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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF MARCH 17. REQUESTING A DECISION AS TO WHETHER THERE IS AUTHORIZED THE REFORMATION OF CONTRACT NO. THIS CONTRACT WAS THE SUBJECT OF OUR DECISION TO YOU DATED NOVEMBER 6. GEN. 363) WHEREIN IT WAS HELD (QUOTING SYLLABUS): "CHARGES BY A MUNICIPALITY FOR SEWER CONNECTIONS INCIDENT TO IMPROVEMENTS BEING MADE TO A FEDERAL GOVERNMENT BUILDING ARE NOT TO BE CONSIDERED TO BE A SPECIAL ASSESSMENT OR TAX LEVIED AGAINST THE FEDERAL GOVERNMENT CONTRARY TO ITS CONSTITUTIONAL IMMUNITY BUT ARE INSTEAD CHARGES FOR THE PRIVILEGE OF CONNECTING THE BUILDING WITH A MUNICIPALLY OWNED SEWER PRESUMABLY TO BE APPLIED TO THE COST OF SEWER CONSTRUCTION AND.

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B-140837, APR. 7, 1960

TO HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES

ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 17, 1960, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER THERE IS AUTHORIZED THE REFORMATION OF CONTRACT NO. GS-09B-G-34-LA, ENTERED INTO BETWEEN YOUR ADMINISTRATION AND G. HERMAN CONSTRUCTION CO., WHEREBY THE COMPANY AGREED TO MAKE CERTAIN IMPROVEMENTS TO THE LOS ANGELES INTERAGENCY MOTOR POOL, LOS ANGELES, CALIFORNIA, FOR A PRICE OF $23,456.

THIS CONTRACT WAS THE SUBJECT OF OUR DECISION TO YOU DATED NOVEMBER 6, 1959, B-140837 (39 COMP. GEN. 363) WHEREIN IT WAS HELD (QUOTING SYLLABUS):

"CHARGES BY A MUNICIPALITY FOR SEWER CONNECTIONS INCIDENT TO IMPROVEMENTS BEING MADE TO A FEDERAL GOVERNMENT BUILDING ARE NOT TO BE CONSIDERED TO BE A SPECIAL ASSESSMENT OR TAX LEVIED AGAINST THE FEDERAL GOVERNMENT CONTRARY TO ITS CONSTITUTIONAL IMMUNITY BUT ARE INSTEAD CHARGES FOR THE PRIVILEGE OF CONNECTING THE BUILDING WITH A MUNICIPALLY OWNED SEWER PRESUMABLY TO BE APPLIED TO THE COST OF SEWER CONSTRUCTION AND, THEREFORE, ARE PROPERLY FOR PAYMENT BY THE GOVERNMENT, NOTWITHSTANDING THAT THE CONSTRUCTION IS INCIDENT TO IMPROVEMENTS AS DISTINGUISHED FROM NEW CONSTRUCTION AND THAT THE PAYMENT IS REQUIRED BY MUNICIPAL ORDINANCE TO BE DEPOSITED INTO SEWER CONSTRUCTION ACCOUNT.

"CHARGES FOR CONNECTIONS TO A MUNICIPAL SEWER, INCIDENT TO CONSTRUCTION OF IMPROVEMENTS TO A FEDERAL GOVERNMENT BUILDING, UNDER A CONTRACT WHICH REQUIRES THE CONTRACTOR TO PAY ALL FEES AND CHARGES FOR CONNECTIONS TO OUTSIDE SERVICES AND FOR USE OF PROPERTY OUTSIDE THE SITE MUST BE REGARDED AS AN OBLIGATION OF THE CONTRACTOR.'

IT APPEARS THAT THE CONTRACTOR PAID TO THE CITY, IN ACCORDANCE WITH THE REFERRED-TO DECISION, THE SUM OF $1,250 "ON ACCOUNT OF BONDED SEWER CONNECTION" (ACREAGE FEE) AND $476 "FOR THE CONNECTION CHARGE FOR OUTLET FACILITIES" (FRONT FOOT FEE) PERTAINING TO THE CONTRACT WORK. IN LETTERS DATED DECEMBER 10, 1959, AND JANUARY 15, 1960, THE CONTRACTOR'S ATTORNEY HAS ALLEGED A MUTUAL MISTAKE IN THE MAKING OF THE CONTRACT IN THAT NEITHER PARTY UNDERSTOOD OR INTENDED THAT THE CONTRACTOR SHOULD PAY THE ACREAGE FEE FOR THE BONDED SEWER CONNECTION AND THE FRONT FOOT FEE FOR THE OUTLET FACILITIES, IT BEING INTENDED THAT THE CONTRACTOR SHOULD PAY ONLY "THE USUAL AND ORDINARY HOOK-UP FEE PAID BY CONTRACTORS TO THE MAIN SEWER LINE," STATED TO BE "GENERALLY ABOUT $25.00 OR $30.00.' SIMILAR STATEMENTS ARE MADE IN GENE HARMAN'S AFFIDAVIT DATED JANUARY 14, 1960, WHICH WAS ACCOMPANIED BY A COPY OF THE FINAL WORK SHEET USED IN PREPARING THE BID SHOWING AN ITEM OF $35 FOR "BUILDING PERMIT/S) STREET AND SEWER.'

IN THE AFFIDAVIT IT IS STATED:

"AT THE TIME AFFIANT MADE THIS PAYMENT, MR. HYATT OF THE CITY OF VENICE, CALIFORNIA BUILDING DEPARTMENT INFORMED AFFIANT THAT THIS WAS THE FIRST OCCASION IN THE HISTORY OF THE CITY THAT A CONTRACTOR HAD PAID THE SUBJECT FEES.'

THE CONTRACTOR REQUESTS THAT THE CONTRACT BE REFORMED BY ADDING TO THE PROVISION RELATING TO FEES QUOTED IN OUR DECISION OF NOVEMBER 6, 1959, A PROVISO SPECIFICALLY EXCEPTING THE ACREAGE FEE OF $400 PER ACRE AND THE FRONT FOOT FEE OF $5 PER FOOT WHICH HAD BEEN PAID BY THE CONTRACTOR AS HEREINABOVE SET OUT.

IN A MEMORANDUM DATED FEBRUARY 11, 1960, THE CONTRACTING OFFICER STATES:

"THIS DIVISION HAD NO KNOWLEDGE OF ANY ACREAGE OR FOOT FRONT FEES WHICH WOULD BE IMPOSED BY THE CITY OF LOS ANGELES, WHEN WE PREPARED THE SPECIFICATIONS FOR THE WORK, OTHERWISE IT WOULD HAVE BEEN INCLUDED. THE GENERAL CONDITIONS ON ALL SPECIFICATIONS FOR WORK OVER $2,000.00 CONTAIN THE FOLLOWING REQUIREMENTS:

"THE CONTRACTOR SHALL OBTAIN AND PAY ALL FEES AND CHARGES FOR CONNECTION TO OUTSIDE SERVICES AND FOR USE OF PROPERTY OUTSIDE THE SITE.'

"AS STATED ABOVE WE HAD NO KNOWLEDGE OF ADDITIONAL FEES AND ASSUMED THAT THE CONNECTION CHARGES ORDINARILY CHARGED BY THE CITY WERE ALL THE CHARGES INVOLVED. THE CONTRACTOR ALSO WAS NOT AWARE OF THE ACREAGE FEE NOR THE FOOT FRONTAGE FEES CHARGED BY THE CITY OF LOS ANGELES.'

AS STATED IN OUR DECISION OF NOVEMBER 6, 1959, A WRITTEN AGREEMENT NOT CONFORMING TO THE ACTUAL INTENTION OF THE PARTIES MAY BE REFORMED TO ACCORD WITH SUCH INTENTION. IN THE INSTANT MATTER, IT APPEARS TO BE CLEARLY ESTABLISHED THAT BOTH PARTIES CONTEMPLATED THAT THE CONTRACTOR SHOULD PAY ONLY "THE USUAL AND ORDINARY HOOKUP FEE TO THE MAIN SEWER LINE," IN THE APPROXIMATE AMOUNT OF $30, AND NOT THE ACREAGE FEE AND THE FRONT FOOT FEE WHICH THE CONTRACTOR HAS PAID IN THE TOTAL AMOUNT OF $1,726. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THIS MATTER, IT WELL MIGHT BE REGARDED AS BOTH UNUSUAL AND UNCONSCIONABLE TO REQUIRE THE CONTRACTOR TO PAY THE ACREAGE FEE AND THE FRONT FOOT FEE IN AN AMOUNT EQUAL TO 7.35 PERCENT OF THE CONTRACT PRICE. FOR THE REASONS ABOVE INDICATED, WE OFFER NO OBJECTION TO MODIFICATION OF THE CONTRACT SO AS TO RELIEVE THE CONTRACTOR FROM LIABILITY FOR PAYMENT OF THE REFERRED-TO ACREAGE FEE AND FRONT FOOT FEE.

IN YOUR LETTER YOUR PRESENT THE QUESTION AS TO WHETHER THE GENERAL SERVICES ADMINISTRATIVE IS AUTHORIZED TO PAY THE CHARGES IN QUESTION " " * * * EVEN THOUGH THESE CHARGES ARE CALLED "FEES" , "PERMITS" AND "CONNECTION" CHARGES BUT ARE SUBSEQUENTLY USED FOR SEWERAGE CONSTRUCTION FUNDS.'" IN OUR DECISION OF NOVEMBER 6, 1959, IT WAS STATED:

"WHILE THE GOVERNMENT MAY NOT BE SUBJECTED TO OR REQUIRED TO PAY A SPECIAL ASSESSMENT OR TAX SOUGHT TO BE LEVIED AGAINST IT, IT HAS BEEN HELD THAT IN THE CASE OF THE CONNECTION OF A NEW GOVERNMENT BUILDING WITH A MUNICIPALLY CONSTRUCTED AND OWNED SEWER A CHARGE MADE BY THE MUNICIPALITY FOR THE PRO RATA COST OF THE CONSTRUCTION OF THE SEWER, THE GOVERNMENT AUTHORITIES BEING ADVISED BEFORE THE CONNECTION WAS MADE THAT THERE WOULD BE SUCH A CHARGE, WAS A CHARGE FOR THE PRIVILEGE OF CONNECTING THE BUILDING WITH THE SEWER AND, AS SUCH, WAS A PROPER CHARGE AGAINST THE UNITED STATES. 9 COMP. GEN. 41; 19 ID. 778. THE PRINCIPLE OF THOSE DECISIONS APPEARS APPLICABLE IN THE INSTANT MATTER, WHETHER IT INVOLVES NEW CONSTRUCTION OR REMODELING OR IMPROVEMENT OF BUILDINGS OR OTHER STRUCTURES, SINCE IT INVOLVES A CONNECTION OR CONNECTIONS WITH A MUNICIPALLY OWNED SEWER. THE FACT THAT THE AMOUNT OF THE CHARGES IS REQUIRED BY THE ORDINANCE TO BE DEPOSITED IN A SEWER CONSTRUCTION ACCOUNT DOES NOT REQUIRE ANY DIFFERENT CONCLUSION. IN MOST INSTANCES, CHARGES FOR SEWER CONNECTIONS PRESUMABLY ARE USED FOR COST OF CONSTRUCTION.'

FOR THE REASONS SET OUT IN THE ABOVE-QUOTED PARAGRAPH, PAYMENT OF THE REFERRED-TO ACREAGE FEE AND FRONT FOOT FEE MAY BE MADE BY THE GENERAL SERVICES ADMINISTRATION FROM FUNDS AVAILABLE FOR THE ..END :

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