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B-150093, NOV. 19, 1962

B-150093 Nov 19, 1962
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THE RECORD SHOWS THAT MCLINN CONSTRUCTION COMPANY WAS AWARDED THE SUBJECT CONTRACT ON MARCH 12. WORK WAS TO START WITHIN 15 DAYS AFTER THE DATE STIPULATED IN THE NOTICE TO PROCEED. THE WORK WAS TO BE COMPLETED BY THE CONTRACTOR WITHIN 200 DAYS AFTER SUCH STIPULATED DATE. LIQUIDATED DAMAGES WERE PROVIDED FOR LATE COMPLETION. THE CONTRACTOR WAS REQUIRED TO SUBMIT TO THE CONTRACTING OFFICER FOR THE PURPOSE OF RECEIVING PROGRESS PAYMENTS. THE CONTRACTING OFFICER DIRECTED THE CONTRACTOR TO SUSPEND ALL WORK ON THE VISITOR CENTER WHILE CONSIDERATION WAS GIVEN TO REVISION OF DRAWINGS AND SPECIFICATIONS TO PROVIDE FOR A BASEMENT FALLOUT SHELTER IN THE BUILDING. THE CONTRACTOR WAS DIRECTED TO RESUME OPERATIONS ON THE VISITOR CENTER IN ACCORDANCE WITH THE ORIGINAL SPECIFICATIONS.

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B-150093, NOV. 19, 1962

TO MR. C. E. PERSONS, AUTHORIZED CERTIFYING OFFICER, NATIONAL PARK SERVICE:

THIS REFERS TO YOUR LETTER OF OCTOBER 10, 1962, WITH ENCLOSURE, REQUESTING OUR DECISION AS TO THE PROPRIETY FOR PAYMENT OF A VOUCHER IN THE AMOUNT OF $4,081.35, TO THE MCLINN CONSTRUCTION COMPANY, ARISING UNDER CONTRACT NO. 14-10-0434-869.

THE RECORD SHOWS THAT MCLINN CONSTRUCTION COMPANY WAS AWARDED THE SUBJECT CONTRACT ON MARCH 12, 1962, FOR THE CONSTRUCTION OF A VISITOR CENTER, RESIDENCE AND UTILITY BUILDING AT FORT CLATSOP NATIONAL MEMORIAL, ASTORIA, OREGON, AT A TOTAL BID PRICE OF $103,281. UNDER THE TERMS OF THE CONTRACT, WORK WAS TO START WITHIN 15 DAYS AFTER THE DATE STIPULATED IN THE NOTICE TO PROCEED, AND THE WORK WAS TO BE COMPLETED BY THE CONTRACTOR WITHIN 200 DAYS AFTER SUCH STIPULATED DATE. LIQUIDATED DAMAGES WERE PROVIDED FOR LATE COMPLETION. THE CONTRACTOR WAS REQUIRED TO SUBMIT TO THE CONTRACTING OFFICER FOR THE PURPOSE OF RECEIVING PROGRESS PAYMENTS, A SCHEDULE OF HIS PROPOSED OPERATION AND PROGRESS, SHOWING THE CONTRACTOR'S ESTIMATED STARTING AND COMPLETION DATES FOR EACH ELEMENT OF THE WORK.

THE CONTRACT CONTAINED A "CHANGES" CLAUSE PROVIDING IN PART AS FOLLOWS:

"THE CONTRACTING OFFICER MAY AT ANY TIME, BY A WRITTEN ORDER, AND WITHOUT NOTICE TO THE SURETIES, MAKE CHANGES IN THE DRAWINGS AND/OR SPECIFICATIONS OF THIS CONTRACT AND WITHIN THE GENERAL SCOPE THEREOF. IF SUCH CHANGES CAUSE AN INCREASE OR DECREASE IN THE AMOUNT DUE UNDER THIS CONTRACT, OR IN THE TIME REQUIRED FOR ITS PERFORMANCE, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY. * * *"

MCLINN RECEIVED A NOTICE TO PROCEED ON APRIL 2, 1962, FIXING THE DATE FOR COMPLETION AS OCTOBER 16, 1962. ITS PROPOSED PROGRESS SCHEDULE CALLED FOR COMPLETION OF THE FOUNDATIONS FOR THE VISITOR CENTER BY MAY 15, THE RESIDENCE BY JUNE 1, AND THE UTILITY BUILDING BY JUNE 15.

ON APRIL 13, 1962, THE CONTRACTING OFFICER DIRECTED THE CONTRACTOR TO SUSPEND ALL WORK ON THE VISITOR CENTER WHILE CONSIDERATION WAS GIVEN TO REVISION OF DRAWINGS AND SPECIFICATIONS TO PROVIDE FOR A BASEMENT FALLOUT SHELTER IN THE BUILDING. ON MAY 17, 1962, THE CONTRACTOR WAS DIRECTED TO RESUME OPERATIONS ON THE VISITOR CENTER IN ACCORDANCE WITH THE ORIGINAL SPECIFICATIONS, AND THE COMPLETION TIME WAS EXTENDED FOR 33 DAYS, TO NOVEMBER 18. ANOTHER STOP ORDER WAS ISSUED ON MAY 21, 1962, FOR THE VISITOR CENTER IN ORDER TO ALLOW THE REMOVAL OF UTILITY LINES WHICH HAD BEEN DISCOVERED UNDER THE SITE OF THAT BUILDING. WORK WAS ORDERED RESUMED ON THE VISITOR CENTER ON MAY 29, 1962, AND THE CONTRACT TIME WAS EXTENDED FOR AN ADDITIONAL 7 DAYS.

AS A RESULT OF THE STOP ORDER ON THE VISITOR CENTER, THE CONTRACTOR DECIDED, APPARENTLY ON HIS OWN INITIATIVE, TO PROCEED WITH THE RESIDENCE AND UTILITY BUILDINGS, AND COMPLETED THE FOUNDATIONS THEREFOR 33 AND 24 DAYS, RESPECTIVELY, AHEAD OF THE DATES ORIGINALLY SCHEDULED. BY LETTER OF MAY 30, 1962, CONTRACTOR REQUESTED AN EQUITABLE ADJUSTMENT OF THE CONTRACT PRICE TO COVER ALLEGED INCREASED COSTS RESULTING FROM THE DELAYS OCCASIONED BY THE STOP ORDERS AND FROM WET GROUND CONDITIONS ENCOUNTERED IN DIGGING THE FOUNDATIONS FOR THE RESIDENCE AND UTILITY BUILDING. THE CONTRACTING OFFICER ISSUED A CHANGE ORDER ON JULY 17, 1962 (CHANGE ORDER NO. 4), ACCEPTED BY THE CONTRACTOR, WHICH STATES IN PERTINENT PART AS FOLLOWS:

"IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 3 AND 4 OF YOUR CONTRACT NO. 14-10-0434-869, DATED MARCH 12, 1962, YOU ARE HEREBY DIRECTED TO PERFORM THE FOLLOWING EXTRA WORK:

"SCHEDULE A--- VISITOR CENTER

"1. REVERSE THE ORDER OF PROPOSED WORK PERFORMANCE AND COMMENCE CONTRACT WORK ON THE RESIDENCE AND UTILITY BUILDING PENDING DECISION AS TO CONSTRUCTION OF A FALL-OUT SHELTER IN BASEMENT OF VISITOR CENTER BUILDING AND PENDING RELOCATION BY OTHERS OF WATER, POWER AND TELEPHONE LINES WHICH HAVE BEEN UNCOVERED BY YOU IN EXCAVATING FOR THE VISITOR CENTER FOUNDATION FOOTINGS. IT IS RECOGNIZED THAT WET GROUND CONDITIONS WILL REQUIRE USE OF TRACK TYPE EQUIPMENT AND THAT SPECIAL PROVISIONS WILL HAVE TO BE MADE TO PROTECT EXCAVATED AREAS AND TO MOVE MATERIALS TO WORK SITES.

"YOU WILL BE COMPENSATED IN THE AMOUNT OF $4,081.35 FOR THE WORK INVOLVED.'

THE CONTRACTING OFFICER APPROVED "FINDING OF FACT," DATED AUGUST 1, 1962, WHICH STATES IN REFERENCE TO THE SUBJECT AMOUNT OF $4,081.35, THAT "THIS CLAIM IS A CONSEQUENCE OF A DELAY CAUSED BY THE GOVERNMENT AND BECAUSE OF THE DISCOVERY OF UNDERGROUND UTILITY LINES PREVIOUSLY UNKNOWN. * * *"

THE CHANGE ORDER PURPORTS TO COVER "EXTRA WORK" ARISING FROM THE REVISED WORK SCHEDULE. THE ,CHANGES" CLAUSE PROVIDES THAT THE CONTRACTING OFFICER MAY MAKE CHANGES IN THE SPECIFICATIONS OF THE CONTRACT. THE SPECIFICATIONS FOR THIS PROJECT DID NOT FIX A SCHEDULE OF PERFORMANCE AS TO EACH OF THE BUILDINGS. IT DID REQUIRE THAT THE CONTRACTOR COMPLETE THE PROJECT WITHIN A CERTAIN TIME, AND THAT THE CONTRACTOR SUBMIT, FOR THE PURPOSE OF RECEIVING PAYMENTS, HIS PROPOSED SCHEDULE OF PERFORMANCE. DURING THE PERIOD OF WORK STOPPAGE ON THE VISITOR CENTER, THE CONTRACTOR REVISED HIS PERFORMANCE SCHEDULE. HOWEVER, THE REVISION DID NOT VARY ANY OF THE TERMS OF THE SPECIFICATIONS; SO FAR AS WE CAN FIND FROM THE RECORD IT WAS A PURELY VOLUNTARY ACT OF THE CONTRACTOR, WITHOUT CONSULTATION WITH THE GOVERNMENT REPRESENTATIVES OR ANY DIRECTION BY THEM, AND WITHOUT NOTICE OF ANY INTENTION TO CLAIM EXTRA COMPENSATION.

THE CONTRACTING OFFICER DID ISSUE THE STOP ORDERS WHICH EXTENDED THE CONTRACT COMPLETION DATE. WHILE IT HAS BEEN SUGGESTED THAT A STOP ORDER MAY ITSELF CONSTITUTE A CHANGE IN A CONTRACT UNDER THE "CHANGES" CLAUSE IF, FOR EXAMPLE, THE PROGRESSION OF THE WORK WERE FIXED BY THE SPECIFICATIONS, AND THE PURPOSE OF THE STOP ORDER WAS TO VARY THE SCHEDULE OF PERFORMANCE, WE DO NOT FEEL THAT THE PRESENT CASE MEETS THOSE CONDITIONS. THE PURPOSE OF THE FIRST ORDER WAS TO ALLOW TIME FOR THE GOVERNMENT TO CONSIDER WHETHER A CHANGE IN SPECIFICATIONS WAS DESIRABLE; THE SECOND WAS TO PERMIT CERTAIN OBSTACLES FOUND AT THE PROJECT SITE TO BE REMOVED. IN THE LIGHT OF A LONG LINE OF DECISIONS OF THE COURTS AND OF ADMINISTRATIVE BOARDS, WE ARE OF OPINION THAT THE CONTRACTOR, UNDER THE TERMS OF THE CONTRACT, WAS ENTITLED TO NO MORE THAN APPROPRIATE EXTENSIONS OF TIME, WITHOUT ANY ADDITIONAL COMPENSATION FOR INCREASED EXPENSES INCIDENTAL TO THE DELAYS. AT THE TIME THE CONTRACT WAS ENTERED INTO, A "SUSPENSION OF WORK" CLAUSE AUTHORIZING COMPENSATION FOR INCREASED COSTS OCCASIONED BY DELAY WAS AUTHORIZED BY THE FEDERAL PROCUREMENT REGULATIONS (FPR 1-7.602-1) BUT IT WAS NOT INCORPORATED IN THIS CONTRACT, AND IN ITS ABSENCE THE CONTRACT CANNOT BE INTERPRETED AS PERMITTING SUCH RELIEF.

WE ARE ALSO UNABLE TO FIND THAT THE INCREASED COSTS OF PERFORMANCE INCURRED WERE DUE TO CAUSES CONTEMPLATED IN THE "CHANGED CONDITIONS" CLAUSE, NAMELY "/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.'

THE UNCOVERED UTILITY LINES COULD CLEARLY CONSTITUTE A CHANGED CONDITION WITHIN THE PURVIEW OF THE CLAUSE. UNDER THE CLAUSE, HOWEVER, A CONTRACTOR IS ONLY ENTITLED TO RECOVER THE COST OF PERFORMING THE WORK NECESSARY TO OVERCOME THE CONDITION ITSELF, AND FOR WORK REQUIRED BY CHANGES IN SPECIFICATIONS MADE TO OVERCOME THE CONDITION. DELAY COST AND INCREASED COST OF PERFORMING UNCHANGED WORK ARISING AS A CONSEQUENCE OF THE CONDITION ARE NOT COMPENSABLE UNDER THE "CHANGED CONDITIONS" CLAUSE. SEE APPEAL OF LEWIS CONSTRUCTION COMPANY, ASBCA NO. 5509, AND CASES CITED THEREIN. THIS CLAIM IS NOT FOR THE COST OF REMOVING THE UTILITY LINES, SINCE THAT WORK WAS DONE BY ANOTHER, AND THE ONLY EFFECT ON THE CONTRACTOR WAS THE DELAY, WHICH WAS ALLOWED AS A BASIS FOR EXTENDING THE TIME FOR PERFORMANCE.

BASED ON THE PRESENT RECORD WE CONCLUDE THAT THE CLAIM HERE CONSIDERED IS NOT PROPERLY ALLOWABLE AS AN EQUITABLE ADJUSTMENT UNDER EITHER THE "CHANGES" CLAUSE, OR THE "CHANGED ONDITIONS" CLAUSE, OF THIS CONTRACT, AND THE SUBJECT VOUCHER MAY THEREFORE NOT BE CERTIFIED.

AS STATED ABOVE, THE RECORD INDICATES THAT THE CONTRACTOR UNDERTOOK TO REVISE HIS PERFORMANCE SCHEDULE WITHOUT PRIOR DIRECTION FROM THE GOVERNMENT AND WITHOUT NOTICE TO THE GOVERNMENT OF HIS INTENTION TO CLAIM ADDITIONAL COMPENSATION THEREFOR. WE DO NOT REGARD SUCH VOLUNTARY ACT BY THE CONTRACTOR AS PROPERLY CONSTITUTING THE SUBJECT OF A CHANGE ORDER WITHIN THE "CHANGES" CLAUSE OF THE CONTRACT. HOWEVER, IF THE FACTS ARE THAT THE GOVERNMENT DID DIRECT THE WORK REVISION, THIS CLAIM MAY BE RESUBMITTED FOR FURTHER CONSIDERATION. IN THIS REGARD IT APPEARS TO US THAT IN REACHING THE AMOUNT OF $4,081.35, WHICH WAS FOUND TO BE THE EQUITABLE ADJUSTMENT ATTRIBUTABLE TO THE REVISED WORK SCHEDULE, THE CONTRACTING OFFICER MAY HAVE INCLUDED CERTAIN ELEMENTS OF COST PROPERLY ATTRIBUTABLE TO THE STOP ORDERS. IF THE CLAIM SHOULD BE RESUBMITTED WE WOULD APPRECIATE RECEIVING FURTHER INFORMATION AS TO HOW THE EQUITABLE ADJUSTMENT WAS COMPUTED.

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