B-165811, JAN. 15, 1969

B-165811, JAN. 15, 1969

TO MR. SECRETARY:

BY LETTER DATED DECEMBER 13, 1968, JOSEPH M. ROBERTSON, ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTED OUR DECISION CONCERNING THE LIABILITY OF THE MCBRIDE LAND AND LIVESTOCK COMPANY, BIG TIMBER, MONTANA, UNDER RENTAL CONTRACT NO. 12-10-240-949, WHICH WAS TERMINATED FOR DEFAULT ON SEPTEMBER 15, 1966, BECAUSE OF THE COMPANY'S FAILURE TO PROVIDE THE OFFICE SPACE AND THE AUXILIARY FACILITIES WHICH IT WAS REQUIRED BY THE TERMS OF THE CONTRACT TO LEASE TO THE GOVERNMENT AS FOLLOWS:

TERMS AND CONDITIONS

UNIT NO. 1 - OFFICE SPACE APPROXIMATELY 2849 SQUARE FEET OF NET USEABLE, CONTIGUOUS OFFICE SPACE, (EXCLUSIVE OF PUBLIC HALLS, CORRIDORS, TOILETS, FURNACE ROOM, JANITOR SUPPLY ROOM, ETC.) ON GROUND FLOOR LEVEL IN ONE BUILDING AT BIG TIMBER, MONTANA, FOR OCCUPANCY NOT LATER THAN SEPTEMBER 1, 1966, TO CONSIST OF: ASCS 2 ROOMS - 593 SQ. FT.

--- ---- FHA 1 ROOMS - 120 SQ. FT.

--- ---- F S 6 ROOMS - 1202 SQ. FT.

--- ---- SCS 3 ROOMS - 526 SQ. FT.

--- ---- CONFERENCE

ROOM 1 ROOMS - 408 SQ. FT. (JOINT-ASCS AND FS)

TOTAL 13 ROOMS - 2849 SQ. FT.

UNIT NO. 2 WAREHOUSE, SHOP AND GARAGE (2520 SQUARE FEET) SEE FLOOR PLAN ATTACHED. (TO BE LOCATED WITHIN 400 FEET OF OFFICE BUILDING OFFERED.)

UNIT NO. 3

STORAGE YARD (2500 SQUARE FEET) STORAGE YARD: AREA ENCLOSED TO TOTAL 2500 SQUARE FEET, WITH 7 FT. HIGH SECURITY FENCE, WITH 18 INCHES OVERHANG, WITH 3-STRAND BARBED WIRE. GATE - 10 FEET IN WIDTH, TO BE PROVIDED. CONCRETE OR ASPHALT PAVING TO COVER ENTIRE STORAGE YARD. YARD TO BE LOCATED IMMEDIATELY ADJACENT TO WAREHOUSE, SHOP, GARAGE FACILITY. PAINT AND GAS SHED:TO BE FIREPROOF, VENTILATED, APPROXIMATELY 10 FEET X 10 FEET, WALK-IN TYPE, TO BE LOCATED A MINIMUM OF 50 FEET FROM NEAREST BUILDING BUT WITHIN THE STORAGE YARD. THESE STRUCTURES WERE TO BE FURNISHED AT AN ANNUAL RENT OF $8,837, WHICH ALSO INCLUDED THE COST OF JANITORIAL SERVICES.

AFTER TERMINATION, NEW BIDS WERE INVITED FOR THE SAME SQUARE FOOTAGE PREVIOUSLY REQUESTED; HOWEVER, THE SPECIFICATIONS FOR THE BUILDINGS WERE ALTERED, AS STATED BELOW, RESULTING IN AN ESTIMATED INCREASE IN CONSTRUCTION COST OF $3,200:

1. DRY WALL BASE TO BE PROVIDED FOR INTERIOR WALLS. ESTIMATED INCREASED COST $2,200.

2. A MINIMUM OF THREE INCHES OF THERMAL INSULATION IN OUTSIDE WALLS TO BE PROVIDED. ESTIMATED INCREASED COST $600.

3. EIGHTY FOOT CANDLES OF LIGHTING TO BE PROVIDED IN OFFICE SPACE INSTEAD OF SEVENTY FOOT CANDLES. ESTIMATED INCREASED COST $300.

4. ADEQUATE LANDSCAPING OF THE GROUNDS REQUIRED. ESTIMATED INCREASED COST $100.

5. REPLACEMENT OF LIGHT BULBS OR TUBES IN UNIT NO. 2, WHAREHOUSE, GARAGE AND SHOP. INCREASED SERVICING COST ESTIMATED AT $15 PER YEAR.

AWARD UNDER THE READVERTISED REQUIREMENT WAS MADE AT AN ANNUAL RENTAL COST OF $9,930, WHICH DID NOT INCLUDE JANITORIAL SERVICES. GENERAL PROVISION NO. 11 OF THE CANCELLED CONTRACT INCLUDED THE FOLLOWING CLAUSE:

"11. DEFAULT

"/B) IN THE EVENT THE GOVERNMENT TERMINATES THIS CONTRACT IN WHOLE OR IN PART AS PROVIDED IN PARAGRAPH (A) OF THIS CLAUSE, THE GOVERNMENT MAY PROCURE, UPON SUCH TERMS AND IN SUCH MANNER AS THE CONTRACTING OFFICER MAY DEEM APPROPRIATE, SUPPLIES OR SERVICES SIMILAR TO THOSE SO TERMINATED, AND THE CONTRACTOR SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COSTS FOR SUCH SIMILAR SUPPLIES OR SERVICES: PROVIDED; THAT THE CONTRACTOR SHALL CONTINUE THE PERFORMANCE OF THIS CONTRACT TO THE EXTENT NOT TERMINATED UNDER THE PROVISIONS OF THIS CLAUSE.'

YOU HAVE ASKED US WHETHER THE PREMISES SPECIFIED UNDER THE REPROCUREMENT ARE SUFFICIENTLY SIMILAR TO THOSE REQUIRED UNDER THE DEFAULTED CONTRACT TO SUPPORT A CLAIM AGAINST THE CONTRACT FOR THE EXCESS COST INCURRED UPON REPROCUREMENT.

THE COURTS HAVE HELD THAT REPROCURED ITEMS ARE NOT CONSIDERED "SIMILAR" TO THOSE ORIGINALLY REQUIRED UNDER A DEFAULTED CONTRACT IF THE COST OF THE REPROCUREMENT HAS INCREASED BECAUSE OF ALTERED SPECIFICATIONS. AMERICAN SURETY COMPANY OF NEW YORK V UNITED STATES, 317 F.2D 652; ROSENBURG V UNITED STATES, 76 CT. CL. 662; SEE ALSO 38 COMP. GEN. 585. IN THE INSTANT CASE IT IS REPORTED THAT THE SPECIFICATION REVISIONS INCORPORATED IN THE REPROCUREMENT NECESSARILY INCREASED THE BUILDING COST, AND IT MUST THEREFORE BE CONCLUDED THAT SUCH INCREASE WOULD BE REFLECTED IN A HIGHER RENTAL COST. IN VIEW THEREOF, THE MCBRIDE LAND AND LIVESTOCK COMPANY MAY NOT BE CHARGED WITH THE EXCESS COST TO THE UNITED STATES OCCASIONED THEREBY.