B-134729, MAR. 25, 1958

B-134729, MAR. 25, 1958

TO MR. CHARLES T. LABELLA:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 11, 1957, AND JANUARY 10, 1958, CONCERNING A DEDUCTION OF $3,141.20 MADE BY THE DEPARTMENT OF HEALTH, EDUCATION AND WELFARE FROM ACCOUNTS DUE THE DURALAB EQUIPMENT CORPORATION ON ACCOUNT OF ITS FAILURE TO DELIVER, WITHIN THE TIME SPECIFIED, CERTAIN SUPPLIES CALLED FOR UNDER CONTRACT NO. SA-43-PH- 1607, DATED FEBRUARY 18, 1957, AS AMENDED.

YOU HAVE REQUESTED AN OPPORTUNITY TO APPEAR PERSONALLY CONCERNING THIS CASE. YOU ARE ADVISED THAT YOU MAY CALL AT OUR OFFICE, 441 G STREET, N.W., ANY TIME DURING OFFICIAL BUSINESS HOURS FOR THE PURPOSE OF DISCUSSING THE MATTER WITH OUR REPRESENTATIVES. IF YOU PLAN TO CALL, IT IS SUGGESTED THAT YOU MAKE PRIOR ARRANGEMENTS WITH J. E. WELCH, ASSOCIATE GENERAL COUNSEL OF OUR OFFICE. THIS MAY BE DONE BY LETTER OR TELEPHONE. MR. WELCH'S ROOM NUMBER IF 7053; HIS TELEPHONE NUMBER IS EXECUTIVE 3-4621, EXTENSION 5784. HOWEVER, FOR REASONS HEREINAFTER SET FORTH, IT IS NOT BELIEVED THAT ANY USEFUL PURPOSE WOULD BE SERVED BY SUCH A CONFERENCE.

THE DURALAB EQUIPMENT CORPORATION WAS TO FURNISH AND DELIVER UNDER THE CONTRACT FIVE COMPLETE FUME HOOD UNITS IN ACCORDANCE WITH SPECIFICATIONS AND DRAWINGS AT A TOTAL COST OF $15,705.50. THE CONTRACT PROVIDED FOR COMPLETION OF THE WORK WITHIN 75 CALENDAR DAYS AFTER APPROVAL OF SHOP DRAWINGS BY THE GOVERNMENT. THE SCHEDULED DATE FOR DELIVERY, BASED UPON RECEIPT OF THE APPROVED SHOP DRAWINGS BY THE CONTRACTOR, WAS FIXED AT JULY 6, 1957. HOWEVER, AT THE CONTRACTOR'S REQUEST, THE TIME FOR DELIVERY WAS EXTENDED TO AUGUST 7, 1957, BECAUSE OF DELAYS INCIDENT TO THE CLOSING OF THE CONTRACTOR'S PLANT FOR A TWO WEEK VACATION PERIOD IN JULY 1957. NOTWITHSTANDING THIS EXTENSION OF TIME, FINAL DELIVERY AND ACCEPTANCE WAS NOT ACCOMPLISHED UNTIL OCTOBER 17, 1957. ACCORDINGLY, PURSUANT TO THE LIQUIDATED DAMAGES PROVISION OF THE CONTRACT, DAMAGES IN THE AMOUNT OF ONE PERCENT OF THE CONTRACT PRICE FOR THE MAXIMUM OF 20 CALENDAR DAYS WERE ASSESSED AGAINST THE CONTRACTOR AND COLLECTED BY OFFSET AGAINST THE AMOUNT OTHERWISE DUE UNDER THE CONTRACT. IN THAT CONNECTION, THE RECORD IS REPLETE WITH REFERENCES TO THE URGENT NEED OF THE PROCURING AGENCY FOR THE CONTRACT SUPPLIES.

WHILE YOU HAVE NOT STATED THE BASIS OF YOUR APPEAL FROM THE DECISION OF THE CONTRACTING OFFICER CONCERNING THE ASSESSMENT OF LIQUIDATED DAMAGES, IT APPEARS THAT LETTER DATED OCTOBER 30, 1957, FROM THE CONTRACTOR TO THE AGENCY EXPLAINING THE CIRCUMSTANCES OF THE DELAY WAS DULY CONSIDERED BY THE CONTRACTING OFFICER IN ARRIVING AT HIS DECISION.

IT IS TO BE NOTED THAT THE CONTRACT CONTAINED NO PROVISION FOR EXCUSING THE CONTRACTOR FOR DELAYS IN PERFORMANCE FOR ANY CLAUSE; RATHER, THE LIQUIDATED DAMAGES PROVISION PROVIDED FOR THE ASSESSMENT OF DAMAGES FOR DELINQUENCY IN DELIVERY "IN THE ABSENCE OF AN EXPLANATION SATISFACTORY TO THE CONTRACTING OFFICER.' THEREFORE, THE QUESTION HERE INVOLVED IS WHETHER PERFORMANCE WAS RENDERED IMPOSSIBLE FOR THE PERIOD OF DELAY, OR ANY PART THEREOF, BY ACTS OF GOD, BY THE LAW, OR BY THE GOVERNMENT. SEE COLUMBUS RY. AND POWER CO. V. COLUMBUS, 249 U.S. 399, 412. NONE OF THE DELAY IS SHOWN, OR EVEN ALLEGED, TO HAVE BEEN CAUSED BY ACTS OF GOD, BY THE LAW, OR BY THE GOVERNMENT.

MOREOVER, THE CONTRACT CONTAINED, BY REFERENCE, THE STANDARD "DISPUTES" CLAUSE WHICH PRESCRIBED THE PROCEDURE WHEREBY THE DECISION OF THE CONTRACTING OFFICER ON DISPUTED QUESTIONS OF FACT MAY BE APPEALED, WITHIN THE PRESCRIBED PERIOD OF TIME, TO THE HEAD OF THE DEPARTMENT. NO APPEAL HAVING BEEN TAKEN FROM THE CONTRACTING OFFICER'S DECISION, AND NO EVIDENCE OF GROSS ERROR, FRAUD OR CAPRICE WITH RESPECT TO SUCH DECISION HAVING BEEN PRESENTED, UNDER A LONG LINE OF JUDICIAL PRECEDENTS WE ARE LEFT WITH NO ALTERNATIVE BUT TO ACCORD FINALITY AND CONCLUSIVENESS TO THE CONTRACTING OFFICER'S DETERMINATION, AS STIPULATED IN THE CONTRACT. SEE PLUMLEY V. UNITED STATES, 266 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, 11 ID. 228; OLSEN V. UNITED STATES, 122 C.CLS. 106; WILDERMUTH V. UNITED STATES, 195 F.2D 18.