B-142388, MAY 24, 1960

B-142388: May 24, 1960

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A DECISION IS REQUESTED AS TO WHETHER YOU CAN RELY ON DECISION 137 OF THE INTERIOR BOARD OF CONTRACT APPEALS THAT OLSON ELECTRIC COMPANY SHOULD BE ALLOWED SEVEN ADDITIONAL DAYS FOR PERFORMANCE OF CONTRACT 14-03-001-13354. YOUR DOUBT ARISES BY REASON OF THE FACT THAT THE DEPARTMENT COUNSEL WHO APPEARED FOR THE GOVERNMENT IN THE CASE BEFORE THE BOARD HAS INDICATED THAT THE BOARD'S DECISION IS PREMISED UPON THE THEORY THAT A CONTRACTOR OR SUBCONTRACTOR IS NOT RESPONSIBLE FOR THE NEGLIGENCE OF ITS EMPLOYEES AND THAT SUCH A RULING WOULD BE CONTRARY TO LAW. THE CRANE OPERATOR SAID HE WAS TESTING HIS BRAKES. THE EVENT THAT RESULTED IN THE DAMAGE TO THE STEEL WAS THE CAUSE OF DELAY. THE BOARD STATED: "* * * NO SPECIFIC FINDINGS WERE MADE (BY THE CONTRACTING OFFICER) * * * WHETHER IT (THE CAUSE) WAS * * * WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR OR SUBCONTRACTOR. * * * THE FINDINGS AND DECISIONS OF THE CONTRACTING OFFICER MUST STAND UNLESS IT APPEARS ON THE FACE OF THE RECORD THAT THEY ARE ERRONEOUS.

B-142388, MAY 24, 1960

TO MR. J. E. PERRY, AUTHORIZED CERTIFYING OFFICER, THROUGH THE HONORABLE, THE SECRETARY OF THE INTERIOR:

IN LETTER OF MARCH 7, 1960, TRANSMITTED BY THE ADMINISTRATIVE ASSISTANT SECRETARY OF THE INTERIOR, A DECISION IS REQUESTED AS TO WHETHER YOU CAN RELY ON DECISION 137 OF THE INTERIOR BOARD OF CONTRACT APPEALS THAT OLSON ELECTRIC COMPANY SHOULD BE ALLOWED SEVEN ADDITIONAL DAYS FOR PERFORMANCE OF CONTRACT 14-03-001-13354, AND CERTIFY FOR PAYMENT TO THAT CONTRACTOR THE $1,400 WITHHELD BY THE CONTRACTING OFFICER AS LIQUIDATED DAMAGES FOR THAT DELAY. YOUR DOUBT ARISES BY REASON OF THE FACT THAT THE DEPARTMENT COUNSEL WHO APPEARED FOR THE GOVERNMENT IN THE CASE BEFORE THE BOARD HAS INDICATED THAT THE BOARD'S DECISION IS PREMISED UPON THE THEORY THAT A CONTRACTOR OR SUBCONTRACTOR IS NOT RESPONSIBLE FOR THE NEGLIGENCE OF ITS EMPLOYEES AND THAT SUCH A RULING WOULD BE CONTRARY TO LAW, THEREBY AFFECTING THE FINALITY OF THE BOARD'S DECISION.

THE CONTRACT INVOLVED CALLED FOR RELOCATION OF A STEEL TOWER. IN THE COURSE OF THE WORK, A CRANE OPERATOR EMPLOYED BY A SUBCONTRACTOR PICKED UP A STEEL ANGLE WITH A CRANE, RAISED IT SLIGHTLY ABOVE THE GROUND, SWUNG IT THIRTY DEGREES, SLACKENED THE LINE, AND LET IT FALL ABOUT A FOOT BEFORE CATCHING IT. THE SHOCK OF THE CATCH BROKE AND BENT TWO OF THE STEEL MEMBERS. ASKED ABOUT THE OCCURRENCE, THE CRANE OPERATOR SAID HE WAS TESTING HIS BRAKES. THE CONTRACTOR COMPLETED THE JOB SEVEN DAYS LATE BECAUSE OF THE TIME REQUIRED TO FABRICATE AND REPLACE THE DAMAGED MEMBER. HOWEVER, THE EVENT THAT RESULTED IN THE DAMAGE TO THE STEEL WAS THE CAUSE OF DELAY.

THE CONTRACTING OFFICER IN DENYING THE CONTRACTOR'S REQUEST FOR A TIME EXTENSION MADE A FINDING THAT THE DAMAGE OCCURRED FROM LACK OF REASONABLE CAUTION ON THE PART OF THE CRANE OPERATOR. THE BOARD, HOWEVER, OVERTURNED THE CONTRACTING OFFICER'S FINDINGS AND DECISION AND GRANTED THE REQUEST. IN ITS DECISION, THE BOARD STATED:

"* * * NO SPECIFIC FINDINGS WERE MADE (BY THE CONTRACTING OFFICER) * * * WHETHER IT (THE CAUSE) WAS * * * WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR OR SUBCONTRACTOR. * * * THE FINDINGS AND DECISIONS OF THE CONTRACTING OFFICER MUST STAND UNLESS IT APPEARS ON THE FACE OF THE RECORD THAT THEY ARE ERRONEOUS.

"THE BOARD CONCLUDES FROM THE RECORD BEFORE IT THAT THE CONTRACTING OFFICER'S FINDINGS AND DECISION ARE ERRONEOUS.

"THE ACCIDENT THAT CAUSED THE DAMAGE TO THE STEEL ANGLE COULD NOT HAVE BEEN FORESEEN. IT WAS AN UNEXPECTED HAPPENING. * * * THE ACTIONS OF THE CRANE OPERATOR, LIKEWISE, COULD NOT BE SAID TO BE DUE TO THE FAULT OR NEGLIGENCE OF THE CONTRACTOR OR SUBCONTRACTOR.'

AS POINTED OUT ABOVE, THE CONTRACTING OFFICER SPECIFICALLY HELD IN HIS DECISION THAT THE CIRCUMSTANCES CAUSING THE SEVEN-DAY DELAY "INDICATED LACK OF REASONABLE CAUTION ON THE PART OF THE CRANE OPERATOR" AND THAT, THEREFORE, THE DELAY WAS NOT EXCUSABLE UNDER THE PROVISIONS OF THE CONTRACT. WE THINK THIS CLEARLY CONSTITUTES A FINDING OF NEGLIGENCE ON THE PART OF THE CRANE OPERATOR. ON THE OTHER HAND, WHILE THE BOARD DID NOT SPECIFICALLY STATE THAT THE CRANE OPERATOR WAS NOT NEGLIGENT, THIS CLEARLY SEEMS TO BE THE PURPORT OF ITS FINDING THAT THE CONTRACTING OFFICER'S FINDINGS AND DECISION ARE ERRONEOUS.

WE AGREE THAT NEGLIGENCE OF AN EMPLOYEE IN THE SCOPE OF HIS EMPLOYMENT IS GENERALLY IMPUTED IN LAW TO HIS EMPLOYER BUT BEFORE THAT PRINCIPLE CAN HAVE ANY APPLICATION NEGLIGENCE OF THE EMPLOYEE MUST FIRST BE ESTABLISHED. IT FOLLOWS THAT WHETHER THE CRANE OPERATOR WAS NEGLIGENT AS FOUND IN EFFECT BY THE CONTRACTING OFFICER OR WAS NOT NEGLIGENT AS FOUND IN EFFECT BY THE BOARD IS THE BASIC AND CONTROLLING QUESTION HERE. FURTHERMORE, SINCE SUCH QUESTION DEPENDS UPON WHETHER THE CRANE OPERATOR EXERCISED ORDINARY CARE UNDER THE CIRCUMSTANCES, IT IS ONE OF FACT. SEE 65 C.J.S., NEGLIGENCE, SEC. 252; AND 38 AM.JUR., NEGLIGENCE, SEC. 354. THIS BEING THE CASE, THE BOARD'S DECISION ON THE APPEAL MUST BE ACCEPTED AS FINAL AND CONCLUSIVE UNDER THE DISPUTES CLAUSE OF THE CONTRACT AND THE WUNDERLICH ACT, 41 U.S.C. 321, 322, UNLESS IT COULD BE SAID TO BE FRAUDULENT, CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. ALSO, SEE SECTION 4.4, TITLE 43, CODE OF FEDERAL REGULATIONS, WHICH PROVIDES THAT THE BOARD EXERCISES THE AUTHORITY OF THE SECRETARY OF THE INTERIOR IN DECIDING APPEALS FROM DECISIONS OF CONTRACTING OFFICERS AND THAT DECISIONS OF THE BOARD ON SUCH APPEALS ARE FINAL FOR THE DEPARTMENT.

WE FIND NOTHING IN THE BOARD'S DECISION TO INDICATE THAT ITS CONCLUSION WAS BASED ON OTHER THAN AN HONEST DISAGREEMENT WITH THE DECISION OF THE CONTRACTING OFFICER ON THE FACTS OF THE CASE AND, UNDER THE CIRCUMSTANCES INVOLVED, WE SEE NO SUFFICIENT BASIS ON WHICH WE WOULD BE JUSTIFIED IN HOLDING THAT THE BOARD'S DECISION IS NOT LEGALLY EFFECTIVE.

ACCORDINGLY, THE VOUCHER IS RETURNED HEREWITH FOR CERTIFICATION FOR PAYMENT IF OTHERWISE ..END :