Protest Involving Alleged Breach of Contract

B-202046: Aug 10, 1981

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A firm protested General Services Administration (GSA) actions in connection with a contract GSA awarded to it. The invitation for bids (IFB) requested bids on the sale of two mobile homes. The notice of award stated that the protester had to remove the mobile homes by August 5, 1980, and that the documents required for release of the property would be forwarded to the protester upon receipt of full payment. Full payment was mailed to GSA on August 27, the same day that GSA awarded a contract for the sale of the mobile homes to the only other bidder on the IFB. That firm paid for and removed the property by August 29, 1980. GSA attempted to reach the protester by telephone prior to the reaward of the contract, but was unsuccessful. Subsequently, the protester resold the mobile homes and received a down payment. The protester sent a letter to GSA containing a photocopy of its canceled check and requesting the appropriate documents for release of the mobile homes. Subsequently, GSA offered to refund the protester's payment in full; the protester refused to accept. Finally, the company to which the protester resold the mobile homes filed suit against the protester for breach of contract, which is subject to the Contract Disputes Act of 1978. Unless specifically exempted, the Act applies to all contracts entered into by an executive agency. It requires that all claims relating to a contract be filed with the contracting officer for a decision. In addition, a contractor may appeal an adverse contracting officer's decision either to the contracting agency's board of contract appeals or to the U.S. Court of Claims. Although the disputes clause in the protester's contract did not reflect the provisions of the Act, it has been held that the jurisdiction granted by the Act is not limited by the use of an obsolete disputes clause, because that clause cannot operate to modify a statute. GAO held that, since the contract involved was subject to the Act, the breach claim was appropriate for resolution under that Act rather than by GAO. Accordingly, GAO declined to consider the claim.