B-144291, DEC. 30, 1960

B-144291: Dec 30, 1960

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HOUSING AND HOME FINANCE AGENCY: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 18. THE CONTRACT WAS TERMINATED BY DEFAULT ON AUGUST 7. A NEW CONTRACT WAS AWARDED COVERING THE UNCOMPLETED WORK AND THE CORRECTION OF CERTAIN OF THE WORK PERFORMED BY MR. THE FINAL PAYMENT REQUEST OF THE ORIGINAL CONTRACTOR WAS REDUCED BY THE NEW CONTRACT COSTS PLUS LIQUIDATED DAMAGES IN ACCORDANCE WITH THE TERMS OF THE ORIGINAL CONTRACT. VARIOUS DOCUMENTS WERE FORWARDED TO MR. THAT HIS CLIENT WAS UNABLE TO ACCEPT THE OFFERED REDUCED PAYMENT AND STATED REASONS THEREFOR. THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SET FORTH IN YOUR LETTER OF OCTOBER 18. WAS ANSWERED BY THE CONTRACTING OFFICER IN YOUR AREA OFFICE IN SEATTLE.

B-144291, DEC. 30, 1960

TO JOHN C. HAZELTINE, COMMISSIONER, COMMUNITY FACILITIES ADMINISTRATION, HOUSING AND HOME FINANCE AGENCY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 18, 1960, AND A LETTER DATED DECEMBER 19, 1960, FROM THE ACTING COMMISSIONER, CONCERNING THE QUESTION AS TO THE TIMELINESS OF AN APPEAL MADE BY MR. HUGH C. MOSSMAN AGAINST ASSESSMENTS OF EXCESS COSTS AND LIQUIDATED DAMAGES IN THE COMPUTATION OF A PROPOSED FINAL PAYMENT UNDER HIS HOUSING AND HOME FINANCE CONTRACT NO. H- 602-20, DATED JULY 11, 1955, COVERING THE CONSTRUCTION OF SCHOOL FACILITIES AT YAKUTAT, ALASKA.

THE CONTRACT WAS TERMINATED BY DEFAULT ON AUGUST 7, 1956, AND A NEW CONTRACT WAS AWARDED COVERING THE UNCOMPLETED WORK AND THE CORRECTION OF CERTAIN OF THE WORK PERFORMED BY MR. MOSSMAN. THE FINAL PAYMENT REQUEST OF THE ORIGINAL CONTRACTOR WAS REDUCED BY THE NEW CONTRACT COSTS PLUS LIQUIDATED DAMAGES IN ACCORDANCE WITH THE TERMS OF THE ORIGINAL CONTRACT. ON FEBRUARY 12, 1958, VARIOUS DOCUMENTS WERE FORWARDED TO MR. MOSSMAN FOR SIGNATURE TO PERMIT THE REDUCED FINAL PAYMENT AS FINALLY DETERMINED BY THE CONTRACTING OFFICER. BY LETTER DATED MARCH 28, 1958, MR. MOSSMAN'S ATTORNEY ADVISED THE REGIONAL ADMINISTRATOR OF YOUR AGENCY IN SAN FRANCISCO, CALIFORNIA, THAT HIS CLIENT WAS UNABLE TO ACCEPT THE OFFERED REDUCED PAYMENT AND STATED REASONS THEREFOR. FROM THAT POINT, THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SET FORTH IN YOUR LETTER OF OCTOBER 18, 1960, AS FOLLOWS:

THE ATTORNEY'S LETTER OF MARCH 28, 1958, WAS ANSWERED BY THE CONTRACTING OFFICER IN YOUR AREA OFFICE IN SEATTLE, WASHINGTON, ON APRIL 29, 1958, AND THE CONTRACTING OFFICER MAINTAINED THAT THE PROPOSED SETTLEMENT FIGURE WAS CORRECT. THERE WAS SUBSEQUENTLY RECEIVED FROM THE CONTRACTOR'S ATTORNEY A LETTER DATED JUNE 27, 1958, DESCRIBED AS A SUPPLEMENT TO AN APPEAL MADE BY LETTER OF MAY 23, 1958. THE SEATTLE OFFICE HAS NO RECORD OF RECEIVING THE MAY 23, 1958, LETTER AND, ON JULY 17, 1958, THERE WAS RECEIVED A SIGNED CARBON COPY OF A LETTER WHICH PURPORTEDLY HAD BEEN ADDRESSED TO AND MAILED TO THE CONTRACTING OFFICER ON MAY 23, 1958.

THE QUESTION AS TO THE TIMELINESS OF THE APPEAL WAS CONSIDERED IN A LETTER DATED JULY 11, 1958, IN WHICH THE CONTRACTOR'S ATTORNEY WAS ADVISED THAT HIS JUNE 27, 1958, LETTER WAS THE FIRST COMMUNICATION RECEIVED SUBSEQUENT TO OR IN RESPONSE TO THE CONTRACTING OFFICER'S LETTER OF APRIL 29, 1958; ALSO, THAT THE REQUEST MADE IN THE JUNE 27, 1958, LETTER FOR A COPY OF THE APPLICABLE RULES AND REGULATIONS OF YOUR AGENCY CONCERNING APPEALS AND APPEALS PROCEDURE "MAKES US WONDER IF YOU HAVE, IN FACT, ATTEMPTED TO PERFECT AN APPEAL FROM THE CONTRACTING OFFICER'S DETERMINATION.' THE MATTER WAS AGAIN CONSIDERED IN A LETTER DATED JULY 18, 1958, FROM THE AGENCY'S AREA COUNSEL, TO THE CONTRACTOR'S ATTORNEY, INDICATING THAT THE TIMELINESS OF THE APPEAL WAS IN DOUBT AND MAKING REFERENCE TO CLAUSE 6 OF THE GENERAL PROVISIONS OF THE CONTRACT (STANDARD FORM 23A).

ON JANUARY 30, 1960, THE CONTRACTOR'S ATTORNEY APPEALED THE CASE TO THE HOUSING AND HOME FINANCE AGENCY ADMINISTRATOR. AFTER STUDY IN THE COMMUNITY FACILITIES ADMINISTRATION, AN INFORMAL HEARING WAS HELD IN SAN FRANCISCO ON JUNE 6, 1960, WITH THE CONTRACTOR'S ATTORNEY. BASED UPON THE HEARING AND REVIEW OF ALL DATA AT HAND, IT WAS DETERMINED THAT THE CONTRACTOR WAS ENTITLED TO AN ADDITIONAL 78 DAYS OF CONTRACT TIME, WHICH WOULD ORDINARILY HAVE THE EFFECT OF CHANGING THE AMOUNT OF THE ASSESSABLE LIQUIDATED DAMAGES FROM $4,125 TO $2,175 AND INCREASING THE AMOUNT DUE THE CONTRACTOR BY $1,950. SEVERAL OTHER CLAIMS INVOLVED IN THE APPEAL WERE FOUND TO BE UNJUSTIFIABLE AND WERE DENIED.

THE ACTING COMMISSIONER'S LETTER OF DECEMBER 19, 1960, WAS WRITTEN IN RESPONSE TO AN INFORMAL REQUEST FOR COPIES OF PERTINENT CORRESPONDENCE AND ADDITIONAL INFORMATION REGARDING CERTAIN ASPECTS OF THE CASE. WE WERE FURNISHED COPIES OF VARIOUS LETTERS AND ADVISED THAT THE LETTER DATED APRIL 29, 1958, WAS CONSIDERED TO BE THE ACTUAL DECISION OF THE CONTRACTING OFFICER UNDER THE "DISPUTES" CLAUSE OF THE CONTRACT; THAT THERE IS ATTACHED TO YOUR FILE COPY OF THAT LETTER A POST OFFICE DEPARTMENT RECEIPT SHOWING THAT THE LETTER WAS RECEIVED BY MR. MOSSMAN'S ATTORNEY ON MAY 3, 1958; AND THAT THE SIGNED CARBON COPY OF THE LETTER DATED MAY 23, 1958, FROM MR. MOSSMAN'S ATTORNEY, HAS STAMPED ON ITS REVERSE SIDE THE REGIONAL OFFICE STAMP SHOWING THAT SUCH LETTER WAS RECEIVED JULY 17, 1958, AT 9:11 A.M.

AS INDICATED IN YOUR LETTER OF OCTOBER 18, 1960, CLAUSE 6 OF STANDARD FORM 23A, ENTITLED ,DISPUTES," PROVIDES FOR DECISIONS TO BE MADE BY THE CONTRACTING OFFICER ON DISPUTES CONCERNING QUESTIONS OFFACT ARISING UNDER THE CONTRACT WHICH ARE NOT DISPOSED OF BY AGREEMENT; THAT, WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF A COPY OF ANY SUCH DECISION, THE CONTRACTOR MAY PRESENT A WRITTEN APPEAL ADDRESSED TO THE HEAD OF THE DEPARTMENT; THAT THE DECISION OF THE HEAD OF THE DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVE SHALL, WITH CERTAIN EXCEPTIONS, BE FINAL AND CONCLUSIVE; AND THAT "IF NO SUCH APPEAL TO THE HEAD OF THE DEPARTMENT IS TAKEN, THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE," THE TERM "HEAD OF THE DEPARTMENT" IS DEFINED IN CLAUSE 1 (A) OF STANDARD FORM 23A AS THE HEAD OR ANY ASSISTANT HEAD OF THE EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT INVOLVED.

THE VARIOUS ITEMS IN DISPUTE WERE DISCUSSED IN THE CONTRACTING OFFICER'S LETTER OF APRIL 29, 1958, AND IT WAS CONCLUDED THEREIN THAT THE BALANCE OWING MR. MOSSMAN ON THE CONTRACT WAS $3,114.90. ALSO, THE LETTER STATES: "THIS IS MY FINAL DETERMINATION. IF MR. MOSSMAN SHOULD ELECT TO APPEAL FROM THIS DETERMINATION HE IS PRIVILEGED TO DO SO.' HENCE, IT IS APPARENT THAT, AS CONCLUDED BY YOUR AGENCY, THAT LETTER MUST BE REGARDED AS THE CONTRACTING OFFICER'S DECISION UNDER THE DISPUTES CLAUSE OF THE CONTRACT AND AN APPEAL SHOULD HAVE BEEN MADE TO THE HOUSING AND HOME FINANCE AGENCY ADMINISTRATOR OR TO AN ASSISTANT ADMINISTRATOR WITHIN 30 DAYS FROM MAY 3, 1958, ESTABLISHED AS THE DATE ON WHICH THE CONTRACTOR RECEIVED THE CONTRACTING OFFICER'S LETTER OF APRIL 29, 1958.

ASSUMING THAT THE CONTRACTOR, THROUGH HIS ATTORNEY, HAD ADDRESSED AND MAILED AN APPEAL TO THE CONTRACTING OFFICER ON MAY 23, 1958, IT WOULD ORDINARILY HAVE BEEN RECEIVED, UNLESS LOST IN THE MAILS, SOMETIME BEFORE JUNE 2, 1958, OR WITHIN 30 DAYS FROM THE DATE THE CONTRACTOR RECEIVED THE CONTRACTING OFFICER'S DECISION. OF COURSE, THE POSSIBILITY EXISTS THAT THE LETTER COULD HAVE BEEN RECEIVED TIMELY BY THE REGIONAL OFFICE AND HAVE BEEN MISLAID. THERE EXISTS THE THIRD POSSIBILITY THAT THE APPEAL LETTER WAS NOT MAILED ON OR ABOUT MAY 23, 1958, SINCE THERE IS NO RECORD OF ITS RECEIPT BY YOUR AGENCY. CONSIDERING THESE VARIOUS POSSIBILITIES AND IN THE ABSENCE OF ANY EVIDENCE SHOWING THAT THE APPEAL LETTER WAS NOT MAILED TIMELY, IT IS OUR VIEW THAT THE DOUBT IN THE MATTER COULD BE AND PROPERLY SHOULD BE RESOLVED IN THE CONTRACTOR'S FAVOR. EXAMINATION OF THE LETTER DATED JUNE 27, 1958, FAILS TO DISCLOSE ANY INCONSISTENCY BETWEEN A PRIOR NOTICE OF APPEAL AND A REQUEST FOR A COPY OF THE APPLICABLE RULES AND REGULATIONS CONCERNING APPEALS AND APPEALS PROCEDURE. APPARENTLY, THE ATTORNEY'S REFERENCE TO A POSSIBLE SETTLEMENT WITHOUT THE NECESSITY OF PRESENTATION TO AN APPEALS BOARD HEARING WAS SUFFICIENT TO INDICATE THAT HE WAS INTERESTED IN OBTAINING A COPY OF THE RULES AND REGULATIONS PRIMARILY FOR USE IN THE EVENT A FORMAL HEARING ON THE APPEAL WAS TO BE ARRANGED.

IT HAS BEEN NOTED THAT THE COPY OF THE LETTER, SUPPOSEDLY MAILED TO THE CONTRACTING OFFICER ON OR ABOUT MAY 23, 1958, IS ADDRESSED TO THE CONTRACTING OFFICER INSTEAD OF TO THE ADMINISTRATOR OR TO AN ASSISTANT ADMINISTRATOR OF THE HOUSING AND HOME FINANCE AGENCY, AS REQUIRED UNDER CLAUSES 6 AND 1 (A) OF STANDARD FORM 23A. HOWEVER, IT IS OUR OPINION THAT SUCH A REQUIREMENT COULD HAVE BEEN WAIVED BY YOUR AGENCY ON THE GROUND THAT NOTICE OF APPEAL TO THE CONTRACTING OFFICER WAS ADEQUATE IN THE PARTICULAR CIRCUMSTANCES.

IN THAT CONNECTION, IT APPEARS THAT THE CONTRACTING OFFICER'S DECISION SHOULD HAVE REFERRED TO THE PERSON TO WHOM AN APPEAL SHOULD BE ADDRESSED, CITING CLAUSES 6 AND 1 (A) OF STANDARD FORM 23A, IN ORDER TO AVOID ANY MISUNDERSTANDING INASMUCH AS IT IS NOT UNUSUAL FOR A CONTRACTOR TO ASSUME, WITHOUT HAVING RECEIVED SPECIFIC ADVICE TO THE CONTRARY, THAT A NOTICE OF APPEAL FROM A CONTRACTING OFFICER'S DECISION UNDER A DISPUTES ARTICLE OF A GOVERNMENT CONTRACT MAY PROPERLY BE ADDRESSED TO HIM AND THEN FORWARDED TO THE HEAD OF THE DEPARTMENT OR AGENCY INVOLVED.

IN THE CIRCUMSTANCES, AND CONSIDERING THAT AN ADMINISTRATIVE REVIEW OF THE CASE HAS ALREADY BEEN MADE, WE PERCEIVE NO OBJECTION TO AN ADJUSTMENT OF THE AMOUNT DETERMINED BY THE CONTRACTING OFFICER AS HAVING ACCRUED TO THE GOVERNMENT AS LIQUIDATED DAMAGES, BASED UPON YOUR FINDING THAT AN ADDITIONAL 78 DAYS OF DELAY IN PERFORMANCE OF THE CONTRACT WORK WAS DUE TO EXCUSABLE CAUSES WITHIN THE MEANING OF CLAUSE 5 (C) OF STANDARD FORM 23A.