B-144645, JAN. 3, 1961

B-144645, JAN. 3, 1961

TO MR. LESTER H. THOMPSON, AUTHORIZED CERTIFYING OFFICER, FEDERAL HOUSING ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15, 1960, WITH ENCLOSURES, SUBMITTING FOR AN ADVANCE DECISION A VOUCHER STATED IN FAVOR OF THE FEDERAL CONSTRUCTION COMPANY IN THE AMOUNT OF $10,000, REPRESENTING THE BALANCE OF THE CONTRACT PRICE CLAIMED BY THE COMPANY TO BE DUE AND PAYABLE UNDER CONTRACT NO. 171-14, DATED NOVEMBER 19, 1959, ENTERED INTO BETWEEN THAT CONCERN AND THE FEDERAL HOUSING ADMINISTRATION. UNDER THE TERMS OF THE INDICATED CONTRACT THE FEDERAL CONSTRUCTION COMPANY AGREED TO REPAIR AND RECONDITION 44 BUILDINGS AT THE COLUMBIA HEIGHTS AND APARTMENTS PROJECT, AN FHA PROJECT LOCATED IN RICHLAND, WASHINGTON, AT A TOTAL COST OF $271,833.

IT WAS REPORTED IN YOUR LETTER THAT A CONTROVERSY AROSE WITH RESPECT TO THE CONTRACTOR'S MEETING CERTAIN FIRE SAFETY REQUIREMENTS OF THE CITY OF RICHLAND; THAT AFTER NUMEROUS DISCUSSIONS, EXCHANGES OF CORRESPONDENCE, ETC., IT WAS DETERMINED THAT STRICT COMPLIANCE WITH THE RICHLAND CODE WAS NECESSARY, AND THAT, ACCORDINGLY, THE FHA CONTRACTING OFFICER WAS REQUESTED TO AMEND THE CONTRACT TO COVER THE EXTRA WORK, WHICH WAS ESTIMATED TO COST $10,000. IT WAS REPORTED FURTHER THAT, IN VIEW OF CERTAIN CITED CONTRACT PROVISIONS, THE CONTRACTING OFFICER REFUSED TO AMEND THE CONTRACT AS REQUESTED UNTIL THE MATTER WAS REFERRED TO YOUR LEGAL DIVISION FOR A RULING, AND THAT AN OPINION WAS RENDERED BY YOUR CHIEF COUNSEL UNDER DATE OF MAY 19, 1960, TO THE EFFECT THAT THERE IS NO LEGAL BASIS UPON WHICH AN AMENDMENT OF THE CONTRACT WOULD BE AUTHORIZED. THEREAFTER, THE CONTRACTOR REFUSED TO PERFORM THE ADDITIONAL WORK AT NO COST TO THE FEDERAL HOUSING ADMINISTRATION AND, AS A RESULT, THE SUM OF $10,000 WAS WITHHELD FROM FUNDS DUE UNDER THE CONTRACT.

THE RECORD INDICATES THAT THE CONTRACTOR OBJECTED TO BEARING THE ADDITIONAL COSTS OF COMPLYING WITH THE CITY ORDINANCES ON THE GROUNDS THAT THE WORK WAS NOT CALLED FOR BY THE ORIGINAL SPECIFICATIONS AND DRAWINGS. IN DEMANDING PAYMENT OF THE INDICATED AMOUNT OF $10,000, THE CONTRACTOR MADE REFERENCE TO THE FACT THAT THE PROJECT HAS BEEN COMPLETED, DULY INSPECTED, AND FINAL APPROVAL GIVEN AS BEING IN STRICT CONFORMANCE WITH THE PROJECT PLANS AND SPECIFICATIONS. IN VIEW OF THE FOREGOING, YOU STATE THAT A QUESTION ARISES AS TO THE CONTRACTOR'S RESPONSIBILITY UNDER THE CONTRACT, AND YOU REQUEST OUR DECISION AS TO WHETHER OR NOT IT WOULD BE PROPER TO CERTIFY THE VOUCHER AND SCHEDULE OF PAYMENTS FOR PAYMENT IN THE AMOUNT CLAIMED.

UNDER THE TERMS OF THE CONTRACT INVOLVED, THE CONTRACTOR AGREED TO FURNISH ALL LABOR, EQUIPMENT, AND MATERIALS, AND TO PERFORM THE WORK REQUIRED TO REPAIR AND RECONDITION 44 BUILDINGS AT THE COLUMBIA HEIGHTS AND APARTMENTS PROJECT, RICHLAND, WASHINGTON, IN STRICT ACCORDANCE WITH THE GENERAL PROVISIONS (STANDARD FORM 23A), SPECIFICATIONS, SCHEDULES, DRAWINGS, AND CONDITIONS, ALL OF WHICH WERE MADE A PART OF THE CONTRACT, INCLUDING, AMONG OTHER DOCUMENTS, STANDARD FORM 21, BID FORM, INVITATION NO. 5387, AND THE SPECIFICATIONS (18 PAGES).

AS STATED IN YOUR LETTER, THE CONTROVERSY IN THIS CASE WAS WITH RESPECT TO THE CONTRACTOR'S MEETING THE FIRE SAFETY REQUIREMENTS OF THE CITY OF RICHLAND. THE CONTRACT SPECIFICATIONS CONTAIN THE FOLLOWING PARAGRAPH:

"COMPLIANCE WITH CODES:

THE CONTRACTOR SHALL COMPLY WITH ALL STATE, CITY AND COUNTY CODES AND LAWS, PRESENTLY IN EFFECT AND SHALL OBTAIN AT HIS OWN EXPENSE SUCH PERMITS, CERTIFICATES, AND LICENSES AS MAY BE REQUIRED IN THE PERFORMANCE OF THE WORK SPECIFIED.'

THE QUOTED LANGUAGE IS PLAIN AND UNAMBIGUOUS AND OBVIOUSLY WAS INCLUDED IN THE SPECIFICATIONS TO REQUIRE COMPLIANCE WITH THE RICHLAND CITY CODE, IT HAVING BEEN DETERMINED THAT COMPLIANCE WITH SUCH CODE WAS NECESSARY. IT IS OUR VIEW THAT THE REQUIREMENT OF THE SPECIFICATIONS AS TO COMPLIANCE WITH THE LOCAL BUILDING CODE IS BINDING UPON THE CONTRACTOR TO THE SAME EXTENT AS ANY OTHER PART OF THE SPECIFICATIONS.

THE CARDINAL RULE OF CONSTRUCTION IS TO ASCERTAIN AND GIVE EFFECT TO THE INTENTION EXPRESSED IN THE INSTRUMENT BEING CONSTRUED. SEE GARDEN GATE BRIDGE AND HIGHWAY DIST. OF CALIFORNIA V. UNITED STATES, 125 F.2D 872, 876. IN THE CASE OF NICE BALL BEARING COMPANY V. LESCURE, 227 F.2D 118, THE COURT HELD THAT THE INTENTIONS OF THE PARTIES TO A WRITTEN CONTRACT CAN BE GATHERED ONLY FROM THE LANGUAGE OF THE WHOLE INSTRUMENT, AND THAT IN DETERMINING THE INTENTIONS OF THE PARTIES TO A WRITTEN CONTRACT, EFFECT MUST BE GIVEN TO EACH WORD, CLAUSE, OR TERM THEREIN, AND THAT NONE OF THEM SHOULD BE REJECTED FOR LACK OF MEANING OR AS SURPLUSAGE. TO THE SAME EFFECT WERE THE FINDINGS OF THE COURT IN THE CASES OF UNITED STATES V. HATHAWAY, 242 P.2D 897, 900, AND ROOSEVELT MATERIALS COMPANY V. NOLAN BROTHERS, INC., 264 F.2D 807.

IN VIEW OF THE FACTS SET FORTH IN YOUR LETTER OF DECEMBER 15, 1960, AND THE ENCLOSURES THERETO, AND OF THE LAW APPLICABLE THERETO AS SET FORTH IN THE DECISIONS CITED ABOVE, WE CONCLUDE THAT THE FEDERAL CONSTRUCTION COMPANY IS OBLIGATED TO COMPLY WITH THE FIRE SAFETY REQUIREMENTS OF THE CITY OF RICHLAND. IT FOLLOWS THAT PAYMENT OF THE AMOUNT OF $10,000, NOW BEING WITHHELD, WOULD NOT BE JUSTIFIED PENDING COMPLETION BY THE CONTRACTOR OF THE WORK NECESSARY TO COMPLY WITH THE LOCAL BUILDING CODE, ESTIMATED TO COST THAT AMOUNT.

IN RESPONSE TO YOUR REQUEST, THE ENCLOSURES TO YOUR LETTER ARE RETURNED HEREWITH.