B-172530, JUL 6, 1971

B-172530: Jul 6, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

BECAUSE THE 1ST CLAIM FOR $341.60 WAS NOT PRESENTED IN ACCORDANCE WITH THE CONTRACT PROVISIONS. THERE IS NO LEGAL BASIS FOR ITS ALLOWANCE. BASED ON THE JOB FOREMAN'S ALLEGED EXPENSES AND LOST TIME WHILE AWAITING THE GOVERNMENT'S APPROVAL OF UNDERFLOOR CONDUIT CHANGES WAS ALSO PROPERLY DENIED. CLAIMANT HAVING FAILED TO ESTABLISH THAT ANY ELEMENT OF THE COST WAS ATTRIBUTABLE TO THE DELAY. MUST ALSO BE DENIED BECAUSE THE CONFLICTING CONTRACTUAL REQUIREMENTS ON WHO SHOULD FURNISH A CERTAIN ELECTRIC DISTRIBUTION PANEL WERE SUCH GLARING DISCREPANCIES THAT CLAIMANT WAS REQUIRED TO INQUIRE AS TO THE PROPER INTERPRETATION UNDER THE PROCEDURES SET OUT IN PARAGRAPH 2 OF THE IFB. INC.: FURTHER REFERENCE IS MADE TO YOUR REQUEST THAT WE REVIEW YOUR CLAIM.

B-172530, JUL 6, 1971

CONTRACTS - ADDITIONAL COSTS - DOTCAB DECISION DENYING CLAIM BY SOUTHWEST SEEKING REVERSAL OF A DECISION BY THE DEPARTMENT OF TRANSPORTATION CONTRACT APPEALS BOARD, WHICH DENIED THREE CLAIMS FOR ADDITIONAL COSTS INCIDENT TO PERFORMANCE OF AN FAA CONTRACT FOR CONSTRUCTION OF AN AIR-CONDITIONED MASONRY WALL FACILITY AT HAYS, KANSAS. BECAUSE THE 1ST CLAIM FOR $341.60 WAS NOT PRESENTED IN ACCORDANCE WITH THE CONTRACT PROVISIONS, THERE IS NO LEGAL BASIS FOR ITS ALLOWANCE. THE 2ND CLAIM, $277.20, BASED ON THE JOB FOREMAN'S ALLEGED EXPENSES AND LOST TIME WHILE AWAITING THE GOVERNMENT'S APPROVAL OF UNDERFLOOR CONDUIT CHANGES WAS ALSO PROPERLY DENIED, CLAIMANT HAVING FAILED TO ESTABLISH THAT ANY ELEMENT OF THE COST WAS ATTRIBUTABLE TO THE DELAY. THE FINAL CLAIM, $464.07, MUST ALSO BE DENIED BECAUSE THE CONFLICTING CONTRACTUAL REQUIREMENTS ON WHO SHOULD FURNISH A CERTAIN ELECTRIC DISTRIBUTION PANEL WERE SUCH GLARING DISCREPANCIES THAT CLAIMANT WAS REQUIRED TO INQUIRE AS TO THE PROPER INTERPRETATION UNDER THE PROCEDURES SET OUT IN PARAGRAPH 2 OF THE IFB, STANDARD FORM 23-A.

TO SOUTHWEST ENGINEERING COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR REQUEST THAT WE REVIEW YOUR CLAIM, WHICH WAS THE SUBJECT OF A DECISION DATED MARCH 29, 1971, BY THE DEPARTMENT OF TRANSPORTATION CONTRACT APPEALS BOARD (DOTCAB), DOCKET NO. 70-26.

THE CLAIM ASSERTED BEFORE THE BOARD SOUGHT REVERSAL OF A CONTRACTING OFFICER'S DECISION DENYING THREE CLAIMS FOR ADDITIONAL COSTS AND ASSESSING SOUTHWEST LIQUIDATED DAMAGES FOR A 20-DAY OVERRUN IN CONTRACT PERFORMANCE TIME UNDER A FEDERAL AVIATION ADMINISTRATION (FAA), CONTRACT NO. FA68CE- 4741, HELD BY SOUTHWEST FOR CONSTRUCTION OF AN AIR CONDITIONED MASONRY WALL VORTAC FACILITY AT HAYS, KANSAS, FOR A CONTRACT PRICE OF $32,172.50. THE BOARD'S DECISION FOUND THAT YOU WERE ENTITLED TO A TIME EXTENSION OF 26 DAYS, WHICH EXTENSION WAS MORE THAN SUFFICIENT TO OFFSET THE 20 DAYS ASSESSED AGAINST YOUR FIRM FOR OVERRUN OF THE CONTRACT COMPLETION DATE, AND THE DECISION CONCLUDED THAT YOU WERE THEREFORE ENTITLED TO RETURN OF THE LIQUIDATED DAMAGES ASSESSED AGAINST YOU. THE BOARD, HOWEVER, DENIED YOUR THREE MONETARY CLAIMS FOR REASONS LATER DISCUSSED. THE BASIS FOR THE REQUEST TO THIS OFFICE IS THAT THE BOARD'S DECISION ON THOSE ISSUES IS IN ERROR IN ITS DISPOSAL OF QUESTIONS OF LAWS, AND AS SUCH, IS NOT BINDING ON OUR OFFICE.

THE CONTRACT, DATED FEBRUARY 6, 1968, INCLUDED THE GENERAL PROVISIONS OF STANDARD FORM 23A (1964 EDITION) FOR CONSTRUCTION CONTRACTS; SPECIAL INVITATION CONDITIONS (1966 EDITION), SPECIFICATIONS AND DRAWINGS. CALLED FOR WORK TO BE COMPLETED WITHIN 90 CALENDAR DAYS FROM THE EFFECTIVE DATE OF NOTICE TO PROCEED, INITIALLY SET AS MAY 15, 1968. HOWEVER, THE PARTIES AGREED TO CONTRACT MODIFICATION NO. 1, WHICH SET MAY 22, 1968, AS THE NEW STARTING DATE AND EXTENDED THE PERFORMANCE TIME SEVEN CALENDAR DAYS, WITHOUT ANY DISCUSSION OF A CLAIM FOR ADDITIONAL COSTS RESULTING FROM THE DELAY.

YOUR FIRST MONETARY CLAIM ARISES OUT OF MODIFICATION NO. 1. ON JANUARY 21, 1970, YOU ASSERTED FOR THE FIRST TIME IN WRITING A CLAIM FOR $341.60 AS COMPENSATION FOR EXPENSES ALLEGEDLY INCURRED BY YOUR JOB SUPERINTENDENT AS A RESULT OF THE GOVERNMENT'S CHANGE OF THE STARTING DATE AFOREMENTIONED. BOTH THE SUCCESSOR CONTRACTING OFFICER AND THE BOARD DENIED THE CLAIM AFTER CONCLUDING THAT IT WAS NOT ELIGIBLE FOR CONSIDERATION BECAUSE OF UNTIMELY FILING. YOU ASSERT, HOWEVER, THAT THE FIRST CONTRACTING OFFICER WAS MADE AWARE OF THESE EXPENSES INCIDENTAL TO THE LATE START DURING A MEETING HELD WITH HIM ON FEBRUARY 10, 1969. YOU ARGUE, HOWEVER, THAT THERE IS NO STATUTE OF LIMITATION WITH RESPECT TO THE FILING OF CLAIMS, AND YOU CITE B-146555, APRIL 4, 1968, AS SUPPORT THEREOF.

WHILE THE CITED DECISION OF OUR OFFICE HELD THAT THERE ARE NO STATUTORY LIMITATIONS TO THE FILING OF CONTRACT CLAIMS AND APPEALS FOR ADMINISTRATIVE DETERMINATIONS BY CONTRACTING OFFICERS AND APPELLATE BOARDS, IT ALSO CONCLUDED THAT THERE WERE PROCEDURES SET OUT IN THE CONTRACT THERE INVOLVED UNDER WHICH FACTUAL DISPUTES WERE TO BE ADMINISTRATIVELY DECIDED. SIMILARLY, THE LEGAL QUESTIONS TO BE ANSWERED HERE ARE WHETHER THERE WERE ANY CONTRACTUAL LIMITATIONS FOR THE FILING AND CONSIDERATION OF CLAIMS IN THE INSTANT CONTRACT, AND, IF SO, WHETHER YOUR CLAIM WAS TIMELY AND IN CONFORMANCE WITH SUCH CONTRACT PROVISIONS.

THE BOARD CONCLUDED, AND WE THINK PROPERLY SO, THAT THIS CLAIM IS ONE ASSERTED UNDER THE SUSPENSION OF WORK CLAUSE FOUND UNDER CLAUSE 17 OF THE ADDITIONAL GENERAL PROVISIONS. THE CONTRACTUAL LIMITATIONS FOR THE FILING AND CONSIDERATION OF CLAIMS UNDER THAT CLAUSE PROVIDED IN PERTINENT PART:

" *** NO CLAIM UNDER THIS CLAUSE SHALL BE ALLOWED (I) FOR ANY COSTS INCURRED MORE THAN TWENTY DAYS BEFORE THE CONTRACTOR SHALL HAVE NOTIFIED THE CONTRACTING OFFICER IN WRITING OF THE ACT OR FAILURE TO ACT INVOLVED (BUT THIS REQUIREMENT SHALL NOT APPLY WHERE A SUSPENSION ORDER HAS BEEN ISSUED), AND (II) UNLESS THE CLAIM, IN AN AMOUNT STATED, IS ASSERTED IN WRITING AS SOON AS PRACTICABLE AFTER THE TERMINATION OF SUCH SUSPENSION, DELAY, OR INTERRUPTION BUT NOT LATER THAN THE DATE OF FINAL PAYMENT UNDER THE CONTRACT. *** "

THE RECORD SHOWS NO DISPUTE RELATIVE TO THE FACT THAT SOUTHWEST DID NOT PRESENT ITS CLAIM FOR PRICE ADJUSTMENT WITHIN THE PERIOD REQUIRED BY THE CONTRACT, I.E., "AS SOON AS PRACTICABLE AFTER THE TERMINATION OF SUCH SUSPENSION, DELAY, OR INTERRUPTION *** ." THE RECORD ALSO REFLECTS THAT YOUR MONETARY CLAIMS WERE APPARENTLY AN AFTERTHOUGHT FOLLOWING AS THEY DID SOME 9 MONTHS AFTER YOUR FIRST APPEAL WAS DENIED ON APRIL 8, 1969. FOLLOWING THE MEETING OF FEBRUARY 10, 1969 (SOME FOUR MONTHS AFTER CONTRACT COMPLETION), WHEREIN YOU ALLEGE THESE MATTERS WERE ORALLY BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER, YOU PRESENTED ADDITIONAL WRITTEN DETAILS IN A CLAIM LETTER DATED MARCH 28, 1969. THAT LETTER, AS LATER CHARACTERIZED BY YOU IN YOUR LETTER OF APRIL 14, 1969, TO THE CONTRACTING OFFICER, WAS CLEARLY A REQUEST FOR A TIME EXTENSION SUFFICIENT TO ELIMINATE LIQUIDATED DAMAGES, AND NO REQUEST WAS MADE FOR A CONTRACT PRICE ADJUSTMENT. ACCORDINGLY, SINCE THIS CLAIM WAS NOT PRESENTED IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT TO WHICH YOUR FIRM HAD AGREED, WE FIND NO LEGAL BASIS ON WHICH THE CLAIM MIGHT PROPERLY BE ALLOWED.

YOUR SECOND MONETARY CLAIM, IN THE SUM OF $277.20 IS BASED ON YOUR JOB FOREMAN'S ALLEGED EXPENSES AND LOST TIME WHILE AWAITING THE GOVERNMENT'S APPROVAL OF UNDERFLOOR CONDUIT CHANGES. WE AGREE WITH THE BOARD'S CONCLUSION THAT ALTHOUGH THIS CLAIM WOULD SIMILARLY FALL FOR LACK OF TIMELINESS UNDER THE SUSPENSION OF WORK CLAUSE, THE CONTRACTING OFFICER WAIVED THAT DEFECT BY RULING UPON THE MERITS OF THE CLAIM. THIS CHANGE WAS THE SUBJECT OF MODIFICATION NO. 2 WHICH, IN ACCORDANCE WITH YOUR PRICE QUOTATION AMOUNTED TO $80.33, THE CONTRACTING OFFICER FOUND PROPERLY COMPENSATED YOUR COMPANY FOR THE CHANGE. THE QUESTION PRESENTED BOTH BEFORE THE CONTRACTING OFFICER AND THE BOARD WAS WHETHER THERE WAS OTHER WORK ON THE PROJECT IN WHICH YOUR FOREMAN COULD HAVE BEEN PROFITABLY EMPLOYED WHILE AWAITING DECISION ON THE CHANGE.

SINCE YOUR COMPANY HAD NOT SUBMITTED WORK PROGRESS SCHEDULES AS OF THE DATES IN QUESTION, IT WAS DIFFICULT TO DETERMINE PRECISELY THE AMOUNT OF WORK REMAINING INCOMPLETE. HOWEVER, THE RECORD DOES REFLECT THAT THERE WERE SEVERAL OPERATIONS UNDER WAY ON THE PROJECT DURING THIS PERIOD WHICH UNDOUBTEDLY WERE UNDER THE SUPERVISION OF YOUR FOREMAN. THE BOARD CONCLUDED, HOWEVER, THAT THERE WAS A CONSTRUCTIVE SUSPENSION OF WORK DURING A THREE DAY PERIOD AND THAT SOUTHWEST WOULD BE ENTITLED TO ANY INCREASE IN THE COSTS OF THE CONTRACT IT COULD ESTABLISH AS BEING DIRECTLY ATTRIBUTABLE TO THAT DELAY. SINCE THE BOARD FOUND THAT THERE WAS NOTHING IN THE RECORD TO DEMONSTRATE THAT SOUTHWEST'S FOREMAN WAS NECESSARILY IDLE DURING THIS PERIOD, YOU FAILED TO ESTABLISH THAT THERE WAS ANY ELEMENT OF COST ATTRIBUTABLE TO THE DELAY. UPON REVIEW OF THE RECORD BEFORE THE BOARD, WHICH IS ALL THAT CAN BE CONSIDERED UNDER THE RULE LAID DOWN IN UNITED STATES V BIANCHI AND COMPANY, INC., 373 U.S. 709 (1963), WE ARE UNABLE TO CONCLUDE THAT THE FACTUAL FINDINGS BY THE BOARD ON THIS CLAIM WERE NOT BASED ON SUBSTANTIAL EVIDENCE OR THAT THE BOARD ACTED ARBITRARILY OR CAPRICIOUSLY.

THE THIRD CLAIM CONCERNS THE QUESTION OF WHO WAS REQUIRED TO FURNISH AN ELECTRIC DISTRIBUTION PANEL "B" AS SHOWN ON DRAWING NO. MKC-D-7208 17. YOU CONTEND THAT PANEL "B" WAS CLEARLY SHOWN ON THE DRAWING AS BEING GOVERNMENT-FURNISHED PROPERTY, AND YOU SEEK COMPENSATION FOR COSTS INCURRED IN THE SUM OF $464.07 BECAUSE OF THE CONTRACTING OFFICER'S DEMAND THAT IT BE FURNISHED BY YOU. BOTH THE CONTRACTING OFFICER AND THE BOARD AGREED THAT THE LEGEND ON THE DRAWING INDICATED THAT PANELBOARDS "A", "B" AND "C" WERE TO BE GOVERNMENT-FURNISHED PROPERTY, BUT FOUND THAT THE LIST OF GOVERNMENT-FURNISHED PROPERTY ENTITLED EXHIBIT "B" TO THE IFB DID NOT LIST PANELBOARD "B" AS AN ITEM TO BE FURNISHED BY THE GOVERNMENT, AND THAT THEREFORE THERE WAS A CLEAR CONFLICT BETWEEN THE DRAWINGS AND THE SPECIFICATIONS. THE BOARD AGREED WITH THE CONTRACTING OFFICER THAT, SINCE ARTICLE 2 OF THE GENERAL PROVISIONS INDICATED THE SPECIFICATION SHALL GOVERN IN CASE OF DIFFERENCE BETWEEN DRAWINGS AND SPECIFICATIONS, YOU WERE REQUIRED UNDER THE CONTRACT TO FURNISH PANELBOARD "B" AT NO INCREASE IN THE CONTRACT PRICE.

YOU CONTEND THAT IN ANY EVENT THE CONTRACT DOCUMENTS WERE AMBIGUOUS, AND THEREFORE SHOULD BE CONSTRUED AGAINST THE DRAFTER. IN ADDITION YOU CONTEND THAT PANELBOARDS "B" AND "C" ARE IDENTICAL, AND SINCE ONE "A" PANELBOARD AND TWO "C" PANELBOARDS WERE DELIVERED TO THE JOB SITE BY THE GOVERNMENT, THE DRAFTER OF THE GOVERNMENT FURNISHED PROPERTY LIST MUST HAVE INTENDED THAT THE GOVERNMENT WOULD FURNISH TWO "C" PANELBOARDS RATHER THAN ONE UNIT OF PANELBOARD "C" AND ONE UNIT OF PANELBOARD "B".

THE BOARD FOUND YOUR ARGUMENT UNREASONABLE AND RELIED SOLELY ON THE ORDER OF PRECEDENCE CLAUSES IN DENYING THIS CLAIM. HOWEVER, WE THINK THE PRINCIPAL ISSUE TO BE ANSWERED IS WHETHER THE ADMITTED DISCREPANCY OR AMBIGUITY WAS SO APPARENT AS TO BRING THIS CASE WITHIN THE MANDATE OF THOSE CASES HOLDING THAT A CONTRACTOR MUST INQUIRE INTO OBVIOUS OMISSIONS OR INCONSISTENCIES IN THE CONTRACT PROVISIONS. IF THE AMBIGUITY IN THIS CASE IS SO APPARENT, YOUR INTERPRETATION CANNOT BE CONSIDERED REASONABLE. SEE JAMSAR, INC. V UNITED STATES, CT. CL. NO. 205-68, DECIDED MAY 14, 1971, AND CASES CITED THEREIN.

IT IS OUR OPINION THAT THE CONFLICT IN THE CONTRACTUAL REQUIREMENTS WAS A GLARING DISCREPANCY WHICH SHOULD HAVE ALERTED A REASONABLE MAN THAT THERE EXISTED (AS STATED BY THE BOARD) "ON THE ONE HAND, A CLEAR INDICATION IN THE DRAWINGS THAT PANELBOARD "B" IS TO BE FURNISHED BY THE GOVERNMENT AND, ON THE OTHER HAND, THE EXPLICIT EXCLUSION OF THAT ITEM FROM THE GOVERNMENT FURNISHED PROPERTY LIST." THIS OBVIOUS DISCREPANCY THEREFORE IMPOSED AN OBLIGATION UPON YOU TO INQUIRE AS TO THE PROPER INTERPRETATION UNDER THE PROCEDURES SET OUT IN PARAGRAPH 2 OF THE INSTRUCTIONS TO BIDDERS, STANDARD FORM 23-A. BEACON CONSTRUCTION COMPANY OF MASSACHUSETTS V UNITED STATES, 161 CT. CL. 1, 314 F. 2D 501 (1963). SINCE YOU FAILED TO REQUEST SUCH AN INTERPRETATION, WE MUST CONCLUDE THAT YOU ASSUMED ALL RISKS OF AN INCORRECT INTERPRETATION, AND THAT YOU CANNOT NOW RELY ON THE PRINCIPLE THAT AMBIGUITIES IN GOVERNMENT-DRAWN CONTRACTS ARE CONSTRUED AGAINST THE DRAFTER. NEITHER DO WE SEE ANY BASIS ON WHICH THE FACT THAT THE GOVERNMENT DELIVERED TWO UNITS OF PANELBOARD "C" TO THE JOB SITE WOULD OPERATE TO CHANGE THE FOREGOING CONCLUSIONS.

FOR THE REASONS STATED, WE FIND NO LEGAL BASIS TO CONCLUDE THAT THE BOARD'S DECISION WAS ERRONEOUS AS A MATTER OF LAW, AND YOUR CLAIM IS THEREFORE DENIED.