B-166507, APR. 30, 1969

B-166507: Apr 30, 1969

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SECRETARY: REFERENCE IS MADE TO LETTER ENGGC-K DATED MARCH 12. DA-18-020-ENG-3691 WAS ENTERED INTO BETWEEN THE COMPANY AND THE GOVERNMENT FOR CONSTRUCTION OF A HYDRANT FUELING EXTENSION SYSTEM AT DOVER AIR FORCE BASE. THE CONTRACT WAS FOR THE LUMP-SUM PRICE OF $217. WAS RECEIVED BY THE DISTRICT ENGINEER AUTHORIZING THE MODIFICATION OF THE DESIGN AND CONSTRUCTION OF THE "HYDRANT REFUELING AVFUEL BY REVISING DRAWINGS SO THAT THE EMERGENCY SHUTDOWN CIRCUITS SHUT DOWN THE INDIVIDUAL LATERAL RATHER THAN THE ENTIRE SYSTEM.'. A GOVERNMENT ESTIMATE FOR THIS PROPOSED CHANGE WAS PREPARED ON JANUARY 21. THE CONTRACTOR WAS FURNISHED THE ABOVE REVISIONS AND WAS REQUESTED TO SUBMIT A DETAILED COST PROPOSAL FOR THIS CHANGE INCLUDING A COMPLETE BREAKDOWN OF THE LABOR.

B-166507, APR. 30, 1969

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER ENGGC-K DATED MARCH 12, 1969, WITH ENCLOSURES, FROM THE DEPUTY GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, REQUESTING A DECISION WHETHER MODIFICATION NO. 5 TO CONTRACT NO. DA-18-020-ENG-3691, AWARDED TO THE DINGER CONTRACTING CO., MAY BE REFORMED TO INCLUDE ADDITIONAL OVERHEAD AND SUPERVISION COSTS IN THE AMOUNT OF $5,817.75.

ON JUNE 30, 1965, CONTRACT NO. DA-18-020-ENG-3691 WAS ENTERED INTO BETWEEN THE COMPANY AND THE GOVERNMENT FOR CONSTRUCTION OF A HYDRANT FUELING EXTENSION SYSTEM AT DOVER AIR FORCE BASE, DELAWARE. THE CONTRACT WAS FOR THE LUMP-SUM PRICE OF $217,362.

THEREAFTER, DIRECTIVE NO. 22 DATED DECEMBER 14, 1965, WAS RECEIVED BY THE DISTRICT ENGINEER AUTHORIZING THE MODIFICATION OF THE DESIGN AND CONSTRUCTION OF THE "HYDRANT REFUELING AVFUEL BY REVISING DRAWINGS SO THAT THE EMERGENCY SHUTDOWN CIRCUITS SHUT DOWN THE INDIVIDUAL LATERAL RATHER THAN THE ENTIRE SYSTEM.' A GOVERNMENT ESTIMATE FOR THIS PROPOSED CHANGE WAS PREPARED ON JANUARY 21, 1966. ON JANUARY 26,1966, THE CONTRACTOR WAS FURNISHED THE ABOVE REVISIONS AND WAS REQUESTED TO SUBMIT A DETAILED COST PROPOSAL FOR THIS CHANGE INCLUDING A COMPLETE BREAKDOWN OF THE LABOR, EQUIPMENT, AND MATERIAL REQUIRED. AT THIS TIME, THE CONTRACTOR HAD COMPLETED 90 PERCENT OF THE WORK AT THE CONSTRUCTION SITE.

THE CONTRACTOR SUBMITTED A PROPOSAL ON FEBRUARY 16, 1966, IN THE AMOUNT OF $47,506.51. INCLUDED IN THIS PROPOSAL WAS $9,440 FOR "ADDITIONAL SUPERVISION," "OFFICE AND TRUCKS," AND ,WINTER WEATHER TO COMPLETION OF CONTRACT.' THIS PROPOSAL WAS REJECTED AS BEING EXCESSIVE. A CONFERENCE WAS THEN HELD ON MARCH 3, 1966, WHICH IS SUMMARIZED BY THE RESIDENT ENGINEER'S LETTER TO THE CONTRACTOR DATED MARCH 8, 1966. IN THE LETTER, THE RESIDENT ENGINEER STATED THAT THE SUPERVISION, OFFICE, AND TRUCK COSTS WERE EXCESSIVE, BUT AGREED THAT A PORTION OF THESE ADDITIONAL COSTS UNDER THESE ITEMS WOULD BE DUE THE CONTRACTOR AS A RESULT OF THIS PROPOSED CHANGE. THE CONTRACTOR WAS REQUESTED TO SUBMIT A REVISED BREAKDOWN OF HIS COSTS. IT IS NOTED THAT THE ORIGINAL GOVERNMENT ESTIMATE OF JANUARY 21, 1966, DID NOT INCLUDE SUCH COSTS.

ON MARCH 15, 1966, THE CONTRACTOR TOOK EXCEPTION, IN PART, TO THE POSITION MAINTAINED BY THE RESIDENT ENGINEER AND SUBMITTED A REVISED PROPOSAL IN THE AMOUNT OF $37,491.01, WHICH INCLUDED THE COST OF ADDITIONAL OVERHEAD AND SUPERVISION AND GAVE A DETAILED ANALYSIS OF WHY THESE ADDITIONAL COSTS WERE INCLUDED. BY LETTER DATED APRIL 4, 1966, AT THE GOVERNMENT'S VERBAL REQUEST, THE CONTRACTOR REVISED HIS PROPOSAL FOR SUPERVISION AND OVERHEAD TO REFLECT A CREDIT FOR THE TIME ITS SUPERINTENDENT WAS NOT AT THE SITE. THIS REVISED PROPOSAL WAS IN THE AMOUNT OF $34,375.79.

THEREAFTER, DIRECTIVE NO. 24 DATED APRIL 5, 1966, WAS RECEIVED WHICH REVISED THE ORIGINAL DRAWINGS AND SPECIFICATIONS SUBMITTED BY THE FIRST DIRECTIVE. BY LETTER DATED MAY 24, 1966, THE CONTRACTING OFFICER FORWARDED TO THE CONTRACTOR REVISED DRAWINGS AND SPECIFICATIONS WHICH SUPERSEDED THOSE SUBMITTED BY LETTER OF JANUARY 26, 1966. THE CONTRACTOR WAS REQUESTED TO SUBMIT A NEW REVISED PROPOSAL AND WAS ADVISED THAT UPON RECEIPT THEREOF, AN EQUITABLE ADJUSTMENT WOULD BE MADE BY CONTRACT MODIFICATION.

THE GOVERNMENT PREPARED AN ESTIMATE FOR THIS WORK, AS MODIFIED, ON JUNE 1, 1966, IN THE AMOUNT OF $26,349. IT IS NOTED THAT IN THIS ESTIMATE NO ADDITIONAL COSTS WERE INCLUDED FOR ADDITIONAL SUPERVISION, PLANT RENTAL AND EXTENDED OVERHEAD RESULTING FROM THIS MODIFICATION EVEN THOUGH THE GOVERNMENT HAD AGREED, IN ITS LETTER TO THE CONTRACTOR ON MARCH 8, 1966, THAT HE WAS ENTITLED TO SOME REIMBURSEMENT FOR THESE COSTS.

ON JUNE 30, 1966, THE CONTRACTOR, AS REQUESTED, SUBMITTED A REVISED PROPOSAL FOR THE PROPOSED CHANGE, AS MODIFIED, WHICH FAILED TO INCLUDE COSTS FOR ADDITIONAL SUPERVISION, PLANT RENTAL, AND EXTENDED OVERHEAD. SEPTEMBER 26, 1966, MODIFICATION NO. 5 WAS EXECUTED TO COVER THE INSTALLATION OF THE ELECTRICAL CONTROL SYSTEM. THE MODIFICATION OF THE CONTRACT WAS ACCEPTED BY THE CONTRACTOR. AT THE TIME OF ACCEPTANCE OF THE MODIFICATION, THE CONTRACTOR HAD COMPLETED 96 PERCENT OF THE WORK AT THE JOB SITE.

ON DECEMBER 27, 1967, THE CONTRACTOR ADVISED THE RESIDENT ENGINEER THAT ADDITIONAL SUPERVISION AND OVERHEAD COSTS HAD BEEN INADVERTENTLY OVERLOOKED BY HIM WHEN HE SUBMITTED HIS COST PROPOSAL ON JUNE 30, 1966, AND ALSO DURING THE FINAL NEGOTIATIONS WHICH HAD RESULTED IN AN AGREED PRICE ON SEPTEMBER 13, 1966. THE CONTRACTOR, THEREFORE, ASKED TO BE REIMBURSED FOR THESE COSTS AND ITEMIZED THEM AS ACTUALLY INCURRED, RATHER THAN ON AN ESTIMATED BASIS. THE TOTAL AMOUNT OF THESE COSTS IS $5,817.75 AND THE CONTRACTOR BASES HIS ENTITLEMENT TO THEM ON THE GOVERNMENT'S EARLIER INDICATIONS, DURING THE NEGOTIATED PERIOD, THAT IT INTENDED TO PAY THESE COSTS.

THE CONTRACTOR IS REQUESTING REFORMATION OF AN EXECUTED, BILATERAL CONTRACT MODIFICATION ON GROUND OF MUTUAL MISTAKE. HE SUPPORTS HIS POSITION BY NOTING THAT WHEN HE WAS ORIGINALLY REQUESTED TO SUBMIT HIS PROPOSAL ON JANUARY 26, 1966, FOR THE PROPOSED CHANGE, HE SUBMITTED, ON THREE SUCCESSIVE OCCASIONS, COST PROPOSALS WHICH INCLUDED ADDITIONAL SUPERVISION AND OVERHEAD COSTS WHICH RESULTED FROM THESE PROPOSED CHANGES. WHEN THE GOVERNMENT, ON MAY 24, 1967, MODIFIED THE ORIGINAL PROPOSED CHANGE, THE CONTRACTOR SUBMITTED A PROPOSAL OF $26,978.24 WHICH WAS EVENTUALLY NEGOTIATED DOWNWARD TO $26,000 AND, SUBSEQUENTLY, INCORPORATED INTO HIS CONTRACT BY MODIFICATION, BUT WHICH DID NOT INCLUDE THESE ADDITIONAL OVERHEAD AND SUPERVISION COSTS. HE ASSERTS THAT NOT ONLY WAS IT HIS ORIGINAL INTENT TO INCLUDE THESE COSTS IN HIS FINAL PROPOSAL, BUT ALSO THAT IT WAS THE GOVERNMENT'S POSITION, AS INDICATED BY ITS LETTER OF MARCH 8, 1966, TO DO LIKEWISE.

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 ACUAL AGREEMENT WAS. SEE 39 COMP. GEN. 363, 365; 30 COMP. GEN. 220, 221, AND CASES THERE CITED. THE RECORD BEFORE US INDICATES THAT IT WAS THE INTENTION OF THE PARTIES TO INCLUDE IN MODIFICATION NO. 5 THE COSTS INCURRED BY THE CONTRACTOR FOR EXTENDED OVERHEAD AND SUPERVISION. IN VIEW THEREOF AND SINCE SUCH A PROVISION WAS OMITTED FROM MODIFICATION NO. 5 BY MUTUAL MISTAKE, IT IS OBVIOUS THAT THE CONTRACT MODIFICATION, AS EXECUTED, DOES NOT CONFORM TO THE REAL INTENTION OF THE PARTIES. ACCORDINGLY, MODIFICATION NO. 5 TO THE CONTRACT MAY BE REFORMED, AS ADMINISTRATIVELY RECOMMENDED, TO PROPERLY REFLECT THE TRUE INTENT AND AGREEMENTS OF THE PARTIES. THE CLAIM OF THE DINGER CONTRACTING CO. IN THE AMOUNT OF $5,817.75 MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.

A COPY OF THIS DECISION SHOULD BE ATTACHED TO THE VOUCHER COVERING THE ADDITIONAL PAYMENT.