B-129403, MAR. 21, 1958

B-129403, MAR. 21, 1958

TO GAINES V. PALMES, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 20, 1957, RELATIVE TO A CLAIM IN THE AMOUNT OF $111,979.86 ALLEGED TO BE DUE ARCHIE AND ALLAN SPIERS, INC., NEWPORT NEWS, VIRGINIA, REPRESENTING INCREASED COSTS OR DAMAGES CAUSED BY DELAYS OF THE GOVERNMENT AMOUNTING TO A BREACH OF CONTRACT NOY-27124, DATED JUNE 30, 1951, FOR THE REHABILITATION BY THIS FIRM OF FUEL AND WATER PIPELINES AT THE UNITED STATES NAVAL BASE, NORFOLK, VIRGINIA. THE CLAIM CONSISTS OF THREE ITEMS SET FORTH IN YOUR LETTER OF OCTOBER 3, 1956, AS FOLLOWS:

TABLE

CLAIM NO. 1. INCREASED COST INCURRED AS A RESULT OF

DELAY IN AWAITING ISSUANCE OF A PROPOSED CHANGE ORDER $14,470.27

CLAIM NO. 2. INCREASED COST OF PERFORMANCE OF ORIGINAL

CONTRACT WORK DUE TO ENCOUNTERING UNFORESEEN

CONDITIONS, AND TO MISREPRESENTATION OF CONDITIONS 90,010.46

CLAIM NO. 3. COST OF MAINTENANCE OF PIPELINES DUE TO

ENCOUNTERING UNFORESEEN CONDITIONS 7,499.13

AS YOU INDICATE, THE CONTRACTOR, BY LETTER DATED MARCH 15, 1954, INITIALLY SUBMITTED A CLAIM TO THE CONTRACTING OFFICER ALLEGING THAT OVER AND ABOVE THE AMOUNT OF $2,072.62 STATED IN THE FINAL PAYMENT VOUCHER, THE ADDITIONAL SUM OF $60,348.06 WAS DUE UNDER THIS CONTRACT FOR (1) STANDBY EXPENSES INCURRED FROM DATE OF COMPLETION OF THE CONTRACT WORK TO FINAL ACCEPTANCE IN THE AMOUNT OF $15,197.16, AND (2) EXPENSES INCURRED BY REASON OF DELAYS CAUSED BY CHANGES IN PLANS AND DRAWINGS AND BY NAVY ACTIVITIES ON PIERS, SUCH AS MOVEMENTS OF AIRPLANES, LOADING AMMUNITION, TC., IN THE AMOUNT OF $45,150.90. BY YOUR LETTER DATED JANUARY 2, 1956, HOWEVER, THE CLAIM WAS RESTATED AND REVISED SO AS TO EMBRACE THE THREE ITEMS NOW CLAIMED, AND THE TOTAL AMOUNT ALLEGED TO BE DUE WAS INCREASED ON THE BASIS THAT "THE CLAIMS MADE HEREIN ARE BASED ON ACTUAL COST FIGURES RATHER THAN ON ESTIMATES AS WAS THE CASE IN FIRST PRESENTING THE CLAIMS.'

PAYMENT OF THE CLAIM WAS DENIED BY THE CONTRACTING OFFICER IN HIS DECISION DATED MARCH 19, 1956, ON THE BASIS THAT (1) TO THE EXTENT THE CLAIM WAS IN THE NATURE OF A CLAIM FOR DAMAGES, IT COULD NOT BE THE SUBJECT OF COMPENSATION UNDER THE TERMS OF THE CONTRACT; (2) SINCE THE CONTRACTOR HAD SIGNED CHANGE ORDERS WITHOUT EXCEPTION REIMBURSING IT FOR EXPENSES INCIDENT TO CHANGED CONDITIONS ENCOUNTERED, NO BASIS EXISTED FOR ALLOWING ADDITIONAL COMPENSATION ON ACCOUNT OF SUCH CHANGED CONDITIONS; AND (3) SINCE ARTICLE 4 (D) OF THE CONTRACT PROVIDED THAT THE CONTRACTOR WOULD BE RESPONSIBLE FOR ALL WORK PERFORMED UNTIL COMPLETION AND FINAL ACCEPTANCE, COST OF SUCH MAINTENANCE WORK MUST BE BORNE BY THE CONTRACTOR. THE CONTRACING OFFICER'S DECISION WAS DULY APPEALED TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS WHERE IT WAS DISMISSED ON THE GROUND URGED BY THE CONTRACTING AGENCY THAT THE CLAIM WAS ESSENTIALLY ONE FOR DAMAGES FOR DELAY AMOUNTING TO A BREACH OF CONTRACT BY THE GOVERNMENT OVER WHICH THE BOARD HAD NO JURISDICTION UNDER THE "DISPUTES" ARTICLE OF THE CONTRACT. ASBCA NO. 3503, AUGUST 6, 1956. APPARENTLY NO ATTEMPT WAS MADE TO OBTAIN FURTHER CONSIDERATION BY THE BOARD.

CLAIM NO. 1, IT IS STATED IN YOUR LETTER OF OCTOBER 3, 1956, WAS MADE ON THE BASIS THAT SINCE THE INCREASED COSTS INCURRED RESULTED FROM AWAITING THE ISSUANCE OF A PROPOSED CHANGE ORDER, WHICH WAS NEVER ISSUED, PAYMENT THEREOF SHOULD BE MADE UNDER THE CHANGES ARTICLE OF THE CONTRACT. CLAIMS NOS. 2 AND 3, IT IS STATED IN THIS LETTER, WERE ASSERTED ON THE GROUND THAT SINCE THE INCREASED COSTS CLAIMED RESULTED FROM ENCOUNTERING CONDITIONS WHICH WERE NOT EXPECTED BY EITHER PARTY THE COSTS WERE COMPENSABLE UNDER ARTICLE 4 OF THE CONTRACT. IT IS STATED FURTHER IN YOUR LETTER THAT "OTHER FACTS ARE HIGHLY MATERIAL TO THESE CLAIMS WHICH ESTABLISH NOT ONLY A CHANGED CONDITION BUT ABREACH OF CONTRACT BY THE CONTRACTING OFFICER THROUGH MISREPRESENTING CONDITIONS TO BE ENCOUNTERED.' THUS, IT IS CONTENDED IN YOUR LETTER THAT, IN ADDITION TO THE INCREASED COST OF $14,476.27 SUSTAINED DURING THE DELAY PERIOD SUBSEQUENT TO COMPLETION OF THE CONTRACT, THE CONTRACTOR ALSO SUSTAINED INCREASED COSTS IN THE AMOUNT OF $90,010.46 IN PERFORMING THE ORIGINAL CONTRACT WORK DUE TO UNREASONABLE DELAYS AND DISRUPTION OF OPERATIONS CAUSED BY FAULTY PLANS AND SPECIFICATIONS PREPARED BY THE NAVY, IN THAT LOCATIONS OF PILING SUPPORTING THE PIERS WERE IN MANY PLACES ENTIRELY DIFFERENT FROM THOSE SHOWN ON THE CONTRACT DRAWINGS, AMOUNTING TO A SERIOUS MISREPRESENTATION OF CONDITIONS TO BE ENCOUNTERED; TOGETHER WITH OTHER INCREASED COSTS OF $7,499.13 FOR MAINTENANCE OF CERTAIN PIPELINES FOR A PERIOD OF THREE MONTHS AFTER THE WORK WAS COMPLETED, BUT BEFORE IT WAS ACCEPTED BY THE GOVERNMENT.

YOU ALLEGE THAT THE INCREASED COSTS CLAIMED REPRESENT THE DIFFERENCE BETWEEN THE ACTUAL COST INCURRED IN PERFORMING THE CONTRACT AND THE REASONABLE COST THEREOF BUT FOR THE DELAYS OCCASIONED BY THE GOVERNMENT, WHICH INCREASED COSTS CONSTITUTE THE MEASURE OF INCREASED COSTS OR DAMAGES PAYABLE TO THE CONTRACTOR. YOU URGE THAT THE "REASONABLE COST" MAY BE DETERMINED BY PROJECTING THE COST ACTUALLY INCURRED DURING THE MONTH OF MAY 1952 (A MONTH DURING WHICH YOU ALLEGE THERE WAS NO INTERFERENCE OR DELAY CAUSED BY THE GOVERNMENT) AT THE RATIO OF THE PERCENTAGE OF WORK PERFORMED DURING THAT MONTH, ESTIMATED AT 16.87 PERCENT IN YOUR MEMORANDUM OF MARCH 29, 1957. HOWEVER, YOU EXCLUDE THE COST OF MATERIALS FROM YOUR DETERMINATION ON THE GROUND THAT SUCH COSTS WERE NOT AFFECTED BY THE DELAYS. ON NOVEMBER 14, 1957, YOU SUBMITTED A "STATEMENT OF INCREASED COST INCURRED BASED UPON THE DIFFERENCE BETWEEN THE REASONABLE COST AND ACTUAL COST" WHICH IS BASED ON AN ESTIMATE OF 11 MONTHS REQUIRED FOR PERFORMANCE INCLUDING CHANGE ORDER WORK NOT PREVIOUSLY CONSIDERED, SHOWING AN AGGREGATE AMOUNT OF $104,206.

FOLLOWING CONFERENCES WITH REPRESENTATIVES OF OUR OFFICE, IN YOUR LETTER OF NOVEMBER 20, 1957, YOU REVIEWED AND REITERATED THE CONTENTIONS PREVIOUSLY ADVANCED IN SUPPORT OF THE CLAIM, CITING SOME OF THE AUTHORITIES REFERRED TO IN THE ATTACHED REPRINT OF YOUR ARTICLE "DAMAGES IN GOVERNMENT CONSTRUCTION CONTRACTS" FROM THE FORDHAM LAW REVIEW, VOL. XXV, NO. 4, WINTER 1956-57. YOU ALSO STATED IN THIS LETTER YOUR VIEWS AND COMMENTS WITH RESPECT TO A "REPORT ON REVIEW OF CONTRACT NOY-27124" MADE BY REPRESENTATIVES OF OUR ACCOUNTING AND AUDITING STAFF BASED UPON AN EXAMINATION OF THE CONTRACTOR'S RECORDS. SUBMITTED WITH YOUR LETTER WERE REVISED COST STATEMENT, SCHEDULE "A"-- "STATEMENT OF INCREASED COSTS INCURRED BASED UPON THE DIFFERENCE BETWEEN THE REASONABLE COST AND ACTUAL COST" AND SCHEDULE "B"--- "SUMMARY OF COST BASED ON ADJUSTED GAO DIT.' SCHEDULE "A" SHOWS "ACTUAL COST ENTIRE CONTRACT WORK" IN THE AMOUNT OF $242,180.83. ACTUAL COSTS FOR MAY 1952 ARE SHOWN AS $12,695.77, AND ON THE THEORY THAT ALL OF THE WORK COULD HAVE BEEN PERFORMED IN 12 MONTHS UNDER THE CONDITIONS WHICH EXISTED IN THAT MONTH, YOU ARRIVE AT A ,REASONABLE COST" OF $152,400, LEAVING A DIFFERENCE OF $89,780 ALLEGED DAMAGES. SCHEDULE "B" SHOWS "CONTRACTOR'S ESTIMATE" OF TOTAL COSTS (EXCLUSIVE OF MATERIAL COSTS) AMOUNTING TO $164,131.58 AND "ADJUSTED COST" (ALSO EXCLUSIVE OF MATERIAL COSTS) AMOUNTING TO $242.180.83, LEAVING A DIFFERENCE OF $78,049.25, WHICH AMOUNT YOU OFFER TO ACCEPT IN FULL SETTLEMENT.

IT IS WELL ESTABLISHED THAT THE UNITED STATES CAN BE REQUIRED TO MAKE COMPENSATION TO A CONTRACTOR FOR DAMAGES WHICH HE HAS ACTUALLY SUSTAINED AS A RESULT OF A BREACH OF THE CONTRACT BY THE GOVERNMENT AND THAT UNDER SUCH CIRCUMSTANCES THE BURDEN IS ON THE CONTRACTOR TO PROVE ITS DAMAGES, IF ANY, LIMITED TO THE ACTUAL LOSSES INCURRED. UNITED STATES V. SMITH, OCTOBER 18, 1876, 94 U.S. 214, 217-219, AND CASES THERE CITED; UNITED STATES V. MEULLER, 113 U.S. 153, 156; UNITED STATES V. BARLOW, 184 U.S. 123, 147; RIPLEY V. UNITED STATES, 223 U.S. 695; UNITED STATES V. WYCKOFF, 271 U.S. 263. HOWEVER, IT IS ALSO WELL ESTABLISHED THAT DELAYS RESULTING FROM CHANGES PERMITTED UNDER THE TERMS OF THE CONTRACT DO NOT CONSTITUTE A BREACH OF CONTRACT BY THE GOVERNMENT, AND THAT THE GOVERNMENT IS NOT LIABLE FOR DAMAGES ALLEGEDLY SUFFERED ON ACCOUNT OF SUCH DELAYS. UNITED STATES V. RICE, NOVEMBER 9, 1942, 317 U.S. 61, AND UNITED STATES V. VOLEY, NOVEMBER 25,1946, 329 U.S. 64. APPLYING THE PRINCIPLES OF THESE DECISIONS TO THE FACTS AND CIRCUMSTANCES OF RECORD IN THIS CASE, OUR OFFICE WOULD NOT BE JUSTIFIED IN CERTIFYING ANY AMOUNT FOR PAYMENT UNDER YOUR CLAIM FOR THE FOLLOWING REASONS.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO FURNISH THE MATERIALS AND PERFORM THE WORK REQUIRED ON CONSIDERATION OF THE PAYMENT BY THE GOVERNMENT OF $424,513.90. THE CONTRACT PROVIDED THAT THE WORK WAS TO COMMENCE JUNE 30, 1951, AND BE COMPLETED BY MARCH 26, 1952, OR WITHIN 270 DAYS (9 MONTHS) SUBJECT TO ASSESSMENT OF LIQUIDATED DAMAGES OF $125 PER CALENDAR DAY FOR DELAY IN COMPLETION PURSUANT TO ARTICLE 11 OF THE CONTRACT. PROVISIONS WERE INCLUDED IN THE CONTRACT FOR MAKING ADJUSTMENTS IN THE CONTRACT PRICE DUE TO "CHANGED CONDITIONS" UNDER ARTICLE 4 (B); FOR CHANGES AND EXTRAS UNDER ARTICLE 10; FOR EXTENSIONS OF TIME FOR COMPLETION DUE TO CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR UNDER ARTICLE 11; AND FOR FINAL AND CONCLUSIVE DECISIONS BY THE CONTRACTING OFFICER OF DISPUTES OF QUESTIONS OF FACT ARISING UNDER THE CONTRACT NOT SETTLED BY AGREEMENT, SUBJECT TO APPEAL TO AND FINAL DECISION BY THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE UNDER ARTICLE 16.

NINE CHANGE ORDERS WERE ISSUED UNDER THE CONTRACT, SIX PURSUANT TO ARTICLE 10 RELATING TO CHANGES IN THE DRAWINGS OR SPECIFICATIONS AND THREE PURSUANT TO ARTICLE 11 RELATING TO DELAYS AND THE ASSESSMENT OF LIQUIDATED DAMAGES. ALL WERE DULY ACCEPTED WITHOUT OBJECTION BY THE CONTRACTOR. PURSUANT TO THESE CHANGE ORDERS THE CONTRACT PRICE WAS INCREASED FROM $424,513.90 TO $522,148.90, AND THE TIME FOR PERFORMANCE AND COMPLETION OF THE WORK STIPULATED IN THE CONTRACT AMOUNTING TO 270 DAYS (9 MONTHS) WAS INCREASED 538 DAYS (18 MONTHS), RESULTING IN A TOTAL OF 808 DAYS (APPROXIMATELY 27 MONTHS) FOR COMPLETION OF THE CONTRACT WITHOUT ASSESSMENT OF LIQUIDATED DAMAGES.

THE RECORD SHOWS THAT THE CONTRACT WORK WAS COMPLETED ON OR ABOUT SEPTEMBER 15, 1953, THE CONTRACT DATE FOR COMPLETION AS EXTENDED BY THE CHANGE ORDERS. BY LETTER DATED SEPTEMBER 14, 1953, THE CONTRACTOR ADVISED THE OFFICER IN CHARGE OF CONSTRUCTION THAT DUE TO FAILURE OF CERTAIN EXPANSION JOINTS TO WORK PROPERLY, ALTHOUGH THEY HAD BEEN INSTALLED ACCORDING TO PLANS, IT WAS NOW FACED WITH AN ADDITIONAL CHANGE ORDER TO CORRECT THIS FAULT; THAT THE ARCHITECT WAS PREPARING ADDITIONAL DRAWINGS; THAT IT WAS UNDERSTOOD THE NAVY WOULD NOT ACCEPT THE JOB UNTIL THIS CONDITION WAS CORRECTED; AND THAT WE (THE CONTRACTOR) WILL EXPECT THE NAVY TO REIMBURSE US FOR MEN AND EQUIPMENT ON THE JOB UNTIL SUCH TIME AS WE ARE IN RECEIPT OF THE CHANGE ORDER. THE OFFICER IN CHARGE OF CONSTRUCTION REPLIED BY LETTER DATED SEPTEMBER 28, 1953, THAT AN INSPECTION BY REPRESENTATIVE OF HIS OFFICE REVEALED THE FACT THAT THE EXPANSION JOINT ANCHORS WERE NOT INSTALLED IN ACCORDANCE WITH THE CONTRACT DRAWINGS. FURTHER CHANGES WERE AUTHORIZED AND NO ADDITIONAL CHANGE ORDERS WERE ISSUED, NOR WAS ANY CORRECTIVE WORK REQUIRED, BUT THE WORK WAS FINALLY ACCEPTED ON JANUARY 12, 1954, IN THE SAME CONDITION AS WHEN IT WAS COMPLETED IN SEPTEMBER. THE CONTRACTOR RECEIVED PAYMENT UNDER THE FINAL VOUCHER DATED NOVEMBER 10, 1953, IN THE AMOUNT OF $2,072.62, LESS $72.62 ADMINISTRATIVELY DEDUCTED, AND THE CONTRACTOR'S CLAIM OF MARCH 15, 1954, FOR EXPENSES ALLEGEDLY INCURRED DURING THE PERIOD AFTER COMPLETION TO FINAL ACCEPTANCE, AGGREGATING $15,197.16, WAS DENIED BY THE CONTRACTING OFFICER'S DECISION OF MARCH 19, 1956, AS HEREINBEFORE INDICATED.

THE CONTRACT AS AMENDED BY AGREEMENT OF THE PARTIES PROVIDED FOR COMPLETION OF ALL THE WORK IN 450 DAYS OR 15 MONTHS, EXCLUSIVE OF THE EXTENSIONS OF TIME AMOUNTING TO 358 DAYS (APPROXIMATELY 12 MONTHS) GRANTED THE CONTRACTOR BECAUSE OF EXCUSABLE DELAYS FOR THE PURPOSE OF RELIEVING HIM FROM THE ASSESSMENT OF LIQUIDATED DAMAGES. OF THE TOTAL 538 DAYS (18 MONTHS) EXTENSIONS IN TIME GRANTED UNDER THE CONTRACT FOR EXCUSABLE DELAYS, IT APPEARS THAT 66.5 PERCENT, THE MAJOR PORTION OF THE DELAY ENCOUNTERED, WAS DUE TO THE CONTRACTOR'S INABILITY TO PROCURE THE MATERIALS HE HAD AGREED TO FURNISH AND INSTALL UNDER THE TERMS OF THE CONTRACT, AND TO INCLEMENT WEATHER, AND A STRIKE, AND THAT MUCH OF THIS DELAY OCCURRED CONCURRENTLY WITH THE DELAY CAUSED BY CHANGES IN THE DRAWINGS AND SPECIFICATIONS. IT SEEMS EVIDENT, THEREFORE, THAT THE DELAYS CAUSED BY THE LACK OF THE REQUIRED MATERIALS--- PRESUMABLY ANTICIPATED BY THE CONTRACTOR AS A PART OF THE RISK INHERENT IN THIS TYPE OF UNDERTAKING- -- NECESSARILY MUST BE CONSIDERED IN DETERMINING SUCH EXCESS COSTS OR DAMAGES AS MAY HAVE BEEN INCURRED BY THE CONTRACTOR BECAUSE OF IMPAIRED EFFICIENCY OF ITS OPERATIONS, AND THAT THIS IS SO, NOTWITHSTANDING THE FACT THAT RECORDED MATERIAL COSTS WERE APPROXIMATELY $60,000 LESS THAN THE CONTRACTOR'S ESTIMATE OF ITS ANTICIPATED COSTS AS SUPPLEMENTED BY ITS ESTIMATES FOR THE CHANGE ORDER WORK. WITH RESPECT TO THE AMOUNT OF THE INCREASED COSTS OR DAMAGES ALLEGEDLY INCURRED BY THE CONTRACTOR, THE EVIDENCE OF RECORD IS IN CERTAIN RESPECTS INCONSISTENT WITH YOUR CONTENTIONS. TWELVE MONTHS IS CLAIMED AS A REASONABLE TIME FOR PERFORMANCE, AS COMPARED WITH THE CONTRACT PERIOD OF FIFTEEN MONTHS. ESTIMATED COSTS, RATHER THAN "ACTUAL COST FIGURES," AS ALLEGED IN YOUR LETTER OF JANUARY 2, 1956, WERE USED IN YOUR DETERMINATION OF BOTH THE CLAIMED "REASONABLE COST" AND THE CLAIMED "ACTUAL COST" OF PERFORMANCE. IT APPEARS FROM THE "REPORT ON REVIEW" BY OUR ACCOUNTING AND AUDITING STAFF THAT, WITHOUT VERIFICATION AS TO WHETHER THE RECORDED LABOR AND EQUIPMENT COSTS ACTUALLY WERE EXPENDED IN THE PERFORMANCE OF THIS CONTRACT, THE CONTRACTOR'S RECORDS REFLECT THAT ALL ITEMS OF COST CHARGEABLE TO THE CONTRACT FOR THE ENTIRE PERIOD OF 31 MONTHS, JUNE 30, 1951, TO JANUARY 30, 1954, AMOUNT TO A TOTAL OF $479,075.87. IT APPEARS FURTHER, THAT THE TOTAL RECORDED COSTS OF $479,075.87, AND LIKEWISE THE TOTAL ESTIMATED COSTS OF $450,476.57 (YOUR REVISED ESTIMATE FOR "REASONABLE COST" IN THE AMOUNT OF $164,131.58, PLUS THE CONTRACTOR'S ESTIMATES FOR MATERIALS IN THE AMOUNT OF $286,344.99), ARE LESS THAN THE TOTAL CONSIDERATION OF $522,148.90 PAID UNDER THE TERMS OF THE CONTRACT.

AS URGED IN THE PRESENTATION OF YOUR CLAIM, THE COURT OF CLAIMS APPARENTLY HAS HELD, IN EFFECT, THAT THE GOVERNMENT IS LIABLE FOR A BREACH OF CONTRACT DUE TO FAULTY DRAWINGS AND UNREASONABLE DELAYS AFFECTING THE EFFICIENCY OF CONTRACT OPERATIONS, AND HAS APPROVED THE AWARD OF DAMAGES IN AN AMOUNT REPRESENTING THE COSTS ACTUALLY INCURRED IN EXCESS OF THE COSTS WHICH REASONABLY WOULD HAVE BEEN INCURRED BUT FOR THE BREACH.

WHILE WE HAVE NEVER CONCURRED IN THE VIEW SOMETIMES EXPRESSED BY THE COURT OF CLAIMS THAT WE ARE WITHOUT JURISDICTION TO CONSIDER CLAIMS FOR UNLIQUIDATED DAMAGES, IT HAS ALWAYS BEEN RECOGNIZED THAT, WHERE THE FACTS ARE IN DISPUTE OR ARE OTHERWISE SO UNCERTAIN AS TO REQUIRE THE TAKING OF TESTIMONY, EXAMINATION AND CROSS-EXAMINING OF WITNESSES, AND THE WEIGHING OF CONFLICTING EVIDENCE, IT IS IMPRACTICAL FOR THE ACCOUNTING OFFICERS TO DETERMINE WITH ACCURACY THE TRUE MERITS OF SUCH CLAIMS. SEE 21 COMP. DEC. 134; 4 COMP. GEN. 404. IT IS EQUALLY TRUE THAT WHERE THE LEGAL BASIS OF A CLAIM IS SO DUBIOUS AS TO LEAVE SERIOUS DOUBT AS TO WHETHER IT WOULD BE RECOGNIZED BY THE COURTS THE PROPER COURSE FOR THE ACCOUNTING OFFICERS IS TO REJECT IT.

IN OUR OPINION, THE INFORMATION AND EVIDENCE SUBMITTED BY YOU, CONSIDERED WITH THE ENTIRE RECORD AVAILABLE IN THIS CASE, DO NOT ESTABLISH YOUR ALLEGATIONS EITHER AS TO THE LIABILITY OF THE GOVERNMENT FOR ALL OF THE INCREASED COSTS CLAIMED, OR AS TO THE AMOUNT TO WHICH THE CONTRACTOR IS ENTITLED, WITH SUFFICIENT CERTAINTY TO JUSTIFY ANY PAYMENT BY OUR OFFICE.

FURTHERMORE, IT SEEMS EVIDENT FROM THE FOREGOING THAT ANY OPINION BY THE DEPARTMENT OF THE NAVY, WHICH IT IS SUGGESTED IN YOUR LETTER OF MARCH 7, 1958, BE REQUESTED BY US, RELATIVE TO THE ,AMOUNT OF DAMAGES SUSTAINED BY THE CONTRACTOR AS A RESULT OF DELAYS AND DISRUPTION OF OPERATIONS OCCASIONED BY THE ERRORS IN THE CONTRACT DRAWINGS" OR AN ADMINISTRATIVE "ESTIMATE OF THE REASONABLE COST OF PERFORMING THE CONTRACT WORK IN STRICT ACCORDANCE WITH THE CONTRACT DRAWINGS AND SPECIFICATIONS," WHICH YOU ALSO SUGGEST BE REQUESTED, COULD NOT BE ACCEPTED, IF FURNISHED, AS DETERMINATIVE OF YOUR CLAIMS.