B-125819, FEB. 24, 1956

B-125819, FEB. 24, 1956

TO NAVAL SALVAGE AND CONTRACTING CORPORATION:

PURSUANT TO REQUEST MADE IN A LETTER OF JANUARY 6, 1956, FROM LEVY, GALOTTA AND CORCORAN, AS YOUR ATTORNEYS, THE RECORD OF YOUR REPORTED INDEBTEDNESS TO THE UNITED STATES BY REASON OF DEFAULT UNDER CONTRACT NO. DA-36-109ENG-321, DATED APRIL 20, 1951, HAS BEEN REVIEWED IN OUR OFFICE.

UNDER THE CITED CONTRACT YOU AGREED TO FURNISH ALL LABOR, MATERIAL AND EQUIPMENT AND PERFORM ALL WORK REQUIRED FOR DISMANTLING AND/OR DEMOLITION AND REMOVAL OF SUNKEN BARGE GAR-LOW NO. 4 AND ATTACHMENTS FROM THE SCHUYLKILL RIVER, PHILADELPHIA, PENNSYLVANIA, IN ACCORDANCE WITH SPECIFICATIONS, SCHEDULES AND DRAWINGS MADE A PART OF THE CONTRACT, FOR THE CONSIDERATION OF $3,950 TO BE PAID IN ONE LUMP SUM UPON COMPLETION AND ACCEPTANCE OF THE WORK. THE CONTRACT PROVIDED THAT WORK SHOULD BE COMMENCED WITHIN 15 CALENDAR DAYS AFTER DATE OF RECEIPT OF NOTICE TO PROCEED, WHICH THE RECORD SHOWS WAS RECEIVED BY YOU ON MAY 15, 1951, AND BE COMPLETED WITHIN 45 DAYS AFTER RECEIPT OF SUCH NOTICE, OR BY JUNE 29, 1951. LIQUIDATED DAMAGES AT THE RATE OF $30 FOR EACH CALENDAR DAY OF DELAY IN COMPLETION WERE SPECIFIED IN THE CONTRACT. THE DESCRIPTION OF THE BARGE IN PARAGRAPH SW-1 B OF THE SPECIFICATIONS IS IN PART AS FOLLOWS:

"LOCATION AND DESCRIPTION: THE SUNKEN BARGE LIES UPSIDE DOWN IN FROM 21 TO 32 FEET OF WATER * * *.THE WRECK IS OF WOOD HULL CONSTRUCTION, 114 FEET IN LENGTH, 33 FEET WIDE AND 10 FEET DEEP * * *.'

UNDER PARAGRAPH GC-2 YOU ACKNOWLEDGE THAT YOU HAD SATISFIED YOURSELF AS TO THE NATURE AND LOCATION OF THE WORK, THE GENERAL LOCAL CONDITIONS, THE CHARACTER OF EQUIPMENT AND FACILITIES REQUIRED AND ALL OTHER MATTERS UPON WHICH INFORMATION WAS REASONABLY OBTAINABLE AND WHICH COULD IN ANY WAY AFFECT THE WORK OR COST UNDER THE CONTRACT. THE SAID PARAGRAPH PROVIDED FURTHER:

"* * * ANY FAILURE BY THE CONTRACTOR TO ACQUAINT HIMSELF WITH ALL THE AVAILABLE INFORMATION WILL NOT RELIEVE HIM FROM RESPONSIBILITY FOR ESTIMATING PROPERLY THE DIFFICULTY OR COST OF SUCCESSFULLY PERFORMING THE WORK. THE GOVERNMENT ASSUMES NO RESPONSIBILITY FOR ANY UNDERSTANDING OR REPRESENTATIONS MADE BY ANY OF ITS OFFICERS OR AGENTS DURING OR PRIOR TO THE EXECUTION OF THIS CONTRACT, UNLESS (1) SUCH UNDERSTANDING OR REPRESENTATIONS ARE EXPRESSLY STATED IN THE CONTRACT AND (2) THE CONTRACT EXPRESSLY PROVIDES THAT THE RESPONSIBILITY THEREFOR IS ASSUMED BY THE GOVERNMENT. REPRESENTATIONS MADE BUT NOT SO EXPRESSLY STATED AND FOR WHICH LIABILITY IS NOT EXPRESSLY ASSUMED BY THE GOVERNMENT IN THE CONTRACT SHALL BE DEEMED ONLY FOR THE INFORMATION OF THE CONTRACTOR.'

UNDER PARAGRAPH SC-9 OF THE SPECIAL CONDITIONS OF THE CONTRACT YOU AGREED TO KEEP SUFFICIENT PLANT ON THE JOB TO MEET THE REQUIREMENTS OF THE WORK. THE SAID PARAGRAPH PROVIDES IN PART AS FOLLOWS:

"* * * THE FOLLOWING PLANT IS THE MINIMUM WHICH THE CONTRACTOR AGREES TO PLACE ON THE JOB UNLESS OTHERWISE DETERMINED BY THE CONTRACTING OFFICER; ITS LISTING HEREIN IS NOT TO BE CONSTRUED AS AN AGREEMENT ON THE PART OF THE GOVERNMENT THAT IT IS ADEQUATE FOR THE PERFORMANCE OF THE K.'

YOU LISTED ONE LIGHTER AND ONE FLAT SCOW OF 15 AND 300 TONS CAPACITY, RESPECTIVELY.

WHILE THE CONTRACT PROVIDED THAT ALL PARTS OF THE WRECK SHOULD BE DEPOSITED ON SHORE ABOVE THE HIGH WATERMARK, PURSUANT TO YOUR REQUEST THE CONTRACTING OFFICER APPROVED DISPOSITION BEHIND PENNSVILLE DIKE APPROXIMATELY 30 MILES DOWN THE STREAM FROM THE LOCATION OF THE WRECK. APPEARS THAT YOU SUCCEEDED IN RAISING AND TOWING THE WRECK TO A POINT WITHIN A FEW HUNDRED FEET OF THE DISPOSITION AREA WHERE IT GROUNDED ON A MUD FLAT. YOU WERE UNABLE TO COMPLETE THE DISPOSITION APPARENTLY DUE TO LACK OF ADEQUATE EQUIPMENT AND, NO WORK HAVING BEEN PERFORMED AFTER JULY 30, 1951, YOUR RIGHT TO PROCEED UNDER THE CONTRACT WAS TERMINATED BY LETTER OF SEPTEMBER 6, 1951. A REPLACING CONTRACT WAS MADE ON NOVEMBER 13, 1951, WHICH REQUIRED COMPLETION BY JANUARY 13, 1952, FOR THE CONSIDERATION OF $5,880 OR $1,930 IN EXCESS OF THE PRICE SPECIFIED IN YOUR CONTRACT.

DEMAND WAS ORIGINALLY MADE ON YOU FOR $1,930 AS THE EXCESS COST INCURRED BY THE GOVERNMENT AND FOR $5,970 AS LIQUIDATED DAMAGES FOR 199 DAYS (JUNE 29, 1951, TO JANUARY 13, 1952). IT WAS LATER DETERMINED BY THE CONTRACTING OFFICER THAT THE GOVERNMENT DID NOT ACT PROMPTLY IN TERMINATING YOUR RIGHT TO PROCEED AND IN SECURING THE REPLACEMENT CONTRACT AND, THEREFORE, THAT YOU WERE LIABLE FOR ONLY $2,370 AS THE LIQUIDATED DAMAGES FOR 79 DAYS' DELAY NOT EXCUSABLE UNDER THE CONTRACT.

IT IS YOUR CONTENTION THAT THE GOVERNMENT FAILED TO ADEQUATELY DESCRIBE THE WRECK IN THE INVITATION FOR BIDS IN THAT IT DID NOT DISCLOSE THE PRESENCE OF 30 TONS OF STEEL DECK PLATING AND YOU ASSERT THAT YOUR DIVERS DID NOT DISCOVER THE STEEL ON THE INSPECTION MADE PRIOR TO THE SUBMISSION OF YOUR BID, SINCE THE WRECK WAS UPSIDE DOWN IN MUD. IT IS FURTHER ASSERTED THAT YOUR FAILURE TO COMPLETE THE CONTRACT WAS DUE IN PART TO SUCH INADEQUATE DESCRIPTION. YOU CONTEND FURTHER THAT A COLLISION OF A VESSEL OWNED BY THE WILSON LINE WITH ONE OF THE LIFTING SCOWS USED BY YOU IN LIFTING AND TOWING THE WRECK WAS THE FINAL CAUSE OF YOUR DEFAULT.

THE ASSERTION BY YOUR ATTORNEYS THAT THE PRESENCE OF STEEL PLATING WAS INFORMATION PECULIARLY WITHIN THE GOVERNMENT'S KNOWLEDGE AND THAT THE FAILURE TO INCLUDE SUCH INFORMATION IN THE DESCRIPTION OF THE WRECK CONSTITUTED DECEPTION ON THE PART OF THE GOVERNMENT IS NOT SUPPORTED BY THE RECORD. THE WRECK WAS UPSIDE DOWN IN MUD AND THERE APPEARS NO BASIS FOR CONCLUDING THAT THE GOVERNMENT'S DIVERS WOULD OR SHOULD HAVE MADE ANY MORE THOROUGH EXAMINATION OF THE WRECK THAN DID YOUR DIVERS. THERE APPEARS NO BASIS FOR CONCLUDING THAT THE GOVERNMENT REPRESENTATIVES SHOULD HAVE ASCERTAINED THE PRESENCE OF STEEL DECK PLATING FROM THE FORMER OWNERS AS A BASIS FOR SOLICITING BIDS, WHEREAS UNDER THE TERMS OF PARAGRAPH GC-2, SUPRA, YOU ACKNOWLEDGED THAT YOU HAD SATISFIED YOURSELF AS TO THE CONDITIONS SET FORTH "AND ALL OTHER MATTERS UPON WHICH INFORMATION IS REASONABLY OBTAINABLE AND WHICH CAN IN ANY WAY AFFECT THE WORK OR THE COST THEREOF UNDER THIS CONTRACT.' IT APPEARS THAT THE RISK ENTAILED IN SUCH ACKNOWLEDGMENT WOULD JUSTIFY THE CONCLUSION THAT A PRUDENT MAN WOULD HAVE EMPLOYED ALL REASONABLE MEANS FOR ASCERTAINING THE TRUE CONDITIONS OF THE WRECK PRIOR TO THE SUBMISSION OF A BID. THUS WHILE THE ADMINISTRATIVE REPORT INDICATES THAT THE WRECK WAS NOT REGISTERED BY ITS FORMER OWNER SINCE ITS USE WAS RESTRICTED TO THE PHILADELPHIA AREA AND THAT, THEREFORE, YOU COULD NOT HAVE ASCERTAINED THE FORMER OWNER FROM THE BUREAU OF CUSTOMS REGISTER, YOU COULD HAVE ASCERTAINED THE IDENTITY OF THE FORMER OWNERS BY MAKING INQUIRIES IN THAT REGARD, AND THERE APPEARS NO DOUBT THAT YOU COULD HAVE ASCERTAINED FROM THE FORMER OWNERS THE PRESENCE OF THE STEEL DECK PLATING ON THE WRECK, SINCE OTHER BIDDERS APPARENTLY ASCERTAINED SUCH FACT. UNDER SUCH CIRCUMSTANCES IT MUST BE CONCLUDED THAT YOUR FAILURE TO ASCERTAIN THE TRUE CONDITION OF THE WRECK WAS DUE TO YOUR OWN LACK OF DILIGENCE AND NOT TO ANY DECEPTION ON THE PART OF THE GOVERNMENT.

WITH RESPECT TO THE COLLISION OF THE WILSON LINE VESSEL WITH ONE OF THE LIFTING SCOWS BEING USED BY YOU, IT APPEARS THAT THE WRECK WENT AGROUND ON THE MUD FLATS ABOUT 1,000 FEET FROM THE PENNSVILLE DIKE ABOUT 11 A.M. ON JULY 10, 1951, AND THAT AFTER MOVING IT ABOUT 100 FEET DURING THE AFTERNOON OF THAT DAY YOU LEFT THE WRECK RESTING IN THE MUD WITH THE CABLES ATTACHED TO THE LIFTING SCOW. NO WORK WAS ACCOMPLISHED ON THE WRECK ON JULY 11 AND 12, 1951, AND ABOUT 12:30 P.M. ON THE LATTER DATE AWILSON LINE EXCURSION VESSEL STRUCK ONE OF THE LIFTING SCOWS. IT IS REPORTED THAT NO VISIBLE DAMAGE WAS SUSTAINED BY THE LIFTING SCOW AND THAT ON JULY 13, 1951, YOU TOOK UP THE SLACK ON THE LIFTING CABLES AND TOWED FOR ABOUT ONE OR TWO HOURS WITHOUT SUCCESS IN FURTHER MOVING THE WRECK. THUS, IT APPEARS THAT NEITHER THE SCOW NOR THE LIFTING CABLES WERE DAMAGED BY THE COLLISION. IN VIEW OF SUCH FACTS IT WAS THE CONCLUSION OF THE DISTRICT ENGINEER THAT THE COLLISION WAS IN NO WAY RESPONSIBLE FOR YOUR FAILURE TO COMPLETE THE DISPOSITION OF THE WRECK IN ACCORDANCE WITH THE CONTRACT TERMS.

WHILE YOU HAVE URGED THAT AS AN OUT-OF-TOWN CONTRACTOR YOU MAY HAVE RECEIVED LESS THAN FULL OR REASONABLE COOPERATION FROM LOCAL EQUIPMENT OWNERS AND THAT THE GOVERNMENT'S REPRESENTATIVES MADE NO EFFORT TO ASSIST YOU IN SECURING NECESSARY EQUIPMENT, UNDER PARAGRAPH GC-2, SUPRA, THE RESPONSIBILITY FOR SECURING NECESSARY EQUIPMENT WAS CLEARLY ASSUMED BY YOU AND THE GOVERNMENT DISCLAIMED RESPONSIBILITY FOR ANY REPRESENTATIONS BY ITS AGENTS IN THAT MATTER. THE RECORD, INCLUDING STATEMENTS IN YOUR LETTERS REQUESTING PARTIAL PAYMENT FOR THE WORK PERFORMED, INDICATES THAT YOU WERE IN FINANCIAL DIFFICULTIES AT THE TIME YOU DEFAULTED UNDER THE CONTRACT AND IT MAY BE THAT SUCH FACT WAS THE BASIS FOR LACK OF COOPERATION FROM LOCAL EQUIPMENT OWNERS.

THERE APPEARS NO LEGAL BASIS FOR RELIEVING YOU FROM LIABILITY FOR EXCESS COSTS IN THE AMOUNT OF $1,930 OR FOR LIQUIDATED DAMAGES IN THE AMOUNT OF $2,370, A TOTAL OF $4,300. ACCORDINGLY, IT IS REQUESTED THAT YOU FORWARD YOUR REMITTANCE FOR SUCH AMOUNT WITHOUT FURTHER DELAY. CHECK OR DRAFT FOR THE AMOUNT SHOULD BE DRAWN TO THE ORDER OF THE "U.S. GENERAL ACCOUNTING OFFICE" AND FORWARDED TO WASHINGTON 25, D.C. ..END :