B-141798, JUL. 22, 1960

B-141798, JUL. 22, 1960

TO EDWARD MCCARTHY, ESQUIRE:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 4, 1960, REQUESTING RECONSIDERATION OF OUR DECISION B-141798 OF FEBRUARY 29, 1960, TO THE GENERAL SERVICES ADMINISTRATION, ADVISING THAT WE WERE NOT AWARE OF ANY LEGAL BASIS FOR AMENDING LEASE GS-04B-4955 WITH THE AUCHTER COMPANY TO COMPENSATE THE LESSOR FOR ADDITIONAL EXPENSES INCURRED IN MEETING FLORIDA STATE BOARD OF HEALTH REQUIREMENTS IN CONSTRUCTING A SEWERAGE PLANT INCLUDED IN THE PROPERTY LEASED TO THE GOVERNMENT.

OUR DECISION OF FEBRUARY 29, 1960, CONSTRUED THE STATEMENT IN ADDENDUM NO. 1 THAT THE "SEWERAGE DISPOSAL PLANT (SHOULD BE) IN STRICT ACCORDANCE WITH THIS SECTION OF THE SPECIFICATIONS AND THE APPLICABLE DRAWINGS" AS BEING QUALIFIED BY THE LANGUAGE IN PARAGRAPH 23 OF THE INVITATION GENERAL PROVISIONS THAT THE PLANT "SHALL BE CONSTRUCTED IN ACCORDANCE WITH APPLICABLE DRAWINGS AND SPECIFICATIONS AND SHALL COMPLY WITH STATE HEALTH AND LOCAL AUTHORITIES.' FURTHER, THE DECISION POINTED OUT THAT NO WARRANTY WAS MADE BY THE GOVERNMENT THAT THE SPECIFICATIONS COMPLIED WITH STATE AND LOCAL STANDARDS, BUT RATHER THAT BIDDERS WERE CAUTIONED THAT THE SEWERAGE PLANT HAD TO BE CONSTRUCTED IN ACCORDANCE WITH APPLICABLE ORDINANCES AND REGULATIONS. THE DECISION CONCLUDED THAT WHEN THE LESSOR FAILED TO CHECK THE GOVERNMENT SPECIFICATIONS AGAINST LOCAL AND STATE REQUIREMENTS, IT ASSUMED THE RISK THAT THEY MET THE LATTER STANDARDS.

YOUR REQUEST FOR RECONSIDERATION IS BASED IN PART ON THE CONTENTION THAT THE SEWERAGE PLANT SPECIFICATIONS AND PLANS CONTAINED IN ADDENDUM NO. 1 SUPERSEDED PARAGRAPH 23 OF THE GENERAL PROVISIONS OF THE INVITATION. THIS CONNECTION, YOU SUBMIT TWO AFFIDAVITS, ONE FROM AN ARCHITECT AND ANOTHER FROM A BUILDING CONTRACTOR, AS EVIDENCE THAT THE TERM "ADDENDUM" AS COMMONLY UNDERSTOOD IN THE BUILDING TRADE IS USED TO INDICATE SUPERCEDENCE OVER PREVIOUS CONTRACT REQUIREMENTS. THE REQUEST FOR REVIEW IS FURTHER BASED ON THE PROPOSITION OF LAW THAT THERE IS AN IMPLIED WARRANTY BY THE PARTY WHO PREPARES PLANS AND SPECIFICATIONS THAT THEY ARE ADEQUATE FOR THE PURPOSE TO BE USED. IN THIS LAST CONNECTION, YOU CITE UNITED STATES V. SMITH, 256 U.S. 11; UNITED STATES V. SPEARIN, 248 U.S. 132; BRADFORD BUILDERS V. SEARS ROEBUCK, 270 F.2D 649; R. M. HOLLINGSHEAD CORP. V. UNITED STATES, 111 F.SUPP. 285; MACKNIGHT FLINTIC STONE CO. V. NEW YORK, 54 N.E. 661; KENNEAR V. LINCOLN PARK, 244 N.W. 463; STATE V. COMMERCIAL CASUALTY INSURANCE CO., 248 N.W. 807; OKLAHOMA CITY V. DERR, 235 PAC. 218; AND LOUISIANA SHIPBUILDING CO. V. BING- DAMPSKIBSAKTIESELSKAB, 104 SO. 364. YOUR CONCLUSION APPEARS TO BE THAT SINCE THE GOVERNMENT PLANSAND SPECIFICATIONS WERE NOT AS IMPLIEDLY WARRANTED, THE GOVERNMENT IS RESPONSIBLE FOR THE COST OF THE RESULTING CHANGES.

IT MAY BE THAT THE WORD "ADDENDUM" STANDING ALONE GENERALLY HAS A SPECIAL MEANING WITHIN THE BUILDING TRADE, BUT THE BEST EVIDENCE OF THE INTENTION OR PURPOSE OF ANY PARTICULAR INSTRUMENT BEARING THAT TITLE NECESSARILY DEPENDS UPON THE LANGUAGE CONTAINED WITHIN IT AND THE MANNER OF ITS ISSUANCE. AN EXAMINATION OF ADDENDUM NO. 1 SHOWS THAT IT PREDATES THE INVITATION TO BID BY FOUR DAYS, AND ALTHOUGH IT SPEAKS OF "MODIFYING" THE INVITATION, THE ONLY CHANGE IT EFFECTS IN RESPECT TO THE SEWERAGE PLANT IS TO "ADD" OR MAKE DRAWING FW-E-1815-4 AND THE SPECIFICATIONS A PART OF THE INVITATION TO BID. SINCE ADDENDUM NO. 1 PREDATES THE INVITATION, THE TITLE "ADDENDUM" APPEARS TO BE A LOOSE LABEL, AND THE REFERENCE IN THE LATER DATED INVITATION TO APPLICABLE SEWERAGE PLANT DRAWINGS AND SPECIFICATIONS IN PARAGRAPH 23 OF THE GENERAL PROVISIONS IS CONSIDERED TO REFER TO THE PARTICULAR DRAWING AND SPECIFICATIONS WHICH ACCOMPANIED THE INVITATION IN THE ,ADDENDUM.' THEREFORE, ALTHOUGH THE SPECIFICATIONS IN THE EARLY DATED "ADDENDUM" CALL FOR STRICT" PERFORMANCE IN ACCORDANCE WITH THE SPECIFICATIONS AND DRAWING, THE LIMITATIONS AND ADMONITIONS IN PARAGRAPH 23 IN THE LATER DATED INVITATION THAT THE SEWERAGE SYSTEM BE CONSTRUCTED IN ACCORDANCE WITH LOCAL AND STATE REGULATIONS ARE DEEMED TO QUALIFY THE PREVIOUS REQUIREMENT.

IN THE CASES YOU CITE THE PARTY WHO PREPARED THE PLANS AND SPECIFICATIONS WAS TO BE THE OWNER OF THE WORK OR PRODUCT THAT THE CONTRACTOR WAS TO FURNISH. HOWEVER, THIS CASE IS DISTINGUISHABLE FROM THOSE. WHILE THE GOVERNMENT DID PREPARE SPECIFICATIONS AND DRAWINGS, IT WAS NOT TO BE THE OWNER OF THE WORK. THE GOVERNMENT MERELY WAS A LESSEE WITH AN OPTION TO PURCHASE AT THE END OF THE LEASE TERM. THE CONTRACTOR WAS THE OWNER OF THE PROPERTY AND WOULD BE THE OWNER OF THE WORK. FURTHERMORE, IF THE GENERAL PROVISIONS DID NOT PUT THE CONTRACTOR ON NOTICE OF ITS RESPONSIBILITY, THEN THE CONTRACTOR SHOULD HAVE KNOWN THAT AS A PRIVATE PARTY OWNING THE PROPERTY AND WORK, IT WAS REQUIRED TO COMPLY WITH THE FLORIDA REGULATIONS UNDER THE LAW WHICH WAS AS MUCH A PART OF THE CONTRACT AS IF IT HAD BEEN EXPRESSED THEREIN. THE STATE AND LOCAL REGULATIONS WERE AVAILABLE TO BIDDERS BEFORE THEY SUBMITTED BIDS PURSUANT TO THE INVITATION TO BID, SO THAT BEFORE BIDDING ANY BIDDER COULD HAVE REVIEWED THE REGULATIONS AND MADE A DETERMINATION AS TO WHETHER THE PLANS AND SPECIFICATIONS ACCOMPANYING THE INVITATION WERE COMPATIBLE WITH THEM. DUE DILIGENCE WOULD REQUIRE THE BIDDERS TO INVESTIGATE TO SEE WHETHER THOSE STATE CRITERIA WERE MET. WHEN THE AUCHTER COMPANY FAILED TO CHECK THE APPLICABLE REQUIREMENT, IT ASSUMED THE RISK THAT THE DRAWING AND SPECIFICATIONS WERE ADEQUATE. IN LONG V. OWEN, 121 PAC. 99, AT PAGE 100, THE COURT SAID:

"* * * EVEN IF NOTHING WAS SAID WHATEVER ABOUT THE WORK BEING DONE IN COMPLIANCE WITH THE CITY ORDINANCE, THAT FACT WOULD BE IMPLIED, AND THE CONTRACTOR WOULD BE OBLIGED TO DO THIS WORK IN SUBSTANTIAL COMPLIANCE WITH THE ORDINANCE BEFORE HE WOULD BE ENTITLED TO RECOVER THE CONTRACT PRICE. WHERE ONE CONTRACTS TO DO A PIECE OF WORK, AND THERE IS AT THE TIME AN EXISTING LAW PRESCRIBING THE SPECIFICATIONS FOR THAT KIND OF WORK AND REQUIRING THAT ALL SUCH WORK BE DONE IN ACCORDANCE WITH THE STATUTE OR ORDINANCE, AS THE CASE MAY BE, THE STATUTE OR ORDINANCE BECOMES A PART OF THE CONTRACT, AND THE ONE WHO UNDERTAKES TO DO SUCH WORK IMPLIEDLY AGREES TO DO IT IN SUCH A MANNER AS TO MEET THE REQUIREMENTS OF LAW.'

AS WE VIEW THE INVITATION TO BID AND ADDENDUM NO. 1, THEY REQUIRED THE CONTRACTOR TO PERFORM UNDER THE SEWERAGE PLANT SPECIFICATIONS AND DRAWING WITHIN THE FRAMEWORK OF THE STATE AND LOCAL REGULATIONS. IF IN COMPLYING WITH THE STATE REGULATIONS, THE CONTRACTOR HAD TO PERFORM EXTRA WORK WHICH WAS MORE EXPENSIVE THAN IT ORIGINALLY ANTICIPATED THAT IS UNFORTUNATE, BUT AS WE VIEW THE CONTRACT, THAT WORK WAS REQUIRED BY ITS TERMS.