B-147832, JAN. 16, 1962

B-147832, JAN. 16, 1962

TO MAGNETIC AMPLIFIERS DIVISION, THE SIEGLER CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 14, 1961 (SERIAL: 9166), SUBMITTING FOR CONSIDERATION BY OUR OFFICE A CLAIM FOR REFUND OF THE SUM OF $3,750, REPORTED TO HAVE BEEN ASSESSED AS LIQUIDATED DAMAGES UNDER CONTRACT NO. N600/167/54783/X) WITH THE DEPARTMENT OF THE NAVY. THERE WERE SET FORTH AT LENGTH IN YOUR LETTER THE REASONS FOR YOUR BELIEF THAT YOUR COMPANY IS ENTITLED TO REMISSION OF THE LIQUIDATED DAMAGES ASSESSED IN THIS CASE AND YOU STATED THAT YOU HAD BEEN ADVISED TO APPEAL THE MATTER TO THE COMPTROLLER GENERAL OF THE UNITED STATES.

IN SUPPORT OF YOUR CLAIM YOU REPORTED, AMONG OTHER THINGS, THE REQUIRED DELIVERY DATES OF THE SEVERAL UNITS TO BE FURNISHED UNDER THE CITED CONTRACT, AND YOU INDICATED THAT UNDER THE TERMS OF THE CONTRACT LIQUIDATED DAMAGES FOR DELAY WERE ASSESSABLE AT THE RATE OF $35 PER DAY, BEGINNING JULY 6, 1960, TO A MAXIMUM OF 50 DAYS FOR THE FIRST UNIT OF ITEM 1, AND AT THE RATE OF $20 PER DAY, BEGINNING JULY 20, 1960, TO A MAXIMUM OF 50 DAYS, FOR THE SECOND AND THIRD UNITS, THE MAXIMUM TOTAL NOT TO EXCEED $3,750. IT WAS STATED FURTHER THAT UNDER DATE OF JULY 14, 1961, YOUR COMPANY RECEIVED A CHECK INDICATING THAT THE FULL AMOUNT OF LIQUIDATED DAMAGES HAD BEEN DEDUCTED, AND THAT AT A MEETING HELD AT THE U.S. NAVY PURCHASING OFFICE ON NOVEMBER 15, 1961, YOU WERE ADVISED, IN EFFECT, THAT NO REFUND OF THE LIQUIDATED DAMAGES WOULD BE MADE.

WE HAVE BEEN INFORMALLY ADVISED BY THE U.S. NAVY PURCHASING OFFICE THAT STANDARD FORM 32, OCTOBER 1957 EDITION, WAS INCORPORATED BY REFERENCE IN THE CONTRACT IN THIS CASE. PARAGRAPH 12 THEREOF--- "DISPUTES"--- PROVIDES THAT EXCEPT AS OTHERWISE PROVIDED IN THE CONTRACT, ANY DISPUTES CONCERNING A QUESTION OF FACT ARISING UNDER THE 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; ALSO, THAT THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE UNLESS, WITHIN THIRTY DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAILS OR OTHERWISE FURNISHES TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE SECRETARY OF THE DEPARTMENT CONCERNED- - IN THIS CASE THE SECRETARY OF THE NAVY. THE INDICATED PARAGRAPH FURTHER PROVIDES THAT THE DECISION OF THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE FOR THE DETERMINATION OF SUCH APPEALS SHALL BE FINAL AND CONCLUSIVE UNLESS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN FRAUDULENT, OR CAPRICIOUS, OR ARBITRARY, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

INFORMATION FURNISHED BY THE U.S. NAVY PURCHASING OFFICE IS TO THE EFFECT THAT AT THE CONFERENCE HELD ON NOVEMBER 15, 1961, THE CONTRACTING OFFICER ADVISED YOUR REPRESENTATIVE OF HIS DETERMINATION THAT LIQUIDATED DAMAGES IN THE AMOUNT OF $3,750 WERE PROPERLY ASSESSABLE IN THIS CASE. WE ARE ADVISED, HOWEVER, THAT THE CONTRACTING OFFICER HAS MADE NO FORMAL (WRITTEN) FINDINGS OF HIS DETERMINATION. IF YOU WISH TO PURSUE THIS MATTER FURTHER IT APPEARS THAT YOUR COMPANY SHOULD REQUEST THE CONTRACTING OFFICER TO REDUCE HIS DECISION TO WRITING IN ORDER THAT YOU MAY EXERCISE YOUR RIGHT OF APPEAL UNDER THE PROVISIONS OF PARAGRAPH 12, REFERRED TO ABOVE.

IT IS A WELL ESTABLISHED RULE THAT WHERE, AS HERE, THE CONTRACT SETS FORTH A PROCEDURE UNDER WHICH DISPUTES OF THE NATURE HERE INVOLVED ARE TO BE DECIDED ADMINISTRATIVELY, THE ADMINISTRATIVE REMEDY SO PROVIDED MUST BE EXHAUSTED BY THE CONTRACTOR BEFORE A CLAIM DEPENDENT UPON A FACTUAL SITUATION DETERMINABLE PURSUANT TO THE PROCEDURE REQUIRED BY THE CONTRACT IS COGNIZABLE EITHER BY THE COURTS OR OUR OFFICE. SEE UNITED STATES V. JOSEPH A. HOLPUCH COMPANY, 328 U.S. 234; UNITED STATES V. BLAIR, 321 U.S. 730; AND UNITED STATES V. CALLAHAN WALKER CONSTRUCTION COMPANY, 317 U.S. 56.

PLEASE BE ADVISED THAT FOR THE REASONS SET FORTH ABOVE YOUR CLAIM IS NOT PRESENTLY FOR CONSIDERATION BY OUR OFFICE.