B-168349, DEC. 30, 1969

B-168349: Dec 30, 1969

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INTERIOR BOARD OF CONTRACT APPEALS FOUND THAT CONTRACTOR WAS TO CLEAR GRASSY AREAS. THAT INTENTIONS OF GOVERNMENT AT ODDS WITH PLAIN MEANING OF SPECIFICATIONS AND OF WHICH CONTRACTOR WAS REASONABLY UNAWARE. GAO HAS REVIEWED EVIDENCE BEFORE BOARD AND BELIEVES BOARD'S CONCLUSION WAS BASED ON SUBSTANTIAL EVIDENCE. GAO FINDS NO REASON TO OBJECT TO BOARD'S LEGAL DETERMINATION THAT GRASSY AREAS WERE PAY ITEMS UNDER SPECIFICATIONS. UNDER WHICH ADMINISTRATIVE FACTUAL DETERMINATIONS ARE FINAL AND CONCLUSIVE UNLESS IT BE SHOWN DETERMINATION WAS FRAUDULENT. OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. GAO BELIEVES BOARD'S CONCLUSION IN FAVOR OF CONTRACTOR WAS BASED ON SUBSTANTIAL EVIDENCE. GEIOGAMAH: REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 7.

B-168349, DEC. 30, 1969

DISPUTES--FINALITY OF ADMINISTRATIVE FINDINGS--CONTRACT INTERPRETATION IN CLEARING AND GRUBBING CONTRACT DISPUTE CASE, INTERIOR BOARD OF CONTRACT APPEALS FOUND THAT CONTRACTOR WAS TO CLEAR GRASSY AREAS, THAT SPECIFICATIONS DID NOT RULE OUT PAYMENT FOR CLEARING AND GRUBBING GRASSY AREAS, AND THAT INTENTIONS OF GOVERNMENT AT ODDS WITH PLAIN MEANING OF SPECIFICATIONS AND OF WHICH CONTRACTOR WAS REASONABLY UNAWARE, CANNOT BIND CONTRACTOR TO GOVT.'S MEANING. GAO HAS REVIEWED EVIDENCE BEFORE BOARD AND BELIEVES BOARD'S CONCLUSION WAS BASED ON SUBSTANTIAL EVIDENCE. GOVT. ADMITTED AMBIGUITY OF SPECIFICATIONS GIVES CREDENCE TO CLAIM OF CONTRACTOR THAT IT PROPERLY INTERPRETED SPECIFICATIONS DRAFTED BY GOVT.; MOREOVER, GAO FINDS NO REASON TO OBJECT TO BOARD'S LEGAL DETERMINATION THAT GRASSY AREAS WERE PAY ITEMS UNDER SPECIFICATIONS. SEE 46 COMP. GEN. 441. DISPUTES--FINALITY OF ADMINISTRATIVE FINDINGS--REVIEW BY THE GENERAL ACCOUNTING OFFICE CONCERNING CONTRACT DISPUTE, GAO JURISDICTION ENTAILING REVIEW OF FACTUAL DETERMINATIONS MADE BY INTERIOR BOARD OF CONTRACT APPEALS UNDER DISPUTES CLAUSE IN ACCORDANCE WITH STANDARDS PRESCRIBED BY WUNDERLICH ACT, 41 U.S.C. 321-322, UNDER WHICH ADMINISTRATIVE FACTUAL DETERMINATIONS ARE FINAL AND CONCLUSIVE UNLESS IT BE SHOWN DETERMINATION WAS FRAUDULENT, CAPRICIOUS, OR ARBITRARY, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, GAO BELIEVES BOARD'S CONCLUSION IN FAVOR OF CONTRACTOR WAS BASED ON SUBSTANTIAL EVIDENCE; HOWEVER, CLARIFYING "DE NOVO" EVIDENCE HAS NOT BEEN CONSIDERED SINCE GAO REVIEW OF DEPARTMENTAL DECISION ON FACTUAL QUESTIONS MUST, UNDER WUNDERLICH ACT, BE CONFINED TO RECORD THEN BEFORE DEPARTMENT. SEE 46 COMP. GEN. 441.

TO MR. GEIOGAMAH:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 7, 1969, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE PROPRIETY OF PAYMENT OF THE AMOUNT OF $21,625.70, IN ACCORDANCE WITH A DECISION AND SUBSEQUENT RECONSIDERATION BY THE DEPARTMENT OF THE INTERIOR BOARD OF CONTRACT APPEALS (BOARD) (IBCA- 701-2-68), DATED JUNE 25 AND AUGUST 15, 1969, RESPECTIVELY. ALTHOUGH YOU DID NOT SUBMIT A VOUCHER COVERING PAYMENT OF THE AWARD BY THE BOARD, WE ASSUME FOR PURPOSES OF THIS DECISION THAT YOU HAVE BEFORE YOU FOR CERTIFICATION SUCH A VOUCHER. SEE 31 U.S.C. 82D. THE CLAIM WAS THE SUBJECT OF AN ADMINISTRATIVE APPEAL BEFORE THE BOARD AND AROSE OUT OF A DISPUTE OVER THE ACREAGE FOR WHICH NIELSONS, INC; WAS ENTITLED TO BE PAID FOR CLEARING AND GRUBBING UNDER CONTRACT NO. 14-20-0600-9304, COVERING THE PAVING OF 17.307 MILES OF ROADWAY ON THE NAVAJO INDIAN RESERVATION NEAR IUKACHUKAI, ARIZONA.

OUR OFFICE'S JURISDICTION IN THIS MATTER ENTAILS THE REVIEW OF THE FACTUAL ADMINISTRATIVE DETERMINATIONS MADE BY THE BOARD UNDER THE DISPUTES CLAUSE OF THE SUBJECT CONTRACT IN ACCORDANCE WITH THE STANDARDS PRESCRIBED BY THE WUNDERLICH ACT, 41 U.S.C. 321-322. SEE 46 COMP. GEN. 441, 459 (1966). THE WUNDERLICH ACT PROVIDES THAT ANY FACTUAL ADMINISTRATIVE DETERMINATION IS FINAL AND CONCLUSIVE UNLESS IT IS SHOWN TO BE "FRAUDULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE." WE HAVE ACCEPTED THE DEFINITION OF "SUBSTANTIAL EVIDENCE" AS SET FORTH BY THE COURT IN EDISON CO. V. LABOR BOARD, 305 U.S. 197, 229 (1938), WHICH HELD THAT "SUBSTANTIAL EVIDENCE" WAS "SUCH RELEVANT EVIDENCE AS A REASONABLE MIND MIGHT ACCEPT AS ADEQUATE TO SUPPORT A CONCLUSION." SEE, ALSO, 46 COMP. GEN. 441, 462 (1966); B 166157, APRIL 11, 1969. IN RUSSELL H. WILLIAMS, ET AL. V. UNITED STATES, 130 CT. CL. 435 (1955), THE COURT HELD THAT EVIDENCE TO SUPPORT A BOARD DECISION WOULD NOT BE SUFFICIENT WHERE THERE IS OPPOSING EVIDENCE SO SUBSTANTIAL AS TO DETRACT FROM ITS WEIGHT AND RENDER IT LESS THAN SUBSTANTIAL ON THE RECORD AS A WHOLE. 46 COMP. GEN. 441, 462 (1966). NO ADMINISTRATIVE DETERMINATIONS ON QUESTIONS OF LAW MADE UNDER DISPUTES CLAUSE PROCEDURES ATTAIN THE CHARACTER OF FINALITY. 46 COMP. GEN. 441, 459 (1966); B-166157, SUPRA.

THE RECORD DISCLOSES THAT THE SUBJECT CONTRACT CONTAINED A PROVISION FOR THE CLEARING AND GRUBBING OF AN ESTIMATED 175 ACRES ON THE PROJECT AT AN UNDISPUTED PRICE PER ACRE. A JOINT SURVEY BY THE PARTIES RESULTED IN A STIPULATION THAT PAYMENT HAD ALREADY BEEN MADE FOR 143.867 ACRES, WITH PAYMENT FOR 25.442 ACRES, ADMITTEDLY CLEARED AND GRUBBED BY THE CONTRACTOR, IN DISPUTE. THE BOARD WAS REQUIRED TO CONSIDER THE DISPUTE CONCERNING THE 25.442 ACRES AS TWO SEPARATE AND DISTINCT SUBAREAS. THE FIRST CONSISTED OF 17.014 ACRES OF SAGEBRUSH WHICH THE GOVERNMENT CONTENDED WAS NOT WITHIN THE STAKED AREAS TO BE CLEARED AND GRUBBED IN ACCORDANCE WITH CONTRACT SPECIFICATIONS. THE REMAINING 8.428 ACRES OF GRASSY AREA RAISED NO DISPUTE AS PROPERLY STAKED AREAS FOR CLEARING AND GRUBBING, BUT THE QUESTION REMAINED WHETHER OR NOT THE CONTRACT SPECIFICATIONS INCLUDED THIS TYPE OF AREA TO BE CLEARED AS A PAY ITEM. THE CONTRACT SPECIFICATIONS PROVIDED FOR THREE METHODS BY WHICH THE CONTRACTOR COULD ASCERTAIN AREAS THE GOVERNMENT WISHED TO BE CLEARED AND GRUBBED AS FOLLOWS: (1) AREAS STAKED, (2) AREAS SHOWN ON THE PLANS, OR (3) AREAS DESIGNATED BY THE ENGINEER. IN ADDITION, THE CONTRACT MEASUREMENT ARTICLE PROVIDES THAT PAYMENT WOULD BE MEASURED BY THE ENGINEER ONLY WITHIN LIMITS SO STAKED BY HIM FOR CLEARING AND GRUBBING. THE PROJECT AREA ENCOMPASSED THROUGH THREE TYPES OF VEGETATION -- TIMBER, SAGEBRUSH, AND GRASSY AREAS. CLEARLY, THE TIMBER AREAS WERE TO BE CLEARED AND GRUBBED BETWEEN THE RIGHT SLOPE STAKE (MARKING THE LIMIT OF CONSTRUCTION) AND THE LEFT RIGHT-OF-WAY LINE (MARKING THE EDGE OF CLEARING AND RIGHT-OF- WAY). WHERE TIMBER DID NOT SHADE THE ROAD, CLEARING WAS LIMITED TO THE CONSTRUCTION AREA BETWEEN THE RIGHT AND LEFT SLOPE STAKES. 54.259 ACRES OF CLEARED AND GRUBBED SAGEBRUSH HAD BEEN PAID FOR BY THE GOVERNMENT.

IN THE ORIGINAL HEARING, THE BOARD CONSIDERED THE TESTIMONY AND ITS IMPLICATIONS AND FOUND (IN THE CASE OF THE 17.014 ACRES) THAT THE GOVERNMENT IN EFFECT CONCEDED THAT THE CLAIMANT DID NOT CLEAR OUTSIDE OF THE CONSTRUCTION ZONE ON THE LEFT. CONSIDERING THE IMPLICATION OF THIS ADMISSION BY THE GOVERNMENT, THE BOARD FOUND THAT THE CLAIMANT WAS ENTITLED TO PAYMENT, CITING IN SUPPORT THEREOF, THE CONTEMPORANEOUS CONSTRUCTION OF THE CONTRACT BY THE CONTRACTING OFFICER IN ALLOWING PAYMENT OF THE 54.259 ACRES OF SAGEBRUSH WITHIN THE CONSTRUCTION AREA.

WITH RESPECT TO THE 8.428 ACRES OF GRASSY AREA, THE BOARD FOUND THAT THE WEIGHT OF THE EVIDENCE INDICATED A REQUIREMENT THAT THE CONTRACTOR WAS TO CLEAR THE GRASSY AREAS. IN INTERPRETING THE CONTRACT, THE BOARD OPINED THAT THE CONTRACT SPECIFICATIONS DID NOT RULE OUT PAYMENT FOR THE CLEARING AND GRUBBING OF GRASSY AREAS. CITING THE RESIDENT ENGINEER'S DIARY ENTRY, THE BOARD FOUND THAT THE GRASSY AREAS CLEARLY WERE DISCLOSED AS PAY ITEMS CONTEMPLATED BY THE CONTRACT. THE BOARD HELD THAT "INTENTIONS OF THE GOVERNMENT AT ODDS WITH THE PLAIN MEANING OF THE SPECIFICATIONS, AND OF WHICH THE CONTRACTOR WAS REASONABLY UNAWARE, CANNOT BIND THE CONTRACTOR TO THE GOVERNMENT'S MEANING."

ON RECONSIDERATION, THE BOARD STATED ITS FINDING AS FOLLOWS:

"* * * ACCORDING TO THE EVIDENCE THE APPELLANT CLEARED AND GRUBBED WITHIN LIMITS MARKED FOR CLEARING AND GRUBBING BY THE SURVEY CREW. THIS FINDING IS IMPLICIT IN THE RECOUNTING OF RELEVANT FACTS IN THE INITIAL OPINION. THERE WAS NO BURDEN UPON APPELLANT TO PROVE THAT THE FLAGGED LATHES MARKED EITHER SLOPE STAKES OR RIGHT OF WAY LIMITS, BUT SIMPLY THAT HE CLEARED, AS INSTRUCTED, WHERE THE SURVEY CREWS STAKED. THIS BURDEN HE DISCHARGED."

WITH REGARD TO THE GRASSY AREAS, THE BOARD NOTED THAT THE BID SCHEDULE CALLED FOR CLEARING AND GRUBBING BUT DID NOT DESCRIBE THE WORK. THE BOARD FELT THAT THE BID SCHEDULE MUST BE READ IN CONJUNCTION WITH THE MAIN CLEARING AND GRUBBING ARTICLE, WHICH READING WOULD CLEARLY INCLUDE THE CLEARING AND GRUBBING OF GRASSY AREAS AS "OBJECTIONABLE MATERIAL" OR "OTHER VEGETATION."

WE HAVE REVIEWED THE EVIDENCE BEFORE THE BOARD AND THE HEARING TRANSCRIPT AND, AS MENTIONED ABOVE, WE MUST LIMIT OUR REVIEW TO WHETHER THE BOARD'S FINDINGS OF FACT WERE FRAUDULENT, OR CAPRICIOUS, OR ARBITRARY, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. WE DO NOT BELIEVE THAT ANY OF THE FIRST FOUR GROUNDS ARE APPLICABLE TO THIS CASE ACCORDING TO THE EVIDENCE; THEREFORE, WE ARE CONFINING OUR REVIEW TO THE QUESTION OF WHETHER THE BOARD'S FINDINGS OF FACT WERE SUPPORTED BY SUBSTANTIAL EVIDENCE. IT IS CLEAR THAT THE TESTIMONY ESTABLISHES THAT THE CLAIMANT ACTUALLY CLEARED AND GRUBBED THE 17.014 ACRES OF SAGEBRUSH LOCATED OUTSIDE OF THE ROADWAY OR BETWEEN THE LEFT SLOPE STAKE (IMPLANTED AFTER THE CLEARING AND GRUBBING) AND THE LEFT RIGHT-OF-WAY MARKERS. IT IS ALSO CLEAR THAT CLAIMANT CLEARED AND GRUBBED IN ACCORDANCE WITH SOME TYPE OF MARKING; THAT IS, LATHE, STAKE, OR SOME INDICATION AS TO THE EDGE OF THE RIGHT-OF-WAY. THEREFORE, WE BELIEVE THAT THE BOARD'S CONCLUSION WAS BASED ON SUBSTANTIAL EVIDENCE WHICH ESTABLISHED THAT CLEARING AND GRUBBING OF THE 17.014 ACRES WAS IN FACT PERFORMED WITHIN LIMITS STAKED OUT BY THE GOVERNMENT'S SURVEY CREW.

WITH RESPECT TO THE GRASSY AREAS, WE FIND NO REASON TO OBJECT TO THE LEGAL DETERMINATION OF THE BOARD THAT SUCH AREAS WERE PAY ITEMS UNDER THE SPECIFICATIONS. IT IS CLEAR THAT GOVERNMENT PERSONNEL ADMITTED THE AMBIGUITY OF THE SPECIFICATIONS, WHICH ADMISSION GIVES CREDENCE TO THE CLAIMS OF THE CONTRACTOR THAT IT PROPERLY INTERPRETED THE SPECIFICATIONS DRAFTED BY THE GOVERNMENT.

THE STATEMENTS DATED NOVEMBER 6, 1969, FROM THE CHIEF OF THE SURVEY PARTY AND THE CHIEF PROJECT INSPECTOR, SUBMITTED FOR THE PURPOSE OF CLARIFYING ALLEGED CONFLICTS IN THE RECORD HAVE NO PRESENT EVIDENTIARY VALUE. HAVE HELD, IN ACCORDANCE WITH UNITED STATES V. CARLO BIANCHI & CO; INC; 373 U.S. 709 (1963), THAT OUR REVIEW OF A DEPARTMENTAL DECISION ON A QUESTION OF FACT UNDER A DISPUTES CLAUSE MUST, UNDER THE WUNDERLICH ACT, BE CONFINED TO CONSIDERATION OF THE RECORD THEN BEFORE THE DEPARTMENT. LIGHT OF THE FOREGOING, THE SUBMITTED "DE NOVO" EVIDENCE HAS NOT BEEN CONSIDERED. 46 COMP. GEN. 441, 461 (1966).

ACCORDINGLY, A VOUCHER IN THE AMOUNT OF $21,625.70, IN FAVOR OF NIELSONS, INC; MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE PROPER.