that he should be responsible for all damages to persons or property that occur as a result of his fault or negligence and that he should also be responsible for all materials delivered and work performed until completion and final acceptance, except for any completed unit which theretofore may have been finally accepted. It was also provided that when all work or materials required for each project for which the amount is stated separately have been performed and furnished, acceptance could be given and the contractor's responsibility would cease. The contract also provided for partial payments and in this regard it was provided that work covered by partial payments should become the sole property of the government, but that this provision should not relieve the contractor of the sole responsibility for all materials and work upon which payments were made or the restoration of any damaged work. Held: Under the above provisions of the contract the responsibility of the contractor for all materials delivered and work performed until completion and final acceptance and for delivering the work complete and undamaged is not limited to damages resulting from the contractor's fault or negligence. (Mittry et al v. U. S., 73 Ct Cl 341; 15 Comp Gen 876; 16 Comp Gen 975). Nor do the partial payment provisions set forth above to the effect that the materials and work covered by the partial payment shall become the property of the government affect the "sole responsibility" of the contractor to restore any damaged work or the right of the government to demand that upon completion of the contract the work be delivered complete and undamaged without additional expense. Inasmuch as the contractor is required to assume the risk of damage to or destruction of the property in the event such damage or destruction should be caused by an act of the contractor or by some occurrence beyond the control of either party prior to final inspection and acceptance by the government, under the provisions of the contract the government does not have a vested right to use or occupy the building and utilities at any of the three projects until all the contract work is completely performed and finally accepted. Held also: However, the contract may be amended to provide for a separate price for each project, so as to permit the acceptance of each project as it is completed since contracting officers may legally modify existing contracts in the interest of the United States. (Citing 19 Comp Gen 662.) MS Comp Gen B-121805, 34 Comp Gen 219. 8 November 1954. § 45.21. Local building permits. The Comptroller General had ruled moneys should be withheld from a contractor under a lump-sum construction contract to cover cost of building permits paid to a municipality by the contractor because the government was not subject to local building laws and ordinances for construction on land acquired by the government and the contractor was an agent of the government (see 30 Comp Gen 28). In a suit by the contractor against the municipality, the United States Court of Appeals for the Fifth Circuit sustained the lower court in ruling that the United States was not the real party to the suit and had no contractual right to sue in its own name. The Comp troller General was again asked whether moneys otherwise due the contractor should be deducted. Held: Since the contract did not provide for price adjustment in event it was subsequently determined fees were not payable, courts could not be expected to rewrite contract and the amounts withheld could be released. MS Comp Gen B-93924, 34 Comp Gen 31. 21 July 1954. § 49.1. Generally. § 47. Purchases by Government § 49. Price Revision Government as not entitled to benefit of court ruling contractor was not subject to local building permit fees where government contract did not provide for price adjustment in the event of a determination that such fees were not payable, see MS Comp Gen B-93924, supra § 45.21. Modification of a contract so as to state separately the price for each of three projects covered by a contract which states only a lump-sum price for the entire work, see Comp Gen B-121805, 8 Nov. 1954, supra § 45.1. § 52. Passing or Acquisition of Title § 52.1. Generally. Bidders acquisition of title to property sold by government on application of his bid deposit to payment of the bid price, see MS Comp Gen B-117440, supra, § 27.1. § 52.11. Sale F. O. B. A contractor agreed to furnish the government a quantity of tomatoes under a contract calling "for delivery f.o.b. destination." The notice or advertisement for bids specified that the tomatoes were to arrive at Oakland, California on a certain date, the contractor submitted its bid as follows: "We will submit 3.50 delivered Oakland on the lot." The tomatoes were shipped from Texas by rail and on arrival at Oakland the government refused to accept them because the tomatoes had deteriorated in transit. Held: In view of the express provision in the contract "for delivery f.o.b. destination," the tomatoes remained the property of the contractor while en route to Oakland, hence the risk of their deterioration in transit was on the contractor. An express provision for delivery to be f.o.b. destination, in the absence of a contrary intention, requires the seller to make delivery to the buyer at the destination point in proper grade or condition before title passes. (Citing 2 Williston on Sales, Rev Ed, § 280b, p 98; 101 ALR 295; 37 Tex Jur, § 206, pp 457458.) Larry Lightner, Inc. v. United States (1954, CA5th Cir), 213 F2d 449. § 53. Decisions of Government Officers; § 53.1. Generally. The Armed Services Board of Contract Appeals was created solely by administrative action to exercise such powers as are conferred by contract upon the heads of the defense departments to decide disputed questions arising under such contract. Its decisions are effective only to the extent that they are made so by contractual agreement, and cannot in any case go beyond the powers of the head of the department concerned. Whether or not a contract has come into being is not a question arising under the contract, nor is it a question as to which the decision of a department head is made final or conclusive by any statutory enactment, or is so considered by ordinary rules of law. Therefore a conclusion by the Board of Contract Appeals that a contractual relationship did not come into existence is not binding upon the comptroller general in determining a defaulting contractor's liability for excess costs incurred in consequence of his default. MS Comp Gen B-120249, 34 Comp Gen 20. 13 July 1954. A construction contract provided that all disputed questions of fact should be decided by the contracting officer, subject to appeal to the head of the department or his duly authorized representative whose decision should be final. Each of seven claims arising out of the contract was decided adversely to the contractor by the contracting officer and his decision was affirmed by the representative of the department head. A petition was filed in the Court of Claims but because of the foregoing all but one of the claims, which claim involved a question of law, were dismissed. Subsequently, PL No. 356, 83rd Cong, 2nd sess, 41 USCA §§ 321, 322, became effective providing in pertinent part that no provision of any contract entered into by the United States relating to the finality of any decision of any department head should be pleaded in any suit filed or to be filed as limiting judicial review of any such decision in cases where fraud by such official is alleged but that any such decision should be final unless the same is fraudulent or capricious or arbitrary or so grossly erroneous as to imply bad faith or is not supported by substantial evidence. In an attempt to take advantage of this law, the plaintiff filed an amended petition alleging that the actions of the contracting officer and the representative of the head of the department were capricious or arbitrary or so grossly erroneous as to imply bad faith or were not supported by substantial evidence. Held: The statute did not serve to reopen the claims previously dismissed since it does not apply to adjudicated claims and the order dismissing the claims became a final adjudication when no action was taken to appeal within the required period notwithstanding the fact that one claim was not dismissed and remained to be adjudicated. (Citing U. S. Code Congressional and Administrative News, pp 2191, 2196; Court of Claims Rules, subdiv b of Rule 38 and Rule 50; Caltex Inc. v. U. S., 100 F Supp 970, cert gr 343 US 955, 96 L ed 1355, 72 S Ct 1050; Reeves v. Beardall, 316 US 283, 86 L ed 1478, 62 S Ct 1085; Collins v. Metro-Goldwyn Pictures, 106 F2d 83; Kasishke v. Baker, 144 F2d 384). United Foundation Corp. v. U. S. (Ct Cl No. 175-52, 1955) 127 F Supp 798. § 55.1. Generally. § 55. Extra Work and Expenses The government had test borings made on a proposed sewer line. The plans and specifications for the sewer line set out the nature of the soil disclosed by the borings but said nothing about subsurface water, although the report on the borings had shown measurable water levels in five of sixteen test holes and also disclosed that water had been encountered in many of the other eleven holes although it could not be accurately measured because the holes had caved in. The successful bidder sued for excess cost incurred in construction of the sewer by reason of encountering quantities of underground water in an amount not expected. Held: Since the specifications said nothing one way or the other about subsurface water, the contractor did not encounter subsurface or latent conditions materially different from those indicated in the specifications within the meaning of a clause in the contract providing for an equitable adjustment if subsurface or latent conditions not shown in the specifications were discovered. However, the withholding by the government of the information shown by the test borings was a breach of contract entitling the contractors who were misled thereby to recover excess costs to which they were put by reason of encountering the water. Ragonese et al. v. United States (1954 Ct Cl) 120 F Supp 768. In connection with certain work on a river bed a contractor agreed to clear an area as indicated on drawings attached to and made a part of the contract. The specifications contained an estimate of the clearing work to be done but it was stated that the government did not guarantee or assume any responsibility as to the accuracy of the estimate and that the contractor should make his own determination of the scope and nature of the clearing work to be done. Prior to bidding the contractor visited the site but due to illness was able to make a reconnaissance only of the areas accessible by car. Furthermore, a number of the project alignment stations had been marked in the winter and were washed away by ice floes. However, there was no indication that any exhaustive attempt was made to determine the acreage of the area to be cleared. After he had started work the contractor notified the government that the area exceeded the number of acres set forth in the specifications. A check verified the estimate but this check, like the original estimate, failed to consider a certain area to be cleared in the river channel. Held: The contractor is entitled only to his original bid. The responsibility for determining the full extent of the work was on him. The fact that an estimate was furnished by the government did not relieve the bidder from familiarizing himself with the physical conditions at the site. Although he may have cleared a larger area than was anticipated that was a risk he assumed, particularly since he was warned to make his own determinations of the scope of the work. In addition the drawings showed the area to be cleared. Also, if the time available for preparation of the bid was inadequate, it would not excuse the bidders failure to make his calculations. He could have refused to submit a bid or he could have requested an extension of time but he did neither and chose to rely upon the government's estimate and his own cursory examination. (Citing H. M. Hampton, Surviving Executor of the Estate of J. D. Young v. U. S., 82 Ct Cl 162; C. W. Blakeslee & Sons and Blakeslee-Rolling Corp. v. U. S., 89 Ct Cl 226; Clarke Bros. Const. Co. v. U. S., 103 Ct Cl 57.) MS Comp Gen B-120331, 33 Comp Gen 616. 29 June 1954. The government is not liable for excess costs incurred in the performance of a construction contract because the quantity of a certain material actually used was less than the amount of the estimate where the contract provided that the estimates were approximations for the purpose of comparing bids and that no claim should be made against the government for excess or deficiency therein. Thompson v. United States (Ct Cl No. 49119), 124 F Supp 645, 5 October 1954. A contract for the painting and decorating of living quarters on a military reservation provided that every practicable effort would be made to have the quarters vacant when the work was being done but that when this was not possible the moving and replacement of household furniture would be the responsibility of the occupant. An addendum to this provision provided that the contractor should base his estimate on having to perform his operation while the quarters were occupied in nine cases out of ten. Another provision of the contract was that the government assumed no responsibility for representations made by any of its officers or agents unless such representations were expressly stated in the contract and the contract expressly provided that responsibility was assumed by the government. An officer of the contractor talked to the post engineer and two of his employees and was informed that it was their interpretation that the contract placed the burden on the government to furnish labor for the moving of furniture from the buildings involved. Some labor was furnished but it was inadequate and the contractor found it necessary to hire its own laborers to remove the furnishings. The contracting officer never agreed to furnish labor for the removal of the furnishings and the contract was never modified to provide for the paying of labor for such purposes. Held: The contractor was not entitled to recover for the excess costs incurred in hiring laborers to remove the furnishings. The contract and the addendum thereto did not place the burden upon the government to furnish labor for the removal of furnishings from the building and neither the post engineer nor his employees had authority to make any representation or interpretations of the contract or to modify or change the contract. The contracting officer was the duly authorized representative of the government and his authority as such was not delegated to the post engineer or his employees. Persons dealing with the government must take notice of the extent of the authority it has given its agents and |