B-125367, OCTOBER 18, 1955, 35 COMP. GEN. 211

B-125367, OCTOBER 18, 1955, 35 COMP. GEN. 211

CONSTRUCTION - LIABILITY FOR REPAIRS PRIOR TO FINAL ACCEPTANCE A CONSTRUCTION CONTRACT WHICH MAKES THE BUILDER RESPONSIBLE FOR ALL MATERIALS DELIVERED AND WORK PERFORMED UNTIL COMPLETION AND FINAL ACCEPTANCE OF A COMPLETE HANGAR REQUIRES THE BUILDER TO REPAIR ANY DAMAGE NOT THE FAULT OF THE GOVERNMENT, WHICH OCCURS PRIOR TO FINAL ACCEPTANCE, EVEN THOUGH THE HANGAR WAS ALREADY OCCUPIED WHEN THE DAMAGE OCCURRED.

TO THE SECRETARY OF THE ARMY, OCTOBER 18, 1955:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 29, 1955, WITH ENCLOSURES, WHEREIN YOU REQUEST A DECISION AS TO THE PROPRIETY OF ISSUING A CHANGE ORDER TO CONTRACT NO. DA-30-192-NG-225, DATED JULY 16, 1953, AUTHORIZING PAYMENT TO THE BRAVERMAN CONSTRUCTION COMPANY, INC., BROOKLYN, NEW YORK, IN THE ADDITIONAL AMOUNT OF $595.28 TO COVER THE COST OF REPAIRING CERTAIN STORM DAMAGE WHICH OCCURRED AUGUST 31, 1954, TO THE ROOF OF THE HANGAR- SHOP CONSTRUCTED BY THE CLAIMANT AT THE NEW YORK NATIONAL GUARD ARMY AVIATION INSTALLATION, ZAHNS' AIRPORT, AMITYVILLE, NEW YORK.

THE CONTRACT PROVIDED FOR THE CONSTRUCTION BY THE CLAIMANT OF A HANGAR- SHOP AT THE INSTALLATION FOR THE SPECIFIED CONSIDERATION OF $155,230. APRIL 1, 1954, THE PROJECT REPORTEDLY WAS 92 PERCENT COMPLETE, PERMITTING ITS USE AND OCCUPATION AS OF THAT DATE BY THE NEW YORK NATIONAL GUARD, AS SPECIFICALLY AUTHORIZED AND PROVIDED FOR IN CLAUSE GC-11, PART II OF THE CONTRACT GENERAL CONDITIONS, ENTITLED " POSSESSION PRIOR TO COMPLETION.' UNDER THIS SECTION OF THE CONTRACT, THE GOVERNMENT RESERVED THE RIGHT TO TAKE POSSESSION OF OR USE ANY COMPLETED OR PARTIALLY COMPLETED PART OF THE WORK WITH THE UNDERSTANDING, HOWEVER, THAT SUCH POSSESSION OR USE SHOULD NOT BE "DEEMED AN ACCEPTANCE OF WORK NOT COMPLETED IN ACCORDANCE WITH THE CONTRACT.' A SO-CALLED "FINAL INSPECTION" WAS MADE OF THE STRUCTURE ON AUGUST 27, 1954, WHICH DISCLOSED CERTAIN "MINOR ITEMS OF DEFECTS," WHICH WERE FORTHWITH REPORTED TO THE CONTRACTOR FOR CORRECTION. FOUR DAYS LATER, ON AUGUST 31, 1954, A STORM OF HURRICANE PROPORTIONS STRUCK THE AREA, DAMAGING THE COPPER CORNICE AND CORRUGATED PLASTIC ENCLOSURE IN THE GABLE ENDS OF THE HANGAR-SHOP. THESE ITEMS OF DAMAGE ALSO WERE REPORTED TO THE CONTRACTOR AND REPAIRED BY HIM AT AN ALLEGED COST OF $595.28. FINAL ACCEPTANCE OF THE STRUCTURE WAS ACCOMPLISHED ON DECEMBER 10, 1954, AFTER ALL ITEMS OF REPORTED DEFECTS AND DAMAGE TO THE BUILDING HAD BEEN REPAIRED.

ARTICLE 7 OF THE CONTRACT AUTHORIZED THE MAKING OF PARTIAL PAYMENTS ON PERIODIC ESTIMATES APPROVED BY THE CONTRACTING OFFICER, AND IN SUBPARAGRAPH (C), ARTICLE 7, SUPRA, IT WAS PROVIDED THAT "ALL MATERIAL AND WORK COVERED BY PROGRESS PAYMENTS SHALL THEREUPON BECOME THE SOLE PROPERTY OF THE GOVERNMENT," SUBJECT, HOWEVER, TO THE FURTHER CONDITION THAT SUCH PARTIAL PAYMENTS WOULD NOT RELIEVE THE CONTRACTOR FROM "SOLE RESPONSIBILITY" FOR ALL MATERIALS AND WORK UPON WHICH PAYMENTS HAD BEEN MADE; THE RESTORATION OF ANY DAMAGED WORK, OR AS A WAIVER OF THE RIGHT OF THE GOVERNMENT TO REQUIRE THE FULFILLMENT OF ALL THE TERMS OF THE CONTRACT. IN ADDITION THERETO, ARTICLE 11 OF THE CONTRACT MADE THE CONTRACTOR "RESPONSIBLE FOR ALL MATERIALS DELIVERED AND WORK PERFORMED UNTIL COMPLETION AND FINAL ACCEPTANCE," EXCEPT FOR ANY COMPLETED UNIT THEREOF WHICH THERETOFORE HAD BEEN FINALLY ACCEPTED.

FROM THE FOREGOING, IT IS APPARENT THAT THE CONTRACT FULLY CONTEMPLATED THE CONSTRUCTION AND DELIVERY TO THE GOVERNMENT OF A "COMPLETE" HANGAR- SHOP, AS DESCRIBED IN THE SPECIFICATIONS. SEE, IN THIS CONNECTION, CLAUSE SW-1, PART I OF THE CONTRACT, ENTITLED " DESCRIPTION OF WORK.' DESCRIBED THE WORK AS COVERING "ALL PLANT, LABOR, MATERIALS AND EQUIPMENT AND PERFORMING ALL WORK * * * FOR THE CONSTRUCTION OF A HANGAR-SHOP, COMPLETE AND ALL WORK INCIDENTAL THERETO.' WHILE IT HAS BEEN CONTENDED ON BEHALF OF THE CLAIMANT THAT NO DEFECTS WERE DISCOVERED IN THE ROOFING AT THE TIME OF THE PURPORTED "FINAL INSPECTION" CONDUCTED ON AUGUST 27, 1954, THUS LENDING SOME SUBSTANCE TO THE ARGUMENT THAT TITLE TO THAT PORTION OF THE STRUCTURE THEREAFTER HAD BECOME VESTED IN THE GOVERNMENT, THERE IS ABSOLUTELY NOTHING OF RECORD WHICH WOULD INDICATE THAT THE UNITED STATES EVER ACCEPTED OR PURPORTED TO ACCEPT ANY INDIVIDUAL OR SEPARABLE UNIT OF THE STRUCTURE PRIOR TO THE DATE OF FINAL ACCEPTANCE ON DECEMBER 10, 1954.

CONCEDEDLY, THE NEW YORK NATIONAL GUARD UNIT DID TAKE POSSESSION OF THE HANGAR-SHOP AS EARLY AS APRIL 1, 1954, AS IT HAD A RIGHT TO DO UNDER THE EXPLICIT TERMS OF CLAUSE 11, PART II OF THE CONTRACT GENERAL CONDITIONS BUT, AS PROVIDED THEREIN, SUCH POSSESSION DID NOT OPERATE AS AN ACCEPTANCE OF THE WORK NOT FULLY COMPLETED IN ACCORDANCE WITH THE TERMS OF THE CONTRACT AND THE APPLICABLE SPECIFICATIONS. HENCE, THE CLAUSES OF THE CONTRACT FIXING UPON THE CONTRACTOR FULL RESPONSIBILITY FOR THE WORK UNTIL THE TIME OF ITS COMPLETION AND ACCEPTANCE BY THE GOVERNMENT MUST BE REGARDED AS HAVING APPLICATION TO THE WORK OF THE PROJECT AS A WHOLE, OR AN ENTIRETY, AND NOT AS TO ANY INDIVIDUAL OR SEPARATE PORTION.

A COURT CASE WHICH FACTUALLY RESEMBLES THE PRESENT ONE IN MITTRY, ET AL. V. UNITED STATES, 73 C.1CLS. 341, WHEREIN THE CONTRACTOR, AS HERE, AGREED TO CONSTRUCT AND DELIVER TO THE GOVERNMENT A ,COMPLETE" STRUCTURE. EXPLOSION OCCURRED AT THE PROJECT SITE THROUGH THE FAULT OF SOME THIRD PARTY, WHICH DESTROYED A PART OF THE STRUCTURE. THE DAMAGED PORTION OF THE WORK WAS RECONSTRUCTED BY THE CONTRACTOR, BUT UNDER PROTEST. THE CONTRACT THERE INVOLVED ALSO PROVIDED THAT ALL MATERIALS AND WORK COVERED BY PARTIAL PAYMENTS SHOULD BECOME THE SOLE PROPERTY OF THE GOVERNMENT. DENYING THE PLAINTIFF RECOVERY FOR THE AMOUNT EXPENDED IN REPAIRING THE DAMAGE, THE COURT STATED, AT PAGE 360: " THE LAW IS WELL ESTABLISHED * * * THAT A CONTRACT FOR THE COMPLETE CONSTRUCTION OF A BUILDING FOR AN ENTIRE PRICE, PAYABLE IN INSTALLMENTS AS THE WORK PROGRESSES, IS AN ENTIRE TRACT," AND THEN WENT ON TO STATE THAT, IF A CONTRACTOR IN THESE CIRCUMSTANCES SHOULD REFUSE TO COMPLETE THE STRUCTURE, THE GOVERNMENT, OR OWNER, WOULD BECOME ENTITLED TO A RETURN OF ANY OF THE INSTALLMENTS THERETOFORE PAID. FURTHERMORE, THE COURT EXPLAINED THAT, SINCE THE CONTRACT REQUIRED THE PLAINTIFF TO DELIVER THE STRUCTURE IN A "COMPLETE" AND PERFECT STATE, HE WAS CHARGEABLE WITH FULL RESPONSIBILITY FOR THE PROPER CARE AND PROTECTION OF THE PROPERTY UNTIL THAT TIME ARRIVED. NUMEROUS OTHER DECISIONS HAVE HELD THAT A CONTRACTOR, WHO HAS UNDERTAKEN TO COMPLETE AN ENTIRE STRUCTURE FOR A SPECIFIED PRICE, IS REQUIRED TO REPLACE OR REPAIR A BUILDING DAMAGED OR DESTROYED BY FIRE, EXPLOSION, OR OTHERWISE, EXCEPT THROUGH THE FAULT OF THE OWNER, AT ANY TIME PRIOR TO ITS COMPLETION AND FINAL ACCEPTANCE. SEE UNITED STATES V. U.S. FIDELITY AND GUARANTY CO., 236 U.S. 12; MCGOWAN V. UNITED STATES, 35 C.1CLS. 606, 619; 6 COMP. GEN. 261; 15 ID. 876; 16 ID. 975; 25 ID. 332.

IN VIEW THEREOF, AND SINCE THE INSTANT CONTRACT EXPRESSLY CHARGED THE CONTRACTOR WITH THE OBLIGATION OF CONSTRUCTING AND DELIVERING TO THE GOVERNMENT A COMPLETE STRUCTURE, AND MADE HIM CHARGEABLE WITH THE RESPONSIBILITY INCIDENT TO THE "RESTORATION OF ANY DAMAGED WORK" UNTIL COMPLETION AND FINAL ACCEPTANCE OF THE PROPERTY, THERE EXISTS NO LEGAL BASIS FOR AMENDING THE CONTRACT TO AUTHORIZE REIMBURSEMENT TO THE CONTRACTOR OF THE COSTS INCIDENT TO THE REPAIR OF THE DAMAGE CAUSED BY THE HURRICANE.