Mr. HENLOCK. As of April 19, 1967. Mr. ANDREWS. You had paid him $9,794,177. So, as of the 19th of April, 1967, you owed him a balance of $1,990,410? Mr. HENLOCK. $1,986,810, on the basis of the original contract price, plus Change Orders issued to date, and the $3,600 item of decrease mentioned. Mr. LANGEN. What have you done, as a result of your past experiences, to prevent a similar experience from occurring in any contracts that we may have in the future? I happen to think this is a pretty deplorable situation and some steps ought to be taken to correct it for any building endeavors in the future. Mr. CAMPIOLI. We thought we had made these specifications as rigid as any we have ever turned out. We realized that the time schedule was short and it required the contractor to do the work in 18 months and that meant whether it took one, two, or three shifts, it would be his responsibility. But from the very beginning, he never showed any indication that he was going to carry out both jobs simultaneously. He proceeded with one first and then went to the other. In order to complete the jobs in 18 months, they would have had to be done simultaneously. Mr. LANGEN. Is there some means whereby, as the construction is underway and when you begin to see that things are going astray, such as they did here, that some steps can be taken to correct them at an earlier stage than this? Mr. CAMPIOLI. If the contractor gets the idea we are expediting him, our counsel advises us that we might subject ourselves to a claim for acceleration. Mr. ANDREWS. Mr. Stewart, we would like this record to be as complete as you are prepared to make it at this time on the underground garage project. There have been considerable delays in this project and we want to know whether the Government's interest has been and is being fully protected. Mr. STEWART. We consider it is. Mr. Chairman, may I say, in elaboration, that in answering Mr. Langen's questions about the garages, which he asked while we were discussing the staffing of these garages, I outlined as many of our problems with the construction of the garages as I believe should be stated of record at this time. Any further detailing of problems or disputes with the contractor should only be done with extensive documentation after thorough study and analysis, as any premature detailing of such matters might adversely affect the Government's interest in the disposition of claims and disputes. Mr. ANDREWS. We have had some questions on and off the record about the garage. Earlier, you read a statement about the garages. It sounded to me like your statement was a rather severe indictment against the contractor. Have you received full cooperation from the contractor in all respects? Has he responded to your request for blueprints, statements, et cetera? Mr. STEWART. I would say he has only responded in part. Mr. ANDREWS. Did you tell us off the record a few minutes ago that, as of this date, he has not furnished you or your associate architects with blueprints with reference to that new system that he used, the excavation bracing system? Have you requested him to furnish you blueprints for that system? Mr. CAMPIOLI. Yes, we have; but we have not as of this date received the shop drawings on the excavation bracing system on square 637 for final approval. Mr. ANDREWS. Do you need those blueprints? Mr. CAMPIOLI. We only need them to verify the fact that the contractor is doing the work in accordance with the earlier submission of the shop drawings which have been previously returned for correction. Mr. ANDREWS. What was the original completion date in the contract? Mr. CAMPIOLI. April 1966. Mr. ANDREWS. One year, plus some days ago? Mr. CAMPIOLI. The exact date is April 7, 1966. Mr. ANDREWS. It is nearly 13 months ago from today? Mr. CAMPIOLI. Yes, sir. Mr. ANDREWS. Who is the general contractor? Mr. CAMPIOLI. Baltimore Contractors, Inc. Mr. ANDREWS. Could you give us a breakdown on the officials of that company? Mr. CAMPIOLI. I believe we can insert that in the record. (The information follows:) BALTIMORE CONTRACTORS, INC. OFFICERS President: Edward Morris Executive Vice President: Leonard H. Hudson Vice president: Gerald J. Jarosinski Vice President: Bernard Shepard Assistant Vice President: Charles M. Callahan Assistant Vice President: John Pfeiffer Treasurer: Miss B. M. Heywood Secretary: Miss Virginia Lambrow Chairman of the Board: Victor Frankil Mr. ANDREWS. How was the original award made, to the lowest bidder? Mr. CAMPIOLI. No, sir. Mr. ANDREWS. Explain how the contract was awarded. Mr. HENLOCK. In 1966 we prepared a brief statement, explaining that award, which we inserted in the hearings at that time, Mr. Chairman. I will be glad to again explain the award. After public advertising, competitive bids were recived and opened in the Office of the Architect of the Capitol, July 15, 1964, for the construction of underground garages in squares 637 and 691 and for the landscape development of the areas above the garages. Square 637 is located immediately south of the Rayburn House Office Building and square 691 is located immediately south of the Longworth House Office Building. Six bids were received, ranging in price from a low of $11,735,000 to a high of $13,750,000. Under the terms of the invitation to bid, each bidder was required to submit with his bid a bid bond in an amount equal to not less than 10 percent of his bid. All six bidders submitted bid bonds, but there was a deficiency in the bid bond of the low bidder, Brookfield Construction Co., Inc., and Baylor Construction Corp., and the bids were submitted to the Comptroller General for advice as to award. By decisions, dated August 3, 1964, and August 6, 1964, the Comptroller General ruled that the low bid should be disregarded because of the bid bond deficiency. The bids and views of the Comptroller General were presented to the House Office Building Commission and that Commission, after a careful review of the case, directed that the contract be awarded to the second lowest bidder, Baltimore Contractors, Inc., whose bid met the requirements of the specifications. A contract, in the amount of $11,770,000, was entered into with Baltimore Contractors, Inc., on August 10, 1964. The Commission noted that the amount of the bid accepted exceeded the original estimate of cost for this project, but felt that the need for the project was sufficiently urgent and the range of prices submitted by the six bidders warranted the award of contract. In the meantime, before a notice to proceed with work under the contract was issued, Brookfield-Baylor appealed the award of the contract to the Comptroller General and the Comptroller General, by letter of September 11, 1964, sustained the award. On September 14, 1964, Brookfield-Baylor filed a motion in the District Court of the United States for the District of Columbia for a temporary restraining order to prevent the Architect of the Capitol from proceeding with any work under the contract with Baltimore Contractors, Inc., including issuance of a notice to proceed with such work. They also filed a motion for a temporary injunction to restrain any action on the part of the Architect of the Capitol to activate work under the contract with Baltimore Contractors, Inc., and further petitioned the court for a writ of mandamus to compel the Architect of the Capitol to award the contract to Brookfield-Baylor. The motion for a temporary restraining order was denied by Judge Holtzoff on September 14, 1964, but September 22, 1964, was set as the date for a formal court hearing on the motion for a temporary injunction and on the petition for a writ of mandamus. The case was heard in district court on September 22, 1964, and on September 30, 1964, Judge Holtzoff of that court denied the temporary injunction and dismissed the request for a writ of mandamus and rendered an opinion upholding the award of the contract for the underground garages to Baltimore Contractors, Inc. Brookfield-Baylor immediately filed an appeal against this decision with the U.S. Court of Appeals, and that court, on October 2, 1964, upheld the action of Judge Holtzoff. These facts were again presented to the House Office Building Commission and the Commission, on October 2, 1964, directed the Architect of the Capitol to issue a formal notice to proceed with work under the garage contract to Baltimore Contractors, Inc. The notice to proceed was issued by the Architect on October 2, 1964. The delay from August to October in issuance of the notice to proceed delayed commencement of work under the contract approximately 2 months. The notice to proceed allowed 550 calendar days for performance, establishing the completion date due as April 7, 1966. Mr. ANDREWS. What is the liquidated-damage provision in the contract? Mr. HENLOCK. $250 per calendar day for any delays for which the contractor is responsible. Mr. ANDREWS. Tell us something about the original delay, the controversy over the specifications or whatever it was that delayed the project in the beginning, by how many months? Mr. CAMPIOLI. The excavation bracing system which I described previously, in our opinion, has delayed the project approximately 8 months. Mr. ANDREWs. Whose idea was that? Mr. CAMPIOLI. The contractor had the option to submit an alternate bracing system subject to the approval of the Architect of the Capitol. Mr. ANDREWS. Did you approve his alternate method? Mr. CAMPIOLI. We eventually did after we finally received the necessary information after a lapse of about 8 months. Mr. ANDREWS. Did you advise him as to whether or not that system should be used? Mr. CAMPIOLI. There is a tremendous amount of correspondence in the file on this subject and he was advised repeatedly that he was not furnishing adequate information so that our associate architects and engineers could make a complete check of the system proposed. Mr. ANDREWS. Has he ever furnished the information you requested? Mr. CAMPIOLI. He has furnished it completely on 691 and incompletely on 637. Mr. ANDREWS. We will adjourn until 2 o'clock. Mr. ANDREWs. The committee will come to order. The last question was "Tell us something about the original delay, the controversy over the specifications or whatever it was that delayed the project in the beginning, by how many months? Has that particular controversy been resolved? Mr. CAMPIOLI. We are still awaiting the prints of the shop drawings on square 637, on this system for final approval. Mr. ANDREWS. How many times have you requested the contractor to furnish you with those drawings? Mr. CAMPIOLI. There have been about five letters written. Mr. VALENTI. He finally sent us drawings that purported to be the final shop drawings on this excavation bracing. As yet he has not submitted them for final approval, but only for record purposes. They are incomplete. I have tabulated all the information and will so advise the contractor of this condition. Mr. ANDREWs. I take it, then, that the contractor has not been cooperative with you in this respect? Mr. CAMPIOLI. No, sir. We have not settled the time element on that delay with the contractor. The contractor, on the other hand, has notified us he is going to submit a claim for extra costs in connection with this alternate excavation-bracing system. Mr. ANDREWS. When did you first hear of extra costs for that new system? Mr. VALENTI. Sir, that came out at the time we had the first problem, with this contractor in 1964. The claim letter is dated December 1. 1964, stating he was going to claim extra costs for delay in getting his alternate excavation-bracing system approved. From that time on, he has continually written us on that same point and reiterated the fact that he was going to ask for extra costs for 78-653-67———7 delay in approving and extra costs for installing, the alternate excavation bracing system. Mr. ANDREWS. Who required him to use the new system? Mr. CAMPIOLI. He elected to use it himself instead of what was shown on the drawings. Mr. ANDREWS. At the time he made the election, did he say anything about extra cost? Mr. CAMPIOLI. No, sir. Mr. ANDREWS. You haven't agreed to pay him any extra costs? Mr. CAMPIOLI. No, sir. Mr. ANDREWS. Your advice was to use the old system, was it, or a different system? Mr. CAMPIOLI. Our recommendation would have been to have used the system shown and specified, but he did have the privilege of submitting an alternate system, subject to approval. Mr. ANDREWS. How many supplements and change orders have you issued? Mr. CAMPIOLI. There have been 135 supplements and of that number there have been about 28 supplements which have been resolved into change orders. Mr. ANDREWS. What have you done, if anything, to the original scope of the work? Mr. CAMPIOLI. Substantially these supplements have not increased the scope of the work with the exception of the additional work involved in connection with the installation of connections for a future sprinkler system. Mr. ANDREWS. Either on or off the record, what is the status of the pricing of the change order work? Mr. CAMPIOLI. As of today's date, I have been informed that there are 28 supplements that have been reduced to change orders for a total of $24.245. Mr. ANDREWS. Is that an up-dated figure in connection with this figure you gave me this morning of $14,587? Mr. CAMPIOLI. That was an earlier figure based on an earlier date and this larger figure is based on today's date. Mr. ANDREWS. That is up roughly $10,000 additional. Mr. CAMPIOLI. Yes, sir. Mr. ANDREWS. In there a rough rule-of-thumb measurement on the value of change orders normally to be expected in construction work of this kind and, if so, are you, in your opinion, within the bounds, so to speak? Mr. CAMPIOLI. Generally speaking, it has been my experience-and I was for some years production manager of one of the largest architectural firms in New York-that if we could keep our change orders to within 5 percent, we would not be in trouble with the owners. Now, of course, that 5 percent is predicated on change orders that do not increase the scope of the work upon changes ordered by an owner by adding additional facilities. Mr. ANDREWS. Your change orders here totaled $24,245, which is well, well, well below the 5-percent figure. Mr. CAMPIOLI. Yes, sir. That is not the total sum, however. Mr. Roof. That is the total sum issued to date, but we have pending change orders in process which we estimated for budget purposes |