March 15, 2004
Appeal of
E. J. PLAISANCE
Under Contract No. 482980-99-A-0156
PSBCA No. 4865
APPEARANCE FOR APPELLANT:
E. J. Plaisance
APPEARANCE FOR RESPONDENT:
Erik Von Handorf, Esq.
OPINION OF THE BOARD
Appellant, E.J. Plaisance,[1] has appealed the decision of the contracting officer denying his claim for $36,782 for the cost of constructing a bulkhead in connection with a new construction lease agreement entered into between Appellant and Respondent, United States Postal Service. At the request of the parties, the appeal is being decided on the record without a hearing. 39 C.F.R. §955.12. Only entitlement is at issue.
FINDINGS OF FACT
1. On or about August 3, 1999, Respondent issued a solicitation seeking offers to enter into a lease under which the lessor would purchase a Postal Service controlled site in Lockport, LA, construct a post office on the site and lease the facility to the Postal Service (Appeal File Tab (AF) 1).
2. Prior to soliciting offers, Respondent obtained an assignable option to purchase the site it had selected for the new post office. All offers were to be based on this site. (AF 1, Assignable Option to Purchase; AF 1, Paragraph 6; Stipulation of Facts, Paragraph (Stip.) 11).
3. A survey of the selected site was completed prior to the issuance of the solicitation and showed that the property was bordered on three sides by a ditch. The survey, which was a part of the solicitation package, showed that the ditch on the southeastern side of the property was included within the boundary of the site, and was four to five feet deep. The survey also noted that the site was located in a designated Federal Emergency Management Agency (FEMA) 100-year flood plain. (AF 22).
4. The solicitation package also included a “Site Utilization Plan.” Paragraph 28 of the solicitation and an identical note on the Site Utilization Plan stated:
“The site utilization plan is for the controlled site identified in this solicitation. The sole purpose of this site utilization plan is to provide the offerors the required configuration of the building structure and parking requirements for this particular site. The boundary and topography survey was used in developing the site utilization plan, and is provided as information only. The Postal Service assumes no responsibility for the correctness of the survey. It is the lessor’s responsibility to meet all site requirements listed in the solicitation and as illustrated on the small standard building plan that relates to this project.”
The Site Utilization Plan did not show, or take into account the presence of, the ditch that was indicated on the survey. In order to locate the post office building, parking facilities, and entrance driveways exactly as shown on the Site Utilization Plan, it would have been necessary either to fill in or bridge over at least part of the drainage ditch on the southeast side of the property. (AF 1, 21, 22, 24 (Sheet C-0.0)).
5. Paragraph 21 of the solicitation provided, in part, that
“Regardless of the terms of the [Assignable] Option [to Purchase], the offeror selected shall assume the role of owner/developer and shall be responsible for due diligence concerning the site and construction according to USPS requirements. This includes securing any necessary rezoning, permits, utility relocations, addressing easements, rights of way, title and site specific engineering. Although the Postal Service has somewhat investigated the site and has no known reason for concern, no written commitments concerning such things have been obtained. The Postal Service assumes no responsibility for such items.” (AF 1).
6. The Lease included a Construction Rider, which, in Paragraph 12 – “Site,” provided:
“Offerors must examine the site and be thoroughly acquainted with conditions thereon. The Lessor will be responsible for site conditions, including but not limited to subsurface or latent physical conditions or unknown physical conditions of an unusual nature differing materially from those ordinarily encountered.” (AF 1).
7. Under paragraph 13 of the Solicitation and under the Construction Rider, the successful offeror was also responsible for obtaining any necessary licenses and permits and for complying with all federal, state and local laws and regulations without additional expense to the Postal Service (AF 1, Construction Rider - NCL, Paragraph 10, LICENSES, PERMITS, SAFETY, INDEMNIFICATION; AF 1, paragraph 13).
8. Prior to submitting an offer, Appellant inspected the proposed site, noting among other things the survey markers, the number of trees that needed to be removed and the location of the utilities. Appellant also spoke with local officials to determine any possible problems with the property. Appellant observed a partial road on the property, which it was determined could be removed, but otherwise did not discover any problems and believed the site was “clean.” (Appellant’s submission dated September 24, 2002, and filed on October 1, 2002 (Appellant’s Oct. 1, 2002 submission)).
9. Appellant and Marilyn Plaisance were the successful offerors and entered into the Lease on October 8, 1999 (Stip. 8). Under the terms of the Lease, Appellant agreed to construct the post office and lease it to Respondent for an initial term of 20 years at an annual rent of $69,450 with two five-year renewal options at annual rental rates of $84,034 and $92,437 (AF 15, 17).
10. Appellant immediately took steps to purchase the property (Appellant’s Oct. 1, 2002 submission). Although Appellant encountered difficulties in securing clear title to the property (see AF 10, 11, 12, 13), he was eventually able to do so, and Respondent issued a Notice to Proceed with construction on September 26, 2000 (AF 8; Stip. 18).
11. At some time prior to the start of construction, through discussions with local officials, including the new mayor, Appellant became aware that the ditch on the southeastern edge of the site provided necessary drainage for the land adjacent to the site, and could not be filled in. The town required that the post office building be moved farther from the property line and drainage ditch than was shown on the Site Utilization Plan in order to protect the ditch. (AF 5; Appellant’s Oct. 1, 2002 submission). Appellant’s construction drawings, dated July 6, 2000, reflect the revised arrangement, which left the drainage ditch unaffected (AF 24, Sheet C-0.0).
12. A revision to Appellant’s construction drawings dated October 2, 2000, added a retaining wall along the inner edge of the ditch on the southeastern side of the site (AF 9).
13. Construction was completed in July 2001. By letter dated August 14, 2001, the Postal Service accepted the new post office retroactive to July 25, 2001. (AF 6, 7; Stip. 19).
14. By letter dated August 26, 2001, Appellant sought reimbursement in the amount of $36,782 for the cost of building the retaining wall/bulkhead along the drainage ditch. Appellant’s letter stated that the existence of the “drainage canal (ditch) was not revealed” at the time bids were solicited, but only became known at the time of construction and that, because of the ditch, the City of Lockport forced Appellant to move the building. Further, Appellant stated that he had to install the retaining wall in order to meet “F.E.M.A. flood elevations.” (AF 5; Stip. 21, 22).
15. On September 27, 2001, the contracting officer issued a final decision denying Appellant's request for reimbursement. The contracting officer relied on Paragraphs 21 and 28 of the Solicitation and Paragraph 12 of the Construction Rider. (AF 4; Stip. 23).
16. By letter dated, November 18, 2001, Appellant filed a timely appeal of the contracting officer's final decision (AF 3; Stip. 24).
DECISION
Appellant’s position is that the Postal Service should be liable for the cost of installing the retaining wall, primarily because the solicitation documents did not reveal the significance of the drainage ditch and the fact that it could not be filled in without creating flooding problems elsewhere. Therefore, he was not put on notice that some other arrangement, such as the retaining wall, would be necessary at greater expense to him.
Respondent argues that Appellant is not entitled to any relief because Paragraphs 21 and 28 of the Solicitation and Paragraph 12 of the Construction Rider place the risk of this occurrence on Appellant. Further, Respondent argues that even if the Board finds that those provisions do not assign the risk to Appellant, he may not recover since he did not notify Respondent in advance and give Respondent the opportunity to investigate the problem before work on the retaining wall commenced.
Having examined the evidence and considered the parties’ arguments, we conclude that Appellant may not recover the cost of constructing the retaining wall. We agree with Respondent that provisions of the Solicitation and Construction Rider placed the risk of this occurrence on Appellant. Solicitation paragraph 12 (Finding 6) obligated Appellant to become “thoroughly acquainted with” the site conditions and made him responsible for dealing with those conditions. Paragraph 21 of the solicitation (Finding 5) made Appellant responsible for “due diligence” regarding the site and made him responsible for “site specific engineering.” That paragraph also advised that although Respondent had “somewhat” investigated the site and knew of no reason for concern, it had no written commitments regarding site conditions and assumed no responsibility therefor.
Although Appellant was obviously aware of the presence of the drainage ditch from having walked the property before submitting his offer, he apparently did not appreciate its significance to the project at that time. It apparently was not until after award that Appellant discovered that he would not be allowed by the City to fill in the ditch (Finding 11) and would be required to take other measures. However, under the provisions of the solicitation and lease, he was responsible for having discovered that fact prior to submitting his offer. Further, there is no evidence that Respondent possessed any information concerning the site that it failed to reveal to Appellant. See, e.g., Thomas J. Young, PSBCA Nos. 3885, 3983, 98-2 BCA ¶ 29,772 at 147,530, and cases cited therein.
Moreover, under the language of solicitation paragraphs 13 and 21, and under paragraph 10 of the Construction Rider (Finding 7), Appellant was responsible for obtaining any necessary permits and licenses, and for complying with federal, state, and local requirements without additional expense to the Postal Service. Therefore, if, as reported by Appellant, he was required by the City of Lockport to move the building away from the drainage ditch and was required to build the retaining wall in order to meet FEMA standards, the costs of such compliance were his responsibility. E.g., Josiah Briggs & Co., PSBCA No. 2304, 90‑1 BCA ¶ 22,429.
Accordingly, the appeal is denied.
David I. Brochstein
Administrative Judge
Vice Chairman
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
Norman D. Menegat
Administrative Judge
Board Member
[1] The contract at issue here was awarded to E.J. and Marilyn Plaisance. However, because Mr. Plaisance filed, and has been prosecuting, the appeal on behalf of both ontractors, we refer to him as the contractor and Appellant in this Opinion.