B-162183, AUG. 18, 1967

B-162183, AUG. 18, 1967

CONTRACTS - MISTAKES - REFORMATION - JUSTIFICATION DECISION TO SECY. OF ARMY RE REFORMATION OF CONTRACT OF COOKSON HILLS ELECTRIC COOPERATIVE, NC., FOR RELOCATION OF POWER LINE AT KERR RESERVOIR AND DAM. RECORD WHICH SHOWS THAT CONTRACTOR AND CONTRACTING OFFICER MUTUALLY CONTEMPLATED THAT CONTRACT WOULD PROVIDE FOR REMBURSEMENT OF COSTS IN PREPARATION TO RELOCATE FACILITIES WHICH PROVISION WAS INADVERTENTLY OMITTED FROM CONTRACT JUSTIFIES REFORMATION OF CONTRACT AND RESULTANT REIMBURSEMENT TO CONTRACTOR.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 1, 1967, FROM THE SPECIAL ASSISTANT FOR CIVIL FUNCTIONS, REQUESTING A DECISION AS TO WHETHER COST- REIMBURSEMENT CONTRACT NO. DA-34-066-CIVENG-66-178, ENTERED INTO ON JANUARY 19, 1966, BETWEEN THE UNITED STATES ARMY CORPS OF ENGINEERS AND COOKSON HILLS ELECTRIC COOPERATIVE, INC., FOR THE RELOCATION OF ELECTRIC POWER LINE FACILITIES AT THE ROBERT S. KERR RESERVOIR, LOCKS AND DAM NO. 15, ARKANSAS RIVER, OKLAHOMA, MAY BE REFORMED TO REFLECT THE PROPER INTENTION OF THE PARTIES IN REGARD TO THE DATE FROM WHICH THE CONTRACTOR WOULD BE REIMBURSED FOR EXPENSES INCURRED THEREUNDER.

IT IS REPORTED THAT ON JANUARY 21, 1964, THE CONTRACTOR WAS INFORMED OF THE CONTEMPLATED CONSTRUCTION OF THE RESERVOIR, AND IT WAS REQUESTED TO PREPARE AND SUBMIT TO THE CONTRACTING AGENCY A COMPLETE PLAN AND ESTIMATE OF COST FOR THE RELOCATION OF ITS FACILITIES AFFECTED BY THE CONSTRUCTION. IN ORDER TO COMPLY WITH THE AGENCY'S REQUEST THE CONTRACTOR THEREAFTER EMPLOYED THE SERVICES OF A CONSULTING ENGINEERING FIRM, WHICH, AT A COST OF $7,464.81, PREPARED A SATISFACTORY RELOCATION PLAN AND COST ESTIMATE THAT WAS SUBMITTED TO THE AGENCY ON JANUARY 5, 1965. AS AN ADJUNCT TO THE PREPARATION OF THE REPORT, THE CONTRACTOR INCURRED LABOR AND MATERIAL COSTS OF $1,175.50, FOR A TOTAL EXPENDITURE OF $8,640.31 DURING THE PERIOD IN QUESTION.

ARTICLE 2/A) OF THE SUBJECT CONTRACT, ENTITLED "OBLIGATIONS OF THE GOVERNMENT," PROVIDES THAT THE CONTRACTOR WILL BE REIMBURSED FOR ALL COSTS EXPENDED SUBSEQUENT TO JANUARY 5, 1965.

IN URGING ALLOWANCE OF THE PROPOSED REFORMATION, THE CONTRACTING OFFICER REPORTS THAT THE PARTIES HAD ORIGINALLY INTENDED AND AGREED THAT THE CONTRACTOR WOULD BE REIMBURSED FOR COSTS INCURRED AFTER JANUARY 21, 1964, THE DATE THE CONTRACTOR WAS REQUESTED TO SUBMIT ITS RELOCATION PLAN AND COST ESTIMATE. HOWEVER, IN PREPARING THE CONTRACT, THE CONTRACTING AGENCY INADVERTENTLY INSERTED IN ARTICLE 2/A) THE DATE THE CONTRACTOR'S PLAN AND ESTIMATE WAS SUBMITTED TO THE GOVERNMENT.

OUR OFFICE HAS AUTHORIZED REFORMATION OF CONTRACTS ON OCCASIONS WHERE IT CAN BE SHOWN THAT BY REASON OF MUTUAL MISTAKE A CONTRACT AS REDUCED TO WRITING DOES NOT REFLECT THE ACTUAL AGREEMENT OF THE PARTIES, AND IT CAN BE ESTABLISHED WHAT THE ACTUAL AGREEMENT WAS. SEE 39 COMP. GEN. 363, 365, AND CASES CITED THEREIN.

ON THE BASIS OF THE PRESENT RECORD, IT IS CLEAR THAT THE CONTRACTOR AND THE CONTRACTING OFFICIALS MUTUALLY CONTEMPLATED THAT THE CONTRACT WOULD PROVIDE FOR THE REIMBURSEMENT OF COSTS INCURRED BY THE CONTRACTOR IN PREPARING TO RELOCATE ITS FACILITIES AFFECTED BY THE CONSTRUCTION OF THE SUBJECT PROJECT. ACCORDINGLY, THE CONTRACT MAY BE REFORMED, AS ADMINISTRATIVELY RECOMMENDED, BY CORRECTING ARTICLE 2/A) TO PROPERLY REFLECT THE TRUE INTENT AND AGREEMENT OF THE PARTIES; THAT IS, THE GOVERNMENT SHALL REIMBURSE THE CONTRACTOR FOR ITS COSTS INCURRED SUBSEQUENT TO JANUARY 21, 1964.