B-28174, SEPTEMBER 8, 1942, 22 COMP. GEN. 194

B-28174: Sep 8, 1942

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BETWEEN THE DATE OF AWARD AND THE DATE THE CERTIFICATES WERE FURNISHED IS NOT SO UNREASONABLE AS TO CONSTITUTE A BREACH OF THE CONTRACT RELIEVING THE CONTRACTOR OF ITS OBLIGATION TO COMPLETE THE WORK AT THE ORIGINAL BID PRICE. 1942: I HAVE YOUR LETTER OF AUGUST 14. THE PERTINENT FACTS IN RELATION THERETO ARE AS FOLLOWS: PURSUANT TO THE AUTHORITY CONFERRED UPON IT UNDER SECTION 203. UNDER THE SUPERVISION AND DIRECTION OF THE FEDERAL PUBLIC HOUSING AUTHORITY (FORMERLY THE UNITED STATES HOUSING AUTHORITY) WITH WHOM A CONTRACT FOR LOAN AND ANNUAL CONTRIBUTION WAS NEGOTIATED DECEMBER 27. IS PLANNING TO DEVELOP THE PARKSIDE DWELLINGS. UNDER THIS ARRANGEMENT THESE TITLE II PROJECTS ARE NOT DEVELOPED FROM ANY SPECIFIC APPROPRIATION TO THE ALLEY DWELLING AUTHORITY.

B-28174, SEPTEMBER 8, 1942, 22 COMP. GEN. 194

CONTRACTS - DELAY IN FURNISHING PREFERENCE RATING CERTIFICATES WHERE A CONSTRUCTION CONTRACT CONTAINED NO STIPULATION THAT THE PREFERENCE CERTIFICATES NECESSARY TO ENABLE THE CONTRACTOR TO OBTAIN MATERIALS WOULD BE FURNISHED WITHIN ANY PARTICULAR TIME AFTER AWARD, A DELAY OF 3 MONTHS, WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTING AGENCY, BETWEEN THE DATE OF AWARD AND THE DATE THE CERTIFICATES WERE FURNISHED IS NOT SO UNREASONABLE AS TO CONSTITUTE A BREACH OF THE CONTRACT RELIEVING THE CONTRACTOR OF ITS OBLIGATION TO COMPLETE THE WORK AT THE ORIGINAL BID PRICE, OR ENTITLING IT TO INCREASED COSTS RESULTING FROM THE DELAY IN COMMENCING THE WORK.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE EXECUTIVE OFFICER, THE ALLEY DWELLING AUTHORITY FOR THE DISTRICT OF COLUMBIA, SEPTEMBER 8, 1942:

I HAVE YOUR LETTER OF AUGUST 14, 1942, AS FOLLOWS:

THE ALLEY DWELLING AUTHORITY HAS BEFORE IT A QUESTION OF CONTRACT MODIFICATION OF A STIPULATED BID FIGURE. THE PERTINENT FACTS IN RELATION THERETO ARE AS FOLLOWS:

PURSUANT TO THE AUTHORITY CONFERRED UPON IT UNDER SECTION 203, TITLE II, ADDED BY SECTION 5 OF PUBLIC LAW NO. 733, 75TH CONGRESS APPROVED JUNE 25, 1938, THE ALLEY DWELLING AUTHORITY, UNDER THE SUPERVISION AND DIRECTION OF THE FEDERAL PUBLIC HOUSING AUTHORITY (FORMERLY THE UNITED STATES HOUSING AUTHORITY) WITH WHOM A CONTRACT FOR LOAN AND ANNUAL CONTRIBUTION WAS NEGOTIATED DECEMBER 27, 1940 FOR THE DEVELOPMENT OF LOW RENT HOUSING PROJECTS, IS PLANNING TO DEVELOP THE PARKSIDE DWELLINGS, D.C. 1-11, COMPRISING 373 DWELLING UNITS LOCATED AT KENILWORTH AVENUE AND BARNES LANE, N.E., WASHINGTON, D.C.

UNDER THIS ARRANGEMENT THESE TITLE II PROJECTS ARE NOT DEVELOPED FROM ANY SPECIFIC APPROPRIATION TO THE ALLEY DWELLING AUTHORITY, BUT THROUGH A LOAN FROM THE FEDERAL PUBLIC HOUSING AUTHORITY (FORMERLY THE UNITED STATES HOUSING AUTHORITY). AFTER THE SITE ACQUISITION AN ESTIMATED BUDGET OF DEVELOPMENT COST IS PRESENTED TO THE FEDERAL PUBLIC HOUSING AUTHORITY FOR THEIR APPROVAL. THESE BUDGETS CARRY A FIVE PERCENT CONTINGENCY FUND. THE INSTANT CASE THE FIVE PER CENT CONTINGENCY FUND AMOUNTS TO $101,604.00. THE PROCEDURE IN THE PAST HAS BEEN TO SUPPORT USE OF THIS CONTINGENCY FUND BY MEANS OF CHANGE ORDERS WHERE CIRCUMSTANCES HAVE NECESSITATED.

THIS PROJECT, PARKSIDE DWELLINGS, WAS ADVERTISED FOR BIDS WHICH WERE OPENED APRIL 17, 1942. THE DYKER BUILDING COMPANY, INCORPORATED, 122 EAST 42ND STREET, NEW YORK CITY, SUBMITTED THE LOW BID OF $1,571,000. ON APRIL 20, 1942 THE FEDERAL PUBLIC HOUSING AUTHORITY (FORMERLY THE UNITED STATES HOUSING AUTHORITY) WAS ADVISED OF THE RESULTS OF THE BID OPENING ALONG WITH THE RECOMMENDATION OF THE ALLEY DWELLING AUTHORITY THAT THE BID OF THE DYKER COMPANY BE ACCEPTED. THE FEDERAL PUBLIC HOUSING AUTHORITY ADVISED THE ALLEY DWELLING AUTHORITY ON APRIL 30, 1942 THAT THEY APPROVED THE AWARD OF THE CONTRACT TO THE DYKER COMPANY. THE ALLEY DWELLING AUTHORITY SO ADVISED THE SAID COMPANY MAY 4, 1942 AND INFORMED THEM THAT A FORMAL CONTRACT WOULD BE PREPARED FOR THEIR EXECUTION. THE DYKER COMPANY ACKNOWLEDGED RECEIPT OF THE CONTRACT AWARD ON MAY 11, AND AT THE SAME TIME EXPRESSED A DESIRE TO SIGN THE CONTRACT IN ORDER TO PROCEED AS SOON AS POSSIBLE.

HOWEVER, AFTER RECEIPT OF THIS LETTER A SERIES OF DELAYS OCCURRED, WHICH WERE IN NO WAY ATTRIBUTABLE TO THE CONTRACTOR, BUT WERE DUE TO THE WAR EMERGENCY SITUATION AND THE DIFFICULTIES ENCOUNTERED IN SECURING THE NECESSARY BLANKET PREFERENCE RATINGS. THE ALLEY DWELLING AUTHORITY RECEIVED THE NECESSARY PRIORITY RATING JULY 31, 1942, AND PROCEEDED WITH ARRANGEMENTS FOR THE EXECUTION OF THE CONTRACT. THE DYKER COMPANY, BECAUSE OF THESE EXTENSIVE DELAYS INVOLVING A PERIOD OF APPROXIMATELY THREE MONTHS, CLAIM A SUBSTANTIAL INCREASE IN LABOR AND MATERIAL COSTS, IN ADDITION TO THE FACT THAT THESE BIDS WERE MADE IN CONTEMPLATION OF PERFORMING THE GREATER PART OF THE WORK DURING THE SUMMER AND FALL MONTHS IN WHICH TIME THE WEATHER IS MOST FAVORABLE FOR BUILDING OPERATIONS. THEY ESTIMATE AN INCREASE IN COST OF LUMBER IN AMOUNT OF $12,000, AND OTHER INCIDENTAL COSTS IN THE AMOUNT OF $13,000; AN OVERALL INCREASE OF APPROXIMATELY $25,000. AS A RESULT THEREOF THIS COMPANY IS REQUESTING THAT THEIR BID PRICE UNDER THIS CONTRACT BE INCREASED ACCORDINGLY.

THE FIRST QUESTION PRESENTED FOR CONSIDERATION IS WHETHER UNDER THE CIRCUMSTANCES, AND IN THE ABSENCE OF A FORMAL EXECUTED DOCUMENT, THERE IS A VALID AND SUBSISTING CONTRACT BETWEEN THE ALLEY DWELLING AUTHORITY AND THE DYKER COMPANY. WE THINK THAT THERE IS AND BASE OUR DECISION UPON THE RULING OF THE COMPTROLLER GENERAL IN 15 COMPTROLLER GENERAL 235, WHERE WE FIND THE FOLLOWING:

"THE FACT THAT AN OFFER AND ACCEPTANCE BY CORRESPONDENCE ARE BOTH MADE IN EXPRESS CONTEMPLATION OF A MORE FORMAL DOCUMENT DOES NOT PREVENT THEIR CONSTITUTING A CONTRACT.'

ASSUMING THAT A CONTRACT EXISTS, DOES THE LAPSE OF THREE MONTHS TIME, A DELAY, NOT DUE TO THE CONTRACTOR WHO WAS READY, WILLING AND ABLE TO PROCEED AT ALL TIMES, EXCUSE THE CONTRACTOR FROM HIS CONTRACTUAL OBLIGATIONS; OR IF HE PROCEEDS UNDER THE TERMS OF THE CONTRACT OFFER HIM A VALID CLAIM FOR DAMAGES? AN EXAMINATION OF THE OPINIONS OF THE COMPTROLLER GENERAL AND THE AUTHORITIES ON THIS POINT DOES NOT REVEAL ANY CASES ENTIRELY IN POINT. HOWEVER, IT IS STATED IN HOLLENBACH V. UNITED STATES ( CT. CL. 1914) 223 U.S. 165:

"THE GOVERNMENT'S CONTRACTS ARE TO BE INTERPRETED THE SAME AS THOSE BETWEEN INDIVIDUALS TO ASCERTAIN THE INTENT OF THE PARTIES AND TO GIVE THE EFFECT ACCORDINGLY IF THEY CAN BE DONE CONSISTENTLY WITH THE TERMS OF THE AGREEMENT.' SUCH A LAPSE OF TIME THEREFOR BETWEEN INDIVIDUALS WOULD APPARENTLY GIVE RISE TO A REMEDY FOR THE CONTRACTOR, OR EXCUSE HIM FROM PROCEEDING WITH THE CONTRACT. IN LIGHT OF THE ABOVE QUOTED PASSAGE APPARENTLY THE CONTRACTOR WOULD BE SO JUSTIFIED IN THIS INSTANCE. IN THE CASE OF MCCOSKEY ( MCCLOSKEY) VERSUS U.S. 66 C.1CLS. 105, IT WAS HELD THAT THE FAILURE OF THE UNITED STATES TO MAKE AVAILABLE TO THE CONTRACTOR THE SITE ON WHICH THE WORK IS TO BE PERFORMED CONSTITUTED A BREACH OF CONTRACT BY THE UNITED STATES.

NOW WE ARRIVE AT THE QUESTION OF MODIFICATION OR INCREASE IN THE BID PRICE OF THIS CONTRACT. AS STATED, IN THIS DEVELOPMENT, THE ALLEY DWELLING AUTHORITY HAS A CONTINGENCY FUND OF $101,604.00. ALLOWING, WITH THE APPROVAL OF THE FEDERAL PUBLIC HOUSING AUTHORITY, THIS CLAIM OF $25,000, THIS CONTINGENCY FUND WOULD STILL REPRESENT APPROXIMATELY 3.77 PERCENT OF THE ESTIMATED DEVELOPMENT COST, WHICH APPEARS AMPLE FOR PROTECTION FOR ANY OTHER CONTINGENCIES WHICH MAY ARISE AS A RESULT OF THIS CONTRACT. THE EVIDENT PURPOSE OF REVISED STATUTE 3709, REQUIRING ADVERTISEMENT FOR BIDS IN CONTRACTS, IS TO ENABLE THE GOVERNMENT TO ENJOY THE BENEFITS OF COMPETITIVE BIDDING AND THE LOWER COSTS RESULTING THEREBY. UNDER INTERPRETATION OF THIS STATUTE IT HAS BEEN HELD THAT CONTRACTS CAN BE MODIFIED WHERE THE INTERESTS OF THE GOVERNMENT WILL BENEFIT. I QUOTE FROM 21 OP.--- A.G., 207-211:

"THAT A MODIFICATION WHERE THE INTERESTS OF THE GOVERNMENT WILL NOT BE PREJUDICED OR ANY STATUTORY PROVISION VIOLATED THEREBY MAY WELL BE PROVIDED FOR IN EVERY CONTRACT TO WHICH THE GOVERNMENT IS A PARTY; AND THAT A CONTRACT SO MODIFIED IS NOT SUCH A NEW CONTRACT AS MUST BE PRECEDED BY AN ADVERTISEMENT FOR PROPOSALS FROM BIDDERS.' THERE IS OF COURSE A DIVERGENCE OF OPINION AMONG THE AUTHORITIES AS TO WHAT CONSTITUTES A MODIFICATION AND WHAT CHANGES THE CONTRACT TO SUCH AN EXTENT THAT A NEW CONTRACT IS NECESSARY. THE ALLEY DWELLING AUTHORITY IS DESIROUS OF MODIFYING THIS CONTRACT, SINCE IT APPEARS THAT THE INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED FOR THE FOLLOWING REASONS:

1. THERE IS AN ACUTE SHORTAGE OF HOUSING IN THE DISTRICT OF COLUMBIA DUE TO THE WAR EMERGENCY, THEREFORE THE TIME ELEMENT IS OF UTMOST IMPORTANCE.

2. THAT THE RECENT EXPERIENCE OF THE ALLEY DWELLING AUTHORITY IN ADVERTISING FOR BIDS ON CONSTRUCTION HAS RESULTED IN RECEIPT OF ONLY ONE OR TWO BIDS, AND THOSE IN EXCESS OF THE BUDGET ALLOWANCE.

3. THAT IT IS A RECOGNIZED FACT THAT LABOR AND MATERIAL COST HAVE INCREASED TO AN APPRECIABLE EXTENT IN THE LAST THREE MONTHS.

4. THAT THE NEXT LOWEST BID IN THE INSTANT CASE WAS $148,333 HIGHER THAN THE BID OF THE DYKER COMPANY.

5. THAT A RESUBMISSION FOR BIDS WILL NO DOUBT RESULT IN RECEIVING PRICES IN EXCESS OF THOSE RECEIVED IN APRIL OF 1942.

IT IS WELL TO MENTION AT THIS POINT THAT THE CLAIM OF THE DYKER COMPANY FOR $25,000 INCREASE WILL NOT ARBITRARILY BE ALLOWED. THE $13,000 WILL HAVE TO BE SUBSTANTIATED AND WILL BE SUBJECT TO STRICT PROOF UPON ACTUAL EXPERIENCE.

ACCORDINGLY, WE RESPECTFULLY SUBMIT FOR YOUR DECISION THIS QUESTION BASED UPON THE FOREGOING FACTS.

CAN THE ALLEY DWELLING AUTHORITY LEGALLY NEGOTIATE WITH THE LOW BIDDER FOR A MODIFICATION OF THE BID PRICE DUE TO INCREASED COSTS AS A RESULT OF THE DELAY COVERING A PERIOD OF THREE MONTHS FROM THE TIME OF THE ACCEPTANCE OF THE BID AND THE TIME OF ISSUANCE OF THE PROCEED ORDER, SUCH DELAY IN NO MANNER BEING ATTRIBUTABLE TO THE CONTRACTOR, WHEN IT APPEARS DEFINITELY TO BE ADVANTAGEOUS TO THE INTERESTS OF THE GOVERNMENT.

IT APPEARS THAT THE INVITATION PURSUANT TO WHICH THE CONTRACTOR'S BID WAS SUBMITTED FOR THE FURNISHING OF THE LABOR AND MATERIALS REQUIRED FOR THE CONSTRUCTION AND COMPLETION OF THE PARKSIDE DWELLINGS PROJECT PROVIDED, WITH RESPECT TO PREFERENCE RATING CERTIFICATES, AS FOLLOWS:

THE ALLEY DWELLING AUTHORITY HAS BEEN ASSURED BY THE WPB THAT THIS PROJECT WILL BE ASSIGNED A PREFERENCE RATING FOR BUILDING MATERIALS IN THE "A" GROUP. HOWEVER, THERE IS NOTHING IN THE SPECIFICATIONS TO THE EFFECT THAT SAID PREFERENCE RATING CERTIFICATES WOULD BE OBTAINED BY THE ALLEY DWELLING AUTHORITY WITHIN ANY PARTICULAR TIME AFTER THE DATE OF AWARD AND, ALTHOUGH YOUR LETTER DOES NOT SO STATE, IT IS ASSUMED THAT THE CONTRACTOR'S BID CONTAINED NO STIPULATION THAT THE PRICES BID FOR THE WORK WERE SUBJECT TO THE PREFERENCE RATING CERTIFICATES BEING FURNISHED WITHIN ANY PARTICULAR TIME. IT DOES APPEAR, HOWEVER, THAT THE SPECIFICATIONS PROVIDED THAT WORK SHOULD BE STARTED WITHIN ONE DAY OF WRITTEN NOTIFICATION TO THE CONTRACTOR TO PROCEED AND SHOULD BE COMPLETED--- WITH THE EXCEPTION OF THE LANDSCAPING--- WITHIN 147 DAYS AFTER RECEIPT OF NOTICE TO PROCEED; AND IN THE EVENT OF DELAY, THAT LIQUIDATED DAMAGES WERE TO BE CHARGED AT THE RATE OF $1 PER DWELLING UNIT FOR EACH CALENDAR DAY OF DELAY.

THE LETTER OF MAY 4, 1942, FROM THE ALLEY DWELLING AUTHORITY, ACCEPTING THE CONTRACTOR'S BID IS AS FOLLOWS:

YOU ARE ADVISED THAT YOUR BID SUBMITTED ON APRIL 17, 1942, PROPOSING TO FURNISH THE MATERIALS AND PERFORM THE LABOR REQUIRED FOR THE CONSTRUCTION OF THE PARKSIDE LOW-RENT HOUSING PROJECT, NO. DC 1-11, FOR THE CONSIDERATION OF ONE MILLION FIVE HUNDRED SEVENTY-ONE THOUSAND * * * DOLLARS IS HEREBY ACCEPTED.

OUR ACTING GENERAL COUNSEL, MR. OMAR T. BURLESON, IS PREPARING THE CONTRACT DOCUMENTS AND WILL CONTACT YOU REGARDING THEIR EXECUTION.

THE CONTRACTOR REPLIED THERETO BY LETTER OF MAY 11, 1942, AS FOLLOWS:

WE ACKNOWLEDGE THE RECEIPT OF YOUR COMMUNICATION OF MAY 4TH ADVISING OF THE AWARD TO US OF THE CONTRACT FOR THE PARKSIDE HOUSING PROJECT NO. DC 1- 11, FOR WHICH PLEASE ACCEPT OUR THANKS.

WE WILL BE PLEASED TO EXECUTE THE CONTRACT AS SOON AS IT HAS BEEN PREPARED BY YOUR MR. OMAR T. BURLESON.

WITH ASSURANCE OF OUR READINESS TO UNDERTAKE AND COMPLETE THIS PROJECT TO YOUR ENTIRE SATISFACTION, WE ARE

ACCORDINGLY, AS IS STATED IN YOUR LETTER, OF AUGUST 14, SUPRA, THERE APPEARS TO BE NO DOUBT BUT THAT A VALID CONTRACT WAS FORMED UPON THE ACCEPTANCE OF THE CONTRACTOR'S BID BY YOUR LETTER OF MAY 4, 1942--- EVEN THOUGH IT WAS CONTEMPLATED AT THE TIME THAT A FORMAL CONTRACT WOULD BE ENTERED INTO AT A LATER DATE--- AND THEREUPON THERE BECAME VESTED IN THE ALLEY DWELLING AUTHORITY THE RIGHT TO HAVE THE CONTRACT PERFORMED BY CONTRACTOR AT THE PRICES STATED IN ITS BID. SEE GARFIELDE V. UNITED STATES, 93 U.S. 242; UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP COMPANY, 239 U.S. 88; UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; WATERS V. UNITED STATES, 75 C.1CLS. 126; AND 18 COMP. GEN. 54.

ALSO, WHILE IT IS SHOWN THAT A PERIOD OF ALMOST THREE MONTHS ELAPSED BETWEEN THE DATE OF THE ACCEPTANCE OF THE CONTRACTOR'S BID AND THE DATE ON WHICH THE ALLEY DWELLING AUTHORITY RECEIVED THE PREFERENCE RATING CERTIFICATES--- WHICH YOUR LETTER STATES WERE NECESSARY FOR THE CONTRACTOR TO OBTAIN MATERIALS--- IT DOES NOT APPEAR THAT SUCH DELAY CONSTITUTED A BREACH OF THE CONTRACT BY THE ALLEY DWELLING AUTHORITY SUCH AS WOULD RELIEVE THE CONTRACTOR FROM ITS OBLIGATION TO COMPLETE THE WORK AT ITS ORIGINAL BID PRICE, OR ENTITLE THE CONTRACTOR TO HOLD THE ALLEY DWELLING AUTHORITY LIABLE FOR ANY INCREASED COSTS WHICH IT MIGHT INCUR AS A RESULT OF THE DELAY IN COMMENCING THE WORK. IN THIS CONNECTION IT IS TO BE NOTED THAT THERE WAS NOTHING IN THE INVITATION FOR BIDS NOR IN THE CONTRACTOR'S BID SPECIFYING THAT THE PREFERENCE RATING CERTIFICATES WOULD BE FURNISHED WITHIN ANY PARTICULAR TIME AFTER AWARD WAS MADE. WHILE THE SPECIFICATIONS PROVIDED THAT WORK WAS TO COMMENCE WITHIN ONE DAY AFTER RECEIPT OF NOTICE TO PROCEED AND THAT LIQUIDATED DAMAGES WERE TO BE CHARGED FOR ANY DELAY IN THE COMPLETION OF THE PROJECT--- THUS INDICATING THAT THE PARTIES CONSIDERED TIME TO BE OF ESSENCE OF THE CONTRACT--- IT DOES NOT APPEAR THAT THE WRITTEN NOTICE TO PROCEED WAS GIVEN AT ANY TIME PRIOR TO THE DATE THE PREFERENCE RATING WAS OBTAINED. AS YOU STATE, IN THE CASE OF MCCLOSKEY V. UNITED STATES, 66 C.1CLS. 105, THE COURT OF CLAIMS HELD THAT THE FAILURE OF THE UNITED STATES TO MAKE AVAILABLE TO THE CONTRACTOR THE SITE ON WHICH WORK WAS TO BE PERFORMED, CONSTITUTED A BREACH OF THE CONTRACT BY THE GOVERNMENT, BUT THERE WAS PRESENT IN SAID CASE THE FACT THAT GOVERNMENT REPRESENTATIVES HAD ASSURED THE CONTRACTOR BEFORE ITS BID WAS SUBMITTED THAT THE SITE WOULD BE AVAILABLE BY A CERTAIN SPECIFIED DATE, AND IT APPEARED THAT IN PREPARING ITS BID THE CONTRACTOR RELIED ON SUCH ASSURANCE. IN THE PRESENT CASE, HOWEVER, THERE IS NO SHOWING THAT THE ALLEY DWELLING AUTHORITY ASSURED THE CONTRACTOR THAT THE PREFERENCE RATING CERTIFICATES AND NOTICE TO PROCEED WOULD BE ISSUED BY ANY PARTICULAR DATE. ACCORDINGLY, IT CAN NOT BE SAID THAT THE DECISION IN THE MCCLOSKEY CASE IS FOR APPLICATION HERE. ON THE OTHER HAND, THERE IS FOR CONSIDERATION A RECENT DECISION OF THE COURT OF CLAIMS IN THE CASE OF JAMES I. BARNES V. UNITED STATES, COURT OF CLAIMS NO. 44088, DECIDED MARCH 2, 1942, IN WHICH IT WAS HELD THAT DELAY BY THE GOVERNMENT FROM APRIL 3 TO AUGUST 17, 1936, IN GIVING A CONTRACTOR NOTICE TO PROCEED, DID NOT CONSTITUTE A BREACH OF THE CONTRACT UNDER THE CIRCUMSTANCES APPEARING THEREIN, SO AS TO ENTITLE THE CONTRACTOR TO INCREASED COSTS OF PERFORMANCE. THE CONTRACT INVOLVED IN THAT CASE COVERED THE REMODELING OF A POST OFFICE; AND IN ORDER FOR WORK TO COMMENCE THEREUNDER IT WAS NECESSARY FOR THE POST OFFICE TO BE VACATED BY THE GOVERNMENT, WHICH FACT WAS KNOWN TO BOTH PARTIES AT THE TIME THE CONTRACT WAS ENTERED INTO. DURING THE PERIOD FROM APRIL 3 TO AUGUST 17 THE PUBLIC BUILDINGS ADMINISTRATION WAS ENDEAVORING TO OBTAIN TEMPORARY QUARTERS FOR THE POST OFFICE AND THE RECORD SHOWED THAT THE INABILITY TO OBTAIN TEMPORARY QUARTERS BEFORE AUGUST 17 WAS NOT DUE TO ANY FAULT OR NEGLIGENCE ON THE PART OF THE PUBLIC BUILDINGS ADMINISTRATION OR ITS EMPLOYEES AND THAT THE TIME THUS CONSUMED WAS NO MORE THAN WAS REASONABLY NECESSARY UNDER THE CIRCUMSTANCES. IN THE COURSE OF ITS OPINION THE COURT STATED:

NO REPRESENTATION OR PROMISE WAS MADE BY DEFENDANT TO PLAINTIFF, EITHER BEFORE OR AFTER HIS BID WAS SUBMITTED, THAT THE POST OFFICE BUILDING WOULD BE VACATED AT ANY DEFINITE TIME. ON THE CONTRARY, HE WAS FULLY ADVISED THAT THE POST OFFICE BUILDING COULD NOT BE VACATED NOR WORK BEGUN UNTIL ADEQUATE TEMPORARY QUARTERS COULD BE OBTAINED AND MADE READY FOR OCCUPANCY.

THE PARTIES COULD NOT HAVE MEANT THAT THE PREMISES WOULD BE VACATED IMMEDIATELY UPON SIGNING THE CONTRACT. AT THE TIME THE CONTRACT WAS SIGNED BOTH PARTIES KNEW THAT TEMPORARY QUARTERS HAD NOT BEEN SECURED. THEY BOTH KNEW AND THE CONTRACT PROVIDED THAT WORK SHOULD NOT BEGIN UNTIL NOTICE TO PROCEED HAD BEEN GIVEN. CERTAINLY THERE WAS NO OBLIGATION ON THE PART OF THE GOVERNMENT TO VACATE THE PREMISES UNTIL A REASONABLE TIME HAD BEEN ALLOWED WITHIN WHICH TO GIVE SUCH NOTICE. THEREFORE, THE WHOLE CASE COMES BACK TO THE QUESTION OF WHETHER THE NOTICE TO PROCEED WAS GIVEN WITHIN A REASONABLE TIME.

THE FACTS IN THE INSTANT CASE CLOSELY PARALLEL THOSE IN THE BARNES CASE AND THE DECISION OF THE COURT OF CLAIMS IN SAID CASE LENDS CONSIDERABLE SUPPORT TO THE VIEW THAT THERE WAS NO BREACH OF CONTRACT BY THE ALLEY DWELLING AUTHORITY. IN OTHER WORDS, THERE WAS NO REPRESENTATION OR PROMISE BY THE ALLEY DWELLING AUTHORITY TO THE CONTRACTOR THAT THE PREFERENCE RATING CERTIFICATES WOULD BE FURNISHED AT ANY DEFINITE TIME AND THE CONTRACTOR KNEW OR SHOULD HAVE KNOWN THAT THE WORK COULD NOT BEGIN UNTIL THE PREFERENCE RATING CERTIFICATES WERE OBTAINED. MOREOVER, THE ALLEY DWELLING AUTHORITY WAS ENTITLED TO A REASONABLE TIME IN WHICH TO OBTAIN THE PREFERENCE RATING CERTIFICATES AND THERE IS NOTHING IN THE RECORD INDICATING THAT THE DELAY IN OBTAINING THE CERTIFICATES RESULTED FROM THE FAULT OR NEGLIGENCE OF YOUR AGENCY, OR THAT THE TIME CONSUMED WAS ENTIRELY DISPROPORTIONATE TO THAT ORDINARILY REQUIRED FOR THE SECURING OF PREFERENCE RATING CERTIFICATES IN SIMILAR CASES. ACCORDINGLY, UNDER THE CIRCUMSTANCES THERE APPEARS TO BE NO UNREASONABLE DELAY FOR WHICH THE THE ALLEY DWELLING AUTHORITY CAN BE HELD LEGALLY RESPONSIBLE.

YOUR LETTER DOES NOT STATE THAT THE CONTRACTOR DEFINITELY HAS REFUSED TO PERFORM THE CONTRACT AT ITS ORIGINAL BID PRICE BUT IT APPEARS THAT THE CONTRACTOR MERELY HAS REQUESTED THAT IT BE REIMBURSED FOR THE INCREASED COSTS OF PERFORMANCE WHICH IT ALLEGES WILL BE INCURRED BECAUSE OF THE DELAY IN FURNISHING THE PRIORITY RATING CERTIFICATES. HOWEVER, IN THIS CONNECTION, THERE IS FOR NOTING THAT THE CONTRACTOR MAY UNDERTAKE TO PERFORM THE CONTRACT AT ITS ORIGINAL BID PRICE WITHOUT PREJUDICING ITS RIGHT TO PROSECUTE, UPON THE COMPLETION THEREOF, ANY CLAIM FOR INCREASED COSTS WHICH IT MAY BELIEVE ITSELF ENTITLED TO RECOVER BECAUSE OF THE DELAY. ON THE OTHER HAND, IF THE CONTRACTOR FAILS TO PERFORM, THE BID BOND, WHICH IT IS UNDERSTOOD THE CONTRACTOR FURNISHED, WILL BE SUBJECT TO FORFEITURE, AND THE CONTRACTOR WILL BE LIABLE FOR ANY ADDITIONAL EXCESS COST INCURRED BY THE ALLEY DWELLING AUTHORITY IN HAVING THE WORK PERFORMED BY ANOTHER CONTRACTOR.

WHILE IT IS REALIZED THAT IT WOULD BE IN INTERESTS OF THE GOVERNMENT TO HAVE THE CONTRACTOR COMPLETE ITS CONTRACT, YET I AM CONSTRAINED TO HOLD THAT UNDER THE FACTS AND CIRCUMSTANCES NOW OF RECORD THERE IS NOT AUTHORITY OF LAW FOR PERMITTING THE ALLEY DWELLING AUTHORITY TO NEGOTIATE WITH THE CONTRACTOR FOR THE PURPOSE OF INCREASING THE CONTRACT PRICE TO THE EXTENT OF THE AMOUNT OF THE EXCESS COSTS SHOWN TO HAVE BEEN ATTRIBUTABLE TO THE DELAY IN FURNISHING THE PREFERENCE RATING CERTIFICATES AND IN GIVING NOTICE TO PROCEED.

THE COPY OF THE SPECIFICATIONS COVERING THE PROJECT, WHICH WAS OBTAINED INFORMALLY FROM YOUR AGENCY, IS RETURNED HEREWITH.