B-164856, AUG. 21, 1968

B-164856: Aug 21, 1968

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SAMUEL LERNER: REFERENCE IS MADE TO YOUR LETTER OF JULY 12. IT APPEARS FROM YOUR LETTER THAT THE CONTRACT IN QUESTION WAS FORMALLY TERMINATED FOR DEFAULT ON APRIL 21. BECAUSE THE CONTRACTING OFFICE WAS DISSATISFIED WITH THE PERFORMANCE UNDER THE CONTRACT AND THAT THE APPEAL FROM SUCH TERMINATION IS NOW PENDING BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA). BOTH THE CONTRACTOR AND THE GOVERNMENT ARE BOUND TO FOLLOW THE PROCEDURES SET OUT IN THE CONTRACT FOR THE ADMINISTRATIVE SETTLEMENT OF DISPUTES ARISING OUT OF THE CONTRACT AND THE CONTRACTOR MUST EXHAUST ITS REMEDIES UNDER THE DISPUTES CLAUSE BEFORE RESORTING EITHER TO OUR OFFICE OR THE COURTS. THE CLAIM FOR RELIEF UNDER THE CONTRACT WILL NOT BE CONSIDERED AT THIS TIME.

B-164856, AUG. 21, 1968

TO MR. SAMUEL LERNER:

REFERENCE IS MADE TO YOUR LETTER OF JULY 12, 1968, WITH ENCLOSURES, PROTESTING ON BEHALF OF YOUR CLIENT, PYRONICS CORPORATION, HACKETTSTOWN, NEW JERSEY, AGAINST THE ACTION OF THE UNITED STATES NAVY SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA, IN HAVING TERMINATED FOR DEFAULT THE CORPORATION'S RIGHT TO PROCEED UNDER A CONTRACT AWARDED TO THE CORPORATION PURSUANT TO INVITATION FOR BIDS NO. 104-252-66 (211).

IT APPEARS FROM YOUR LETTER THAT THE CONTRACT IN QUESTION WAS FORMALLY TERMINATED FOR DEFAULT ON APRIL 21, 1967, BECAUSE THE CONTRACTING OFFICE WAS DISSATISFIED WITH THE PERFORMANCE UNDER THE CONTRACT AND THAT THE APPEAL FROM SUCH TERMINATION IS NOW PENDING BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA). IN VIEW THEREOF, IT WOULD NOT BE PROPER FOR OUR OFFICE TO CONSIDER THE MERITS OF THE CORPORATION'S COMPLAINT UNTIL AFTER THE DECISION BY THE ASBCA. IN THAT REGARD, THE DISPUTES CLAUSE IN STANDARD GOVERNMENT CONTRACTS PROVIDES THAT ALL DISPUTES ON QUESTIONS OF FACT BE DECIDED BY THE CONTRACTING OFFICER AND THAT ADVERSE DECISIONS BY SUCH OFFICER MAY BE APPEALED TO THE HEAD OF THE AGENCY REPRESENTED BY THE ASBCA. BOTH THE CONTRACTOR AND THE GOVERNMENT ARE BOUND TO FOLLOW THE PROCEDURES SET OUT IN THE CONTRACT FOR THE ADMINISTRATIVE SETTLEMENT OF DISPUTES ARISING OUT OF THE CONTRACT AND THE CONTRACTOR MUST EXHAUST ITS REMEDIES UNDER THE DISPUTES CLAUSE BEFORE RESORTING EITHER TO OUR OFFICE OR THE COURTS. SEE UNITED STATES V HAMMER CONTRACTING CORPORATION, 331 F.2D 173 (1964); BEACON CONSTRUCTION COMPANY OF MASS. V UNITED STATES, 314 F.2D 501 (1963); UNITED STATES V PETER KIEWIT SONS' CO., 345 F.2D 879 (1965); 37 COMP. GEN. 568, AND AUTHORITIES CITED THEREIN.

ACCORDINGLY, THE CLAIM FOR RELIEF UNDER THE CONTRACT WILL NOT BE CONSIDERED AT THIS TIME. IF PYRONICS IS UNSUCCESSFUL IN ITS APPEAL BEFORE THE ASBCA AND IT BELIEVES THAT THE DENIAL OF ITS CLAIM WAS ERRONEOUS IN POINT OF FACT OR LAW, IT MAY THEN REQUEST OUR OFFICE TO REVIEW THE MATTER ACCORDING TO THE STANDARDS OF THE WUNDERLICH ACT, 41 U.S.C. 321, 322.