B-162632, AUG. 8, 1968

B-162632, AUG. 8, 1968

TO MR. EDWARD F. FARRELL:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 17, 1968, CONCERNING THE CLAIM OF FIRM BALTICO FOR UNLIQUIDATED DAMAGES ARISING OUT OF THE PERFORMANCE OF CONTRACT NO. DA-91-591-EUC-2340, DATED APRIL 2, 1962, WITH THE UNITED STATES ARMY PROCUREMENT CENTER, FRANKFURT, GERMANY.

IN YOUR LETTER YOU REFER TO OUR DECISION OF MARCH 28, 1968, B 162632, AND YOU TAKE EXCEPTION TO OUR DENIAL OF THE CLAIM FOR EXTRA COSTS ALLEGED TO HAVE BEEN INCURRED IN FURNISHING CHIPBOARD AND VENEER MEETING SPECIFICATION QMSC-F-2000A. YOU ALLEGE THAT THE BOARD OF CONTRACT APPEALS DETERMINED THAT THE SPECIFICATION WAS NOT AVAILABLE TO THE CLAIMANT PRIOR TO THE SUBMISSION OF ITS BID. THEREFORE, YOU CONTEND THAT THE BOARD'S FINDINGS ARE FINAL AND THAT THE INCREASED COST WAS DUE TO THE GOVERNMENT'S BREACH OF THE CONTRACT.

IN OUR DECISION WE ACCEPTED THE BOARD'S FINDINGS OF FACT AS BEING FINAL; HOWEVER, WE DETERMINED THAT AS A MATTER OF LAW THE FACTS DID NOT WARRANT THE CONCLUSION THAT THE GOVERNMENT BREACHED THE CONTRACT. FOR THE REASONS STATED IN OUR PRIOR DECISION WE ADHERE TO THAT POSITION AND, CONSEQUENTLY, NO PART OF SUCH CLAIM MAY BE ALLOWED.

REGARDING THE CLAIM FOR INDIRECT COSTS INCURRED AS A RESULT OF THE DELAY CAUSED BY THE DEFECTIVE SPECIFICATIONS FURNISHED BY THE GOVERNMENT THE FOLLOWING FACTS WERE FOUND BY THE BOARD OF CONTRACT APPEALS. THE SPANISH GOVERNMENT ISSUED A DECREE INCREASING SOCIAL CONTRIBUTIONS PER UNIT AS WELL AS WAGES WHICH INCREASED THE CONTRACTOR'S COSTS BY $4.17 PER UNIT. IT IS CLEAR THAT THESE INDIRECT COSTS WERE NOT INCURRED IN ATTEMPTING TO COMPLY WITH THE FAULTY SPECIFICATIONS. CONSEQUENTLY, THEY ARE NOT COMPENSABLE UNDER THE CHANGES CLAUSE OF THE CONTRACT. HOWEVER, CONSIDERING THAT THE BOARD FOUND THAT THESE COSTS WOULD NOT HAVE BEEN INCURRED IF THE CONTRACTOR HAD NOT BEEN DELAYED IN PERFORMING THE WORK BECAUSE OF THE FAULTY GOVERNMENT SPECIFICATIONS WE THINK THAT IT WOULD BE INEQUITABLE TO REQUIRE THE CONTRACTOR TO BEAR THE ADDITIONAL COSTS OCCASIONED BY THE GOVERNMENT'S FAILURE TO FURNISH PROPER SPECIFICATIONS. SINCE 609 DESKS WERE INVOLVED WE WILL ALLOW THE SUM OF $2,539.53. HOWEVER, SUCH SUM WILL ONLY BE PAID PROVIDED THE CONTRACTOR FURNISHES A SIGNED STATEMENT THAT SUCH SUM WILL BE ACCEPTED IN FULL AND FINAL SETTLEMENT OF ALL CLAIMS UNDER THE CONTRACT.