Protest Against Contract Termination

Highlights

A firm protested the termination of a contract issued by the Veterans Administration (VA). VA issued a purchase order for surgical instruments to the protester. The protester quoted a 60/90-day delivery date. Subsequently, the protester advised VA that the delivery would be delayed. VA at first acquiesced in the extended delivery date, but later terminated the contract for default. The protester contended that the decision to delay the delivery date was a modification of existing contract terms and that the termination was improper. The question of whether a contract should be terminated for default is a matter of contract administration for consideration under the procedures set forth in the disputes clause of the contract and is not for resolution under bid protest procedures. These procedures are reserved for considering whether an award, or proposed award, of a contract complies with statutory, regulatory, and other legal requirements. Accordingly, the protest was dismissed.

View Decision

B-202592, MAY 8, 1981

DIGEST: TERMINATION FOR LATE DELIVERY OF SURGICAL INSTRUMENT IS MATTER OF CONTRACT ADMINISTRATION FOR RESOLUTION BY CONTRACTING AGENCY UNDER DISPUTES CLAUSE, AND NOT GAO'S BID PROTEST PROCEDURES.

SURGICAL INSTRUMENT COMPANY OF AMERICA:

THE VETERANS ADMINISTRATION (VA) ISSUED A PURCHASE ORDER FOR SURGICAL INSTRUMENTS TO SURGICAL INSTRUMENT COMPANY OF AMERICA (SURGICAL) IN THE AMOUNT OF $4,596. THE PURCHASE ORDER WAS RECEIVED ON OCTOBER 3, 1980. SURGICAL QUOTED 60/90-DAY DELIVERY DATE.

SURGICAL SUBSEQUENTLY ADVISED THAT DELIVERY WOULD BE MADE ON APRIL 20, 1981. THE VA AT FIRST ACQUIESCED IN THE EXTENDED DELIVERY DATE, BUT LATER TERMINATED THE CONTRACT FOR DEFAULT. SURGICAL CONTENDS THAT THE DECISION TO DELAY THE DELIVERY DATE WAS A MODIFICATION OF EXISTING CONTRACT TERMS AND THAT THE TERMINATION WAS IMPROPER.

THE QUESTION WHETHER A CONTRACT SHOULD BE TERMINATED FOR DEFAULT IS A MATTER OF CONTRACT ADMINISTRATION FOR CONSIDERATION UNDER THE PROCEDURES SET FORTH IN THE DISPUTES CLAUSE OF THE CONTRACT AND IS NOT FOR RESOLUTION UNDER OUR BID PROTEST PROCEDURES, WHICH ARE RESERVED FOR CONSIDERING WHETHER AN AWARD, OR PROPOSED AWARD, OF A CONTRACT COMPLIES WITH STATUTORY, REGULATORY AND OTHER LEGAL REQUIREMENTS. OKLAHOMA AEROTRONICS, INC., B-201026, NOVEMBER 18, 1980, 80-2 CPD 375.

THE PROTEST IS DISMISSED.