B-123363, AUG. 24, 1955

B-123363: Aug 24, 1955

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TO DOUGLASS BROS.: REFERENCE IS MADE TO YOUR CLAIM FOR REIMBURSEMENT IN THE AMOUNT OF $32. 247.82 WHICH WAS ADMINISTRATIVELY DEDUCTED FROM AMOUNTS OTHERWISE DUE YOU TO COMPENSATE THE UNITED STATES FOR DAMAGES SUSTAINED AS THE RESULT OF A FIRE WHICH OCCURRED ON SEPTEMBER 26. WHILE CERTAIN ELECTRICAL EQUIPMENT WAS BEING TESTED AT THE BASE FROM LINES WHICH HAD BEEN CONVERTED TO THE NEW VOLTAGE BY CERTAIN OF THE SUBCONTRACTOR'S EMPLOYEES. WAS CONVENED AT THE HOLLOMAN AIR FORCE BASE FOR THE PURPOSE OF DETERMINING THE EXACT CAUSE OF THE FIRE. WHO WAS PRIMARILY RESPONSIBLE FOR THE FIRE. TESTIMONY WAS TAKEN AND FORMAL STATEMENTS MADE BY SEVERAL WITNESSES TO THE FIRE. WHEREIN THERE WERE RELATED THE EVENTS WHICH IMMEDIATELY PRECEDED THE FIRE.

B-123363, AUG. 24, 1955

TO DOUGLASS BROS.:

REFERENCE IS MADE TO YOUR CLAIM FOR REIMBURSEMENT IN THE AMOUNT OF $32,247.82 WHICH WAS ADMINISTRATIVELY DEDUCTED FROM AMOUNTS OTHERWISE DUE YOU TO COMPENSATE THE UNITED STATES FOR DAMAGES SUSTAINED AS THE RESULT OF A FIRE WHICH OCCURRED ON SEPTEMBER 26, 1953, AT THE HOLLOMAN AIR FORCE BASE, NEW MEXICO, DURING THE COURSE OF PERFORMANCE OF CONTRACT NO. AF 29/600/-330, DATED MAY 4, 1953.

BY THE TERMS OF THE CONTRACT YOU AGREED, FOR THE CONSIDERATION RECITED, TO CONVERT THE PRIMARY ELECTRICAL DISTRIBUTION SYSTEM AT HOLLOMAN AIR FORCE BASE FROM 2400/4160 VOLTS TO 7620/13200 VOLTS, AS REQUIRED BY THE PERTINENT SPECIFICATIONS.

FROM THE FACTS OF RECORD IT APPEARS THAT ON THE AFTERNOON OF SEPTEMBER 26, 1953, WHILE CERTAIN ELECTRICAL EQUIPMENT WAS BEING TESTED AT THE BASE FROM LINES WHICH HAD BEEN CONVERTED TO THE NEW VOLTAGE BY CERTAIN OF THE SUBCONTRACTOR'S EMPLOYEES, A FIRE BROKE OUT IN BUILDINGS NOS. 295 AND 297 WHICH RESULTED IN CONSIDERABLE DAMAGE BY FIRE AND WATER TO THE BUILDINGS AND TO THE ELECTRONIC AND OTHER GOVERNMENT-OWNED EQUIPMENT LOCATED IN THE BUILDINGS. UNDER DATE OF SEPTEMBER 30, 1953, A BOARD OF QUALIFIED OFFICERS, CONSISTING OF FOUR MEMBERS, WAS CONVENED AT THE HOLLOMAN AIR FORCE BASE FOR THE PURPOSE OF DETERMINING THE EXACT CAUSE OF THE FIRE, THE EXTENT OF THE DAMAGE, AND WHO WAS PRIMARILY RESPONSIBLE FOR THE FIRE. DURING THE COURSE OF THE PROCEEDINGS, TESTIMONY WAS TAKEN AND FORMAL STATEMENTS MADE BY SEVERAL WITNESSES TO THE FIRE, INCLUDING THE FIRE CHIEF AND THE CHIEF ELECTRICIAN AT THE BASE. DURING THE COURSE OF ITS DELIBERATIONS THE BOARD ALSO TOOK INTO CONSIDERATION SWORN STATEMENTS VOLUNTARILY MADE TWO DAYS EARLIER, ON SEPTEMBER 28, 1953, TO THE STAFF JUDGE ADVOCATE AT THE BASE BY THREE EMPLOYEES OF THE ELECTRICAL SUBCONTRACTOR (L. G. SIMON ELECTRIC COMPANY), WHEREIN THERE WERE RELATED THE EVENTS WHICH IMMEDIATELY PRECEDED THE FIRE. FROM THESE STATEMENTS IT APPEARS THAT WHILE TWO OF THE SUBCONTRACTOR'S EMPLOYEES WERE ENGAGED IN THE WORK OF CONNECTING THE SERVICE DROPS (THE WIRES RUNNING FROM THE POLE LINE TO THE STRUCTURE) FROM BUILDINGS NOS. 295 AND 297 TO THE NEWLY CONSTRUCTED 110-208 VOLT SECONDARY WIRES, THEY INADVERTENTLY CONNECTED THE GROUND WIRE FROM EACH BUILDING TO A SECONDARY LINE WHICH, UPON BECOMING ENERGIZED WITH 110 VOLTS OF ELECTRICITY, CAUSED THE GROUND WIRES WITHIN THE BUILDINGS TO REACH A TEMPERATURE OF APPROXIMATELY 2000 DEGREES FAHRENHEIT, THUS CAUSING THE STRUCTURES TO CATCH FIRE ALMOST IMMEDIATELY. IT FURTHER APPEARS THAT THE SUBCONTRACTOR'S EMPLOYEES WHO PERFORMED THIS WORK MERELY ASSUMED THAT THEY WERE MAKING THE CORRECT CONNECTIONS, HAVING FAILED TO TEST THEM AFTER INSTALLATION AND THEY ADMIT, AS DID THE SUBCONTRACTOR'S FOREMAN, THAT A MISTAKE WAS MADE IN CONNECTING THE SERVICE DROPS TO THOSE BUILDINGS. AFTER A CAREFUL REVIEW OF ALL THE EVIDENCE, THE FIRE INVESTIGATION BOARD MADE A DETERMINATION, AS FOLLOWS:

"17. THE FIRES RESULTED FROM GROUND WIRES, LEADING FROM A POLE LINE INTO BUILDINGS 295 AND 297, BEING ENERGIZED WITH 110 VOLTS THROUGH AN IMPROPER ELECTRICAL CONNECTION TO A 110 VOLT LINE. THE IMPROPER CONNECTION WAS MADE BY AN EMPLOYEE OF THE L. G. SIMON ELECTRIC COMPANY OF GREENTREE, NEW MEXICO.

"18. EMPLOYEES OF THE L. G. SIMON ELECTRIC COMPANY FAILED TO MAKE ELECTRICAL TESTS TO DETERMINE WHICH WIRE WAS THE GROUND WIRE PRIOR TO CONNECTING THE SERVICE DROPS INTO BUILDINGS 295 AND 297.'

THESE FINDINGS WERE FOLLOWED BY A RECOMMENDATION OF THE BOARD THAT APPROPRIATE ACTION BE TAKEN TO COLLECT FROM THE CONTRACTOR THE DAMAGES SUFFERED BY THE GOVERNMENT AS A RESULT OF THE FIRE, ESTIMATED AT THAT TIME TO BE $81,422. AFTER INVESTIGATING FURTHER SOLELY INTO THE MATTER OF THE DAMAGES WHICH RESULTED DIRECTLY FROM THE FIRE, THE BOARD ULTIMATELY FIXED THE DAMAGES AT $32,247.82, THE AMOUNT OF THE INSTANT CLAIM.

IN A LETTER DATED OCTOBER 13, 1953, THE CONTRACTING OFFICER AT THE HOLLOMAN AIR FORCE BASE NOTIFIED YOU OF THE FINDINGS OF THE BOARD, AND DIRECTED YOUR SPECIFIC ATTENTION TO YOUR RESPONSIBILITY IN THE MATTER, AS DEFINED IN CLAUSE 31, GENERAL PROVISIONS OF THE CONTRACT, WHICH READS:

"31. PERMITS AND RESPONSIBILITY FOR WORK. THE CONTRACTOR SHALL OBTAIN ALL REQUIRED LICENSES AND PERMITS. HE SHALL BE RESPONSIBLE FOR ALL DAMAGES TO PERSONS THAT OCCUR AS A RESULT OF HIS FAULT OR NEGLIGENCE IN CONNECTION WITH THE PROSECUTION OF THE WORK. EXCEPT FOR "GOVERNMENT PROPERTY," AS DEFINED IN CLAUSE 24 (LIABILITY FOR GOVERNMENT-OWNED PROPERTY), THE RESPONSIBILITY FOR WHICH IS AS STATED IN SAID CLAUSE, THE CONTRACTOR SHALL BE RESPONSIBLE FOR ALL LOSS OR DESTRUCTION OF OR DAMAGE TO PROPERTY THAT OCCURS AS A RESULT OF HIS FAULT OR NEGLIGENCE IN CONNECTION WITH THE PROSECUTION OF THE WORK, AND SHALL BE RESPONSIBLE FOR ALL MATERIALS DELIVERED AND WORK PERFORMED UNTIL COMPLETION AND FINAL ACCEPTANCE. UPON COMPLETION OF THE CONTRACT THE WORK SHALL BE DELIVERED COMPLETE AND UNDAMAGED.'

THE ABOVE COMMUNICATION WAS FOLLOWED BY THE CONTRACTING OFFICER'S LETTER OF JANUARY 5, 1954, AGAIN NOTIFYING YOU OF YOUR LIABILITY FOR DAMAGES SUFFERED BY THE GOVERNMENT. IN THIS LETTER YOU ALSO WERE INSTRUCTED TO NOTIFY THAT OFFICE OF THE ACTION YOU PROPOSED TO TAKE TOWARD SETTLEMENT OF THE GOVERNMENT'S CLAIM. AFTER YOUR CONTINUED FAILURE TO EFFECT SETTLEMENT OF SUCH CLAIM, AS REQUESTED, THE AMOUNT WAS COLLECTED FROM SUMS OTHERWISE DUE YOU UNDER THE CONTRACT.

IN YOUR BASIC LETTER OF AUGUST 24, 1954, TO THIS OFFICE, YOU FILED CLAIM FOR REFUND OF THE AMOUNT OF $32,247.82 COLLECTED FROM YOU BY THE GOVERNMENT CONTRACTING AGENCY, CONTENDING, THROUGH YOUR ATTORNEYS, THAT THE AMOUNT OF DAMAGE ACTUALLY SUSTAINED BY THE GOVERNMENT BY REASON OF THIS FIRE IS STILL IN DISPUTE, IN VIEW OF WHICH THERE ALLEGEDLY IS NO LEGAL JUSTIFICATION FOR THE WITHHOLDING OF AN UNLIQUIDATED CLAIM, BASED PRIMARILY UPON TORT, AGAINST YOUR LIQUIDATED CLAIM FOR PAYMENT OF THE AMOUNT DUE FOR WORK PERFORMED UNDER YOUR CONTRACT. YOU CITE AS AUTHORITIES FOR YOUR POSITION IN THE MATTER THE CASES OF UNITED STATES V. BUCHANAN, 49 U.S. 83; WINDER V. CALDWELL, 55 U.S. 434; UNITED STATES V. ROBESON, 34 U.S. 319, WHICH APPEAR TO STAND FOR THE GENERAL PRINCIPLE THAT UNLIQUIDATED DAMAGES CLAIMED FOR WRONGS OR TORTS DONE CANNOT BE PLEADED BY WAY OF SET-OFF. YOU FURTHER CONTEND THAT THE CAUSE OF THE FIRE AND THE EXTENT OF THE DAMAGE ARE STILL IN DISPUTE, AND SINCE THE CONTRACT PROVIDES "UNCONDITIONALLY, FOR PAYMENT FOR THE WORK PERFORMED AND MATERIALS AND SERVICES FURNISHED, UPON CERTIFICATION OF THE RECEIPT THEREOF BY THE GOVERNMENT, YOU FEEL THAT YOU ARE ENTITLED TO PAYMENT OF THE FULL CONTRACT PRICE, IRRESPECTIVE OF ANY CLAIM OF THE AIR FORCE, "LIQUIDATED OR UNLIQUIDATED.' ALSO YOU CONTEND THAT THE DAMAGES HERE INVOLVED RESULTED FROM FAULTY OR IMPROPER WIRING WHICH HAD PREVIOUSLY BEEN INSTALLED AT THE HOLLOMAN AIR FORCE BASE, AND ALLEGE FURTHER THAT UNDER THE PROVISIONS OF CLAUSE 24, GENERAL PROVISIONS OF THE CONTRACT, LIABILITY FOR THE DAMAGES CANNOT BE IMPOSED UPON YOU.

ANSWERING YOUR CONTENTIONS THAT THE GOVERNMENT'S CLAIM IN THIS INSTANCE IS FOUNDED PRINCIPALLY UPON TORT, THAT IT IS UNLIQUIDATED IN CHARACTER AND, THEREFORE, IS NOT SUCH AS MIGHT BE SET OFF FROM AMOUNTS OTHERWISE DUE YOU UNDER THE CONTRACT, IT SHOULD BE EMPHASIZED AT THE OUTSET THAT WHILE THE ACTS WHICH WERE DIRECTLY RESPONSIBLE FOR THE FIRE UNDOUBTEDLY RESULTED FROM NEGLIGENCE UPON THE PART OF THE SUBCONTRACTOR'S EMPLOYEES, AND THUS SOUNDED IN TORT, THE GOVERNMENT'S CLAIM FOR DAMAGES IN THIS INSTANCE IS PREDICATED PRIMARILY UPON CONTRACT, AND THE BREACH BY YOU, THROUGH YOUR SUBCONTRACTOR, OF CERTAIN WELL DEFINED CONDITIONS AND RESPONSIBILITIES IMPOSED BY THE CONTRACT. NOT ONLY DOES CLAUSE 31 OF THE CONTRACT GENERAL PROVISIONS IMPOSE UPON YOU FULL RESPONSIBILITY "FOR ALL LOSS OR DESTRUCTION OF OR DAMAGE TO PROPERTY" OCCURRING AS A RESULT OF YOUR "FAULT OR NEGLIGENCE," IN CONNECTION WITH THE PERFORMANCE OF THE WORK SPECIFIED, BUT IT ALSO IMPOSES UPON YOU THE UNQUALIFIED DUTY OF PERFORMING THE WORK AND DELIVERING IT TO THE GOVERNMENT IN A "COMPLETE AND UNDAMAGED" CONDITION. ANOTHER OF THE PRINCIPAL DUTIES OR OBLIGATIONS WHICH YOU ASSUMED UNDER YOUR CONTRACT WAS THAT SET OUT IN PARAGRAPH 1-03, SECTION 1, GENERAL PROVISIONS, UNDER THE GENERAL HEADING "DESCRIPTION OF WORK," AS FOLLOWS:

"1-03. SITE INVESTIGATION AND REPRESENTATIONS:

THE CONTRACTOR ACKNOWLEDGES THAT HE HAS SATISFIED HIMSELF AS TO THE NATURE AND LOCATION OF THE WORK, THE GENERAL AND LOCAL CONDITIONS. * * * THE CHARACTER, QUALITY, AND QUANTITY OF SURFACE AND SUBSURFACE MATERIALS TO BE ENCOUNTERED, THE CHARACTER OF EQUIPMENT AND FACILITIES NEEDED PRELIMINARY TO AND DURING THE PROSECUTION OF THE WORK AND ALL OTHER MATTERS WHICH CAN IN ANY WAY AFFECT THE WORK OR THE COST THEREOF UNDER THIS CONTRACT. ANY FAILURE BY THE CONTRACTOR TO ACQUAINT HIMSELF WITH ALL THE AVAILABLE INFORMATION CONCERNING THESE CONDITIONS WILL NOT RELIEVE HIM FROM RESPONSIBILITY FOR ESTIMATING PROPERLY THE DIFFICULTY OR COST OF SUCCESSFULLY PERFORMING THE WORK. * * *"

THUS, IT IS APPARENT THAT YOU UNQUALIFIEDLY WERE OBLIGATED AND BOUND BY YOUR CONTRACT TO ACQUAINT YOURSELF FULLY WITH THE WORKING CONDITIONS PREVAILING AT THE SITE OF THE PROJECT, AND TO MAKE SUCH PRELIMINARY INSPECTIONS AND TESTS AS WOULD ASSURE THE ORDERLY PROGRESS AND COMPLETE PERFORMANCE OF THE CONTRACT WORK. HAD YOU OR YOUR SUBCONTRACTOR TAKEN THE NECESSARY PRECAUTIONS TO FULLY ACQUAINT YOURSELVES THOROUGHLY WITH THE WIRING AND THE OTHER ELECTRICAL INSTALLATIONS AT THE HOLLEMAN AIR FORCE BASE PRIOR TO COMMENCEMENT OF THE WORK OF YOUR CONTRACT, AND HAD THE SUBCONTRACTOR'S EMPLOYEES--- YOUR AGENTS--- MADE THE NECESSARY TESTS OF THE LINES TO WHICH THEY HAD CONNECTED THE SERVICE DROPS TO BUILDINGS NOS. 295 AND 297, THERE CAN BE NO DOUBT THAT THE MISTAKE WHICH RESULTED IN THIS FIRE COULD, AND PROBABLY WOULD, HAVE BEEN AVOIDED. ACCORDINGLY, IT MUST BE CONCLUDED THAT THE GOVERNMENT'S CLAIM FOR DAMAGES IN THIS INSTANCE MUST BE REGARDED AS HAVING BEEN FOUNDED UPON YOUR BREACH OF CERTAIN OF THE ESSENTIAL INSPECTION, PERFORMANCE AND ASSUMPTION OF RESPONSIBILITY CLAUSES OF YOUR CONTRACT.

CONCERNING YOUR CONTENTION THAT THE GOVERNMENT'S CLAIM IS UNLIQUIDATED, DISPUTED AND, THEREFORE, NOT SUBJECT TO SET-OFF, IT WILL BE OBSERVED THAT IMMEDIATELY FOLLOWING THIS CONTINGENCY, THE FIRE INVESTIGATION BOARD OF OFFICERS WHICH WAS CONVENED AT THE HOLLOMAN AIR FORCE BASE ON SEPTEMBER 30, 1953, WAS IN NO POSITION, AT THAT TIME, AND DID NOT ATTEMPT NOR PURPORT TO FIX THE ACTUAL AMOUNT OR THE EXTENT OF THE DAMAGES WHICH RESULTED TO THE GOVERNMENT-OWNED PROPERTY AND EQUIPMENT BY REASON OF THE FIRE. IN FACT, IN THEIR INITIAL REPORT OF THE PROCEEDINGS HELD AT THAT BASE, THEY MERELY "ESTIMATED" THE DAMAGES AT APPROXIMATELY $81,422 WHICH, OF COURSE, WAS NOT INTENDED TO BE A FINAL DETERMINATION OF THE DAMAGES. THE BOARD DID RECONVENE, HOWEVER, ON DECEMBER 15, 1953, FOR THE SPECIFIC PURPOSE OF DETERMINING THE ACTUAL AMOUNT OF THE LOSS SUFFERED AND, AFTER A COMPLETE ANALYSIS OF ALL OF THE EVIDENCE ADDUCED AT THAT CONVENTION, IT MADE A DETERMINATION OF FACT THAT THE "FINAL TOTAL COST TO THE GOVERNMENT OF THE FIRE IN BUILDINGS 295 AND 297" WAS $32,247.82--- THE AMOUNT ACTUALLY COLLECTED FROM YOU. IN THE CIRCUMSTANCES, AND AFTER GIVING DUE CONSIDERATION TO THE FACT THAT THE ITEMS OF COST COMPRISING THAT FIGURE WERE ARRIVED AT BY ADVERTISING FOR BIDS, AND DETERMINING THE AMOUNT OF THE LOWEST BID RECEIVED UNDER EACH INVITATION, AND ALSO BY CONSULTING WITH EXPERTS IN THE FIELD OF ELECTRONICS AND OTHER SCIENCES FOR THE PURPOSE OF DETERMINING THE REPAIR OR REPLACEMENT COST OF THE APPARATUS WHICH HAD BEEN DAMAGED OR DESTROYED BY THE FIRE, IT IS OBVIOUS THAT THE GOVERNMENT'S CLAIM FOR DAMAGES IN THIS INSTANCE DEFINITELY IS IN A LIQUIDATED AMOUNT AND, THEREFORE, PROPERLY WAS FOR COLLECTION BY SET OFF AGAINST AMOUNTS OTHERWISE DUE UNDER THE CONTRACT.

REGARDING THE MATTER OF SET-OFF, GENERALLY, IT SHOULD BE POINTED OUT THAT, UNDER A LONG LINE OF JUDICIAL PRECEDENTS, THE UNITED STATES HAS THE UNEQUIVOCAL RIGHT OF EVERY CREDITOR TO APPLY THE UNAPPROPRIATED MONIES OF THE DEBTOR, IN THE POSSESSION OF THE FORMER, IN EXTINGUISHMENT OF THE DEBTS DUE IT. SEE UNITED STATES V. MUNSEY TRUST COMPANY, 332 U.S. 234, 239 -240; BARRY V. UNITED STATES, 229 U.S. 47; CHERRY COTTON MILLS, INC. V. UNITED STATES, 103 C.CLS. 243; TAGGART V. UNITED STATES, 17 ID. 322; BONNAFON V. UNITED STATES, 14 ID. 484. IN VIEW THEREOF, AND SINCE THE DAMAGES RESULTING TO THE GOVERNMENT BY VIRTUE OF THIS FIRE ARE READILY ASCERTAINABLE, AND HAVE BEEN FIXED OR ESTABLISHED IN A DEFINITE AMOUNT, THERE CAN BE NO DOUBT CONCERNING THE CORRECTNESS OF THE ACTION OF THE HOLLOMAN AIR FORCE BASE IN HAVING COLLECTED THOSE DAMAGES BY SET-OFF. SEE, IN THIS CONNECTION, 7 COMP. GEN. 186, 189, AND THE AUTHORITIES THERE CITED. OBVIOUSLY, THE PROVISIONS OF CLAUSE 24 OF THE CONTRACT GENERAL PROVISIONS HAVE NO APPLICATION HERE, SINCE THE TERMS "GOVERNMENT PROPERTY," AS REFERRED TO IN THE CLAUSE, HAS RELATION ONLY TO PROPERTY WITHIN THE "POSSESSION OR CONTROL OF THE CONTRACTOR" WHICH HAD BEEN FURNISHED BY THE GOVERNMENT IN CONNECTION WITH THE WORK OF THE CONTRACT. HENCE, THE PROVISO IN THE CLAUSE PURPORTING TO EXCUSE YOU FOR LOSS DUE TO "FIRE" AND OTHER LIKE CAUSES, HAS REFERENCE ONLY TO SUCH PROPERTY OR SUPPLIES AS THE GOVERNMENT HAD EXPRESSLY AGREED TO FURNISH YOU UNDER THE PROVISIONS OF ARTICLE VI, PAGE 29, OF THE CONTRACT. MANIFESTLY, THE SAID CLAUSE 24 COULD NOT HAVE BEEN INTENDED TO APPLY TO THE BUILDINGS, STRUCTURES AND EQUIPMENT PERMANENTLY SITUATED AT THE HOLLOMAN AIR FORCE BASE SINCE THEY COULD NOT BE CONSIDERED TO HAVE BEEN IN YOUR EXCLUSIVE "POSSESSION OR CONTROL" AT ANY TIME.

WITH YOUR SUPPLEMENTAL LETTER DATED APRIL 11, 1955, YOU TRANSMITTED FOR OUR CONSIDERATION A LENGTHY REPORT ON THE FIRE WHICH WAS PREPARED BY VICTOR H. DOUGLASS, SECRETARY OF YOUR COMPANY, AND ALSO SEVERAL STATEMENTS AND EXHIBITS DESIGNED TO PROVE THAT THE FIRE HERE IN QUESTION RESULTED FROM FAULTY WIRING, THE LACK OF PROPER GROUND CONNECTIONS, INADEQUATE FUSING, FAILURE OF THE GOVERNMENT TO DISCONNECT THE SWITCHES IN THE PRINCIPAL BUILDINGS, AND THE ALLEGED FAILURE PROPERLY TO IDENTIFY THE WIRES TO WHICH THE SERVICE DROPS TO STRUCTURES 295 AND 297 WERE TO BE CONNECTED. AS YOU WERE ADVISED IN OUR LETTER OF MAY 6, 1955, ALL OF THE SUPPLEMENTAL STATEMENTS AND EXHIBITS FURNISHED BY YOU WERE REFERRED TO THE SECRETARY OF THE AIR FORCE FOR REPORT AND COMMENT AND, UNDER DATE OF JULY 25, 1955, THE DEPARTMENT OF THE AIR FORCE FURNISHED US WITH A SUPPLEMENTAL REPORT, ACCOMPANIED BY SEVERAL STATEMENTS FROM RESPONSIBLE AND QUALIFIED OFFICIALS OF THE AIR FORCE HAVING A DIRECT KNOWLEDGE OF THIS TRANSACTION. IN THESE STATEMENTS IT IS ALLEGED THAT THE SERVICE WIRES IN CONTROVERSY DEFINITELY WERE SUSCEPTIBLE OF READY IDENTIFICATION; THAT THE ELECTRICAL SYSTEM SERVICING THESE BUILDINGS WAS IN GOOD CONDITION; ADEQUATELY GROUNDED, AND PROPERLY FUSED, ALL OF WHICH WOULD TEND TO REFUTE YOUR CONTENTION THAT THE GOVERNMENT WAS NEGLIGENT AND WAS PRIMARILY RESPONSIBLE FOR PERMITTING CONDITIONS TO EXIST AT THE BASE WHICH RESULTED IN THIS FIRE. IN CONNECTION WITH THE STATEMENTS FURNISHED BY YOU, IT IS OBSERVED THAT NO EVIDENCE HAS BEEN SUBMITTED WHICH MIGHT BE DEEMED ADEQUATE TO REFUTE THE AFFIRMATIVE ADMINISTRATIVE FINDING OR DETERMINATION THAT THE FIRE HERE IN QUESTION WAS DIRECTLY AND PROXIMATELY CAUSED BY THE NEGLIGENCE OF THE SUBCONTRACTOR'S EMPLOYEES CONNECTING THE SERVICE WIRES LEADING TO THE DAMAGED BUILDINGS. OF COURSE, WE HAVE NO DIRECT OR FIRST- HAND KNOWLEDGE OF THE ACTUAL CONDITIONS WHICH PREVAILED AT THE BASE, OR THE CAUSES WHICH WERE DIRECTLY RESPONSIBLE FOR THE FIRE, AND IN CASES OF DISPUTES, SUCH AS ARE HERE INVOLVED, WE NECESSARILY ARE COMPELLED TO RELY UPON THE CORRECTNESS OF THE FACTS AS REPORTED TO US BY THE RESPONSIBLE AND QUALIFIED ADMINISTRATIVE OFFICIALS OF THE GOVERNMENT. SEE 20 COMP. GEN. 573, 578; 16 ID. 410.

INSOFAR AS THE INSTANT CONTRACT IS CONCERNED, YOU WILL NOTE THAT CLAUSE 11 OF THE CONTRACT GENERAL PROVISIONS SPECIFICALLY DESIGNATES THE CONTRACTING OFFICER AT THE HOLLOMAN AIR FORCE BASE, OR HIS DULY AUTHORIZED REPRESENTATIVE OR SUCCESSOR, TO BE THE "FINAL" ARBITER OF ALL DISPUTES CONCERNING QUESTIONS OF FACT WHICH MIGHT ARISE DURING THE PERFORMANCE OF THE CONTRACT WORK AND, BY ITS TERMS, MAKES HIS FINDINGS ON DISPUTED ISSUES OF FACT "FINAL AND CONCLUSIVE" UPON THE PARTIES. IN HIS LETTER OF OCTOBER 13, 1953, TO YOU, THE CONTRACTING OFFICER EXPRESSED HIS UNEQUIVOCAL CONCURRENCE IN THE FINDINGS OF THE BOARD OF OFFICERS CONVENED ON SEPTEMBER 30, 1953, AND ADOPTED THOSE FINDINGS AS HIS OWN UPON THE FACTUAL QUESTIONS OF WHAT ACTUALLY CAUSED THE FIRE IN QUESTION AND WHO WAS RESPONSIBLE FOR THE FIRE. CONSEQUENTLY, THE FINDINGS OF THE BOARD TO THE EFFECT THAT THE FIRE WAS CAUSED BY IMPROPER WIRING CONNECTIONS MADE TO THE SERVICE DROPS LEADING TO BUILDINGS 295 AND 297, AND THAT SUCH IMPROPER CONNECTIONS WERE MADE THROUGH NEGLIGENCE UPON THE PART OF THE SUBCONTRACTOR'S EMPLOYEES--- YOUR AGENTS--- MUST BE INTERPRETED AS THE FINDINGS OF THE CONTRACTING OFFICER, MADE IN THE EXERCISE OF HIS OFFICIAL FUNCTIONS, AS PRESCRIBED IN CLAUSE 11. IN VIEW OF THE CONTRACTING OFFICER'S FINDINGS WE HAVE NO ALTERNATIVE BUT TO ACCORD FINALITY TO THE FACTS AS REPORTED. SEE, IN THIS CONNECTION, WILLIAMS COMPANY, INC. V. UNITED STATES, 85 C.CLS. 431; JOHN MCSHAIN, INC. V. UNITED STATES, 88 ID. 284; UNITED STATES V. CALLAHAN- WALKER COMPANY, 317 U.S. 56; UNITED STATES V. JOSEPH A. HOLPUCH COMPANY, 328 ID. 234; CF. UNITED STATES V. WUNDERLICH, 342 ID. 98.