B-144353, FEB. 21, 1961

B-144353: Feb 21, 1961

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 24. THERE HAVE BEEN RECEIVED ALSO YOUR FOUR LETTERS OF JANUARY 25. BOTH OF WHICH CORPORATIONS YOU STATE HAVE BEEN FORCED TO DISCONTINUE BUSINESS BECAUSE OF IMPROPER RETENTION OF FUNDS AND OTHER IMPROPER ACTIONS BY THE PUBLIC BUILDINGS SERVICE. IT IS STATED THAT REPRESENTATIVES OF THAT AGENCY HAD CONFERRED WITH YOU REPEATEDLY IN EFFORTS TO RESOLVE YOUR PROBLEMS. WHICH PROBLEMS RESULTED FROM YOUR FAILURE TO FOLLOW THE SPECIFICATIONS AND/OR DRAWINGS AND YOUR REFUSAL TO ACCEPT THEIR INTERPRETATIONS OF CONTRACTS IN INSTANCES WHERE QUESTIONS HAVE ARISEN. IT IS STATED FURTHER THAT YOU HAVE BEEN INSTRUCTED AS TO YOUR RIGHT TO APPEAL THE DECISIONS OF THE CONTRACTING OFFICER BUT THAT YOU HAVE REFUSED TO APPEAL IN THE MANNER PRESCRIBED BY THE CONTRACTS.

B-144353, FEB. 21, 1961

TO SIMBRAW, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 24, 1960, AND ENCLOSURES, RELATIVE TO CONTRACT DEALINGS WITH THE PUBLIC BUILDINGS SERVICE, GENERAL SERVICES ADMINISTRATION. THERE HAVE BEEN RECEIVED ALSO YOUR FOUR LETTERS OF JANUARY 25, 1961, WITH THEIR ENCLOSURES. YOUR LETTERS AND THEIR ENCLOSURES RELATE TO 46 PROJECTS PERFORMED DURING THE PAST FOUR YEARS BY SIMBRAW, INC., AND SAVOYE CONSTRUCTION COMPANY, INC. (CORPORATIONS UNDER THE SAME MANAGEMENT), BOTH OF WHICH CORPORATIONS YOU STATE HAVE BEEN FORCED TO DISCONTINUE BUSINESS BECAUSE OF IMPROPER RETENTION OF FUNDS AND OTHER IMPROPER ACTIONS BY THE PUBLIC BUILDINGS SERVICE. IN YOUR LETTER OF OCTOBER 24, 1960, YOU STATE THAT YOU ESPECIALLY WANT TO RECOVER YOUR INVESTED CAPITAL OF $27,981.61 WHICH HAS BEEN WITHHELD OVER A YEAR; IN ONE OF THE LETTERS OF JANUARY 25, 1961, YOU LIST ALLEGED LOSSES IN THE AMOUNT OF $85,991.14; AND IN ANOTHER LETTER OF JANUARY 25, 1961, YOU LIST ALLEGED LOSSES IN THE AMOUNT OF $117,106.27.

IN A REPORT RECEIVED FROM THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, IT IS STATED THAT REPRESENTATIVES OF THAT AGENCY HAD CONFERRED WITH YOU REPEATEDLY IN EFFORTS TO RESOLVE YOUR PROBLEMS, WHICH PROBLEMS RESULTED FROM YOUR FAILURE TO FOLLOW THE SPECIFICATIONS AND/OR DRAWINGS AND YOUR REFUSAL TO ACCEPT THEIR INTERPRETATIONS OF CONTRACTS IN INSTANCES WHERE QUESTIONS HAVE ARISEN. IT IS STATED FURTHER THAT YOU HAVE BEEN INSTRUCTED AS TO YOUR RIGHT TO APPEAL THE DECISIONS OF THE CONTRACTING OFFICER BUT THAT YOU HAVE REFUSED TO APPEAL IN THE MANNER PRESCRIBED BY THE CONTRACTS.

THE CORRESPONDENCE AND OTHER PAPERS INCLUDED IN THE FILE INDICATE THAT THE CONTENTIONS OF GENERAL SERVICES ADMINISTRATION IN THAT RESPECT ARE CORRECT. THERE IS NOT PERCEIVED ANY SOUND BASIS FOR YOUR COMPLAINT THAT SOME OFFICIALS OR EMPLOYEES OF THE CONTRACTING AGENCY SERVE IN DUAL CAPACITIES--- FOR EXAMPLE, AS CONTRACTING OFFICER AND AS HEAD OF A DIVISION. THE CONTRACTS SPECIFICALLY AUTHORIZE THE CONTRACTOR TO APPEAL TO THE HEAD OF THE DEPARTMENT OR AGENCY FROM THE CONTRACTING OFFICER'S DECISIONS, THUS PROTECTING THE CONTRACTOR AGAINST IMPROPER OR PREJUDICIAL DECISIONS BY ANY SUBORDINATE PERSONNEL.

IT IS NOT PRIMARILY A FUNCTION OF OUR OFFICE TO RESOLVE DISPUTED QUESTIONS OF FACT. UPON DISPUTED QUESTIONS OF FACT BETWEEN ADMINISTRATIVE OFFICERS OF THE GOVERNMENT AND A CLAIMANT OR OTHER PERSON DEALING WITH THE GOVERNMENT, THE LONG-ESTABLISHED RULE OF THE ACCOUNTING OFFICERS IS TO ACCEPT THE STATEMENTS OF FACT FURNISHED BY THE ADMINISTRATIVE OFFICERS, IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. 16 COMP. GEN. 325; ID. 410.

THERE IS NOTED YOUR CONTENTION THAT IN SOME INSTANCES YOUR CORPORATIONS WERE IMPROPERLY REFUSED AWARDS OF CONTRACTS FOR THE STATED REASON THAT THEY WERE NOT RESPONSIBLE BIDDERS. IT IS WELL ESTABLISHED, BOTH BY DECISIONS OF THE COURTS AND OUR OFFICE, THAT AN ADMINISTRATIVE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS CONCLUSIVE UNLESS IT IS SHOWN THAT SUCH DETERMINATION WAS NOT BASED ON SUBSTANTIAL EVIDENCE DEMONSTRATING THE BIDDER'S LACK OF RESPONSIBILITY. SEE 38 L.R.A. (NS) 653; WILSON V. CITY OF NEW CASTLE, 152 A. 102, 103; SANDERLIN V. LUKEN, 66 S.E. 225, 227; INGE V. BOARD OF PUBLIC WORKS, 33 SO. 678, 681; 36 COMP. GEN. 42; 37 ID. 798; 38 ID. 131. THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE BRUNT OF ANY DIFFICULTY EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY AND THEY MUST MAINTAIN THE DAY-TO-DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS IN ANY CASE IN WHICH THERE APPEARS TO BE A SUBSTANTIAL BASIS FOR THE ACTION OF THOSE OFFICIALS. THE FACTS SHOWN BY THE FILE IN THE INSTANT MATTER, INCLUDING THE FACT THAT SOME OF YOUR CONTRACTS (INCLUDING CONTRACT NO. GS-02B-4782, NORTHAMPTON, PENNSYLVANIA; CONTRACT NO. GS-R3-B-6494, POINT PLEASANT, WEST VIRGINIA; CONTRACT NO. GS-R3-B-4941, MOUNT HOPE, WEST VIRGINIA), WERE TERMINATED BECAUSE OF YOUR DEFAULT, INDICATE THAT THERE WAS A SUBSTANTIAL BASIS FOR THE ACTIONS OF THE ADMINISTRATIVE OFFICES IN REJECTING YOUR BIDS.

WITH RESPECT TO THAT PORTION OF YOUR CLAIM BASED ON REFUSAL OF CONTRACTING OFFICIALS TO AWARD CONTRACTS TO YOUR CORPORATIONS, WE SEE NO LEGAL BASIS FOR SUCH CLAIM. OBVIOUSLY, IT CANNOT BE BASED ON A CONTRACT, AS NO CONTRACT WAS ENTERED INTO BY YOU AND THE GOVERNMENT.

IF THE CLAIM IS BASED ON ALLEGED TORTIOUS ACTS OF GOVERNMENT AGENTS, THERE IS FOR CONSIDERATION THE FACT THAT THE FEDERAL TORT CLAIMS ACT DOES NOT APPLY TO ANY CLAIM BASED ON AN ACT OR OMISSION OF AN EMPLOYEE OF THE GOVERNMENT, EXERCISING DUE CARE, IN THE EXECUTION OF A STATUTE OR REGULATION, WHETHER OR NOT SUCH STATUTE OR REGULATION BE VALID, OR BASED UPON THE EXERCISE OR PERFORMANCE OR FAILURE TO EXERCISE OR PERFORM A DISCRETIONARY FUNCTION OR DUTY ON THE PART OF A FEDERAL AGENCY OR AN EMPLOYEE OF THE GOVERNMENT, WHETHER OR NOT THE DISCRETION INVOLVED BE ABUSED. IT HAS BEEN UNIFORMLY HELD THAT A BIDDER FOR PUBLIC CONTRACTS ACQUIRES NO ACTIONABLE LEGAL RIGHTS (EXCEPT CONTRACT RIGHTS ARISING FROM ACCEPTANCE OF HIS BID) UNDER STATUTORY REQUIREMENTS PRESCRIBING PROCEDURES AND STANDARDS TO BE OBSERVED IN MAKING AWARDS. AS MOST FULLY STATED IN PERKINS V. LUKENS STEEL COMPANY, 310 U.S. 113, 125 ET. SEQ., THE DUTY IMPOSED BY SUCH STATUTES UPON GOVERNMENT OFFICIALS ARE OWING TO THE GOVERNMENT ONLY AND BIDDERS OR PROSPECTIVE SELLERS HAVE NO STANDING IN COURT, EITHER BY VIRTUE OF ANY INDIVIDUAL INTERESTS OF THEIRS OR AS REPRESENTATIVES OF THE PUBLIC'S INTEREST, TO ENFORCE THE RESPONSIBILITIES OF SUCH OFFICIALS, WHICH ARE DUE ONLY TO HIGHER EXECUTIVE OR LEGISLATIVE AUTHORITY.

IT IS TO BE OBSERVED, ALSO, THAT SUCH CLAIM AS YOU HAVE PRESENTED IS UNLIQUIDATED AND RESTS ON A CONTROVERSIAL BASIS. IN CASES INVOLVING DISPUTES OF FACT AFFECTING THE PROPRIETY OR VALIDITY OF A CLAIM IT IS "THE UNDOUBTED RIGHT AND DUTY" OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO REJECT THE CLAIM IN WHOLE OR IN PART "AS THEIR JUDGMENT DICTATES" (LONGWILL V. UNITED STATES, 17 CT.CL. 288, 291), LEAVING THE CLAIMANTS TO PROSECUTE THEIR CLAIMS IN A COURT OF LAW.

WITH RESPECT TO THAT PORTION OF YOUR CLAIM BASED ON INTEREST ALLEGED TO BE DUE, IT IS A WELL-SETTLED PRINCIPLE OF LAW THAT THE UNITED STATES IS NOT LIABLE FOR INTEREST ON ITS OBLIGATIONS EXCEPT WHEN STIPULATED IN A CONTRACT OR SPECIFICALLY DIRECTED BY STATUTE. ANGARICA V. BAYRD, 127 U.S. 251; UNITED STATES V. NORTH AMERICAN COMPANY, 253 U.S. 330, 336; SEABOARD AIR LINE RAILWAY CO. V. UNITED STATES, 261 U.S. 299; KOMATSU MANUFACTURING CO., LTD., V. UNITED STATES, 132 CT.CL. 314; DRESSER V. UNITED STATES, 84 F.SUPP. 993, 995; 27 COMP. GEN. 690 AND AUTHORITIES THEREIN CITED.

THE RECORD SHOWS THAT AMOUNTS OTHERWISE DUE YOU UNDER VARIOUS CONTRACTS HAVE BEEN WITHHELD FROM TIME TO TIME PENDING DETERMINATION AS TO YOUR LIABILITY FOR LIQUIDATED DAMAGES OR LABOR VIOLATIONS. IT APPEARS, HOWEVER, THAT SUCH AMOUNTS HAVE BEEN PAID TO YOU SUBSEQUENTLY IN ALL CASES WHERE IT HAS BEEN DETERMINED THAT SUCH LIABILITY WAS NOT ESTABLISHED.

FOR THE REASONS ABOVE SET OUT, IT IS CONCLUDED, AFTER CAREFUL CONSIDERATION, THAT THERE IS NO VALID BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTIONS OF THE ADMINISTRATIVE OFFICES IN CONNECTION WITH THE VARIOUS CONTRACTS INVOLVED OR FOR ALLOWANCE BY OUR OFFICE OF ANY PORTION OF YOUR CLAIM.