2-122. Final Acceptance. Final acceptance by the contracting officer will be in writing at the time all work is completed to the satisfaction of the contracting officer; provided, however, that the contracting officer may at his discretion and in the interest of the Government accept individual completed divisions of work.

The contract was completed within the time required. Final acceptance thereof by the Government in writing was made on October 18, 1961.

The matter was submitted by the parties on the record without an oral hearing.

The evidence discloses that a huge mud flow from a glacier on Mount Hood occurred sometime between the afternoon of August 31 and noon the next day, September 1, 1961. The deluge of mud and water flowed through forest land and in its descent picked up logs, large rocks and other debris and piled them to a height of 9 feet against the steel tower erected by appellant, causing damage thereto to a substantial extent. Appellant was directed by the contracting officer to make the necessary repairs and replacements, and claims the sum of $2,540.13 as compensation for doing this work. The cost of removing the logs and debris deposited about the tower by the mud flow was, however, borne by the Government and paid for by the issuance of a change order in the amount of $1,371.06. This latter work was ordered for purpose of preventing further damage to the tower.

Appellant's contention that the cost of repairing the damaged tower should be borne by the Government is predicated on the theory that for all practical purposes all construction work had been completed and verbally accepted by Government inspectors two weeks prior to the mud flow, that is, on August 18, 1961. Appellant, however, has failed to adduce any proof in substantiation of such allegations, which are unequivocally denied by the Government.

The contracting officer found, and appellant does not deny, that while all construction work specified in the contract was completed on August 18, 1961, cleanup was not completed until August 31, 1961. Clause 1-107 of the contract required cleanup to be completed within 30 days after completion of construction. Clause 3-106 specified in detail what was to be done in the way if cleanup, and then went on to provide that if appellant failed to perform any of the required cleanup, the Government would perform it at the expense of appellant or its sureties. It is clear from these provisions that cleanup was a material part of the work to be done by appellant, and that until it had been performed a finding that "all work is completed," within the meaning of Clause 2-122, could not properly be made. Hence,

January 29, 1964

completion did not occur until August 31, 1961, the very day on which the mud flow began.

Appellant's allegation that there was a verbal acceptance by Government inspectors is unsupported by any showing of who the inspectors were, what they said, and whether they had any authority to give the final acceptance provided for in Clauses 2-108 and 2-122. Even if there were such a showing, a mere verbal acceptance would not suffice, since the clauses just cited provide that final acceptance is to be "in writing." The record contains no intimation of any circumstances, such as waiver or ratification, that conceivably might validate a verbal acceptance. Moreover, the assertion that the work had been accepted by August 18, 1961, is inconsistent with the fact that it was not completed until August 31, 1961.

The statement in Clause 2-122 that final acceptance is to be made at the time all work is completed "to the satisfaction" of the contracting officer clearly imports that the contracting officer is to have a reasonable opportunity to satisfy himself that the work fully conforms to all requirements of the contract. Obviously, the brief interval that elapsed between the completion of cleanup on August 31, 1961, and the discovery the next day that the tower had been damaged did not afford such an opportunity. The record, moreover, contains evidence to the effect that it is a standard practice of the Bonneville Power Administration not to accept a newly-constructed transmission line until an energization test has been made for the purpose of ascertaining whether the line is free from potential grounds, and that appellant was aware of this practice at the time when it entered into the contract here at issue. Appellant has proffered no proof that the Bonneville Power Administration could and should have made the energization test prior to the time when the mud flow occurred.

The reasonableness of the Government's conduct in not accepting the work before the tower was damaged is also supported by the fact that appellant's letter requesting final acceptance bears the date of September 5, 1961, which was four days after the damage was discovered. While appellant alleges that written notice of completion was given by it on August 18, 1961, proof for this assertion is entirely lacking.

Appellant's second contention that payment by the Government for the cost of removal of logs and debris from around the tower warrants Government responsibility for the expense of repairing damage to the tower is also untenable. A change order was issued by the contracting officer subsequent to the mud flow, authorizing payment for such

723-875-64- -2

removal, which had been directed in order to prevent further damage to the tower. The correspondence between appellant and the Government shows that when appellant made the repairs to the tower it was fully aware that the Government, while willing to pay for the removal of logs and debris, disclaimed any responsibility for the expense of repairing damage to the tower. These circumstances negate, rather than support, any assumption of liability by the Government for the tower repairs.

Appellant further avers that the logs and debris which caused damage to the tower were the property of the Government and not of a third party, and that by reason thereof the cost of repairing the tower should be borne by the Government.

We do not find the question of ownership of the logs and debris to be of particular legal significance. The evidence discloses that the mud flow which was of deluge proportion, was triggered by a heavy rainstorm that fell upon a glacier, the lower portions of which had been made unstable by exceptionally high melting induced by exceptionally hot weather. The cause of the damage must therefore be attributable to an Act of God or to other forces of nature. We find that neither the appellant nor the Government was at fault.

2

This appeal falls within the application of the general rule of contract law that a contractor must bear the risk of increases in the cost of contract work caused by the forces of nature, without the fault of either party, unless there is, as there is not here, a contract provision shifting this responsibility to the Government.

This rule is carried over into subject contract by the incorporation of Clause 11 and Clause 2-108 (both of them are quoted above), which specifically placed upon appellant the responsibility for all work until it was accepted in writing by the contracting officer.

3

It is well settled by the courts and by opinions of this Board' that where work is damaged before completion and acceptance by an Act of God or by other forces of nature, without the fault of either party, and in the absence of a contract provision shifting the risk of such a loss to the Government, the contractor is obligated to repair the damage at its own expense.

2 Report of Bonneville Power Administration geologist, dated October 9, 1961.

3 Day v. United States, 245 U.S. 159 (1917); W. F. Maxwell v. United States, Ct. Cl. No. 392-58 (January 12, 1962); Jack Carmen v. United States, 143 Ct. Cl. 747 (1958); DeArmas v. United States, 108 Ct. Cl. 436 (1947).

A Montgomery-Macri Company and Western Line Construction Company, Inc., IBCA-59 and IBCA-72 (June 28, 1963), 70 I.D. 242, 279, 1963 BCA par. 3819, 5 Gov. Contr. par. 419; Barnard-Curtiss Company, IBCA-82 (August 9, 1957), 57-2 BCA par. 1373; McWaters and Bartlett, IBCA-56 (October 31, 1956), 56-2 BCA par. 1140; Osberg Construction Company, IBCA-32 (June 19, 1956), 63 I.D. 180.

January 31, 1964

Under the circumstances of this case, the Board is of the opinion that appellant is not entitled under the contract to payment for the costs of repairing damage to the tower. The unforeseen results caused by the melting of the glacier, the rainstorm, and the concomitant mud flow with its burden of logs and debris was, in our opinion, a happening of which the Government was not the cause and for which it is not liable to pay.

CONCLUSION

For reasons set forth above, the appeal is denied.

JOHN J. HYNES, Member.

I CONCUR:

I CONCUR:

PAUL H. GANTT, Chairman.

HERBERT J. SLAUGHTER, Member.

IBCA-317

APPEAL OF PROMACS, INC.

Decided January 31, 1964

Contracts: Interpretation-Contracts: Specifications

Where a duly issued modification of specifications incorporated in the contract eliminates provisions for adjustment of price for excavation in the event that rocks of a certain size and extent are encountered, and substitutes a provision that all excavation shall be paid for at the stipulated contract price without any adjustment, an interpretation by the contractor of such modification, as constituting a representation by the Government that no rock would be encountered in the excavation work, is so strained as to be unreasonable. The unreasonableness of the interpretation precludes application of the doctrine of contra proferentem.

Contracts: Changed Conditions-Contracts: Additional Compensation

A contractor is not entitled to additional compensation on the theory of a changed condition, where the only basis for the claim is the absence of contract warnings as to possible rock and permafrost, if the contractor had the same opportunity before bidding, as did the Government, to ascertain that rock and permafrost were being encountered at nearby excavation work, and should have known that they probably would be found at the job site also.

BOARD OF CONTRACT APPEALS

This timely appeal, involving a claim of $20,511.41, was heretofore the subject of a motion by the Government to dismiss for failure to comply with the notice requirement of Clause 4, "Changed Conditions," of Standard Form 23A (March 1953). The motion was denied by the Board on the ground that in addition to the issue of

January 31, 1964

timely notice under the Changed Conditions clause, there is also in issue the interpretation of Clause 1-04 of the specifications, entitled "Excavation." 1

The contract, dated September 17, 1959, contains Standard Form 23A (March 1953) and a number of additional General Provisions, Special Provisions and Specifications, including, in particular, a Modification of Section 1, entitled "Clearing, Excavating and Grading,” of the specifications.

The project covered by the contract included "Utilidor, Utilities, Boiler House and Steamheating of Buildings, Headquarters Area, McKinley National Park, Alaska." The completion date required by the contract, as extended, was June 26, 1961. Final inspection took place during the period of June 26 to June 30, 1961, and the work was accepted subject to correction of a number of minor deficiencies. The last of these deficiencies was finally corrected early in 1962.

The contract price of $385,981.26 was made up of several lump sum bids for items such as the construction of a boiler house and the conversion to steam heating in several existing buildings, together with a number of unit bid prices based on estimated quantities such as Item 1, Reinforced Concrete Utilidor (estimated quantity 2000 lineal feet) and Item 10, Over-Excavation and compacted gravel backfill for Utilidor (estimated quantity 1000 cubic feet).

In a letter dated July 25, 1961, the contractor notified the contracting officer that it had encountered "quantities of boulders and in some places, permafrost ***" during the excavation of the trench for the boiler house and Utilidor, and furnished a tentative estimate of the additional cost of excavation caused by those conditions as "exceeding $15,000." The contracting officer replied by letter of August 1, 1961, acknowledging receipt of the contractor's letter, and confirming a conversation with Mr. Guy McGee, Project Manager of the contractor, on August 1, 1961. That conversation was to the effect that the letter of July 25, 1961 could not be construed as a formal claim; that it would be considered as a notice of intent to file a formal claim; and that the letter of July 25, 1961 "*** was the first notification you have tendered us regarding a claim for additional payments. * * *”

No further claim was filed until the contractor's letter of February 27, 1962. That letter included a detailed tabulation of work hours and costs for the additional work alleged to have been performed, during the period of June 11 through August 10, 1960, as to the excavation for the boiler house, drain pipe, and Utilidor. The tabulation

1 Promacs, Inc., IBCA-317 (May 29, 1962), 4 Gov. Contr. 291 (g).