B-164641, AUG. 7, 1968

B-164641, AUG. 7, 1968

TO MR. JENSEN:

REFERENCE IS MADE TO YOUR LETTER 6540 DATED MAY 6, 1968, REQUESTING A DECISION REGARDING PAYMENT OF A VOUCHER UNDER FOREST SERVICE CONTRACT NO. 001850 WITH THE DISCOUNT CO.

THE CONTRACT PROVIDED FOR THE CONSTRUCTION OF THE NORTH WALDO CAMPGROUND IN THE WILLAMETTE NATIONAL FOREST, OREGON. A CONTRACT COVERING THE CONSTRUCTION OF THE ACCESS ROAD TO THE WORKSITE WAS LET BY THE FOREST SERVICE TO ANOTHER CONTRACTOR, MANN CONSTRUCTION COMPANY.

PARAGRAPH 5 OF THE SUPPLEMENTAL SPECIFICATIONS IN THE CONTRACT WITH THE DISCOUNT CO. PROVIDED: "SURFACING OF THE WALDO LAKE ROAD NO. 204 AND SOUTH FORK ROAD NO. 163 AND CONSTRUCTION OF ISLET CAMPGROUND ROAD NO. 2170 IS EXPECTED TO BE IN PROGRESS DURING THE TIME OF THIS CONTRACT. SOME DELAY IN ACCESS TRAVEL, EQUIPMENT HAULING AND LOG HAULING OVER ROADS NO. 204, 163 AND 2170 MAY BE EXPECTED DUE TO THE SURFACING AND CONSTRUCTION OPERATIONS. CONTRACTOR'S ATTENTION IS DIRECTED TO ARTICLE 14, OTHER CONTRACTS, OF SF-23A, GENERAL PROVISIONS.' PARAGRAPH 6 OF THE SUPPLEMENTAL SPECIFICATIONS PROVIDED: "TEMPORARY ACCESS ROADS FOR TIMBER HAULING AND THE PIONEER CONSTRUCTION ROAD SHALL BE CONSTRUCTED ONLY WITHIN THE LIMITS OF THE CUT AND FILL STAKES.' AMENDMENT 3 TO THE INVITATION FOR BIDS UPON WHICH THE CONTRACT IS BASED ADDED TO THE SUPPLEMENTAL SPECIFICATIONS THE FOLLOWING: "IT IS ANTICIPATED THAT THE CONSTRUCTION OF ISLET ROAD NO. 2170 AND NORTH WALDO ROAD NO. 2170-A WILL NOT BE COMPLETED UNTIL APPROXIMATELY SEPTEMBER 15, 1967. THE CONTRACTOR MAY NOT UTILIZE THESE ROADS FOR HAULING OF LOGS AND EQUIPMENT UNTIL AFTER THEIR COMPLETION, UNLESS SEPARATE ARRANGEMENTS ARE MADE BY AND BETWEEN MANN CONSTRUCTION COMPANY AND THE CONTRACTOR.'

THE CONTRACT WAS AWARDED TO THE DISCOUNT CO. ON AUGUST 28, 1967. NOTICE TO PROCEED WAS ISSUED ON SEPTEMBER 14, 1967, EFFECTIVE SEPTEMBER 20, 1967. HOWEVER, THE ACCESS ROAD WAS UNDER CONSTRUCTION BY MANN AND NOT COMPLETED AT THAT TIME. ALL WORK ON THE ACCESS ROAD AND ADJACENT CONSTRUCTION HAD BEEN UNDER A TOTAL WORK SUSPENSION BETWEEN AUGUST 14, 1967, AND SEPTEMBER 13, 1967, BECAUSE OF A FIRE CLOSURE. BAD WEATHER COMMENCING ON OCTOBER 2, 1967, MADE THE ROAD ALMOST TOTALLY UNSUITABLE FOR TRAFFIC AND ANY CONSTRUCTION WORK. THE WORK WAS NOT FINISHED BY THE TIME ALL THE WORK IN THE AREA WAS CLOSED DOWN FOR THE WINTER.

BASED ON THE FACT THAT AMENDMENT 3 REPRESENTED THAT THE ACCESS ROAD WOULD BE COMPLETED BY APPROXIMATELY SEPTEMBER 15, 1967; THAT THERE HAD BEEN A TOTAL SUSPENSION OF WORK ON THE ACCESS ROAD BETWEEN AUGUST 14, 1967, AND SEPTEMBER 13, 1967; AND THAT ON OCTOBER 2, 1967, SEASONAL RAINS MADE CONDITIONS ON THE ACCESS ROAD UNSUITABLE FOR WORK THAT HAD NOT BEEN RESUMED BEFORE CLOSURE OF THE PROJECT FOR THE WINTER, THE CONTRACTING OFFICER DETERMINED UNDER ARTICLE 4 OF THE CONTRACT THAT THERE WAS A LATENT PHYSICAL CONDITION AT THE SITE. HE THEREFORE ISSUED A CHANGE ORDER ON APRIL 17, 1968, PROVIDING AN EQUITABLE ADJUSTMENT IN THE LUMP-SUM AMOUNT OF $12,182.56. THE CHANGE ORDER PROVIDED THAT THE PRICE ADJUSTMENT SHALL CONSTITUTE COMPENSATION FOR ALL EXCESS COST INCURRED BY THE CONTRACTOR THROUGH THE PERIOD ENDING 15 WORK DAYS AFTER THE DATE THAT WORK CAN BE RESUMED ON THE ACCESS ROAD, AND ALSO FOR A 30-DAY EXTENSION OF TIME.

YOU STATE THAT YOU BELIEVE THAT THE CONDITION OF THE ROAD WAS NOT A LATENT PHYSICAL CONDITION AND THAT, THEREFORE, IT DID NOT CONSTITUTE A CHANGED CONDITION FOR WHICH AN EQUITABLE ADJUSTMENT MAY BE MADE UNDER THE TERMS OF THE CONTRACT. YOU STATE THAT YOU BELIEVE THAT THERE IS PROPERLY INVOLVED A BREACH OF CONTRACT FOR SETTLEMENT BY OUR OFFICE. YOU THEREFORE QUESTION THE AUTHORITY OF THE CONTRACTING OFFICER TO TREAT THE MATTER AS A CHANGED CONDITION. HOWEVER, YOU AGREE THAT THE COMPENSATION STATED IN THE CHANGE ORDER IS REASONABLE UNDER THE CIRCUMSTANCES.

ARTICLE 4 OF THE CONTRACT PROVIDES WITH REFERENCE TO CHANGED CONDITIONS:

"THE CONTRACTOR SHALL PROMPTLY, AND BEFORE SUCH CONDITIONS ARE DISTURBED, NOTIFY THE CONTRACTING OFFICER IN WRITING OF: (A) SUBSURFACE OR LATENT PHYSICAL CONDITIONS AT THE SITE DIFFERING MATERIALLY FROM THOSE INDICATED IN THIS CONTRACT, OR (B) UNKNOWN PHYSICAL CONDITIONS AT THE SITE, OF AN UNUSUAL NATURE, DIFFERING MATERIALLY FROM THOSE ORDINARILY ENCOUNTERED AND GENERALLY RECOGNIZED AS INHERING IN WORK OF THE CHARACTER PROVIDED FOR IN THIS CONTRACT. THE CONTRACTING OFFICER SHALL PROMPTLY INVESTIGATE THE CONDITIONS, AND IF HE FINDS THAT SUCH CONDITIONS DO SO MATERIALLY DIFFER AND CAUSE AN INCREASE OR DECREASE IN THE CONTRACTOR'S COST OF, OR THE TIME REQUIRED FOR, PERFORMANCE OF THIS CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT MODIFIED IN WRITING ACCORDINGLY. ANY CLAIM OF THE CONTRACTOR FOR ADJUSTMENT HEREUNDER SHALL NOT BE ALLOWED UNLESS HE HAS GIVEN NOTICE AS ABOVE REQUIRED; OR UNLESS THE CONTRACTING OFFICER GRANTS A FURTHER PERIOD OF TIME BEFORE THE DATE OF FINAL PAYMENT UNDER THE CONTRACT. IF THE PARTIES FAIL TO AGREE UPON THE ADJUSTMENT TO BE MADE, THE DISPUTE SHALL BE DETERMINED AS PROVIDED IN CLAUSE 6 OF THESE GENERAL PROVISIONS.'

THE COURTS HAVE CONSISTENTLY HELD THAT THE CHANGED CONDITIONS CLAUSE IS INAPPLICABLE TO DELAYS CAUSED BY THE FAILURE OF ANOTHER CONTRACTOR TO PERFORM ON, OR IN RELATION TO, THE CONSTRUCTION SITE. GILBANE BUILDING COMPANY V UNITED STATES, 333 F.2D 867; COMMERCE INTERNATIONAL COMPANY, INC. V UNITED STATES, 338 F.2D 81. ALSO, SEE UNITED STATES V HOWARD P. FOLEY CO., INC., 329 U.S. 64; PETER KIEWIT SONS CO., INC., ET AL. V UNITED STATES, 138 CT. CL. 668; 41 COMP. GEN. 436; 44 ID. 353, WHEREIN WE CONSIDERED THE APPLICABILITY OF THE CHANGES CLAUSE TO CLAIMS FOR DAMAGES RESULTING FROM BREACH OF CONTRACT FOR DELAYS IN PERFORMING UNCHANGED WORK THAT WERE ATTRIBUTABLE TO THE GOVERNMENT. IN VIEW OF THESE AUTHORITIES, THE CONTRACTING OFFICER SHOULD NOT HAVE MADE AN EQUITABLE PRICE ADJUSTMENT UNDER THE CHANGED CONDITIONS CLAUSE OF THE CONTRACT.

AS A GENERAL RULE, THE GOVERNMENT IS NOT LIABLE FOR DELAYS IN MAKING WORK OR MATERIAL AVAILABLE TO A CONTRACTOR. UNITED STATES V RICE, 317 U.S. 61, AND UNITED STATES V FOLEY CO., SUPRA. ALSO, UNLESS THE GOVERNMENT GUARANTEES TO MAKE THE SITE AVAILABLE AT A PARTICULAR TIME, THE GOVERNMENT IS NOT LIABLE IN DAMAGES FOR THE DELAYS CAUSED BY ANOTHER CONTRACTOR UNLESS THE GOVERNMENT WAS IN SOME WAY AT FAULT IN MAKING THE SITE AVAILABLE AT AN EARLIER DATE. BEN C. GERWICK, INC. V UNITED STATES, 152 CT. CL. 69.

IN YOUR LETTER, YOU INDICATE THAT THE DELAY IN COMPLETION OF THE ACCESS ROAD MAY BE ATTRIBUTABLE TO THE FAILURE OF THE GOVERNMENT TO MAKE GOVERNMENT-FURNISHED ROCK AVAILABLE TO THE ROAD-BUILDING CONTRACTOR (MANN). HOWEVER, THE RECORD DOES NOT ESTABLISH THE FACTS WITH RESPECT TO THAT ASPECT OF CONTRACT PERFORMANCE AND WHETHER THE GOVERNMENT KNEW AT THE TIME THE NOTICE TO PROCEED WAS ISSUED TO THE DISCOUNT CO. THAT THE OTHER CONTRACTOR WOULD NOT HAVE THE ROCK TO TIMELY COMPLETE THE ACCESS ROAD. FURTHER, THE CHANGE ORDER PROVIDED THAT THE LUMP-SUM ADJUSTMENT WOULD CONSTITUTE COMPENSATION FOR ALL EXCESS COST INCURRED THROUGH "15 WORK DAYS AFTER THE DATE THAT WORK CAN BE RESUMED ON THE ACCESS ROAD," WHICH DATE WAS EXPECTED TO BE IN MAY 1968. YOUR LETTER DOES NOT STATE WHETHER THE ACCESS ROAD WAS CONSTRUCTED WITHIN THE PERIOD PROVIDED IN THE CHANGE ORDER OR WHETHER THE CONTRACTOR WAS SUBJECTED TO FURTHER DELAYS. IN THIS REGARD, IT WOULD BE PREFERABLE TO SETTLE ALL POSSIBLE CLAIMS ARISING FROM DELAYS ATTRIBUTABLE TO THE GOVERNMENT RATHER THAN TO EFFECT A PARTIAL DELAYS DAMAGES SETTLEMENT.

UPON RECEIPT OF THE INFORMATION INDICATED ABOVE, INCLUDING A PROPOSED SETTLEMENT IN AGREEMENT WITH THE CONTRACTOR, IF POSSIBLE, IN FULL AND FINAL SETTLEMENT OF ALL CLAIMS ARISING BY VIRTUE OF THE CONTRACT, INCLUDING THAT RELATING TO THE DELAY IN PROVIDING TIMELY USE OF THE ACCESS ROAD, OUR OFFICE WILL CONSIDER THE MATTER FURTHER.