B-120249, JULY 13, 1954, 34 COMP. GEN. 20

B-120249: Jul 13, 1954

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1954: REFERENCE IS MADE TO YOUR REQUEST. 128.50 WHICH WAS WITHHELD BY THE DEPARTMENT OF THE ARMY TO SATISFY THE GOVERNMENT'S CLAIM FOR EXCESS COSTS INCURRED IN CONSEQUENCE OF YOUR DEFAULT UNDER CONTRACT NO. YOUR PRIMARY CONTENTION APPEARS TO BE THAT THE ACTION OF THE BOARD OF CONTRACT APPEALS ON YOUR APPEAL FROM THE CONTRACTING OFFICER'S TERMINATION FOR DEFAULT AMOUNTED TO A BINDING ADJUDICATION THAT THERE WAS NO CONTRACTUAL RELATIONSHIP BETWEEN YOU AND THE GOVERNMENT. THE ACTUAL DECISION OF THE BOARD ON THAT POINT WAS THAT THE APPEAL SHOULD BE DISMISSED BECAUSE. " AND THAT CONSEQUENTLY THERE WAS NO BASIS FOR EXERCISE OF JURISDICTION BY THE BOARD. THE ARMED SERVICES BOARD OF CONTRACT APPEALS WAS CREATED SOLELY BY ADMINISTRATIVE ACTION TO EXERCISE SUCH POWERS AS ARE CONFERRED BY CONTRACT UPON THE HEADS OF THE DEFENSE DEPARTMENTS TO DECIDE DISPUTED QUESTIONS ARISING UNDER SUCH CONTRACT.

B-120249, JULY 13, 1954, 34 COMP. GEN. 20

CONTRACTS - DISPUTES - AUTHORITY OF ARMED SERVICES BOARD OF CONTRACT APPEALS THE AUTHORITY ADMINISTRATIVELY GRANTED TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS TO DECIDE DISPUTED QUESTIONS ARISING UNDER A CONTRACT DOES NOT PERMIT THE BOARD TO DECIDE WHETHER OR NOT A CONTRACT ACTUALLY EXISTS, AND THEREFORE A DEFAULTING CONTRACTOR MAY NOT BE RELIEVED OF EXCESS COSTS INCURRED AS RESULT OF HIS DEFAULT ON THE BASIS OF A DECISION RENDERED BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS THAT NO CONTRACTUAL RELATIONSHIP EXISTED BETWEEN THE CONTRACTOR AND THE GOVERNMENT.

ACTING COMPTROLLER GENERAL WEITZEL TO OAKLAND TRUCK SALES, INC., JULY 13, 1954:

REFERENCE IS MADE TO YOUR REQUEST, BY LETTER OF MAY 10, 1954, FROM YOUR ATTORNEY, FOR RECONSIDERATION OF SETTLEMENT DATED APRIL 12, 1954, DISALLOWING YOUR CLAIM FOR THE SUM OF $4,128.50 WHICH WAS WITHHELD BY THE DEPARTMENT OF THE ARMY TO SATISFY THE GOVERNMENT'S CLAIM FOR EXCESS COSTS INCURRED IN CONSEQUENCE OF YOUR DEFAULT UNDER CONTRACT NO. DA-20 018-ORD- 718.

YOUR PRIMARY CONTENTION APPEARS TO BE THAT THE ACTION OF THE BOARD OF CONTRACT APPEALS ON YOUR APPEAL FROM THE CONTRACTING OFFICER'S TERMINATION FOR DEFAULT AMOUNTED TO A BINDING ADJUDICATION THAT THERE WAS NO CONTRACTUAL RELATIONSHIP BETWEEN YOU AND THE GOVERNMENT.

THE ACTUAL DECISION OF THE BOARD ON THAT POINT WAS THAT THE APPEAL SHOULD BE DISMISSED BECAUSE, UPON THE EVIDENCE BEFORE IT,"WE CANNOT HOLD THAT ANY CONTRACT HAS COME INTO EXISTENCE," AND THAT CONSEQUENTLY THERE WAS NO BASIS FOR EXERCISE OF JURISDICTION BY THE BOARD.

THE ARMED SERVICES BOARD OF CONTRACT APPEALS WAS CREATED SOLELY BY ADMINISTRATIVE ACTION TO EXERCISE SUCH POWERS AS ARE CONFERRED BY CONTRACT UPON THE HEADS OF THE DEFENSE DEPARTMENTS TO DECIDE DISPUTED QUESTIONS ARISING UNDER SUCH CONTRACT. ITS DECISIONS ARE EFFECTIVE ONLY TO THE EXTENT THAT THEY ARE MADE SO BY CONTRACTUAL AGREEMENT, AND CANNOT IN ANY CASE GO BEYOND THE POWERS OF THE HEAD OF THE DEPARTMENT CONCERNED. WHETHER OR NOT A CONTRACT HAS COME INTO BEING IS NOT A QUESTION ARISING UNDER THE CONTRACT, NOR IS IT A QUESTION AS TO WHICH THE DECISION OF A DEPARTMENT HEAD IS MADE FINAL OR CONCLUSIVE BY ANY STATUTORY ENACTMENT, OR IS SO CONSIDERED BY ORDINARY RULES OF LAW. THE CONCLUSION OF THE BOARD OF CONTRACT APPEALS ON THAT POINT IS NOT, THEREFORE, REGARDED AS BINDING UPON THIS OFFICE.

WITHOUT REFERENCE TO THE SEVERAL MATTERS IN DISPUTE, AS SET FORTH IN THE DECISION OF THE BOARD AND IN YOUR ATTORNEY'S LETTER REQUESTING REVIEW, THERE ARE ADEQUATE GROUNDS IN THE OFFICIAL FILE TO REQUIRE THE CONCLUSION THAT THERE WAS A VALID CONTRACT BETWEEN YOU AND THE GOVERNMENT, AND THAT THE ACTION TAKEN THEREUNDER WAS PROPER.

YOUR ORIGINAL BID UNDER INVITATION NO. DA-20-018-ORD-50-66 WAS DATED SEPTEMBER 30, 1949, THE DATE FOR OPENING OF BIDS, AND THE TIME FOR ACCEPTANCE WAS EXPRESSLY LIMITED TO THIRTY DAYS FROM THAT DATE. WHEN, THEREFORE, THE ADMINISTRATIVE OFFICE, BY TELEGRAM OF NOVEMBER 2, 1949, REQUESTED AN "EXTENSION" OF YOUR BID, YOUR ORIGINAL OFFER HAD ALREADY EXPIRED AND NO ACT OF THE GOVERNMENT COULD THEN HAVE CREATED A CONTRACT OR IMPOSED ANY OBLIGATION UPON YOU. YOUR LETTER OF NOVEMBER 25, IN RESPONSE TO THAT TELEGRAM, WAS THEREFORE A NEW OFFER, AND SINCE IT CONTAINED NO QUALIFICATION OR MODIFICATION OF THE PRICE ORIGINALLY QUOTED, IT COULD NOT REASONABLY HAVE BEEN CONSTRUED AS EMBODYING THE ALLEGATION OF ERROR PREVIOUSLY MADE, BUT RATHER AS A CONFIRMATION OF YOUR WILLINGNESS TO CONTRACT AT THE PRICES QUOTED.

THIS OFFER WAS ACCEPTED BY THE CONTRACTING OFFICER ON DECEMBER 9, 1949, WITHIN THE PERIOD SPECIFIED BY YOUR LETTER. THERE IS ON FILE IN THIS OFFICE A NOTICE OF ASSIGNMENT RECEIVED FROM THE COLONIAL TRUST COMPANY, PITTSBURGH, PENNSYLVANIA, TO WHICH IS ATTACHED A DUPLICATE ASSIGNMENT, DATED DECEMBER 9, 1949, EXECUTED BY OAKLAND TRUCK SALES, INC., BY M. KLEIN, PRESIDENT, CORPORATE SEAL ATTESTED BY C. C. LAVALLEE, SECRETARY, ASSIGNING TO THE COLONIAL TRUST COMPANY ALL MONEYS DUE OR TO BECOME DUE UNDER CONTRACT NO. DA-20-018-ORD-718, DATED DECEMBER 9, 1949. THE NOTICE OF ASSIGNMENT FURTHER DESCRIBED THE CONTRACT AS FOR TRUCK PARTS, AND IN THE AMOUNT OF $3,328.

THIS INSTRUMENT ALONE ESTABLISHES BEYOND ANY DOUBT THAT THE GOVERNMENT'S ACCEPTANCE OF YOUR BID HAD BEEN COMMUNICATED TO YOU AND THAT A VALID AND BINDING CONTRACT WAS THEREFORE CREATED.