B-129908, DEC. 31, 1956

B-129908: Dec 31, 1956

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INC.: REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 8. AF 09/603/-15882 AND AF 09/603/-20123 WERE SIMILAR. PARAGRAPH 21 (B) OF THE SCHEDULE ATTACHED TO EACH CONTRACT PROVIDED THAT IT WAS THE GOVERNMENT'S INTENTION TO FURNISH THE NECESSARY REPLACEMENT PARTS BUT THAT WHEN PARTS WERE NOT AVAILABLE FROM AIR FORCE STOCKS YOU WOULD BUY THEM AND BE REIMBURSED YOUR ACTUAL COST. FAILURE TO AGREE TO ANY ADJUSTMENT WAS TO BE REGARDED AS A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF EACH CONTRACT LED. 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. UNLESS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN FRAUDULENT.

B-129908, DEC. 31, 1956

TO ACCESSORY OVERHAUL INDUSTRIES, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 8, 1956, REQUESTING REVIEW OF SETTLEMENT DATED OCTOBER 5, 1956, WHICH DISALLOWED YOUR CLAIM FOR $7,565.29, REPRESENTING AN ADDITIONAL AMOUNT ALLEGED TO BE DUE FOR WORK PERFORMED UNDER DEPARTMENT OF THE AIR FORCE CONTRACTS NOS. AF 09/603/- 15882, AF 09/603/-20123, AND AF 41/608/-6619.

UNDER THE TERMS OF THE CONTRACTS YOU AGREED TO FURNISH ALL FACILITIES AND LABOR AND PERFORM ALL THE WORK FOR OVERHAULING AND RECONDITIONING VARIOUS ITEMS OF GOVERNMENT EQUIPMENT, FOR THE PRICES SPECIFIED. CONTRACTS NOS. AF 09/603/-15882 AND AF 09/603/-20123 WERE SIMILAR. PARAGRAPH 21 (B) OF THE SCHEDULE ATTACHED TO EACH CONTRACT PROVIDED THAT IT WAS THE GOVERNMENT'S INTENTION TO FURNISH THE NECESSARY REPLACEMENT PARTS BUT THAT WHEN PARTS WERE NOT AVAILABLE FROM AIR FORCE STOCKS YOU WOULD BUY THEM AND BE REIMBURSED YOUR ACTUAL COST, INCLUDING FREIGHT, LESS PAYMENT AND TRADE DISCOUNTS. PARAGRAPH 20 OF THE GENERAL PROVISIONS OF EACH CONTRACT ALSO PROVIDED THAT THE GOVERNMENT WOULD NOT BE LIABLE TO THE CONTRACTOR FOR DAMAGES OR LOSS OF PROFIT BY REASON OF ANY DELAY IN DELIVERY OF OR FAILURE TO DELIVER ANY OR ALL OF THE GOVERNMENT-FURNISHED PROPERTY, EXCEPT THAT IN CASE OF SUCH DELAY OR FAILURE, UPON THE WRITTEN REQUEST OF THE CONTRACTOR, AN EQUITABLE ADJUSTMENT SHOULD BE MADE IN THE DELIVERY OR PERFORMANCE DATES, OR PRICES, OR BOTH, AND IN ANY OTHER CONTRACTUAL PROVISION AFFECTED THEREBY, IN ACCORDANCE WITH THE PROCEDURES PROVIDED FOR IN THE CONTRACT CLAUSE ENTITLED "CHANGES.' PARAGRAPH 2 OF THE GENERAL PROVISIONS TITLED,"CHANGES," PROVIDED THAT THE CONTRACTING OFFICER MIGHT AT ANY TIME REQUIRE CHANGES IN THE CONTRACT WORK OR SERVICES AND THAT, IF SUCH CHANGES CAUSED A MATERIAL INCREASE OR DECREASE IN THE AMOUNT OR CHARACTER OF THE WORK TO BE PERFORMED, AN EQUITABLE ADJUSTMENT OF THE FIXED PRICE TO BE PAID SHOULD BE MADE AND THE CONTRACT MODIFIED IN WRITING ACCORDINGLY. THIS LATTER PROVISION ALSO REQUIRED THAT ANY CLAIM BY THE CONTRACTOR FOR ADJUSTMENT UNDER THIS PARAGRAPH MUST BE ASSERTED WITHIN 90 DAYS FROM THE DATE OF RECEIPT BY THE CONTRACTOR OF THE NOTIFICATION OF THE CHANGE, PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, IF HE DECIDED THAT THE FACTS JUSTIFIED SUCH ACTION, MIGHT RECEIVE AND ACT UPON ANY SUCH CLAIM ASSERTED AT ANY TIME PRIOR TO FINAL PAYMENT UNDER THE CONTRACT. FAILURE TO AGREE TO ANY ADJUSTMENT WAS TO BE REGARDED AS A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF EACH CONTRACT LED,"DISPUTES.' ALSO, THIS PARAGRAPH REGARDING CHANGES PROVIDED THAT NOTHING THEREIN SHOULD EXCUSE THE CONTRACTOR FROM PROCEEDING WITH THE CONTRACT AS CHANGED. PARAGRAPH 8 OF THE SAME GENERAL PROVISIONS ENTITLED,"DISPUTES," PROVIDED THAT---

"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 DECISION OF THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE FOR THE HEARING OF SUCH APPEALS SHALL, UNLESS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN FRAUDULENT, ARBITRARY, CAPRICIOUS, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, 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 THE 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.'

THE PROVISIONS OF CONTRACT NO. AF 41/608/6619 ARE SIMILAR IN ALL PERTINENT MATTERS REGARDING THE WORK TO BE PERFORMED AND MATERIALS TO BE FURNISHED BY THE GOVERNMENT EXCEPT THAT SPECIAL CLAUSE 22 PROVIDED THAT, IF THE GOVERNMENT COULD NOT FURNISH ALL OVERHAUL PARTS AND MATERIAL, AN EQUITABLE ADJUSTMENT IN THE CONTRACT PRICE WOULD BE MADE IN ACCORDANCE WITH GENERAL CLAUSE NO. 2 ENTITLED,"CHANGES.'

THE RECORD SHOWS THAT, AFTER THE GOVERNMENT WAS UNABLE TO FURNISH SOME OF THE PARTS AND MATERIAL, YOU WERE REQUIRED TO PURCHASE THEM FROM COMMERCIAL SOURCES AND THAT YOU HAVE BEEN FULLY REIMBURSED THEREFOR PURSUANT TO THE CONTRACT TERMS. YOUR CLAIM FOR ADDITIONAL COMPENSATION IS PREDICATED ON THE ALLEGATION THAT YOU HAD ONLY INCLUDED IN YOUR BID PRICE AN AMOUNT OF 5 PERCENT TO COVER THE HANDLING, PROCESSING, AND OTHER CHARGES INCIDENTAL AND IN ADDITION TO THE ACTUAL COST OF ARTICLES PURCHASED FROM COMMERCIAL SOURCES BECAUSE OF THE FAILURE OF THE GOVERNMENT TO FURNISH SUCH ARTICLES FROM STOCK. IN THIS REGARD, YOU STATE THAT IT WAS YOUR UNDERSTANDING THAT THE GOVERNMENT WOULD FURNISH AT LEAST 90 PERCENT OF THE REPAIR PARTS FOR USE IN CONNECTION WITH WORK UNDER CONTRACT NO. AF 41 (608/-6619 AND THAT, AS TO THE TWO OTHER CONTRACTS, THE GOVERNMENT WOULD FURNISH ALL REPAIR PARTS AND THAT YOU WOULD BE ONLY "REQUIRED TO FURNISH PARTS IN EMERGENCY.'

IT IS NOTED THAT YOU HAVE REFERRED TO THE AMOUNT ALLOCATED UNDER THE THREE CONTRACTS FOR PURCHASE OF PARTS ALTHOUGH YOU ADMIT IN YOUR LETTER OF FEBRUARY 17, 1956, IN PRESENTING YOUR CLAIM TO OUR OFFICE, THAT ANY ALLOCATION THAT THE GOVERNMENT MAKES FOR THE PURCHASE OF REPAIR PARTS BY THE CONTRACTOR "IS PURE GUESSWORK BECAUSE THE CONTRACTING OFFICER DOES NOT KNOW WHAT PARTS ARE NEEDED UNTIL THE CONTRACTOR DISMANTLES THE ACCESSORIES AND INSPECTS THE PARTS.' IT HAS BEEN ADMINISTRATIVELY REPORTED THAT AS TO THE WORK COVERED BY THE THREE CONTRACTS THERE IS NO RECORD AVAILABLE OF ANY AGREEMENT OR UNDERSTANDING AS TO WHAT PERCENTAGE OF THE NECESSARY PARTS WOULD BE FURNISHED FROM GOVERNMENT STOCK.

REGARDLESS OF WHAT YOU INCLUDED IN YOUR BID FOR THE HANDLING OF SUCH PURCHASES, PROVISION FOR REIMBURSEMENT FOR SUCH PURCHASES WAS SPECIFICALLY MADE IN EACH OF THE CONTRACTS. CHANGE ORDERS WERE ISSUED IN EACH CASE TO COVER THE AMOUNT DUE FOR SUCH PURCHASES. SOME OF THESE CHANGE ORDERS BEAR YOUR WRITTEN ACCEPTANCE. AS TO THE MATTER GENERALLY, IT IS ADMINISTRATIVELY REPORTED THAT YOU FAILED TO ASSERT YOUR CLAIM FOR ADDITIONAL COMPENSATION WITHIN THE TIME PROVIDED FOR UNDER THE "CHANGES" PROVISION OF THE SEVERAL CONTRACTS AND THERE IS NO RECORD OF YOUR PROTEST IN REGARD TO SUCH CHANGE ORDERS AS DID NOT BEAR YOUR WRITTEN ACCEPTANCE. IF YOU WERE DISSATISFIED WITH THE AMOUNT ALLOWED YOU BY THE CONTRACTING OFFICERS IN EACH CASE, YOU SHOULD HAVE FOLLOWED THE APPEAL PROCEDURE OUTLINED IN THE DISPUTES CLAUSE OF EACH CONTRACT. IT IS WELL SETTLED THAT A CLAIM AGAINST THE UNITED STATES IS BARRED BY THE FAILURE OF THE CLAIMANT TO EXHAUST ITS ADMINISTRATIVE REMEDIES UNDER CONTRACT PROVISIONS SUCH AS WERE PRESCRIBED IN THE DISPUTES CLAUSE OF YOUR CONTRACTS. SILAS MASON CONSTRUCTION COMPANY V. UNITED STATES, 90 C.CLS. 266; UNITED STATES V. CALLAHAN-WALKER COMPANY, 317 U.S. 56; UNITED STATES V. BLAIR, 321 U.S. 730, 735, 736; UNITED STATES V. HOLPUCH CO., 328 U.S. 234.

THE FACT THAT YOU COULD NOT ASCERTAIN THE COSTS AT THE TIME YOU PURCHASED THE MATERIALS WOULD NOT ALTER THE CONCLUSION IN THIS MATTER BECAUSE YOU COULD HAVE ACCEPTED THE CHANGE ORDERS UNDER PROTEST AND RESERVED YOUR CLAIM FOR DETERMINATION LATER BY THE CONTRACTING OFFICER AND, IN THE EVENT OF AN ADVERSE DECISION, YOU COULD HAVE APPEALED SUCH DECISION TO THE SECRETARY OF THE AIR FORCE.

IN THE CIRCUMSTANCES, THERE IS PERCEIVED NO LEGAL BASIS FOR THE ALLOWANCE OF YOUR CLAIM.