B-140990, NOV. 23, 1959

B-140990, NOV. 23, 1959

TO HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

UNDER DATE OF JULY 24, 1959 (CAC), THE ASSISTANT DIRECTOR OF ACCOUNTING OPERATIONS, ACCOUNTING DIVISION, FORWARDED TO OUR CLAIMS DIVISION FOR DIRECT SETTLEMENT A CLAIM BY THE EMECO CORPORATION, HANOVER, PENNSYLVANIA, IN THE AMOUNT OF $7,200, ALLEGED TO BE DUE AS A REFUND OF LIQUIDATED DAMAGES ASSESSED UNDER CONTRACT NO. GS-08S-11513, DATED AUGUST 5, 1957, ON ACCOUNT OF DELAY IN DELIVERY OF A QUANTITY OF CHAIRS TO THE AIR FORCE ACADEMY AT COLORADO SPRINGS, COLORADO.

THE RECORD INDICATES THAT DURING THE PERFORMANCE OF THE CONTRACT WORK THERE WAS CONSIDERABLE CORRESPONDENCE BETWEEN YOUR AGENCY AND THE CONTRACTOR RELATING TO CHANGES, SUBSTITUTIONS, ETC. BY LETTER OF FEBRUARY 12, 1959, THE CLAIMANT PROTESTED THE ASSESSMENT OF LIQUIDATED DAMAGES IN THIS CASE, IT BEING STATED THEREIN THAT THE ASSESSMENTS WERE BASED ON A DELAY OF FIVE DAYS IN THE DELIVERY DUE ON JULY 1, 1958, A DELAY OF TEN DAYS IN THE DELIVERY DUE ON AUGUST 22, 1958, A DELAY OF SEVENTEEN DAYS IN THE DELIVERY DUE ON SEPTEMBER 1, 1958, AND A DELAY OF SIXTEEN DAYS IN THE DELIVERY DUE ON NOVEMBER 15, 1958, A TOTAL OF48 DAYS WHICH, IN THE APPLICABLE RATE OF $150 PER DAY, EQUALS $7,200. IN THE LETTER OF FEBRUARY 12, 1959--- SUPPLEMENTED BY LETTERS OF APRIL 7 AND 23, 1959--- THE CLAIMANT SET FORTH ITS REASONS WHY THE AMOUNT ASSESSED AND COLLECTED SHOULD BE REFUNDED. FOR EXAMPLE, THE CLAIMANT ALLEGED THAT THE LATE DELIVERIES ON AUGUST 22 AND SEPTEMBER 1, 1958, WERE WITHOUT FAULT OR NEGLIGENCE ON ITS PART. SPECIFICALLY, WITH RESPECT TO THE DELIVERY ON AUGUST 22, 1958, THE CONTRACTOR ALLEGED THAT THE DELAY INVOLVED WAS DUE TO THE LATE DELIVERY OF TUBING BY ITS SUPPLIER--- REVERE COPPER AND BRASS, INC.

UNDER THE DATE OF SEPTEMBER 25, 1959, OUR CLAIMS DIVISION ISSUED A CERTIFICATE OF SETTLEMENT TO THE CLAIMANT DENYING ITS CLAIM. A COPY OF THE CERTIFICATE OF SETTLEMENT WAS FORWARDED TO YOUR AGENCY. UNDER DATE OF OCTOBER 1, 1959, THE CLAIMANT APPEALED FROM THE SETTLEMENT ACTION, STATING THAT THE ACTION TAKEN BY YOUR AGENCY IS UNWARRANTED AND NOT WITHIN ACCEPTED GOOD BUSINESS PRACTICE.

IT APPEARS THAT A DISPUTE EXISTS IN THIS CASE AS TO FACTS WHICH PROPERLY IS FOR SETTLEMENT UNDER THE "DISPUTES" CLAUSE OF THE CONTRACT, UNDER WHICH THE CONTRACTING OFFICER IS REQUIRED TO DECIDE SUCH MATTERS AND TO FURNISH A COPY OF A WRITTEN DECISION TO THE CONTRACTOR WHO MAY THEN EXERCISE ITS RIGHT OF APPEAL. STANDARD FORM NO. 32, NOVEMBER 1949 EDITION, INCORPORATED INTO THE CONTRACT BY REFERENCE, CONTAINS THE USUAL "DISPUTES" CLAUSE. THE RECORD FURNISHED OUR OFFICE CONTAINS NO INDICATION THAT THE CONTRACTING OFFICER EVER REDUCED HIS DECISION TO WRITING (OTHER THAN IN AN INTER-OFFICE MEMORANDUM) OR FURNISHED A COPY THEREOF TO THE CONTRACTOR, OR THAT ANY ANSWER WAS MADE BY ANYONE IN YOUR AGENCY TO THE CONTRACTOR'S LETTERS OF FEBRUARY AND APRIL 1959.

WHERE, AS THIS INSTANCE, A CONTRACT PROVIDES FOR A DECISION WITH RESPECT TO SPECIFIED MATTERS BY A DESIGNATED OFFICIAL, THE CONTRACTOR IS ENTITLED TO HAVE SUCH DECISION MADE BY THE DESIGNATED OFFICIAL. SEE UNITED STATES V. NORTH AMERICAN COMMERCIAL COMPANY, 74 F. 145; PHOENIX BRIDGE COMPANY V. UNITED STATES, 85 C.CLS. 603, 629, AND 86 C.CLS. 665, 667. FURTHER, WHERE AS IN THIS CASE THE CONTRACT SETS OUT A PROCEDURE UNDER WHICH DISPUTES AS TO FACTS ARE TO BE SETTLED ADMINISTRATIVELY, THE ADMINISTRATIVE REMEDY THEREBY PROVIDED MUST BE EXHAUSTED BY THE CONTRACTOR BEFORE A CLAIM MATERIALLY RELEVANT TO A FACTUAL QUESTION FOR DETERMINATION PURSUANT TO THE PROCEDURE IS COGNIZABLE EITHER BY THE COURTS OR BY OUR OFFICE. SEE UNITED STATES V. JOSEPH A. HOLPUCH COMPANY, 328 U.S. 234; UNITED STATES, V. CALLAHAN WALKER CONSTRUCTION COMPANY, 317 U.S. 6; B- 98784; DATED NOVEMBER 28, 1950, AND B-122849, DATED MARCH 21, 1955.

ACCORDINGLY, THE PERTINENT DOCUMENTS FORWARDED HERE WITH THE LETTER OF JULY 24, 1959, ARE BEING RETURNED, SO THAT THE ADMINISTRATIVE PROCEDURE PRESCRIBED BY THE DISPUTES CLAUSE OF THE CONTRACT MAY BE CARRIED OUT. ALSO ATTACHED ARE A LETTER DATED SEPTEMBER 9, 1959, FROM THE CLAIMANT, THE SETTLEMENT OF SEPTEMBER 25, 1959, AND THE CLAIMANT'S LETTER OF OCTOBER 1, 1959. A COPY OF OUR LETTER OF TODAY TO THE CLAIMANT IS ALSO ENCLOSED. THE ACTION TAKEN IN THE SETTLEMENT OF SEPTEMBER 25, 1959, WILL BE CONSIDERED AS CANCELLED.