B-156695, JUL. 6, 1965

B-156695: Jul 6, 1965

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JOHNSON AND FARRAHER: REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 26 AND APRIL 21. YOUR LETTERS WILL BE CONSIDERED AS REQUESTS FOR REVIEW OF OFFICE SETTLEMENT CERTIFICATE DATED FEBRUARY 16. THE CONTRACT WAS AWARDED ON APRIL 29. THE ORIGINAL AMOUNT OF THE CONTRACT WAS $34. THE STATED PURPOSE OF THE CONTRACT WAS TO OBTAIN FINISHED PLANS AND STAKING NOTES WHICH HAVE CHECKED ON THE GROUND. IT WAS INTENDED THAT THE CONTRACTOR SHOULD UTILIZE THE STRIP MAP MADE AVAILABLE BY THE GOVERNMENT RATHER THAN OBTAIN DATA FROM P-LINE SURVEY FOR THE PURPOSE OF DESIGN. UPON COMPLETION OF DESIGN THE CONTRACTOR WAS TO STAKE THE L-LINE CENTERLINE AND DEVELOP THE CROSS-SECTIONS AND LEVELS. THE DESIGN DATA WAS TO BE PROCESSED TO DEVELOP YARDAGE QUANTITIES AND SUCH ADJUSTMENTS IN DESIGN AS WERE NECESSARY TO ACHIEVE A BALANCED AND ECONOMICAL DESIGN.

B-156695, JUL. 6, 1965

TO SULLIVAN, ROCHE, JOHNSON AND FARRAHER:

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 26 AND APRIL 21, 1965, WRITTEN IN BEHALF OF U.S. GRANT AND SON, RELATIVE TO ITS CLAIM FOR AN ADDITIONAL AMOUNT ALLEGED TO BE DUE FOR SERVICES RENDERED THE UNITED STATES DEPARTMENT OF AGRICULTURE FOREST SERVICE, LOS PADRES NATIONAL FOREST, IN CONNECTION WITH CONTRACT NO. 39-431, DATED APRIL 29, 1964. YOUR LETTERS WILL BE CONSIDERED AS REQUESTS FOR REVIEW OF OFFICE SETTLEMENT CERTIFICATE DATED FEBRUARY 16, 1965, WHICH DISALLOWED THE CLAIM IN THE AMOUNT OF $3,772.

THE CONTRACT WAS AWARDED ON APRIL 29, 1964, TO U.S. GRANT AND SON, FOR PROFESSIONAL ENGINEERING SERVICES FOR SURVEY, DESIGN AND STAKING OF SANTA YNEZ RIVER ROAD ON THE LOS PADRES NATIONAL FOREST. THE ORIGINAL AMOUNT OF THE CONTRACT WAS $34,735.50, BASED ON ESTIMATED LENGTH OF THE ROAD. APPROVED CHANGE INCREASED THIS TO $35,195.50. THE CONTRACT PROVIDES, AMONG OTHER THINGS, THAT THE CONTRACTOR SHALL FURNISH A DETAILED LOCATION, DESIGN AND COMPLETE SET OF WORKING PLANS FOR CONSTRUCTION OF A SINGLE-LANE ALL-PURPOSE ROAD. THE STATED PURPOSE OF THE CONTRACT WAS TO OBTAIN FINISHED PLANS AND STAKING NOTES WHICH HAVE CHECKED ON THE GROUND. IT WAS INTENDED THAT THE CONTRACTOR SHOULD UTILIZE THE STRIP MAP MADE AVAILABLE BY THE GOVERNMENT RATHER THAN OBTAIN DATA FROM P-LINE SURVEY FOR THE PURPOSE OF DESIGN. UPON COMPLETION OF DESIGN THE CONTRACTOR WAS TO STAKE THE L-LINE CENTERLINE AND DEVELOP THE CROSS-SECTIONS AND LEVELS. THE DESIGN DATA WAS TO BE PROCESSED TO DEVELOP YARDAGE QUANTITIES AND SUCH ADJUSTMENTS IN DESIGN AS WERE NECESSARY TO ACHIEVE A BALANCED AND ECONOMICAL DESIGN.

DURING THE MONTH OF SEPTEMBER 1964 A FOREST FIRE, KNOWN AS THE "COYOTE" FIRE BURNED A LARGE AREA OF THE LOS PADRES FOREST, INCLUDING THE CONTRACT AREA. THE CONTRACTOR HAD ALREADY COMPLETED A PART OF THE JOB, 8.3 MILES OF "P" LINE TRAVERSE AND 3.2 MILES OF "L" CENTERLINE STAKING. THE FIRE COMPLETELY DESTROYED STAKES PREVIOUSLY PLACED BY THE CONTRACTOR. THE CONTRACTOR'S ORIGINAL CLAIM WAS FOR $3,772 FOR REESTABLISHING THE SURVEY LINE, WHICH WAS DISALLOWED BY THIS OFFICE FOR THE REASON THAT THE CONTRACT WAS FOR A FINISHED PRODUCT AND WAS ENTIRE AND NOT DIVISIBLE. YOUR LETTERS OFFER TO ACCEPT A COMPROMISE SETTLEMENT OF THE CLAIM IN THE AMOUNT OF $2,000 ON THE BASIS OF YOUR CONTENTIONS THAT THE CONTRACT WAS "DIVISIBLE" AND THAT "COMPLETED WORK" WAS ACCEPTED BY THE GOVERNMENT.

ARTICLE V OF THE CONTRACT PROVIDES AS FOLLOWS:

"1. ESTIMATES SHALL BE MADE MONTHLY, BY THE CONTRACTING OFFICER, OF THE AMOUNT AND VALUE OF THE WORK AND SERVICES PERFORMED BY THE CONTRACTOR UNDER THIS CONTRACT.

"2. UPON APPROVAL OF SUCH ESTIMATE BY THE CONTRACTING OFFICER AND SUBMISSION OF A CERTIFIED INVOICE BY THE CONTRACTOR, PAYMENT SHALL BE MADE TO THE CONTRACTOR AS SOON AS PRACTICABLE, OF 90 PERCENT OF THE AMOUNT AS DETERMINED ABOVE, LESS ALL PREVIOUS PAYMENTS.

"3. THE CONTRACTOR SHALL BE PAID THE UNPAID BALANCE OF ANY MONEY DUE UNDER THIS CONTRACT UPON SATISFACTORY COMPLETION OF THE WORK AND ITS FINAL ACCEPTANCE. PRIOR TO SUCH FINAL PAYMENT UNDER THE CONTRACT, OR PRIOR TO SETTLEMENT UPON TERMINATION OF THE CONTRACT, THE CONTRACTOR SHALL EXECUTE AND DELIVER TO THE CONTRACTING OFFICER A RELEASE, IF REQUIRED, OF ALL CLAIMS AGAINST THE GOVERNMENT ARISING UNDER OR BY VIRTUE OF THIS CONTRACT, OTHER THAN SUCH CLAIMS, IF ANY, AS MAY BE SPECIFICALLY EXCEPTED BY THE CONTRACTOR FROM THE OPERATION OF THE RELEASE IN STATED AMOUNTS TO BE SET FORTH THEREIN.'

AT THE TIME OF THE FIRE ONE PARTIAL PAYMENT HAD BEEN MADE IN THE AMOUNT OF $5,732.10 LESS 10 PERCENT OR A NET PAYMENT OF $5,158.89.

SECTION VII OF THE GENERAL SPECIFICATIONS SETS FORTH PERCENTAGES TO APPLY TO DIFFERENT INDIVIDUAL OPERATIONS "FOR THE PURPOSE OF PREPARING PARTIAL PAYMENT ESTIMATES.' HOWEVER, THE BASIS OF PAYMENT SPECIFIED BY THE CONTRACT IS FOUND IN ARTICLE III WHICH STATES AS FOLLOWS:

"THE GOVERNMENT SHALL PAY THE CONTRACTOR A FIXED FEE OF $4,185.00 PER MILE (EST. $34,735.50) WHICH SHALL CONSTITUTE FULL COMPENSATION FOR ALL SERVICES AND MATERIALS AS OUTLINED IN ARTICLE II. THE FEE SHALL BE PAID AS PROVIDED IN ARTICLE V. MEASUREMENT WILL BE TO THE NEAREST .01 MILE AS DETERMINED FROM FINAL SURVEY.'

THE COURTS HAVE HELD THAT THE USUAL TEST OF "SEVERABILITY" OF A CONTRACT IS WHETHER THE CONSIDERATION IS SO SEGREGATED THAT IT MAY BE SEVERALLY APPLIED TO EACH INDEPENDENT COVENANT IN THE CONTRACT. HOSPELHORN V. CIRCLE CITY COAL CO., 117 F.2D 166, 168. ALSO, THE COURTS HAVE STATED THAT A CONTRACT IS AN "ENTIRE CONTRACT" WHEN BY ITS TERMS, NATURE AND PURPOSE, IT CONTEMPLATES THAT EACH OF ITS PARTS AND CONSIDERATION SHALL BE COMMON TO EACH OTHER AND INTERDEPENDENT, AND A "SEVERABLE CONTRACT" IS ONE WHICH IN ITS NATURE AND PURPOSE IS SUSCEPTIBLE OF DIVISION AND APPOINTMENT. MORGAN V. FIRESTONE TIRE AND RUBBER CO., 201 P.2D 976, 980; DURANT V. SNYDER, 151 P.2D 776, 782. IT IS OUR VIEW THAT ALL OF THE THINGS TO BE DONE UNDER THIS CONTRACT WERE TO BE TAKEN AS A WHOLE. SECTION I OF THE CONTRACT SPECIFICATIONS IS SPECIFIC AS TO CONTRACTOR RESPONSIBILITY. IT PROVIDES THAT THE CONTRACTOR SHALL FURNISH A DETAILED LOCATION, DESIGN AND COMPLETE SET OF WORKING PLANS FOR CONSTRUCTION OF A SINGLE-LANE ALL-PURPOSE ROAD "IN ACCORDANCE WITH THE FOLLOWING STANDARDS, SPECIFICATIONS AND DESCRIPTIONS AND FOLLOWING THE GENERAL LOCATION AS SHOWN ON THE ATTACHED MAP.' THE SPECIFICATIONS THEN GO INTO DETAIL AS TO WORK TO BE PERFORMED. SECTION III, PARAGRAPH A, STATES "THE CONTRACTOR SHALL STAKE ON THE GROUND BY APPROVED TRANSIT AND TAPE METHODS THE FINAL ACCEPTED CENTERLINE OF THE PROPOSED ROAD.' PARAGRAPH B IN ADDITION TO REQUIRING PROFILE ELEVATIONS OF "L" LINE STAKES AND CHECK LEVELS, REQUIRES BENCH MARKS TO BE SET OUTSIDE CONSTRUCTION LIMITS. IT IS OUR VIEW, THEREFORE, THAT THE CONTRACT IS NOT DIVISIBLE BUT IS ENTIRE, IT BEING ONE BARGAIN FOR A COMPLETELY FINISHED PRODUCT, THE PRODUCT BEING A SET OF ROAD CONSTRUCTION PLANS WITH STAKING ON THE GROUND TO PERMIT CONSTRUCTION BY OTHERS.

THE PRESENT SITUATION IS NOT ONE WHERE THE SUBJECT MATTER OF THE CONTRACT, THROUGH NO FAULT OF THE CONTRACTING PARTY, CEASED TO EXIST, RENDERING PERFORMANCE IMPOSSIBLE. IT IS RATHER ONE INVOLVING INCREASED COSTS ARISING FROM AN UNFORESEEN CIRCUMSTANCE OR HAPPENING. THE CONTRACTOR'S PERFORMANCE WAS NOT EXCUSED BECAUSE OF THE DESTRUCTION OF THE SUBJECT MATTER OF THE CONTRACT. IN FACT, PERFORMANCE HERE WAS COMPLETED AFTER THE FIRE BECAUSE THE THING DESTROYED WAS THE THING WHICH ONE OF THE PARTIES EXPRESSLY CONTRACTED TO PRODUCE. A BUILDER WHO AGREES, UNDER AN ENTIRE CONTRACT, TO CONSTRUCT A COMPLETED WORK IS NOT EXCUSED FROM THE FULL PERFORMANCE OF HIS CONTRACT BY THE DESTRUCTION OF THE WORK WHEN PARTLY COMPLETED, BUT MUST HIMSELF BEAR THE LOSS, ALTHOUGH SUCH DESTRUCTION IS CAUSED BY UNAVOIDABLE ACCIDENT. COLLINS V. POST, 362 P.2D 325, 327. IT IS WELL SETTLED THAT IF A PARTY CHARGE HIMSELF WITH AN OBLIGATION POSSIBLE TO BE PERFORMED HE MUST ABIDE BY IT UNLESS PERFORMANCE IS RENDERED IMPOSSIBLE BY THE ACT OF GOD, THE LAW, OR THE OTHER PARTY. UNFORESEEN DIFFICULTIES WILL NOT EXCUSE PERFORMANCE AND WHERE THE PARTIES HAVE MADE NO PROVISION FOR A DISPENSATION THE TERMS OF THE CONTRACT MUST PREVAIL. COLUMBUS RAILWAY, POWER AND LIGHT CO. V. CITY OF COLUMBUS, OHIO, ET AL., 249 U.S. 399; UNITED STATES V. GLEASON, 175 U.S. 588, 602, AND AUTHORITIES CITED; CARNEGIE STEEL CO. V. UNITED STATES, 240 U.S. 156, 164, 165; DAY V. UNITED STATES, 245 U.S. 159. WE THINK THAT THE CONTRACT BEING ENTIRE, THE RISK OF LOSS OF THE PARTLY COMPLETED PORTION OF THE WORK IS UPON THE CONTRACTOR UNTIL THE WORK IS FULLY COMPLETED OR IS ACCEPTED BY THE GOVERNMENT. 16 COMP. GEN. 975.

REGARDING YOUR CONTENTION THAT "COMPLETED WORK" WAS "ACCEPTED" BY THE GOVERNMENT, REFERENCE MUST BE HAD TO SECTION V OF THE CONTRACT SPECIFICATIONS. THIS SECTION SETS FORTH A SCHEDULE FOR INSPECTIONS. PARAGRAPH B STATES IN PERTINENT PART THAT "IN NO CASE SHALL THE CONTRACTOR BEGIN A SUCCESSIVE PHASE OF THE WORK WITHOUT THE PRECEDING PHASE HAVING BEEN APPROVED IN FULL BY THE FOREST SERVICE * * *.' THERE IS NO MENTION IN THIS SECTION OF "ACCEPTANCE" OF THE DIFFERENT PHASES, BUT ONLY "APPROVAL" PRIOR TO THE SUCCEEDING STEP BEING TAKEN. ARTICLE V OF THE CONTRACT IS TITLED "METHOD OF PAYMENT.' IT FIRST PROVIDES FOR PARTIAL PAYMENTS BASED ON ESTIMATES. IT THEN PROVIDES FOR FINAL PAYMENT UPON SATISFACTORY COMPLETION OF THE WORK AND ITS FINAL ACCEPTANCE WHICH BY ITS TERMS COULD NOT TAKE PLACE BEFORE COMPLETION OF ALL THE WORK. LIABILITY FOR DAMAGES PRIOR TO COMPLETION MUST THEREFORE FALL UPON THE CONTRACTOR, THERE BEING NO CONTRACT PROVISION EXPRESSLY EXEMPTING IT THEREFROM. COMP. GEN. 975; 19 COMP. GEN. 560; 20 COMP. GEN. 782; 22 COMP. GEN. 260; 25 COMP. GEN. 332.

FOR THE FOREGOING REASONS, IT MUST BE CONCLUDED THAT THERE IS NO BASIS UNDER THE TERMS OF THE CONTRACT FOR RELIEVING THE CONTRACTOR OF THE LOSS RESULTING FROM THE INCREASED COSTS OF PERFORMANCE. THEREFORE, THE DISALLOWANCE OF FEBRUARY 16, 1965, IS, UPON REVIEW, SUSTAINED.