B-137991, JUN. 28, 1960

B-137991, JUN. 28, 1960

TO MURRAY STEINBERG, ATTORNEY AT LAW, SUITE 200, INTERNATIONAL OFFICE BUILDING:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 11, 1960, WITH ENCLOSURES, AND PREVIOUS CORRESPONDENCE, RELATIVE TO THE CLAIM OF SEYMOUR WALLAS THE COMPANY IN THE AMOUNT OF $16,972.67, REPRESENTING LOSS OF OVERHEAD INCIDENT TO THE PERFORMANCE OF CONTRACTS NOS. AF 33/602/-6572 AND 6766.

THE CLAIM IS ALLEGED TO HAVE ARISEN ON ACCOUNT OF THE DELAYS OF THE GOVERNMENT IN PROVIDING REVISED SPECIFICATIONS, CORRECT DRAWINGS AND OTHER TECHNICAL DATA NECESSARY FOR PRODUCTION OF THE CONTRACT ITEMS.

IT APPEARS FROM THE CONTRACT FILES THAT CHANGE ORDERS INCREASING THE CONTRACT PRICES WERE NEGOTIATED WITH THE CONTRACTOR AFTER PRODUCTION HAD BEEN COMMENCED; THAT PRICE INCREASES OF ABOUT $8 PER UNIT WERE PROVIDED BY CHANGE ORDERS TO COMPENSATE THE CONTRACTOR FOR MODIFICATIONS OF SPECIFICATIONS, CHANGES IN PACKAGING REQUIREMENTS, AND CHANGES IN DELIVERY SCHEDULES; AND THAT THESE NEGOTIATED PRICE CHANGES PRESUMABLY COVERED THE PRODUCTION DELAYS WHICH ARE THE SUBJECT OF THIS CLAIM.

THE CHANGES WERE ACCOMPLISHED BY THE CONTRACTING OFFICER UNDER PARAGRAPH 2 OF THE GENERAL PROVISIONS OF THE CONTRACT. THAT PARAGRAPH ENTITLED,"CHANGES," READ AS FOLLOWS:

"THE CONTRACTING OFFICER MAY AT ANY TIME, BY A WRITTEN ORDER, AND WITHOUT NOTICE TO THE SURETIES, MAKE CHANGES, WITHIN THE GENERAL SCOPE OF THIS CONTRACT, IN ANY ONE OR MORE OF THE FOLLOWING: (I) DRAWINGS, DESIGNS, OR SPECIFICATIONS, WHERE THE SUPPLIES TO BE FURNISHED ARE TO BE SPECIALLY MANUFACTURED FOR THE GOVERNMENT IN ACCORDANCE THEREWITH; (II) METHOD OF SHIPMENT OR PACKING; AND (III) PLACE OF DELIVERY. IF ANY SUCH CHANGE CAUSES AN INCREASE OR DECREASE IN THE COST OF, OR THE TIME REQUIRED FOR, PERFORMANCE OF THIS CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE IN THE CONTRACT PRICE OR DELIVERY SCHEDULE, OR BOTH, AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY. ANY CLAIM BY THE CONTRACTOR FOR ADJUSTMENT UNDER THIS CLAUSE MUST BE ASSERTED WITHIN 30 DAYS FROM THE DATE OF RECEIPT BY THE CONTRACTOR OF THE NOTIFICATION OF CHANGE: PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, IF HE DECIDES THAT THE FACTS JUSTIFY SUCH MOTION, MAY RECEIVE AND ACT UPON ANY SUCH CLAIM ASSERTED AT ANY TIME PRIOR TO FINAL PAYMENT UNDER THIS CONTRACT. FAILURE TO AGREE TO ANY ADJUSTMENT SHALL BE A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF THIS CONTRACT ENTITLED "DISPUTES.' HOWEVER, NOTHING IN THIS CLAUSE SHALL EXCUSE THE CONTRACTOR FROM PROCEEDING WITH THE CONTRACT AS CHARGED.'

PARAGRAPH 12 OF THE GENERAL PROVISIONS PROVIDED AS FOLLOWS:

"DISPUTES

"EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THIS CONTRACT WHICH IS NOT DISPOSED OF BY AGREEMENT SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHO SHALL REDUCE HIS DECISION TO WRITING AND MAIL OR OTHERWISE FURNISH A COPY THEREOF TO THE CONTRACTOR. WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAY APPEAL BY MAILING OR OTHERWISE FURNISHING TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE SECRETARY, AND THE DECISIONS OF THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE FOR THE HEARING OF SUCH APPEALS SHALL BE FINAL AND CONCLUSIVE: PROVIDED, THAT IF NO SUCH APPEAL IS TAKEN, THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE. IN CONNECTION WITH ANY APPEAL PROCEEDING UNDER THIS CLAUSE, THE CONTRACTOR SHALL BE AFFORDED AN OPPORTUNITY TO BE HEARD AND TO OFFER EVIDENCE IN SUPPORT OF ITS APPEAL. PENDING FINAL DECISION OF A DISPUTE HEREUNDER, THE CONTRACTOR SHALL PROCEED DILIGENTLY WITH THE PERFORMANCE OF THE CONTRACT AND IN ACCORDANCE WITH THE CONTRACTING OFFICER'S DECISION.'

IT IS OUR VIEW THAT WHATEVER CLAIM THE CONTRACTOR MIGHT HAVE HAD BECAUSE OF ALLEGEDLY UNREASONABLE DELAYS ON THE PART OF THE GOVERNMENT SHOULD HAVE BEEN PRESENTED AND DISPOSED OF IN ACCORDANCE WITH PARAGRAPHS 2 AND 12 OF THE CONTRACT. UNDER THESE CONTRACT PROVISIONS, THE ACTION TAKEN BY THE CONTRACTING OFFICER ON ANY SUCH CLAIM WOULD BE FINAL AND CONCLUSIVE IN THE ABSENCE OF AN APPEAL TO THE SECRETARY OF THE AIR FORCE WITHIN 30 DAYS AFTER RECEIPT OF THE CONTRACTING OFFICER'S DECISION. THE CONTRACT PROCEDURES QUOTED ABOVE SHOULD HAVE BEEN FOLLOWED IN ORDER TO PERMIT ANY ADJUSTMENT IN THE CONTRACT PRICES ON ACCOUNT OF ALLEGED DELAYS OF THE GOVERNMENT. SEE SILAS MASON CO. V. UNITED STATES, 90 C.CLS. 266; ID. 105 C.CLS. 27; UNITED STATES V. CALLAHAN WALKER CO., 317 U.S. 56, 61; UNITED STATES V. BLAIR, 321 V.S. 730, 735, 736; UNITED STATES V. HELPUCH CO., 328 U.S. 234, 239, 240.

ACCORDINGLY, YOU ARE ADVISED THAT THERE EXISTS NO LEGAL BASIS TO ALLOW PAYMENT OF ANY PART OF THE CLAIM.