B-168636, JAN. 19, 1970

B-168636, JAN. 19, 1970

CONTRACTS--DEFAULT--PAYMENT DECISION TO SECRETARY OF AGRICULTURE CONCERNING CLAIM OF WILLIAM BRUSH AND SONS, INC; FOR WORK INCIDENT TO CANCELED CONTRACT FOR ROAD WIDENING PROJECT IN SHOSHONE NATIONAL FOREST. A CONTRACTOR WHOSE BID PRICE FOR ROAD PROJECT WAS SUBSTANTIALLY BELOW OTHER BID PRICE AND 80 PERCENT OF THE GOVERNMENT ESTIMATE BASED ON FAULTY SPECIFICATIONS IS ENTITLED TO SOME RELIEF WITHOUT LIABILITY FOR EXCESS COSTS. REVIEW OF MATTER INDICATES CONTRACTOR'S CLAIM IS EXCESSIVE ALTHOUGH PAYMENT FOR WORK ACTUALLY ACCOMPLISHED IS SUGGESTED. CONTRACTOR REFUSES, MATTER MAY BE PURSUED IN COURT.

TO MR. SECRETARY:

WE REFER TO THE CLAIM FROM WILLIAM BRUSH AND SONS, INCORPORATED, OF RIVERTON, WYOMING, IN CONNECTION WITH FOREST SERVICE PURCHASE ORDER NO. 319-14-67, FORWARDED BY YOUR DEPARTMENT FOR SETTLEMENT ON DECEMBER 11, 1969. THE FACTS ARE REPORTED AS FOLLOWS:

THE FOREST SERVICE, SHOSHONE NATIONAL FOREST, CODY, WYOMING, ISSUED A REQUEST FOR QUOTATIONS ON JUNE 23, 1967, FOR A ROAD-WIDENING PROJECT IN THE SHOSHONE NATIONAL FOREST. THE SPECIFICATIONS AND PLANS CALLED FOR THE EXCAVATION OF AN EMBANKMENT ON ONE SIDE OF THE ROAD AND THE PLACEMENT AND COMPACTION OF THE EXCAVATED MATERIAL ON THE OPPOSITE SIDE OF THE ROAD FOR A SIGN TURNOUT.

IT WAS INDICATED IN THE ATTACHED PLANS THAT APPROXIMATELY 255 CUBIC YARDS OF EXCAVATION WOULD BE REQUIRED TO SUPPLY 218 CUBIC YARDS OF MATERIALS SUITABLE FOR THE EMBANKMENT ON THE OPPOSITE SIDE OF THE ROAD. THE SPECIFICATIONS STATED THAT PAYMENT FOR EXCAVATION WAS TO BE ON A LUMP-SUM BASIS, WITH NO ADDITIONAL PAYMENT ALLOWED FOR PLACEMENT OF EMBANKMENT. THE SECOND ITEM CONSISTED OF OBTAINING, HAULING, PLACING AND COMPACTING CRUSHED GRAVEL SURFACING. THE SPECIFICATIONS STATED THAT PAYMENT FOR THIS ITEM ALSO WAS TO BE ON A LUMP-SUM BASIS, WITH NO ADDITIONAL COMPENSATION TO BE PAID TO THE CONTRACTOR FOR OBTAINING OR HAULING THE GRAVEL.

THE RFQ SCHEDULE CALLED FOR UNIT PRICES ON 255 CUBIC YARDS OF UNCLASSIFIED EXCAVATION AND 95 TONS OF CRUSHED GRAVEL AS WELL AS FOR A TOTAL LUMP-SUM BID PRICE FOR THE ENTIRE JOB. TWO QUOTATIONS WERE RECEIVED AND OPENED ON JUNE 29, 1967. WILLIAM BRUSH & SONS WAS LOW QUOTING $1.50 PER CUBIC YARD FOR EXCAVATION AND $3.50 PER TON FOR GRAVEL, FOR A TOTAL BID OF $715. KING ENGINEERS QUOTED PRICES TOTALING $1,825 AND THE ENGINEER'S ESTIMATE FOR THE JOB WAS $890. BY LETTER DATED JUNE 30, 1967, BRUSH WAS NOTIFIED OF THE AWARD. THE SUBJECT PURCHASE ORDER WAS FORWARDED TO HIM AND HE WAS REQUESTED TO NOTIFY THE FOREST ENGINEER THE DAY BEFORE HE STARTED WORK.

BRUSH STARTED WORK ON AUGUST 14, 1967. HE STATES THAT HE CALLED THE FOREST ENGINEER ON THAT DATE, BUT THE FOREST ENGINEER REPORTS THAT HE FIRST HEARD FROM BRUSH ON AUGUST 21, AT WHICH TIME BRUSH COMPLAINED OF EXCESS ROCK AND LACK OF FILL MATERIAL AT THE EXCAVATION SITE. THE ENGINEER VISITED THE SITE THE NEXT DAY AND FOUND THAT THE EXCAVATION WAS APPROXIMATELY 75 PERCENT COMPLETED. HE ALSO FOUND THAT THERE WERE MORE LARGE ROCKS THAN HAD BEEN ANTICIPATED, SO THAT FILL MATERIAL WOULD HAVE TO BE HAULED IN FROM SOME OTHER LOCATION. THE ENGINEER AND BRUSH DISCUSSED HAULING ADDITIONAL FILL FROM A LOCATION ABOUT 10 MILES FROM THE CONSTRUCTION SITE, AND THE ENGINEER SUGGESTED THAT THE FOREST SERVICE WOULD ALLOW PAYMENT OF 15[ PER YARD MILE FOR THIS. BRUSH COUNTERED WITH AN OFFER OF 46[ PER YARD MILE, STATING THAT HE COULD NOT AGREE TO THE 15[ PAYMENT. NO AGREEMENT WAS REACHED, AND BRUSH SAID THAT HE WOULD HAVE TO MOVE HIS EQUIPMENT TO ANOTHER JOB PENDING RESOLUTION OF THE MATTER. BRUSH STATES THE ENGINEER AGREED TO HIS LEAVING THE JOB UNTIL AGREEMENT COULD BE REACHED ON THE CLAIM FOR EXTRA COMPENSATION. (YOUR DEPARTMENT REPORTS THAT THE EVIDENCE OF RECORD IS NOT CLEAR ON THIS POINT.)

IN ANY CASE, NOTHING FURTHER OCCURRED UNTIL MAY 9, 1968, WHEN THE CONTRACTING OFFICER WROTE TO BRUSH CONCERNING HIS PLANS FOR COMPLETING THE JOB. DISCUSSIONS WERE HELD REGARDING BRUSH'S CLAIM, BUT THE MATTER WAS NOT RESOLVED. ON JUNE 4, 1968, THE CONTRACTING OFFICER AGAIN WROTE TO BRUSH STATING THAT IF HE DID NOT HEAR FROM HIM BY JUNE 10, THE PURCHASE ORDER WOULD BE CANCELLED AND SOMEONE ELSE WOULD BE USED TO COMPLETE THE JOB. NO WORD WAS RECEIVED FROM BRUSH BY JUNE 10, AND ON JUNE 12 ANOTHER CONTRACT WAS NEGOTIATED WITH ARCHIE D. CLAY, WHO COMPLETED THE JOB FOR THE LUMP SUM OF $980. BRUSH DID CALL THE CONTRACTING OFFICER ON JUNE 12, AND WAS THEN ADVISED OF THE NEW CONTRACT. A FEW DAYS LATER HE SUBMITTED A CLAIM IN THE AMOUNT OF $1472 FOR WORK PERFORMED BASED ON AN HOURLY CHARGE FOR MEN AND EQUIPMENT. WITH REGARD TO HIS FAILURE TO REPLY ON JUNE 10, HE EXPLAINED THAT HE WAS NOT IN A POSITION TO LOCATE OR FURNISH FILL MATERIAL AND THEREFORE COULD NOT HAVE GIVEN ANY PRICE AS REQUESTED IN THE JUNE 4 LETTER, WHICH HE ALLEGED WAS NOT EVEN RECEIVED UNTIL JUNE 9. FINALLY, BRUSH BLAMED HIS PREDICAMENT ON THE FOREST SERVICE FOR INITIALLY FURNISHING INACCURATE ESTIMATES AND THEN FOR NOT FULLY COOPERATING WITH BRUSH IN HIS EFFORTS TO OVERCOME THE DIFFICULTIES ENCOUNTERED. THE CONTRACTING OFFICER DENIED BRUSH'S CLAIM, FINDING INSTEAD THAT BRUSH WAS LIABLE TO THE GOVERNMENT FOR EXCESS COSTS OF $40, BASED ON THE PRICES PAID TO THE COMPLETING CONTRACTOR.

BRUSH HAS APPEALED THIS DECISION. HOWEVER, SINCE THE SUBJECT PURCHASE ORDER DOES NOT CONTAIN A "DISPUTES" CLAUSE, THE CLAIM HAS BEEN TRANSMITTED TO OUR OFFICE RATHER THAN THE BOARD OF CONTRACT APPEALS. ALSO, THE PURCHASE ORDER DOES NOT CONTAIN THE USUAL CLAUSES FOR CHANGED OR DIFFERING SITE CONDITIONS, TERMINATION, AND PROVISION FOR DAMAGES UPON TERMINATION.

YOUR DEPARTMENT EXPRESSES CONCERN REGARDING CERTAIN ELEMENTS OF THIS CASE. IT NOTES THAT BRUSH'S BID PRICE OF $715 WAS SUBSTANTIALLY BELOW THE OTHER BID PRICE OF $1825 AND WAS 80 PERCENT OF THE ENGINEER'S ESTIMATE OF $890. IT ALSO NOTES THAT ALTHOUGH THE JOB WAS TO BE ON A LUMP-SUM BASIS, OFFERORS WERE PROVIDED WITH ESTIMATED QUANTITIES OF WORK TO BE PERFORMED AND WERE REQUESTED TO QUOTE UNIT PRICES FOR THOSE QUANTITIES. FURTHER, YOUR DEPARTMENT POINTS OUT THAT THE CONTRACTOR WAS NEVER NOTIFIED IN WRITING THAT HIS CONTRACT WAS BEING TERMINATED FOR DEFAULT, AND WAS ONLY INFORMED ABOUT THE COMPLETION CONTRACT WITH ANOTHER PARTY WHEN HE CALLED THE CONTRACTING OFFICER ON JUNE 12. IT IS SUGGESTED THAT THESE MATTERS SHOULD BE CONSIDERED IN SETTLING THE CLAIM.

IN ADDITION TO THE MATTERS NOTED BY YOUR DEPARTMENT, WE ARE ALSO CONCERNED BY THE FACT THAT IT WAS NECESSARY TO OBTAIN FILL FROM A LOCATION ABOUT 10 MILES FROM THE JOB SITE IN ORDER TO COMPLETE THE PROJECT. THE PARTIES TO THE CONTRACT NEVER CONTEMPLATED THAT THIS MIGHT BE NECESSARY. IT COULD WELL BE ARGUED THAT THE GOVERNMENT PLANS AND SPECIFICATIONS WERE MISLEADING WITH RESPECT TO THE EXTENT OF WORK REQUIRED TO COMPLETE THE PROJECT. SEE HOLLERBACH V. UNITED STATES, 233 U. S. 165 (1914); UNITED STATES V. ATLANTIC DREDGING CO. 253 U. S. 1 (1920); BUT ALSO SEE MACARTHUR BROTHERS V. UNITED STATES, 258 U. S. 6 (1922). THESE CASES RECOGNIZE THAT A CONTRACTOR MAY BE ENTITLED TO SOME RELIEF AS A RESULT OF FAULTY ESTIMATES FURNISHED BY THE GOVERNMENT. UNDER THE CIRCUMSTANCES, WE BELIEVE THE CONTRACTOR SHOULD BE PAID FOR THE WORK HE PERFORMED, WITHOUT ANY LIABILITY FOR EXCESS COSTS.

ACCORDING TO THE FOREST SERVICE ESTIMATES SUBMITTED HERE, BRUSH COMPLETED 205 CUBIC YARDS OF EXCAVATION PRIOR TO LEAVING THE JOB. THE SUCCESSOR CONTRACTOR WAS FOUND TO HAVE PERFORMED 50 ADDITIONAL CUBIC YARDS OF EXCAVATION AT THE JOB SITE (THEREBY OBTAINING 20CUBIC YARDS OF USABLE FILL), IN ADDITION TO THE 150 CUBIC YARDS OF FILL HE HAULED IN TO COMPLETE THE EMBANKMENT. THE SUCCESSOR CONTRACTOR ALSO PROVIDED THE REQUIRED 95 TONS OF CRUSHED GRAVEL. IN TOTAL, THE FOREST SERVICE ESTIMATES THAT 405 CUBIC YARDS WERE EXCAVATED, OR 159 PERCENT OF THE ORIGINALLY ESTIMATED 255 CUBIC YARDS.

BRUSH DIFFERS WITH THESE FIGURES CLAIMING THAT HE ACTUALLY EXCAVATED 255 CUBIC YARDS RATHER THAN THE 205 CUBIC YARDS ESTIMATED BY THE FOREST SERVICE. IN ANY CASE, WE BELIEVE BRUSH SHOULD BE PAID FOR THE WORK HE ACCOMPLISHED. IN THIS RESPECT, WE SEE NO BASIS FOR ALLOWING BRUSH $1,472 AS CLAIMED. IT IS REPORTED THAT CLAY, THE SUCCESSOR CONTRACTOR, WAS ABLE TO COMPLETE THE JOB WITHOUT DIFFICULTY IN ABOUT 2-1/2 DAYS USING A BULLDOZER RATHER THAN A HOUGH FRONT-END LOADER AND A PATROL CAT OF THE ROAD GRADER TYPE, SUCH AS WERE REPORTEDLY USED BY BRUSH. THE RECORD ALSO INDICATES THAT WHILE BRUSH EXCAVATED 205 CUBIC YARDS OF MATERIAL, MOST OF THE EMBANKMENT WORK WAS ACCOMPLISHED BY THE COMPLETING CONTRACTOR. VIEW OF THESE FACTS, WE REGARD BRUSH'S CLAIM AS EXCESSIVE.

ACCORDINGLY, WE CONCLUDE THAT BRUSH MAY BE PAID AT THE RATE OF $1.50 PER CUBIC YARD FOR EXCAVATION PERFORMED, AS DETERMINED BY YOUR DEPARTMENT. THE CONTRACTOR REFUSES THIS SETTLEMENT, HE REMAINS FREE, OF COURSE, TO PURSUE THE MATTER IN DISTRICT COURT OR THE COURT OF CLAIMS.