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Contracts: Acts of Government Contracts: Breach
A claim by a construction contractor for additional compensation on account

of the withdrawal of bids by prospective subcontractors, because of apprehen-
sion that the contract might be administered too strictly by the Government
is, in the absence of circumstances amounting to either an express change or
a constructive change in the drawings or specifications, a claim for breach
of contract that neither the contracting officer nor the Board of Contract

Appeals has jurisdiction to decide. Contracts: Performance The Government as a party to a construction contract is entitled to the per

formance specified in the contract, irrespective of whether such performance conforms to customary construction standards in the area, and need not accept something else that, from a functional standpoint, may be "just as good."

BOARD OF CONTRACT APPEALS

This is a timely appeal from the contracting officer's denial of contractor-appellant's claim for additional compensation in the amount of $4,500. The claim is described as a “building loss,” arising from several causes. The alleged causes may be summarized as follows: (1) a mistake was made in computing the amount of the bid; (2) issuance of notice to proceed was unduly delayed; (3) furnishing of gas service was unduly delayed; (4) concrete forms of better quality than the contract specified were required; (5) inspection was overly exacting; and (6) specifications and design were unreasonable.

The contracting officer denied the entire claim on the ground that it constituted a claim for unliquidated damages which was beyond his jurisdiction.

The issue of whether the contract price could be increased because of the alleged mistake in bid was decided adversely to appellant by the Comptroller General, prior to the taking of this appeal.' It was also decided adversely to appellant by this Board in its initial decision upon this appeal. The first of the six alleged causes of the "building loss” thus affords no basis on which additional compensation could be granted.

A motion by Department Counsel to dismiss the appeal in toto on jurisdictional grounds was denied by the Board in its initial decision so as to give appellant an opportunity to show, if possible, that some one or more of the five other alleged causes of the “building loss” would afford a basis on which relief could be granted.

An oral hearing pertaining solely to these latter elements of appellant's claim was held before the writer of this decision on July 14, 1964, at Great Falls, Montana.

1 Dec. Comp. Gen. B-149574 (August 24, 1962).

2 Clifford W. Gartzka, IBCA-399 (January 22, 1964), 1964 BCA par. 4021, 6 Gov. Contr. 95(1).

December 24, 1964 The contract was awarded appellant on June 12, 1962. It called for the construction of two frame residences, a sewage disposal system, and miscellaneous water piping at Benton Lake National Wildlife Refuge, located 12 miles north of Great Falls, Montana, for a fixed contract price of $39,453. The work was to begin within 10 days of appellant's receipt of notice to proceed, and all work was to be completed 90 days subsequent thereto.

The contract was on Standard Form 23 (January 1961 ed.) and was to be performed in accordance with the General Provisions of Standard Form 23A (April 1961 ed.). These included the customary “Changes," "Changed Conditions,” and “Termination for DefaultDamages for Delay—Time Extensions” provisions (Clauses 3, 4, and 5, respectively). The General Conditions contained a “Temporary Suspension of the Work" provision (section 20) which reads in pertinent part as follows:

The Engineer shall suspend the work by written order for such period or periods as are necessary because of extended unsuitable weather or for such other conditions as may be unfavorable for the prosecution of the work. * * * Extensions of time will be allowed as provided in Clause 5(d) of the General Provisions * *

The evidence adduced at the hearing shows that appellant's claim for an equitable adjustment of the contract price is premised principally on the theory that the issuance of notice to proceed was unduly delayed, thereby causing an increase in the costs of performance, and on the theory that the construction standards enforced or threatened to be enforced by the Government were too stringent, thereby also causing an increase in the costs of performance.

The evidence discloses that on June 14, 1962, which was two days following the date of award of the contract, appellant advised the contracting officer by telephone that he had made a mistake in the computation of his bid costs. Submission of the supporting documentation by appellant was not completed until June 29, 1962. The contracting officer then transmitted the claim of mistake in bid to the appropriate Washington office of the Department of the Interior, where it was reviewed and put in order for submission to the Comptroller General for his decision. The claim was transmitted to the latter on July 27, 1962.

The Comptroller General, on August 24, 1962, issued a decision holding that the acceptance of appellant's bid on June 12, 1962, had created a valid and binding contract, and that there was no legal basis for increasing the contract price above the amount of such bid.

By a letter dated September 14, 1962, the contracting officer advised appellant of the Comptroller General's decision. After an unsuccess

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ful attempt by appellant's counsel to have the decision reconsidered, notice to proceed with the work was issued by the contracting officer. The notice was issued on September 25, 1962, and was received by appellant three days later.3

In the interim, the firms to whom appellant expected to subcontract the excavation, concrete forming, and plumbing work withdrew their bids for such work. One reason assigned for these withdrawals was that the lapse of approximately three months between the dates when their bids were submitted and the date when appellant received notice to proceed would necessarily extend the performance of the job into the winter season, whereas their bids were predicated on summertime work, which is less costly. Another reason assigned was that during these three months the prospective subcontractors had learned, through experience gained in performing another job at the Benton Lake National Wildlife Refuge, that they would probably be required to adhere to more exacting standards of construction than were allowed for in their bids. As the result of the withdrawal of the subcontract bids, appellant himself performed some of the work that he had expected to subcontract, and had the remainder performed on a cost-plus basis. Appellant began work on October 4, 1962, and the contract was completed within the time required by its terms, as ultimately extended.

The contract did not contain a provision requiring the contracting officer to issue notice to proceed within a specified time. In the absence of such a provision, the law allowed a reasonable time for the the giving of notice to proceed. Whether the time actually consumed was reasonable depends upon the weight which should be accorded to various pertinent circumstances. Among them are the fact that the mistake in bid was made by appellant, the fact that the papers requisite for an intelligent determination of the claim for reformation of the bid were not submitted immediately by appellant, and the fact that action by the Comptroller General as well as by the Department of the Interior was necessary.

In any event, it is unnecessary to determine whether, in the circumstances here present, notice to proceed was issued within a reasonable

5

3 Tr. pp. 42, 100.

* An assessment of liquidated damages in the amount of $3,150 for a delay of 70 days in performance was originally made. The time for performance was, however, subse. quently extended for a period of 70 days, pursuant to the “Temporary Suspension of the Work" clause, thereby canceling out the assessment of liquidated damages.

5 This omission distinguishes the present appeal from Abbett Electric Corp. v. United States, 142 Ct. Cl. 609 (1958) and T. 0. Bateson Construction Co., ASBCA No. 5985 (August 30. 1960), 60–2 BCA par. 2767, 2 Gov. Contr. par. 522, where the dates for issuance of notice to proceed were specified in the contract.

6 Parish v. United States, 120 Ct. Ci, 100, 124-26 (1951), cert. denied, 342 U.S. 953 (1952); Montgomery-Macri Co., IBCA-59 and IBCA-72 (June 28, 1963), 70 I.D. 242, 323, 1963 BCA par. 3819, p. 19,047, 5 Gov. Contr. par. 419.

December 24, 1964 time. This is because the contract contains no provision which would authorize the making of an equitable adjustment in the contract price on account of an unreasonable delay in giving notice to proceed. The “Termination for Default-Damages for Delay-Time Extensions" provision (Clause 5) and the "Temporary Suspension of the Work" provision (section 20) authorize the granting of extensions of time for performance on account of delays caused by various circumstances, including conduct of the Government. However, neither of these provisions contains any language that could be interpreted as affording a basis for the granting of monetary compensation on acount of such delays.

Since the contract does not authorize a price adjustment for a delay in giving notice to proceed, a claim for additional compensation on the ground that the giving of notice to proceed was unduly delayed is not cognizable by the Board. Such a claim is one for breach of contract, as distinguished from a claim under the contract. In the absence of specific authorization for their consideration, claims for breach of contract arising from Government delay are beyond the jurisdiction of contracting officers and boards of contract appeals to determine.? Hence, the second alleged cause of the "building loss" affords no basis on which relief could be granted by us.

This is also true of the third alleged cause, undue delay in furnishing gas service. Such service did not become available at the site of the work until about December 7, 1962. The evidence falls short of demonstrating that the Government failed to perform on time any obligation with respect to gas service that rested on it, or that appellant could have effectively utilized gas service prior to the time when it actually became available. But, even if both of these essential elements had been proved, the claim would, nevertheless, be one for breach of contract and, as such, not cognizable by the Board.

The fourth, fifth and sixth alleged causes of the "building loss” are similar in nature and will be considered together. In the main, they stem from events that occurred in connection with the construction of a service building at the Benton Lake National Wildlife Refuge. This building was constructed under a different contract than is here involved, held by a different contractor than appellant. During the summer of 1962, while appellant was awaiting resolution of his claim of mistake in bid, work on the service building was performed by the firms from whom appellant had obtained excavation, concrete forming,

7 Electrical Builders, IBCA-406 (August 12, 1964), 1964 BCA par. 4377; Commonwealth Electric Co., IBCA-347 (March 12, 1964), 71 I.D. 106, 1964 BCA par. 4136, 6 Gov. Contr. 262, and cases cited therein.

and plumbing bids. These firms appear to have formed the opinion that various features of the design of that building, such as the tolerance of one-eighth inch allowed for surface irregularities in concrete walls, either were unnecessary departures from customary building practices in the area or were enforced too literally. A like opinion was formed by the prime contractor for that building. The attitudes in question appear to have affected the work under the instant contract in two ways: by inducing prospective subcontractors to withdraw their bids, and by inducing appellant to adopt higher construction standards, with respect to such matters as concrete forms, than he had originally contemplated.

The weight of the evidence is to the effect that the Government did not require better work, either under the contract for the service building or under the instant contract, than the applicable contract provisions authorized. Where extra work was required, additional compensation was paid pursuant to the “Changes" clause of the contracts. Fundamentally, the burden of the testimony offered on behalf of appellant is that the various contract and subcontract bids were prepared on the basis of customary construction standards in the area, rather than on the basis of the standards spelled out in the contract. The law, on the other hand, is plain that the Government as a party to a construction contract is entitled to the performance specified in the contract, and need not accept something else that, from a functional standpoint, may be "just as good.” 8

“ Even if it were to be found that in some particulars the contracts were administered too strictly, there is no showing of circumstances which would amount to either an express change or a constructive change in the drawings or specifications of the instant contract and which would justify an equitable adjustment of the contract price, in addition to the price adjustments already made by the contracting officer. On the contrary, the testimony bearing upon the fourth, fifth, and sixth alleged causes of the "building loss” reveals that any claim which appellant may have on account of excessively strict administration would be a claim for breach of contract and, therefore, beyond our jurisdiction as well as that of the contracting officer.

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Conclusion

We find from the evidence that appellant is not entitled to an equitable adjustment for any of the elements of his claim, none of which present matters cognizable by the Board within the meaning of the “Changes" clause (Clause 3), the "Changed Conditions" clause (Clause

8 Farwell Co. v. United States, 137 Ct. Cl. 832 (1957).

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