B-136897, B-139976, DEC. 22, 1960

B-136897,B-139976: Dec 22, 1960

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DISPLAY CORPORATION: FURTHER REFERENCE IS MADE TO YOUR CLAIM FOR DAMAGES ARISING OUT OF THE PERFORMANCE OF CONTRACT NO. YOUR CLAIM WAS PREVIOUSLY CONSIDERED BY THIS OFFICE AND WAS THE SUBJECT OF OUR LETTER OF NOVEMBER 18. ON THE BASIS OF THIS REPORT WE HAVE GIVEN THE MATTER FURTHER CONSIDERATION. 250.75 IS BASED UPON (1) ERRORS IN DRAWINGS FURNISHED BY THE GOVERNMENT AND (2) INTERFERENCE IN CONTRACT PERFORMANCE BY A GOVERNMENT INSPECTOR. THE BOARD'S ACTION WAS ON THE BASIS THAT THE EVIDENCE PRESENTED DID NOT PERMIT A DETERMINATION OF THE INCREASED COSTS INVOLVED. THE DECISION OF THE BOARD IS FINAL AND UNDER THE LAW (41 U.S.C. 321) MAY NOT BE QUESTIONED UNLESS IT CAN BE HELD THAT THE DECISION WAS FRAUDULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH.

B-136897, B-139976, DEC. 22, 1960

TO U.S. DISPLAY CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR CLAIM FOR DAMAGES ARISING OUT OF THE PERFORMANCE OF CONTRACT NO. DA-30-280-52-QM-27563 DATED MAY 23, 1952, FOR THE FABRICATION OF 446,000 SLEEPING BAG CASES FROM GOVERNMENT FURNISHED MATERIAL.

YOUR CLAIM WAS PREVIOUSLY CONSIDERED BY THIS OFFICE AND WAS THE SUBJECT OF OUR LETTER OF NOVEMBER 18, 1959. SUBSEQUENTLY, THE DEPARTMENT OF THE ARMY, AS A RESULT OF YOUR REQUEST, RECONSIDERED ITS POSITION WITH RESPECT TO YOUR CLAIM, AND BY LETTER DATED JULY 18, 1960, FURNISHED TO THIS OFFICE A SUPPLEMENTAL REPORT. ON THE BASIS OF THIS REPORT WE HAVE GIVEN THE MATTER FURTHER CONSIDERATION. AT PRESENT, YOUR CLAIM TOTALING $231,250.75 IS BASED UPON (1) ERRORS IN DRAWINGS FURNISHED BY THE GOVERNMENT AND (2) INTERFERENCE IN CONTRACT PERFORMANCE BY A GOVERNMENT INSPECTOR.

WITH REFERENCE TO THAT PART OF YOUR CLAIM RELATING TO ERRORS IN DRAWINGS FURNISHED BY THE GOVERNMENT, THE ARMED SERVICES BOARD OF CONTRACT APPEALS CONSIDERED THE MATTER AND DENIED PAYMENT BY DECISION ASBCA NO. 2850, DATED JULY 23, 1956. THE BOARD'S ACTION WAS ON THE BASIS THAT THE EVIDENCE PRESENTED DID NOT PERMIT A DETERMINATION OF THE INCREASED COSTS INVOLVED.

AS WE ADVISED YOU IN OUR LETTER OF NOVEMBER 18, 1959, THE DECISION OF THE BOARD IS FINAL AND UNDER THE LAW (41 U.S.C. 321) MAY NOT BE QUESTIONED UNLESS IT CAN BE HELD THAT THE DECISION WAS FRAUDULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. AFTER A CAREFUL REVIEW OF THE MATTER WE DO NOT BELIEVE THAT THERE IS A BASIS FOR THIS OFFICE TO OVERRULE THE BOARD'S DECISION. IN ADDITION EVEN IF SUCH A BASIS DID EXIST WE DO NOT BELIEVE THAT THE PRESENT RECORD IS SUFFICIENT TO CONCLUSIVELY ESTABLISH THE INCREASED COSTS INVOLVED.

THAT PART OF YOUR CLAIM BASED ON INSPECTION INTERFERENCE WAS NOT SPECIFICALLY RULED ON BY THE BOARD SINCE IT WAS WITHDRAWN AT THE HEARING. HOWEVER, THE BOARD IN ITS DECISION OF JULY 23, 1956, REFERRED TO ABOVE, STATED THAT IT WAS INCLINED TO CONCUR WITH THE DECISION OF THE CONTRACTING OFFICER THAT HE (THE CONTRACTING OFFICER) WAS WITHOUT JURISDICTION TO PASS UPON THE CLAIM FOR INSPECTION INTERFERENCE.

WE HAVE GIVEN CAREFUL CONSIDERATION TO THE COST FIGURES SUBMITTED BY YOU TO SUPPORT YOUR CLAIM FOR INSPECTION INTERFERENCE AND WE ARE OF THE OPINION THAT SUCH FIGURES DO NOT CONCLUSIVELY DEMONSTRATE THAT THE ACTS OF THE GOVERNMENT INSPECTOR CONTRIBUTED TO THE LOSS OF EFFICIENCY TO THE EXTENT CLAIMED. CONSEQUENTLY, THE BURDEN OF PROOF CUSTOMARILY REQUIRED TO SUPPORT PAYMENT OF A CLAIM BY THIS OFFICE HAS NOT BEEN MET.

IN VIEW OF THE FINALITY OF THE BOARD'S DECISION WITH RESPECT TO THAT PART OF YOUR CLAIM BASED ON ERRORS IN GOVERNMENT DRAWINGS AND THE LACK OF PROOF CUSTOMARILY REQUIRED BY US TO SUBSTANTIATE DAMAGES (BOTH AS TO THE ERRORS IN DRAWINGS AND AS TO INSPECTION INTERFERENCE), THIS OFFICE HAS NO LEGAL BASIS FOR AUTHORIZING PAYMENT OF YOUR CLAIM.

HOWEVER, IT APPEARS THAT YOU WERE DELAYED AT LEAST ONE MONTH BECAUSE OF ERRORS IN DRAWINGS AND THAT SOME MONETARY LOSS WAS THEREBY INCURRED. ALSO, THE RECORD BEFORE US INDICATES THAT SOME INSPECTION INTERFERENCE PROBABLY DID DISRUPT YOUR PERFORMANCE SCHEDULE. IN ADDITION, WE RECOGNIZE THAT THE CIRCUMSTANCES ON WHICH YOUR CLAIM IS BASED MAKE IT DIFFICULT FOR YOU TO ESTABLISH BY A PREPONDERANCE OF EVIDENCE THE EXTENT TO WHICH YOU HAVE BEEN DAMAGED. WITH THESE CONSIDERATIONS IN MIND, WE BELIEVE THAT YOUR CLAIM CONTAINS SUCH ELEMENTS OF EQUITY AS TO WARRANT CONSIDERATION BY THE CONGRESS UNDER THE ACT OF APRIL 10, 1928, 31 U.S.C. 236. IN ANALYZING THE FINANCIAL DATA CONTAINED IN THE RECORD, WE BELIEVE THAT THE AMOUNT OF $34,500 REPRESENTS A REASONABLE ESTIMATE, ALTHOUGH ADMITTEDLY NOT SUBJECT TO DEFINITIVE PROOF, OF THE DAMAGES SUFFERED BY YOUR COMPANY BY REASON OF THE GOVERNMENT'S ACTIONS. THE BASIS FOR THE $34,500 FIGURE WAS EXPLAINED BY A REPRESENTATIVE OF THIS OFFICE TO YOUR ACCOUNTANT ON DECEMBER 19, 1960.

IN THE EVENT YOUR COMPANY ADVISES US IN WRITING THAT IT WILL ACCEPT THE AMOUNT OF $34,500 IN FULL AND FINAL SETTLEMENT OF ALL CLAIMS ARISING OUT OF THE PERFORMANCE OF CONTRACT NO. DA-30-280-52-QM-27563, WE WILL UNDERTAKE TO REPORT THE MATTER TO CONGRESS UNDER THE ACT OF APRIL 10, 1928, RECOMMENDING THAT CONGRESS AUTHORIZE A PAYMENT IN THAT AMOUNT.

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