B-180726, MAY 6, 1974, 53 COMP GEN 829

B-180726: May 6, 1974

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CONTRACT CONTAINED "CHANGES" CLAUSE AND DISPUTES ARISING UNDER SPECIFIC CONTRACT PROVISION ARE FOR ADMINISTRATIVE RESOLUTION. J17C-2023 WAS AWARDED TO BRADLEY MECHANICAL CONTRACTING. AMONG THE "GENERAL REQUIREMENTS" OF BRADLEY'S CONTRACT WAS THE FOLLOWING PROVISION: WORKING HOURS: WORKING HOURS WITHIN THE BUILDINGS AND ON THE GROUNDS OF THE INSTITUTION SHALL BE 7:45 A.M. ANY FAILURE BY THE CONTRACTOR TO DO SO WILL NOT RELIEVE HIM FROM RESPONSIBILITY FOR SUCCESSFULLY PERFORMING THE WORK WITHOUT ADDITIONAL EXPENSE TO THE GOVERNMENT. UNLESS SUCH UNDERSTANDING OR REPRESENTATIONS BY THE GOVERNMENT ARE EXPRESSLY STATED IN THE CONTRACT. BRADLEY AND ITS SUBCONTRACTORS WERE DIRECTED BY PRISON OFFICIALS TO LEAVE THE SITE BY 4:00 P.M.

B-180726, MAY 6, 1974, 53 COMP GEN 829

CONTRACTS - DISPUTES - SETTLEMENT - ADMINISTRATIVE - UNDER DISPUTES CLAUSE CONSTRUCTION CONTRACTOR'S REQUEST FOR EQUITABLE ADJUSTMENT IN PRICE, BASED ON DELAY IN COMPLETION CAUSED BY REDUCED AVAILABILITY OF SITE, SHOULD BE RESOLVED PURSUANT TO "DISPUTES" CLAUSE PROCEDURE. CONTRACT CONTAINED "CHANGES" CLAUSE AND DISPUTES ARISING UNDER SPECIFIC CONTRACT PROVISION ARE FOR ADMINISTRATIVE RESOLUTION.

IN THE MATTER OF BRADLEY MECHANICAL CONTRACTING, INC., MAY 6, 1974:

ON MAY 19, 1971, CONTRACT NO. J17C-2023 WAS AWARDED TO BRADLEY MECHANICAL CONTRACTING, INC. (BRADLEY) BY THE DEPARTMENT OF JUSTICE, BUREAU OF PRISONS, FOR THE INSTALLATION OF AIR CONDITIONING EQUIPMENT IN THE MAXIMUM SECURITY WING OF THE MEDICAL CENTER FOR FEDERAL PRISONERS IN SPRINGFIELD, MISSOURI.

AMONG THE "GENERAL REQUIREMENTS" OF BRADLEY'S CONTRACT WAS THE FOLLOWING PROVISION:

WORKING HOURS: WORKING HOURS WITHIN THE BUILDINGS AND ON THE GROUNDS OF THE INSTITUTION SHALL BE 7:45 A.M. TO 4:15 P.M. ON MONDAYS THROUGH FRIDAYS. ***

BRADLEY'S CONTRACT ALSO CONTAINED THE STANDARD "DISPUTES," "CHANGES," "SUSPENSION OF WORK" AND "CONDITIONS AFFECTING THE WORK" CLAUSES, CONTAINED IN STANDARD FORM 23-A (OCT. 1969 EDITION). THE LATTER CLAUSE STATES:

THE CONTRACTOR SHALL BE RESPONSIBLE FOR HAVING TAKEN STEPS REASONABLY NECESSARY TO ASCERTAIN THE NATURE AND LOCATION OF THE WORK, AND THE GENERAL AND LOCAL CONDITIONS WHICH CAN AFFECT THE WORK OR THE COST THEREOF. ANY FAILURE BY THE CONTRACTOR TO DO SO WILL NOT RELIEVE HIM FROM RESPONSIBILITY FOR SUCCESSFULLY PERFORMING THE WORK WITHOUT ADDITIONAL EXPENSE TO THE GOVERNMENT. THE GOVERNMENT ASSUMES NO RESPONSIBILITY FOR ANY UNDERSTANDING OR REPRESENTATIONS CONCERNING CONDITIONS MADE BY ANY OF ITS OFFICERS OR AGENTS PRIOR TO THE EXECUTION OF THIS CONTRACT, UNLESS SUCH UNDERSTANDING OR REPRESENTATIONS BY THE GOVERNMENT ARE EXPRESSLY STATED IN THE CONTRACT.

SOON AFTER WORK HAD COMMENCED, BRADLEY AND ITS SUBCONTRACTORS WERE DIRECTED BY PRISON OFFICIALS TO LEAVE THE SITE BY 4:00 P.M. DAILY IN ORDER THAT AN INMATE HEAD COUNT COULD BE CONDUCTED. IT IS ALLEGED THAT WORKMEN HAD TO STOP AND BEGIN SECURING THEIR TOOLS NO LATER THAN 3:45 P.M. IN ORDER TO CLEAR THE SECURITY GATES BY 4:00 P.M. BRADLEY THEREFORE CLAIMS THAT AT LEAST ONE-HALF WORKING HOUR PER DAY PER MAN WAS LOST AS A RESULT OF THIS PROCEDURE.

AFTER PARTIALLY PERFORMING THE CONTRACT UNDER THESE CONDITIONS, BRADLEY REQUESTED THAT THE INITIAL 180-DAY COMPLETION SCHEDULE BE EXTENDED BY 47 DAYS. THE CONTRACTING OFFICER GRANTED THIS EXTENSION BY LETTER IN WHICH HE EXPRESSED AGREEMENT "THAT SOME TIME IS LOST EACH DAY DUE TO THE FACT THE WEST GATE MUST BE SECURED AT 4:00 P.M."

SHORTLY BEFORE FINAL PAYMENT UNDER THE CONTRACT WAS TO OCCUR, BRADLEY REQUESTED ON ITS OWN BEHALF AND FOR ITS SUBCONTRACTORS, THAT THE CONTRACTING OFFICER ISSUE A CHANGE ORDER INCREASING THE CONTRACT PRICE BY $12,426.29. THE BASIS FOR THIS CLAIM WAS THAT BRADLEY AND ITS SUBCONTRACTORS WERE OBLIGATED TO PAY WAGES FOR AN 8-HOUR DAY IN EXCHANGE FOR WHICH THEY RECEIVED A 7 1/2 HOUR DAY AS A RESULT OF THE DENIAL OF ACCESS TO THE SITE AFTER 4:00 P.M.

THE CONTRACTING OFFICER DENIED BRADLEY'S REQUEST FOR AN EQUITABLE ADJUSTMENT ON THE GROUND THAT THE "CONDITIONS AFFECTING THE WORK" CLAUSE, QUOTED ABOVE, OBLIGATED BRADLEY TO ASCERTAIN THE EXISTENCE OF THE 4:00 P.M. HEAD COUNT PROCEDURE AND BRADLEY'S FAILURE TO DO SO DID NOT RELIEVE IT FROM COMPLETING THE WORK AT ITS BID PRICE. IN THIS REGARD, THERE IS APPARENTLY A DISPUTE BETWEEN BRADLEY AND THE PROCURING ACTIVITY AS TO WHETHER THE 4:00 P.M. HEAD COUNT PROCEDURE EXISTED AT THE TIME BRADLEY SUBMITTED ITS BID OR WAS INSTITUTED AFTER CONSTRUCTION HAD BEGUN.

BRADLEY SUBSEQUENTLY RESUBMITTED ITS REQUEST FOR AN EQUITABLE ADJUSTMENT IN THE REDUCED AMOUNT OF $10,912.83, WHICH REFLECTED THE DECISION OF SEVERAL SUBCONTRACTORS NOT TO PURSUE THE MATTER. BRADLEY ADVISED THE CONTRACTING OFFICER THAT IF "IN YOUR OPINION THE REDUCED CLAIM IS STILL NOT JUSTIFIED PLEASE FURNISH US WITH THE NECESSARY FORMS TO FILE A CLAIM AS OUTLINED IN (THE 'DISPUTES' CLAUSE)."

THE CONTRACTING OFFICER RESPONDED, IN PERTINENT PART:

WE ARE STILL OF THE OPINION THAT THIS IS NOT A JUSTIFIED CLAIM, FOR REASONS AS SET FORTH IN (THE CONTRACTING OFFICER'S PREVIOUS LETTER), AND IS THEREFORE DENIED. IF YOU SO WISH, YOU MAY FILE A CLAIM WITH THE UNITED STATES GENERAL ACCOUNTING OFFICE, WASHINGTON, D.C. THERE ARE NO SPECIFIED FORMS FOR THIS PROCEDURE.

BRADLEY ACCEPTED THE CONTRACTING OFFICER'S ADVICE AND PRESENTED ITS CLAIM TO OUR OFFICE, WHEREUPON WE OBTAINED A REPORT FROM THE BUREAU OF PRISONS. THE BUREAU'S POSITION WAS THAT THE (CONDITIONS AFFECTING THE WORK" CLAUSE, AND OTHER PROVISIONS OF A SIMILAR TENOR IN THE IFB AND RESULTING CONTRACT, PLACED UPON BRADLEY THE RESPONSIBILITY "TO DETERMINE THE WORKING CONDITIONS AND ANTICIPATE ANY PROBLEMS HE MIGHT ENCOUNTER IN MOVEMENT INTO AND THROUGH THE WORKING AREA." THE BUREAU ALSO EMPHASIZED THAT IN ITS OPINION, BRADLEY HAD NOT MET THE REQUIREMENTS OF THE FOLLOWING PORTION OF THE "DISPUTES" CLAUSE:

*** THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE UNLESS, WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAILS OR OTHERWISE FURNISHES TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE HEAD OF THE AGENCY INVOLVED. ***

THE THRESHOLD QUESTION IS WHETHER BRADLEY'S CLAIM IS ONE FOR BREACH OF CONTRACT OVER WHICH OUR OFFICE HAS JURISDICTION, OR IS ONE FOR ADMINISTRATIVE DETERMINATION PURSUANT TO THE PROCEDURE SET FORTH IN THE "DISPUTES" CLAUSE OF THE CONTRACT. WE THINK IT IS SIGNIFICANT THAT PARAGRAPHS S-5A. AND B. OF THE CONTRACT'S "SUPPLEMENT TO THE GENERAL CONDITIONS" PROVIDED:

ACCESS TO THE SITE WILL BE AVAILABLE DURING NORMAL WORKING HOURS EXCEPT DURING INSTITUTIONAL EMERGENCY.

NORMAL HOURS OF WORK WILL BE REGULAR INSTITUTION HOURS, MONDAY THRU FRIDAY; HOWEVER, SPECIAL ARRANGEMENTS CAN BE MADE WHEN NECESSARY.

AS WE OBSERVED ABOVE, THE CONTRACT ALSO SPECIFICALLY DEFINED "WORKING HOURS" AS "7:45 A.M. TO 4:15 P.M. ON MONDAYS THROUGH FRIDAYS."

IN VIEW OF THESE SPECIFIC REPRESENTATIONS IN BRADLEY'S CONTRACT, WE THINK DIRECTIONS TO CLEAR THE SITE BY 4:00 P.M. COULD BE REGARDED AS A CHANGE IN THE WORK. SINCE BRADLEY'S CONTRACT CONTAINS A "CHANGES" CLAUSE AND SINCE THERE APPEAR TO BE DISPUTES OF FACT ARISING FROM THE ADMINISTRATION OF THE CONTRACT, WE FEEL THAT BRADLEY'S CLAIM WAS ERRONEOUSLY REFERRED TO OUR OFFICE FOR RESOLUTION. RATHER, THE REQUEST FOR AN EQUITABLE ADJUSTMENT SHOULD BE DECIDED PURSUANT TO THE PROCEDURES SET FORTH IN THE "DISPUTES" CLAUSE OF THE CONTRACT.

IN ITS REPORT TO OUR OFFICE, THE BUREAU OF PRISONS TAKES THE POSITION THAT BRADLEY IS NOW PRECLUDED FROM PURSUING ITS REMEDY UNDER THE "DISPUTES" PROCEDURE BECAUSE IT FAILED TO APPEAL WITHIN 30 DAYS OF RECEIPT OF EITHER OF THE CONTRACTING OFFICER'S DECISIONS. WE OFFER THE FOLLOWING OBSERVATIONS CONCERNING THAT ARGUMENT.

SECTION 1-1.318-1(A) OF THE FEDERAL PROCUREMENT REGULATIONS PROVIDES:

WHEN A FINAL DECISION OF THE CONTRACTING OFFICER CONCERNS A DISPUTE THAT IS OR MAY BE SUBJECT TO THE DISPUTES CLAUSE, A PARAGRAPH SUBSTANTIALLY AS FOLLOWS SHALL BE INCLUDED IN THE DECISION:

THIS DECISION IS MADE IN ACCORDANCE WITH THE DISPUTES CLAUSE AND SHALL BE FINAL AND CONCLUSIVE AS PROVIDED THEREIN, UNLESS, WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF THIS DECISION, A WRITTEN NOTICE OF APPEAL (IN TRIPLICATE) ADDRESSED TO THE (TITLE OF THE HEAD OF THE AGENCY) IS MAILED OR OTHERWISE FURNISHED TO THE CONTRACTING OFFICER. THE NOTICE OF APPEAL, WHICH IS TO BE SIGNED BY YOU AS THE CONTRACTOR OR BY AN ATTORNEY ACTING ON YOUR BEHALF, AND WHICH MAY BE IN LETTER FORM, SHOULD INDICATE THAT AN APPEAL IS INTENDED, SHOULD REFER TO THIS DECISION AND SHOULD IDENTIFY THE CONTRACT BY NUMBER. THE NOTICE OF APPEAL MAY INCLUDE A STATEMENT OF THE REASONS WHY THE DECISION IS CONSIDERED TO BE ERRONEOUS.

NEITHER OF THE TWO LETTERS FROM THE CONTRACTING OFFICER TO BRADLEY, NOW CHARACTERIZED AS FINAL DECISIONS, CONTAINED SUCH A PARAGRAPH. THE FIRST LETTER SIMPLY DENIED BRADLEY'S REQUEST FOR AN EQUITABLE ADJUSTMENT IN PRICE. THE SECOND LETTER, WHICH RESPONDED TO BRADLEY'S REQUEST FOR "THE NECESSARY FORMS TO FILE A CLAIM AS OUTLINED" IN THE "DISPUTES" CLAUSE, ERRONEOUSLY REFERRED BRADLEY TO OUR OFFICE.

IN ROSCOE-AJAX CONSTR. CO. V. UNITED STATES, 198 CT. CL. 133, 458F. 2D55 (1972), THE COURT OF CLAIMS STATED WITH RESPECT TO A CONTRACTING OFFICER'S LETTER WHICH WAS NOT CLEARLY DENOMINATED A FINAL DECISION AND WHICH DID NOT ADVISE THE CONTRACTOR OF HIS APPEAL RIGHTS:

*** ACCORDINGLY, THE FAILURE OF THE AGENCY TO COMPLY WITH ITS OWN REGULATION IN THIS RESPECT PREVENTS THE LETTER FROM CONSTITUTING THAT KIND OF A FINAL DECISION UNDER THE DISPUTES ARTICLE FROM WHICH THE CONTRACTOR IS OBLIGATED TO APPEAL WITHIN THIRTY DAYS. BOSTWICK BATTERSON CO. V. UNITED STATES, 151 CT. CL. 560, 283F.2D 956, 959 (1960). ***. (198 CT. CL. AT 148, 458F.2D AT 64.)

SEE ALSO KEYSTONE COAT & APRON MFG. CO. V. UNITED STATES, 150 CT. CL. 277 (1960), CERT. DENIED 372 U.S. 942 (1963).

IN VIEW THEREOF, WE BELIEVE THE PROCURING AGENCY MAY WISH TO REEXAMINE ITS POSITION CONCERNING THE FINALITY OF THE CONTRACTING OFFICER'S DECISION AND THE AVAILABILITY TO BRADLEY OF A REMEDY UNDER THE "DISPUTES" PROCEDURE.