Mr. CAMPIOLI. I do not think we have any alternative but to take care of all the windows and doors. With regard to the other items Mr. Rubel is more familiar with them than I am. Mr. ANDREWS. Mr. Rubel. Mr. RUBEL. As far as the item of $45,000 for replacement of the evaporative condenser on the roof of the building is concerned, in my opinion, I think we will be fortunate if we get through the summer of 1969 and be able to have air conditioning, unless this condenser is replaced in the meantime. So I think it is absolutely necessary to replace that unit during next winter or we cannot guarantee the air conditioning system would continue in operation the following summer. Mr. ANDREWS. How long have you had a $21,000 per year lease? Mr. ROOF. $21,000 is the correct amount of the lease. I just verified that. Mr. HENLOCK. The lessee is obligated to operate the premises as a hotel during this period; to protect the premises; to keep the building and its equipment in good repair and maintain the same in the physical condition existing on September 30, 1963, excepting for ordinary wear and tear; to furnish all furniture, furnishings and other items required to operate the premises as a hotel; to carry adequate fire and extended coverage insurance on the premises, as well as casualty insurance. In addition, under the current lease, the lessee was required. to make expenditures for certain stipulated improvements. Mr. ANDREWs. How much? Mr. HENLOCK. Between $75,000 and $100,000. Mr. ANDREWS. In 1963? Mr. HENLOCK. During the past 5 years. The improvements, as indicated, were made by the lessee without expense to the Government, as required by the lease. Mr. ANDREWS. And they repainted. Mr. HENLOCK. Their lease requires them to do all exterior and interior painting required during the lease period. Mr. CAMPIOLI. And they redecorated and refurbished the dining room too. WITHDRAWAL OF TWO ITEMS AFFECTING CONGRESSIONAL HOTEL [CLERK'S NOTE.-The following discussion with reference to the Congressional Hotel items occurred, subsequently, at hearings before the Committee on April 5, 1968.] Mr. HENLOCK. There is a rather urgent matter which we would like to take up before the committee concludes its hearings this morning. On Tuesday, we submitted to you a figure of $850.000 as the estimated cost of work urged to be done in the fiscal year 1969 in the three House office buildings and the Congressional Hotel if you decide to defer the Longworth remodeling program. We included in that estimate, which was prepared hurriedly, $204,000 for Congressional Hotel repair and replacement items consisting of $54,000 for reputtying and recaulking exterior windows and doors. The rest was for equipment replacement and repairs, estimated to cost $150,000. That $150,000 should be deducted. We should have submitted to you an estimate of $700,000. We advised at the time we did not have the hotel lease with us. Because of built-in chests and other furniture and equipment of that nature, when the Justice Department wrote the stipulation acquiring the property, they defined certain items to be real property and others to be furniture and equipment, notwithstanding the normal classifications of real property. When this estimate was prepared late on April 1 and we came to you early the next day, all items appeared to be the responsibility of the Government under article 6 of the lease. However, subsequent analysis of the items and a more comprehensive understanding of their nature and scope, reveals that two of the items, totaling $150,000, are definitely the responsibility of the lessee and not that of the United States Government under terms of the lease applicable to certain items normally classified as real property but treated separately under the purchase stipulation and the lease. So, we are asking, may we resubmit this statement in the proper form and amend the discussion accordingly? Mr. ANDREWS. You may correct the record. Mr. HENLOOK. We appreciate that. Corrected breakdown of estimated cost of work necessary to be done in the Fiscal Year 1969 in the Three House Office Buildings and the Congressional Hotel, in the event the Longworth remodelling program is deferred Longworth House Office Building: Locker room for police____ $34, 500 Furniture storage room for the Clerk of the House (now in Rayburn building) 68,000 Cannon House Office Building: Changes in Cannon Building to provide expanded accom- Total, Cannon Building_ $115, 100 Rayburn House Office Building: Firearms practice range for the 68, 000 183, 100 113, 500 54,000 76, 900 Congressional Hotel: Reputtying and recaulking exterior windows and doors.... Total estimated appropriation required for the fiscal year UNDERGROUND GARAGES $700,000 Mr. ANDREWS. Mr. Stewart, I notice on page 105 you list $13,512,648 for underground garages in squares 637 and 691, including architectural and engineering fees. Actually it is not all for underground garages, is it? Mr. STEWART. No, sir. Mr. ANDREWS. Aren't there some shops and facilities in those underground locations? Mr. STEWART. I would like Mr. Campioli to answer that question. Mr. CAMPIOLI. The shops are in the upper level of the garage in square 637 and occupy half of that level. Mr. ANDREWS. Precisely what does the $13,512,648 represent? Is that the final cost? Mr. HENLOCK. No, sir; it is not the final cost. There are a number of claims pending and we have a statement on that item when you reach that point. Mr. ANDREWs. Is there more work to be done or is the contractor finished? Mr. CAMPIOLI. The only items remaining are the punch list items. Mr. ANDREWS. Punch list items? Mr. CAMPIOLI. Yes, miscellaneous and corrective items. Mr. ANDREWS. Have you accepted the project? That is, have you settled with the contractor? Mr. STEWART. No, sir. PENDING CLAIMS-UNDERGROUND GARAGES Mr. ANDREWS. What claims are pending, how much, and for what? Mr. STEWART. Mr. Chairman, I would like to read to you a summary of the claims filed by Baltimore Contractors, Inc., prepared by Mr. Winkelmann, our Chief Counsel: To date, Baltimore Contractors, Inc., has filed a total of 99 claims. Some of these claims have been submitted without any stated amount, requesting recognition of entitlement of the contractor to additional reimbursement in principle. The total amount claimed and stated thus far is $5,021,199. The last two claims were just filed on February 26, 1968, and March 25, 1968. Further, the contractor has advised that he intends to submit additional claims hereafter. To date, the amount of $148,522 has been allowed and paid on a total of 14 different claims. Three additional claims are expected to be allowed and paid shortly, in the total amount of $4,717. Generally, these claims were submitted in considerably larger amounts than the amount ultimately allowed and accepted by the contractor, after negotiations. To date, claims in the amount of $342,011 have been rejected by the Architect of the Capitol. Appeals have been filed in every case of rejection. These appeals are pending docketing with the Contract Appeals Board of the House Office Building Commission. Their docketing has been deferred upon request of the contractor's counsel, acceded to by Counsel for the Government as a matter of courtesy as well as convenience. The contractor's claim filed on February 26, 1968, involves the bulk, that is, approximately 80 percent, of the total amount claimed thus far. This claim is for $3.886,421. The claim alleges (1) additional costs allegedly caused by changed subsurface conditions claimed to have been encountered by the contractor upon excavation and the installation of the bracing of the excavation in squares 637 and 691, (2) additional costs allegedly caused by alleged delays of the Government in approving a substitute excavation bracing system, proposed by the contractor in lieu of the system shown on the contract drawings, as well as by alleged delays of the Government in connection with approval of granite work, backfill and roof-deck work, and (3) additional cost allegedly caused by alleged orders of the Government to accele rate the contract work upon threat of liquidated damages and by the holdback of alleged excessive retention of funds. The "delay" and "acceleration" portions of this claim were previously rejected by final decisions of the Architect of the Capitol which are now on appeal. In this respect the claim can only be considered a request for reconsideration of the Architect of the Capitol's previous decisions. That portion of the claim dealing with alleged subsurface conditions has not been the subject of a previous decision of the Architect of the Capitol. In view thereof, and in view of the lack of any breakdown in the amount of the claim ($3,886,421), no portion of the amount of the claim can be deemed rejected thus far. Other large and medium-size claims which make up the bulk of balance of still pending claims (i.e., except for smaller claims under $5,000) are listed as follows: (1) A claim for increased costs allegedly caused by the Government allegedly delaying the contractor in backfilling operations, in the amount of (2) A claim involving allegedly Government-caused increased costs in insulation, in the amount of. (3) A claim for alleged increased costs by alleged incompatibility of tolerances, in the amount of.. of (4) A claim involving tolerances on relieving angles, in the amount (5) A claim involving shoring of the chilled water tunnel, in the amount of.. $110, 598 112, 174 180,000 40.873 23,090 (6) A claim involving alleged suspension of work on lower wall, backfill, sidewalk and topsoil plant, in the amount of--- 50,715 (7) A claim for alleged suspension of work on foam-glass-membrane flashing, in the amount of. 10,927 (8) A claim involving filler for steel cover plate, in the amount of (9) A claim involving tolerances of hydrolythic waterproofing and protective coating, in the amount of. (10) A claim involving anchor plates in split-face stone, in the amount of___. 12, 100 9.982 (11) A claim involving split-face granite, in the amount of (12) A claim for increased costs for alleged additional work involving utilities, in the amount of.. 16,060 13,296 13.002 (13) A claim for increased costs allegedly caused by the Government involving excavation work stoppage, in the amount of (14) A claim involving additional bumper guards in both garages, in the amount of-----. 5,955 5,569 I also have a short statement I would like to present with respect to these claims. The statement is as follows: Mr. Chairman, I am sure that you can appreciate that I am reluctant to discuss on the record any matters pertaining to the merits or lack of merits of these claims, particularly the claim of such magnitude as the claim of $3,886,421 filed a month ago. Any statements that I might make now on the record would be premature and might result in prejudicing the Government's position and might also be construed as a prejudgment of claims prior to their complete analysis and determination. Needless to say, we will spare no engineering, architectural, or legal effort to defend the Government's side of this case. As the committee will recall, for more than 3 years we battled claims, totaling nearly $1 million, filed by the McCloskey Co. under the foundations contract for the Rayburn Building, before we were successful in winning our case before the House Office Building Commission's Board of Contract Appeals. Mr. ANDREWs. Who will determine these claims? Mr. HENLOCK. We must determine the validity of the claims. If the contractor appeals our rejection of any claims, then they would be heard and determined by the House Office Building Commission's Board of Contract Appeals. That Board consists of three members of the staff of the General Accounting Office assigned by the Comptroller to the Commission and answerable solely to the Commission. They do not act as employees of the General Accounting Office during that period, but solely as representatives of the Commission. Mr. ANDREWs. If the contractor rejects the decision of the Board of Contract Appeals can the contractor go to court? Mr. STEWART. Yes, sir; to the Court of Claims. Mr. ANDREWS. And you take the position you do not owe these claims and you oppose them? Mr. HENLOCK. Mr. Chairman, as Mr. Stewart said, we just received nearly a $4 million claim a few weeks ago. It has been impossible in the interim to analyze it thoroughly. After all, we must be fair in our settlement of claims. Were we to express at this time any conclusions with respect to these claims, before a thorough analysis has been made, we might adversely affect the Government's case. I think you can appreciate that, because anything said prematurely on the record might have an effect on any legal proceedings not only before the contract appeals board but also before the Court of Claims. Anything we say on the record in that connection might be construed as a prejudgment, before we have studied all aspects of the case. CHANGES AND PAYMENTS UNDER CONTRACT Mr. ANDREWS. I believe you said in the past you had a so-called lock and key contract for that project? Mr. HENLOCK. Yes. Mr. ANDREWs. What was the amount of that contract? Mr. CAMPIOLI. $11,770,000. Mr. Roof. To date the total amount of the contract is $12,117,516.52. Mr. ANDREWS. How much of that have you paid? Mr. RooF. Of that amount we have paid in $11,944,912, leaving a balance of $172,605, of which $150,000 is being retained under the general retainage provision of the contract. Mr. ANDREWs. Your original contract was $11,770,000? Mr. HENLOCK. Yes, sir. Mr. ROOF. That means to date we have issued change orders of $351,116. Mr. ANDREWS. Of course you approved all of the change orders? Mr. ANDREWS. So we are talking about a $12,117,516 contract? Mr. ANDREWS. And you have paid him all of that except $172,605? |