B-175184, APR 14, 1972

B-175184, APR 14, 1972

CONTRACT - DISPUTED QUESTION OF FACT - DISPUTES CLAUSE CONCERNING A CLAIM OF SAVIN BUSINESS MACHINES CORPORATION FOR PAYMENT OF AN AMOUNT THAT WAS DEDUCTED FROM ITS INVOICE TO COVER A SHORTAGE OF 130 ROLLS OF ELECTROSTATIC COPY PAPER IN A DELIVERY TO FORT ORD, CALIF., UNDER A FEDERAL SUPPLY SERVICE CONTRACT. SINCE THE SUBJECT CLAIM INVOLVES A DISPUTED QUESTION OF FACT, IT MUST BE RETURNED TO THE DEPARTMENT OF THE ARMY FOR PROCESSING IN ACCORDANCE WITH THE DISPUTES CLAUSE OF THE CONTRACT AND THE APPLICABLE REGULATIONS OF THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION.

TO SAVIN BUSINESS MACHINES CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 28, 1972, WITH ATTACHMENT, REQUESTING A REVIEW OF OUR SETTLEMENT CERTIFICATE DATED JANUARY 19, 1972, WHICH DISALLOWED YOUR CLAIM FOR $885.40, REPRESENTING THE AMOUNT THAT WAS DEDUCTED FROM YOUR INVOICE NUMBER 71138 TO COVER A SHORTAGE OF 130 ROLLS OF ELECTROSTATIC COPY PAPER, IN A DELIVERY TO THE DEPARTMENT OF THE ARMY, FORT ORD, CALIFORNIA, UNDER FEDERAL SUPPLY SCHEDULE CONTRACT NO. GS-00S- 81814. THE CLAIM WAS FORWARDED TO THE CLAIMS DIVISION (NOW TRANSPORTATION AND CLAIMS DIVISION) OF THIS OFFICE FOR SETTLEMENT ON SEPTEMBER 16, 1971, BY THE ARMY FINANCE CENTER, INDIANAPOLIS, INDIANA.

THE DELIVERY ORDER, DABF07-70-D-6723 DATED APRIL 15, 1970, PROVIDED FOR DELIVERY, F.O.B. DESTINATION, OF 1750 ROLLS OF "ELECTROSTATIC COPY PAPER; 8" WIDTH X 460'; FOR SAVIN 220 MACHINE; 2 ROLLS PER CARTON. ITEM 51-101- 5." YOU CONTENDED IN THE INITIAL PRESENTATION OF YOUR CLAIM THAT YOU SUPPLIED SAGE TRANSPORTATION, INC., WITH 1750 ROLLS OF THE ELECTROSTATIC COPY PAPER (DELIVERY RECEIPT 31222, DATED MAY 27, 1970) TO BE DELIVERED TO BUILDING 2065, FORT ORD, CALIFORNIA. YOU ALSO ASSERTED THAT THE DELIVERY RECEIPTS, DULY SIGNED BY AN AUTHORIZED GOVERNMENT AGENT, DID NOT RECORD A 130-ROLL SHORTAGE AND THE FULL SHIPMENT SHOULD THEREFORE BE CONSIDERED TO HAVE BEEN RECEIVED.

THE DEPARTMENT OF THE ARMY REPORTED THAT THE SHIPMENT WAS RECEIVED WITHOUT A PACKING LIST AND THAT THE RECEIVING AGENT ACKNOWLEDGED THE RECEIPT OF 21 SKIDS OF PAPER PRODUCTS, BUT NOT THE CONTENTS OF THE SHIPMENT. IN ADDITION, THE DEPARTMENT OF THE ARMY STATED THAT THE CARRIER'S RECEIPT FOR THE SHIPMENT WAS NOT ANNOTATED BECAUSE THE SHORTAGE WAS NOT KNOWN UNTIL THE SHIPPING CONTAINERS WERE OPENED BY ARMY PERSONNEL WHO TALLIED ONLY 1620 ROLLS OF THE PAPER.

IN VIEW OF THE ABOVE, WHICH WAS REGARDED AS A DISPUTED QUESTION OF FACT BETWEEN A CONTRACTOR AND ADMINISTRATIVE OFFICERS, YOUR CLAIM WAS DISALLOWED BY OUR CLAIMS DIVISION BY THE SETTLEMENT CERTIFICATE OF JANUARY 19.

AFTER REVIEWING THE MATTER, WE ARE OF THE VIEW THAT YOUR CLAIM WAS IMPROPERLY FORWARDED TO, AND CONSIDERED BY, OUR CLAIMS DIVISION BECAUSE IT INVOLVES A DISPUTE OF FACT ARISING UNDER YOUR CONTRACT WHICH INCORPORATES BY REFERENCE THE STANDARD "DISPUTES" CLAUSE (STANDARD FORM 32, PARAGRAPH 12) CONTAINING PROCEDURES FOR RESOLVING DISPUTED QUESTIONS OF FACT. THIS CONNECTION, WE STATED IN B-170805, SEPTEMBER 29, 1970:

"IT APPEARS THAT THE DISPUTE INVOLVED CLEARLY ARISES UNDER THE CONTRACT AND AS SUCH IS FOR SETTLEMENT PURSUANT TO THE PROCEDURES SET OUT IN THE 'DISPUTES' CLAUSE WHICH IS CONTAINED IN STANDARD GOVERNMENT CONTRACTS. THAT REGARD, SUCH DISPUTES ARE TO BE DECIDED BY THE CONTRACTING OFFICER, WITH THE CONTRACTOR HAVING A RIGHT OF APPEAL FROM SUCH DECISION TO THE HEAD OF THE AGENCY CONCERNED. BOTH THE CONTRACTOR AND THE GOVERNMENT ARE BOUND TO FOLLOW THE PROCEDURE SET OUT IN THE CONTRACT FOR THE ADMINISTRATION OF DISPUTES ARISING OUT OF THE CONTRACT, AND THE CONTRACTOR MUST EXHAUST ITS ADMINISTRATIVE REMEDIES UNDER THE DISPUTES CLAUSE BEFORE APPEALING EITHER TO OUR OFFICE OR THE COURTS. SEE B. H. DEACON CO. V. UNITED STATES, 189 F. SUPP. 146 (1960); HAPPEL V. UNITED STATES, 176 F. SUPP. 787 (1959), AFFIRMED 279 F.2D 88 (1960); AUTOMATIC SCREW PRODUCTS COMPANY V. UNITED STATES, 145 CT. CL. 94 (1959); 37 COMP. GEN. 568 (1958) AND AUTHORITIES CITED THEREIN."

IN ADDITION, STANDARD INSTRUCTIONS (PARAGRAPH (F)) ISSUED BY THE GENERAL SERVICES ADMINISTRATION IN ITS GUIDE TO SOURCES OF SUPPLY AND SERVICE, FEDERAL SUPPLY CATALOG, APPLICABLE TO FEDERAL SUPPLY SCHEDULE CONTRACTS, PROVIDES THAT "ALL DISPUTES CONCERNING QUESTIONS OF FACT, WHICH CANNOT BE SETTLED SATISFACTORILY BETWEEN THE ORDERING OFFICE AND THE CONTRACTOR, SHALL BE REFERRED TO THE OFFICE ISSUING THE SCHEDULE."

ACCORDINGLY, WE ARE RETURNING THE FILE TO THE DEPARTMENT OF THE ARMY FOR PROCESSING IN ACCORDANCE WITH THE DISPUTES CLAUSE OF THE CONTRACT AND THE ABOVE INSTRUCTIONS OF THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION.