February 2, 1977 United States Department of the Interior Fish and Wildlife Service 1500 N.E. Irving Street P.O. Box 3737 Portland, Org 97208 Atten: Mr. Richard D. Mundinger, Contracting Officer Re: Contract # 14-16-0001-6309 Gentlemen: This letter is to inform you that we are unable to complete the above contract per the specified time completion of 240 calendar days for reasons beyond our control. We completed the above installation week ending July 16, 1976. We have been waiting for notification from your office to start system, and perform outlined operational tests per specifications. I phoned Mr. Howard Fast at jobsite and he notified me that the electrical and piping connections for this system have not been made. Per the specifications these connections were to be completed in July, 1976. Futher checking with your office I find that the contracts have not been let for these connections and it could be as late as November, 1977 before these connections are made. We are enclosing copies of letters from our equipment suppliers in regards to warranties. Note that the factory warranty on the circulating pump and heat exchanger will end as of October, 1977. The boiler warranty ends as of July 1, 1977 but they will extend warranty for one year from start-up for a fee as stated in their letter. Please advise us to what action you would like us to take regarding these product warranties. We request contract retention payment to us be released immediately or interest of 1% a month be paid to us beginning January 1, 1977. Our present labor contract ends April, 1977. Due to the large increases hhat have been negotiated in the past we request a change order to cover increased labor cost to us from April, 1977 to job completion. Respectfully submitted, INTERSTATE AIR CONDITIONING & WLH/skl William L. Harvey, President Furnished delivered and installed water heating system as specified. This invoice for partial payment of 90% of the contract per Special Conditions, Section 3.a. I read with interest upon my return from Washington, D. C. We found that when we offered discounts for prompt payment this greatly enhanced our collection time and in certain instances contracts are written with this clause and I recommend that the clause be continued. I also concur with your interest penalty provision. I think that it should be mandatory. I am not aware of the statue which you quote, so I do not know what the prevailing interest rate is at this time. My suggestion would be, however, that the maximum allowable interest rate be imposed as determined by local or state statutes. The reason for this suggestion is simple. Cash flow to a Insofar as excessive paper work is concerned, my past experience has been there is excessive amount of detail required for simple contracts. I can understand a requirement for a great deal of detail information on contracts costing thousands and thousands of dollars, but when one is doing business on a basis of supplying materials and equipment and or labor in the matter of one to five or ten thousand dollars the paper requirement adds a considerable amount of expense to the overhead of the operation. In the past, we have done work for HUD and other government agencies and been required to submit all kinds of information concerning minority hiring, certified payroll reports for individual employees working on the project, etc., etc., even though the projects were a fixed price nature. It appears to me that this paper work is unnecessary and I doubt that anyone in the government ever reviews it. In this matter, as far as is concerned labor, payroll, reports, I believe the Davis-Baker Act predominates and it is my feeling that this has cost both national and local government agencies a great many dollars over the years. In the past, we were a Union contractor and obviously paid scale benefits and so forth and were supervised by the Union in the performance of this which in essence made all of our reports to the government a duplication of effort and, since there was no similarity between the reports each one had to be prepared individually. I think it can be accepted on face in most cases that any Union contractor will be paying whatever the scale requirements are and it is my feeling that he should be subject to audit but not required to submit certified reports. In the case of a non-union contractor, which we are at this time, our pay and benefits scales are comparable although we pay our men on a monthly basis rather than an hourly rate. I have as a result, not bid any government work since becoming non-union as it would require me to set up entirely different pay scales in order to do the work. To my way of thinking it would cause me a great deal more problems than would create benefit for me in additional work. The secondary reason for not bothering with the work is that we have never found government work to yield a reasonable rate of return, while simultaneously it yields an excessive amount of problems. The combination is not conducive to profit and since we are attempting to make profit in this business, we have elected not to do any further work with the government. I will attempt to attend your hearings, but in the event I am not able to do so, I hope this letter will stand in my stead. |