREE WITH THE EXAMINER'S DENIAL OF THE CONCRETE AGGREGATE CLAIM. C. WORK ON CRANE

THE CONTRACT PROVIDED THAT S AND E WOULD UNLOAD FROM A NEARBY RAILHEAD TWO ONE HUNDRED-TON GOVERNMENT-FURNISHED CRANES AND PUT THEM IN PLACE ON RUNWAYS ABOVE THE BASIN AND TEST THEM. THIS WORK WAS TO BE DONE UNDER THE SUPERVISION OF AN ENGINEER FROM THE YUBA CORPORATION WHICH WAS THE MANUFACTURER OF THE CRANES. THE CRANES WERE NEW MODELS AND IN INSTALLING THEM IT WAS NECESSARY TO MAKE MODIFICATIONS WHICH, ACCORDING TO THE EXAMINER, COULD NOT HAVE BEEN CONTEMPLATED AT THE TIME THE CONTRACT WAS ENTERED INTO. S AND E ORIGINALLY CLAIMED THAT THE DIRECTION TO USE ITS MEN FOR THE MODIFICATION WORK WAS A CONSTRUCTIVE CHANGE ORDER AND THAT IT WAS ENTITLED TO AN EQUITABLE ADJUSTMENT. AFTER NEGOTIATIONS YUBA PAID FOR THE EXTRA WORK AND THIS CLAIM WAS ABANDONED. LATER, HOWEVER, S AND E CLAIMED THAT DRAWING OFF ITS MEN FOR THE WORK AND THE GENERAL DELAYS INCIDENT TO THE MODIFICATIONS SUSPENDED WORK UNDER CLAUSE 32 OF THE GENERAL PROVISIONS. THE EXAMINER HELD THAT, ALTHOUGH THE WORK WAS PROBABLY FOR THE BENEFIT OF THE GOVERNMENT WITHIN THE INTENT OF THE CLAUSE, THERE WAS INSUFFICIENT EVIDENCE TO CONCLUDE THAT THE GENERAL CONTRACT WORK WAS ,UNREASONABLY" DELAYED BY THE MODIFICATION WORK. HE, THEREFORE, DENIED THE CLAIM. THE RECORD SUPPORTS THE EXAMINER'S DECISION. D. FELTING OF DAMPERS

THE CONTRACT PROVIDED FOR THE INSTALLATION OF A HEATING AND VENTILATING SYSTEM. CLAUSE 147 OF THE TECHNICAL PROVISIONS, AS AMENDED, SPECIFIED THAT "HEATING AND VENTILATING UNITS SHALL BE TRANE TORRIVENT,- OR APPROVED EQUAL.' IN ADDITION, TP-151/D/5 PROVIDED THAT "ALL BLADE EDGES SHALL BE FELTED FOR QUIET OPERATION.'

S AND E'S SUBCONTRACTOR FOR THIS WORK (EPCO MECHANICAL CORPORATION) ORDERED AND INSTALLED THE BRAND NAME UNIT SPECIFIED IN TP-147. HOWEVER, THE TRANE "TORRIVENT" UNITS WERE DESIGNED AND BUILT WITHOUT FELTING. THE FINAL INSPECTION A GOVERNMENT INSPECTOR INSISTED ON FELTING. S AND E CONTENDED THAT THE TRANE "TORRIVENT" UNITS WERE BUILT IN SUCH A WAY THAT FELTING WAS UNNECESSARY AND IN THE END WOULD DO MORE HARM THAN GOOD AND ASSERTED THAT THE GOVERNMENT'S INSISTENCE ON FELTING CONSTITUTED A CHANGE FOR WHICH IS WAS ENTITLED TO AN EQUITABLE ADJUSTMENT. THE EXAMINER HELD:

IT IS FELT THAT UNDER EXPRESSIO UNIUS, THE STANDARD "TRANE TORRIVENT" MET THE SPECIFICATIONS AS REASONABLY INTERPRETED. IN ANY EVENT THE SPECIFICATIONS WERE AMBIGUOUS, AND, THEREFORE, ARE TO BE CONSTRUED AGAINST THE GOVERNMENT. PETER KIEWIT AND SONS CO. V. UNITED STATES 109 CT. CL. 390.

ACCORDINGLY, IT IS FOUND THAT THE APPELLANT IS ENTITLED TO AN EQUITABLE ADJUSTMENT TO COMPENSATE FOR THE COST OF INSTALLING THE FELT.

AS NOTED EARLIER, THE COMMISSION REVERSED THE EXAMINER'S HOLDING ON THIS CLAIM ON APPEAL BY THE CONTRACTING OFFICER. THE COMMISSION HELD THAT THE REQUIREMENT IN TP-151 THAT BLADES BE FELTED WAS CLEAR, UNCONDITIONAL AND NOT DEPENDENT ON THE IDENTITY OF THE MANUFACTURER OF THE UNIT. WE BELIEVE THAT THE COMMISSION'S CONCLUSION IS CLEARLY CORRECT.

IMPOSSIBILITY OF PERFORMANCE

THIS CLAIM AND THE EXAMINER'S DISPOSITION OF IT ARE AS STATED IN THE FOLLOWING EXCERPT FROM THE EXAMINER'S DECISION (PP. 71-72):

AT THE HEARING A CONSIDERABLE AMOUNT OF EVIDENCE WAS INTRODUCED DIRECTED TOWARDS THE ESTABLISHMENT OF THE PROPOSITION THAT IT WAS PRACTICALLY IMPOSSIBLE AT THE OUTSET TO PERFORM THE CONTRACT AT THE CONTEMPLATED RATE OF WORK IN LESS THAN 338 DAYS. IT WAS CONTENDED THAT THE TIME FOR COMPLETION SHOULD BE FIXED BY THE CRITERION OF PRACTICAL POSSIBILITY.

THE DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE AB INITIO IS A TECHNICAL ONE IN THE LAW AND IS CIRCUMSCRIBED IN MANY WAYS. IT IS TRUE THAT IN RECENT YEARS IT HAS BEEN APPLIED MORE LIBERALLY THAN IN THE PAST AND SOME OF THE BOARDS CHARGED WITH THE RESPONSIBILITY OF DECIDING DISPUTES UNDER THE DIPUTES CLAUSE HAVE GRANTED ADJUSTMENTS WHERE THE GOVERNMENT SPECIFICATIONS HAVE EXACTED THE PHYSICALLY IMPOSSIBLE, AND A CONTRACTOR HAS EXPENDED TIME AND MONEY STRIVING TO ATTAIN THE UNATTAINABLE. SEE, NASH, IMPOSSIBILITY OF PERFORMANCE, GOVERNMENT CONTRACTS MONOGRAPH NO. 4, GEO. WASH. UNIV., LAW CENTER 1962. (THIS ARTICLE HAS A VERY COMPLETE COLLECTION OF CASES ON THE SUBJECT.) MOST OF THE CASES RELATE TO TECHNICAL SPECIFICATIONS AND THE IMPOSSIBILITY INVOLVED IS THE RESULT OF THE OPERATIONS OF INEXTRICABLE PHYSICAL LAWS. NO CASE HAS BEEN FOUND IN WHICH IT WAS CONTENDED THAT THE OBLIGATIONS OF A CONTRACTOR IN A CONSTRUCTION CONTRACT WITH RESPECT TO TIME WAS IMPOSSIBLE TO MEET. EXPERIENCED CONTRACTORS ARE PRESUMED TO KNOW THEIR OWN CAPABILITIES AND ASSUME THE RISK OF LIVING UP TO THEIR COMMITMENTS. IT IS INTERESTING THAT IN THE INSTANT CASE THERE WERE FOUR COMPETENT BIDDERS AND THE BID RANGE WAS VERY CLOSE. IT SHOULD BE BORNE IN MIND THAT IT SHOULD HAVE BEEN CLEAR TO ALL THAT THE BIDS WERE IRREVOCABLE FOR 60 DAYS SO THAT THE WORK MIGHT HAVE STARTED AS LATE AS AUGUST 10. (SIC) IN CONCLUSION APPELLANT'S CLAIM FOR EXTENSIONS BECAUSE OF IMPOSSIBILITY OF PERFORMANCE IS REJECTED AS A MATTER OF LAW.

WE THINK THAT THE EXAMINER'S ANALYSIS OF THE APPLICABLE LEGAL PRECEDENTS ON IMPOSSIBILITY OF PERFORMANCE AS TO TIME IS CORRECT, AND THIS CLAIM NEED NOT CONCERN US FURTHER.

NEAR THE END OF HIS DECISION THE EXAMINER MADE A NUMBER OF OBSERVATIONS, WHICH WE WILL QUOTE IN FULL, SINCE THEY APPEAR TO GO A LONG WAY IN EXPLAINING WHY THE FINDINGS ON WHICH THE DECISION WAS BASED FAILED IN MANY VITAL RESPECTS TO MEET THE REQUIREMENTS OF THE WUNDERLICH ACT. FOR EXAMPLE, HE STATED (P. 77) THAT IN REFLECTING ON THE RECORD AS A WHOLE, FOUR SALIENT FACTORS EMERGED WITH GREAT CLARITY:

1. DUE TO THE NEGLIGENCE OF THE GOVERNMENT IN SELECTING THE SITE, S AND E UNEXPECTEDLY FOUND ITSELF BOUND TO A CONTRACT UNDER ADVERSE CONDITIONS WHICH NO ONE ANTICIPATED AT THE TIME OF THE OFFER AND ACCEPTANCE. IT WAS HELD TO THE CONTRACT WITHOUT ANY ALLOWANCE FOR THE CHANGED CIRCUMSTANCES.

2. THE SAME INSISTENCE ON THE LETTER OF THE CONTRACT THAT TOOK PLACE AT THE OUTSET PERVADED ALL PHASES OF THE UNDERTAKING, E.G., THE INSISTENCE ON THE FELTING OF DAMPERS AT NO EXTRA COST UNDER THE AMBIGUOUS SPECIFICATIONS. THIS CAME AT THE VERY END. LIKEWISE, IN AREAS OF DISCRETION, THE CONTRACT WAS ADMINISTERED IN A VERY STRICT AND TECHNICAL WAY THROUGHOUT, E.G., THE CRITERIA FOR ALLOWANCE FOR WEATHER; THE REFUSAL TO PAY MATERIAL JOB-SITE; THE WITHHOLDING OF MONEY FOR CHANGE-ORDER WORK, ETC.

3. THE WORK WENT STRAIGHT THROUGH THE DEAD OF AN UNUSUALLY SEVERE IDAHO WINTER. THIS COULD NOT HAVE BEEN ANTICIPATED AT THE TIME OF THE BID. THE FACT THAT IT HAPPENED RESULTED PRIMARILY FROM THE INITIAL DELAYS CAUSED BY THE NEGLIGENCE IN SELECTING THE SITE AND THE IMPACT OF CHANGE ORDER NO. 2 WITH GREAT DIFFICULTY, EXTRA EXPENSE AND EVEN DANGER, S AND E AND ITS SUBCONTRACTORS CARRIED PHASE 1 OF THE S5G PROJECT TO ITS COMPLETION.

4. AS A RESULT OF THEIR EFFORT, A NUMBER OF WELL-ESTABLISHED AND REPUTABLE BUSINESS CONCERNS ARE LEFT IN SHATTERED REMNANTS.

THESE OBSERVATIONS, ESPECIALLY THOSE NUMBERED 1 AND 3 SEEM TO SET THE STAGE FOR THE EXAMINER'S DECISIONS ON ALL THE CLAIMS AND, WE THINK, CANNOT HELP BUT HAVE INFLUENCED THEM. WE HAVE SEEN THAT NEGLIGENCE IN SELECTION OF THE SITE WAS NOT ONLY IMMATERIAL, AS THE COMMISSION RECOGNIZED, BUT THAT THERE WAS NOTHING IN THE RECORD TO SUBSTANTIATE SUCH A CONCLUSION.

THE EXAMINER'S STATEMENT THAT S AND E WAS HELD TO THE CONTRACT WITHOUT ANY ALLOWANCE FOR THE CHANGED CIRCUMSTANCES STRONGLY IMPLIES THAT HE BELIEVES THE CONTRACTING OFFICER ACTED UNFAIRLY IN THE MATTER. FOR PURPOSES OF CLARIFYING THE RECORD IT SHOULD BE POINTED OUT THAT, ASIDE FROM THE FACT THAT IT WAS S AND E WHICH BOUND ITSELF TO BID ACCEPTANCE WITHIN 60 DAYS, THE LAW IS CLEAR THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO MAKE "ANY ALLOWANCE FOR THE CHANGED CIRCUMSTANCES" (UNLESS THEY CAME WITHIN THE SCOPE OF THE "CHANGED CONDITIONS" CLAUSE OF THE CONTRACT). IT IS WELL SETTLED THAT, IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING, NO AGENT OR OFFICER OF THE UNITED STATES HAS AUTHORITY TO GIVE AWAY OR SURRENDER A VESTED RIGHT IN THE GOVERNMENT. COMP. GEN 260. MOREOVER, CONSIDERATIONS OF SYMPATHY FOR THE POSSIBLE MISFORTUNE OF A CONTRACTOR DO NOT AUTHORIZE ANY EXCEPTION TO THE RULE. COMP. GEN. 703. THE CONTRACTING OFFICER IN THIS CASE, ACTED IN THE ONLY WAY THAT HE HAD POWER TO ACT. IN FOLLOWING THE LAW APPLICABLE TO GOVERNMENT CONTRACTS OF THIS NATURE, IT CANNOT BE SAID THAT THE CONTRACTING OFFICER ACTED UNFAIRLY, FOR IT IS THE LAW WHICH DEFINES WHAT IS, OR IS NOT, FAIR.

THE EXAMINER'S CRITICISM OF THE CONTRACTING OFFICER'S ADMINISTRATION OF THE CONTRACT (SEE ALSO P. 72), ON THE GROUND IT WAS TOO STRICT, CANNOT BE SUPPORTED IN THE RECORD. THE CONTRACTING OFFICER DID INSIST ON PERFORMANCE OF THE WORK IN STRICT ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACT. HOWEVER, HAD HE DONE LESS HE WOULD HAVE BEEN DERELICT IN HIS DUTY. THE INSISTENCE ON FELTING OF THE DAMPER BLADES WAS NO MORE THAN THE GOVERNMENT PAID FOR AND THE CONTRACT REQUIRED. THE CRITERIA FOR ALLOWANCES FOR WEATHER IS NOT, AS THE EXAMINER STATES, AN "AREA OF DISCRETION.' CLAUSE 5 OF THE GENERAL PROVISIONS SETS FORTH THE SPECIFIC CRITERIA FOR DETERMINING ALLOWABLE EXTENSIONS FOR WEATHER CONDITIONS, AND SUCH CRITERIA HAVE BEEN FURTHER DEFINED IN DECISIONS OF COURTS AND OF THIS OFFICE. IF THOSE CRITERIA ARE MET, THE CONTRACTING OFFICER HAS NO DISCRETION TO REFUSE EXTENSIONS. IF THEY ARE NOT MET, HE HAS NO DISCRETION TO GRANT EXTENSIONS.

ON THE BASIS OF THE ENTIRE RECORD IN THIS CASE, AS HERETOFORE DISCUSSED IN DETAIL, IT IS OUR OPINION THAT, IN THE SEVERAL VITAL RESPECTS INDICATED HEREIN, THE DECISION RENDERED BY THE HEARING EXAMINER ON JUNE 26, 1963, AS REVIEWED BY THE COMMISSION, FAILS TO MEET THE REQUIREMENTS OF THE WUNDERLICH ACT ON MATERIAL QUESTIONS OF FACT AND IS ERRONEOUS ON SEVERAL MATERIAL QUESTIONS OF LAW, AS SET OUT ABOVE. WE MUST ADVISE, THEREFORE, THAT S AND E CONTRACTORS, INC., HAS NO VALID CLAIM AGAINST THE GOVERNMENT UPON WHICH AN EQUITABLE ADJUSTMENT, AS ORDERED BY THE EXAMINER AND THE COMMISSION, MAY BE MADE. THE ATOMIC ENERGY COMMISSION WILL BE FURNISHED A COPY OF THIS DECISION AND WILL BE ADVISED OF OUR VIEWS.

WE TURN NOW TO THE MATTERS INVOLVED IN THE VOUCHER WHICH YOU SUBMITTED TO OUR OFFICE FOR DECISION. THE FACTS INVOLVED IN THE THREE ITEMS LISTED IN THE VOUCHER ARE NOT IN DISPUTE. IN REGARD TO THE ITEM FOR $1,651.54, IT APPEARS THAT THE AEC PROVIDED TELEPHONE SERVICES IN THAT AMOUNT TO S AND E DURING THE COURSE OF THE CONSTRUCTION PERIOD THROUGH ITS OPERATING CONTRACTOR PHILLIPS PETROLEUM COMPANY AND THAT S AND E DID NOT PAY. THE PRICE OF THIS SERVICE AND S AND E'S RIGHT TO UTILIZE IT WERE SET FORTH IN SC-05 OF CONTRACT NO. AT/30-3/-790. PHILLIPS PETROLEUM COMPANY IS AN INTEGRATED, COST-PLUS FIXED-FEE CONTRACTOR OF THE AEC, AND PAYMENTS MADE TO IT FOR TELEPHONE SERVICE CONSTITUTE DIRECT CREDITS AGAINST THE COSTS WHICH ARE THE GOVERNMENT'S OBLIGATION. THE CONTRACTING OFFICER SET-OFF THE AMOUNT REFERENCED FROM THE CONTRACT PRICE DUE S AND E. BY AN INSTRUMENT DATED FEBRUARY 14, 1964, PHILLIPS PETROLEUM ASSIGNED THE S AND E ACCOUNT TO THE AEC EFFECTIVE AS OF SEPTEMBER 5, 1962.

THE SUM OF $22,280 REPRESENTS AN AMOUNT UNPAID FOR GOVERNMENT-OWNED CONCRETE AGGREGATE FURNISHED TO S AND E BY THE AEC THROUGH ANOTHER OF ITS OPERATING TYPE CONTRACTORS, H.K. FERGUSON COMPANY, DURING THE COURSE OF CONSTRUCTION. THE PRICES FOR THE AGGREGATE AND S AND E'S RIGHT TO USE IT WERE SET FORTH IN SC-31 OF CONTRACT NO. AT/30-3/-790. THE CONTRACTING OFFICER SET-OFF THE REFERENCED SUM FROM THE CONTRACT PRICE DUE S AND E. BY AN INSTRUMENT DATED AUGUST 27, 1962, H. K. FERGUSON ASSIGNED ITS CLAIM FOR UNPAID AGGREGATE AGAINST S AND E TO THE AEC EFFECTIVE JUNE 26, 1962.

THE SUM OF $8,366.19 REPRESENTS THE CONTRACTING OFFICER'S COMPUTATION OF ACTUAL DAMAGES RESULTING DIRECTLY FROM S AND E'S DELAY IN COMPLETION OF THE WORK WHICH WAS WITHHELD FROM FINAL PAYMENT AND SET-OFF AGAINST THE CONTRACT PRICE. THESE DAMAGES WERE FOR ADDITIONAL COSTS BILLED TO THE AEC BY ANOTHER AEC CONTRACTOR, ELECTRIC BOAT DIVISION OF GENERAL DYNAMICS CORPORATION, AND PAID BY THE CONTRACTING OFFICER. THEY WERE BROUGHT ABOUT BY THE FAILURE OF S AND E TO INSTALL THE BRIDGE CRANES IN TIME FOR UTILIZATION BY ELECTRIC BOAT IN ITS CONTRACT WORK. (PP. 1370, 1371, TRANSCRIPT). ALSO, APPARENTLY, ELECTRIC BOAT HAD TO PROVIDE GENERATORS BECAUSE PERMANENT POWER WAS NOT AVAILABLE AS IT WOULD HAVE BEEN HAD S AND E COMPLETED ITS WORK ON TIME (P. 1371, TRANSCRIPT). ELECTRIC BOAT IS A NONINTEGRATED COST-PLUS FIXED-FEE CONTRACTOR WHO HAS A CONTRACT FOR THE MANUFACTURING OF CERTAIN ITEMS IN THE CONCRETE BASIN WHICH WAS CONSTRUCTED BY S AND E UNDER CONTRACT NO. AT/30-3/-790.

IT WILL BE RECALLED THAT THE EXAMINER'S DECISION ORDERED IMMEDIATE PAYMENT OF THE AMOUNTS SET OFF AGAINST S AND E BY THE CONTRACTING OFFICER FOR THE NONPAYMENT OF AGGREGATE AND FOR ACTUAL DAMAGES CAUSED BY S AND E'S DELAY IN COMPLETION OF THE WORK. THE EXAMINER REASONED (SEE PP. 76 AND 77 OF HIS DECISION) AS FOLLOWS:

IN ADDITION TO THE AMOUNT DUE FOR CHANGE-ORDER WORK, THE APPELLANT ASSERTS THAT THE CONTRACTING OFFICER IS WITHHOLDING $8,000 AS A PROTECTION AGAINST A POSSIBLE SUIT BY ELECTRIC BOAT, BASED ON DELAYS BROUGHT ABOUT BY THE FAILURE OF S AND E TO HAVE THE BASIN READY ON TIME FOR ELECTRIC BOAT TO BEGIN ITS CONTRACT WORK. IF THIS IS THE CASE, THIS MONEY SHOULD BE PAID NOW. IT IS ELEMENTAL THAT THE CONTRACTING OFFICER HAS NO AUTHORITY TO PREJUDGE A LAW SUIT AND ASSESS DAMAGES. THE APPELLANT LIKEWISE ASSERTS THAT THE CONTRACTING OFFICER IS WITHHOLDING $22,280 ON THE GROUND THAT S AND E OWES THAT AMOUNT TO H. K. FERGUSON FOR AGGREGATE. IF THIS IS TRUE, THIS AMOUNT SHOULD BE PAID NOW FOR THE SAME REASON. IN THIS CONNECTION IT MIGHT BE NOTED THAT ADMITTING THAT S AND E OWES FERGUSON MONEY, THE RECORD INDICATES THAT S AND E HAS AN ACTION FOR BREACH OF WARRANTY AGAINST FERGUSON, WHICH WOULD OPERATE AS AN OFFSET. * * *.

IT IS NOTED THAT THE EXAMINER'S DECISION DID NOT PASS UPON THE $1,651.54 VOUCHER ITEM REPRESENTING UNPAID TELEPHONE SERVICES.

THE EXAMINER'S ORDER OF IMMEDIATE PAYMENT OF THE WITHHELD SUMS WAS AMENDED BY THE COMMISSION'S MEMORANDUM AND ORDER DATED FEBRUARY 11, 1964, IN WHICH THE COMMISSION STATED THAT IF AT THE TIME OF PAYMENT IT APPEARED THAT A LAWFUL CLAIM BY THE GOVERNMENT EXISTED AGAINST S AND E, THEN THAT FACT COULD BE TAKEN INTO ACCOUNT IN MAKING THE EQUITABLE ADJUSTMENT.

THE RECORD INDICATES THAT BY INSTRUMENT DATED SEPTEMBER 12, 1961, S AND E ASSIGNED ALL PAYMENTS DUE, OR TO BECOME DUE, UNDER THE CONTRACT TO THE FIRST CITIZENS BANK, DALLAS, TEXAS. NOTICE OF THE ASSIGNMENT WAS GIVEN BY THE BANK TO THE CONTRACTING OFFICER BY A DOCUMENT DATED SEPTEMBER 12, 1961. THE CONTRACTING OFFICER ACKNOWLEDGED RECIPT OF THIS NOTICE ON SEPTEMBER 18, 1961, AND THE VOUCHER FORWARDED WITH YOUR SUBMISSION IS DRAWN IN FAVOR OF THE BANK AS ASSIGNEE.

THE CONTRACT BETWEEN S AND E AND THE GOVERNMENT, AS FAR AS WE HAVE BEEN ABLE TO DETERMINE, DID NOT CONTAIN A NO-SET-OFF CLAUSE, WHICH IS PERMITTED UNDER CERTAIN CIRCUMSTANCES IN AEC CONTRACTS BY THE PROVISIONS OF 41 U.S.C. 15.

THE ESSENTIAL FACTS INVOLVED IN THE VOUCHER ITEMS UPON WHICH YOU REQUESTED A DECISION ARE NOT IN DISPUTE. THE EXAMINER'S DECISION RELATING TO THE TWO VOUCHER ITEMS WHICH HE PASSED UPON (ACTUAL DAMAGES AND CONCRETE AGGREGATE), WAS PREDICATED UPON QUESTIONS OF LAW ONLY. AS TO THE $8,000 DAMAGE ITEM HE RULED THAT "IT IS ELEMENTAL THAT THE CONTRACTING OFFICER HAS NO AUTHORITY TO PREJUDGE A LAW SUIT AND ASSESS DAMAGES.' AS TO THE $22,280 AGGREGATE ITEM HE STATED THAT IF IT WERE TRUE THAT THE CONTRACTING OFFICER WAS WITHHOLDING $22,280 ON THE GROUND THAT S AND E OWED THAT AMOUNT TO H. K. FERGUSON "THIS AMOUNT SHOULD BE PAID NOW FOR THE SAME REASON.'

ON THE BASIS OF ESTABLISHED LEGAL PRECEDENT WE BELIEVE THAT THE EXAMINER'S DECISION IS ERRONEOUS. INITIALLY, WE FAIL TO SEE HOW THE CONTRACTING OFFICER'S SET-OFF ACTIONS CAN BE SAID TO CONSTITUTE PREJUDGING OF A LAW SUIT, BUT EVEN IF THEY DID THE LEGAL SIGNIFICANCE OF SUCH PREJUDGMENT IS DIFFICULT TO COMPREHEND. IT SHOULD BE NOTED THAT CLAUSE 5/B) OF THE GENERAL PROVISIONS EXPRESSLY PROVIDES THAT IF THE GOVERNMENT DOES NOT TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED, THE CONTRACTOR SHALL CONTINUE THE WORK,"IN WHICH EVENT HE * * * SHALL BE LIABLE TO THE GOVERNMENT * * * FOR * * * ANY ACTUAL DAMAGES OCCASIONED BY SUCH DELAY.' IT IS BEYOND DISPUTE, AT THIS LATE DATE, THAT THE GOVERNMENT, AS STATED BY THE UNITED STATES SUPREME COURT IN UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234, 239 (1947),"HAS THE SAME RIGHT -WHICH BELONGS TO EVERY CREDITOR, TO APPLY THE UNAPPROPRIATED MONEYS OF HIS DEBTOR, IN HIS HANDS, IN EXTINGUISHMENT OF THE DEBTS DUE TO HIM,-" CITING GRATIOT V. UNITED STATES, 15 PET. 336, 370 AND MCKNIGHT V. UNITED STATES, 98 U.S. 179, 186. THE COMMISSION'S MEMORANDUM AND ORDER OF FEBRUARY 11, 1964, APPARENTLY RECOGNIZED THE GOVERNMENT'S BASIC SET-OFF RIGHT IN THE MATTER.

IN VIEW OF THE ASSIGNMENT OF THE CONTRACT PROCEEDS TO THE FIRST CITIZENS BANK, THE QUESTION ARISES WHETHER THE GOVERNMENT'S SET-OFF RIGHTS MAY BE ASSERTED AGAINST THE ASSIGNEE, SINCE THAT ASSIGNMENT WAS PERFECTED PRIOR TO THE ACCRUAL OF THE GOVERNMENT'S CLAIMS. GENERALLY, THE GOVERNMENT MAY NOT SET OFF RIGHTS ACQUIRED UNDER INDEPENDENT TRANSACTIONS SUBSEQUENT TO THE DATE OF RECEIPT OF NOTICE OF A VALID ASSIGNMENT. SEE 20 COMP. GEN. 458 AND 29 ID. 40. HOWEVER, WHERE THE DEBT OR CLAIM FOR WHICH SET-OFF IS MADE IS ACQUIRED UNDER THE SAME TRANSACTION OR CONTRACT THE PRIOR NOTICE OF ASSIGNMENT DOES NOT DEFEAT THE RIGHT OF SET-OFF. SEE 30 COMP. GEN. 98. THE ULTMIATE QUESTION PRESENTED, THEREFORE, IS WHETHER THE CLAIMS SET -OFF BY THE CONTRACTING OFFICER AROSE INDEPENDENTLY OF THE CONTRACT BETWEEN THE GOVERNMENT AND S AND E. ON THIS ASPECT OF THE CASE THE CONTRACTING OFFICER'S ATTORNEY, IN HIS LEGAL BRIEF SUBMITTED TO OUR OFFICE ON APRIL 23, 1965, MAKES THE FOLLOWING CONTENTIONS:

BY ITS CONTRACT WITH THE GOVERNMENT, S AND E WAS OBLIGATED TO REIMBURSE THE GOVERNMENT FOR THE COST OF TELEPHONE SERVICE UTILIZED BY S AND E (SEE SC-05 OF CONTRACT NO. AT/30-3/-790). PAYMENTS WERE TO BE MADE THROUGH PHILLIPS PETROLEUM COMPANY, AN INTEGRATED COST-TYPE CONTRACTOR OF THE AEC WHICH WAS RESPONSIBLE FOR VARIOUS OPERATIONAL AND "HOUSEKEEPING" SERVICES AT THE NATIONAL REACTOR TESTING STATION. IN ACCORDANCE WITH THE AGREED PROCEDURE, BILLINGS WERE SUBMITTED TO S AND E BY PHILLIPS. FAILURE OF S AND E TO PAY FOR THE TELEPHONE SERVICE, AS AGREED, DID NOT INFLICT ANY LOSS ON PHILLIPS BECAUSE ITS OPERATIONS WERE CONDUCTED FOR THE GOVERNMENT WITH GOVERNMENT FUNDS. IN FACT, THE PHILLIPS CONTRACT, NO. AT/10-1/-205, CONTAINS THE FOLLOWING CLAUSE: "ARTICLE VII--- PAYMENTS AND ADVANCES

H. REVENUES. ALL REVENUES OTHER THAN THE CONTRACTOR'S FIXED FEE OR FEES, IF ANY, ACCRUING TO THE CONTRACTOR IN CONNECTION WITH THE WORK SHALL BE GOVERNMENT PROPERTY AND SHALL BE DEPOSITED IN THE SPECIAL BANK ACCOUNTS TO BE AVAILABLE FOR PAYMENT OF ALLOWABLE COST UNDER THIS CONTRACT.' (THE COMPLETE TEXT OF THIS TYPE CLAUSE IS SET FORTH IN THE AEC'S PROCUREMENT REGULATIONS AS AECPR 9-7.5006-23.)

THE GOVERNMENT SUSTAINED THE LOSS, AS A RESULT OF S AND E'S FAILURE TO MAKE PAYMENTS IN ACCORDANCE WITH ITS CONTRACT WITH THE AEC. PHILLIPS HAS NO ACTUAL OR BENEFICIAL INTEREST IN THE CLAIM OF $1,651.54 AGAINST S AND E. IT IS THE GOVERNMENT'S CLAIM. SOME CONFUSION HAS RESULTED FROM THE FACT THAT, AS A MERE BOOKKEEPING TRANSACTION, LONG AFTER THE EVENTS WITH WHICH WE ARE CONCERNED WITH IN THIS CASE, PHILLIPS EXECUTED A DOCUMENT WHICH PURPORTS TO ASSIGN THE CLAIM TO THE GOVERNMENT. THAT PROCEDURE FOLLOWED AN ACCOUNTING PRACTICE WHICH THE COMMISSION FOLLOWS IN ITS DEALINGS WITH A NUMBER OF ITS COST-TYPE CONTRACTORS. FOR THE USE OF THE GOVERNMENT'S TELEPHONE SERVICE, CONTRACTED FOR BY S AND E UNDER CONTRACT NO. AT/30-3/-790, S AND E OWES THE GOVERNMENT $1,651.54.

SIMILARLY, BY ITS CONTRACT WITH THE GOVERNMENT (SEE SC-31 OF CONTRACT NO. AT/30-3/-790), S AND E WAS OBLIGATED TO PAY FOR THE GOVERNMENT-OWNED CONCRETE AGGREGATE OBTAINED FROM A FACILITY OPERATED BY H.K. FERGUSON COMPANY, ANOTHER COST-TYPE CONTRACTOR OF THE COMMISSION. IN THE FERGUSON CASE, AS IN THE PHILLIPS SITUATION, PAYMENT TO THE GOVERNMENT WAS TO BE MADE THROUGH FERGUSON ON THE BASIS OF BILLINGS PREPARED AND SUBMITTED BY THE LATTER. FERGUSON DID NOT OWN OR HAVE ANY BENEFICIAL INTEREST IN THE MATERIAL SOLD TO S AND E, AND ALL OF FERGUSON'S OPERATIONS WERE FINANCED BY THE GOVERNMENT (THE FERGUSON CONTRACT ALSO CONTAINS AN AECPR 9-7.5006- 23 TYPE CLAUSE). IN THIS SITUATION, ALSO, THE SO-CALLED ASSIGNMENT DID NOT CHANGE THE BENEFICIAL INTEREST OR LEGAL RIGHTS OF THE PARTIES. THE GOVERNMENT WAS, AND STILL IS, THE PARTY AGGRIEVED BY THE FAILURE OF S AND E TO PAY FOR THE CONCRETE AGGREGATE AS REQUIRED BY S AND E'S CONTRACT WITH THE AEC. FOR THE CONCRETE AGGREGATE, PURCHASED BY S AND E FROM THE GOVERNMENT UNDER CONTRACT NO. AT/30-3/-790, S AND E OWES THE GOVERNMENT $22,280.

THE HEARINGS CONDUCTED BY THE HEARING EXAMINER DISCLOSED NO DISAGREEMENT OR CONTROVERSY WITH RESPECT TO ANY OF THE FACTS RECITED ABOVE. TO THE EXTENT THAT THERE IS ANY CONTROVERSY CONCERNING THE TWO CLAIMS, IT INVOLVES LEGAL QUESTIONS ONLY. THE ABSENCE OF A DISPUTE CONCERNING A QUESTION OF FACT WAS EVIDENT TO THE CONTRACTING OFFICER PRIOR TO THE HEARINGS, AND HIS DENIAL OF THE CLAIMS WAS BASED ON HIS LACK OF JURISDICTION UNDER THE "DISPUTES" CLAUSE OF THE CONTRACT.

A SOMEWHAT DIFFERENT SITUATION IS PRESENTED BY THE THIRD ITEM ON THE VOUCHER, WHICH IS A CLAIM IN THE AMOUNT OF $8,366.19. THAT AMOUNT WAS PAID BY THE AEC TO A COST-TYPE CONTRACTOR, GENERAL DYNAMICS CORPORATION, FOR PROVIDING CRANES AND EQUIPMENT WHICH WERE NEEDED BECAUSE S AND E BREACHED ITS CONTRACT BY FAILING TO INSTALL A BRIDGE CRANE BY THE CONTRACT COMPLETION DATE AS EXTENDED. THE POSITION OF THE CONTRACTING OFFICER WITH RESPECT TO THIS MATTER WAS STATED IN A LETTER TO S AND E'S ATTORNEY ON SEPTEMBER 20, 1962, AND IT HAS NOT CHANGED. THE FOLLOWING IS QUOTED FROM THAT LETTER, WHICH IS PART OF THE RECORD BEFORE YOU:

"BECAUSE YOUR CLIENT BREACHED ITS CONTRACT BY FAILING TO PERFORM THE WORK IN ACCORDANCE WITH THE APPROVED PROGRESS SCHEDULES, AND FAILED TO COMPLETE THE WORK WITHIN THE TIME PRESCRIED BY THE CONTRACT, IT WAS NECESSARY FOR THE GOVERNMENT TO INCUR EXPENSE TO OBTAIN CERTAIN SERVICES AND EQUIPMENT WHICH WOULD NOT HAVE BEEN REQUIRED IF YOUR CLIENT HAD COMPLIED WITH THE REQUIREMENTS OF ITS CONTRACT. BY YOUR CLIENT'S BREACH, THE GOVERNMENT HAS SUFFERED DAMAGE. THE EXACT AMOUNT OF THAT DAMAGE HAS BEEN DETERMINED ONLY WITHIN THE PAST FEW DAYS. IT IS $8,366.19. TO PROTECT ITS INTERESTS WITH RESPECT TO THIS CLAIM AGAINST YOUR CLIENT, THE GOVERNMENT WITHHELD $8,000 FROM PAYMENTS OTHERWISE DUE AND OWING YOUR CLIENT UNDER CONTRACT NO. AT/30 -3/-790; AND, AS IT NOW APPEARS, THAT AMOUNT WAS NOT ADEQUATE FOR THAT PURPOSE.'

DURING THE COURSE OF THE HEARINGS THE CONTRACTING OFFICER'S ATTORNEY INTRODUCED INTO EVIDENCE SIX EXHIBITS (C-1 THROUGH C-6) RELATING TO THE TELEPHONE SERVICE AND CONCRETE AGGREGATE CLAIMS. (SEE PP. 474 488, TRANSCRIPT.) EXHIBITS C-1, C-3, C-5 AND C-6 ARE NARRATIVE STATEMENTS MADE BY EMPLOYEES OF PHILLIPS, FERGUSON AND THE AEC CONCERNING, AMONG OTHER THINGS, THE RELATIONSHIP OF PHILLIPS AND FERGUSON TO THE AEC. THESE FOUR EXHIBITS SHOW THAT S AND E UTILIZED THE GOVERNMENT'S TELEPHONE SERVICES FOR WHICH IT DID NOT PAY AND THAT S AND E WAS FURNISHED CONCRETE AGGREGATE FROM GOVERNMENT-OWNED STOCKPILES IN THE AMOUNT OF $22,280 FOR WHICH IT DID NOT PAY. IT SHOULD BE NOTED THAT THESE EXHIBITS WERE OFFERED AND ACCEPTED INTO EVIDENCE UNDER A STIPULATION BY S AND E'S ATTORNEY THAT THE EMPLOYEES WHO MADE THE NARRATIVE STATEMENTS WOULD TESTIFY IN ACCORDANCE WITH THEIR STATEMENTS IF CALLED TO DO SO. WITH RESPECT TO THE $8,000 DAMAGE CLAIM, THE RECORD MADE BEFORE THE HEARING EXAMINER IS, UNFORTUNATELY, IMCOMPLETE. THE CONTRACTING OFFICER'S ATTORNEY STATES IN HIS BRIEF OF APRIL 23, 1965, THAT THE CONTRACTING OFFICER DETERMINED THE GOVERNMENT HAD SUFFERED DAMAGE IN THE AMOUNT OF $8,366.19 AND THAT THIS SUM WAS PAID TO GENERAL DYNAMICS CORPORATION. THERE IS NOTHING IN THE RECORD MADE BEFORE THE EXAMINER TO REFUTE THESE STATEMENTS. IN ANY EVENT, HOWEVER, WHAT RECORD THERE IS SUPPORTS THE CONTRACTING OFFICER'S POSITION THAT THE CLAIMS SET-OFF AGAINST THE CONTRACT PAYMENTS DUE S AND E AROSE OR WERE ACQUIRED UNDER THE SAME TRANSACTION OR CONTRACT IN REGARD TO WHICH THE ASSIGNMENT WAS MADE. MOREOVER, ANY CLAIM THAT S AND E MAY HAVE AGAINST THE GOVERNMENT FOR BREACH OF WARRANTY WITH RESPECT TO CONCRETE AGGREGATE FURNISHED FROM GOVERNMENT STOCKPILES IS NOT WITHIN THE JURISDICTION OF THE HEARING EXAMINER UNDER THE DISPUTES CLAUSE AND HIS COMMENTS IN REGARD THERETO ARE IN OUR OPINION WITHOUT LEGAL SIGNIFICANCE AND ARE BASED UPON A BARREN AND INCOMPLETE RECORD. ACCORDINGLY, WE MUST ADVISE THAT VOUCHER AND SCHEDULE OF PAYMENTS NO. 64-274 MAY NOT BE CERTIFIED FOR PAYMENT, AND IT SHALL THEREFORE BE RETAINED IN OUR FILES.

THE PAPERS AND DOCUMENTS FORWARDED TO OUR OFFICE BY MR. RICHARD C. FOCHT, ATTORNEY FOR THE CONTRACTING OFFICER, ARE RETURNED PURSUANT TO HIS REQUEST.