B-63245, APRIL 7, 1947, 26 COMP. GEN. 744

B-63245: Apr 7, 1947

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EXPRESSED THE UNDERSTANDING OF THE PARTIES AT THE TIME IT WAS EXECUTED. INFORMED AS THEY WERE. 1947: REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 14. IT IS STATED. * * * NO PROFIT WAS INCLUDED IN THE WORK FOR WHICH THE CONTRACT PRICE OF 27. 500 WAS NEGOTIATED. IT WAS INTENDED THAT THIS CONTRACT WOULD BE A STRAIGHT COST CONTRACT TO BE UNDERTAKEN BY THE COMPANY AS A MATTER OF ACCOMMODATION TO THE NAVY. DESIRED THAT THE CONTRACT BE EXECUTED PRIOR TO THE TIME THAT HE LEFT THE NAVAL SERVICE AND ASSURED THE CONTRACTOR THAT IF THE TOTAL COSTS WERE NOT COVERED BY THE CONTRACT PRICE OF $27. THE BUREAU OF YARDS AND DOCKS IS OF THE OPINION THAT THE SUBJECT CLAIM IS MERITORIOUS. THAT THE COSTS CLAIMED WERE REASONABLE.

B-63245, APRIL 7, 1947, 26 COMP. GEN. 744

CONTRACTS - REFORMATION - UNILATERAL MISTAKE WHERE A CONTRACT, STIPULATING A LUMP-SUM PRICE FOR RELOCATING THE CONTRACTOR'S RAILROAD APPURTENANCES FOR THE CONVENIENCE OF THE GOVERNMENT, EXPRESSED THE UNDERSTANDING OF THE PARTIES AT THE TIME IT WAS EXECUTED, INFORMED AS THEY WERE, THE ALLEGED MISTAKE OF THE CONTRACTOR IN INCORRECTLY DETERMINING THE AMOUNT OF THE ACTUAL COSTS TO BE USED AS A BASIS FOR NEGOTIATING THE LUMP-SUM PRICE, BEING A UNILATERAL RATHER THAN A MUTUAL MISTAKE, CONSTITUTES NO BASIS FOR THE REFORMATION OF THE CONTRACT SO AS TO AUTHORIZE THE PAYMENT OF AN ADDITIONAL AMOUNT TO COMPENSATE THE CONTRACTOR FOR THE COSTS ACTUALLY INCURRED IN PERFORMING THE CONTRACT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, APRIL 7, 1947:

REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 14, 1947, AND MARCH 19, 1947, YOUR FILE NOY-11117, FL-1/VMC, REQUESTING DECISION RELATIVE TO A PROPOSED AMENDMENT TO NAVY CONTRACT NOY-11117, ENTERED INTO AS OF FEBRUARY 21, 1945, SO AS TO PROVIDE FOR THE PAYMENT OF $464.63 IN ADDITION TO THE LUMP SUM OF $27,500 STIPULATED IN SAID CONTRACT FOR THE REMOVAL OF THE CONTRACTOR'S AERIAL POLE LINE PLANT AND SIGNAL MAST LOCATED ON THE RIGHT- OF-WAY OF THE DELAWARE AND BOUND BROOK RAILROAD CO. NEAR THE UNITED STATES NAVAL AIR FACILITY, TRENTON, N.J. IN YOUR LETTER OF JANUARY 14, 1947, IT IS STATED.

* * * NO PROFIT WAS INCLUDED IN THE WORK FOR WHICH THE CONTRACT PRICE OF 27,500 WAS NEGOTIATED. IT WAS INTENDED THAT THIS CONTRACT WOULD BE A STRAIGHT COST CONTRACT TO BE UNDERTAKEN BY THE COMPANY AS A MATTER OF ACCOMMODATION TO THE NAVY. THE OFFICER IN CHARGE OF CONSTRUCTION, CAPTAIN DECHANT, DESIRED THAT THE CONTRACT BE EXECUTED PRIOR TO THE TIME THAT HE LEFT THE NAVAL SERVICE AND ASSURED THE CONTRACTOR THAT IF THE TOTAL COSTS WERE NOT COVERED BY THE CONTRACT PRICE OF $27,500 A CHANGE ORDER WOULD BE EXECUTED BY THE NAVY TO INCLUDE THE ADDITIONAL COSTS.

THE BUREAU OF YARDS AND DOCKS IS OF THE OPINION THAT THE SUBJECT CLAIM IS MERITORIOUS, THAT THE COSTS CLAIMED WERE REASONABLE, WERE ACTUALLY INCURRED BY THE CLAIMANT AND WERE NOT COVERED IN THE DEFINITIVE CONTRACT BECAUSE OF THE ASSURANCE WHICH THE OFFICER-IN 1CHARGE OF CONSTRUCTION GAVE TO THE CONTRACTOR THAT ANY ADJUSTMENT IN COSTS WOULD BE LATER MET. ESPECIALLY IN VIEW OF THE FACT THAT THE CONTRACTOR WAS MAKING AN EFFORT TO ACCOMMODATE THE NAVY AND WAS PERFORMING THE WORK IN QUESTION UNDER A STRAIGHT COST ARRANGEMENT WITHOUT PROFIT, THE BUREAU IS OF THE OPINION THAT THE CLAIM SHOULD BE PAID.

IT WILL BE NOTED THAT THE CONTRACT PRICE OF $27,500 WAS INSERTED IN THE CONTRACT ON THE BASIS OF INFORMATION AS TO PAST COSTS AND REMAINING ESTIMATED COSTS INDICATING THAT THE TOTAL OF SUCH COSTS WOULD BE COVERED BY THE $27,500. SUBSEQUENTLY IT APPEARED THAT THE CORRECT TOTAL OF COSTS WHICH IT WAS INTENDED TO REIMBURSE WAS $27,964.63, WHICH FIGURE WOULD HAVE BEEN INSERTED IN THE CONTRACT IF THE CORRECT INFORMATION HAD BEEN BEFORE THE PARTIES AT THE TIME OF EXECUTION. IT WOULD APPEAR, THEREFORE, THAT RESCISSION OF THE CONTRACT PRICE OF $27,500 AND SUBSTITUTION THEREFOR OF THE ACTUAL AND REASONABLE COST FIGURE OF $27,964.63 ARE JUSTIFIED BY REASON OF THE MUTUAL MISTAKE OF FACT.

IT ALSO APPEARS THAT THE CONTRACTOR SIGNED THE CONTRACT AS WRITTEN IN RELIANCE UPON THE REPRESENTATION OF THE OFFICER-IN-1CHARGE OF CONSTRUCTION CONDUCTING NEGOTIATIONS ON BEHALF OF THE GOVERNMENT THAT THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND ACTUAL COSTS WOULD BE TAKEN CARE OF BY A " CHANGE ORDER.' THERE IS NO QUESTION THAT BOTH THE CONTRACTOR AND THE OFFICER-IN-1CHARGE WERE WRONG IN THEIR IMPRESSION THAT THIS COULD BE DONE UNDER THE CONTRACT AS WRITTEN. * * *

THERE WAS INCLUDED AMONG THE ENCLOSURES WITH YOUR LETTER OF JANUARY 14, AN AFFIDAVIT BY THE CHIEF ENGINEER OF THE CONTRACTOR WHICH STATES IN PART AS FOLLOWS:

AS THE WORK NEARED COMPLETION, THE NAVY DEPARTMENT, THROUGH CAPTAIN (FORMER COMMANDER) DECHANT REQUESTED THAT THE DEFINITIVE OR NEGOTIATED CONTRACT BE EXECUTED ON OUR PART. CAPTAIN DECHANT CALLED AT THE OFFICE OF OUR CHIEF ENGINEER ON AUGUST 17, 1945, STATING THAT AS HE EXPECTED TO RETIRE FROM THE NAVY ON SEPTEMBER 15TH, IT WAS DESIRED TO HAVE THE FORMAL CONTRACT EXECUTED AS PROMPTLY AS POSSIBLE. TO DO THIS, IT WAS NECESSARY TO OBTAIN THE TOTAL COSTS OF THIS WORK TO DATE AND TO ESTIMATE THE COST OF THE WORK REMAINING TO BE DONE, SO THAT "THE LUMP SUM CONSIDERATION" COULD BE INCLUDED IN THE NEGOTIATED CONTRACT. AT THAT TIME, CAPT. DECHANT STATED TO OUR CHIEF ENGINEER THAT IRRESPECTIVE OF THE AMOUNT INCLUDED IN THE NEGOTIATED CONTRACT, THIS COMPANY WOULD BE REIMBURSED FOR THE ACTUAL COST INCURRED BY US FOR THE PERFORMANCE OF THIS WORK UNDER THE TERMS OF THE CONTRACT AND ANY DIFFERENCE BETWEEN THE AMOUNT STATED IN THE CONTRACT AND THE ACTUAL FINAL COST (OVER OR UNDER) WOULD BE TAKEN CARE OF BY WHAT THE NAVY DEPARTMENT TERMS A " CHANGE ORDER.'

AFTER OBTAINING FROM THE ACCOUNTING DEPARTMENT THE TOTAL COST TO DATE, AND THE ESTIMATED REMAINING COSTS FROM OTHER DEPARTMENTS, IT WAS FOUND THAT THIS TOTAL APPROXIMATED $27,000. IN VIEW OF THE STATEMENT OF CAPT. DECHANT IN REGARD TO THE POSSIBILITY OF MAKING A FUTURE ADJUSTMENT BY A CHANGE ORDER, AND SO AS TO PROVIDE A SLIGHT LEEWAY, IT WAS DECIDED TO USE THE FIGURE OF $27,500, AS THE LUMP SUM CONSIDERATION IN THE NEGOTIATED CONTRACT. THE CONTRACT (NOY-11117) WITH THIS AMOUNT WAS DATED FEBRUARY 21, 1945 (THE DATE OF THE LETTER OF INTENT), AND EXECUTED.

SUBSEQUENTLY IT WAS FOUND THAT THE TOTAL COST OF ALL WORK PERFORMED UNDER THIS CONTRACT AMOUNTED TO $27,964.63, AN INCREASE OF $464.63 OVER THE AMOUNT PROVIDED FOR IN THE CONTRACT.

IN VIEW OF THE FACT THAT OUR TOTAL COST EXCEEDED THE AMOUNT IN THE NEGOTIATED CONTRACT, AND THAT SUCH CONTRACT WAS EXECUTED UNDER THE AFOREMENTIONED CONDITIONS, REIMBURSEMENT IS HEREBY REQUESTED FOR THE TOTAL COST OF THE WORK IN AMOUNT $27,964.63 WHICH IS AN AMOUNT OF $464.63 OVER THE CONTRACT PRICE.

ALSO, IN A LETTER DATED MARCH 22, 1946, F. H. DECHANT, THE OFFICER IN CHARGE OF CONSTRUCTION, STATED:

THE ABOVE CONTRACT CONCERNED THE REMOVAL OF OVERHEAD ELECTRIC LINES OF THE READING COMPANY WHICH WERE CONSIDERED AN OBSTRUCTION TO FLIGHT AT THE NAVY'S MERCER FIELD AIR STATION. THE LINES WERE USED FOR SIGNAL PURPOSES AND COMMUNICATION AND WERE OWNED AND OPERATED BY THE READING CO. THE CONTRACT CALLED FOR THEM TO BE PLACED UNDERGROUND AND BECAUSE OF THEIR NATURE THE READING CO. WOULD NOT PERMIT THEIR HANDLING BY OUTSIDE CONTRACT EXCEPT FOR THE CONSTRUCTION OF CONDUIT AND MANHOLES, AND DID THE WORK THEMSELVES UNDER THE ABOVE NEGOTIATED LUMP SUM CONTRACT. I WAS DESIGNATED OFFICER IN CHARGE AND HANDLED ALL OF THE NEGOTIATIONS AND ARRANGED A "NO PROFIT" AGREEMENT.

IN THE ENCLOSED COPY OF NOTES BY CHIEF ENGINEER ALLEN OF THE READING COMPANY YOU WILL NOTE THAT I TOLD THE READING COMPANY THAT COSTS OVER OR UNDER THE NEGOTIATED CONTRACT PRICE WOULD BE ADJUSTED THROUGH A " CHANGE ORDER" WHICH WAS COMMONLY DONE ON MANY CONTRACTS.

NOW, I AM INFORMED THAT THE READING CO. HAS BEEN ASKED TO SIGN A RELEASE IN AN AMOUNT $464.63 LESS THAN THE ACTUAL COST OF THE WORK WHICH WAS $27,964.63, AND NOTE AN EXCEPTION ON IT BY REASON OF THIS CLAIM.

CAPT. DUNLAP IS FAMILIAR WITH THIS CONTRACT FROM ITS INCEPTION AND HE KNOWS THE CIRCUMSTANCES UNDER WHICH IT WAS FINALLY NEGOTIATED.

THE RECORD SHOWS THAT UNDER DATE OF JANUARY 23, 1945, A LETTER OF INTENT WAS ISSUED TO THE READING CO. WHEREIN IT WAS SATED, INTER ALIA, THAT THE NAVY DEPARTMENT INTENDED TO ENTER INTO A DEFINITIVE LUMP-SUM CONTRACT WITH THAT COMPANY FOR THE REMOVAL OF ITS AERIAL POLE LINE PLANT AND SIGNAL MAST ON THE NORTHWESTERLY SIDE OF THE TRACKS OF THE NEW YORK BRANCH OF THE SAID COMPANY ON THE RIGHT-OF-WAY OF THE DELAWARE AND BOUND BROOK RAILROAD CO. IT WAS STATED FURTHER THAT THE CONSIDERATION TO BE PAID TO THE COMPANY WOULD BE DETERMINED BY FURTHER NEGOTIATION WITH THE CHIEF OF THE BUREAU OF YARDS AND DOCKS, WITH THE PROVISO THAT THE CONSIDERATION SO DETERMINED WOULD INCLUDE ALLOWANCE FOR THE COST OF CONSTRUCTION OF THE WORK TO BE PERFORMED; THAT PARTIAL PAYMENTS WOULD BE MADE UNDER THE LETTER OF INTENT COMMENSURATE WITH THE WORK PERFORMED IN SUCH AMOUNTS AS MIGHT BE APPROVED FROM TIME TO TIME BY THE OFFICER IN CHARGE, WITH A FURTHER PROVISO THAT IN THE ABSENCE OF SPECIFIC EXTENSION OF THE PERIOD BY THE GOVERNMENT SUCH PAYMENTS WOULD NOT BE MADE UNDER THE LETTER OF INTENT--- AS DISTINGUISHED FROM THE CONTRACT TO BE EXECUTED--- AFTER JUNE 30, 1945; THAT THE CONTRACT WOULD BE IN THE FORM OF CONTRACT NO. NOY-11117 SUBMITTED WITH THE LETTER OF INTENT; AND THAT THE SAID CONTRACT, WHEN EXECUTED, WOULD SUPERSEDE THE LETTER OF INTENT BUT THAT WORK DONE AND PAYMENTS MADE UNDER THE LETTER OF INTENT WOULD BE DEEMED TO HAVE BEEN UNDER THE CONTRACT IN THE ABSENCE OF A PROVISION IN THE LETTER OF INTENT TO THE CONTRARY. FINALLY, IN THE LETTER OF INTENT THE CONTRACTOR WAS ADVISED THAT IF THE STATEMENTS MADE THEREIN WERE SATISFACTORY TO IT, THE CONTRACTOR SHOULD SO INDICATE BY SIGNING IN THE SPACE PROVIDED FOR ACCEPTANCE ON THE ORIGINAL AND TWO COPIES AND BY RETURNING SAME TO THE BUREAU OF YARDS AND DOCKS IMMEDIATELY; AND THAT THE LETTER OF INTENT WOULD CONSTITUTE THE AGREEMENT BETWEEN THE PARTIES UNTIL EXECUTION OF THE DEFINITIVE CONTRACT OR TERMINATION OF THE LETTER OF INTENT. THE LETTER OF INTENT WAS ACCEPTED UNCONDITIONALLY BY THE CONTRACTOR ON FEBRUARY 21, 1945.

IT THUS APPEARS FROM THE LETTER OF INTENT THAT THE PURPOSE OF THE PARTIES THERETO WAS TO HAVE THE CONTRACTOR PROCEED WITH THE WORK WITH THE UNDERSTANDING THAT THE CONSIDERATION TO BE PAID WOULD BE DETERMINED BY FURTHER NEGOTIATION WITH THE CHIEF OF THE BUREAU OF YARDS AND DOCKS, AT WHICH TIME THE NAVY DEPARTMENT WOULD ENTER INTO A SUPERSEDING DEFINITIVE LUMP-SUM CONTRACT THE LUMP SUM TO ,INCLUDE ALLOWANCE FOR THE COST OF" THE WORK.

THE RECORD SHOWS THAT ALTHOUGH THE DEFINITIVE CONTRACT WAS ENTERED INTO AS OF FEBRUARY 21, 1945, IT WAS NOT SIGNED BY THE CONTRACTOR UNTIL AUGUST 24, 1945, THE DATE ON WHICH IT APPARENTLY WAS ACTUALLY EXECUTED. ARTICLE 1 (A) AND 1 (C) OF THE CONTRACT PROVIDED AS FOLLOWS:

(A) STATEMENT OF THE WORK. THE CONTRACTOR SHALL REMOVE ITS AERIAL POLE LINE PLANT AND SIGNAL MAST ON THE NORTHWESTERLY SIDE OF THE TRACKS OF THE NEW YORK BRANCH OF READING COMPANY, ON RIGHT OF WAY OF THE DELAWARE AND BOUND BROOK RAILROAD COMPANY, BETWEEN ENGINEERING STATIONS 1768 PLUS 100 AND 1786 PLUS 16 WHICH INCLUDES ALL OF SAID AERIAL POLE LINE PLANT WITHIN FIVE HUNDRED (500) FEET (MEASURED AT RIGHT ANGLES TO THE CENTER LINE) OF THE CENTER LINE OF RUNWAY NO. 3 PRODUCED, OF THE U.S. NAVAL AIR FACILITY, TRENTON, N.J. THE FOREGOING PROVISIONS OF THIS ARTICLE 1 (A) ARE HEREINAFTER REFERRED TO AS "THE WORK.'

(C) FOR THE STRICT AND FAITHFUL PERFORMANCE OF ALL ITS OBLIGATIONS HEREUNDER, THE GOVERNMENT SHALL PAY THE CONTRACTOR THE LUMP SUM CONSIDERATION OF $27,500.00; PROVIDED THAT THE AFORESAID CONSIDERATION INCLUDES ALLOWANCE FOR COST OF CONSTRUCTION OF AN UNDERGROUND CABLE IN DUCTS IN PLACE OF CONTRACTOR'S AERIAL LINE TO BE REMOVED PURSUANT TO THIS CONTRACT AND THE RELOCATION OF CONTRACTOR'S SIGNALS; AND FURTHER PROVIDED THAT THE AFORESAID CONSIDERATION SHALL BE THE TOTAL AMOUNT FOR WHICH THE GOVERNMENT SHALL BE OBLIGATED AND THE GOVERNMENT SHALL NOT BE LIABLE IN ANY WAY WHATSOEVER FOR THE CONSTRUCTION OF AN UNDERGROUND CABLE IN DUCTS IN PLACE OF CONTRACTOR'S AERIAL LINE TO BE REMOVED PURSUANT TO THIS CONTRACT, THE RELOCATION OF CONTRACTOR'S SIGNALS OR ANY OTHER COST OR ITEM WHATSOEVER IN CONNECTION WITH, OR RELATING TO, THE REMOVAL OF CONTRACTOR'S AERIAL POLE LINE PLANT AND SIGNAL MAST PURSUANT TO THIS CONTRACT.

ARTICLE 15 OF THE CONTRACT PROVIDED THAT NO ORAL STATEMENT OF ANY PERSON WHOMSOEVER WOULD IN ANY MANNER OR DEGREE MODIFY OR OTHERWISE AFFECT THE TERMS OF THE CONTRACT AND, EXCEPT AS OTHERWISE THEREIN PROVIDED, NO CHARGE WOULD BE MADE FOR ANY EXTRA WORK OR MATERIAL UNLESS THE SAME HAD BEEN ORDERED IN WRITING BY THE CONTRACTING OFFICER.

IT APPEARS FROM THE AFFIDAVIT OF THE CONTRACTOR'S ENGINEER, QUOTED IN PART ABOVE, THAT THE LUMP-SUM CONTRACT WAS NEGOTIATED BEFORE THE WORK WAS COMPLETELY PERFORMED BECAUSE THE OFFICER IN CHARGE OF CONSTRUCTION EXPECTED TO RETIRE FROM ACTIVE DUTY WITH THE NAVY DEPARTMENT ON SEPTEMBER 15, 1945, AND WAS DESIROUS OF HAVING THE FORMAL CONTRACT EXECUTED AS PROMPTLY AS POSSIBLE. WHILE THE LETTER OF INTENT DID NOT STATE DEFINITELY WHEN THE DEFINITIVE CONTRACT WOULD BE EXECUTED, IT WAS STATED THAT SUCH CONTRACT WOULD BE EXECUTED AS EXPEDITIOUSLY AS POSSIBLE AFTER COMPLETION OF FURTHER NEGOTIATIONS REGARDING THE AMOUNT OF CONSIDERATION TO BE PAID. THEREFORE, IT APPEARS THAT THE NEGOTIATION AND EXECUTION OF THE LUMP-SUM CONTRACT BEFORE THE WORK WAS FULLY COMPLETED WAS NOT CONTRARY TO THE INTENTION OF THE PARTIES AS EXPRESSED IN THE LETTER OF INTENT.

WITH RESPECT TO YOUR STATEMENT THAT THE ACTUAL COST FOR WHICH REIMBURSEMENT IS CLAIMED WAS NOT COVERED BY THE DEFINITIVE CONTRACT FOR THE REASON THAT THE OFFICER IN CHARGE OF CONSTRUCTION ASSURED THE CONTRACTOR THAT ANY ADJUSTMENT IN THE LUMP-SUM CONTRACT PRICE TO COVER THE ACTUAL COST WOULD BE MADE, ADMITTEDLY THE OFFICER IN CHARGE HAD NO AUTHORITY TO WAIVE ANY RIGHT WHICH THE GOVERNMENT HAD UNDER THE CONTRACT, OR TO RELIEVE THE CONTRACTOR OF ANY OBLIGATION ASSUMED BY IT UNDER THE EXPRESS TERMS THEREOF. AS SHOWN ABOVE, THE TERMS OF ARTICLE 1 (C) OF THE CONTRACT NOT ONLY PROVIDED CLEARLY THAT THE LUMP-SUM CONSIDERATION OF $27,500 WOULD BE THE TOTAL AMOUNT FOR WHICH THE GOVERNMENT WOULD BE OBLIGATED FOR THE WORK, BUT ARTICLE 15 EXPRESSLY PROVIDED THAT NO ORAL STATEMENT OF ANY PERSON WOULD BE ACCEPTED TO MODIFY, OR OTHERWISE AFFECT, THE TERMS OF THE CONTRACT. WITH RESPECT TO YOUR STATEMENT THAT THE PRICE OF $27,500 WAS INSERTED IN THE CONTRACT ON THE BASIS OF INFORMATION AS TO PRIOR COST AND REMAINING ESTIMATED COSTS INDICATING THAT THE TOTAL OF SUCH COSTS WOULD BE COVERED BY THE LUMP-SUM PRICE OF $27,500, IT WILL BE NOTED FROM THE STATEMENT OF THE CONTRACTOR'S ENGINEER, QUOTED IN PART ABOVE, THAT COST INFORMATION WAS OBTAINED FROM THE CONTRACTOR'S OWN RECORDS; THAT IT WAS FOUND, ON THE BASIS OF SUCH RECORDS, THAT THE TOTAL COST WOULD APPROXIMATE $27,000 BUT THAT $500 ADDITIONAL WAS ADDED "TO PROVIDE A SLIGHT LEEWAY.' THUS, IT IS ADMITTED THAT THE CONTRACTOR INCLUDED IN THE LUMP-SUM PRICE $500 MORE THAN THE APPROXIMATE TOTAL COST DETERMINED ON THE BASIS OF ITS OWN RECORDS IN ORDER TO BE CERTAIN THAT THE LUMP SUM PRICE WOULD COVER THE ACTUAL COST. OBVIOUSLY, THE CONTRACTOR INSERTED IN THE CONTRACT THE PRICE IT INTENDED TO INSERT THEREIN.

RELATIVE TO YOUR STATEMENT THAT THE ACTUAL COST FIGURE OF $27,964.63 WOULD HAVE BEEN INSERTED IN THE CONTRACT IF THE CONTRACTOR HAD BEEN IN POSSESSION OF CORRECT INFORMATION AT THE TIME IT EXECUTED THE CONTRACT AND THAT IT WOULD APPEAR THAT SUCH FIGURE SHOULD BE SUBSTITUTED FOR THE LUMP SUM OF $27,500 STIPULATED IN THE CONTRACT ON THE GROUND THAT A MUTUAL MISTAKE OF FACT WAS MADE BY THE PARTIES, IT MAY BE POINTED OUT THAT THE RESPONSIBILITY FOR DETERMINING THE AMOUNT OF THE COSTS TO BE USED AS A BASIS FOR ARRIVING AT THE LUMP-SUM PRICE TO BE NEGOTIATED AND INSERTED IN THE CONTRACT WAS UPON THE CONTRACTOR. IF IT SUBSEQUENTLY DEVELOPED THAT THE LUMP-SUM PRICE DID NOT COVER ALL OF THE ACTUAL COST BECAUSE OF AN OMISSION OF SOME ITEM OF PAST COST OR AN ERRONEOUS ESTIMATE AS TO FUTURE COST, IT IS OBVIOUS THAT SUCH OMISSION OR ERRONEOUS ESTIMATE WAS DUE SOLELY TO THE CONTRACTOR'S NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE ELLICOTT MACHINE COMPANY V. UNITED STATES, 44 C.1CLS. 127. WHEREIN IT WAS STATED, QUOTING FROM THE SYLLABUS, THAT---

IT IS WELL SETTLED THAT WHERE A CONTRACT IS VALID ON ITS FACE AND NO FRAUD OR CONCEALMENT HAS BEEN SHOWN, A PARTY CAN NOT BE RELIEVED FROM ITS OBLIGATIONS FOR MISTAKE UNLESS THE MISTAKE WAS MUTUAL. A PARTY CAN NOT SET UP HIS NEGLIGENCE AND CALL IT A MUTUAL MISTAKE. ( ITALICS SUPPLIED.)

THERE IS NOTHING IN THE PRESENT RECORD TO SHOW THAT THE GOVERNMENT CONTRACTING OFFICER KNEW THAT THE AMOUNT WHICH CONTRACTOR AGREED SHOULD BE INSERTED IN THE CONTRACT WOULD NOT COVER THE ACTUAL COST OF THE WORK. NOR IS THERE ANYTHING IN THE RECORD TO INDICATE THAT THE LUMP SUM PRICE STIPULATED IN THE CONTRACT WAS NOT THE PRICE WHICH THE CONTRACTING OFFICER INTENDED TO HAVE INSERTED THEREIN OR THAT THERE WAS ANY ERROR ON HIS PART IN EXECUTING THE CONTRACT WITH A PROVISION THEREIN FOR THE PAYMENT OF THE LUMP-SUM PRICE OF $27,500. FROM AN EXAMINATION OF THE ENTIRE RECORD, IT IS APPARENT THAT THE ERROR, IF ANY, WAS UNILATERAL AND NOT MUTUAL.

MOREOVER, THE COURTS HAVE HELD THAT A MISTAKE AS TO AN EXISTING SITUATION WHICH LEADS EITHER ONE OR BOTH OF THE PARTIES TO ENTER INTO A CONTRACT WHICH THEY WOULD NOT HAVE ENTERED INTO HAD THEY BEEN ADVISED OF THE ACTUAL FACTS, WILL NOT JUSTIFY REFORMATION AND THAT IT IS NOT WHAT THE PARTIES WOULD HAVE INTENDED HAD THEY KNOWN BETTER BUT WHAT THEY DID INTEND AT THE TIME, INFORMED AS THEY WERE. SEE RUSSELL ET AL. V. SHELL PETROLEUM CORPORATION, 66 F.2D 864, 867, AND WISE ET AL. V. BROOKS ET AL., 13 S. 836, 837.

IN DONIPHAN, K. AND S.R. CO. V. MISSOURI AND N.A.R. CO., 149 S.W. 60, 64, THE COURT, IN CONSIDERING THE MATTER OF REFORMATION OF WRITTEN INSTRUMENTS, STATED THAT---

IN ALL SUCH CASES, THE QUESTION IS NOT WHAT THE PARTIES WOULD HAVE INTENDED BUT FOR A MISAPPREHENSION, NOT WHAT THEY WOULD HAVE INTENDED HAD THEY KNOWN BETTER, BUT RATHER, DID THE PARTIES UNDERSTANDINGLY EXECUTE THE INSTRUMENT, AND DOES IT EXPRESS THEIR INTENTION AT THE TIME, INFORMED AS THEY WERE? COURTS OF EQUITY WILL NOT REFORM A CONTRACT ON THE ALLEGED GROUND OF MISTAKE WHEN SUBSEQUENT EVENTS SHOW THAT SOMETHING DESIRED WAS OMITTED. SUCH COURTS MAY COMPEL PARTIES TO EXECUTE THEIR CONTRACTS, BUT CANNOT MAKE CONTRACTS FOR THEM. THEY MAY CORRECT AN INSTRUMENT SO AS TO MAKE IT CONFORM TO THE AGREEMENT, BUT THEY CANNOT CORRECT BAD JUDGMENT OR THE RESULT OF INATTENTION OR CARELESSNESS. * * *

SINCE IT APPEARS THAT THE LUMP-SUM CONTRACT EXPRESSED THE UNDERSTANDING OF THE PARTIES AT THE TIME IT WAS EXECUTED, INFORMED AS THEY WERE, AND SINCE THE MISTAKE ALLEGEDLY MADE BY THE CONTRACTOR WAS UNILATERAL AND NOT MUTUAL, I HAVE TO ADVISE THAT, ON THE BASIS OF THE PRESENT RECORD, THERE APPEARS NO LEGAL BASIS FOR MODIFYING THE CONTRACT SO AS TO AUTHORIZE PAYMENT TO THE CONTRACTOR OF THE ADDITIONAL AMOUNT OF $464.63.