B-150515, NOV. 13, 1963

B-150515: Nov 13, 1963

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TO SEAVIEW ELECTRIC COMPANY: WE ARE IN RECEIPT OF YOUR LETTER DATED JULY 31. YOU SEEK TO HAVE THE TERMINATION FOR DEFAULT OF CONTRACT NO. BY ITS CONDUCT AFTER DELIVERY WAS DUE. THE DECISION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS DENYING YOUR CONTENTIONS (1) THAT YOUR DEFAULT WAS EXCUSABLE AND (2) THAT THE GOVERNMENT HAD WAIVED THE CONTRACT DELIVERY DATE AND ELECTED TO PERMIT YOU TO CONTINUE PERFORMANCE THEREAFTER IS. FINAL AND CONCLUSIVE BOTH UPON THIS OFFICE AND THE COURTS UNLESS SUCH DECISION WAS FRAUDULENT. OR UNLESS SUCH DECISION WAS ON A QUESTION OF LAW (41 U.S.C. 322). IT IS THEREFORE MATERIAL IN THE CONSIDERATION OF YOUR CLAIM TO CONSIDER WHETHER THE BOARD'S DECISION ON THE "WAIVER" ISSUE WAS AS TO A QUESTION OF FACT OR LAW.

B-150515, NOV. 13, 1963

TO SEAVIEW ELECTRIC COMPANY:

WE ARE IN RECEIPT OF YOUR LETTER DATED JULY 31, 1963, REQUESTING RECONSIDERATION OF OUR DECISION DATED JULY 1, 1963, DENYING YOUR CLAIM FOR RELIEF FROM AN ADVERSE DECISION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA NO. 7189 DATED MARCH 27, 1962), IN THE LIGHT OF THE OPINION OF THE UNITED STATES COURT OF CLAIMS IN THE RECENT CASE OF STEIN BROTHERS MANUFACTURING CO. V. UNITED STATES, COURT OF CLAIMS NO. 389-59, JULY 12, 1963.

YOU SEEK TO HAVE THE TERMINATION FOR DEFAULT OF CONTRACT NO. DA-36 039-SC -84218 BETWEEN YOUR COMPANY AND THE UNITED STATES ARMY SIGNAL CORPS (NOW PART OF THE ARMY MATERIEL COMMAND) CONVERTED TO A TERMINATION FOR CONVENIENCE OF THE GOVERNMENT UNDER CLAUSE 11E OF THE CONTRACT. THE ARMED SERVICES BOARD OF CONTRACT APPEALS FOUND YOUR DEFAULT TO BE INEXCUSABLE AND HELD THAT THE GOVERNMENT DID NOT, BY ITS CONDUCT AFTER DELIVERY WAS DUE, WAIVE THE DELIVERY SCHEDULE OR ELECT TO PERMIT YOU TO CONTINUE PERFORMANCE. OUR OFFICE, BY ITS DECISION OF JULY 1, 1963, SUSTAINED THE BOARD'S ACTION AND REFUSED TO CONSIDER NEW EVIDENCE ON THE QUESTION OF ELECTION WHICH HAD NOT BEEN BROUGHT BEFORE THE BOARD, CITING THE RULE SET FORTH IN UNITED STATES V. CARLO BIANCHI AND COMPANY, INCORPORATED (SUPREME COURT OF THE UNITED STATES NO. 529, DECIDED JUNE 3, 1962).

THE DECISION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS DENYING YOUR CONTENTIONS (1) THAT YOUR DEFAULT WAS EXCUSABLE AND (2) THAT THE GOVERNMENT HAD WAIVED THE CONTRACT DELIVERY DATE AND ELECTED TO PERMIT YOU TO CONTINUE PERFORMANCE THEREAFTER IS, BY THE DISPUTES CLAUSE OF YOUR CONTRACT, FINAL AND CONCLUSIVE BOTH UPON THIS OFFICE AND THE COURTS UNLESS SUCH DECISION WAS FRAUDULENT, ARBITRARY, CAPRICIOUS, SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE (41 U.S.C. 321), OR UNLESS SUCH DECISION WAS ON A QUESTION OF LAW (41 U.S.C. 322).

IT IS THEREFORE MATERIAL IN THE CONSIDERATION OF YOUR CLAIM TO CONSIDER WHETHER THE BOARD'S DECISION ON THE "WAIVER" ISSUE WAS AS TO A QUESTION OF FACT OR LAW. IF THE FORMER, THEN THE DECISION IS CONCLUSIVE UNLESS FRAUDULENT, ARBITRARY, CAPRICIOUS, GROSSLY ERRONEOUS, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. IF, ON THE OTHER HAND, IT BE CONSIDERED A DECISION ON A QUESTION OF LAW, IT HAS NO BINDING EFFECT ON US OR THE COURTS, AND WE MUST JUDGE THE CLAIM ON ITS MERITS. THERE MUST ALSO BE CONSIDERED, IN EITHER CASE, THE EFFECT OF THE SUPREME COURT'S DECISION IN BIANCHI ON THE NEW EVIDENCE PRESENTED BY YOU TO ESTABLISH "WAIVER" OF THE DELIVERY SCHEDULE WHICH WAS DESCRIBED IN OUR DECISION OF JULY 1, 1963.

IT IS CLEAR FROM A READING OF BIANCHI THAT SUBSEQUENT JUDICIAL REVIEW OF A BOARD DECISION ON A QUESTION OF FACT IS LIMITED TO THE EVIDENCE WHICH WAS PRESENTED TO THE BOARD. IT IS NOT SO CLEAR WHETHER BIANCHI PRECLUDES JUDICIAL CONSIDERATION OF NEW EVIDENCE IF THE "ULTIMATE ISSUE IN THE CASE * * * IS ONE OF LAW NOT OF FACT * * *.' STEIN BROTHERS MANUFACTURING COMPANY V. UNITED STATES, CT.CLS.NO. 389 59, DECIDED JULY 12, 1963. ALSO, IN WPC ENTERPRISES, INC. V. UNITED STATES, CT.CLS.NO. 256-59, DECIDED OCTOBER 11, 1963, THE COURT STATED THAT LEGAL QUESTIONS ARE TO BE RESOLVED INDEPENDENTLY BY THE COURT AND THAT "SUBORDINATE "FACTUAL" FINDINGS * * * ARE WHOLLY SUBSUMED IN THE LARGER LEGAL PROBLEM OF CONTRACT INTERPRETATION.' WE MUST NOTE, HOWEVER, THAT IN BOTH THE STEIN AND WPC CASES THE STATEMENTS BY THE COURT OF CLAIMS AS TO THE NONAPPLICABILITY OF BIANCHI TO QUESTIONS OF LAW, ALTHOUGH FORCEFUL, ARE IN FACT DICTA RATHER THAN SQUARE HOLDINGS.

YOUR REQUEST FOR RECONSIDERATION OF OUR DECISION OF JULY 1, 1963, URGES THAT THE QUESTION OF WAIVER IS A QUESTION OF LAW, THAT THE STEIN CASE HOLDS BIANCHI TO BE INAPPLICABLE WHERE THE BOARD DECISION COMPLAINED OF IS ON A QUESTION OF LAW, AND CONSEQUENTLY THAT WE SHOULD CONSIDER THE NEW EVIDENCE PRESENTED TO US AND MAKE OUR OWN RULING ON THE QUESTION WHETHER THERE WAS A WAIVER OF YOUR DELIVERY SCHEDULE.

AS WE STATED IN OUR DECISION OF JULY 1, 1963, WE CANNOT CONCLUDE THAT THE DECISION OF THE BOARD WAS ARBITRARY, CAPRICIOUS, OR WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE IF WE CONSIDER ONLY THE EVIDENCE PRESENTED TO THE BOARD. IT IS CLEAR THAT IF THE ISSUE INVOLVED IS A QUESTION OF FACT WE ARE PRECLUDED BY BIANCHI FROM CONSIDERING ADDITIONAL EVIDENCE.

IT IS WELL RECOGNIZED THAT THE DISTINCTION BETWEEN QUESTIONS OF FACT AND LAW IS ONE OF THE MOST DIFFICULT AND TROUBLESOME LEGAL PROBLEMS. IT HAS BEEN STATED THAT THE QUESTION "WHETHER THERE HAS BEEN AN ELECTION TO CONTINUE PERFORMANCE" IS USUALLY A QUESTION OF FACT. SEE DICTUM IN PORTER V. HARRINGTON, 262 MASS. 203, 208; 159 N.E. 530, 531. HOWEVER, WE HAVE FOUND NO CLEARLY CONTROLLING DECISIONS ON THIS POINT.

FAVORABLE CONSIDERATION OF YOUR CLAIM REQUIRES THAT WE DETERMINE FIRST, THAT THE ISSUE INVOLVED IS ONE OF LAW RATHER THAN FACT, SECOND, THAT WE AGREE WITH THE DICTA IN STEIN AND WPC ENTERPRISES THAT BIANCHI DOES NOT APPLY TO QUESTIONS OF LAW, AND LASTLY, THAT, ON THE BASIS OF THE NEW EVIDENCE PRESENTED TO US, THE FINDING OF THE BOARD, CONSIDERED AS ON A QUESTION OF LAW, IS ERRONEOUS.

WE DO NOT FEEL THAT WE CAN RESOLVE ALL OF THESE MATTERS IN YOUR FAVOR. THERE IS, IN OUR OPINION, SUFFICIENT DOUBT AS TO THESE QUESTIONS THAT WE MUST REJECT YOUR CLAIM AND LEAVE YOU TO PROSECUTE IT IN THE COURTS, IF YOU SO DESIRE. LONGWILL V. UNITED STATES, 17 CT.CLS. 288, CHARLES V. UNITED STATES, 19 CT.CLS. 316,319. ..END :