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CORPS OF ENGINEERS: REFERENCE IS MADE TO YOUR LETTER OF JULY 16. WE CONCURRED WITH YOUR PREDECESSOR'S VIEW THAT THE JULY 1956 ESCALATION RATES SHOULD APPLY ON THE BASIS THAT IT WAS NOT LIKELY OR REASONABLY EXPECTED THAT WESTINGHOUSE COULD HAVE ACTUALLY PERFORMED SOME WORK ON AUGUST 1. WAS ALSO EMPHASIZED THAT UNDER THE CIRCUMSTANCES THERE APPARENTLY WOULD BE ONLY ONE DAY. THERE BEING NOTHING TO INDICATE THAT SUCH A RESULT WAS INTENDED BY THE CONTRACTING PARTIES. IT NOW APPEARS FROM THE ADDITIONAL INFORMATION AND EVIDENCE WHICH YOU HAVE SUBMITTED WITH YOUR LETTERS THAT ON NOVEMBER 2. WESTINGHOUSE HAD ADVISED THE CONTRACTING OFFICER THAT IT WAS IN THE MIDST OF A LABOR DISPUTE WHICH BEGAN ON OCTOBER 17.

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B-135531, OCT. 8, 1959

TO MR. F. BARRINEAU, DISBURSING OFFICER, CORPS OF ENGINEERS:

REFERENCE IS MADE TO YOUR LETTER OF JULY 16, 1959, AS SUPPLEMENTED SEPTEMBER 9, 1959, AND THE ENCLOSURES, FILE SALVE/SEC, FORWARDED BY THE OFFICE OF THE CHIEF OF ENGINEERS UNDER INDORSEMENTS DATED AUGUST 13 AND SEPTEMBER 17, 1959. YOU REQUEST AN ADVANCE DECISION AS TO THE PROPRIETY OF MAKING PAYMENT ON THE ENCLOSED VOUCHER TO THE WESTINGHOUSE ELECTRIC CORPORATION IN THE AMOUNT OF $3,664.22 CLAIMED DUE AS ESCALATION ADJUSTMENT UNDER CONTRACT NO. DA-01-076-ENG-3029 WHICH HAD BEEN DENIED IN ACCORDANCE WITH OUR DECISION OF APRIL 4, 1958, TO YOUR PREDECESSOR.

UNDER OUR DECISION OF APRIL 4, 1958, WE CONSIDERED A VOUCHER IN FAVOR OF WESTINGHOUSE IN THE AMOUNT OF $16,168.88 BASED UPON ESCALATION PRICES FOR THE MONTH OF AUGUST 1956 WHICH HAD BEEN SUBMITTED BY YOUR PREDECESSOR BECAUSE OF HIS DOUBT AS TO THE CORRECTNESS OF THE METHOD USED IN COMPUTING THE ESCALATED PRICES. THE CONTRACT REQUIRED COMPLETION NOT LATER THAN AUGUST 1, 1956. WE CONCURRED WITH YOUR PREDECESSOR'S VIEW THAT THE JULY 1956 ESCALATION RATES SHOULD APPLY ON THE BASIS THAT IT WAS NOT LIKELY OR REASONABLY EXPECTED THAT WESTINGHOUSE COULD HAVE ACTUALLY PERFORMED SOME WORK ON AUGUST 1, 1956, AND STILL EFFECTED DELIVERY ON THE SAME DATE. WAS ALSO EMPHASIZED THAT UNDER THE CIRCUMSTANCES THERE APPARENTLY WOULD BE ONLY ONE DAY, AUGUST 1, 1956, UPON WHICH THE "ESTIMATES" AND "TOTAL AMOUNT OF WORK PERFORMED IN ANY ONE MONTH" COULD BE BASED FOR THE PURPOSE OF AN ADJUSTMENT OF PAYMENTS UNDER THE PROVISIONS OF PARAGRAPH SC-14 (C) OF THE SPECIAL CONDITIONS OF THE CONTRACT PRESCRIBING THE PROCEDURE FOR "ADJUSTMENT OF PRICES FOR LABOR AND MATERIAL.' WE EXPRESSED THE OPINION THAT ESTIMATES OF WORK SUBMITTED OR PERFORMED BY THE CONTRACTOR FOR ONLY ONE DAY OUT OF A MONTH COULD NOT BE SAID TO REPRESENT A PROPER BASIS FOR APPLYING THAT PART OF THE PRICE ESCALATION CLAUSE, THERE BEING NOTHING TO INDICATE THAT SUCH A RESULT WAS INTENDED BY THE CONTRACTING PARTIES.

IT NOW APPEARS FROM THE ADDITIONAL INFORMATION AND EVIDENCE WHICH YOU HAVE SUBMITTED WITH YOUR LETTERS THAT ON NOVEMBER 2, 1955, WESTINGHOUSE HAD ADVISED THE CONTRACTING OFFICER THAT IT WAS IN THE MIDST OF A LABOR DISPUTE WHICH BEGAN ON OCTOBER 17, 1955, AND WOULD DELAY PERFORMANCE OF THE CONTRACT; THAT ON MARCH 28, 1956, THE CONTRACTOR INFORMED THE CONTRACTING OFFICER THAT A GENERAL STRIKE HAD BEEN CALLED BY THE INTERNATIONAL UNION OF ELECTRICAL, RADIO AND MACHINE WORKERS AGAINST ALL PLANTS OF WESTINGHOUSE EFFECTIVE OCTOBER 17, 1955, AND THAT THIS STRIKE HAD BEEN TERMINATED ON MARCH 18, 1956, OR AFTER A PERIOD OF 156 DAYS. HOWEVER, THE CONTRACTING OFFICER STATES IN HIS ADMINISTRATIVE STATEMENT OF SEPTEMBER 4, 1959, THAT A DETERMINATION THAT THE DELAY IN PERFORMANCE CAUSED BY THE STRIKE WAS BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR WAS NOT MADE AT THAT TIME BECAUSE SUFFICIENT FACTS WERE NOT BEFORE HIM. THE RECORD NOW SHOWS THAT ON AUGUST 1, 1956, THE CONTRACT WAS ONLY 46 PERCENT COMPLETED AND, THEREFORE, A SUBSTANTIAL PORTION REMAINED FOR PERFORMANCE AFTER THAT DATE. FURTHERMORE, THE CONTRACTING OFFICER HAS DETERMINED THAT THE DELAY IN PERFORMANCE WAS BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, AND HAS EXTENDED THE TIME FOR COMPLETION 154 CALENDAR DAYS TO JANUARY 2, 1957, AS EVIDENCED BY CONTRACT AMENDMENT NO. 3 DATED MAY 7, 1959. AS YOU HAVE INDICATED, THIS IS A BELATED ACTION ON THE PART OF THE CONTRACTING OFFICER WHICH DOES NOT CONFORM WITH ESTABLISHED PROCEDURE. HOWEVER, SINCE MONTHLY ADJUSTMENTS WOULD HAVE BEEN APPROPRIATE AFTER THE MONTH OF AUGUST HAD THE EXTENSION BEEN TIMELY MADE, NO FURTHER OBJECTION WILL BE INTERPOSED IN THIS CASE TO THE ADJUSTMENT CLAIMED.

ACCORDINGLY, YOU ARE ADVISED THAT PAYMENT ON THE VOUCHER WHICH IS RETURNED HEREWITH IS AUTHORIZED, IF OTHERWISE CORRECT.

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