B-151383, JUN. 17, 1964

B-151383, JUN. 17, 1964

TO THE SECRETARY OF THE ARMY:

FURTHER REFERENCE IS MADE TO THE CLAIM OF LANE CONSTRUCTION CORPORATION OF MERIDEN, CONNECTICUT, FOR A TOTAL OF $10,604.97 ($1,185.05 UNDER CONTRACT NO. DA-49-080-ENG-4329 AND $9,419.92 UNDER CONTRACT NO. DA-49-080 -ENG-4182) FOR ADDITIONAL EXPENSES INCURRED AS THE RESULT OF THE ISSUANCE OF A STOP WORK ORDER OF ONE DAY'S DURATION. THE ORDER FACILITATED THE PROTECTION OF PREMIER NIKITA S. KHRUSHCHEV AND HIS PARTY UPON HIS ARRIVAL AT ANDREWS AIR FORCE BASE, MARYLAND, ON SEPTEMBER 15, 1959.

THE CLAIM HAS BEEN DENIED BY BOTH THE CONTRACTING OFFICER AND THE CORPS OF ENGINEERS BOARD OF CONTRACT APPEALS (ENG BCA NO. 1977 DATED SEPTEMBER 20, 1961) ON THE GROUND THAT THE STOP ORDER WAS SOVEREIGN ACT OF THE GOVERNMENT FOR WHICH THE GOVERNMENT COULD NO BE HELD LIABLE IN ITS CAPACITY AS CONTRACTOR.

BOTH CONTRACTS CONTAIN A SUSPENSION OF WORK CLAUSE (GC-11 OF THE GENERAL CONDITIONS) AUTHORIZING THE CONTRACTING OFFICER TO ORDER THE SUSPENSION OF WORK FOR SUCH TIME AS HE DETERMINES IS NECESSARY OR DESIRABLE FOR THE CONVENIENCE OF THE GOVERNMENT, AND TO MAKE AN ADJUSTMENT IN THE CONTRACT PRICES WHERE SUCH SUSPENSION UNREASONABLY DELAYS THE PROGRESS OF THE WORK AND CAUSES ADDITIONAL EXPENSE TO THE CONTRACTOR. THE TERM "CONTRACTING OFFICER" AS DEFINED AT CLAUSE 1 (B) OF THE GENERAL PROVISIONS INCLUDES THE CONTRACTING OFFICER'S AUTHORIZED REPRESENTATIVE. BOTH NOTICES TO PROCEED DESIGNATED ALBERT W. COVINGTON AS THE AUTHORIZED REPRESENTATIVE OF THE CONTRACTING OFFICER.

BY LETTER OF SEPTEMBER 12, 1959, THE CONTRACTOR WAS ORDERED TO SUSPEND WORK DURING SEPTEMBER 15, 1959. THE LETTER WAS SIGNED BY A. W. COVINGTON AS AUTHORIZED REPRESENTATIVE OF THE CONTRACTING OFFICER. A SIMILAR LETTER WAS ADDRESSED TO EACH OF THE OTHER CONTRACTORS ON THE BASE. THE SUSPENSION ORDER WAS BASED ON A DIRECTIVE OF THE BASE COMMANDER WHICH IN TURN RESULTED FROM INSTRUCTIONS ISSUED BY THE DEPARTMENT OF STATE AND THE SECRET SERVICE.

THE CORPS CONCEDES THAT BECAUSE OF THE SUSPENSION ORDER CONTRACTOR PERFORMED NO WORK ON SEPTEMBER 15, AND AS A RESULT SUFFERED A DISRUPTION IN THE WORK AND AN INCREASE IN THE COST OF PERFORMANCE WITHOUT HIS FAULT OR NEGLIGENCE. THE CORPS CONTENDS, HOWEVER, THAT THE ORDER TO STOP WORK WAS A SOVEREIGN ACT FOR WHICH THE GOVERNMENT MAY NOT BE HELD LIABLE IN ITS CONTRACTUAL CAPACITY.

EVEN IF THE ORDER WAS INDEED A SOVEREIGN ACT, THE COURTS HAVE HELD IT TO BE WITHIN THE GOVERNMENT'S POWER TO CONTRACT AWAY ITS RIGHT TO STAND UPON THE DEFENSE. UNITED STATES V. BOSTWICK (1876), 94 U.S. 53; SUSSWICK CORPORATION V. UNITED STATES (1948), 109 CT.CL. 772; JOSEPH A. BEUTTAS, ET AL. V. UNITED STATES (1948), 111 CT.CL. 532. HERE THE SUSPENSION WAS ORDERED BY THE AUTHORIZED REPRESENTATIVE OF THE CONTRACTING OFFICER AND THE TERMS OF THE CONTRACT PROVIDED THAT SUCH SUSPENSION ORDER WOULD RESULT IN A PRICE ADJUSTMENT WHERE THE CONDITIONS OF THE CLAUSE ARE MET. IN OUR VIEW, THE CONDITIONS OF THE CLAUSE HAVE BEEN MET AND THE CLAIM IS PROPERLY FOR CONSIDERATION THEREUNDER. SEE, APPEAL OF EMPIRE GAS ENGINEERING COMPANY, ASBCA 7190, MARCH 15, 1962, A SUBSTANTIALLY SIMILAR CASE WHERE THE CONTRACTOR WAS HELD ENTITLED TO BE PAID.

THE CONTRACTING OFFICER DOES NOT APPEAR TO HAVE DETERMINED THE MEASURE OF THE PRICE ADJUSTMENT BECAUSE OF THE SUSPENSION. SUCH DETERMINATION SHOULD BE MADE AND WE SHOULD BE ADVISED OF IT. PAYMENT OF ANY AMOUNT FOUND DUE AND OWING TO THE CONTRACTOR SHOULD BE WITHHELD, HOWEVER, PENDING A FINAL DETERMINATION OF THE STATUS OF ACCOUNTS BETWEEN THE CONTRACTOR AND THE GOVERNMENT. SEE B-146894, JUNE 2, 1964.