B-163447, MARCH 1, 1968, 47 COMP. GEN. 475

B-163447, MARCH 1, 1968, 47 COMP. GEN. 475

CONTRACTS - INCREASED COSTS - GOVERNMENT ACTIVITIES - WORK SUSPENSION THE ADDITIONAL COSTS INCURRED BY A CONTRACTOR TO INSTALL A TELEVISION SURVEILLANCE SYSTEM AT CAPE KENNEDY DUE TO DELAYS OCCASIONED BY LAUNCH ACTIVITIES, WHERE THE CONTRACT DID NOT CONTAIN A ,SUSPENSION OF WORK- CLAUSE OR OTHER PROVISIONS TO COVER DELAY BUT DID REQUIRE THE CONTRACTOR TO ASCERTAIN WORK CONDITIONS, CONSTITUTE A CLAIM FOR BREACH OF CONTRACT DAMAGES WITHIN THE SETTLEMENT JURISDICTION OF THE GENERAL ACCOUNTING OFFICE. HOWEVER, AS THE CAUSE OF THE DELAY WAS EVIDENT AT THE TIME THE CONTRACT WAS EXECUTED, NO FAULT OR NEGLIGENCE IS ATTRIBUTABLE TO THE GOVERNMENT AND, THEREFORE, THERE IS NO LEGAL LIABILITY ON THE PART OF THE GOVERNMENT TO PAY THE CONTRACTOR THE INCREASED COSTS. CONTRACTS - DAMAGES - GOVERNMENT LIABILITY - BREACH OF CONTRACT WHILE EVERY CONTRACT IMPLIES THE PROMISE THAT NEITHER PARTY TO THE CONTRACT WILL PREVENT, HINDER, OR DELAY PERFORMANCE, THE NATURE AND SCOPE OF SUCH PROMISE MUST BE GATHERED FROM THE PARTICULAR CONTRACT, ITS CONTENT, AND THE SURROUNDING CIRCUMSTANCES. WHERE A CONTRACT IMPOSES RESPONSIBILITY ON THE CONTRACTOR TO ASCERTAIN THE CONDITIONS THAT COULD AFFECT WORK OR COST, THE FAILURE OF THE CONTRACTOR TO CONSIDER DELAYS ATTRIBUTABLE TO NORMAL OPERATIONS THAT ARE EVIDENT AT THE TIME THE CONTRACT IS EXECUTED DOES NOT RELIEVE THE CONTRACTOR FROM PERFORMING THE WORK WITHOUT ADDITIONAL COSTS TO THE GOVERNMENT, AND THE DELAYS OCCASIONED BY NO FAULT OR NEGLIGENCE ON THE PART OF THE GOVERNMENT DO NOT CONSTITUTE A BREACH OF CONTRACT IMPOSING A LEGAL LIABILITY ON THE GOVERNMENT FOR INCREASED COSTS.

TO SYSTEMS DESIGN CORPORATION, MARCH 1, 1968:

REFERENCE IS MADE TO YOUR CLAIM IN THE AMOUNT OF $11,000 FOR ADDITIONAL COSTS INCURRED IN PERFORMING CONTRACT NO. AF34/601/27179 DATED JUNE 9, 1966, WITH THE DEPARTMENT OF THE AIR FORCE, WHICH WAS FORWARDED HERE BY THE DEPARTMENT FOR SETTLEMENT.

ITEM NO. 1 OF THE CONTRACT CALLED FOR THE ENGINEERING, FURNISHING AND INSTALLATION OF AN OPERATIONAL CLOSED CIRCUIT TELEVISION SURVEILLANCE SYSTEM AT LAUNCH COMPLEX 17, CAPE KENNEDY AFS, FLORIDA, WITH DELIVERY 36 DAYS AFTER RECEIPT OF THE CONTRACT. THE CONTRACT DID NOT CONTAIN A ,SUSPENSION OF WORK" CLAUSE, AND PROVIDED UNDER PART XXIV, CONCERNING THE INSTALLATION PORTION OF THE WORK, AS FOLLOWS:

"D. CONDITIONS AFFECTING THE WORK (JUNE 1964)

"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.

"N. JOINT TENANCY

"THE CONTRACTOR SHALL BE RESPONSIBLE FOR COORDINATING ALL THE REQUIRED INSTALLATION ACTIVITIES WITH THE AIR FORCE EASTERN TEST RANGE TO PRECLUDE ANY INTERFERENCE WITH NASA AND AIR FORCE LAUNCH CREWS.'

YOU STATE THAT YOU BASED YOUR PRICE FOR THE WORK UPON FULL AND UNINTERRUPTED ACCESS TO THE BLOCKHOUSE AND LAUNCH PADS IN THE COMPLEX, WHEREAS YOUR INSTALLATION CREW WAS COMPLETELY BARRED FROM THE JOB SITE FOR SEVERAL DAYS DURING YOUR CONTRACT PERIOD AND HAD BUT PARTIAL ACCESS TO THE LAUNCH COMPLEX ON SEVERAL OTHER DAYS DUE TO ACTIVITIES AND COMMITMENTS ASSOCIATED WITH THE LAUNCHING OF THE DELTA 39 AND PIONEER SPACE VEHICLES. YOU REQUESTED ADJUSTMENT IN THE CONTRACT PRICE FOR YOUR INCREASED COSTS ATTRIBUTABLE TO THE DELAYS CAUSED BY THE GOVERNMENT, AND THE AMOUNT OF $11,000 HAS BEEN AGREED UPON BETWEEN YOU AND AIR FORCE OFFICIALS AS A REASONABLE AND EQUITABLE COMPENSATION FOR SUCH DELAYS. SINCE THE CONTRACT DID NOT CONTAIN A "SUSPENSION OF WORK" CLAUSE OR OTHER PROVISION TO COVER DELAYS, THE AIR FORCE CONCLUDED THAT THE AGREED AMOUNT COULD NOT BE PAID ADMINISTRATIVELY UNDER THE TERMS AND CONDITIONS OF THE CONTRACT, AND YOUR CLAIM WAS FORWARDED TO THIS OFFICE FOR PAYMENT ON THE BASIS THAT IT WAS A CLAIM FOR DAMAGES ARISING FROM GOVERNMENT-CAUSED DELAYS WHICH APPEARED TO CONSTITUTE A BREACH BY THE GOVERNMENT OF THE CONTRACT.

IT HAS BEEN THE CONSISTENT POSITION OF THIS OFFICE THAT WHERE A CONTRACT DOES NOT CONTAIN A ,SUSPENSION OF WORK" CLAUSE OR OTHER PROVISION EXPRESSLY GRANTING THE CONTRACTOR A RIGHT TO COMPENSATION FOR DELAY, A CLAIM BY THE CONTRACTOR FOR COSTS INCURRED THROUGH DELAYS CAUSED BY THE GOVERNMENT IS ESSENTIALLY A CLAIM FOR BREACH OF CONTRACT DAMAGES WHICH THE CONTRACTING OFFICER OR OTHER ADMINISTRATIVE OFFICIALS OF THE AGENCY CONCERNED HAVE NO AUTHORITY TO PAY. SEE 44 COMP. GEN. 353. WHILE THIS OFFICE HAS JURISDICTION TO SETTLE A CLAIM FOR DAMAGES OR ADDITIONAL COSTS BASED ON AN ALLEGED BREACH OF THE GOVERNMENT'S CONTRACTUAL OBLIGATIONS, A BASIC PREREQUISITE TO THE ALLOWANCE OF ANY PART OF SUCH A CLAIM IS THE CLEAR ESTABLISHMENT OF THE GOVERNMENT'S LEGAL LIABILITY IN THE MATTER.

THE RECORD DOES NOT INDICATE, NOR HAVE YOU CONTENDED, THAT THE DELAYS WERE CAUSED BY WRONGFUL ACTIONS OF THE GOVERNMENT OR THAT THE LAUNCH COMPLEX LOCKOUTS WERE UNNECESSARY OR CONSTITUTED AN IMPROPER EXERCISE OF AUTHORITY BY THE GOVERNMENT'S REPRESENTATIVES. FURTHER, THERE IS NO INDICATION THAT THE PERIODS OF TIME DURING WHICH YOUR INSTALLATION CREW DID NOT HAVE ACCESS TO CERTAIN PORTIONS OF THE LAUNCH COMPLEX WERE UNREASONABLE UNDER THE CIRCUMSTANCES OR THAT THE GOVERNMENT NEGLIGENTLY OR UNDULY DELAYED REOPENING THE COMPLEX TO YOUR CREW FOLLOWING THE LAUNCHINGS.

WHILE IT HAS SOMETIMES BEEN BROADLY STATED THAT THERE IS IN EVERY CONTRACT AN IMPLIED PROMISE THAT NEITHER PARTY TO THE CONTRACT WILL DO ANYTHING TO PREVENT, HINDER OR DELAY PERFORMANCE THEREOF BY THE OTHER PARTY, THE NATURE AND SCOPE OF SUCH PROMISE MUST BE GATHERED FROM THE PARTICULAR CONTRACT, ITS CONTENT, AND THE SURROUNDING CIRCUMSTANCES. SEE COMMERCE INTERNATIONAL COMPANY V UNITED STATES (CT. CL. 1964) 338 F.2D 81. YOUR CONTRACT SPECIFICALLY PROVIDED THAT THE CONTRACTOR WOULD BE RESPONSIBLE FOR HAVING TAKEN STEPS REASONABLY NECESSARY TO ASCERTAIN THE GENERAL AND LOCAL CONDITIONS WHICH COULD AFFECT THE WORK OR THE COST THEREOF, AND ANY FAILURE TO DO SO WOULD NOT RELIEVE HIM FROM PERFORMING THE WORK WITHOUT ADDITIONAL COST TO THE GOVERNMENT. ALSO, IT SPECIFICALLY PROVIDED THAT THE CONTRACTOR WOULD BE RESPONSIBLE FOR COORDINATING ALL THE REQUIRED INSTALLATION ACTIVITIES WITH THE AIR FORCE EASTERN TEST RANGE TO PRECLUDE ANY INTERFERENCE WITH NASA AND AIR FORCE LAUNCH CREWS. THE LAUNCHING OF SPACE VEHICLES IS A NORMAL FUNCTION OF THE LAUNCHING COMPLEXES AT CAPE KENNEDY AND IT DOES NOT APPEAR UNREASONABLE TO CONCLUDE THAT YOU SHOULD HAVE UNDERSTOOD, PARTICULARLY IN THE LIGHT OF THE ABOVE CAUTION, THE POSSIBILITY THAT SUCH LAUNCHING OPERATIONS COULD AFFECT THE PROGRESS OF YOUR INSTALLATION CREW AND THEREBY DELAY OR INCREASE THE COST OF THE WORK. THE CONTRACT REQUIRED YOU TO COORDINATE YOUR INSTALLATION ACTIVITIES SO AS NOT TO INTERFERE WITH THE LAUNCHING CREWS, AND THE DELAY INCURRED THROUGH COMPLYING WITH SUCH CONTRACTUAL REQUIREMENT FORMS THE PRIMARY BASIS FOR YOUR CLAIM. SINCE THE POSSIBILITY OF SUCH DELAYS WAS CLEARLY EVIDENT AT THE TIME OF THE CONTRACT, AND THE DELAYS WERE OCCASIONED NOT THROUGH ANY FAULT OR NEGLIGENCE ON THE PART OF THE GOVERNMENT OR IN VIOLATION OF ANY AFFIRMATIVE WARRANTY OR PROMISE, BUT IN THE PERFORMANCE OF ITS NORMAL OPERATIONS THE CONTINUANCE AND PRIORITY OF WHICH WERE PROVIDED FOR IN THE CONTRACT, WE DO NOT BELIEVE THAT THE DELAY EXPERIENCED WAS SUCH AS COULD BE CONSIDERED AS A BREACH BY THE GOVERNMENT OF THE CONTRACT, UNDER APPLICABLE LEGAL PRINCIPLES ESTABLISHED BY THE COURTS. SEE COMMERCE INTERNATIONAL COMPANY V UNITED STATES, SUPRA; UNITED STATES V HOWARD P. FOLEY CO., 329 U.S. 64; UNITED STATES V RICE, 317 U.S. 61; GILBANE BUILDING COMPANY V UNITED STATES, 333 F.2D 867.

IN THE ABSENCE OF A SPECIFIC CONTRACT PROVISION FOR COMPENSATION FOR DELAY OCCASIONED BY ACTS OF THE GOVERNMENT, OR SOME FAULT OR NEGLIGENCE ON THE PART OF THE GOVERNMENT IN CAUSING IT, THERE IS NO LEGAL LIABILITY ON THE PART OF THE GOVERNMENT FOR INCREASED COSTS ATTRIBUTABLE TO THE DELAYS ENCOUNTERED BY YOUR INSTALLATION CREW BY REASON OF THE LAUNCH ACTIVITIES AT THE WORK SITE, AND YOUR CLAIM FOR REIMBURSEMENT FOR SUCH COSTS MUST THEREFORE BE, AND IS HEREBY, DISALLOWED.