B-156192, FEB. 7, 1969

B-156192, FEB. 7, 1969

TO MR. ATTORNEY GENERAL:

THIS LETTER HAS REFERENCE TO THE OPINION OF YOUR PREDECESSOR DATED JANUARY 16, 1969, ADVISING THE SECRETARY OF THE AIR FORCE THAT HE WAS NOT LEGALLY REQUIRED TO COMPLY WITH A REQUEST OF THE COMPTROLLER GENERAL THAT APPROPRIATE STEPS BE TAKEN TO DETERMINE THE AMOUNT OF AN EQUITABLE ADJUSTMENT TO WHICH WE HAD CONCLUDED THAT A CONTRACTOR, SOUTHSIDE PLUMBING COMPANY, INC., WAS ENTITLED UNDER ITS CONTRACT WITH THE AIR FORCE.

THE CONTRACTOR'S CLAIM HAD BEEN PREVIOUSLY DISALLOWED BY THE CONTRACTING OFFICER WHOSE DECISION HAD BEEN AFFIRMED BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS, AND THE ATTORNEY GENERAL'S OPINION HAD BEEN REQUESTED BY THE SECRETARY OF THE AIR FORCE BY REASON OF THE CONTENTION OF HIS DEPARTMENT THAT OUR OFFICE HAS NO AUTHORITY TO REVIEW A DECISION OF THE BOARD UNDER THE CONTRACTUAL DISPUTES PROCEDURE, OR TO ALLOW A CLAIM AFTER DISALLOWANCE BY THAT BOARD.

FOR THE REASONS FULLY SET FORTH IN THE MEMORANDUM BRIEF WE FURNISHED THE FORMER ATTORNEY GENERAL UNDER DATE OF DECEMBER 11, 1967, WE ARE IN COMPLETE DISAGREEMENT WITH THE CONCLUSION REACHED IN THE JANUARY 16, 1969, OPINION THAT THE STATUTORY MANDATE THAT "ALL CLAIMS AND DEMANDS WHATEVER BY THE UNITED STATES OR AGAINST IT" BE SETTLED AND ADJUSTED IN THIS OFFICE (31 U.S.C. 71) IS NOT TO BE FOLLOWED IN A CASE IN WHICH SUCH A CLAIM HAS BEEN ACTED UPON UNDER A CONTRACTUALLY CREATED ADMINISTRATIVE DISPUTES PROCEDURE. WHILE WE WILL TAKE NO FURTHER ACTION IN THE PARTICULAR CASE WHICH PRECIPITATED THIS CONTROVERSY, WE MUST ADVISE THAT IN THE FUTURE WE INTEND TO CONSIDER ON THE MERITS ANY CLAIMS WHICH MAY BE PRESENTED TO US WITHOUT REGARD TO THE VIEWS STATED IN THE OPINION OF YOUR PREDECESSOR.

WE WANT, HOWEVER, TO EXPRESS OUR APPROVAL OF THE RECOMMENDATION MADE IN THE JANUARY 16 OPINION, THAT THE EXECUTIVE DEPARTMENTS AND AGENCIES SHOULD ESTABLISH AFFIRMATIVE PROCEDURES FOR INTERNAL REVIEW OF DECISIONS OF ADMINISTRATIVE BOARDS HANDLING CONTRACT DISPUTES TO DETERMINE WHETHER FURTHER REVIEW IS DESIRABLE TO PROTECT THE INTERESTS OF THE GOVERNMENT. WE AGREE COMPLETELY WITH THE STATEMENT IN THE OPINION THAT THE LEGISLATIVE HISTORY OF THE WUNDERLICH ACT MAKES IT CLEAR THAT THE CONGRESS INTENDED BOARD DECISIONS TO BE NO MORE CONCLUSIVE AGAINST THE GOVERNMENT THAN AGAINST THE CONTRACTOR. HOWEVER, IN VIEW OF OUR BROAD DECISION MAKING AUTHORITY, OUR BROAD AUDIT AUTHORITY AND OUR BROAD CLAIMS SETTLEMENT AUTHORITY IN THE AREA OF OUR JURISDICTION -- THAT IS IN DETERMINING THE LEGALITY AND PROPRIETY OF EXPENDITURES FROM APPROPRIATED FUNDS -- WE ARE INCLINED TO QUESTION THE DESIRABILITY OR PRACTICABILITY OF THE PROPOSAL THAT YOUR DEPARTMENT ACT AS THE REVIEWING AUTHORITY IN SUCH CASES UNLESS AND UNTIL IT BECOMES NECESSARY TO CONSIDER WHETHER OR NOT LITIGATION SHOULD BE INSTITUTED TO RECOVER ERRONEOUS PAYMENTS NOT OTHERWISE COLLECTIBLE.

ON THE OTHER HAND, WE HAVE CONSISTENTLY MAINTAINED THAT SOME METHOD OF REVIEW OF SUCH DECISIONS IS ESSENTIAL TO THE GOVERNMENT'S INTERESTS. IS BROUGHT OUT IN THE OPINION, OUR OFFICE HAS ACTED IN SUCH CASES AS HAVE COME TO OUR ATTENTION TO ASSURE JUDICIAL REVIEW OF QUESTIONABLE DECISIONS AGAINST THE GOVERNMENT, BY PREVENTING PAYMENTS FROM BEING MADE.

WE HAVE NEVER CONSIDERED THAT WE WERE IN A POSITION TO UNDERTAKE REVIEW OF ALL, OR EVEN A SUBSTANTIAL PORTION, OF SUCH DECISIONS UPON OUR OWN INITIATIVE. WE THEREFORE AGREE WITH THE SUGGESTION EXPRESSED IN THE OPINION THAT THE AGENCY CONTRACTING AND LEGAL OFFICIALS HAVING INTIMATE FAMILIARITY WITH THE CASES SHOULD HAVE PRIMARY RESPONSIBILITY FOR INITIATING SUCH REVIEW AS MAY BE DETERMINED TO BE DESIRABLE IN PARTICULAR CASES. AS MENTIONED IN OUR MEMORANDUM BRIEF SUBMITTED TO YOUR PREDECESSOR, WE HAVE IN A NUMBER OF INSTANCES RECEIVED REQUESTS FROM EXECUTIVE DEPARTMENTS AND AGENCIES (NOT INCLUDING THE MILITARY DEPARTMENTS) FOR DECISIONS UPON QUESTIONS OF LAW PRESENTED IN CASES PENDING IN THE AGENCIES UNDER THE DISPUTES PROCEDURE. WE HAVE ALSO RECEIVED REQUESTS FROM ACCOUNTABLE OFFICERS FOR DECISIONS AS TO THE PROPRIETY OF CERTIFICATION OR PAYMENT OF VOUCHERS COVERING AWARDS MADE UNDER THE DISPUTES PROCEDURE; WE HAVE IN SEVERAL INSTANCES REVIEWED DECISIONS UPON OUR OWN INITIATIVE; AND WE ARE CURRENTLY ENGAGED IN A REVIEW OF ONE WHICH WAS BROUGHT TO OUR ATTENTION BY A PRIVATE ATTORNEY WHO FORMERLY REPRESENTED THE CONTRACTING AGENCY BEFORE THE BOARD. WE BELIEVE THAT THOSE INSTANCES, FEW AS THEY ARE, DEMONSTRATE THAT THERE IS A NEED FOR SOME SYSTEMATIC PROCESS OF REVIEW IN THE AGENCIES.

FOR THESE REASONS, IF ANY AGENCY SHOULD REQUEST RECONSIDERATION BY YOU OF THIS MATTER, WE WOULD LIKE AN OPPORTUNITY TO DISCUSS IT FURTHER WITH YOU BEFORE ANY FINAL DECISION IS REACHED TO MODIFY THE RECOMMENDATION REFERRED TO. ..END :