B-125582, OCT. 21, 1955

B-125582, OCT. 21, 1955

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 21, 1955, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN REGARDING A CLAIM OF CONN STRUCTORS, CHARLESTON, SOUTH CAROLINA, FOR ADDITIONAL MONEY RESULTING FROM FOOTING CHANGES DIRECTED BY CHANGE ORDER NO. 1 TO CONTRACT DA-38-081-ENG-173.

THE ORIGINAL CONTRACT WAS ENTERED INTO BETWEEN CONN STRUCTORS AND THE UNITED STATES ON MAY 21, 1952, AND PROVIDED FOR THE CONSTRUCTION OF AIRMEN'S DORMITORIES, MESS AND ADMINISTRATION BUILDINGS, AND BACHELOR OFFICERS' QUARTERS, AT CHARLESTON AIRFIELD, CHARLESTON, SOUTH CAROLINA, FOR AN ESTIMATED PRICE OF $1,724,397.60. ON AUGUST 5, 1952, CHANGE ORDER NO. 1 WAS ISSUED, REDESIGNING THE FOUNDATIONS AND PROVIDING FOR AN INCREASE IN PRICE UNDER ITEM 1A FOR FURNISHING ADEQUATE CONCRETE FOOTINGS FOR THE TWO NORTHERN-MOST DORMITORIES OF GROUP 1 IN STRICT ACCORDANCE WITH SHEET 9A, CONTRACT DRAWING NO. 21-01 77, DATED JULY 3, 1952, AT AN INCREASE IN COST OF 52,236.50. THE CONTRACTOR ACCEPTED THE MODIFICATION OF THE CONTRACT WITHOUT PROTEST AND RETURNED AN EXECUTED COPY TO THE CONTRACTING OFFICER ON AUGUST 21, 1952. BY LETTER DATED DECEMBER 10, 1953, THE CONTRACTOR ALLEGED MISTAKE IN CHANGE ORDER NO. 1 IN THAT NO CONSIDERATION WAS GIVEN TO THE NECESSITY OF LAPPING THE STEEL FOR THE REINFORCING COLUMNS IN ACCORDANCE WITH THE SPECIFICATIONS AND, BECAUSE THIS WORK WAS NOT CONTEMPLATED AT THE TIME OF AWARD OF THE CHANGE ORDER, IT WAS REQUESTED THAT A MODIFICATION TO THE CONTRACT PRICE BE ISSUED INCREASING THE CHANGE ORDER IN THE AMOUNT OF $1,056. BY LETTER DATED DECEMBER 23, 1953, THE CONTRACTOR REQUESTED THAT THE AMOUNT OF CHANGE ORDER NO. 1, BE FURTHER INCREASED BY $4,266.81 DUE TO AN ERROR IN COMPUTING THE QUANTITY OF ADDITIONAL MATERIAL INVOLVED. IT IS REPORTED THAT, BY LETTER DATED JANUARY 28, 1954, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT, SINCE HE HAD ACCEPTED CHANGE ORDER NO. 1 WITHOUT PROTEST AND HAD AGREED TO FURNISH ALL LABOR, MATERIAL AND EQUIPMENT AND TO CONSTRUCT THE FOOTINGS OF THESE BUILDINGS IN STRICT ACCORDANCE WITH SHEET 9A, CONTRACT DRAWING NO. 21-01-77, WHICH AGREEMENT INCLUDED THE WORK FOR WHICH HE WAS REQUESTING ADDITIONAL COMPENSATION, THE CLAIM WAS THEREFORE DENIED.

PARAGRAPH SC-11 (A) OF THE CONTRACT SPECIFICATIONS PROVIDES IN EFFECT THAT IN THE EVENT OF A NEW FOUNDATION DESIGN THE CONTRACT PRICE WILL BE INCREASED OR DECREASED ON THE BASIS OF SPECIFIED UNIT PRICES. THE CONTRACTING OFFICER IN HIS STATEMENT OF FACTS REPORTS THAT A REVIEW OF THE DRAWINGS AND GOVERNMENT ESTIMATE INDICATES THAT MORE STEEL AND CONCRETE WAS REQUIRED IN ORDER TO COMPLY WITH THE DRAWINGS FOR THE REVISED FOOTINGS THAN WAS SET FORTH IN THE CHANGE ORDER, AND THE CONTRACTOR WAS GIVEN AN OPPORTUNITY TO SHOW THE COMPUTATIONS BY WHICH HE ARRIVED AT THE INCREASED FIGURE AND THE JUSTIFICATION FOR THE INCREASE. IN RESPONSE TO THIS REQUEST, THE CONTRACTOR FURNISHED A COPY OF AN INVOICE FROM ONE OF THE SUPPLIERS OF STEEL UNDER THE CONTRACT SHOWING THAT, INSTEAD OF 4,275 POUNDS OF REINFORCING STEEL, WHICH APPARENTLY FORMED THE BASIS OF THE CHANGE ORDER, 12,662 POUNDS OF ADDITIONAL STEEL WERE USED. AS PREVIOUSLY STATED, BY LETTERS OF DECEMBER 10 AND DECEMBER 23, 1953, THE CONTRACTOR FURNISHED REVISED COST FIGURES AMOUNTING TO $5,282.81 WHICH AMOUNT WAS $341.68 WERE MORE THAN THE GOVERNMENT'S ESTIMATE AND WAS EXCLUSIVE OF THE AMOUNT OF $2,236.50 PROVIDED FOR IN CHANGE ORDER NO. 1. THE CONTRACTING OFFICER HAS FOUND THAT "THE AMOUNT SET FORTH IN CHANGE ORDER NO. 1 DOES NOT REPRESENT EQUITABLE COMPENSATION DUE THE CONTRACTOR UNDER THE PROVISIONS OF SPECIFICATIONS ARTICLE SC-11 (A)" AND THAT "A MUTUAL MISTAKE OCCURRED IN COMPUTING THE ACTUAL QUANTITIES OF MATERIALS INVOLVED IN THE REDESIGNED FOOTINGS.' HE THEREFORE PROPOSES TO ISSUE A SUPPLEMENT TO CHANGE ORDER NO. 1 IN THE AMOUNT OF $4,941.13.

THE RECORD REASONABLY ESTABLISHES THAT, THROUGH MUTUAL ERROR, CHANGE ORDER NO. 1 WAS ISSUED ON A LUMP-SUM BASIS RATHER THAN ON THE BASIS OF ALLOWING ADDITIONAL UNITS OF WORK AT STATED UNIT PRICES IN ACCORDANCE WITH PARAGRAPH SC-11 (A) OF THE CONTRACT SPECIFICATIONS AND THE UNIT PRICES CONTAINED IN THE BID FORM. SUCH A MUTUAL MISTAKE FORMS A SUFFICIENT BASIS FOR REFORMING A WRITTEN INSTRUMENT IF IT CAN BE ESTABLISHED CLEARLY WHAT THE CONTRACT ACTUALLY WAS OR WOULD HAVE BEEN BUT FOR THE MISTAKE. SEE 30 COMP. GEN. 220; 26 ID. 899; 20 ID. 533 AND CASES THERE CITED. HERE, IT APPEARS TO BE CLEARLY ESTABLISHED THAT IT WAS THE INTENTION OF THE PARTIES THAT THE WORK INVOLVED UNDER CHANGE ORDER NO. 1 WAS TO BE ADJUSTED ON THE BASIS OF THE UNIT PRICES SPECIFIED. ACCORDINGLY, THIS OFFICE WILL NOT OBJECT TO THE EXECUTION OF A SUPPLEMENTAL AGREEMENT TO CHANGE ORDER NO. 1 PROVIDING FOR ADDITIONAL COMPENSATION AS PROPOSED BY THE CONTRACTING OFFICER.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE SUPPLEMENTAL AGREEMENT AMENDING CHANGE ORDER NO. 1.