B-183693, MAY 8, 1975

B-183693, MAY 8, 1975

WHERE CONTRACTOR HAS DISAGREEMENT WITH CONTRACTING AGENCY CONCERNING A MATTER OF CONTRACT PERFORMANCE, MATTER SHOULD BE PURSUED FOR RESOLUTION PURSUANT TO CONTRACT DISPUTES CLAUSE, AND THEREFORE GAO HAS NO JURISDICTION TO CONSIDER MATTER. S&E CONTRACTORS, INCORPORATED V. UNITED STATES, 406 U.S. 1 (1972).

HYDRO FITTING MANUFACTURING CORPORATION:

BY LETTER DATED APRIL 16, 1975, HYDRO FITTING MANUFACTURING CORPORATION (HYDRO) PROTESTED TO THIS OFFICE THE FINAL DECISION OF A DEFENSE SUPPLY AGENCY (DSA) CONTRACTING OFFICER. THE DSA DECISION IS IN REGARD TO A DISPUTE UNDER THE TERMS OF A CONTRACT BETWEEN THAT AGENCY AND HYDRO. THE FINAL PARAGRAPH OF THE SUBJECT CONTRACTING OFFICER'S DECISION STATES AS FOLLOWS:

"THIS IS THE FINAL DECISION OF THE CONTRACTING OFFICER. DECISIONS ON DISPUTED QUESTIONS OF FACT AND ON OTHER QUESTIONS THAT ARE SUBJECT TO THE PROCEDURE OF THE DISPUTES CLAUSE MAY BE APPEALED IN ACCORDANCE WITH THE PROVISIONS OF THE DISPUTES CLAUSE. IF YOU DECIDE TO MAKE SUCH AN APPEAL FROM THIS DECISION, WRITTEN NOTICE THEREOF (IN TRIPLICATE) MUST BE MAILED OR OTHERWISE FURNISHED TO THE CONTRACTING OFFICER WITHIN THIRTY DAYS FROM THE DATE YOU RECEIVE THIS DECISION. SUCH NOTICE SHOULD INDICATE THAT AN APPEAL IS INTENDED AND SHOULD REFERENCE THIS DECISION AND IDENTIFY THE CONTRACT BY NUMBER. THE ARMED SERVICES BOARD OF CONTRACT APPEALS IS THE AUTHORIZED REPRESENTATIVE OF THE SECRETARY FOR HEARING AND DETERMINING SUCH DISPUTES. THE RULES OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS ARE SET FORTH IN THE ARMED SERVICES PROCUREMENT REGULATION, APPENDIX A, PART 2."

A REVIEW OF THE SUBMITTED MATERIAL INDICATES THAT HYDRO'S PROBLEMS ENSUED FROM A DISAGREEMENT CONCERNING WHETHER A SINGLE $14.75 PART WAS DELIVERED TO DSA. AS CLEARLY SPELLED OUT IN THE CONTRACTING OFFICER'S DECISION, SUCH A DISPUTE FALLS UNDER THE DISPUTES CLAUSE OF THE CONTRACT. THIS CLAUSE PROVIDES IN EFFECT THAT DISPUTES BETWEEN THE PARTIES ON SUCH FACTUAL ISSUES ARISING UNDER THE CONTRACT ARE FOR RESOLUTION IN ACCORDANCE WITH THE ADMINISTRATIVE PROCEDURE SET OUT IN THAT CLAUSE. OUR OFFICE HAS NO JURISDICTION TO CONSIDER SUCH MATTERS. IT IS WELL ESTABLISHED THAT WHEN A CONTRACT SETS OUT A PROCEDURE UNDER WHICH DISPUTES ARE TO BE SETTLED ADMINISTRATIVELY, THE REMEDY THEREBY PROVIDED MUST BE EXHAUSTED BY THE CONTRACTOR. UNITED STATES V. JOSEPH A. HOLPUCH COMPANY, 328 U.S. 234 (1946). FURTHERMORE, FOLLOWING THE SUPREME COURT DECISION IN S&E CONTRACTORS, INCORPORATED V. UNITED STATES, 406 U.S. 1 (1972), WE NO LONGER REVIEW BOARD OF CONTRACT APPEALS DECISIONS ABSENT A SHOWING OF FRAUD OR BAD FAITH. IN THE CIRCUMSTANCES, THERE IS NO ACTION WE MAY PROPERLY TAKE.