B-131243, SEP. 20, 1957

B-131243, SEP. 20, 1957

TO J. HERMAN COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 23, 1957, REQUESTING OF OUR SETTLEMENT DATED AUGUST 9, 1957, WHICH DISALLOWED YOUR CLAIM FOR REMISSION OF $1,200 LIQUIDATED DAMAGES IMPOSED BECAUSE OF A 60-DAY DELAY IN THE COMPLETION OF CONTRACT NO. NOY-85204, DATED JANUARY 13, 1955.

THE CONTRACT PROVIDED FOR THE REHABILITATION OF THE EXHAUST SYSTEM AT SHOP 56, BUILDING 131, LONG BEACH NAVAL SHIPYARD, CALIFORNIA, IN ACCORDANCE WITH THE PERTINENT SPECIFICATIONS, FOR THE STIPULATED AMOUNT OF $21,500. THE WORK OF THE CONTRACT WAS TO HAVE BEEN COMPLETED BY YOU ON OR BEFORE JUNE 20, 1955. BY CHANGE ORDER "B," THE COMPLETION DATE WAS EXTENDED THROUGH AUGUST 1, 1955, OR FOR 42 CALENDAR DAYS, TO COVER THE EXCUSABLE DELAYS INCIDENT TO OBTAINING A CORRECT PROTECTIVE COATING FOR THE FAN BLADES INSTALLED AS A PART OF THE WORK OF THE PROJECT. THE WORK OF THE CONTRACT WAS SUBSTANTIALLY COMPLETED ON SEPTEMBER 30, 1955, OR 60 DAYS AFTER THE SPECIFIED COMPLETION DATE, AUGUST 1, 1955, AND SINCE THE CONTRACT PROVIDED FOR LIQUIDATED DAMAGES OF $20 FOR EACH DAY OF UNEXCUSED DELAY, THERE WAS DEDUCTED FROM YOUR BID PRICE THE SUM OF $1,200.

YOU CONTEND, IN SUBSTANCE, THAT THE DELAYS ENCOUNTERED IN THE PERFORMANCE OF YOUR CONTRACT WERE BEYOND YOUR CONTROL, AND PARTICULARLY THAT "SOURCE INSPECTION OF THE EQUIPMENT WAS UNNECESSARILY DELAYED BY THE NAVY.' SUPPORT OF YOUR CONTENTION, YOU POINT OUT THAT A LOCAL NAVY INSPECTOR WHO ALLEGEDLY KNEW ALL THE FACTS OF THE CASE "BECAME ILL AND WAS UNABLE TO RETURN TO DUTY BEFORE HIS DEATH.'

YOU WILL NOTE THAT ARTICLE 5/C) OF THE CONTRACT GENERAL PROVISIONS EXPRESSLY AUTHORIZES THE GOVERNMENT CONTRACTING OFFICER TO EXTEND THE PERFORMANCE TIME TO COVER THOSE DELAYS FOUND BY HIM TO BE ATTRIBUTABLE TO "UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR," SUCH AS, ACTS OF GOD, THE GOVERNMENT, OR THE PUBLIC ENEMY, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER. IT ALSO PRESCRIBES THE FOLLOWING PROCEDURES TO BE FOLLOWED BY THE CONTRACTOR IN REQUESTING EXTENSIONS OF TIME:

"PROVIDED, THAT THE CONTRACTOR SHALL WITHIN 10 DAYS FROM THE BEGINNING OF ANY SUCH DELAY, UNLESS THE CONTRACTING OFFICER SHALL GRANT A FURTHER PERIOD OF TIME PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT, NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSES OF DELAY. THE CONTRACTING OFFICER SHALL ASCERTAIN THE FACTS AND THE EXTENT OF THE DELAY AND EXTEND THE TIME FOR COMPLETING THE WORK WHEN IN HIS JUDGMENT THE FINDINGS OF FACT JUSTIFY SUCH AN EXTENSION, AND HIS FINDINGS OF FACT THEREON SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO, SUBJECT ONLY TO APPEAL AS PROVIDED IN CLAUSE 6 HEREOF.'

ARTICLE 6 OF THE CONTRACT GENERAL PROVISIONS READS:

"6. DISPUTES

"EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THIS CONTRACT WHICH IS NOT DISPOSED OF BY AGREEMENT SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHO SHALL REDUCE HIS DECISION TO WRITING AND MAIL OR OTHERWISE FURNISH A COPY THEREOF TO THE CONTRACTOR. WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAY APPEAL BY MAILING OR OTHERWISE FURNISHING TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE HEAD OF THE DEPARTMENT, AND THE DECISION OF THE HEAD OF THE DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVES FOR THE HEARINGS OF SUCH APPEALS SHALL, UNLESS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN FRAUDULENT, ARBITRARY, CAPRICIOUS, OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, BE FINAL AND CONCLUSIVE: PROVIDED, THAT, IF NO SUCH APPEAL TO THE HEAD OF THE DEPARTMENT IS TAKEN, THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE. * * *"

THE RECORD SHOWS THAT IN RESPONSE TO YOUR WRITTEN REQUEST OF JUNE 17, 1955, THE CONTRACTING OFFICER, ON JULY 14, 1955, MADE A FORMAL FINDING OF FACT--- PURSUANT TO ARTICLE 5 (C) ABOVE--- WHEREIN IT WAS DETERMINED THAT YOU WERE DELAYED A TOTAL OF 42 CALENDAR DAYS DUE TO THE "ERRONEOUS PROTECTIVE COATING REQUIRED BY THE SPECIFICATIONS, WHICH WOULD NOT MEET THE SPARK TEST REQUIRED FOR THE MATERIAL, AND THAT THE CONTRACTOR WAS, THROUGH NO FAULT OR NEGLIGENCE ON HIS PART, DELAYED IN THE DELIVERY OF THE REQUIRED MATERIAL.' IT WAS UPON THE BASIS OF THIS FINDING THAT CHANGE ORDER "B" WAS ISSUED, EXTENDING THE CONTRACT PERFORMANCE TIME FROM JUNE 21 THROUGH AUGUST 1, 1955.

SPECIFICALLY, WITH RESPECT TO YOUR CONTENTION THAT YOU ENCOUNTERED CONSIDERABLE DIFFICULTY IN OBTAINING SOURCE OR FACTORY INSPECTION OF THE FANS BY NAVAL PERSONNEL, THE RECORD SHOWS THAT BY THE SAID LETTER OF JUNE 17, 1955, YOU NOTIFIED THE OFFICER IN CHARGE OF CONSTRUCTION AT THE LONG BEACH NAVAL SHIPYARD OF THE DIFFICULTIES ENCOUNTERED IN OBTAINING APPROVAL OF THE CORRECT COATING TO BE APPLIED TO THE FANS, AND ALSO, THAT YOU HAD EXPERIENCED CONSIDERABLE DELAY IN OBTAINING SOURCE OR FACTORY INSPECTION OF THOSE ITEMS, IN VIEW OF WHICH YOU REQUESTED AN EXTENSION OF TIME FROM JUNE 20 TO AUGUST 1, 1955. THIS, AS STATED, WAS GRANTED UNDER CHANGE ORDER "B.' AS THE RESULT OF FURTHER CORRESPONDENCE ON THIS SUBJECT WITH THE CONTRACTING AGENCY, AND PARTICULARLY YOUR LETTER OF OCTOBER 19, 1955, POINTING OUT CERTAIN OF THE DIFFICULTIES YOU ENCOUNTERED IN COMPLETING THE CONTRACT, AND REQUESTING AN ADDITIONAL EXTENSION OF 60 DAYS, THE CONTRACTING OFFICER FOUND AS A FACT THAT THE DELAYS COMPLAINED OF WERE ATTRIBUTABLE PRIMARILY TO LACK OF PLANNING, COORDINATION AND SUPERVISION UPON YOUR PART. ACCORDINGLY, IN HIS COMMUNICATION OF NOVEMBER 23, 1955, HE ADVISED YOU OF CERTAIN DELAYS WHICH WERE ATTRIBUTABLE TO YOUR OWN FAULT OR NEGLIGENCE, AND FURTHER, THAT SINCE YOU HAD NOT SUBMITTED SUFFICIENT FACTUAL JUSTIFICATION FOR THE REQUESTED EXTENSION OF TIME, IT COULD NOT BE APPROVED.

AS YOU WILL OBSERVE, ARTICLES 5 AND 6 OF THE CONTRACT GENERAL PROVISIONS MAKE THE GOVERNMENT CONTRACTING OFFICER THE FINAL ARBITER OF THE FACTS INVOLVED IN ANY DISPUTE ARISING BETWEEN THE CONTRACTOR AND THE GOVERNMENT DURING THE COURSE OF PERFORMANCE OF THE CONTRACT WORK. THEY ALSO AUTHORIZE THAT OFFICIAL, OR THE HEAD OF THE DEPARTMENT IN CASE OF AN APPEAL, TO MAKE AFFIRMATIVE FINDINGS OR DETERMINATIONS ON ALL FACTUAL MATTERS INVOLVING DELAYS, AND THE CAUSES THEREOF, AND ALSO MAKE THE FINDINGS OF THAT OFFICER "FINAL AND CONCLUSIVE" UPON THE PARTIES, UNLESS, OF COURSE, THEY ARE PATENTLY ERRONEOUS, ARBITRARY OR CAPRICIOUS. THE SAID ARTICLES ALSO PRESCRIBE CERTAIN PROCEDURES WHEREBY THE DECISIONS OF A CONTRACTING OFFICER ON A DISPUTED ISSUE OF FACT MAY BE APPEALED, WITHIN A PRESCRIBED PERIOD OF TIME, TO THE HEAD OF THE DEPARTMENT--- IN THIS INSTANCE, THE SECRETARY OF THE NAVY. NO APPEAL HAVING BEEN TAKEN BY YOU FROM THE CONTRACTING OFFICER'S FINDINGS IN THIS MATTER, AND NO EVIDENCE OF GROSS ERROR, FRAUD OR CAPRICE WITH RESPECT TO SUCH FINDINGS HAVE BEEN PRESENTED BY YOU, UNDER A LONG LINE OF JUDICIAL PRECEDENTS WE ARE LEFT WITH NO ALTERNATIVE BUT TO ACCORD FINALITY AND CONCLUSIVENESS TO THE CONTRACTING OFFICER'S DETERMINATIONS IN THIS MATTER, AS STIPULATED IN YOUR CONTRACT. SEE PLUMLEY V. UNITED STATES, 226 U.S. 545; UNITED STATES V. BROOKS-CALL AWAY COMPANY, 318 ID. 120; PENN BRIDGE COMPANY V. UNITED STATES, 59 C.CLS. 892, 896-897; WILLIAMS COMPANY V. UNITED STATES, 85 ID. 431, 441; B-W CONSTRUCTION COMPANY V. UNITED STATES, 97 ID. 92, 122-124; MITCHELL CANNERIES, INC. V. UNITED STATES, 111 ID. 228.