B-165129, OCT. 10, 1968

B-165129: Oct 10, 1968

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FOR ADDITIONAL COSTS ALLEGEDLY INCURRED DUE TO THE LATE DELIVERY OF A GOVERNMENT-FURNISHED HIGH PRESSURE GATE VALVE AND ASSOCIATED EQUIPMENT WHICH WAS INSTALLED UNDER CONTRACT NO. 14-06-D-5827 IN THE CONSTRUCTION OF THE CONTRA LOMA DAM. THE PERTINENT FACTS AND CIRCUMSTANCES ARE REPORTED BY THE CHIEF ENGINEER. 751.93 WAS DENIED ON THE BASIS THAT IT WAS A CLAIM FOR DAMAGES DUE TO LATE DELIVERY OF GOVERNMENT-FURNISHED MATERIALS (5- BY 5 - FOOT HIGH PRESSURE GATE VALVE) AND WAS. ON THE BASIS THAT FAILURE TO MAKE TIMELY DELIVERY OF GOVERNMENT-FURNISHED MATERIALS IS A CHANGE UNDER CLAUSE NO. 3 OF THE GENERAL PROVISIONS OF THE CONTRACT. MY ACTION IN REQUESTING SETTLEMENT OF THE CLAIM IN THIS MANNER IS BASED ON THE PREMISE THAT THE GOVERNMENT MAY HAVE ERRED IN ITS ESTIMATE OF THE TIME THAT WOULD BE REQUIRED BY A SUPPLY CONTRACTOR TO MANUFACTURE THE GOVERNMENT-FURNISHED MATERIALS FOR TIMELY DELIVERY TO THE CONSTRUCTION CONTRACTOR.

B-165129, OCT. 10, 1968

TO MR. SECRETARY:

WE REFER TO A LETTER OF AUGUST 23, 1968, FROM YOUR DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING OUR ADVICE AS TO WHETHER THE BUREAU OF RECLAMATION MAY PAY THE CLAIM OF PARISH BROTHERS, INC., AND HAROLD O. PARISH AND RICHARD I. PARISH, FOR ADDITIONAL COSTS ALLEGEDLY INCURRED DUE TO THE LATE DELIVERY OF A GOVERNMENT-FURNISHED HIGH PRESSURE GATE VALVE AND ASSOCIATED EQUIPMENT WHICH WAS INSTALLED UNDER CONTRACT NO. 14-06-D-5827 IN THE CONSTRUCTION OF THE CONTRA LOMA DAM, DELTA DIVISION, CENTRAL VALLEY PROJECT, CALIFORNIA. THE DEPUTY ASSISTANT SECRETARY POINTS OUT IN HIS LETTER THAT THE CONTRACT DOES NOT CONTAIN THE PRESENTLY USED ,SUSPENSION OF WORK" CLAUSE, OR A GOVERNMENT-FURNISHED PROPERTY CLAUSE PROVIDING FOR REIMBURSEMENT OF THE CONTRACTOR FOR EXTRA COST INCURRED DUE TO DELAY IN RECEIVING SUCH PROPERTY.

THE PERTINENT FACTS AND CIRCUMSTANCES ARE REPORTED BY THE CHIEF ENGINEER, BUREAU OF RECLAMATION, DENVER, COLORADO, AS FOLLOWS: "BY FINDINGS OF FACT AND DECISION OF THE CONTRACTING OFFICER DATED FEBRUARY 27, 1968, THE CONTRACTOR'S CLAIM IN AMOUNT OF $19,751.93 WAS DENIED ON THE BASIS THAT IT WAS A CLAIM FOR DAMAGES DUE TO LATE DELIVERY OF GOVERNMENT-FURNISHED MATERIALS (5- BY 5 - FOOT HIGH PRESSURE GATE VALVE) AND WAS, THEREFORE, NOT WITHIN MY ADMINISTRATIVE AUTHORITY AS CONTRACTING OFFICER TO ENTERTAIN OR SETTLE UNDER THE CONTRACT PROVISIONS. THE CONTRACTOR APPEALED FROM THE FINDINGS AND DECISION ON APRIL 9, 1968, ON THE BASIS THAT FAILURE TO MAKE TIMELY DELIVERY OF GOVERNMENT-FURNISHED MATERIALS IS A CHANGE UNDER CLAUSE NO. 3 OF THE GENERAL PROVISIONS OF THE CONTRACT, A CHANGED CONDITION UNDER CLAUSE NO. 4, AND A BREACH OF CONTRACT. ,DEPARTMENT COUNSEL HAS BEEN DESIGNATED TO REPRESENT THE GOVERNMENT. HOWEVER, BECAUSE OF THE CIRCUMSTANCES RELATING TO THE SUPPLY CONTRACT FOR THE GOVERNMENT FURNISHED MATERIALS (HEREINAFTER DISCUSSED), I HEREBY REQUEST THAT THE CLAIM BE FORWARDED TO THE COMPTROLLER GENERAL FOR HIS CONSIDERATION AND DECISION. THE CONTRACTOR HAS FORMALLY AGREED TO MY PROPOSED ACTION, INCLUDING MY REQUEST DATED MAY 17, 1968, TO THE BOARD OF CONTRACT APPEALS TO HOLD THE APPEAL IN ABEYANCE UNTIL A DECISION HAS BEEN RECEIVED FROM THE COMPTROLLER GENERAL. MY ACTION IN REQUESTING SETTLEMENT OF THE CLAIM IN THIS MANNER IS BASED ON THE PREMISE THAT THE GOVERNMENT MAY HAVE ERRED IN ITS ESTIMATE OF THE TIME THAT WOULD BE REQUIRED BY A SUPPLY CONTRACTOR TO MANUFACTURE THE GOVERNMENT-FURNISHED MATERIALS FOR TIMELY DELIVERY TO THE CONSTRUCTION CONTRACTOR, THEREBY RESULTING IN DELAY AND ADDITIONAL EXPENSE TO THE CONSTRUCTION CONTRACTOR WHEN THE GOVERNMENT-FURNISHED MATERIALS WERE NOT AVAILABLE FOR INSTALLATION AS HE HAD EXPECTED AND AS NECESSARY TO PROPERLY SCHEDULE THE WORK UNDER THE CONTRACT. THE DETAILS OF THE CLAIM AND THE EFFECT OF THE SUPPLY CONTRACT ARE GIVEN BELOW. "ON MARCH 17, 1966, PARISH BROTHERS, INC., AND HAROLD O. PARISH AND RICHARD I. PARISH, A JOINT VENTURE, WAS AWARDED CONTRACT NO. 14-06-D-5827 IN THE ESTIMATED TOTAL AMOUNT OF $1,781,626.10 FOR CONSTRUCTION AND COMPLETION OF CONTRA LOMA DAM, CENTRAL VALLEY PROJECT, CALIFORNIA, UNDER SPECIFICATIONS NO. DC- 6392. "NOTICE TO PROCEED WITH THE WORK UNDER THIS CONTRACT WAS RECEIVED BY THE CONTRACTOR ON APRIL 2, 1966. THE REQUIRED COMPLETION DATE WAS 600 CALENDAR DAYS AFTER RECEIPT OF NOTICE TO PROCEED OR NOVEMBER 23, 1967. ORDERS FOR CHANGES NO. 1, 2, AND 3 DIRECTED SEVERAL CHANGES AND ADDITIONS IN THE WORK, AND ADJUSTMENT IN TIME FOR COMPLETION OF CONTRACT, ORDERS FOR CHANGES NO. 1 AND 2, EXTENDED THE CONTRACT TIME A TOTAL OF 30 CALENDAR DAYS OR TO AND INCLUDING DECEMBER 23, 1967. THE CONTRACT WORK WAS ACCEPTED AS SUBSTANTIALLY COMPLETED AS OF DECEMBER 20, 1967, WITHIN THE CONTRACT TIME AS EXTENDED. "PARAGRAPH 27 OF THE SPECIFICATIONS LISTS ALL THE MATERIALS WHICH WERE TO BE FURNISHED BY THE GOVERNMENT AND INSTALLED IN THE WORK BY THE CONTRACTOR, INCLUDING THREE HIGH-PRESSURE GATE VALVES. THE CONTRACTOR'S CLAIM PERTAINS TO ONLY THE 5- BY 5 - FOOT HIGH-PRESSURE GATE VALVE AND THE ASSOCIATED TWO METAL TRANSITIONS AND GATE HOIST WHICH HE WAS REQUIRED TO INSTALL IN THE OUTLET WORKS OF THE DAM IN ACCORDANCE WITH PARAGRAPH 140 OF THE SPECIFICATIONS. NEITHER OF THESE PARAGRAPHS CONSIDERS DELIVERY TIME OF THE GOVERNMENT FURNISHED MATERIAL. "THE GOVERNMENT-FURNISHED 5- BY 5 - FOOT HIGH PRESSURE GATE VALVE AND ITS TWO TRANSITIONS AND HOIST WERE PURCHASED FROM STEWARD MACHINE COMPANY, BIRMINGHAM, ALABAMA, UNDER CONTRACT NO. 14-06-D-5992 DATED JULY 12, 1966, INVITATION NO. DS-6432. UNDER THIS CONTRACT, COMPLETESHIPMENT OF THE GATE VALVE, TRANSITIONS AND HOIST WAS TO BE MADE WITHIN 150 CALENDAR DAYS AFTER RECEIPT OF NOTICE OF AWARD OF CONTRACT (JULY 19, 1966) OR ON OR BEFORE DECEMBER 16, 1966. BY FINDINGS OF FACT DATED FEBRUARY 5, 1968, THE CONTRACT TIME FOR SHIPMENT OF THESE MATERIALS WAS EXTENDED 2 CALENDAR DAYS OR TO AND INCLUDING DECEMBER 18, 1966, BECAUSE OF DELAYS INCURRED BY THE SUPPLIER DUE TO UNUSUALLY SEVERE WEATHER. SHIPMENT OF THE GATE VALVE AND ACCESSORIES WAS MADE ON APRIL 10, 1967, INVOLVING A DELAY OF 113 CALENDAR DAYS UNDER THE SUPPLY CONTRACT. LIQUIDATED DAMAGES WERE ASSESSED FOR 113 DAYS AT $50 PER DAY IN ACCORDANCE WITH THE TERMS OF THE SUPPLY CONTRACT. "ON HIS INITIAL TENTATIVE CONSTRUCTION SCHEDULE DATED MAY 11, 1966,AND ON A REVISION TO THIS SCHEDULE DATED NOVEMBER 20, 1966, PARISH BROTHERS, INC., INDICATED THAT WORK INVOLVING THE GATE VALVES UNDER SCHEDULE ITEM 63 WOULD BE STARTED ON ABOUT DECEMBER 1, 1966, WHICH CONFORMED REASONABLY WITH THE ORIGINAL CONTRACT SHIPPING DATE (DECEMBER 16, 1966) OF THE 5- BY 5 - FOOT GATE VALVE FURNISHED UNDER INVITATION NO. DS-6432. ACCORDING TO PROJECT INFORMATION, THE CONTRACTOR PLANNED TO START INSTALLING THE 5- BY 5 - FOOT GATE VALVE IN JANUARY 1967 AND TO COMPLETE THE INSTALLATION IN APRIL 1967, INCLUDING CONSTRUCTION OF THE CONCRETE CHAMBER WHICH ENCLOSES THE GATE VALVE. HE PLANNED TO THEN PROCEED WITH PLACEMENT OF DAM EMBANKMENT WHICH SURROUNDS THE GATE CHAMBER AND WHICH MUST NECESSARILY BE PLACED SUBSEQUENT TO CONSTRUCTION OF THE GATE CHAMBER. IT WOULD HAVE BEEN POSSIBLE TO CONSTRUCT THE GATE CHAMBER AND PROCEED WITH CONSTRUCTION OF DAM EMBANKMENT PRIOR TO DELIVERY OF THE GATE VALVE, LATER INSTALLING THE GATE VALVE IN THE GATE CHAMBER BY USING THE OUTLET CONDUIT FOR ACCESS AND THE OPTIONAL METHOD OF SECOND-STAGE CONCRETE CONSTRUCTION WHICH IS PROVIDED IN PARAGRAPH 109 OF THE SPECIFICATIONS. BY LETTER DATED JANUARY 27, 1967, THE CONTRACTOR WAS REMINDED OF THE ALTERNATE METHODS PROVIDED FOR INSTALLING THE GATE VALVE. HOWEVER, HAVING INITIALLY PLANNED TO USE ONLY FIRST-STAGE CONCRETE AND ANTICIPATING A SHIPMENT DATE OF FEBRUARY 15, 1967, AS INDICATED IN THE JANUARY 27 LETTER, HE ELECTED TO WAIT UNTIL AFTER DELIVERY OF THE GATE VALVE BEFORE STARTING CONSTRUCTION OF THE GATE CHAMBER. THE GOVERNMENT GAVE NUMEROUS NOTICES TO THE CONTRACTOR PROGRESSIVELY REVISING THE TENTATIVE SHIPPING DATE FOR THIS VALVE FROM DECEMBER 1966 TO FEBRUARY 15, 1967 (BY LETTER OF JANUARY 27, 1967), TO THE LAST WEEK OF MARCH 1967 (BY LETTER OF MARCH 15, 1967) WITH SHIPMENT ULTIMATELY BEING MADE ON APRIL 10, 1967. THE CONTRACTOR'S INITIAL CONSTRUCTION PROGRAM WAS APPROVED BY THE CONTRACTING OFFICER BY LETTER DATED AUGUST 3, 1966, STATING THAT ALL GOVERNMENT-FURNISHED MATERIALS WERE SCHEDULED FOR SHIPMENT IN TIME TO MEET THE CONTRACTOR'S NEEDS. THE NOVEMBER 20, 1966 REVISION TO THE SCHEDULE WAS APPROVED BY THE CONTRACTING OFFICER BY LETTER DATED MARCH 17, 1967, WITH RESERVATIONS CONCERNING UNCERTAIN DELIVERY DATE OF THE GATE VALVE. THE GATE VALVE WAS DELIVERED TO THE JOB-SITE ON APRIL 15, 1967, APPROXIMATELY THE DATE ON WHICH THE CONTRACTOR HAD EXPECTED TO COMPLETE THE INSTALLATION OF THE VALVE UNDER HIS ORIGINAL CONSTRUCTION SCHEDULE. INSTALLATION OF THE GATE VALVE AND CONSTRUCTION OF THE GATE CHAMBER WERE STARTED IMMEDIATELY AND WERE COMPLETED ON JULY 14, 1967. IN THE MEANTIME, AND AFTER A SHUTDOWN BECAUSE OF RAINY WEATHER, THE CONTRACTOR BEGAN PLACING THE DAM EMBANKMENT ON A LIMITED BASIS ON MAY 8, 1967. IT WAS NECESSARY TO LEAVE AN OPENING IN THE EMBANKMENT TO ACCOMMODATE INSTALLATION OF THE HIGH-PRESSURE GATE VALVE AND CONSTRUCTION OF THE GATE CHAMBER, WHICH CONSIDERABLY REDUCED THE WORK AREA AVAILABLE FOR THE EARTHWORK EQUIPMENT AND CAUSED SOME OF THE CONTRACTOR'S EQUIPMENT TO BE IDLE. ON JULY 17, 1967, AFTER COMPLETION OF THE GATE CHAMBER, FULL-SCALE OPERATIONS WERE RESUMED ON CONSTRUCTION OF THE DAM EMBANKMENT. "BY LETTER DATED AUGUST 30, 1967, THE CONTRACTOR CLAIMED REIMBURSEMENT IN THE AMOUNT OF $19,751.93 FOR ALLEGED LOSS IN PRODUCTION TIME FOR CERTAIN EARTHWORK EQUIPMENT BETWEEN MAY 8, 1967, THE DATE ON WHICH THE LISTED EQUIPMENT COULD HAVE BEEN USED ON DAM EMBANKMENT CONSTRUCTION IF THE GATE VALVE HAD BEEN INSTALLED AS SCHEDULED, AND JULY 14, 1967, THE DATE ON WHICH CONSTRUCTION OF THE GATE CHAMBER WAS COMPLETED AND FULL-SCALE EMBANKMENT CONSTRUCTION OPERATIONS WERE RESUMED. IT HAS BEEN DETERMINED FROM PROJECT RECORDS THAT THE PLACEMENT RATE AVERAGED APPROXIMATELY 884 CUBIC YARDS PER DAY LESS DURING THE SLOWDOWN PERIOD THAN THE PLACEMENT RATE AFTER FULL-SCALE OPERATIONS RESUMED. THIS LOSS IN EMBANKMENT PRODUCTION (884 CUBIC YARDS PER DAY FOR 46 DAYS WORKED AT THE LIMITED RATE) IS DIRECTLY ATTRIBUTABLE TO THE LATE DELIVERY OF THE GOVERNMENT-FURNISHED GATE VALVE, SINCE FULL-SCALE EMBANKMENT OPERATIONS COULD NOT PROCEED UNTIL THE GATE WAS INSTALLED AND THE GATE CHAMBER COMPLETED. THE CONTRACTOR DETERMINED THE VALUE OF THE LOSS BY MULTIPLYING THE NET TIME THAT CERTAIN EARTHWORK EQUIPMENT WAS IDLE BY AN HOURLY OWNERSHIP EXPENSE. "BY LETTER DATED OCTOBER 18, 1967, THE CONTRACTOR WAS ADVISED THAT HIS CLAIM WAS FOR DAMAGES WHICH THE CONTRACTING OFFICER HAS NO AUTHORITY TO SETTLE. THE CONTRACTOR WAS ALSO ADVISED THAT IF HE WISHED TO PURSUE THE CLAIM FURTHER, HE SHOULD NOTIFY THE PROJECT OFFICE IN WRITING, AND A FINDINGS OF FACT WOULD BE PREPARED IN ACCORDANCE WITH CLAUSE NO. 6 OF THE GENERAL PROVISIONS OF THE CONTRACT. THE CONTRACTOR, BY LETTER DATED OCTOBER 20, 1967, ADVISED THE CONTRACTING OFFICER THAT HE WISHED TO PURSUE THE CLAIM FURTHER, AND THE FINDINGS OF FACT AND DECISION OF THE CONTRACTING OFFICER WERE MAILED TO HIM ON MARCH 18, 1968. "DELAY IN PLACEMENT OF DAM EMBANKMENT WAS INCURRED BY THE CONTRACTOR AS A DIRECT RESULT OF THE GOVERNMENT-FURNISHED 5- BY 5 - FOOT HIGH-PRESSURE GATE VALVE NOT BEING AVAILABLE TO PERMIT CONSTRUCTION OF THE GATE CHAMBER AS PLANNED AND AS SCHEDULED. ALTHOUGH THE SUPPLY CONTRACT REQUIRED SHIPMENT OF THE GATE VALVE WITHIN A PERIOD OF TIME (150 DAYS) THAT WOULD HAVE PERMITTED THE CONSTRUCTION CONTRACTOR TO MEET HIS TENTATIVE CONSTRUCTION SCHEDULE, IT APPARENTLY DID NOT ALLOW SUFFICIENT TIME FOR A SUPPLY CONTRACTOR TO PROCURE THE NECESSARY MATERIALS AND MANUFACTURE THE NUMEROUS COMPONENTS. MANY OF THE COMPONENTS CONSISTED OF HEAVY IRON CASTINGS AND SPECIAL BRONZE SEATS AND SILLS THAT COULD POSSIBLY REQUIRE CASTING IN RESPECTIVE IRON AND BRONZE FOUNDRIES AND TRANSPORTING TO THE SUPPLY CONTRACTOR'S SHOP FOR MACHINING AND ASSEMBLING. THE PRODUCTION STATUS REPORTS BY THE GOVERNMENT INSPECTOR SHOW THAT WITHIN A MONTH AFTER RECEIPT OF NOTICE OF AWARD OF CONTRACT, THE STEWARD MACHINE COMPANY HAD ORDERED APPROXIMATELY 75 PERCENT OF THE NECESSARY MATERIALS AND SCHEDULED PRODUCTION TO BE STARTED IN HIS OWN SHOP IN NOVEMBER 1966. DELIVERY OF CASTINGS TO THE SUPPLY CONTRACTOR WAS LATE, HOWEVER, AND THE CONTRACT TIME EXPIRED ON DECEMBER 16, 1966, WITH ONLY ABOUT 50 PERCENT OF THE NECESSARY MATERIALS RECEIVED BY THE STEWARD MACHINE COMPANY AND 25 PERCENT OF THE TOTAL CONTRACT WORK COMPLETED. "AS THE WORK PROCEEDED, FURTHER DIFFICULTY WAS ENCOUNTERED IN PRODUCTION OF THE IRON CASTINGS, AND THE SHIPPING DATE WAS REPEATEDLY POSTPONED. THE SUPPLY CONTRACTOR VERBALLY CLAIMED THAT THE 150 DAYS ALLOWED FOR COMPLETION OF THE CONTRACT WORK WOULD NOT BE SUFFICIENT TO MANUFACTURE SUCH EQUIPMENT, EVEN IF NO DIFFICULTIES WERE ENCOUNTERED. SEVERAL SUPPLY CONTRACTS FOR FURNISHING ALMOST IDENTICAL EQUIPMENT FOR OTHER PROJECTS AND AWARDED SUBSEQUENT TO INVITATION NO. DS-6432 ALLOWED CONSIDERABLY MORE TIME FOR COMPLETION. THE COMPLETION TIME FOR THOSE CONTRACTS RANGED FROM 180 TO 240 DAYS. ON SOME OF THE CONTRACTS THAT ALLOWED ONLY 180 DAYS, LATE SHIPMENT WAS MADE AND LIQUIDATED DAMAGES WERE ASSESSED. "THE GATE AND ITS ACCESSORIES, WEIGHING APPROXIMATELY 19 TONS, WERE SHIPPED ON APRIL 10, 1967. TO SAVE TIME IN SHIPPING, TRUCKS WERE USED IN LIEU OF RAILROAD CARS AND THE ADDITIONAL FREIGHT COSTS WERE PAID BY THE GOVERNMENT. "IN SUMMARY, WE BELIEVE THAT THE GOVERNMENT'S FAILURE TO ALLOW SUFFICIENT TIME FOR FABRICATION OF THE VALVE BY THE SUPPLIER CAUSED PARISH TO PRODUCE A SCHEDULE FOR INSTALLING THE VALVE THAT WAS NOT REALISTIC UNDER THE CIRCUMSTANCES. IN TURN, THE ULTIMATE DELAY IN DELIVERY OF THE VALVE CAUSED DISRUPTION IN THE CONTRACTOR'S ACTUAL CONSTRUCTION SCHEDULE, WHICH RESULTED IN INCREASED COSTS TO THE CONTRACTOR. AS STATED, THIS SERIES OF CIRCUMSTANCES STEMMED FROM THE GOVERNMENT'S INITIAL OMISSION TO CONSIDER WHAT WOULD BE A REASONABLE AND ORDINARY PERIOD OF TIME FOR THE GATE FABRICATION, AS REVEALED BY PRACTICE UNDER OTHER BUREAU CONTRACTS. "THE CONTRACTOR'S CLAIM IN THE AMOUNT OF $19,751.93 FOR DISRUPTION IN HIS CONSTRUCTION SCHEDULE RESULTING FROM THE LATE DELIVERY OF THE GOVERNMENT-FURNISHED GATE VALVE IS CONSIDERED REASONABLE. IF THE COMPTROLLER GENERAL DECIDES THAT THE GOVERNMENT IS LIABLE FOR THE EXTRA COSTS INCURRED BY THE CONTRACTOR, IT IS RECOMMENDED THAT THE CONTRACTOR BE REIMBURSED FOR THE ENTIRE AMOUNT OF THE CLAIM; THAT IS, $19,751.93.'

SINCE BREACH OF CONTRACT IS THE ONLY BASIS PRESENTED BY PARISH IN ITS APPEAL WHICH IS NOT WITHIN THE JURISDICTION OF THE INTERIOR CONTRACT APPEALS BOARD, WE ASSUME THAT THE CONTRACTOR'S CONCURRENCE WITH YOUR REQUEST FOR OUR DECISION RELATES ONLY TO THE BREACH QUESTION, AND OUR DECISION WILL THEREFORE BE SO LIMITED.

BASED UPON OUR REVIEW OF THE FACTS, AS SET OUT ABOVE, WE ARE UNABLE TO AGREE WITH THE CHIEF ENGINEER'S CONCLUSION THAT THE CONTRACTOR'S DELAY IN PLACEMENT OF THE DAM EMBANKMENT WAS "DIRECTLY ATTRIBUTABLE" TO, OR A "DIRECT RESULT" OF, THE LATE DELIVERY OF THE GOVERNMENT FURNISHED GATE VALVE. SUCH A CONCLUSION DOES NOT SEEM TO REFLECT ADEQUATE CONSIDERATION OR WEIGHING OF THE PRIOR STATEMENT: "IT WOULD HAVE BEEN POSSIBLE TO CONSTRUCT THE GATE CHAMBER AND PROCEED WITH CONSTRUCTION OF DAM EMBANKMENT PRIOR TO DELIVERY OF THE GATE VALVE, LATER INSTALLING THE GATE VALVE IN THE GATE CHAMBER BY USING THE OUTLET CONDUIT FOR ACCESS AND THE OPTIONAL METHOD OF SECOND-STAGE CONCRETE CONSTRUCTION WHICH IS PROVIDED IN PARAGRAPH 109 OF THE SPECIFICATIONS.'

FROM THE FOREGOING IT WOULD APPEAR THAT ANY DELAY MAY HAVE BEEN THE COMBINED RESULT OF THE LATE DELIVERY AND THE CONTRACTOR'S ELECTION NOT TO AVAIL ITSELF OF THE ALTERNATE METHOD OF CONSTRUCTION. FURTHER, THE RECORD DOES NOT CLEARLY REFLECT THAT THE WORK HAD PROCEEDED IN ACCORDANCE WITH THE CONTRACTOR'S CONSTRUCTION SCHEDULE TO THE POINT WHERE INSTALLATION OF THE GATE VALVE WOULD HAVE COMMENCED IN JANUARY 1967 HAD SUCH VALVE BEEN AVAILABLE. IT IS NOTED THAT THE CONTRACTOR DID NOT INFORM THE GOVERNMENT OF ANY WORK DELAY ON ACCOUNT OF NONDELIVERY OF THE GATE VALVE UNTIL MARCH 22, 1967, ALTHOUGH CLAUSE 5 OF THE CONTRACT'S GENERAL PROVISIONS, TERMINATION FOR DEFAULT -- DAMAGES FOR DELAY -- TIME EXTENSIONS, STANDARD FORM 23-A, JUNE 1964 EDITION, PROVIDES THAT NOTICE OF THE CAUSE OF ANY DELAY WHICH IS EXCUSABLE UNDER THAT CLAUSE SHALL BE GIVEN THE CONTRACTING OFFICER WITHIN TEN DAYS FROM THE BEGINNING OF SUCH DELAY. ADDITIONALLY, NEITHER THE CHIEF ENGINEER'S REPORT NOR THE LETTER OF AUGUST 23 IDENTIFIES THE LEGAL PREMISE ON WHICH PAYMENT OF THE CLAIM IS RECOMMENDED, OR CITES ANY AUTHORITY IN SUPPORT OF THE PROPOSED PAYMENT. IT APPEARS FROM THE CHIEF ENGINEER'S SUMMARY, WHEREIN REFERENCE IS MADE TO "THE GOVERNMENT'S FAILURE TO ALLOW SUFFICIENT TIME FOR FABRICATION OF THE VALVE BY THE SUPPLIER," THAT THE RECOMMENDATION IS BASED ON THE GROUND THAT IT IS IMPOSSIBLE TO FABRICATE THE GATE VALVE WITHIN THE 150 DAYS SPECIFIED BY THE GOVERNMENT IN ITS CONTRACT WITH STEWARD, AND THAT THERE IS LEGAL LIABILITY OUTSIDE THE CONTRACT ON THE PART OF THE GOVERNMENT FOR HAVING ADVISED PARISH THAT ALL GOVERNMENT-FURNISHED MATERIALS WERE SCHEDULED FOR SHIPMENT IN TIME TO MEET THE CONTRACTOR'S NEEDS.

THE RECORD FALLS FAR SHORT OF ESTABLISHING THAT THE CONTRACT WITH STEWARD WAS IMPOSSIBLE OF PERFORMANCE. WHILE THE CHIEF ENGINEER STATES THAT THE SUPPLY CONTRACT "APPARENTLY" DID NOT ALLOW SUFFICIENT TIME FOR A SUPPLY CONTRACTOR TO PROCURE THE NECESSARY MATERIALS AND MANUFACTURE THE NUMEROUS COMPONENTS, HE FURTHER INDICATES THAT STEWARD HAD ORDERED THE NECESSARY CASTING, ETC., TO PERMIT PRODUCTION TO BE STARTED IN ITS OWN SHOP IN NOVEMBER 1966 BUT ONLY ABOUT 50 PERCENT OF SUCH MATERIALS HAD BEEN RECEIVED FROM ITS SUPPLIERS ON DECEMBER 16, 1966. IT IS ALSO STATED THAT FURTHER DIFFICULTY WAS ENCOUNTERED IN PRODUCTION OF THE IRON CASTINGS. WOULD APPEAR THAT THE LIQUIDATED DAMAGES WERE ASSESSED AGAINST STEWARD FOR ITS LATE DELIVERY PURSUANT TO ARTICLE 11 (F) OF THAT SUPPLY CONTRACT'S GENERAL PROVISIONS, AS INSERTED THEREIN PURSUANT TO PARAGRAPH 1-1.315-3 (A) OF THE FEDERAL PROCUREMENT REGULATIONS. SINCE STEWARD WAS NOT RELIEVED FROM LIABILITY FOR LIQUIDATED DAMAGES UNDER SUBPARAGRAPH (III) OF THAT ARTICLE WHICH PROVIDES FOR RELIEF WHERE THE DELAY IS DUE TO CAUSES BEYOND THE CONTROL OF BOTH THE CONTRACTOR AND SUBCONTRACTOR, AND WITHOUT THE FAULT OR NEGLIGENCE OF EITHER OF THEM, SUCH ASSESSMENT WOULD SEEM TO BE INCONSISTENT WITH ANY SUGGESTION THAT THE CONTRACT WAS IMPOSSIBLE OF PERFORMANCE WITHIN THE PERIOD SPECIFIED. FURTHER, WE ARE NOT PERSUADED BY THE STATEMENT THAT SHIPMENT WAS LATE ON SOME SUBSEQUENT CONTRACTS WHICH ALLOWED 180 DAYS FOR SHIPPING SUCH ITEMS, SINCE LIQUIDATED DAMAGES WERE ALSO ASSESSED IN THOSE CONTRACTS THEREBY INDICATING THAT THE DELAY INVOLVED WAS NOT DUE TO CAUSES BEYOND THE CONTROL OF BOTH THE CONTRACTOR AND ITS SUBCONTRACTORS, AND WITHOUT THE FAULT OR NEGLIGENCE OF EITHER OF THEM.

WHILE THE DETERMINATION OF DELIVERY REQUIREMENTS TO MEET ITS NEED IS THE PRIMARY RESPONSIBILITY OF THE PROCURING AGENCY, THE DETERMINATION OF WHETHER SUCH REQUIREMENTS CAN BE MET BY AN OFFEROR IS THE PRIMARY RESPONSIBILITY OF THAT PROSPECTIVE CONTRACTOR. ALTHOUGH IT IS WELL RECOGNIZED THAT A SHORTER DELIVERY SCHEDULE MAY RESULT IN A HIGHER PRICE FOR AN ITEM, BY REQUIRING THE CONTRACTOR TO PAY OVERTIME WAGES, ADDITIONAL AMOUNTS FOR EXPEDITED DELIVERY OF COMPONENTS BY SUBCONTRACTORS, ETC., STEWARD WAS DETERMINED TO BE A RESPONSIBLE CONTRACTOR AND SUCH MATTERS DO NOT DETRACT FROM THE GOVERNMENT'S RIGHT TO EXPECT THAT THE CONTRACTOR HAD CAREFULLY CONSIDERED THE REQUIREMENTS AND WOULD TAKE WHATEVER ACTION WAS ESSENTIAL TO MEET THE SPECIFIED DELIVERY DATE. WE DO NOT FIND THAT THE GOVERNMENT HAD ANY REASON TO BELIEVE THAT STEWARD WOULD NOT MEET ITS CONTRACTUAL COMMITMENTS, WHEN PARISH WAS ADVISED ON AUGUST 3, 1966, THAT THE GOVERNMENT-FURNISHED MATERIALS WERE SCHEDULED FOR SHIPMENT IN TIME TO MEET ITS NEEDS.

IT IS TO BE NOTED THAT THE GOVERNMENT DID NOT WARRANT THE MATERIAL WOULD BE MADE AVAILABLE TO PARISH AS SCHEDULED, AND UNDER CLAUSE 5 OF THE CONTRACT'S GENERAL PROVISIONS ONLY AN EXTENSION OF TIME IS ALLOWED FOR DELAY ARISING FROM THE ACTS OF ANOTHER CONTRACTOR IN THE PERFORMANCE OF A CONTRACT WITH THE GOVERNMENT. THE GOVERNMENT DID NOT EXPRESSLY OBLIGATE ITSELF UNDER ANY PROVISIONS OF THE CONTRACT TO PAY DAMAGES TO PARISH BECAUSE OF DELAY IN MAKING THE GATE VALVE AVAILABLE, AND WE DO NOT PERCEIVE WHERE THE DELAY IN SUPPLYING THE VALVE IS ATTRIBUTABLE TO ANY FAULT OR NEGLIGENCE ON THE GOVERNMENT'S PART, OR WHERE THE GOVERNMENT FAILED TO DO WHAT IT SHOULD UNDER THE CONTRACT WITH PARISH SO AS TO CONSTITUTE A BREACH OF THAT CONTRACT. THE RECORD DOES NOT INDICATE THAT TERMINATION OF THE CONTRACT WITH STEWARD FOR DEFAULT, AND CONTRACTING WITH ANOTHER FIRM FOR THE GATE VALVE WOULD HAVE RESULTED IN AN EARLIER DELIVERY. FURTHER, PARISH WAS REMINDED, AT THE TIME THAT HE HAD PLANNED TO START INSTALLING THE VALVE, OF THE ALTERNATE METHODS PROVIDED FOR SUCH INSTALLATION WHICH WOULD HAVE PERMITTED THE CONTRACTOR TO PROCEED IN A TIMELY MANNER WITH THE CONSTRUCTION OF THE DAM EMBANKMENT. WE BELIEVE THAT IN SUCH CIRCUMSTANCES THE LAW CLEARLY SUPPORTS THE POSITION THAT NO LEGAL LIABILITY ACCRUED TO THE GOVERNMENT FOR PAYMENT OF DAMAGES TO PARISH FOR BREACH OF CONTRACT BY REASON OF THE DELAY OF STEWARD IN FURNISHING THE VALVE. SEE GILBANE BUILDING CO. V UNITED STATES, 166 CT. CL. 347, CITING UNITED STATES V FOLEY, 329 U.S. 64, AND OTHERS.

IN VIEW OF THE FOREGOING WE FIND NO BASIS IN THE PRESENT RECORD ON WHICH THE BUREAU OF RECLAMATION MAY MAKE PAYMENT OF THE SUBJECT CLAIM FOR DELAY DAMAGES ON THE THEORY THAT THE GOVERNMENT BREACHED ITS CONTRACT.