Warranty Repairs, Maintenance Center, Falls Lake Project

DEPARTMENT OF THE ARMY
WILMINGTON DISTRICT, CORPS OF ENGINEERS
P.O. BOX 1890
WILMINGTON, NORTH CAROLINA 28402-1890

December 20, 1990

IN REPLY REFER TO
Project Management Branch

SUBJECT: Warranty Repairs, Contract No. DACW54-88-C-0021, Maintenance
Center, Falls Lake Project

Mr. John N. Morris
Director, Water Resources Division
North Carolina Department of Environment,
Health and Natural Resources
Post Office Box 27687
Raleigh, North Carolina 27611-7687

Dear Mr. Morris:

Reference is made to to the enclosed letters dated May 11, 1990, and
June 27, 1990, from Mr. William T. Branager, Jr., the Corps' Area Engineer
in our Raleigh Area Office, to Mr. Kevin MacNaughton, Division of Parks and
Recreation, on the above subject. I am writing to you because we have
received no response to either of those letters.

As indicated by Mr. Branager's letters, Mr. David Kellam, State Parks'
Falls Lake Superintendant, reported a water line leak at the Ranger Security
Building to the Corps as a construction contract deficiency. In reliance on
this report, the Corps directed its construction contractor to investigate
and, if necessary, repair the leak.

The Corps' authority for giving this direction to its contractor was
Contract Clause 62(h), Inspection of Construction, which provides, in part:

If, before acceptance of the entire work, the Government decides to
examine already completed work by removing it or tearing it out, the
contractor, on request, shall promptly furnish all necessary
facilities, labor, and material....[I]f the work is found to meet
contract requirements, the Contracting Officer shall make an equitable
adjustment for the additional services involved in the examination and
reconstruction....

As also indicated by Mr. Branager's letters, when the contractor
uncovered the water line, no leaks were found. Additionally, the contractor
has submitted a request for equitable adjustment under Contract Clause 62(h)

in the amount of $677.07. We consider this amount to be fair and reasonable
as an equitable adjustment for the work performed, and are issuing a
contract modification to compensate the contractor accordingly.

It is our position that this cost should be borne by the State of North
Carolina. This is based on the provisions of our lease (Lease No. DACW21-1-
81-2614) for Public Park, Recreation and Fish and Wildlife Purposes at Falls
Lake, and on the factual circumstances surrounding these events.

The pertinent lease provision is Exhibit "C", Division of
Responsibilities, Falls Lake, Item 2, Construction Activities, particularly
Project Construction. Under this provision, the State has "assist"
responsibility for inspection of the construction. As indicated by the
definitions of responsibilities, the agency with "assist" responsibility may
have monetary responsibility for actions taken when performing these
functions.

In addition to the facts discussed above, the pertinent circumstances
include Corps' forbearance in not holding the State responsible for the
costs of investigating another false report of water line leaks made by your
representatives. As you are aware, no leaks were found when a Corps
contractor investigated reported leaks at six sites at Sandling Beach
Recreation Area as identified in our July 30, 1990, letter addressing
Outstanding Issues at Falls Lake and B. Everett Jordan Projects.

Also, at the time these false reports were made, the State is properly
considered to have had actual knowledge of its potential liability in the
event of an erroneous report of a construction deficiency This is because
Contract Clause 62(h), under which the Corps is liable to the contractor,
was part of the documentation furnished for your review prior to the
advertisement and award of the construction contract.

Enclosed is a bill for the $677.07 direct cost to us of the equitable
adjustment being issued to the construction contractor. Your prompt payment
of this bill is requested.

If you have any questions, please contact Mr Glenn McIntosh, our
Project Manager for the Falls Lake Project, at [phone].

Sincerely,

C. E. Shuford, Jr., P.E.
Deputy District Engineer
Project Management

Enclosures

Copy Furnished.

Dr. Philip K. McKnelly
Director, Parks and Recreation Division
North Carolina Department of Environment,
Health and Natural Resources
Post Office Box 27687
Raleigh, North Carolina 27611-7687

Mr. Tom Wells
Deputy Director, Parks and Recreation Division
North Carolina Department of Environment,
Health and Natural Resources
Post Office Box 27687
Raleigh, North Carolina 27611-7687

Mr. Kevin MacNaughton
Chief, Design and Development Section
Parks and Recreation Division
12700 Bayleaf Church Road
Raleigh, North Carolina 27614

Wilmington District Finance and Accounting Office

Optional Form 1114 (12-79)
Title 7, GAO Manual
501114-107
Date
BILL FOR COLLECTION
Bill No. B0391G020
CDR, USAED Wilmington, PO Box 1890, Wilmington, NC 28402-189bate -------19 December 1990
---------
(Department or Establishment and Bureau or Office)
12/19/90
(Address)
Mr. John N. Morris
Director, Water Resources Division
NC Department of Environment, Health
and Natural Resources
P. 0. Box 27687
Raleigh, NC 27611-7687
DESCRIPTION
Equitable adjustment for erroneous
report of a water line leak at the
Falls Lake Ranger Security Building,
Contract No DACW54--88-C-0021, Lease
No. DACW21-1-81-2614)
Interest is chargeable for late pay-
ments at a rate of 9 0% per annum ism
accordance with Treasury Fiscal Manual
8025.40. Interest will accrue from this
date until date of payment unless this
debt is paid within 30 days from the
date of this bill.
96X3122 BE2550800AOCX07
BE2551900A0CX07
BE2551910A0CX07
This is not a receipt
Quantity
This bill should be returned by the
payer with his remittance.
SEE INSTRUCTIONS BELOW.
Unit Price
Cost Per
Amount
$677. 07
AMOUNT DUE THIS BILL, $ 677. 07
INSTRUCTIONS
Tender of payment of the above bill may be made in cash, United States postal money order, express money order, bank draft, or check,
to the office indicated. Such tender, when in any other form than cash, should be drawn to the order of the Department or Establishment
and Bureau or Office indicated above.
Receipts will be issued in all cases where "cash" is received, and only upon request when remittance is in any other form. If tender
of payment of this bill is other than cash or United States postal money order, the receipt shall not become an acquittance until such
tender has been cleared and the amount received by the Department or Establishment and Bureau or Office indicated above.
Failure to receive a receipt for a cash payment should be promptly reported by the payer to the chief administrative officer of the
bureau or agency mentioned above.
* U.S. GOVERNMENT PRINTING OFFICE : 1982 0 - 361-526 (7443)
1

Optional Form 1114 (12-79)
Title 7, GAO Manual
501114-107
Date
BILL FOR COLLECTION
Bill No. B03911G020
QDR, USAED Wilmington, PO Box 1890, Wilmington, NC 28402-189bate__ 19 December 1990
(Department or Establishment and Bureau or Office)
(Address)
Mr. John N. Morris
Director, Water Resources Division
NC Department of Environment, Health
and Natural Resources
P. 0. Box 27687
Raleigh, NC 27611-7687
DESCRIPTION Quantity
12/19/90 Equitable adjustment for erroneous
report of a water line leak at the
Falls Lake Ranger Security Building,
Contract No DACW54--88-C-0021 Lease
No. DACW21-1-81-2614)
Interest is chargeable for late pay-
ments at a rate of 9 0% per annum im
accordance with Treasury Fiscal Manual
8025.40. Interest will accrue from this
date until date of payment unless this
debt is paid within 30 days from the
date of this bill.
96X3122 BE2550800A0CX07
BE2551900AOCX07
BE2551910A0CX07
This is not a receipt
This bill should be returned by the
payer with his remittance.
SEE INSTRUCTIONS BELOW.
Unit Price
Cost Per
Amount
$677. 07
AMOUNT DUE THIS BILL, $ 677. 07
INSTRUCTIONS
Tender of payment of the above bill may be made in cash, United States postal money order, express money order, bank draft, or check,
to the office indicated. Such tender, when in any other form than cash, should be drawn to the order of the Department or Establishment
and Bureau or Office indicated above.
Receipts will be issued in all cases where "cash" is received, and only upon request when remittance is in any other form. If tender
of payment of this bill is other than cash or United States postal money order, the receipt shall not become an acquittance until such
tender has been cleared and the amount received by the Department or Establishment and Bureau or Office indicated above.
Failure to receive a receipt for a cash payment should he promptly reported by the payer to the chief administrative officer of the
bureau or agency mentioned above.
* U.S. GOVERNMENT PRINTItNG OFFICE : 1982 0 - 361-526 (7443)
t

27 June 1990

Subject: Contract No. DACW54-88-C-0021, Maintenance Center, Falls Lake
Project

Mr. Kevin MacNaughton
Division of Parks and Recreation
12700 Bay Leaf Church Road
Raleigh, North Carolina 27614

Dear Mr. MacNaughton:

Reference is made to my t1,May 1990 letter regarding waterline repair for
the Ranger Security Building at the Sandlin.g Beach Recreation Area.

I am in receipt of another letter from the contractor dated 24 June 1990
herein he is again requesting payment tor his services. I have received no
response from your office regarding resolution of this matter. The contractor,
deservedly, is due payment for his work. Please advise the status of this matter
as soon as possible.

Please call if you have questions.

Sincerely,

William T. Branager Jr.
Authorized Representative
of the Contracting Officer

11 May 1990

Subject: Contract No. DACW54-88—C--0021, Maintenance Center, Falls Lake
Project

Hr. Kevin MacNaughton
Division ot Parks and Recreation
12700 Bay Leaf Church Road
Raleigh, North Carolina 27614

Dear Mr. MacNaughton:

Reference is made to the attached letter from the contractor regarding
waterline repair for the Ranger Security Building at the Sandling Beach
Recreation Area.

The alleged deficiency in the waterline was identified to my staff by your
Mr. David Kellam, supported also by your Mr. Sam Oxendine, and, accordingly, was
forwarded to the contractor for correction. However, as noted in the
contractors letter, there was no deficicncy found. The alleged deficiency was
forwarded to the contractor based on your representative's request. Accordingly,
the attached invoice is being forwarded to your office for resolution.

Please call if you have questions.

Sincerely,

William T Dranager Jr.
Authorized Representative
of the Contracting Officer

Enclosure
HOWARD MANAGEMENT GROUP
GREENSBORO. N. C. 27401
May 4, 1990
Department of the Army
Wilmington District, Corps of Engineers
Raleigh Area Office
11409 Falls of the Neuse Rd.
Wake Forest, N.C. 27587
Re: Falls lake Maintenance Center
Contract DACW54-88-C-0021
Gentlemen:
(7) r
r,
44
WAY
Raleigh Area Offcs
As we have discussed with Mr. Bill Black of your office, on April 26,
1990, we came to Sandling Beach to repair leaks in the water line
installed under the referenced contract. These leaks had been located
by the Stat of North Carolina forces and were considered a deficiency
by your office to our contract.
Upon uncovering the line where, and adjacent to, the location marked
we did not find any leaks. Several of the state people were present
including Mr. David Kellam. They agreed there were no leaks. Please
note this line was tested on 3/17/89 and passed (Copy of report attached).
There are some springs in the area of the line and we believe the state
forces were hearing and observing flows from these springs.
In the Contract Clauses, Article 62, Para (h) states that if work is
uncovered and found to not be defective, the Contracting Officer will
make an equitable adjustment for the additional services involved in
the examination. We hereby request adjustment as follows:
Labor: Supt. - 8 hrs
Taborer 8 hrs
subtotal
Payroll Taxes
Total Labor
@ $17.41 = $139.28
@ 6.50 = 52.00
= 191.28
& Ins @20% = 38.26
$229.54
Equipment: Bacchoe Rental(Hertz)= $270.38
Pick-up Mileage
180 miles@.22 = 39.60
3" Pump - 1 day @ 20 = 20.00
Total Equipment
Total Direct Cost
Overhead @ 10%
Subtotal
Margin @ 10%
Total
Should you have any questions or need any additional
$329.98
$559.52
56.00
$615.52
61.55
$677.07
information
201 N. ELM STREET • SUITE 1300 • (91 9) 274-0765

please let us know.
Regards,
HMG, INC.
.lc
Gary Arnold, Supt.

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