B-148015, FEB. 9, 1962

B-148015, FEB. 9, 1962

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22, 1962, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER THERE IS AUTHORIZED THE REFORMATION OF CONTRACT NO. 14-06-400-1244 DATED NOVEMBER 4, 1960, WITH THE THORN CONSTRUCTION COMPANY OF PROVO, UTAH, SO AS TO PERMIT PAYMENT TO THE CONTRACTOR OF AN ADDITIONAL AMOUNT REPRESENTING THE INCREASED COSTS INCURRED BY THE CONTRACTOR AS A RESULT OF THE FACT THAT THE BORROW AREAS DESIGNATED IN THE SPECIFICATIONS AS SOURCES OF RIPRAP AND ROCKFILL PROVED TO BE UNSUITABLE FOR THAT PURPOSE.

UNDER THE TERMS OF THE CONTRACT--- WHICH WAS AWARDED ON THE BASIS OF A SMALL BUSINESS SET-ASIDE--- THORN CONSTRUCTION COMPANY AGREED TO CONSTRUCT CARLILE AND DIAMOND BAR-X DIKES, PROVO RIVER CHANNEL REVISION, PROVO RIVER PROJECT, UTAH, IN ACCORDANCE WITH BUREAU OF RECLAMATION SPECIFICATIONS NO. 400C-149 FOR A CONTRACT PRICE OF $265,079. THE ENGINEER'S ESTIMATE APPEARS TO HAVE BEEN $291,980.80. ITEMS NOS. 8 AND 9 OF THE BIDDING SCHEDULE REQUIRED THE FURNISHING AND PLACING OF 57,300 TONS OF RIPRAP AND 4,300 TONS OF ROCKFILL, RESPECTIVELY. IT IS STATED IN YOUR LETTER THAT MORE THAN HALF OF THE CONTRACT PRICE REPRESENTED THE COST OF FURNISHING AND PLACING THE REFERRED-TO RIPRAP AND ROCKFILL.

PARAGRAPH 4 OF THE GENERAL PROVISONS OF THE CONTRACT INCLUDES PROVISIONS FOR AN EQUITABLE ADJUSTMENT IF THE CONTRACTING OFFICER FINDS THAT THE COST OF PERFORMING THE CONTRACT IS INCREASED OR DECREASED AS A RESULT OF:

"* * * (1) SUBSURFACE OR LATENT PHYSICAL CONDITIONS AT THE SITE DIFFERING MATERIALLY FROM THOSE INDICATED IN THIS CONTRACT, OR

"/2) UNKNOWN PHYSICAL CONDITIONS AT THE SITE, OF AN UNUSUAL NATURE, DIFFERING MATERIALLY FROM THOSE ORDINARILY ENCOUNTERED AND GENERALLY RECOGNIZED AS INHERING IN WORK OF THE CHARACTER PROVIDED FOR IN THIS CONTRACT. * * *"

HOWEVER, PARAGRAPH 45 OF THE SPECIAL CONDITIONS PROVIDES IN PART:

"THE RIPRAP MATERIAL MAY BE OBTAINED FROM ANY APPROVED SOURCE.

FIVE SOURCES SHOWN ON DRAWING NO. 1 (244-418-320) ARE AVAILABLE AND NO CHARGE WILL BE MADE TO THE CONTRACTOR FOR RIPRAP MATERIAL TAKEN FROM THESE SOURCES AND USED IN WORK COVERED BY THESE SPECIFICATIONS. ANY ROYALTIES OR OTHER CHARGES REQUIRED TO BE PAID FOR ROCK MATERIAL TAKEN FROM SOURCES NOT OWNED OR CONTROLLED BY THE GOVERNMENT SHALL BE PAID BY THE CONTRACTOR. THE NECESSARY HAUL ROADS, INCLUDING ANY STRUCTURES REQUIRED, SHALL BE CONSTRUCTED AT THE EXPENSE OF THE CONTRACTOR. THE CONTRACTOR, AT HIS EXPENSE, SHALL CLEAR THE AREAS FROM WHICH ROCK MATERIAL WILL BE OBTAINED OF TREES, ROOTS, BRUSH AND OTHER OBJECTIONABLE MATERIAL AND SHALL STRIP THE AREAS OF OVERBURDEN AS REQUIRED TO OBTAIN THE ROCK. IF THE CONTRACTOR OBTAINS MATERIALS FROM ANY OF THE APPROVED SITES LISTED ABOVE, HE SHALL BE RESPONSIBLE FOR CLEANUP OF THE QUARRY BEFORE FINAL ACCEPTANCE OF THE WORK. CLEANUP SHALL INCLUDE REMOVAL OF THE CONTRACTOR'S EQUIPMENT AND DEBRIS, REMOVING AND WASTING IN APPROVED AREAS UNDERSIZED AND REJECTED MATERIAL RESULTING FROM THE CONTRACTOR'S QUARRYING OPERATIONS, PULLING DOWN LOOSENED MATERIAL FROM THE QUARRY WALLS, AND CLEARING THE FLOOR OF THE QUARRY SO THAT FUTURE OPERATIONS AT THE SITE WILL NOT BE HANDICAPPED.

"THE FACT THAT THE GOVERNMENT HAS MADE THESE BORROW AREAS AVAILABLE TO THE CONTRACTOR DOES NOT IMPLY THAT ROCK FROM THESE SOURCES WILL BE OF THE SPECIFIED QUALITY OR MAY BE OBTAINED IN THE REQUIRED QUANTITY. THE CONTRACTOR IS REQUIRED TO FURNISH ROCK OF THE DESIRED QUALITY FOR THIS WORK.'

PARAGRAPH 47 OF THE SPECIAL CONDITIONS PROVIDES IN PART:

"ROCKFILL.(A) GENERAL.--- THE CONTRACTOR SHALL FURNISH AND PLACE ROCKFILL IN THE ROCK DROPS TO THE LINES AND GRADES SHOWN ON THE DRAWINGS OR AS DIRECTED. THE CONTRACTOR SHALL ALSO STOCKPILE ROCKFILL MATERIAL AT A SITE DESIGNATED BY THE CONTRACTING OFFICER ADJACENT TO THE ROCK DROP ON THE DIAMOND BAR-X DIKE. THE ROCKFILL SHALL BE WEIGHED IN THE SAME MANNER AS THAT SPECIFIED FOR RIPRAP IN PARAGRAPH 45. STONE REQUIRED FOR THE ROCKFILL MAY BE OBTAINED FROM THE SAME SOURCES OR OTHER APPROVED SOURCES AS SPECIFIED IN PARAGRAPH 45.'

THE CONTRACTING OFFICER STATES THAT THESE BORROW AREAS ARE KNOWN AS (A) CEDAR HOLLOW; (B) MOON; (C) RILEY (TWO LOCATIONS); AND (D) VALEO. FOUR OF THE FIVE BORROW AREAS DESIGNATED IN THE SPECIFICATIONS WERE IN THE IMMEDIATE VICINITY OF THE CONSTRUCTION SITES BUT THE VALEO AREA WAS ABOUT 12 MILES FARTHER FROM THE SITES. IT IS STATED IN YOUR LETTER THAT THESE AREAS HAD BEEN EXAMINED BY GOVERNMENT ENGINEERS AND A GOVERNMENT GEOLOGIST, ALL OF WHOM WERE FAMILIAR WITH THE AREA AND WHO WERE CONFIDENT THAT SUFFICIENT QUANTITIES OF SOUND ROCK COULD BE OBTAINED FROM ONE OR MORE OF THE LOCATIONS. THE CONTRACTING OFFICER STATES THAT THEIR CONFIDENCE WAS SUCH THAT "IT WAS CONSIDERED UNNECESSARY TO PERFORM ANY DRILLING OR OTHER EXPLORATORY WORK TO DETERMINE THE EXTENT OF THE DEPOSITS AND THE CHARACTER OF THE ROCK BENEATH THE SURFACE.' IT IS STATED ALSO THAT BOTH THE GOVERNMENT AND THE BIDDERS INTENDED THAT ONE OR MORE OF THESE BORROW AREAS WOULD BE UTILIZED IN THE PERFORMANCE OF THE CONTRACT.

THE CONTRACTING OFFICER STATES THAT AFTER ENTERING INTO THE SUBJECT CONTRACT, THE GOVERNMENT PLANNED TO ADVERTISE FOR OTHER SIMILAR WORK IN THE VICINITY FOR WHICH IT NEEDED SUCH BORROW AREAS AS WOULD NOT BE NEEDED UNDER THE EXISTING CONTRACT. AT THE REQUEST OF THE GOVERNMENT, THORN CONSTRUCTION COMPANY RELEASED ALL OF THE BORROW AREAS EXCEPT CEDAR HOLLOW, HAVING EXPRESSED ITS INTENTION TO OBTAIN THE REQUIRED MATERIAL FROM THE LATTER AREA, AND IT APPEARS THAT THE RELEASED AREAS WERE ASSIGNED FOR CONSTRUCTION WORK UNDER OTHER CONTRACTS.

THE CONTRACTOR INCURRED GREAT EXPENSE IN ATTEMPTING TO OBTAIN FROM THE CEDAR HOLLOW AREAS AND FROM TWO ADDITIONAL AREAS (WILLOW HOLLOW AND CEMETERY QUARRY) SUITABLE RIPRAP AND ROCKFILL BUT WAS ABLE TO OBTAIN ONLY A SMALL AMOUNT. THEREFORE, MUCH OF THE REQUIRED MATERIAL WAS OBTAINED FROM THE PEOA QUARRY, WHICH WAS APPROXIMATELY 15.4 MILES FROM THE CARLILE DIKE AND 21 MILES FROM THE DIAMOND BAR-X DIKE. THE CONTRACTOR'S REQUEST FOR ADDITIONAL PAYMENT INCLUDES ALSO THE SUM OF $4,761 FOR STRIPPING OVERBURDEN AT PEOA QUARRY.

MEANWHILE, THE GOVERNMENT MADE EFFORTS TO LOCATE OTHER SOURCES OF SUITABLE MATERIAL NEAR THE CONSTRUCTION SITES, INVESTIGATING AND DRILLING AT SEVERAL LOCATIONS AND FINALLY DECIDING THAT THE BEST SOURCE OF SUITABLE MATERIAL WAS AT PINE VALLEY. THEREFORE, THE CONTRACTOR OBTAINED THE REMAINING MATERIAL REQUIRED UNDER CONTRACT NO. 14-06-400-1244 FROM PINE VALLEY, WHICH WAS NEARER THAN THE PEOA QUARRY TO THE CONSTRUCTION SITES BUT FARTHER THAN CEDAR HOLLOW FROM THOSE SITES.

IT IS REPORTED THAT BEFORE COMMENCING OPERATIONS AT PEOA QUARRY, THE CONTRACTOR MET WITH BUREAU OF RECLAMATION OFFICIALS AND REQUESTED ADDITIONAL COMPENSATION TO COVER THE EXTRA COST OF OBTAINING MATERIAL FROM PEOA QUARRY INSTEAD OF FROM CEDAR HOLLOW AND THAT THE CONTRACTOR WAS ADVISED THAT CONSIDERATION WOULD BE GIVEN TO THE REQUEST BUT THAT NO COMMITMENT WAS MADE AS TO PAYMENT OF ADDITIONAL COMPENSATION. SUBSEQUENTLY, AT A CONFERENCE BETWEEN THE CONTRACTOR AND REPRESENTATIVES OF THE BUREAU OF RECLAMATION ON OCTOBER 19, 1961, IT WAS AGREED THAT THE TOTAL AMOUNT OF THE PROPERLY REIMBURSABLE INCREASED COST INCURRED BY THE CONTRACTOR AS A RESULT OF THE FAILURE OF THE CEDAR HOLLOW AREA WAS $51,205.84, INCLUDING $24,051.69 AS THE ADDITIONAL COST FOR DEVELOPMENT WORK AND $27,154.15 AS THE ADDITIONAL COST OF HAULING THE MATERIAL FROM MORE DISTANT QUARRIES. THE AGREED AMOUNT DOES NOT INCLUDE THE EXPENSE INCURRED IN ATTEMPTING TO OBTAIN MATERIAL FROM CEDAR HOLLOW, THAT EXPENSE BEING AGREED TO BE THE CONTRACTOR'S RESPONSIBILITY.

UNDER CERTAIN CIRCUMSTANCES, A WRITTEN AGREEMENT NOT CONFORMING TO THE ACTUAL INTENTIONS OF THE PARTIES MAY BE REFORMED TO ACCORD WITH SUCH INTENTIONS. WHERE, BY REASON OF MUTUAL MISTAKE, A CONTRACT AS REDUCED TO WRITING DOES NOT REFLECT THE ACTUAL AGREEMENT AND INTENTION OF THE PARTIES, THE WRITTEN INSTRUMENT MAY BE REFORMED IF IT CAN BE ESTABLISHED WHAT THE AGREEMENT ACTUALLY WAS. SEE 36 COMP. GEN. 507, 509; 30 ID. 220, 20 ID. 533 AND CASES THERE CITED. IN 36 COMP. GEN. 507 IT IS STATED THAT "A WRITTEN AGREEMENT NOT IN CONFORMITY WITH THE ACTUAL INTENTION OF THE PARTIES BECAUSE OF A MUTUAL MISTAKE OF FACT MAY BE REFORMED IN ACCORDANCE WITH SUCH ACTUAL INTENT.'

IN THE INSTANT MATTER, IT MAY BE REGARDED AS ESTABLISHED THAT BOTH PARTIES CONTEMPLATED AND INTENDED THAT THE REQUIRED RIPRAP AND ROCKFILL SHOULD BE OBTAINED FROM ONE OR MORE OF THE BORROW AREAS NEAR THE CONSTRUCTION SITES AS DESIGNATED IN THE CONTRACT. IT SEEMS CLEAR THAT IF THE PARTIES HAD KNOWN THAT THE REQUIRED MATERIAL COULD NOT BE OBTAINED FROM THE DESIGNATED AREAS THE ABOVE-QUOTED LANGUAGE OF SECTION 45 OF THE SPECIAL CONDITIONS--- WHICH WOULD EXPRESSLY REQUIRE THE CONTRACTOR TO FURNISH SUITABLE RIPRAP AND ROCKFILL WHETHER OBTAINABLE FROM THE FIVE DESIGNATED AREAS OR NOT--- WOULD NOT HAVE BEEN INCLUDED IN THE CONTRACT. THIS VIEW IS STRONGLY SUPPORTED BY THE FACTS THAT THE CONTRACTOR, AT THE REQUEST OF THE GOVERNMENT, RELEASED ALL BUT ONE OF THE DESIGNATED AREAS AND THAT THE GOVERNMENT SUBSEQUENTLY, WITH CONSIDERABLE EFFORT, LOCATED ANOTHER SUITABLE AREA AND MADE IT AVAILABLE TO THE CONTRACTOR. THESE FACTS ALSO INDICATE THE GOVERNMENT'S RESPONSIBILITY IN CONNECTION WITH THE ENTIRE SITUATION.

IN VIEW OF THE FOREGOING, WE OFFER NO OBJECTION TO MODIFICATION OF THE CONTRACT AS PROPOSED SO AS TO PERMIT PAYMENT OF THE AGREED ADDITIONAL AMOUNT TO THE CONTRACTOR. APPROPRIATE REFERENCE TO THIS DECISION SHOULD ACCOMPANY THE MODIFICATION.