B-173500, SEP 10, 1971

B-173500: Sep 10, 1971

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THE RECORD INDICATES THAT CLAIMANT WAS GIVEN AMPLE NOTICE OF HIS RIGHT TO MAKE A PERSONAL APPEARANCE AT THE HEARING. IT CANNOT BE CONCLUDED THAT THE DECISION OF GSBCA AS TO THE LOCATION OF THE HEARING WAS EITHER ARBITRARY OR UNFAIR TO CLAIMANT. GAO CONCURS WITH THE BOARD'S ANALYSIS THAT COLEMAN WAS NOT EXCUSED FROM PERFORMANCE UNDER THE CONTRACT AND THAT THE EXCESS COSTS CHARGED WERE REASONABLE. COLEMAN COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 30. THIS MATTER WAS THE SUBJECT OF AN ADVERSE DECISION BY THE GENERAL SERVICES BOARD OF CONTRACT APPEALS. YOU NOW ALLEGE THAT YOU WERE NOT GIVEN A PROPER OPPORTUNITY TO PRESENT YOUR CASE. WHICH IS QUOTED IN PERTINENT PART: "ON AUGUST 14.

B-173500, SEP 10, 1971

CONTRACT - DEFAULT - EXCESS COSTS ON REPROCUREMENT DECISION DENYING RELIEF FROM A DECISION OF THE GENERAL SERVICES BOARD OF CONTRACT APPEALS (GSBCA) THAT THE ALLAN J. COLEMAN COMPANY SHOULD BE ASSESSED $409.50 FOR EXCESS COSTS INCURRED BY THE GOVERNMENT FROM REPROCUREMENT FOLLOWING CLAIMANT'S DEFAULT ON A CONTRACT. THE RECORD INDICATES THAT CLAIMANT WAS GIVEN AMPLE NOTICE OF HIS RIGHT TO MAKE A PERSONAL APPEARANCE AT THE HEARING, OR TO SUPPLEMENT THE RECORD WITH ANY INFORMATION HE DEEMED PERTINENT. IT CANNOT BE CONCLUDED THAT THE DECISION OF GSBCA AS TO THE LOCATION OF THE HEARING WAS EITHER ARBITRARY OR UNFAIR TO CLAIMANT. FURTHER, GAO CONCURS WITH THE BOARD'S ANALYSIS THAT COLEMAN WAS NOT EXCUSED FROM PERFORMANCE UNDER THE CONTRACT AND THAT THE EXCESS COSTS CHARGED WERE REASONABLE.

TO ALLAN J. COLEMAN COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 30, 1971, IN WHICH YOU CLAIM THAT THE GENERAL SERVICES ADMINISTRATION (GSA) HAS IMPROPERLY CHARGED YOUR CONCERN $409.50 FOR EXCESS COSTS INCURRED BY THE GOVERNMENT FROM THE REPROCUREMENT FOLLOWING YOUR DEFAULT UNDER CONTRACT NO. GS-06S- 1988.

THIS MATTER WAS THE SUBJECT OF AN ADVERSE DECISION BY THE GENERAL SERVICES BOARD OF CONTRACT APPEALS, DOCKET NO. 2896, AND YOU NOW ALLEGE THAT YOU WERE NOT GIVEN A PROPER OPPORTUNITY TO PRESENT YOUR CASE, AND THAT YOU SHOULD NOT BE REQUIRED TO PAY THE EXCESS COSTS IN QUESTION.

GSA HAS FURNISHED US WITH A REPORT ON YOUR CLAIM, WHICH IS QUOTED IN PERTINENT PART:

"ON AUGUST 14, 1968, A FIXED PRICE, DEFINITE QUANTITY CONTRACT FOR FURNISHING 45 EACH, WATER CLOSET, PIPE AND SEWER ELECTRIC AUGER KITS, FSN 5130-293-2852 WAS AWARDED TO THE ALLAN J. COLEMAN COMPANY. THE CONTRACT REQUIRED SUBMITTAL OF A PREPRODUCTION SAMPLE, WHICH WAS RECEIVED AND REJECTED BY THE GENERAL SERVICES ADMINISTRATION FOR FAILURE TO MEET THE REQUIREMENTS OF PARAGRAPH 3.4.1.4 OF MILITARY SPECIFICATION MIL-A-9904. COLEMAN WAS THEN GIVEN AN OPPORTUNITY TO SUBMIT A REPLACEMENT SAMPLE, WHICH HE DID NOT DO. BY LETTER DATED SEPTEMBER 26, 1968, COLEMAN ADVISED THE CONTRACTING OFFICER THAT IT WAS UNABLE TO COMPLY WITH THE SPECIFICATIONS AND REQUESTED RETURN OF THE SAMPLE. BY LETTER DATED OCTOBER 3, 1968, THE CONTRACTING OFFICER AGAIN URGED THAT COLEMAN 'GIVE FURTHER CONSIDERATION AS TO A PROPOSED CURE FOR THE FAILURE TO SATISFACTORILY PERFORM AND SUBMIT YOUR PROPOSAL WITHIN TEN (10) DAYS.' COLEMAN WAS ALSO ADVISED THAT FAILURE TO PERFORM WITHIN TEN (10) DAYS WOULD RESULT IN TERMINATION OF THE CONTRACT PURSUANT TO ARTICLE 11(A)(II) OF THE DEFAULT CLAUSE OF THE GENERAL PROVISIONS. COLEMAN'S ONLY REPLY WAS A REQUEST ON OCTOBER 9, 1968, THAT THE PERTINENT SPECIFICATIONS BE WAIVED. THE CONTRACTING OFFICER BY A FINAL DECISION ISSUED OCTOBER 21, 1968, TERMINATED COLEMAN'S RIGHT TO PROCEED FURTHER WITH PERFORMANCE OF THE CONTRACT. BECAUSE THE CONTRACTING OFFICER DETERMINED THAT FAILURE TO PERFORM SATISFACTORILY DID NOT ARISE OUT OF CAUSES BEYOND COLEMAN'S CONTROL AND WITH COLEMAN'S FAULT OR NEGLIGENCE WITHIN THE MEANING OF ARTICLE 11(C) OF THE GENERAL PROVISIONS, HE INFORMED COLEMAN THAT THEY WOULD BE HELD LIABLE FOR ANY EXCESS COSTS RESULTING FROM REPROCUREMENT. EXCESS COSTS IN THE AMOUNT OF $409.50 WERE INCURRED."

GSA FURTHER STATES THAT FOR APPROXIMATELY TWO YEARS FOLLOWING THE CONTRACTING OFFICER'S FINAL DECISION THERE WAS A GREAT DEAL OF CORRESPONDENCE BETWEEN THE GENERAL SERVICES BOARD OF CONTRACT APPEALS (GSBCA) AND YOUR CONCERN; THAT YOU CONTINUALLY DELAYED CHOOSING A SPECIFIC APPEAL PROCEDURE AND DEMANDED THAT THE GSBCA HOLD ITS HEARING IN CHICAGO; AND THAT THIS REQUEST WAS DENIED.

IN THIS REGARD, WE HAVE BEEN FURNISHED WITH A COPY OF A LETTER DATED OCTOBER 13, 1969, FROM A MEMBER OF THE GSBCA TO YOUR CONCERN IN WHICH THE MEMBER STATED THAT IF A HEARING ON YOUR CASE WAS TO BE HELD ANYWHERE OTHER THAN WASHINGTON, D. C., IT WOULD HAVE TO BE IN KANSAS CITY, MISSOURI. HOWEVER, THE MEMBER POINTED OUT THAT INASMUCH AS KANSAS CITY, MISSOURI, IS APPROXIMATELY THE SAME DISTANCE FROM CHICAGO AS WASHINGTON, D. C. IS FROM CHICAGO, IT WOULD BE OF NO BENEFIT TO YOUR CONCERN TO HAVE A HEARING IN KANSAS CITY AND, THEREFORE, THE HEARING WOULD HAVE TO BE HELD IN WASHINGTON, D. C. THE MEMBER FURTHER STATED THAT YOU STILL COULD AVAIL YOURSELF OF THE PROVISIONS OF THE BOARD'S RULE 9, I.E., A DECISION ON THE BASIS OF THE RECORD WITHOUT A HEARING, AND THAT YOU WOULD HAVE AN AMPLE OPPORTUNITY TO SUPPLEMENT THE RECORD.

IN THIS REGARD, IT IS OUR INFORMAL UNDERSTANDING THAT THE BOARD'S STATEMENT THAT KANSAS CITY WAS ACCEPTABLE FOR THE LOCATION OF THE HEARING WAS BASED ON THE CIRCUMSTANCE THAT THE GOVERNMENT'S WITNESSES IN YOUR APPEAL, I.E., THOSE GSA EMPLOYEES WHO ADMINISTERED YOUR CONTRACT, WERE STATIONED IN THAT CITY, THE LOCATION OF THE GSA REGIONAL OFFICE WHICH AWARDED YOUR CONTRACT.

GSA ALSO STATES THAT YOU WERE ADVISED OF YOUR OPPORTUNITY TO SUPPLEMENT THE RECORD BY LETTERS DATED DECEMBER 16, 1969, JANUARY 29, AND FEBRUARY 24, 1970, BUT THAT YOU FAILED TO RESPOND TO THESE LETTERS. ACCORDINGLY, YOU WERE NOTIFIED BY LETTER DATED MARCH 19, 1970, THAT THE RECORD WAS CLOSED.

IN ITS DECISION THE BOARD NOTED THAT YOUR ONLY EXCUSE FOR NONPERFORMANCE WAS STATED IN A LETTER DATED OCTOBER 24, 1968, TO THE CONTRACTING OFFICER AFTER TERMINATION OF THE CONTRACT. YOU STATED THAT YOUR "SUBCONTRACTOR" PREVIOUSLY MANUFACTURED THE TYPE OF MOTORS SPECIFIED IN THE CONTRACT BUT HAD DISCONTINUED THEM AND THAT WAS A "CHANGE MADE SOLELY BY THEM THROUGH NO FAULT OF OURS."

THE BOARD FOUND THAT THIS WAS NO DEFENSE FOR YOUR FAILURE TO DELIVER THE SPECIFIED ITEMS FOR THE REASON THAT YOUR CONCERN OBVIOUSLY MADE NO BINDING AGREEMENT FOR SUPPLYING THE ITEMS IN QUESTION PRIOR TO BIDDING AND, THEREFORE, YOUR COMPANY HAD NO SUBCONTRACTOR OR SOURCE OF SUPPLY FOR THE SPECIFIED ITEM AT THE TIME YOUR BID WAS SUBMITTED.

IN VIEW THEREOF, THE BOARD FOUND THAT THE TERMINATION OF YOUR CONTRACT WAS PROPER AND, AFTER REVIEWING THE AMOUNT OF EXCESS COSTS ASSESSED YOUR FIRM, DETERMINED THAT SUCH CHARGES WERE REASONABLE.

YOU STATE THAT YOU SHOULD HAVE BEEN ALLOWED TO PRESENT YOUR CASE IN PERSON BEFORE THE BOARD AND THAT YOU SHOULD NOT BE CALLED UPON TO PAY THE EXCESS CHARGES ASSESSED YOUR CONCERN.

UNDER RULE 17, HEARINGS, OF THE GSBCA, THE BOARD MAY, IN ITS DISCRETION, SET AN APPEAL HEARING AT A LOCATION OTHER THAN WASHINGTON, D. C., WITH DUE CONSIDERATION TO THE "REGULAR ORDER OF APPEALS AND OTHER PERTINENT FACTORS."

AS NOTED ABOVE IT WAS THE POSITION OF THE BOARD THAT THE CONVENIENCE OF ALL THE PARTIES TO YOUR APPEAL, INCLUDING THE GOVERNMENT AND THE BOARD, WOULD BE SERVED EITHER BY HOLDING THE HEARING ON YOUR APPEAL IN KANSAS CITY, MISSOURI, WHERE THE CONTRACT ORIGINATED AND WAS ADMINISTERED, OR WASHINGTON, D. C. WE CANNOT CONCLUDE THAT THIS DECISION WAS ARBITRARY, OR WAS BASICALLY UNFAIR TO YOUR CONCERN, SINCE THE CONVENIENCE OF ALL THE PARTIES TO THE APPEAL PROCEDURE MUST BE TAKEN INTO CONSIDERATION IN DECIDING THE LOCATION OF THE HEARING, AND NOT MERELY THE CONVENIENCE OF THE CONTRACTOR.

IN ANY EVENT, YOU WERE SUPPLIED WITH AN AMPLE OPPORTUNITY TO SUPPLEMENT THE RECORD, BUT YOU CHOSE NOT TO ACCEPT THIS OFFER. IN VIEW THEREOF, AND INASMUCH AS YOU HAVE NOT INDICATED ANY ADDITIONAL LEGAL DEFENSE WHICH YOU WOULD HAVE ADVOCATED BEFORE THE BOARD, HAD YOU OBTAINED A PERSONAL APPEARANCE BEFORE THAT BODY, WE CANNOT CONCLUDE THAT YOU WERE UNFAIRLY DENIED AN OPPORTUNITY TO SET FORTH A COMPLETE DEFENSE FOR YOUR FAILURE TO DELIVER CONFORMING GOODS UNDER THIS CONTRACT.

WITH RESPECT TO THE LEGAL PROPRIETY OF THE BOARD'S DECISION, WE CONCUR WITH THE ANALYSIS OF THE BOARD THAT YOU WERE NOT EXCUSED FROM DELIVERING CONFORMING GOODS UNDER THE CONTRACT BECAUSE YOUR "SUBCONTRACTOR" DISCONTINUED MANUFACTURE OF THE TYPE OF MOTORS SPECIFIED IN THE CONTRACT.

WITH RESPECT TO THE PROPRIETY OF THE ACTIONS TAKEN IN PROCURING THE DEFAULTED ORDER, THE BOARD'S DECISION STATES THAT THE REPROCUREMENT CONTRACT WAS AWARDED TO THE LOW OFFEROR AT AN AMOUNT LESS THAN 10 PERCENT ABOVE YOUR BID ON FEBRUARY 17, 1969, AFTER THE GOVERNMENT RECEIVED THREE OFFERS FROM SEVEN POTENTIAL SUPPLIERS. IN VIEW THEREOF, WE AGREE WITH THE BOARD'S FINDING THAT THE AMOUNT OF EXCESS COSTS CHARGED TO YOUR CONCERN WERE REASONABLE.

ACCORDINGLY, YOUR REQUEST FOR RELIEF FROM PAYMENT OF THE EXCESS COSTS MUST BE DENIED.