B-126511, JAN 16, 1956

B-126511, JAN 16, 1956

PRECIS-UNAVAILABLE

EDMUND F. MANSURE, GENERAL SERVICES ADMINISTRATION:

YOUR LETTER OF DECEMBER 13, 1955, TRANSMITTED FOR REVIEW COPIES OF PROPOSED REVISIONS OF GSA REG. 1-II-209.02 AND 209.03, RELATING TO SUPPLY CONTRACT STANDARD FORMS AND STANDARD FORM 32 PRESCRIBED BY THE REGULATION.

IN THE PROPOSED TRANSMITTAL LETTER IT IS STATED THAT ARTICLE 12, THE DISPUTES CLAUSE OF THE PROPOSED STANDARD FORM 32, IS REVISED TO LIMIT THE FINALITY OF ADMINISTRATIVE DECISIONS IN ACCORDANCE WITH PUBLIC LAW 356, APPROVED MAY 11, 1954, 68 STAT. 81. WE BELIEVE THAT THIS CLAUSE AS NOW WRITTEN MIGHT BE CONSTRUED AS PRECLUDING OUR OFFICE FROM QUESTIONING FACTUAL DETERMINATIONS OF AN AGENCY HEAD EVEN THOUGH SUCH DETERMINATIONS WERE FOUND BY US TO BE FRAUDULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. ALTHOUGH THE GENERAL ACCOUNTING OFFICE IS NOT SPECIFICALLY MENTIONED IN PUBLIC LAW 356, THE LEGISLATIVE HISTORY OF THAT LAW ESTABLISHES BEYOND QUESTION THAT ONE OF ITS PURPOSES WAS TO RESERVE TO OUR OFFICE THE SAME AUTHORITY AS THE COURTS TO REVIEW ADMINISTRATIVE DECISIONS RENDERED UNDER SO-CALLED FINALITY CLAUSES. IT IS STATED IN THE HOUSE JUDICIARY COMMITTEE REPORT NO. 1380 ON SENATE BILL 24, 83D CONGRESS, WHICH, AS AMENDED, BECAME PUBLIC LAW 356, THAT:

"THE PROPOSED LEGISLATION, AS AMENDED, WILL NOT ADD TO, NARROW, RESTRICT, OR CHANGE IN ANY WAY THE PRESENT JURISDICTION OF THE GENERAL ACCOUNTING OFFICE EITHER IN THE COURSE OF A SETTLEMENT OR UPON AUDIT, AND THE LANGUAGE USED IS NOT INTENDED EITHER TO CHANGE THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE OR TO GRANT ANY NEW JURISDICTION, BUT SIMPLY TO RECOGNIZE THE JURISDICTION WHICH THE GENERAL ACCOUNTING OFFICE ALREADY HAS.

"THE ELIMINATION OF THE SPECIFIC MENTION OF THE GENERAL ACCOUNTING OFFICE FROM THE PROVISIONS OF THE BILL AS AMENDED SHOULD NOT BE CONSTRUED AS TAKING AWAY ANY OF THE JURISDICTION OF THAT OFFICE. IT IS INTENDED THAT THE GENERAL ACCOUNTING OFFICE, AS WAS ITS PRACTICE, IN REVIEWING A CONTRACT AND CHANGE ORDERS FOR THE PURPOSE OF PAYMENT, SHALL APPLY THE STANDARDS OF REVIEW THAT ARE GRANTED TO THE COURTS UNDER THIS BILL. THE SAME TIME THERE IS NO INTENTION OF SETTING UP THE GENERAL ACCOUNTING OFFICE AS A 'COURT OF CLAIMS.' NOR SHOULD THE ELIMINATION OF THE SPECIFIC MENTION OF THE GENERAL ACCOUNTING OFFICE IN THE BILL BE CONSTRUED AS LIMITING ITS REVIEW TO THE FRAUDULENT INTENT STANDARD PRESCRIBED BY THE WUNDERLICH DECISION."

IT IS THUS APPARENT THAT, IN DRAFTING PUBLIC LAW 356, THE CONGRESS INTENTIONALLY REFRAINED FROM MENTIONING NOT ONLY OUR OFFICE BUT THE COURTS IN ORDER THAT THERE COULD BE NO MISUNDERSTANDING THAT OUR OFFICE AS WELL AS THE COURTS WOULD HAVE JURISDICTION TO REVIEW ADMINISTRATIVE DECISIONS UNDER THE LAW. CONSEQUENTLY, IN ORDER TO AVOID PROVIDING FOR A DISPUTES CLAUSE WHICH WOULD BE CONTRARY TO THE INTENTION OF THE CONGRESS AND TO REMOVE ANY DOUBT AS TO OUR JURISDICTION, WE URGENTLY REQUEST THAT THERE BE ELIMINATED FROM THE DISPUTES CLAUSE HERE PROPOSED, IN LINES 11 AND 12, THE WORDS "DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN."

REGARDING THE ALTERNATE DISPUTES CLAUSE REFERRED TO AT THE BOTTOM OF PAGE 3 OF THE PROPOSED TRANSMITTAL LETTER, WHILE NO OBJECTION IS PERCEIVED TO ITS USE, WE FEEL THAT THE CLAUSE IN THE PROPOSED STANDARD FORM 32 WOULD BETTER SUFFICE TO MEET THE NEEDS OF THE GOVERNMENT AND ITS CONTRACTORS AND WOULD MORE NEARLY CONFORM WITH THE SPIRIT AND PURPOSE OF PUBLIC LAW 356, PROVIDED, OF COURSE, IT BE AMENDED AS REQUESTED.

REGARDING THE POSSIBLE INCLUSION IN STANDARD FORM 32 OF THE ALTERNATE TAX PROVISION MENTIONED IN SUBSECTION 2.E. OF THE TRANSMITTAL LETTER, SINCE WE ARE NOT FULLY INFORMED AS TO THE PROPRIETY OF INCLUDING OR EXCLUDING SUCH PROVISION OR THE EXTENT TO WHICH IT MIGHT BE UTILIZED, WE ARE NOT IN A POSITION TO RECOMMEND FOR OR AGAINST ITS INCLUSION.

WE HAVE NOTED AN APPARENT TYPEGRAPHICAL ERROR IN OMITTING THE WORD "TO" BEFORE THE LAST TWO WORDS OF THE FIRST SENTENCE OF PARAGRAPH (B) OF ARTICLE 13, THE PATENT INFRINGEMENT CLAUSE.

OTHER THAN THE ABOVE WE HAVE NO FURTHER COMMENTS AT THIS TIME REGARDING THE ISSUANCE OF THE PROPOSED REGULATIONS AND STANDARD FORM.