B-183172, MAR 7, 1975

B-183172: Mar 7, 1975

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THAT IS A MATTER FOR SETTLEMENT PURSUANT TO THE PROCEDURES SET OUT IN THE "DISPUTES" CLAUSE WHICH IS CONTAINED IN STANDARD GOVERNMENT CONTRACTS. 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. IS NOT SUBJECT TO FURTHER ADMINISTRATIVE REVIEW.

B-183172, MAR 7, 1975

DISPUTE ARISING UNDER CONTRACT BETWEEN CONTRACTOR AND CONTRACTING OFFICER AS TO PERFORMANCE REQUIREMENTS MUST BE PURSUED UNDER CONTRACT "DISPUTES" CLAUSE PROCEDURE.

E.P. REID, INC.:

THIS MATTER CONCERNS A REQUEST BY E.P. REID, INC. (REID), THAT OUR OFFICE REVIEW A CONTRACTING OFFICER'S DETERMINATION WHICH DIRECTED REID TO PERFORM ITS CONTRACT F28609-74-9-0152 AWARDED BY THE DEPARTMENT OF THE AIR FORCE IN ACCORDANCE WITH THE CONTRACTING OFFICER'S INTERPRETATION OF CERTAIN CONTRACT PROVISIONS. THE CORRESPONDENCE FURNISHED OUR OFFICE BY REID INDICATES THAT IT DISPUTES THE CONTRACTING OFFICER'S INTERPRETATION.

THE AUTHORITY OF OUR OFFICE DOES NOT INCLUDE INTERVENTION BETWEEN A CONTRACTOR AND A CONTRACTING AGENCY FOR THE PURPOSE OF RESOLVING A DISPUTE ARISING UNDER A CONTRACT. THAT IS A MATTER FOR SETTLEMENT PURSUANT TO THE PROCEDURES SET OUT IN THE "DISPUTES" CLAUSE WHICH IS CONTAINED IN STANDARD GOVERNMENT CONTRACTS. THOSE PROCEDURES PROVIDE FOR A DECISION BY THE CONTRACTING OFFICER, WITH THE CONTRACTOR HAVING A RIGHT OF APPEAL FROM THE 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 TO THE COURTS.

FURTHERMORE, IT SHOULD BE NOTED THAT AS A RESULT OF S&E CONTRACTORS, INC. V. UNITED STATES, 406 U.S. 1 (1972), OUR OFFICE NO LONGER REVIEWS DECISIONS RENDERED UNDER THE "DISPUTES" CLAUSE. IN THAT CASE, THE UNITED STATES SUPREME COURT HELD THAT, ABSENT BAD FAITH OR FRAUD, A FINAL AGENCY SETTLEMENT OR DECISION, RENDERED UNDER THE "DISPUTES" CLAUSE, IS NOT SUBJECT TO FURTHER ADMINISTRATIVE REVIEW.

ACCORDINGLY, ANY REMEDY AVAILABLE TO REID MUST BE PURSUED ACCORDING TO PROCEDURES SET FORTH IN THE "DISPUTES" CLAUSE OF THE CONTRACT.