DOCKET AECBCA No. 35-7-66

APPEAL OF R. W. MIER CONSTRUCTION CO.

Decided October 14, 1966

CONTRACTS

INTERPRETATION

The Board found the contract clear and not misleading as to responsibility for coating and wrapping certain Government-furnished pipe where techincal provisions explicitly instructed bidders as to the material with which the pipe was to have been coated and wrapped and as to how that material was to have been applied.

The Board found that Appellant should have made appropriate inquiry before assuming that certain pipe would be coated and wrapped when furnished, where Appellant knew at the time its bid was prepared that the pipe was not then coated and wrapped but would have to be coated and wrapped prior to installation.

DOCKET AECBCA No. 35-7-66

APPEAL OF R. W. MIER CONSTRUCTION CO.

UNDER CONTRACT AT-(29-2)-2063

Mr. C. A. Riddle, R. W. Mier Construction Co. 2133 South Bellaire Street, Denver, Colo. 80222.

APPEARANCE FOR CONTRACTING OFFICER:

Albert E. Wehde, Esq., Counsel for Contracting Officer, Albuquerque Operations Office, U.S. Atomic Energy Commission, Post Office Box 5400, Albuquerque, N. Mex. 87115.

OPINION BY MR. ROBERTS

This appeal, which was docketed by the Board on July 18, 1966, seeks $4,341 1 for coating and wrapping certain Government furnished pipes in connection with construction work on a utilities expansion project at the Rocky Flats Plant of the Atomic Energy Commission near Denver, Colo. By order of August 8, 1966, Appellant's request for the accelerated procedure, provided by 10 CFR §3.13 was granted. The conference and hearing were held in Denver, Colo. on September 1,

1 Originally, Appellant sought $5,899.21, but that figure was based upon estimates. During the conference, the parties stipulated that the actual amount of Appellant's claim is $4,341. Transcript (T), 76.

1966, at which time all proof was submitted and the parties were given to October 3, 1966, for the submission of posthearing briefs. Upon consideration of the preconference briefs, the evidence, and the posthearing briefs, the appeal is denied.

The dispute arose under a construction contract between the Atomic Energy Commission and R. W. Mier Construction Co., a sole proprietorship, which was the low bidder in reply to the invitation for bids. In preparing its bid, Appellant requested the Howard Electric Co. to submit, to Appellant, a quote covering certain electrical and mechanical work contemplated by the IFB. In turn, Howard requested Commercial Industrial Constructors, Inc., to quote a price for the mechanical work included in Appellant's request for a quote from Howard. In submitting its quote to Howard, which in due course submitted it to Appellant for inclusion in Appellant's bid, however, CIC omitted any allowance for the cost of coating and wrapping certain pipe furnished by the Government. Appellant now appeals from the Contracting Officer's denial of Appellant's claim, asserted for and on behalf of CIC, for the cost of coating and wrapping the pipe. Thus, the issue presented, by this appeal is whether responsibility for coating and wrapping certain pipe is that of CIC (and, hence, Appellant), or is that of AEC.

FINDINGS OF FACT

We find the following facts:

1. The Albuquerque Operations Office of the Atomic Energy Commission issued Invitation for Bids No. 292-66-20 (IFB) on January 24, 1966. As a result of the submission of bids in response to the IFB, AEC, awarded, to the R. W. Mier Construction Co. (Mier), a sole proprietorship, construction Contract No. AT–(29–2)– 2063 (Contract), which called for expansion of utilities and supporting facilities at AEC's Rocky Flats Plant in Colorado, for a price of $1,156,295. The Contract specifies that the work shall be completed within 270 calendar days from receipt of notice to proceed,2 which was issued to Mier on April 11, 1966.

2. In the preparation of its bid in response to the IFB, Mier solicited quotes on the electrical and mechanical portions of the work from the Howard Electrical Co. (Howard). Howard, then, solicited a quote on the mechanical portions of the work from Commercial Industrial Constructors, Inc. (CIC). Howard received CIC's quote, added its own for the electrical work and submitted a responsive quote to Mier. After Mier had been awarded the Contract on April 1, 1966, it let an electrical and mechanical subcontract to Howard, which, then, let a mechanical subcontract to CIC in accordance with the quote submitted earlier."

3. In the spring of 1965, AEC was considering expansion of utility facilities at the Rocky Flats Plant. To avoid delays due to an impending steel strike, AEC purchased certain black, seamless, ASTM A53 or ASTM A106, Grade B, bevel end, random length pipe of

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various sizes. None of this pipe purchased and delivered to the Rocky Flats Plant in the summer of 1965 was coated and wrapped.' AEČ decided to defer its utilities expansion project until 1966, and it was determined also that the pipe delivered in the summer of 1965 and thereafter stored, in the open, at Rocky Flats, would be provided as Government furnished property (GFP) for the utilities expansion construction.9

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4. The IFB set forth specifications, which were included in the Contract 10 and which, in Special Conditions (SC-14A 5), stated that the pipe described in finding 3, above, would be furnished by the Government for installation by the contractor. The Technical Provisions of these same specifications (in M6-C.12), further state, in part, that:

Steel piping to be installed underground shall have hot protective coatings and wrappers applied to the exterior surface in accordance with the specifications below. Such protective coatings and wrappers shall be applied mechanically in one operation by passing the pipe through a pipe wrapping machine. The protective coatings shall meet the requirements of AWWA C-203.11 Specification M6-C.12a 1 and 2 prescribed the coating material and the method of its application.12 This protective coatings requirement does not apply to fuel oil, insulated steam and condensate lines pipe.13 5. Between the issuance of the IFB to prospective bidders, including Appellant Mier, on January 24, 1966, and the opening of bids on March 3, 1966, a prebid conference was held.14 This prebid conference, at the Rocky Flats Plant on February 22, 1966, was attended by Raymond L. Dahl, a general construction superintendent for CIC,15 and by Walter F. Lasky, a project engineer and estimator for CIC.16 Although the applicable specifications were available to and were read by James A. Kangers, manager and majority stockholder of CIC, who supervised preparation of the CIC quote to Howard," Mr. Kangers did not attend the prebid conference. CIC had other representatives at the conference, however. 18

6. Mr. Raymond L. Dahl attended the prebid conference as a general superintendent and he was interested primarily in supporting facilities to the pipeline rather than the pipeline itself, for his "capacity would be telling them when, not technically how." 19 Mr. Walter F. Lasky, project engineer and estimator for CIC,20 attended the prebid conference at the Rocky Flats Plant on February 22, 1966.21 Mr. Lasky saw the pipe to have been furnished by the Government, which was stacked over an extensive area, but Mr. Lasky did not see any coated and wrapped pipe.22

7. The difference between pipe which is coated and wrapped and that which is not coated and wrapped is apparent.23 Pipe that has been coated and wrapped must be handled with greater care than uncoated and unwrapped pipe in order that the coating and wrapping not be damaged.24 When coated and wrapped pipe is stacked, pieces of wood are placed at the ends of individual lengths of pipe to prevent contact between pieces of pipe and, thus, lessen likelihood of damage to the wrapping and coating.2

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8. Before CIC submitted its quote to Howard, it was aware, definitely, that the pipe involved in this appeal had to be coated and wrapped before it was placed in the ground.26 However, CIC assumed that the pipe would be furnished coated and wrapped by the manufacturer. This assumption, by CIC, that the pipe would be coated and wrapped, was based upon the phrase "for installation by the contractor" which occurs in SC-14 A.5 of the contract, upon the fact that CIC buys pipe coated and wrapped by the manufacturer, 28 and upon the fact that pipe substantially more often than not is coated and wrapped at the site of manufacture rather than at the place of installation.29

9. The Government furnished pipe was offered for inspection to those attending the prebid conference of February 22, 1966, at the Rocky Flats Plant.30 It should have been quite apparent upon this site inspection that the Government furnished pipe was not coated and not wrapped.31

10. After having been shown the Government pipe and certain other items of interest, those attending the prebid conference gathered in a cafeteria at the Rocky Flats Plant for a question and answer period with representatives of AEC, Dow Chemical Co., the operating contractor, and the architect-engineer, Daniel, Mann, Johnson, and Mendenhall.32 During the prebid conference, CIC asked no questions pertaining to the Government furnished pipe.33 Although other prospective bidders' representatives may have asked about removal of the pipe from the site for coating and wrapping 34 and it was stated that Government owned pipe might be used wherever "it was applicable," 35 CIC's representatives did not hear, during the prebid conference, any significant mention of Government furnished pipe not being coated and wrapped.36

11. AEC supplied black seamless pipe, as described in the Contract, which was not coated and not wrapped.37 After Appellant had been given notice of award of the Contract, on April 1, 1966, and after notice to proceed had been issued on April 11, 1966, but not later than April 27, 1966, a representative of ĈIC, verbally complained to

representatives of the Government that none of the pipe furnished by the Government was coated or wrapped. CIC was informed, verbally, that coating and wrapping of the pipe was the contractor's responsibility.38 Thereafter, Mier made a timely request that the Contracting Officer make findings of fact on the CIC claim for the cost of coating and wrapping the pipe. This is a timely appeal from the Contracting Officer's decision denying that claim.

12. Subsequent to April 27, 1966, CIC sent appropriate sections of Government furnished pipe to Hill-Hubbell, a Denver concern, which coated and wrapped the pipe, which then was returned to the Rocky Flats Plant construction site.39 The total cost to CIC of removing the pipe, having Hill-Hubbell coat and wrap it, and returning it to the construction site amounted to $4,341, which is the amount in dispute in this appeal.40

13. The contract required that the pipe, with which this appeal is concerned, be coated and wrapped before installation. The specifications to the contract, explicitly instructed bidders as to how steel piping, to have been installed underground, shall have been coated and wrapped, with what material, and how that material shall have been applied.41

OPINION

As noted in findings 4 and 13, above, the Contract, Part IV, Technical Provisions, M6-C.12a 1 and 2, M6-33-34, expressly provides, in part, that "Steel piping to be installed underground shall have hot protective coatings and wrappers applied to the exterior surface in accordance with the specifications below. Such protective coatings and wrappers shall be applied mechanically in one operation by passing the pipe through a pipe wrapping machine. The protective coatings shall meet the requirements of AWWA C-203." Following this passage, the specifications go on to describe how the coating shall be applied and of what material it shall consist. These fairly extensive provisions would have served no purpose whatever in the contract concerned, if the contractor were to have been furnished pipe that already had been coated and wrapped. It is these technical provisions, for the coating and wrapping of the pipe, which distinguished this case from Pioneer Canvas Products Co., Inc., ASBCA No. 10641 (October 22, 1965), 65-2 BCA paragraph 5167, upon which Appellant relies. Certainly, these instructions, for coating and wrapping underground pipe, afforded ample cause, and the prebid conference provided ample opportunity,42 for Appellant, or CIC, to have sought an interpretation from the AEC before consummating the agreement, instead of electing to rest on its own reading. If CIC felt

38 Stipulation, pars. 11-13, T. 12.

39 T. 35, 41.

40 T. 76-77 (Oral Stipulation).

41 T. 49. AR Tab 3, M6C-12 a.1 and 2 (pp. M-33 and M-34).

42 See also the IFB, Instructions to Bidders 1., which says:

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1. Explanation to Bidders. Any explanation desired by a bidder regarding the meaning or interpretation of the invitation for bids, drawings, specifications, etc., must be requested in writing and with sufficient time allowed for a reply to reach bidders before the submission of their bids. Any interpretation made will be in the form of an amendment of the invitation for bids, drawings, specifications, etc., and will be furnished to all prospective bidders. Its receipt by the bidder must be acknowledged in the space provided on the Bid Form (Standard Form 21) or by letter or telegram received before the time set for opening of bids. Oral explanations or instructions given before the award of the contract will not be binding.

43 Beacon Construction Co. of Massachusetts v. United States, 161 Ct. Cl. 1, 6-7; 314 F. 2d 501, 504 (1963) Slip Op. p. 5; and Black, Raber-Kief & Associates v. United States, 357 F. 2d 355, 358-359 (Ct. Cl., 1966), Slip Op. pp. 5-6.