B-154410, SEP. 21, 1965

B-154410, SEP. 21, 1965

TO SELLERS, CONNER AND CUNEO:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 9, 1965, AND PREVIOUS CORRESPONDENCE, REGARDING THE CLAIM OF THE NATIONAL WRECKING COMPANY FOR DAMAGES FOR THE POSTPONEMENT OF COMMENCEMENT OF CONTRACT GS-03B 11004, DATED NOVEMBER 1, 1962.

UNDER THE CONTRACT, THE NATIONAL WRECKING COMPANY UNDERTOOK TO DEMOLISH CERTAIN TEMPORARY BUILDINGS IN WASHINGTON, D.C; REFERRED TO AS LANGSTON HALLS, FOR THE SUM OF $16,239. WHILE THE CONTRACT IS DATED NOVEMBER 1, 1962, A NOTICE TO PROCEED WAS NOT ISSUED TO THE CONTRACTOR UNTIL DECEMBER 3, 1962, AND POSSESSION OF THE BUILDINGS WAS NOT ACTUALLY TURNED OVER TO THE CONTRACTOR UNTIL DECEMBER 18, 1962. THE GENERAL SERVICES ADMINISTRATION HAS FURNISHED A REASON FOR ITS DELAY IN ACTING AFTER THE NOTICE OF AWARD WAS ISSUED. AT THE TIME THE INVITATION FOR BIDS WAS ISSUED, THE REGIONAL OFFICE EXPECTED THAT THE NEW LEASED SPACE FOR THE TENANTS IN THE BUILDINGS TO BE DEMOLISHED WOULD BE AVAILABLE MOMENTARILY, BUT AS A RESULT OF NEWLY ASSIGNED RESPONSIBILITIES TO THE AGENCY WHICH WOULD BE OCCUPYING THE NEW LEASED PREMISES ADDITIONAL MODIFICATIONS HAD TO BE MADE TO THE NEW PREMISES BEFORE THE TENANTS COULD MOVE IN WITH THE RESULT THAT THEY WERE DELAYED IN LEAVING THE PREMISES WHICH WERE TO BE DEMOLISHED.

YOU ALLEGE THAT UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR WAS ENTITLED TO RECEIVE POSSESSION OF THE PREMISES AS EARLY AS NOVEMBER 2, 1962, AND THAT AS A RESULT OF THE LATER TRANSFER OF POSSESSION THE CONTRACTOR LOST, AT LEAST, $33,450 BY VIRTUE OF STANDBY COSTS INCURRED IN WAITING FOR THE TRANSFER OF POSSESSION, BY THE EXTRA EXPENSE IN DISMANTLING UNDER ADVERSE WEATHER CONDITIONS, AND BY THE LOSS OF REVENUE FROM MATERIAL THAT COULD NOT BE RESOLD BECAUSE OF ITS CONDITION AFTER THE WINTER ELEMENTS OF ICE AND SNOW HAD ACTED UPON IT.

YOU BASE THE CLAIM TO THE CONTRACTOR'S ENTITLEMENT TO POSSESSION OF THE BUILDING ON NOVEMBER 2, 1962, IN PART UPON SECTIONS 2-08 AND 5-08 OF THE INVITATION FOR BIDS. SECTION 2-08 PROVIDES:

"TIME FOR COMPLETION

"THE TIME FOR COMPLETION OF THE CONTRACT HEREUNDER SHALL BE FORTY FIVE (45) CALENDAR DAYS FROM DATE OF RECEIPT OF NOTICE TO PROCEED.' SECTION 5- 08, AS AMENDED BY AMENDMENT 1 TO THE INVITATION, SPECIFIES:

"SALVAGE AND SALVAGED MATERIALS

"EXCEPT AS OTHERWISE SPECIFIED HEREIN, IN CONSIDERATION OF THE FAITHFUL PERFORMANCE HEREOF, THE CONTRACTOR SHALL RECEIVE TITLE TO ALL REAL PROPERTY TO BE DEMOLISHED WHICH IS NOT SPECIFICALLY DESIGNATED AS BEING RETAINED BY THE GOVERNMENT, SAID TITLE TO VEST IN THE CONTRACTOR IMMEDIATELY UPON THE CONTRACTOR'S RECEIPT OF THE NOTICE OF AWARD. THE GOVERNMENT WILL NOT BE RESPONSIBLE FOR THE CONDITION OF OR ANY LOSS OR DAMAGE TO SUCH PROPERTY FROM ANY CAUSE WHATSOEVER. ALL SALVAGE MATERIALS REMOVED SHALL BE TAKEN FROM THE PREMISES PROMPTLY, AS THE STORAGE OF SALVAGE MATERIALS ON THE SIGHT WILL NOT BE PERMITTED. BIDDERS SHALL TAKE INTO ACCOUNT THE SALVAGE VALUE TO THEM OF THE MATERIALS REMOVED, AND SUCH VALUE SHALL BE REFLECTED IN THE BIDS.'

YOU CONTEND THAT SINCE THE INVITATION PROVIDED FOR THE TRANSFER OF TITLE UPON RECEIPT OF THE NOTICE OF AWARD, WHICH WAS ISSUED ON NOVEMBER 1, 1962; FOR THE RISK OF LOSS OF SUCH PROPERTY THEREAFTER FALLING UPON THE CONTRACTOR; AND FOR 45 DAYS TO COMPLETE DEMOLITION, WHICH IS ALLEGED TO BE INCOMPATIBLE WITH PERFORMANCE DURING THE WINTER SEASON, THE CONTRACTOR HAD A RIGHT TO EXPECT THAT IT WOULD RECEIVE POSSESSION AND HAVE A RIGHT TO PERFORM UPON DELIVERY BY IT TO THE GENERAL SERVICES ADMINISTRATION OF THE EXECUTED CONTRACT AND BONDS ON NOVEMBER 2, 1962. IT IS STATED THAT IF THE CONTRACTOR HAD BEEN ALLOWED TO COMMENCE WORK PROMPTLY, IT WOULD HAVE COMPLETED THE WORK BEFORE THE WINTER WEATHER WHICH MADE THE WORK MORE ARDUOUS AND EXPENSIVE AND DESTROYED THE SALVAGE VALUE OF CERTAIN MATERIAL.

IT IS YOUR POSITION THAT IF THE CONTRACT IS NOT CLEAR THAT A NOTICE TO PROCEED WAS TO ISSUE ON NOVEMBER 2, 1962, THEN THERE IS AN AMBIGUITY IN THE CONTRACT WHICH THE CONTRACTOR IS ENTITLED TO HAVE INTERPRETED IN ITS FAVOR WHERE THE CONCLUSION IT REACHES IS REASONABLY SUPPORTED BY THE FACTS OF THE SITUATION. IN SUPPORT OF YOUR POSITION YOU CITE PETER KIEWIT SONS' COMPANY V. UNITED STATES, 109 CT.CL. 390. IN ADDITION YOU POINT OUT THAT IN FRAMLAU CORP; IBCA 228, IT WAS INDICATED THAT WHERE THERE ARE AMBIGUITIES IN CONTRACT MATERIAL THE RULE OF CONTRA PROFERENTEM MUST APPLY WHERE THE GOVERNMENT CREATED THE CONFUSION.

IN THE KIEWIT CASE, IT IS TRUE THE COURT STATED THAT WHERE THE GOVERNMENT DRAWS SPECIFICATIONS WHICH ARE FAIRLY SUSCEPTIBLE TO A CERTAIN CONSTRUCTION AND THE CONTRACTOR ACTUALLY AND REASONABLY CONSTRUES THEM, JUSTICE AND EQUITY REQUIRE THAT CONSTRUCTION TO BE ADOPTED. HOWEVER, THE COURT ALSO POINTED OUT IN THAT CASE THAT WHERE STATEMENTS IN SPECIFICATIONS ARE INESCAPABLE, IF THE CONTRACTOR WAS MISLED BY THE LANGUAGE, IT MUST STAND THE CONSEQUENCE IF THE CONTRACTOR WAS NOT JUSTIFIED IN READING THE SPECIFICATIONS AS IT DID.

WHILE THE CONTRACTOR MAY HAVE ASSUMED IN VIEW OF THE APPROACHING WINTER SEASON AND THE IMMEDIATE TRANSFER OF TITLE AND RISK OF LOSS THAT THE NOTICE TO PROCEED WOULD ISSUE PROMPTLY, THE FACT STILL REMAINS THAT THE CONTRACT WHICH THE CONTRACTOR SIGNED CONTAINED NO PROVISION OR IMPLICATION THAT THE AGENCY WAS ACTING UNDER A SIMILAR VIEW OF URGENCY. IN THAT CONNECTION, THE EXECUTED CONTRACT STATES THAT THE "WORK SHALL BE STARTED" WHEN A "NOTICE TO PROCEED WILL BE GIVEN" AND THE BID FORM ITSELF PROVIDES THAT THE CONTRACTOR WILL HAVE 15 CALENDAR DAYS AFTER THE RECEIPT OF THE CONTRACT AND BOND FORMS TO EXECUTE AND FURNISH THEM. ADDITIONALLY, WE BELIEVE IT IS IMPLICIT, WITHOUT BEING STATED IN THE BID FORM OR CONTRACT, THAT THE GOVERNMENT UPON RECEIPT OF THE EXECUTED CONTRACT AND BONDS WILL BE ENTITLED TO TIME TO PROCESS THEM IN ACCORDANCE WITH ESTABLISHED PROCEDURE. HAVING REGARD FOR ALL THE FACTS, WE DO NOT BELIEVE THAT THE CONTRACTOR'S INTERPRETATION WAS REASONABLE IN THE CIRCUMSTANCES.

ABBETT ELECTRIC CORPORATION V. UNITED STATES, 142 CT. CL. 609, WHICH YOU RELY UPON IS NOT APPLICABLE TO THE IMMEDIATE CASE. THE SPECIFICATIONS THERE CALLED FOR THE UNITED STATES TO GIVE THE CONTRACTOR A NOTICE TO PROCEED WITHIN A SPECIFIED PERIOD OF TIME. ROSS ENGINEERING COMPANY, INC. V. UNITED STATES, 92 CT. CL. 253, IS EQUALLY DISTINGUISHABLE. IN THAT CASE THE GOVERNMENT APPARENTLY HAD NO REASON TO DELAY THE NOTICE TO PROCEED. THE VIEW IN KRAFT CONSTRUCTION CO., C., ASBCA NO. 4976, THAT A NOTICE TO PROCEED SHOULD ISSUE IN A REASONABLE TIME WHERE THERE IS NO SPECIFIC COVENANT THAT IT WILL ISSUE AT A PARTICULAR TIME IS NOT UNACCEPTABLE; HOWEVER, AS WILL BE INDICATED SUBSEQUENTLY, THAT IS NOT IN OUR VIEW DECISIVE OF THIS CASE.

WHILE CASES SUCH AS UNITED STATES V. FOLEY CO., 329 U.S. 64, AND BEN. GERWICK, INC. V. UNITED STATES, 152 CT. CL. 69, HAVE EXCUSED THE GOVERNMENT FOR DELAYS BROUGHT ABOUT AFTER THE NOTICE TO PROCEED HAD BEEN ISSUED, YOU SUGGEST THAT THE GOVERNMENT WAS EXCUSED IN SUCH CASES BECAUSE THE COMPLAINING CONTRACTOR WAS AWARE THAT IT WAS A FOLLOWON CONTRACTOR AND KNEW THAT IT COULD NOT PERFORM UNTIL THE PRECEDING CONTRACTOR COMPLETED AND THAT IT WAS ACTUALLY THE DELAYED PERFORMANCE OF THE PRECEDING CONTRACTOR WHICH DELAYED THE PERFORMANCE OF THE FOLLOWON CONTRACTOR. HOWEVER, YOU STATE THAT WHERE THE GOVERNMENT THROUGH WILFULL NEGLECT, LACK OF DILIGENCE OR LACK OF CONSIDERATION FOR THE INTERESTS OF THE CONTRACTOR DELAYS THE CONTRACT WORK OR RENDERS PERFORMANCE MORE EXPENSIVE IT MUST BEAR THE RESPONSIBILITY. IN THAT CONNECTION YOU CITE THE GERWICK CASE, SUPRA, AND OZARK DAM CONSTRUCTORS V. UNITED STATES, 130 CT. CL. 354, 360, WILLIAM A. SMITH CONTRACTING CO., INC., ET AL. V. UNITED STATES, 155 CT.CL. 1, 10; PETER KIEWIT SONS CO., INC., ET AL. V. UNITED STATES, 138 CT.CL. 668; VOLENTINE AND LITTLETON V. UNITED STATES, 144 CT. CL. 723; GEORGE A. FULLER COMPANY V. UNITED STATES, 108 CT. CL. 70, 101. ADDITIONALLY, YOU SUGGEST THAT BY WITHHOLDING THE INFORMATION CONCERNING THE DELAYED COMMENCEMENT OF PERFORMANCE FROM THE BIDDERS, THE CONTRACTING AGENCY MISREPRESENTED THE CONDITIONS UNDER WHICH THE SUCCESSFUL BIDDER COULD REASONABLY EXPECT TO PERFORM. YOU THEREFORE SUGGEST THAT THE GOVERNMENT BY WITHHOLDING SUCH INFORMATION BETRAYED THE CONTRACTOR INTO A "RUINOUS COURSE OF ACTION" FOR WHICH RELIEF IS REQUIRED, CITING HELENE CURTIS INDUSTRIES, INC. V. UNITED STATES, 160 CT. CL. 437.

HOWEVER, WE CANNOT FIND ANY WILFUL NEGLECT, LACK OF DILIGENCE OR OF CONSIDERATION FOR THE INTERESTS OF THE CONTRACTOR IN THIS CASE. INDICATED ABOVE, A GOOD MEASURE OF THE REASON FOR DELAY WAS THE FACT THAT AFTER THE INVITATION WAS ISSUED ADDITIONAL MODIFICATIONS TO THE NEW PREMISES WHERE THE TENANTS IN THE BUILDINGS TO BE DEMOLISHED WERE TO MOVE WERE REQUIRED TO SATISFY NEWLY ASSIGNED RESPONSIBILITIES TO THE OCCUPYING AGENCY. WHILE IT MAY BE ARGUED THAT AN AMENDMENT TO THE INVITATION SHOULD HAVE BEEN ISSUED TO ADVISE BIDDERS OF THE POSSIBLE DELAY THAT MIGHT RESULT FROM THIS CONDITION, SINCE THERE WAS NO PROMISE IN THE ORIGINAL INVITATION AS TO WHEN THE PROPERTY WOULD BE AVAILABLE, THE ISSUANCE OF SUCH AN AMENDMENT DOES NOT SEEM TO BE REQUIRED. IN THE HELENE CURTIS CASE THE CONTRACTOR WAS NOT INFORMED OR ALERTED TO THE NEED FOR GRINDING THE PRODUCT WHICH WAS A NOVEL ONE. IN THE IMMEDIATE CASE, THE CONTRACTOR COULD ANTICIPATE THE POSSIBILITY OF A DELAY WITHOUT BEING ADVISED OF THAT POSSIBILITY SINCE THE CONTRACTOR BID WITH KNOWLEDGE THAT THE BUILDINGS WHICH WERE TO BE DEMOLISHED WERE OCCUPIED AND HAD TO BE VACATED AND THE GOVERNMENT HAD NOT PROMISED TO ISSUE A NOTICE TO PROCEED BY ANY PARTICULAR DATE.

RELEVANT TO THE ISSUE HERE INVOLVED IS THE CASE OF JAMES T. BARNES V. UNITED STATES, 96 CT. CL. 60. IN THAT CASE THE GOVERNMENT HAD AGREED TO SURRENDER CERTAIN PREMISES TO THE CONTRACTOR FOR EXTENSION AND REMODELING, BUT AS A RESULT OF DELAY IN FINDING TEMPORARY QUARTERS FOR THE OCCUPANTS OF THE PREMISES, BECAUSE BIDDERS OFFERING TEMPORARY SPACE EXCEEDED ECONOMY ACT LIMITATIONS, THE NOTICE TO PROCEED DID NOT ISSUE UNTIL MORE THAN 4 MONTHS AFTER THE REMODELING CONTRACT WAS LET. AS A RESULT OF THE DELAY, THE CONTRACTOR HAD TO PERFORM WORK IN THE WINTER THAT IT HAD EXPECTED TO PERFORM DURING SUMMER AND EARLY FALL. IT CLAIMED DAMAGES FOR THIS DELAY AS WELL AS STANDBY COSTS IT ALLEGEDLY INCURRED IN WAITING FOR THE WORK TO COMMENCE. THE COURT DENIED THE CLAIMS BECAUSE THE RECORD SHOWED THAT THE GOVERNMENT REPRESENTATIVES TOOK NO MORE TIME THAN WAS REASONABLY NECESSARY TO DO THE THINGS WHICH WERE REQUIRED BY LAW IN OBTAINING TEMPORARY QUARTERS. THE COURT IN DISPOSING OF THE CASE SAID, JUST AS THE BOARD DID IN THE KRAFT CASE, THAT THE WHOLE QUESTION WAS WHETHER THE NOTICE TO PROCEED WAS ISSUED WITHIN A REASONABLE TIME. AS TO WHAT CONSTITUTES A REASONABLE TIME, THE COURT SAID AT PAGE 76 THAT "IT HAS BEEN UNIFORMLY HELD BY THE COURT THAT THE QUESTION OF WHAT CONSTITUTES A REASONABLE TIME IS WHOLLY DEPENDENT UPON THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE.' HOWEVER, AS NOTED, THE COURT FOUND THAT THE GOVERNMENT'S DELAY IN ISSUING THE NOTICE TO PROCEED WAS COMPELLED BY THE EXISTING CIRCUMSTANCES. THIS CASE IS ANALOGOUS TO THE BARNES CASE IN THAT HERE THE DELAY IN ISSUING THE NOTICE TO PROCEED WAS THE RESULT OF HAVING TO REQUIRE ADDITIONAL MODIFICATIONS ON THE NEW PREMISES TO BE OCCUPIED BECAUSE NEW RESPONSIBILITIES WERE ASSIGNED TO THE OCCUPYING AGENCY. AS THE COURT SAID IN THE BARNES CASE, AGAIN AT PAGE 76,"IT WOULD HAVE BEEN WHOLLY IMPROPER AS WELL AS IMPRACTICABLE TO ISSUE NOTICE TO PROCEED WITH THE WORK UNTIL PROPER TEMPORARY QUARTERS HAD BEEN ARRANGED FOR ESSENTIAL ACTIVITIES OF THE GOVERNMENT.' SEE ALSO EDWARD E. STAFFORD V. UNITED STATES, 109 CT. CL. 479, AND MICHAEL H. PARISH, ET AL. V. UNITED STATES, 120 CT. CL. 100, WHEREIN THE COURT OF CLAIMS DENIED DAMAGES RESULTING FROM DELAY IN ISSUING NOTICES TO PROCEED WHERE THE GOVERNMENT HAD REASONABLE EXCUSES FOR THE DELAYS.

AS AN ALTERNATIVE TO THE FOREGOING, YOU HAVE CLAIMED THAT THE CONTRACTOR IS ENTITLED TO RENT FOR THE PERIOD AFTER WHICH IT ASSUMED TITLE AND UNTIL IT CAME INTO POSSESSION OF THE BUILDINGS. AS AUTHORITY FOR PAYMENT ON SUCH BASIS YOU CITE WILLIAM C. ATWATER, JR; ET AL. V. UNITED STATES, 106 CT. CL. 196, AND JERONIMO FONDALLEDAS V. UNITED STATES, 123 CT. CL. 483, INVOLVING THE TAKING OF PROPERTY UNDER EMINENT DOMAIN, CHARLES W. CARLSTROM V. UNITED STATES, 147 CT. CL. 297, INVOLVING A SITUATION WHERE THE PLAINTIFF BOUGHT FROM THE GOVERNMENT RENTAL PROPERTY IN WHICH A POST OFFICE WAS LOCATED AND WAS FORCED TO SUE WHEN IT COULD NOT REACH AGREEMENT WITH THE GOVERNMENT AS TO WHAT THE REASONABLE RENTAL FOR THE POST OFFICE SHOULD BE, AND NIAGARA FALLS BRIDGE COMMISSION V. UNITED STATES, 111 CT. CL. 338, A SUIT FOR RENT FOR OCCUPANCY OF QUARTERS BY THE CUSTOMS SERVICE. HOWEVER, THE SUPREME COURT HAS STATED THAT WHEN AN EXPRESS CONTRACT OR AN ARRANGEMENT BETWEEN THE PARTIES SHOWS THAT IT WAS NOT INTENDED BY THEM TO CONSTITUTE THE RELATION OF LANDLORD AND TENANT, AN IMPLICATION TO PAY RENT DOES NOT EXIST. CARPENTER V. UNITED STATES, 17 WALL. 489.WE BELIEVE THE LATTER PRINCIPLE WOULD BE APPLICABLE TO THE IMMEDIATE CASE. WHILE, AS INDICATED ABOVE, WE DO NOT BELIEVE THAT THE CONTRACTOR IS ENTITLED TO A SETTLEMENT FOR THE DELAY IN THE ISSUANCE OF THE NOTICE TO PROCEED, WE WOULD BE WILLING TO CONSIDER, AT YOUR REQUEST, THE POSSIBILITY OF AN ALLOWANCE FOR THE TIME DURING WHICH THE CONTRACTOR WAS DENIED POSSESSION OF THE PREMISES AFTER THE NOTICE TO PROCEED WAS ISSUED, NAMELY, FROM DECEMBER 3, 1962, TO DECEMBER 18, 1962.