B-163447, JUL. 14, 1969
Highlights
THAT IT WAS REPRESENTED THAT HE WOULD HAVE UNLIMITED ACCESS TO THE AREA AND THAT GOVERNMENT BENEFITED FROM ITS ERRONEOUS ADVICE TO THE CONTRACTOR PAYMENT ALLOWED. WHICH DISALLOWED THE CLAIM OF SDC FOR ADDITIONAL COSTS INCURRED BY REASON OF BEING DENIED ACCESS TO THE JOB SITE FOR VARIOUS PERIODS DURING SPACE VEHICLE LAUNCHING ACTIVITIES WHILE SDC WAS INSTALLING A CLOSED CIRCUIT TELEVISION SURVEILLANCE SYSTEM AT LAUNCH COMPLEX 17. THAT THE CONTRACTOR WAS REQUIRED TO COORDINATE ITS ACTIVITIES SO AS TO PRECLUDE ANY INTERFERENCE WITH THE LAUNCHING CREWS. WE ALSO REASONED THAT SINCE THE LAUNCHING OF SPACE VEHICLES WAS A NORMAL FUNCTION AT THE WORK SITE THE POSSIBILITY OF WORK INTERRUPTIONS WAS CLEARLY EVIDENT AT THE TIME OF CONTRACTING.
B-163447, JUL. 14, 1969
CONTRACTS - ADDITIONAL COSTS - DELAYS DECISION ALLOWING CLAIM OF SYSTEMS DESIGN CORPORATION ADDITIONAL COSTS ($11,000) INCURRED UNDER AIR FORCE CONTRACT FOR INSTALLATION CLOSED CIRCUIT TELEVISION SURVEILLANCE SYSTEM AT CAPE KENNEDY BY REASON OF BEING DENIED ACCESS TO JOB SITE FOR VARIOUS PERIODS. ON BASIS OF NEW EVIDENCE INDICATING THAT CONTRACTOR TRIED TO ASCERTAIN CONDITIONS AFFECTING WORK; THAT IT WAS REPRESENTED THAT HE WOULD HAVE UNLIMITED ACCESS TO THE AREA AND THAT GOVERNMENT BENEFITED FROM ITS ERRONEOUS ADVICE TO THE CONTRACTOR PAYMENT ALLOWED.
TO JOHNSON AND STEFFEN:
WE REFER TO YOUR LETTER OF MAY 26, 1969, WITH ENCLOSURES, SUBMITTED ON BEHALF OF YOUR CLIENT, SYSTEMS DESIGN CORPORATION (SDC). ON THE BASIS OF NEW EVIDENCE FURNISHED WITH YOUR LETTER, YOU REQUEST RECONSIDERATION OF OUR DECISION OF MARCH 1, 1968, B-163447, WHICH DISALLOWED THE CLAIM OF SDC FOR ADDITIONAL COSTS INCURRED BY REASON OF BEING DENIED ACCESS TO THE JOB SITE FOR VARIOUS PERIODS DURING SPACE VEHICLE LAUNCHING ACTIVITIES WHILE SDC WAS INSTALLING A CLOSED CIRCUIT TELEVISION SURVEILLANCE SYSTEM AT LAUNCH COMPLEX 17, CAPE KENNEDY AIR FORCE STATION, FLORIDA, IN PERFORMANCE OF DEPARTMENT OF THE AIR FORCE CONTRACT NO. AF34/601/27179, DATED JUNE 9, 1966.
IN OUR DECISION OF MARCH 1, WE POINTED OUT THAT THE CONTRACT SPECIFICALLY PROVIDED THAT THE CONTRACTOR WOULD BE RESPONSIBLE FOR HAVING TAKEN STEPS REASONABLY NECESSARY TO ASCERTAIN THE GENERAL AND LOCAL CONDITIONS WHICH COULD AFFECT THE WORK OR THE COST THEREOF, AND THAT THE CONTRACTOR WAS REQUIRED TO COORDINATE ITS ACTIVITIES SO AS TO PRECLUDE ANY INTERFERENCE WITH THE LAUNCHING CREWS. WE ALSO REASONED THAT SINCE THE LAUNCHING OF SPACE VEHICLES WAS A NORMAL FUNCTION AT THE WORK SITE THE POSSIBILITY OF WORK INTERRUPTIONS WAS CLEARLY EVIDENT AT THE TIME OF CONTRACTING, AND WE DID NOT THEREFORE BELIEVE THAT THE INTERRUPTIONS AND DELAY EXPERIENCED WERE SUCH AS COULD BE CONSIDERED AS A BREACH BY THE GOVERNMENT OF THE CONTRACT.
WITH YOUR LETTER OF MAY 26 YOU HAVE ENCLOSED AN AFFIDAVIT BY THE AIR FORCE CONTRACTS NEGOTIATOR WHO PARTICIPATED IN THE NEGOTIATION OF THE CONTRACT'S DELIVERY SCHEDULE. IT IS STATED THEREIN THAT DURING THE NEGOTIATIONS THE QUESTION REGARDING OPEN AVAILABILITY OF THE COMPLEX SITE FOR PURPOSES OF CONTRACTOR PERFORMANCE WAS RAISED, AND THAT THE CONTRACT NEGOTIATOR WAS ADVISED BY THE AIR FORCE EASTERN TEST RANGE THAT THE COMPLEX WOULD BE OPEN AND AVAILABLE FOR CONTRACTOR PERFORMANCE DURING THE REQUIRED PERFORMANCE PERIOD. THE AFFIDAVIT FURTHER STATES THAT SUCH INFORMATION WAS RELAYED BY HIM TO SDC, AND THE CONTRACT WAS THEREAFTER AWARDED.
IN VIEW OF SUCH NEW INFORMATION, AND SINCE DATA CONCERNING LAUNCHING ACTIVITIES AND OPERATIONS IS A MATTER GENERALLY WITHIN THE SPECIAL KNOWLEDGE OF THE GOVERNMENT, IT NOW APPEARS THAT THE CONTRACTOR DID MAKE A REASONABLE EFFORT TO ASCERTAIN THOSE CONDITIONS WHICH COULD AFFECT ITS WORK. IT FURTHER SEEMS EVIDENT THAT THE CONTRACT WAS BASED UPON THE MUTUAL UNDERSTANDING BY BOTH PARTIES THAT THE CONTRACTOR WOULD HAVE UNINTERRUPTED ACCESS TO THE WORK SITE, AND THAT THE CONTRACTOR RELIED UPON THE GOVERNMENT'S REPRESENTATION OF SUCH MATERIAL CONDITION TO HIS DETRIMENT. WE ALSO BELIEVE THAT WERE IT NOT FOR THE GOVERNMENT'S REPRESENTATION, THE CONTRACTOR WOULD HAVE ADDED ADDITIONAL AMOUNTS IN ITS CONTRACT PRICE AS CONTINGENCY FACTORS TO PROTECT IT AGAINST THE ADDITIONAL EXPENSE INCIDENT TO DELAYS AND INTERRUPTED WORK ARISING FROM POSSIBLE LAUNCHING ACTIVITIES AT THE SITE, AND TO THAT EXTENT THE GOVERNMENT HAS BENEFITED FROM ITS ERRONEOUS ADVICE TO THE CONTRACTOR.
WHILE THE AMOUNTS WHICH WOULD HAVE BEEN ADDED BY THE CONTRACTOR TO COVER SUCH CONTINGENCIES IS SPECULATIVE AT THIS TIME, WE PERCEIVE NO COMPELLING BASIS REQUIRING A CONCLUSION THAT THE ADDED AMOUNTS WOULD NOT HAVE BEEN SUFFICIENT TO COVER THE EXTRA COSTS ACTUALLY INCURRED BY THE CONTRACTOR. THE CONTRACTOR'S STATEMENT OF SUCH COSTS HAS RECEIVED AN EXTENSIVE REVIEW AND AUDIT BY THE DEFENSE CONTRACT AUDIT AGENCY, AND THE AMOUNT OF $11,000 AGREED UPON BY THE CONTRACTOR AND THE DEPARTMENT OF THE AIR FORCE IN SETTLEMENT OF SUCH COSTS APPEARS REASONABLE UNDER THE CIRCUMSTANCES INVOLVED.
ACCORDINGLY, OUR CLAIMS DIVISION IS BEING AUTHORIZED TO EFFECT PAYMENT TO THE CONTRACTOR, IN CARE OF YOUR FIRM, OF THE $11,000 AS FULL AND FINAL SETTLEMENT OF ALL CLAIMS BY THE CONTRACTOR ARISING PURSUANT TO, OR BY REASON OF, THE SUBJECT CONTRACT.