Is it reported speech if it begins with "didn't say"

[HomerBong]

I have to complete the verbs in this letter and it goes like this:
Dear Sue, thank you for your letter which I got last week. It was really good to hear from you. You said you had seen(I have to use "Saw") Angela a few weeks back, but you didn't say how she was/had been ("Be").

Then is it better to say:
It's a bit untidy at the moment because it is decorating, but it'll be fine.
It's a bit untidy at the moment because it has been decorating, but it'll be fine.

Thank you very much in advance.

 

[emsr2d2]

I have to complete the verbs in this letter and it goes like this:
Dear Sue, thank you for your letter which I got last week. It was really good to hear from you. You said you had seen(I have to use "Saw") (had seen is fine) Angela a few weeks back, but you didn't say how she was/had been ("Be") ("how she was" fits here).

Then is it better to say:

It's a bit untidy at the moment because it is decorating, but it'll be fine.
It's a bit untidy at the moment because it is being decorated, but it will be fine.

It's a bit untidy at the moment because it has been decorating, but it'll be fine.
It's a bit untidy at the moment because it has [recently] been decorating, but it will be fine.

Thank you very much in advance.

I think the problem with your example is that you have misunderstood the use of "decorating". "To decorate" is something a person does to a room or a house etc. The room or house is "decorated" or is "being decorated" etc.

 

[5jj]

I agree with ems.

In answer to the original question in your title, (non-) speech introduced by 'X didn't say (that)' is reported (non-) speech.

 

[HomerBong]

Oh I'm such a fool, I didn't notice that, however is it better to use passive present continuous or present perfect continuous. In this case, I think the second sounds better but I might be wrong...