B-170805, SEP. 29, 1970

B-170805, SEP. 29, 1970

CONTRACTS - TERMINATION - DISPUTES ADVICE THAT MATTER OF DISAGREEMENT OVER INTERPRETATION OF CONTRACT SPECIFICATIONS FOR PAINTING BUILDINGS AT FORT WAINRIGHT, ALASKA, IS INITIALLY FOR SETTLEMENT UNDER THE DISPUTES CLAUSE PROCEDURE OF THE CONTRACT AND THEN IF THE FINAL DECISION IS BELIEVED TO BE ERRONEOUS IN POINT OF LAW OR FACT IT MAY BE REVIEWED BY GAO UNDER THE WUNDERLICH ACT STANDARDS.

TO MILLER & VAN HOOMISSEN:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 11, 1970, REQUESTING ON BEHALF OF INTERIOR PAINT COMPANY, INC., THAT ITS CONTRACT (NO. DACA 85 70- B-0039) FOR PAINTING CERTAIN BUILDINGS AT FORT WAINWRIGHT NEAR FAIRBANKS, ALASKA, BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT, AND THE CONTRACTOR BE ALLOWED TO RECOVER ITS ACTUAL COSTS FOR WORK PERFORMED TO DATE.

YOU STATE THAT THERE IS A DISAGREEMENT BETWEEN YOUR CLIENT AND THE GOVERNMENT AS TO THE PROPER INTERPRETATION OF THE CONTRACT SPECIFICATIONS, AND THAT YOUR CLIENT WILL INCUR A VERY SUBSTANTIAL LOSS IF THE WORK IS COMPLETED IN THE MANNER BEING REQUIRED BY THE GOVERNMENT.

IT APPEARS THAT THE DISPUTE INVOLVED CLEARLY ARISES UNDER THE CONTRACT AND AS SUCH IS FOR SETTLEMENT PURSUANT TO THE PROCEDURES SET OUT IN THE "DISPUTES" CLAUSE WHICH IS CONTAINED IN STANDARD GOVERNMENT CONTRACTS. THAT REGARD, SUCH DISPUTES ARE TO BE DECIDED BY THE CONTRACTING OFFICER, WITH THE CONTRACTOR HAVING A RIGHT OF APPEAL FROM SUCH DECISION TO THE HEAD OF THE AGENCY CONCERNED. BOTH THE CONTRACTOR AND THE GOVERNMENT ARE BOUND TO FOLLOW THE PROCEDURE SET OUT IN THE CONTRACT FOR THE ADMINISTRATION OF DISPUTES ARISING OUT OF THE CONTRACT, AND THE CONTRACTOR MUST EXHAUST ITS ADMINISTRATIVE REMEDIES UNDER THE DISPUTES CLAUSE BEFORE APPEALING EITHER TO OUR OFFICE OR THE COURTS. SEE B.H. DEACON CO. V UNITED STATES, 189 F. SUPP. 146 (1960); HAPPEL V UNITED STATES, 176 F. SUPP. 787 (1959), AFFIRMED 279 F. 2D 88 (1960); AUTOMATIC SCREW PRODUCTS COMPANY V UNITED STATES, 145 CT. CL. 94 (1959); 37 COMP. GEN. 568 (1958) AND AUTHORITIES CITED THEREIN.

ACCORDINGLY, WE MUST ADVISE YOU THAT THE MATTER IS INITIALLY FOR RESOLUTION BY THE AGENCY UNDER THE DISPUTES CLAUSE OF THE CONTRACT, AND THIS OFFICE MAY NOT REQUIRE THE ACTION YOU REQUEST. IF YOUR CLIENT IS UNSUCCESSFUL IN ANY CLAIM IT PRESENTS THROUGH THE ADMINISTRATIVE PROCESS, AND IT IS BELIEVED UPON COMPLETION OF SUCH PROCEEDINGS THAT THE FINAL ADMINISTRATIVE DECISION IS ERRONEOUS IN POINT OF FACT OR LAW, THIS OFFICE MAY THEN BE REQUESTED TO REVIEW THE MATTER ACCORDING TO THE STANDARDS OF THE WUNDERLICH ACT, 41 U.S.C. 321, 322.