B-158458, AUG 2, 1972, 52 COMP GEN 63
Highlights
THAT DECISIONS RENDERED PURSUANT TO THE DISPUTES CLAUSE OF A CONTRACT IN FAVOR OF A CONTRACTOR ARE FINAL AND CONCLUSIVE AND NOT SUBJECT TO REVIEW BY THE UNITED STATES GENERAL ACCOUNTING OFFICE (GAO) ABSENT FRAUD OR BAD FAITH. GAO NO LONGER WILL OBJECT TO THE PAYMENT OF A CLAIM FOR REFUND OF THE AMOUNT WITHHELD FROM A CONTRACTOR ON THE BASIS A MARYLAND STATE SALES TAX DETERMINED TO BE INAPPLICABLE HAD BEEN INCLUDED IN THE CONTRACT PRICE AND PAID. GEN. 782 HELD THE BOARD WAS WRONG AS A MATTER OF LAW. 1972: THIS IS IN REFERENCE TO YOUR LETTER OF JULY 5. THE CLAIM AROSE OUT OF A DISPUTE AS TO WHETHER THE CONTRACT PRICE INCLUDED AN AMOUNT FOR A MARYLAND STATE SALES TAX THAT WAS SUBSEQUENTLY DETERMINED TO BE INAPPLICABLE TO THE CONTRACT.
B-158458, AUG 2, 1972, 52 COMP GEN 63
CONTRACTS - DISPUTES - CONTRACT APPEALS BOARD DECISION - REVIEW BY THE GENERAL ACCOUNTING OFFICE - S&E CONTRACTORS, INC., CASE EFFECT IN VIEW OF THE HOLDING BY THE UNITED STATES SUPREME COURT IN S&E CONTRACTORS, INC. V. UNITED STATES, NO. 70-88, APRIL 24, 1972, THAT DECISIONS RENDERED PURSUANT TO THE DISPUTES CLAUSE OF A CONTRACT IN FAVOR OF A CONTRACTOR ARE FINAL AND CONCLUSIVE AND NOT SUBJECT TO REVIEW BY THE UNITED STATES GENERAL ACCOUNTING OFFICE (GAO) ABSENT FRAUD OR BAD FAITH, GAO NO LONGER WILL OBJECT TO THE PAYMENT OF A CLAIM FOR REFUND OF THE AMOUNT WITHHELD FROM A CONTRACTOR ON THE BASIS A MARYLAND STATE SALES TAX DETERMINED TO BE INAPPLICABLE HAD BEEN INCLUDED IN THE CONTRACT PRICE AND PAID, A REFUND APPROVED BY THE BOARD OF CONTRACT APPEALS BUT NOT RETURNED TO THE CONTRACTOR BECAUSE THE GAO IN 49 COMP. GEN. 782 HELD THE BOARD WAS WRONG AS A MATTER OF LAW.
TO JOHN H. BRANSBY, DEPARTMENT OF THE ARMY, AUGUST 2, 1972:
THIS IS IN REFERENCE TO YOUR LETTER OF JULY 5, 1972, REQUESTING AN ADVANCE DECISION AS TO WHETHER THE CLAIM OF JOHN C. GRIMBERG COMPANY, INCORPORATED (GRIMBERG), AGAINST THE UNITED STATES ARMY CORPS OF ENGINEERS UNDER CONSTRUCTION CONTRACT DA-18-020-ENG-3098 MAY BE PAID.
THE CLAIM AROSE OUT OF A DISPUTE AS TO WHETHER THE CONTRACT PRICE INCLUDED AN AMOUNT FOR A MARYLAND STATE SALES TAX THAT WAS SUBSEQUENTLY DETERMINED TO BE INAPPLICABLE TO THE CONTRACT. THE CONTRACTING OFFICER, BELIEVING THAT $13,926.30 OF THE CONTRACT PRICE WAS INCLUDED FOR PAYMENT OF THE SALES TAX, SET OFF THAT AMOUNT AGAINST OTHER FUNDS OWED TO THE COMPANY. ON APPEAL UNDER THE DISPUTES CLAUSE, THE BOARD OF CONTRACT APPEALS DECIDED THAT THE SALES TAX IN QUESTION WAS NOT INCLUDED IN THE CONTRACT PRICE. ASBCA NO. 12783, JANUARY 22, 1970. HOWEVER, WE SUBSEQUENTLY HELD THAT THE BOARD WAS WRONG AS A MATTER OF LAW AND ADVISED YOU THAT THE CLAIM SHOULD NOT BE PAID. 49 COMP. GEN. 782(1970).
YOUR REQUEST IS PROMPTED BY THE ASSERTION OF COUNSEL FOR GRIMBERG THAT A RECENT DECISION OF THE UNITED STATES SUPREME COURT, S&E CONTRACTORS, INC. V. UNITED STATES, NO. 70-88, APRIL 24, 1972, REQUIRES THAT THE CLAIM BE PAID. IN THAT CASE, THE SUPREME COURT HELD THAT DECISIONS RENDERED PURSUANT TO THE DISPUTES CLAUSE OF A CONTRACT IN FAVOR OF A CONTRACTOR ARE FINAL AND CONCLUSIVE AND NOT SUBJECT TO REVIEW BY THIS OFFICE ABSENT FRAUD OR BAD FAITH. ACCORDINGLY, SINCE THERE IS NO INDICATION OF FRAUD OR BAD FAITH IN THIS CASE, WE WILL NO LONGER INTERPOSE AN OBJECTION TO PAYMENT OF GRIMBERG'S CLAIM.