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TO THE SECRETARY OF THE TREASURY: WE HAVE RECEIVED A REPORT FROM THE ASSISTANT SECRETARY. WERE HEARD AND REJECTED BY ESPECIALLY APPOINTED COAST GUARD BOARD OF CONTRACT APPEALS ON OCTOBER 10 AND 11. THERE WAS NO WRITTEN RECORD OF ADVERSARY PROCEEDINGS BEFORE THE BOARD FOR THE COMMANDANT TO REVIEW AND FOR HIM TO REBUT. IT SHOULD BE NOTED THAT WHILE CONGRESS HAS RECOGNIZED THAT DISPUTES ARE SETTLED ADMINISTRATIVELY ACCORDING TO CONTRACTUAL DISPUTES CLAUSES. SINCE THE DISPUTES PROCEDURE IS GENERALLY NOT AN ADJUDICATION REQUIRED BY STATUTE. THE ONLY RELEVANT REQUIREMENTS ARE THOSE SET FORTH BY THE ADMINISTRATIVE AGENCY OR IN THE DISPUTES CLAUSE OF THE GENERAL PROVISIONS OF THE SUBJECT CONTRACT.

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B-152346, NOV. 22, 1963

TO THE SECRETARY OF THE TREASURY:

WE HAVE RECEIVED A REPORT FROM THE ASSISTANT SECRETARY, DATED AUGUST 13, 1963, ON CLAIMS SUBMITTED TO OUR OFFICE BY A LETTER DATED JULY 18, 1963, FROM PACIFIC GENERAL CONSTRUCTION COMPANY, INC., AND AMERICAN SERVICE, INC., HEREINAFTER REFERRED TO AS THE CONTRACTOR, FOR COMPENSATION IN ADDITION TO THAT ALREADY PAID UNDER CONSTRUCTION CONTRACT T17CG-1053 WITH THE UNITED STATES COAST GUARD FOR WORK PERFORMED IN 1960 ON SITKINAK ISLAND, ALASKA. THE FOUR CLAIMS PRESENTED TO THIS OFFICE FOR CONSIDERATION, ALONG WITH SEVERAL OTHERS, WERE HEARD AND REJECTED BY ESPECIALLY APPOINTED COAST GUARD BOARD OF CONTRACT APPEALS ON OCTOBER 10 AND 11, 1961. THE CONTRACTOR THEN OBJECTED TO THE FACT THAT WHILE THE COMMANDANT OF THE COAST GUARD ALLEGEDLY HAD AGREED TO RECONSIDER THE RECOMMENDATIONS OF THIS BOARD, THERE WAS NO WRITTEN RECORD OF ADVERSARY PROCEEDINGS BEFORE THE BOARD FOR THE COMMANDANT TO REVIEW AND FOR HIM TO REBUT.

IT SHOULD BE NOTED THAT WHILE CONGRESS HAS RECOGNIZED THAT DISPUTES ARE SETTLED ADMINISTRATIVELY ACCORDING TO CONTRACTUAL DISPUTES CLAUSES, THE DISPUTES PROCEDURE ITSELF GENERALLY HAS NO STATUTORY FOUNDATION. SEE 41 U.S.C. 321. SINCE THE DISPUTES PROCEDURE IS GENERALLY NOT AN ADJUDICATION REQUIRED BY STATUTE, THE PROVISIONS OF THE ADMINISTRATIVE PROCEDURES ACT PERTAINING TO THE HEARINGS DO NOT APPLY IN THE INSTANT CASE. SEE 5 U.S.C. 1001 ET SEQ. THE ONLY RELEVANT REQUIREMENTS ARE THOSE SET FORTH BY THE ADMINISTRATIVE AGENCY OR IN THE DISPUTES CLAUSE OF THE GENERAL PROVISIONS OF THE SUBJECT CONTRACT, WHICH PROVIDES:

"EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THIS CONTRACT WHICH IS NOT DISPOSED OF BY AGREEMENT SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHO SHALL REDUCE HIS DECISION TO WRITING AND MAIL OR OTHERWISE FURNISH A COPY THEREOF TO THE CONTRACTOR. WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAY APPEAL BY MAILING OR OTHERWISE FURNISHING TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE HEAD OF THE DEPARTMENT, AND THE DECISION OF THE HEAD OF THE DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVES FOR THE HEARINGS OF SUCH APPEALS SHALL, UNLESS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN FRAUDULENT, ARBITRARY, CAPRICIOUS, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, BE FINAL AND CONCLUSIVE: PROVIDED, THAT, IF NO SUCH APPEAL TO THE HEAD OF THE DEPARTMENT IS TAKEN, THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE. IN CONNECTION WITH ANY APPEAL PROCEEDING UNDER THIS CLAUSE, THE CONTRACTOR SHALL BE AFFORDED AN OPPORTUNITY TO BE HEARD AND TO OFFER EVIDENCE IN SUPPORT OF ITS APPEAL. PENDING FINAL DECISION OF A DISPUTE HEREUNDER, THE CONTRACTOR SHALL PROCEED DILIGENTLY WITH THE PERFORMANCE OF THE CONTRACT AND IN ACCORDANCE WITH THE CONTRACTING OFFICER'S DECISION.'

APPARENTLY THE BASIS OF THE CONTRACTOR'S OBJECTION TO THE PROCEEDINGS IN OCTOBER OF 1961 WAS THAT IT WAS GIVEN TO UNDERSTAND THAT THE FINAL ARBITER OF THE DISPUTE WOULD BE THE HEAD OF THE DEPARTMENT RATHER THAN HIS DULY AUTHORIZED REPRESENTATIVES, AND THAT THE HEAD OF THE DEPARTMENT HAD NO RECORD FROM WHICH TO MAKE A DECISION. IT IS UNNECESSARY FOR US TO CONSIDER THE MERITS OF THIS CONTENTION, SINCE BY A LETTER DATED FEBRUARY 16, 1962, THE ASSISTANT SECRETARY OF THE TREASURY, ACTING AS YOUR DULY APPOINTED REPRESENTATIVE, ADVISED THE CONTRACTOR THAT IT COULD PRESENT ITS CASE FOR DE NOVO CONSIDERATION TO AN APPOINTED BOARD WHICH WOULD HAVE PREPARED A VERBATIM TRANSCRIPT. THE ASSISTANT SECRETARY INFORMED IT THAT IN ADDITION TO THE TRANSCRIPT THE FINAL DECISION WOULD---

"* * * BE BASED ON ALL OF THE MATERIAL IN THE FILE, INCLUDING, BUT NOT LIMITED TO, THE CONTRACT, ALL RELATED CORRESPONDENCE WITH THE CONTRACTOR, INSPECTION REPORTS, THE CONTRACTING OFFICER'S DECISION, THE APPEAL AND HIS REBUTTAL THERETO, AND ALL OTHER MATERIALS WHICH ALREADY HAVE BEEN SUBMITTED TO THE COAST GUARD BY THE CONTRACTOR. UPON YOUR REQUEST, THE ENTIRE FILE WILL BE AVAILABLE FOR YOUR EXAMINATION BEFORE THE HEARING. YOU DO NOT HAVE COPIES OF ANY OF THE MATERIAL, THEY WILL BE FURNISHED UPON PAYMENT OF THE FEES PRESCRIBED FOR COPIES. I WILL CONSIDER ALSO WHATEVER MATERIAL YOU WISH TO FILE DURING OR AFTER THE HEARING.'

ON MARCH 28 AND 29, 1962, THE CONTRACTOR PRESENTED ITS CASE TO THIS SECOND BOARD OF CONTRACT APPEALS, HEREINAFTER REFERRED TO AS THE BOARD. AFTER THE HEARINGS, IT SUBMITTED A MEMORANDUM, AND THE CONTRACTING OFFICER PREPARED A WRITTEN REBUTTAL DATED JUNE 5 TO THE MEMORANDUM AND TO THE EVIDENCE THE CONTRACTOR PRESENTED AT THE HEARINGS. THE CONTRACTOR WAS GIVEN A COPY OF THIS REBUTTAL AND RESPONDED TO IT. THE BOARD CONSIDERED THESE MEMORANDUMS AND THE MATTERS OUTLINED IN THE ASSISTANT SECRETARY'S LETTER OF FEBRUARY 16. IN REGARD TO THE FOUR CLAIMS APPEALED TO THIS OFFICE, THE BOARD RECOMMENDED DISALLOWANCE AND GAVE ITS REASONS FOR THIS RECOMMENDATION. ITS CONCLUSIONS AND REASONS WERE REVIEWED AT VARIOUS LEVELS OF THE UNITED STATES COAST GUARD AND THE DEPARTMENT OF THE TREASURY. ON DECEMBER 20, 1962, THE ASSISTANT SECRETARY NOTIFIED YOU THAT HE HAD DECIDED NOT TO ALLOW CLAIMS 1, 4, PART 2 OF 13, AND 14. THE CONTRACTOR SUBMITTED APPEAL BRIEFS TO THIS OFFICE UNDER COVER LETTERS DATED JULY 18 AND SEPTEMBER 25, 1963.

THE FOUR CLAIMS, WHICH WILL BE IMMEDIATELY AND INDIVIDUALLY CONSIDERED BELOW, ARE BASED ON THE CHANGES AND CHANGED CONDITIONS CLAUSES OF THE GENERAL PROVISIONS OF THE CONTRACT, WHICH PROVIDE:

"3. CHANGES

"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. ANY CLAIM OF THE CONTRACTOR FOR ADJUSTMENT UNDER THIS CLAUSE MUST BE ASSERTED IN WRITING WITHIN 30 DAYS FROM THE DATE OF RECEIPT BY THE CONTRACTOR OF THE NOTIFICATION OF CHANGE: PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, IF HE DETERMINES THAT THE FACTS JUSTIFY SUCH ACTION, MAY RECEIVE AND CONSIDER, AND ADJUST ANY SUCH CLAIM ASSERTED AT ANY TIME PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT. IF THE PARTIES FAIL TO AGREE UPON THE ADJUSTMENT TO BE MADE THE DISPUTE SHALL BE DETERMINED AS PROVIDED IN CLAUSE 6 HEREOF. BUT NOTHING PROVIDED IN THIS CLAUSE SHALL EXCUSE THE CONTRACTOR FROM PROCEEDING WITH THE PROSECUTION OF THE WORK AS CHANGED. EXCEPT AS OTHERWISE HEREIN PROVIDED, NO CHARGE FOR ANY EXTRA WORK OR MATERIAL WILL BE ALLOWED.

"4. CHANGED CONDITIONS

"THE CONTRACTOR SHALL PROMPTLY, AND BEFORE SUCH CONDITIONS ARE DISTURBED, NOTIFY THE CONTRACTING OFFICER IN WRITING 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. THE CONTRACTING OFFICER SHALL PROMPTLY INVESTIGATE THE CONDITIONS, AND IF HE FINDS THAT SUCH CONDITIONS DO SO MATERIALLY DIFFER AND CAUSE AN INCREASE OR DECREASE IN THE COST OF, OR THE TIME REQUIRED FOR, PERFORMANCE OF THIS CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT MODIFIED IN WRITING ACCORDINGLY. ANY CLAIM OF THE CONTRACTOR FOR ADJUSTMENT HEREUNDER SHALL NOT BE ALLOWED UNLESS HE HAS GIVEN NOTICE AS ABOVE REQUIRED; PROVIDED THAT THE CONTRACTING OFFICER MAY, IF HE DETERMINES THE FACTS SO JUSTIFY, CONSIDER AND ADJUST ANY SUCH CLAIM ASSERTED BEFORE THE DATE OF FINAL SETTLEMENT OF THE CONTRACT. IF THE PARTIES FAIL TO AGREE UPON THE ADJUSTMENT TO BE MADE, THE DISPUTE SHALL BE DETERMINED AS PROVIDED IN CLAUSE 6 HEREOF.'

CLAIM NO. 1

THIS CLAIM FOR $13,605.30 IS BASED ON THE CONTENTION THAT THE DIRECTION OF THE SLOPE OF THE TOP OF A PARKING AREA THE CONTRACTOR WAS REQUIRED TO CONSTRUCT, WHICH AREA ADJOINED AN EXISTING AIRCRAFT RUNWAY, WAS CHANGED BY A WRITTEN DIRECTIVE OF THE CONTRACTING OFFICER EARLY IN THE WORK, CAUSING AN INCREASE IN THE QUANTITY OF FILL REQUIRED TO BRING THE PARKING AREA UP TO A POSITION SLANTING 1 1/2 DEGREE FROM THE RUNWAY.

THE SURFACE OF THE PARKING APRON IS IN THE FORM OF A TRAPEZOID, AS SHOWN ON SHEET 2 OF DRAWING 108102, AND MAY BE VISUALIZED AS HAVING A VERTICAL LONG EDGE OR SIDE WHICH IS CONTIGUOUS WITH THE RUNWAY AND BOTH PARALLEL TO AND AT THE LEFT OF THE SHORT SIDE OF THE TRAPEZOID, WITH THE UPPER AND LOWER LEGS SLANTING TO THE RIGHT TO CONNECT THE LONG AND SHORT SIDES. GEOGRAPHIC NORTH IS MARKED AND SHOWN BY THE GRID COORDINATES TO RUN OBLIQUELY FROM THE LOWER RIGHT TO THE UPPER LEFT OF THE DRAWING, ROUGHLY PARALLEL WITH THE UPPER LEG OF THE TRAPEZOID.

NOTE 11 OF ADDENDUM 4 TO THE SPECIFICATION ORIGINALLY REQUIRED THE PARKING APRON TO BE FILLED SO THAT IT WOULD SLOPE DOWNWARD AT A 1 1/2 DEGREE ANGLE FROM THE RUNWAY, THAT IS, THE LONG SIDE OF THE AREA, TO THE "NORTHEAST" SIDE. THE ADDENDUM DID NOT SAY WHICH SIDE WAS THE "NORTHEAST" SIDE, ALTHOUGH THE GOVERNMENT INTENDED TO INDICATE THE SHORT SIDE, NOR DID IT GIVE A LOCUS OF DIRECTION FROM WHICH TO DETERMINE NORTHEAST. UNLIKE THE CIRCUMSTANCES WHICH WOULD HAVE PREVAILED IF THE AREA HAD BEEN IN THE FORM OF A RECTANGLE, OBTAINING A SIDE OR LEG WHICH FORMS A PERPENDICULAR INTERSECTION WITH A LINE DRAWN IN A NORTHEASTERLY DIRECTION DEPENDS UPON THE LOCUS WITHIN THE TRAPEZOID FROM WHICH THE LINE IS DRAWN. ACCORDINGLY, THE UPPER LEG OF THE TRAPEZOID COULD BE CONSIDERED EITHER THE EAST OR THE NORTHEAST SIDE.

ON APRIL 25, 1960, THE CONTRACTOR TELEPHONED THE CONTRACTING OFFICER. THE CONTRACTING OFFICER REPORTS THAT THE CONTRACTOR STATED THAT IT COULD NOT UNDERSTAND WHAT SLOPE WAS REQUIRED FOR THE PARKING APRON BECAUSE IT COULD NOT TELL FROM ADDENDUM 4 WHERE THE NORTHEAST EDGE OF THE PARKING APRON WAS. ALLEGEDLY, THE CONTRACTOR STATED THAT IT THOUGHT A SLOPE PERPENDICULAR TO THE RUNWAY WAS PROPERLY REQUIRED SINCE A DIAGONAL SLOPE TO THE APRON WOULD GIVE A SLOPE LONGER THAN 1 1/2 DEGREES PERPENDICULAR TO THE RUNWAY, RESULTING IN AN UNDESIRABLE FACILITY. THE CONTRACTOR STATED BEFORE THE BOARD THAT WHILE IT DID NOT RECALL THE EXACT CONVERSATION WITH THE CONTRACTING OFFICER, IT WAS INITIATED BECAUSE ITS ENGINEER HAD POINTED OUT TO IT THAT THE FACILITY CALLED FOR IN THE SPECIFICATIONS WAS PERHAPS NOT DESIRABLE. THE CONTENT OF ITS TESTIMONY IMPLIEDLY SUGGESTS THAT IT DID NOT CONFESS IGNORANCE AS TO THE LOCATION OF THE NORTHEAST SIDE.

THE DAY AFTER THE TELEPHONE CONVERSATION, APRIL 26, LIEUTENANT COMMANDER R. B. LONG, CHIEF, CIVIL ENGINEERING SECTION OF THE 17TH DISTRICT, WROTE TO THE CONTRACTOR AND CHANGED THE SPECIFICATIONS TO REQUIRE THAT THE PARKING APRON SLOPE FROM ITS LONG SIDE TO THE "SOUTHEAST" SIDE RATHER THAN THE "NORTHEAST" SIDE. IT WAS UNDERSTOOD THAT THE "SOUTHEAST" SIDE WAS THE SHORT SIDE OF THE TRAPEZOID. FOR THE PURPOSES OF ARGUMENT, WE ASSUME THAT THIS LETTER WAS WRITTEN WITH THE KNOWLEDGE AND AT THE REQUEST OF THE CONTRACTING OFFICER.

NO FURTHER COMMUNICATION ENSUED BETWEEN THE CONTRACTOR AND THE COAST GUARD UNTIL AUGUST 19, 1960, WHEN THE CONTRACTOR WROTE A LETTER TO THE COMMANDER OF THE COAST GUARD REQUESTING ADDITIONAL PAYMENT OF $25,190 FOR EXTRA WORK PERFORMED IN COMPLIANCE WITH THE LETTER OF APRIL 26. IN A LETTER OF AUGUST 31, 1960, THE CONTRACTING OFFICER DENIED THIS CLAIM AND SAID THAT THE SCOPE OF THE CONTRACT HAD NOT BEEN BROADENED BY THE LETTER OF APRIL 26, WHICH HE REGARDED AS A CLARIFICATION RATHER THAN A CHANGE ORDER. FURTHERMORE HE STATED:

"IF YOU THOUGHT YOU HAD A BONA FIDE CLAIM BASED ON OUR LETTER OF 26 APRIL 1960, YOU SHOULD HAVE ASSERTED SUCH CLAIM WITHIN 30 DAYS AFTER RECEIPT OF THE LETTER AS IS CLEARLY SPELLED OUT IN PARA 3 OF STANDARD FORM 23A "GENERAL PROVISIONS (CONSTRUCTION CONTRACTS)," OF THE SPECIFICATIONS.'

IN A LETTER OF SEPTEMBER 7, 1960, TO THE COAST GUARD, THE CONTRACTOR OBJECTED TO THE CONTRACTING OFFICER'S INTERPRETATION OF THE LETTER OF APRIL 26, AND ALLEGED THAT THE ORIGINAL SPECIFICATIONS CLEARLY DELINEATED THE TOP OF THE SLOPE. ALTHOUGH THE CONTRACTOR STATED IN THE LETTER OF SEPTEMBER 7 THAT THE AMOUNT OF WORK OBVIOUSLY WAS BEING INCREASED BY THE CHANGE ORDER, ITS REPRESENTATIVE TESTIFIED BEFORE THE BOARD THAT IT WAS NOT AWARE THAT THE CHANGE ORDER INCREASED THE NEED FOR FILL UNTIL AROUND AUGUST 19, 1960, WHEN IT SUBMITTED THIS CLAIM FOR ADDITIONAL PAYMENT.

UPON APPEAL FROM THE CONTRACTING OFFICER'S DECISION, THE BOARD CONSIDERED THAT THE QUESTION FOR DECISION WAS WHETHER THE LETTER OF APRIL 26, 1960, CONSTITUTED A CHANGE ORDER UNDER CLAUSE 3 OF THE GENERAL PROVISIONS OF THE CONTRACT, QUOTED ABOVE, WHICH REQUIRED AN EQUITABLE ADJUSTMENT, OR MERELY CLARIFIED AN APPARENT MINOR ERROR OR OMISSION IN THE DRAWING OR SPECIFICATIONS. IN THE LATTER EVENT THE BOARD CONSIDERED THAT CLAUSE 7 OF ADDITIONAL GENERAL PROVISIONS (CONSTRUCTION CONTRACTS' SHORE STRUCTURES) WOULD BE CONTROLLING ON THIS ISSUE. THIS CLAUSE PROVIDED IN RELEVANT PART: "* * * THE CONTRACTOR SHALL TAKE NO ADVANTAGE OF ANY APPARENT MINOR ERROR OR OMISSION IN THE DRAWINGS AND SPECIFICATIONS, AND THE CONTRACTING OFFICER WILL MAKE SUCH CORRECTIONS AND INTERPRETATIONS AS MAY BE DEEMED NECESSARY FOR THE FULFILLMENT OF THE INTENT OF THE DRAWINGS AND SPECIFICATIONS. * * *" ON THE POINT, SEE DISCUSSION IN WPC ENTERPRISES, INCORPORATED V. UNITED STATES, CT.CL.NO. 256-59, DECIDED OCTOBER 11, 1963.

THE BOARD PROCEEDED TO HEAR, CONSIDER AND, UPON REQUEST, RECOMMEND DENIAL OF THE CONTRACTOR'S CLAIM ON THE MERITS. IRRESPECTIVE OF THE MERITS OF THE CLAIM, THE RECORD SHOWS NO DISPUTE AS TO THE FACT THAT THE CONTRACTOR DID NOT PRESENT ITS CLAIM FOR ADJUSTMENT WITHIN THE PERIOD REQUIRED BY THE CONTRACT, I.E., 30 DAYS OF THE ISSUANCE OF THE CHANGE IN THE SPECIFICATIONS. THE QUESTION OF WHETHER A CLAIM IS TIMELY AND IN CONFORMITY WITH THE CONTRACT PROVISIONS IS ONE OF LAW. POLORON PRODUCTS, INC. V. UNITED STATES, 126 CT.CL. 816; 116 F.SUPP. 588 (1953). THEREFORE, IT MAY BE DECIDED BY THIS OFFICE. SEE 42 COMP. GEN.

- , B-150173, DATED JANUARY 11, 1963.

IT IS CLEAR UNDER THE LANGUAGE OF THE CHANGES CLAUSE OF THE CONTRACT THAT AN UNTIMELY CLAIM IS BARRED UNLESS THE CONTRACTING OFFICER CHOOSES TO WAIVE THE DEFENSE OF UNTIMELINESS. THE ARUNDEL CORPORATION V. UNITED STATES, 96 CT.CL. 77 (1942), AND CASES CITED THEREIN. THE BOARD ITSELF CANNOT WAIVE THE DEFENSE. SEE P.L.S. COAT AND SUIT CORP. V. UNITED STATES, 148 CT.CL. 296, 300-301; 180 F.SUPP. 400, 403 (1960). IN THE INSTANT CASE, THE CONTRACTING OFFICER HAS NOT ONLY NOT WAIVED THE DEFENSE, BUT HAS CONSISTENTLY RELIED UPON IT. ACCORDINGLY, SINCE CLAIM NO. 1 FOR $13,605.30 WAS NOT PRESENTED IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT TO WHICH THE CONTRACTOR HAD AGREED, WE FIND NO LEGAL BASIS ON WHICH THE CLAIM MIGHT BE ALLOWED. SEE 18 COMP. GEN. 232, CITING PLUMLEY V. UNITED STATES, 226 U.S. 545 (1913), AND B 140907, DATED NOVEMBER 6, 1961, CITING YUHASZ V. UNITED STATES, 109 F.2D 467 (7TH CIR. 1940).

CLAIM NO. 4

THIS CLAIM FOR $45,459 ARISES OUT OF THE DISPUTE OVER THE INTERPRETATION OF PART "V," PARAGRAPH 3B (2) OF THE SPECIFICATION:

"FINISHING OF EXPOSED CONCRETE SURFACES SHALL BE ACHIEVED BY POINTING OF THE SURFACES, WHERE REQUIRED, IMMEDIATELY UPON REMOVAL OF THE FORM WORK. HOLES, VOIDS AND HONEYCOMBS SHALL BE WETTED AND FILLED WITH 1:2 GROUT, TROWELLED SMOOTH. * * *"

ON JUNE 6, 1960, EARLY IN THE WORK, THE GOVERNMENT INSPECTOR ON THE SITE NOTED THE APPEARANCE IN THE EXPOSED WALL SURFACES OF SMALL HOLES, VARIOUSLY REFERRED TO AS AIR BUBBLES, HONEYCOMB OR SMALL PITS, HAVING DIAMETERS UP TO 0.25 OF AN INCH. EXPERIMENTS WERE UNDERTAKEN TO ELIMINATE THESE HOLES. IN A LETTER DATED JUNE 14, 1960, THE CONTRACTOR ADVISED THE COMMANDER OF THE 17TH COAST GUARD DISTRICT THAT THE EXPERIMENTS TO REMOVE THE SMALL HOLES HAD BEEN UNSUCCESSFUL, AND THAT THE ONLY WAY TO FILL THEM WAS BY GRINDING AND SACKING. THE CONTRACTOR BELIEVED THAT WHILE THE FILLING OF SMALL HOLES OF SOMEWHAT GREATER DIAMETER WAS REQUIRED BY THE SPECIFICATIONS, THE FILLING OF ALLEGEDLY INCONSEQUENTIAL PITS OF THIS SIZE WAS NOT, AND WOULD NOT ENTITLE IT TO ADDITIONAL COMPENSATION IF SUCH WORK WAS PERFORMED.

THE EXPERIMENTS CONTINUED. THE INSPECTOR ADVISED THE CONTRACTOR'S SUPERINTENDENT OF A METHOD SUGGESTED BY THE DISTRICT OFFICE FOR PLACING CONCRETE, AND IT WAS AGREED THAT THIS METHOD WOULD BE EMPLOYED IN THE NEXT POUR OF CONCRETE. ON JUNE 22, THE DISTRICT OFFICE ADVISED THE CONTRACTOR THAT IN ITS OPINION THE SPECIFICATIONS REQUIRED THE SMALL PITS TO BE FILLED. ON JUNE 24, THE INSPECTOR RECORDED IN HIS DAILY LOG THAT AT THE BEGINNING OF THE CONCRETE POUR OF THAT DAY THE CONTRACTOR'S LABOR FOREMAN BEGAN TO FOLLOW HIS INSTRUCTIONS AS TO THE METHOD SUGGESTED BY THE DISTRICT OFFICE. HOWEVER, HE ALSO RECORDED THAT SUCH OBEDIENCE DID NOT LAST LONG AND, AFTER REPEATED PRODDINGS, ONLY A FEEBLE EFFORT WAS MADE TO CARRY OUT THE PROCESS. NONETHELESS, IT WAS DISCOVERED ON JUNE 28, WHEN THE WALL FORMS WERE STRIPPED, THAT THE WALLS WERE MUCH FREER FROM AIR BUBBLES THAN ON ANY PREVIOUS POUR. IN THE JUDGMENT OF THE INSPECTOR, THE CONTRACTOR SHOULD BE HELD RESPONSIBLE FOR THE NUMEROUS AIR POCKETS BECAUSE OF ITS FAILURE TO DILIGENTLY COMPLY WITH REPEATED INSTRUCTIONS AS TO HOW TO ELIMINATE THESE HOLES THROUGH PROPER WORKMANSHIP.

IN A LETTER OF JULY 12, 1960, THE CONTRACTOR AGAIN OBJECTED TO THE COMMANDER OF THE 17TH DISTRICT ABOUT THE REQUIREMENT THAT THE SMALL PITS BE FILLED AND OFFERED TO GRIND, FLOAT AND SACK THE WALLS FOR $45,459. THE ESSENCE OF THE CONTRACTOR'S CONTENTION WAS THAT THE SMALL PITS WERE NOT DUE TO POOR WORKMANSHIP BUT WERE UNIVERSALLY INEVITABLE. IN SUPPORT OF THIS CONCLUSION, IT CITED AND QUOTED PARTS FROM A REPORT OF THE CORPS OF ENGINEERS, ALASKA DISTRICT, WHICH ALLEGEDLY INVOLVED THE RESULTS OF EXTENSIVE TESTS TO ELIMINATE PROBLEMS OF SMALL PITS IN VERTICAL WALL SURFACES. IN TELEGRAMS TO AND FROM THE COMMANDER OF THE 17TH DISTRICT, ON JULY 19, THE CONTRACTOR REFUSED TO FILL THE SMALL PITS WITHOUT A SPECIFIC DIRECTIVE, AND RECEIVED A DIRECTIVE TO PROCEED AND SUBMIT AN APPEAL AS PROVIDED FOR IN THE DISPUTES CLAUSE IF IT CONSIDERED THIS WORK TO BE BEYOND THE SCOPE OF THE CONTRACT. ON JULY 21, IN RESPONSE TO A REQUEST FROM THE CONTRACTOR, THE COAST GUARD AGREED TO THE USE OF RUBBER FLOAT INSTEAD OF TROWEL IF RESULTS SATISFACTORY TO THE AGENCY WERE NONETHELESS OBTAINED.

BY LETTER OF NOVEMBER 10, 1960, THE CONTRACTING OFFICER OFFICIALLY ENTERED THIS DISPUTE AND REPLIED TO THE CONTRACTOR'S LETTER OF JULY 12. THE CONTRACTING OFFICER STATED THAT THE CONTRACTOR WAS FACTUALLY INCORRECT IN ITS ASSUMPTION THAT THE SMALL PITS COULD NOT BE FILLED WITH GROUT TROWELLED SMOOTH. HE ALSO STATED "YOUR POINTS SUPPORTED BY THE CORPS OF ENGINEERS MAY BE WELL TAKEN, HOWEVER, REGARDLESS OF "INEVITABILITY" OF HOLES THE SPECIFICATION CALLED FOR THE PATCHING OF THESE HOLES.' HOWEVER, NO SPECIFIC FINDING WAS MADE AS TO WHETHER THE AIR BUBBLES WERE INEVITABLE EVEN WITH THE BEST OF WORKMANSHIP.

THE CONTRACTING OFFICER'S DECISION WAS APPEALED TO THE BOARD. THE CONTRACTOR APPEARS TO HAVE ASSUMED THAT THE ONLY ISSUE BEFORE THE BOARD WAS WHETHER THE SPECIFICATIONS COULD REASONABLY BE INTERPRETED TO REQUIRE THE SMALL PITS TO BE TROWELLED SMOOTH. THE CONTRACTOR'S EVIDENCE WAS DIRECTED PRIMARILY TO THIS POINT, AND IT DID NOT INTRODUCE THE REPORT FROM THE CORPS OF ENGINEERS, ALTHOUGH IT DID REFER TO THE STATEMENT OF THE CONTRACTING OFFICER, QUOTED IN THE FOREGOING PARAGRAPH, REGARDING THIS REPORT. THE CONTRACTOR ALSO CITED SEVERAL DECISIONS OF BOARDS OF CONTRACT APPEALS, WHICH APPEAR TO ACCEPT THAT AIR HOLES ARE CHARACTERISTIC OF CONCRETE POURED ON A NONABSORPTIVE FORM.

AFTER HEARINGS, THE CONTRACTING OFFICER SUBMITTED A BRIEF TO SUPPORT AND DOCUMENT THE POSITION OF THE PROCURING ACTIVITY. AMONG OTHER ARGUMENTS REGARDING THIS CLAIM, THE CONTRACTING OFFICER CONTENDED THAT THE INSPECTOR'S LOG SHOWED THAT THE PITS WERE DUE TO POOR WORKMANSHIP. REFERENCED PAGES IN THE LOG DEALING WITH THE INSPECTOR'S COMMENTS OF JUNE 24, WHICH HAVE ALREADY BEEN SET FORTH ABOVE AND WHICH INVOLVED POURS OF CONCRETE FOR THE WALLS, AND PAGES DEALING WITH THE MIXTURE AND POURING OF CONCRETE FOR FOOTINGS, A MATTER NOT RELEVANT TO THIS CLAIM.

IN ITS REBUTTAL BRIEF, THE CONTRACTOR STATED THAT THE REFERENCES TO THE INSPECTOR'S LOG INVOLVED FOOTINGS AND NOT THE WALLS. THIS IMPLICATION THAT THE REFERENCES TO THE LOG ARE IRRELEVANT IS PARTIALLY INCORRECT. UPON REVIEW, THE BOARD RELIED UPON THE OPINION OF THE INSPECTOR AND DENIED RELIEF ON THE BASIS THAT THE SMALL PITS IN QUESTION RESULTED FROM POOR WORKMANSHIP.

THE FOREGOING CHRONOLOGY SHOWS THAT TWO FACTUAL QUESTIONS SHOULD BE CRITICAL TO THE DISPOSITION OF THIS CLAIM. FIRST, WERE THE SMALL PITS CAUSED BY POOR OR INADEQUATE WORKMANSHIP? THE GOVERNMENT INSPECTOR INDICATES THEY WERE. THE CONTRACTOR SAYS THAT A REPORT FROM THE CORPS OF ENGINEERS PROVES THAT AIR BUBBLES OF THIS NATURE CANNOT BE ELIMINATED BY GOOD WORKMANSHIP BUT ARE INEVITABLE, AND THAT DECISIONS OF OTHER BOARDS ACCEPT THIS FACT. THE CONTRACTING OFFICER BYPASSED THE QUESTION, AND THE BOARD RELIED UPON THE OPINION OF THE INSPECTOR. UNDER THE BOARD'S VIEW, IT IS UNNECESSARY TO REACH THE SECOND QUESTION, I.E., WHETHER THE SPECIFICATION WAS REASONABLY INTERPRETED TO REQUIRE THE FILLING OF HONEYCOMB WHICH ALLEGEDLY WAS A NATURAL AND EXPECTED PHENOMENON IN THIS TYPE OF CONSTRUCTION IN THIS AREA.

IN OUR VIEW, THE FACT THAT THE BOARD NEITHER HAD BEFORE IT NOR CONSIDERED THE REPORT OF THE CORPS OF ENGINEERS IS FATAL TO A FAIR CONSIDERATION OF THE CLAIM. THE WUNDERLICH ACT, APPROVED MAY 11, 1954, CH. 199, 68 STAT. 81, 41 U.S.C. 321, PROVIDES IN EFFECT THAT THE DECISION OF THE BOARD ON THE MATTER AT HAND CANNOT BE CONSIDERED FINAL UNLESS IT IS "SUPPORTED BY SUBSTANTIAL EVIDENCE.' THE BOARD MAY WISH TO GIVE CONSIDERABLE WEIGHT TO THE OPINION OF THE INSPECTOR THAT IF THE CONTRACTOR HAD FOLLOWED INSTRUCTIONS MORE CLOSELY THE CONCRETE WOULD NOT HAVE BEEN POCKMARKED. HOWEVER, REGARDLESS OF THE WEIGHT ALLOCATED TO THE INSPECTOR'S VIEWS, WE DO NOT THINK THIS EVIDENCE ALONE MAY BE TAKEN TO SUBSTANTIALLY SUPPORT THE BOARD'S CONCLUSION WITHOUT SOME REASONABLE BASIS TO DISMISS THE EXPERT OPINION OF THE CORPS OF ENGINEERS, WHICH ALLEGEDLY IS DIRECTLY CONTRARY TO THAT OF THE INSPECTOR AND WHICH INITIALLY WAS IMPLICITLY ACCEPTED AND HAS NEVER BEEN DIRECTLY REBUTTED BY THE CONTRACTING OFFICER. WE DO NOT MEAN TO SUGGEST THAT THE REPORT OF THE CORPS OF ENGINEERS IS CONTROLLING. SINCE WE DO NOT HAVE THE BENEFIT OF HAVING SEEN THIS REPORT, WE DO NOT EVEN KNOW HOW RELEVANT IT IS. HOWEVER, WE DO KNOW THAT THE CONTRACTOR AND THE CONTRACTING OFFICER BELIEVED IT TO BE RELEVANT. UNDER THESE CIRCUMSTANCES, WE MUST HOLD THAT THE FINDING CONCERNING THE CAUSE OF THE SMALL PITS MAY NOT BE CONSIDERED FINAL AND CONCLUSIVE UNTIL THE BOARD CONSIDERS AND GIVES TO THE CORPS OF ENGINEERS' REPORT WHATEVER WEIGHT IT BELIEVES IT IS ENTITLED TO. SINCE THE CONTRACTOR WAS APPARENTLY UNAWARE THAT THIS QUESTION WAS IN ISSUE BEFORE THE BOARD, IT MAY WISH NOW TO SUBMIT INFORMATION IN ADDITION TO THE CORPS OF ENGINEERS' REPORT TO SUPPORT ITS CONTENTION.

IF UPON RECONSIDERATION THE BOARD SHOULD DECIDE THAT THE SMALL HOLES WERE NOT CAUSED BY POOR WORKMANSHIP, WE THINK IT MUST THEN RULE UPON THE CORRECTNESS OF THE DETERMINATION BY THE CONTRACTING OFFICER THAT THE SMALL PITS COULD IN FACT BE TROWELLED SMOOTH. IF IT FINDS THAT TROWELLING IS A PRACTICABLE PROCEDURE FOR FILLING HOLES OF THIS SMALL SIZE, WE SEE NO REASON TO LIMIT THE APPARENT MEANING OF "HOLES, VOIDS AND HONEYCOMBS," AS USED IN THE SPECIFICATION, TO EXCLUDE THE SMALL PITS. ON THE OTHER HAND, IF IT IS ESTABLISHED THAT NO CONTRACTOR IN THE AREA WOULD REASONABLY UNDERTAKE TO FINISH THE PITTED SURFACE BY TROWELLING HOLES MEASURING LESS THAN 0.25 INCH IN DIAMETER, IT MAY BE THAT THE SPECIFICATION SHOULD BE INTERPRETED TO REQUIRE THE FILLING ONLY OF THOSE SIZED HOLES WHICH ARE CUSTOMARILY TROWELLED SMOOTH. IN THE LATTER EVENT, IT IS OUR OPINION THAT THE BOARD SHOULD FURTHER DETERMINE THE MOST PRACTICABLE AND ECONOMICAL METHOD BY WHICH THE EXTRA WORK COULD HAVE BEEN PERFORMED, AND ALLOW PAYMENT OF A SUM REPRESENTING THE REASONABLE COST AND PROFIT FOR EMPLOYING SUCH METHOD.

CLAIM NO. 4 FOR $45,459 IS ACCORDINGLY RETURNED FOR FURTHER CONSIDERATION BY THE BOARD.

CLAIM NO. 13, PART 2

THIS CLAIM FOR $310,299.86, WHICH SHOULD BE REDUCED BY $16,015.94 BECAUSE OF AN ERROR IN CALCULATING ALLEGED DAMAGES, ARISED OUT OF THE FACT THAT ALTHOUGH A GOVERNMENT SURVEY SHOWED 24 FOOTINGS ON WHICH CERTAIN BUILDINGS WERE TO BE CONSTRUCTED, THE CONTRACTING OFFICER REQUIRED THE CONTRACTOR TO MAKE CHANGES IN THE FIELD AS DIRECTED BY THE GOVERNMENT INSPECTOR SO THAT ALL NECESSARY FOOTINGS WOULD REACH A SUBSOIL LEVEL HAVING A BEARING CAPACITY OF 3,000 POUNDS PER SQUARE FOOT, AS REQUIRED BY THE SPECIFICATIONS. ADDENDUM 4 OF THE CONTRACT ANTICIPATES THESE CHANGES TO THE EXTENT OF ADVISING BIDDERS, IN EFFECT, THAT NEITHER THE ROUGHLY LEVEL FOOTING LINE ORIGINALLY SHOWN ON THE CONTRACT DRAWINGS NOR THE ONE DRAWN THREE FEET LOWER FOR PURPOSES OF BIDDING WAS A BUILDING LINE, AND THAT THE ACTUAL FOOTING WOULD REQUIRE ADDITIONAL EXCAVATION FOR CONCRETE WORK. ALSO, SHEETS 9, 20, 22 AND 36 OF THE ORIGINAL DRAWINGS SHOW A STEPPED FOOTING AS REQUIRED TO MEET VARYING SOIL CONDITIONS. ACCORDINGLY, ADDENDUM 4 PROVIDED:

"BIDDERS SHALL FURNISH THE FOLLOWING UNIT PRICES WHICH WILL BE USED FOR ISSUING A CHANGE ORDER TO COVER THE CHANGED FOUNDATION CONDITIONS WHICH WILL BE BASED ON A DETAILED SUB-SURFACE SURVEY NOW BEING MADE. THIS CHANGE ORDER WILL BE ISSUED PROMPTLY AFTER CONTRACT AWARD TO PREVENT DELAY IN ORDERING ADDITIONAL MATERIALS REQUIRED.

"/1) ADDITIONAL UNCLASSIFIED EXCAVATION CONSISTING OF TUNDRA AND CLAY. UNIT PRICE PER CUBIC YARD---------------------$---------------

"/2) ADDITIONAL CLASSIFIED BACKFILL MATERIAL. UNIT PRICE PER CUBIC YARD-

"/3) ADDITIONAL REINFORCED CONCRETE FOR FOOTINGS, FOUNDATION WALLS, PIERS, ETC. UNIT PRICE PER CUBIC YARD---------------$-------------- " ACCORDANCE WITH THE LANGUAGE QUOTED ABOVE, THE CONTRACTOR WAS GIVEN A GOVERNMENT SURVEY, DATED MARCH 17, SHOWING A TOTAL OF 24 STEPPED FOOTINGS. HOWEVER, THE DRAWING CONTAINED THE FOLLOWING NOTE:

"THE PROPOSED CHANGED FOOTING LINE IS ASSUMED TO MEET ACTUAL SOIL CONDITIONS AT SITE BASED ON FIELD DATA OBTAINED 26, FEBRUARY 1960, BUT SHALL BE VARIED AS NECESSARY TO SUIT ACTUAL CONDITIONS AT THE SITE AS DIRECTED BY THE GOVERNMENT SUPERINTENDING OFFICER.'

ON APRIL 18, 1960, AFTER DISCUSSIONS WITH THE CONTRACTOR AND AFTER THE CONTRACTOR HAD REDUCED ITS PRICE FOR CONCRETE FROM $400 TO $300, THE CONTRACTING OFFICER ISSUED A CHANGE ORDER, WHICH CONTAINED THE FOLLOWING LANGUAGE:

"BASED ON THE BELOW FINDING OF FACT, THE TOTAL AMOUNT DUE UNDER THE CONTRACT IS INCREASED BY THE AMOUNT OF $21,478.50:

"THAT THE FOOTINGS AS DEFINED BY THE CONTRACT DO NOT EXTEND, IN ALL INSTANCES, TO THE CLAY LINE. THAT IT IS DESIRED TO CARRY ALL FOOTINGS OF THE BARRACKS BUILDING AND SIGNAL AND POWER BUILDING TO THE CLAY LINE AS SHOWN ON DRAWINGS NO. 108136 AND 108120 INCLUDING REVISION NO. 1.

"FURNISH AN ADDITIONAL 48.72 CUBIC YARDS OF CONCRETE AT $360.00 PER CUBIC YARD--- $14,616.00

"FURNISH AN ADDITIONAL 256.12 CUBIC YARDS OF EXCAVATION AT $6.00 PER CUBIC YARD--- $2,049.00

"FURNISH AN ADDITIONAL 481.55 CUBIC YARDS OF BACKFILL AT $10.00 PER CUBIC YARD--- $4,813.50

TOTAL--- $21.478.50

"THAT NO CHANGE SHALL BE MADE IN FINISHED FLOOR ELEVATIONS FROM THOSE SHOWN.

"IF THE CLAY LINE IS NOT AS SHOWN ON DRAWINGS, NO. 108136 AND 108120, A CHANGE IN FOOTING ELEVATIONS WILL BE THE SUBJECT OF A SUBSEQUENT CHANGE ORDER.

"THE CONTRACT PRICE FOR ADDITIONAL REINFORCED CONCRETE IS HEREBY CHANGED TO READ $300.00 PER CUBIC YARD IN LIEU OF $400.00 PER CUBIC YARD.'

IN A LETTER OF APRIL 29, 1960, THE CONTRACTOR OBJECTED TO THE CHANGE ORDER. IT WAS SUBSEQUENTLY REVISED ON MAY 12 TO PROVIDE AS FOLLOWS:

"BASED ON THE BELOW FINDING OF FACT, THE TOTAL AMOUNT DUE UNDER THE CONTRACT IS INCREASED BY AN AMOUNT NOT TO EXCEED $27,600.00.

"THAT THE FOOTINGS AS DEFINED BY THE CONTRACT DO NOT EXTEND IN ALL INSTANCES TO THE CLAY LINE. THAT IT IS DESIRED TO CARRY ALL FOOTINGS OF THE BARRACKS BUILDING AND SIGNAL AND POWER BUILDING TO THE CLAY LINE AS SHOWN ON DRAWING NO. 108136 AND 108120 INCLUDING REVISION NO. 1 AND CROSS SECTION DRAWING DATED MARCH 12, 1960, REVISED MARCH 17, 1960. THAT ADDENDUM NO. 4 STATED THAT FOOTING DEPTHS WERE VARIABLE AND FOR BASIS OF BID SHOULD BE THREE FEET LOWER THAN SHOWN ON DRAWING NO. 108120 AND 108136.

"VARIATIONS IN THE FOOTING LINE SHALL BE MADE AS NECESSARY AND AS DIRECTED BY THE GOVERNMENT INSPECTOR TO MEET ANY VARIATIONS IN THE ACTUAL CLAY LINE IF IT IS OTHER THAN THE ESTIMATED LINE SHOWN. ALL INCREASES IN CONCRETE WORK, EXCAVATION, AND BACKFILL WILL BE PAID FOR AT THE FOLLOWING RATES.

2. CLASSIFIED BACKFILL....................$ 10.00 PER CU.YD.

3. UNCLASSIFIED EXCAVATION TUNDRA

AND CLAY....................................$ 8.00 PER CU.YD.

"PAYMENT WILL BE BASED ON THE AMOUNT OF WORK ACTUALLY PERFORMED IN EXCESS OF CONTRACT QUANTITIES. EXCAVATION SHALL BE ONLY AS NECESSARY AND AS APPROVED BY THE GOVT. INSPECTOR.'

AMONG OTHER REASONS FOR OBJECTING TO THE INITIAL CHANGE ORDER NO. 1, THE CONTRACTOR WROTE IN ITS LETTER OF APRIL 29 THAT UNLESS THE INFORMATION GIVEN ON THE DRAWING DATED MARCH 17 WAS MADE A PART OF THE CONTRACT, IT COULD NOT DETERMINE QUANTITIES OF CONCRETE, EXCAVATION AND BACKFILL, AND WOULD BE AT A FURTHER DISADVANTAGE OF BEING UNABLE TO PREFABRICATE FORMS UNTIL THE EXCAVATION WAS OPENED. IT ALSO STATED THAT ANY INCREASE IN FOUNDATION WORK MIGHT REQUIRE A TIME EXTENSION. IT REFUSED TO SIGN THE CHANGE ORDER IN EITHER ITS ORIGINAL OR REVISED FORM. UNDER PROTEST, THE CONTRACTOR WAS DIRECTED ON MAY 18 TO VARY THE FOOTING LINE SHOWN ON THE DRAWING OF MARCH 17 ACCORDING TO INSTRUCTIONS GIVEN IN THE FIELD AS THE WORK PROGRESSED. ON OCTOBER 24, 1960, IT REQUESTED ADDITIONAL COMPENSATION. AFTER A FINAL ADVERSE FINDING OF FACTS BY THE CONTRACTING OFFICER, THE CONTRACTOR SUBMITTED A TIMELY APPEAL.

FOR PURPOSES OF THIS CLAIM, IT IS SUFFICIENT TO NOTE THAT THE CONTRACTOR WAS ENTITLED TO RELY UPON THE ORIGINAL CONTRACT DRAWINGS, NOTWITHSTANDING EXCULPATORY PROVISIONS OF THE CONTRACT, AND TO RECEIVE ADDITIONAL PAYMENT FOR ANY CHANGES IN THOSE DRAWINGS WHICH RESULTED IN EXTRA COSTS. SEE FEHLHABER CORPORATION V. UNITED STATES, 138 CT.CL. 571, 584-585; 151 F.SUPP. 817, 825 (1957), CERTIORARI DENIED, 355 U.S. 877 (1957). FURTHERMORE THERE APPEARS TO BE NO DISPUTE THAT BOTH PARTIES MUST HAVE KNOWN THAT THE FOOTINGS SHOWN ON THE ORIGINAL DRAWINGS WERE SUBJECT TO CHANGE; THAT CHANGES WERE IN FACT SHOWN IN A DRAWING DATED MARCH 17, AND ORDERED IN A CHANGE ORDER DATED MAY 12, 1960; THAT THESE CHANGES AND SUBSEQUENT ONES MADE IN THE FIELD RESULTED IN ADDITIONAL EXCAVATION, FILL AND REINFORCED CONCRETE FOR FOOTINGS; AND THAT IN REGARD TO THE CONCRETE WORK, INCLUDING THE CONCOMITANT FORMING WORK WHICH WOULD HAVE BEEN REQUIRED FOR THE 24 FOOTINGS SHOWN IN THE MARCH 17 DRAWING, THE GOVERNMENT WAS OBLIGATED BY ADDENDUM 4 TO MAKE NO ADDITIONAL PAYMENT FOR EXTRAWORK OTHER THAN $300 FOR EACH CUBIC YARD OF EXTRA CONCRETE.

HOWEVER, IT IS ALSO INDISPUTABLE THAT ADDENDUM 4 ADVISED THE CONTRACTOR THAT IT WOULD BE TOLD OF CHANGES IN FOUNDATION CONDITIONS PROMPTLY IN ORDER "TO PREVENT DELAY IN ORDERING ADDITIONAL MATERIALS REQUIRED.' THE CONTRACTOR SAYS THAT IT WAS TOLD OF THE CHANGES, I.E., THE 24 FOOTINGS SHOWN IN THE DRAWING OF MARCH 17, AND ACCORDINGLY ORDERED A STEEL SUPPLIER TO PRECUT THE NEEDED REINFORCED STEEL AND ITS CARPENTER TO PREFABRICATE THE WOODEN FORMS. THE COMPANY ARGUES THAT IT IS ENTITLED TO AN EQUITABLE ADJUSTMENT OVER AND ABOVE THE PAYMENT SCHEDULE IN ADDENDUM 4 BECAUSE, WHEN THE 24 FOOTINGS WERE ALLEGEDLY CHANGED AND ADDITIONAL ONES ORDERED, IT WAS FORCED TO DISCARD PREFABRICATED FORMS AND PRECUT REINFORCING STEEL, RUSH ORDER ADDITIONAL LUMBER AND STEEL, AND INCUR ADDED LABOR COSTS TO CUSTOM BUILD THE FORMS AND LAY THE FOOTINGS ON A TIME SCHEDULE COMMENSURATE WITH THE COMPLETION DATE OF THE CONTRACT. THESE VARIOUS COSTS ARE BROKEN DOWN IN DETAIL BY THE CONTRACTOR AND ARE DISPUTED BY THE CONTRACTING OFFICER.

THE BOARD DID NOT RESOLVE THE COST DISPUTE, BECAUSE IT AGREED WITH THE CONTRACTING OFFICER'S VIEW THAT SINCE THE CONTRACT CALLED FOR NO UNIT PRICES FOR BUILDING AND PLACING FORMS, PAYMENT FOR THAT WORK BEING INCLUDED IN THE UNIT PRICE OF PLACING EXTRA CONCRETE, THE CONTRACTOR WAS NOT ENTITLED TO BE PAID FOR COSTS RESULTING FROM A CHANGE IN THE FOOTING DESIGNS. IN THIS REGARD, THE COURT OF CLAIMS HOLDS IN CASES WHERE THE CONTRACTOR ALLEGEDLY HAS INCURRED EXTRA FORMING COSTS BECAUSE OF UNEXPECTED FOOTING CHANGES THAT THE CRITICAL ISSUE IS NOT WHETHER THE GOVERNMENT HAS SPECIFICALLY ASKED FOR UNIT PRICES FOR EXTRA FORM WORK, BUT WHETHER SUCH WORK IS THE KIND OF WORK TO WHICH THE UNIT PRICES ON EXTRA CONCRETE WORK WERE INTENDED TO APPLY. SEE CAUSES OF ACTIONS 11 AND 16 IN SILAS MASON COMPANY, INC. V. UNITED STATES, 116 CT.CL. 1, 166, 175 (1950). CF. GERHARDT F. MEYNE COMPANY V. UNITED STATES, 110 CT.CL. 527, 548-549; 76 F.SUPP. 811, 815 (1948). IN ORDER TO DETERMINE IN ANY GIVEN CASE WHETHER THE PARTIES INTENDED THAT UNIT PRICES FOR CONCRETE WORK WOULD COVER ADDITIONAL COSTS FOR FORM WORK, IT APPEARS FROM THE ABOVE CASES THAT THE COURT WILL CONSIDER WHETHER THE UNEXPECTED CHANGES IN DESIGN WERE SUCH AS TO REQUIRE THE CONTRACTOR TO EMPLOY METHOD OF ACCOMPLISHING THE FORM WORK WHICH WAS DIFFERENT FROM AND MORE EXPENSIVE THAN THAT PREVIOUSLY CONTEMPLATED.

IT IS WORTH NOTING AT THIS POINT THAT WHILE NOTHING IN THE CONTRACT PROHIBITS THE CONTRACTOR FROM USING PRECUT MATERIALS, IT IS SPECIFICALLY WARNED IN THE DRAWING OF MARCH 17 THAT THE FOOTING LINE MAY BE CHANGED TO MEET ACTUAL CONDITIONS. CONCEIVABLY, IF THE CONTRACTOR HAD BASED ITS PRICES FOR THIS WORK ON THE ASSUMPTION THAT FORMING MATERIALS COULD BE PREFABRICATED ACCORDING TO POST-BID INFORMATION, IT MIGHT HAVE HAD GOOD GROUNDS FOR TIMELY REQUESTING AN EQUITABLE ADJUSTMENT WHEN IT LEARNED FROM THE MARCH 17 DRAWING THAT THE GOVERNMENT WAS RESERVING AN OPTION TO FURTHER CHANGE THE FOOTING LINES AND IN EFFECT TO HAVE THE LUMBER AND STEEL FORMED DURING THE EXCAVATION RATHER THAN PRIOR TO IT. ON APRIL 29, THE CONTRACTOR DID OBJECT TO THE CONTINUED UNCERTAINTY, BUT EXPLICITLY RECOGNIZED THAT IT WOULD PREVENT THE COMPANY FROM ORDERING PRECUT MATERIALS. ON OR SHORTLY AFTER MAY 12, IT RECEIVED THE REVISION OF CHANGE ORDER NO. 1, WHICH REFERRED TO THE DRAWING AND CONTAINED ESSENTIALLY THE SAME CAVEAT AS TO THE FOOTING LINE, AND WHICH ACTED AS FURTHER NOTICE THAT THE USE OF PRECUT MATERIALS MIGHT BE IMPRUDENT. THE CONTRACTOR NOW CLAIMS NOT THE AMOUNT IT ALLEGEDLY LOST BECAUSE IT COULD NOT ORDER PRECUT MATERIALS, BUT THE LARGE AMOUNT IT ALLEGES IT LOST BECAUSE IT DID ORDER THOSE MATERIALS AND COULD NOT USE THEM.

MOREOVER, THE RECORD DOES NOT ENTIRELY SUPPORT THE CONTRACTOR'S PREMISE THAT IT BASED ITS PRICES FOR THE WORK ON THE ASSUMPTION THAT IT WOULD NOT BE REQUIRED TO CUSTOM BUILD AND CUT ANY OF THE WOODEN FORMS AND REINFORCING STEEL. WE GET THE IMPRESSION FROM THE TESTIMONY TAKEN BY THE BOARD THAT THE CONTRACTOR'S REAL COMPLAINT WAS NOT SO MUCH THAT TO ITS SURPRISE IT HAD TO CUSTOM BUILD SOME OF THE FORMS, BUT THAT IT HAD TO CUSTOM BUILD WHAT IT REGARDED AS AN UNEXPECTEDLY AND UNUSUALLY LARGE NUMBER OF THEM. NONETHELESS, IF THE CONTRACTOR INDICATED KNOWLEDGE THAT THE FIELD ORDERS MIGHT CHANGE THE DESIGN OF THE FOOTINGS FROM THAT SHOWN ON THE DRAWING OF MARCH 17, WHICH ORDERS WOULD REQUIRE IT TO SHAPE AND CUT SOME OF THE MATERIALS AS EXCAVATION PROCEEDED, THE EVIDENCE WILL NOT SUPPORT A RECOVERY UNDER THE THEORY THAT IT EMPLOYED A METHOD OF ACCOMPLISHING THE JOB WHICH WAS DIFFERENT FROM AND MORE EXPENSIVE THAN THE METHOD IT INTENDED TO USE UNTIL THE CHANGES WERE ORDERED.

IN ITS LETTER TO THE COAST GUARD DATED APRIL 13, 1960, WELL AFTER RECEIPT OF THE MARCH 17 DRAWING, THE CONTRACTOR MADE THE FOLLOWING OBSERVATION AND SUGGESTION TO THE COAST GUARD:

"THE ACTUAL EXCAVATION LINES WILL PROBABLY VARY UPWARDS AND DOWNWARDS FROM THE LINES INDICATED ON THE DRAWINGS IN ORDER FOR THE FOOTINGS TO CONFORM WITH THE SOIL BEARING CAPACITY REQUIREMENT OF 3,000 POUNDS PER SQUARE FOOT. THIS CONDITION WILL NOT BE APPARENT UNTIL THE EXCAVATION IS BEING PERFORMED. BASED ON THE ABOVE, IT IS REQUESTED THAT THE GOVERNMENT'S OFFICER DETERMINE THE EXCAVATION LINES AND APPROVE THE FOOTING ELEVATIONS PRIOR TO PLACEMENT OF CONCRETE.'

IN AN ATTEMPT TO EXPLAIN THE ABOVE STATEMENT THE CONTRACTOR LATER SAYS:

"* * * WE WERE FOREWARNED THAT IF THERE WERE ERRORS IN THE GOVERNMENT'S SURVEY, CHANGES WOULD HAVE TO BE MADE. THIS IS CERTAINLY NOT UNUSUAL, HOWEVER, WE REPEAT, THE CONTRACTOR DID NOT KNOW IF CHANGES WERE GOING TO BE MADE. A LETTER WAS ISSUED BY OUR OFFICE BECAUSE WE WISHED TO ESTABLISH A DEFINITE PROCEDURE TO BE FOLLOWED BY THE GOVERNMENT IN THE EVENT CHANGES WERE MADE. * * *"

HOWEVER, THE GOVERNMENT HAS NOT TRIED TO IMPUTE OMNISCIENCE TO THE CONTRACTOR. IT IS SUFFICIENT THAT, AS THE CONTRACTOR ADMITS, WHILE NEITHER THE COMPANY NOR THE GOVERNMENT KNEW THE EXTENT OF ANY CHANGES WHICH MIGHT BE MADE IN THE GOVERNMENT SURVEY, BOTH UNDERSTOOD THAT SOME CHANGES WERE PROBABLE, AND THAT IF MADE, WOULD RESULT IN EXTRA FORM WORK. WITH COGNIZANCE OF THE PROBABILITY THAT EXTRA FORM WORK WOULD BE REQUIRED, THE CONTRACTOR PROCEEDED TO HAVE THE FORMS PRECUT, PRESUMABLY WITH THE HOPE THAT THE EXTENT OF THE CHANGES WOULD BE MINIMAL.

THE SUPERIOR COURT OF WISCONSIN HAS RECENTLY CONSIDERED A CASE SIMILAR IN ONE RESPECT TO THE INSTANT ONE. IN THOMSEN-ABBOTT CONSTRUCTION CO. V. CITY OF WAUSAU, 100 N.W.2D 921, 9 WIS.2D 225 (1960), THE MUNICIPAL GOVERNMENT HAD CHANGED THE CONCRETE FOOTING PLANS WHICH CAUSED THE CONTRACTOR TO INCUR "DE-WATERING" EXPENSES. THE CONTRACT DRAWINGS SHOWED THE DEPTH OF THE FOOTINGS TO BE 1,157 FEET ABOVE SEA LEVEL. A NOTE ON THE DRAWINGS INCLUDED THE FOLLOWING INFORMATION: "SOIL PRESSURE--- 6,000 LBS. PER SQUARE FOOT ASSUMED AT DEPTH INDICATED.'

THE CONTRACTOR, BEFORE SUBMITTING ITS BID, INVESTIGATED THE GROUNDWATER TABLE AND DETERMINED THAT THE SPECIFIED ELEVATION FOR THE BOTTOM OF THE FOOTINGS WAS SIX INCHES BELOW SUCH WATER TABLE. IN ADDITION TO ARTICLE 15, A PROVISION SIMILAR TO THE INSTANT CHANGED CONDITIONS CLAUSE, THE CONTRACT PROVIDED THAT IF THE FOUNDATION DESIGN WAS ALTERED, THE CONTRACTOR WOULD FURNISH ADDITIONAL CONCRETE,"EXCAVATION, BACKFILL, REINFORCING, FORMING, ETC., FOR THE SUM OF $74.00 PER CUBIC YARD.' THE CONTRACTOR KNEW THAT MORE CONCRETE WORK MIGHT BE REQUIRED THAN WAS INDICATED ON THE DRAWING, AND THAT SUCH EXTRA WORK WOULD INVOLVE COSTS SEPARATE FROM BUT RELATED TO ADDITIONAL EXCAVATION AND CONCRETE, I.E., "DE -WATERING" EXPENSE IN THE CITED CASE AND FORMING WORK IN THE INSTANT CASE.

IT DEVELOPED THAT THE 6,000-POUND PRESSURE LEVEL WOULD NOT BE REACHED UNTIL 61 OF THE 70 FOOTINGS WERE LOWERED TO VARIOUS DEPTHS BEYOND THE 1,157-FOOT MARK. THIS INCREASED EXCAVATION REQUIRED THE CONTRACTOR TO "DE -WATER" OR LOWER THE GROUND WATER LEVEL 6 1/2 FEET INSTEAD OF THE 6 INCHES IT HAD ANTICIPATED. THE CONTRACTOR CLAIMED COMPENSATION IN ADDITION TO THE $74 PER CUBIC YARD OF CONCRETE FOR THE COST OF "DE-WATERING.' CLAIM WAS MADE FOR THE EXTRA FORMING WORK. THE COURT HELD AS FOLLOWS: "THE CRUCIAL QUESTION IS WHETHER THE UNIT PRICE PROVISION COVERS THE ITEM OF THE DE-WATERING EXPENSE TO WHICH THE CONTRACTOR WAS PUT AS A RESULT OF THE ARCHITECT'S CHANGE ORDER DEEPENING THE FOOTINGS. IT IS A QUESTION WHICH HAS CAUSED US NO LITTLE DIFFICULTY TO DECIDE. MR. ABBOTT, AN OFFICER OF THE PLAINTIFF CORPORATION, IS A GRADUATE CIVIL ENGINEER AND LICENSED BY THE STATE TO PRACTICE ENGINEERING, WHO HAS HAD MANY YEARS OF EXTENSIVE EXPERIENCE IN BUILDING CONSTRUCTION WORK. HE TESTIFIED THAT UNIT PRICE PROVISIONS IN BUILDING CONTRACTS ARE TO COVER ADDITIONAL WORK, OR LESS WORK, OF THE SAME NATURE INVOLVED IN THE CONTRACT. LIKEWISE, MR. SCHOEPKE, THE ARCHITECT, ALSO TESTIFIED THAT UNIT PRICES FOR EXTRAS BY THE GENERAL CUSTOM OF THE CONSTRUCTION TRADE ARE NOT TO BE APPLIED TO WORK OF A NATURE THAT IS CONSIDERABLY DIFFERENT FROM THE GENERAL PLAN OR WHICH REQUIRES DIFFERENT METHODS.

"IT IS INDISPUTABLE, IF DE-WATERING IS REQUIRED IN ORDER TO LAY BE NONRESPONSIBLE AND THAT THE FAILURE TO ARRIVE AT THE SAME CONCLUSION AS TO FRIEZ INDICATES THE USE OF A DIFFERENT STANDARD. IN YOUR LETTER OF SEPTEMBER 9, 1963 TO THE PROCURING AGENCY, COPY OF WHICH WAS FURNISHED TO USE, YOU SET OUT SEVEN INSTANCES TENDING TO SUPPORT YOUR CONCLUSION THAT THE PAST RECORD OF PERFORMANCE BY THE SUCCESSFUL CONTRACTOR IS SUCH THAT APPLYING THE STANDARD EMPLOYED ON YOUR FIRM WOULD ALSO RESULT IN A DETERMINATION OF NONRESPONSIBILITY.

YOU CONTEND THAT DELIVERIES BY FRIEZ UNDER 1960 AND 1961 WEATHER BUREAU CONTRACTS WERE SUBSTANTIALLY DELAYED. FRIEZ STATES THAT THESE CONTRACTS CALLED FOR LIQUIDATED DAMAGES OF $1.00 PER UNIT FOR FAILURE TO MEET DELIVERY SCHEDULES PLUS A PERIOD OF GRACE. UNDER THOSE CONTRACTS WHICH COVERED A TOTAL OF ALMOST 175,000 UNITS ONLY $170.00 IN LIQUIDATED DAMAGES WAS CHARGED AGAINST THE CONTRACTOR. THE ADMINISTRATIVE REPORT INDICATES THAT THE COMPANY'S PERFORMANCE ON THE WEATHER BUREAU CONTRACT WAS REGARDED AS SATISFACTORY.

YOU NEXT POINT OUT THAT UNDER SIGNAL CORPS ORDER NO. 8021-PP-60, FRIEZ WAS LATE IN THE DELIVERY OF 2,784 UNITS. WHILE IT IS CONCEDED THAT THIS TARDINESS IN DELIVERY DID EXIST, IT IS POINTED OUT THAT OVER NINETY PERCENT OF THE UNITS INCLUDED IN THE ORDER WERE DELIVERED ON TIME.

YOU NEXT STATE THAT PREPRODUCTION AND PRODUCTION DELIVERIES UNDER NAVY CONTRACT NO. N383-80619A RESULTING FROM INVITATION NO. 383-588-63 WERE NOT DELIVERED ON SCHEDULE. THE ADMINISTRATIVE REPORT INDICATES THAT EVEN THOUGH THE GOVERNMENT WAS THIRTY DAYS LATE IN NOTIFYING THE CONTRACTOR OF PREPRODUCTION APPROVAL, THE CONTRACT WAS COMPLETED THREE MONTHS AHEAD OF SCHEDULE.

YOU AVER ALSO THAT UNDER SIGNAL CORPS ORDER NO. 07207-PP-59 RESULTING FROM INVITATION NO. 59-582, DELIVERIES WERE SO DELINQUENT THAT THE GOVERNMENT HAD TO NEGOTIATE A REPLACEMENT CONTRACT WITH ANOTHER FIRM AT A HIGHER COST. THE ADMINISTRATIVE REPLY TO THE STATEMENT IS THAT THE DELAYS WERE FOUND BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS IN DECISION NO. 7589, DATED JUNE 27, 1962, TO BE BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR.

NEXT IT IS STATED THAT DELIVERIES UNDER SIGNAL CORPS ORDER NO. 10986 PP- 61 WERE LATE. THE ADMINISTRATIVE REPORT ACKNOWLEDGES THAT THE CONTRACTOR WAS ONE MONTH LATE ON INITIAL DELIVERIES, BUT CAUGHT UP WITH THE SCHEDULE IN THE SECOND MONTH AND COMPLETED THE CONTRACT ON TIME.

IT IS NEXT CONTENDED THAT FRIEZ IS NOT MEETING DELIVERY SCHEDULE UNDER AIR FORCE DEVELOPMENT CONTRACT NO. AF 19-16281-1655. BENDIX CONTENDS THAT OF THE THIRTY UNITS REQUIRED TO BE DESIGNED, DEVELOPED AND FABRICATED UNDER THE CONTRACT, TEN WERE DELIVERED THREE MONTHS EARLY AND THE REMAINDER WAS DELIVERED ON TIME. IT IS FURTHER STATED BY FRIEZ THAT THE DRAWINGS REQUIRED TO BE DELIVERED UNDER THE TERMS OF THE CONTRACT WERE SEVERAL MONTHS LATE DUE TO GOVERNMENT ORDERED CHANGES IN SCOPE AND THE REQUIREMENTS FOR ACCELERATED DELIVERY.

FINALLY, YOU CONTEND THAT UNDER AIR FORCE CONTRACT NO. AF-33 (600) 40743 ALL FLIGHT TESTS HAVE FAILED TO DATE. FRIEZ STATES THAT THE CONTRACT FOR THE DESIGN AND DEVELOPMENT OF AN AIRBORNE WEATHER SYSTEM AS MODIFIED IN SEPTEMBER 1962 REQUIRED DELIVERY BY NOVEMBER 6, 1962. FRIEZ FURTHER REPORTS THAT ALL HARDWARE ITEMS WERE COMPLETED IN OCTOBER OF 1962, BUT THAT FINAL COMPLETION IS DEPENDENT ON THE AVAILABILITY OF USAF AIRCRAFT FOR FLIGHT TESTING. WITH RESPECT TO THE AIR FORCE CONTRACTS THE ADMINISTRATIVE REPORT INDICATES THAT THE AIR FORCE AT BALTIMORE CONSIDERS FRIEZ'S PERFORMANCE ON CONTRACTS AS SATISFACTORY, WHILE HANSCOM FIELD CHARACTERIZES FRIEZ PERFORMANCE AS VERY GOOD.

AS WE INDICATED IN OUR DECISION OF SEPTEMBER 5, 1963 ON THE SAME PROCUREMENT, THE APPARENT ABILITY OF A BIDDER TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS SET OUT IN THE INVITATION IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY AND IS NOT SUBJECT TO QUESTION BY OUR OFFICE IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR. 37 COMP. GEN. 430, 535. A COMPARISON OF THE RECORD OF PERFORMANCE BY YOUR FIRM FOR THE LAST FEW YEARS AS COMPARED WITH THAT OF THE SUCCESSFUL CONTRACTOR PROVIDES, IN OUR VIEW, NO BASIS TO CONCLUDE THAT THE DETERMINATIONS WITH RESPECT TO THE RESPONSIBILITY OF THE TWO FIRMS WERE ARBITRARY OR CAPRICIOUS OR UNREASONABLE OR MADE IN BAD FAITH. THEREFORE, AND IN VIEW OF THE DISCRETION VESTED IN THE CONTRACTING AGENCY WITH RESPECT TO SUCH MATTERS WE MUST CONCLUDE THAT THERE IS NO BASIS UPON WHICH WE MAY QUESTION THE LEGALITY OF THE AWARD MADE PURSUANT TO THE INVITATION. SEE 39 ..END :

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