B-155829, FEB. 12, 1965

B-155829, FEB. 12, 1965

TO THE HONORABLE LAWSON B. KNOTT, JR., ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED DECEMBER 21, 1964, FROM YOUR ASSISTANT GENERAL COUNSEL, REGULATIONS AND GENERAL LAW DIVISION, REQUESTING OUR REVIEW AND COMMENTS ON A PROPOSED NEW REGULATION TO BE INCORPORATED AS SECTION 1-7.100-1 OF THE FEDERAL PROCUREMENT REGULATIONS.

THE PURPOSE OF THE REGULATION, AS STATED IN THE LETTER, IS TO AVOID THE POSSIBLE UNDESIRABLE EFFECTS WHICH MIGHT FOLLOW THE INDISCRIMINATE APPLICATION OF THE DOCTRINE OF G. L. CHRISTIAN AND ASSOCIATES V. UNITED STATES, 312 F.2D 345, THAT A CLAUSE REQUIRED BY STATUTORILY AUTHORIZED REGULATION TO BE INCLUDED IN A CONTRACT OF THE UNITED STATES WILL BE CONSIDERED TO BE A PART OF THE CONTRACT WHETHER OR NOT IT IS ACTUALLY INCLUDED THEREIN.

WHILE WE ARE IN AGREEMENT WITH THE OBJECTIVE OF THE PROPOSED REGULATION, WE HAVE SOME DOUBT WHETHER IT OFFERS EITHER THE MOST EFFECTIVE OR THE MOST DESIRABLE METHOD OF ACHIEVING THE DESIRED END.

WITH RESPECT TO CERTAIN OF THE BASIC STANDARD FORMS, SUCH AS 30, 32, 19, 23 AND 23A, WE QUESTION WHETHER IT WOULD NOT ORDINARILY BE MORE IN THE INTEREST OF THE GOVERNMENT THAT THEY BE READ INTO GOVERNMENT CONTRACTS IN WHICH THEIR USE IS PRESCRIBED, RATHER THAN THAT THE GOVERNMENT'S RIGHTS AND REMEDIES BE SUBJECT TO DETERMINATION WITHOUT THE BENEFIT OF THEIR PROVISIONS. IN THIS CONNECTION, SECTION 206 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (40 U.S.C. 487) AUTHORIZES THE ADMINISTRATOR OF GENERAL SERVICES TO PRESCRIBE STANDARDIZED FORMS, AND THE 1952 AMENDMENT THERETO, 66 STAT. 593, DIRECTS THAT "EACH FEDERAL AGENCY SHALL UTILIZE SUCH * * * STANDARDIZED FORMS * * *," EXCEPT AS THE ADMINISTRATOR SHALL OTHERWISE PROVIDE. IN THE LIGHT OF THESE PROVISIONS, IT WOULD SEEM THAT YOUR PRESCRIPTION BY REGULATION OF STANDARD FORMS HAS THE FORCE AND EFFECT OF LAW, EXCEPT TO THE EXTENT THAT EXCEPTIONS AND DEVIATIONS ARE PROVIDED IN THE REGULATIONS. THESE CONSIDERATIONS SEEM TO SUGGEST A QUESTION AS TO WHETHER THE BROAD LANGUAGE OF THE PROPOSED REGULATION-- EVEN IF NOT OBJECTIONABLE AS AN ATTEMPT TO ENACT SUBSTANTIVE LAW BEYOND THE SCOPE OF THE REGULATORY AUTHORITY GRANTED TO YOUR OFFICE--- MIGHT NOT BE CONSIDERED SO INDEFINITE AS TO CREATE DOUBT AND UNCERTAINTY IN THE APPLICATION OF THE STANDARD FORM REGULATIONS. ADDITIONALLY, THE LANGUAGE OF PARAGRAPH (A) (2) OF THE PROPOSED REGULATION APPEARS TO BE PARTICULARLY OBJECTIONABLE IN THAT IT WOULD SEEM TO CONDONE UNAUTHORIZED DEVIATIONS FROM THE FORM OR CONTENT OF FORMS PRESCRIBED FOR MANDATORY USE, AND THUS IN EFFECT TO PERMIT CIRCUMVENTION OF LIMITATIONS WHICH SUCH FORMS MAY INTEND TO IMPOSE UPON THE AUTHORITY GRANTED TO CONTRACTING OFFICERS, OR TO NULLIFY THE PRESCRIPTION, IN ACCORDANCE WITH THE STATUTORY PROVISIONS REFERRED TO, OF STANDARDIZED FORMS FOR USE BY ALL FEDERAL AGENCIES.

IN OUR VIEW, THE PRINCIPAL OBJECTIONS TO THE CHRISTIAN ASSOCIATES DECISION DO NOT GO TO THE BROAD LEGAL PROPOSITION INVOLVED, BUT TO ITS APPLICATION TO THE SITUATION IN THAT CASE, WHERE THE FAILURE TO INCLUDE THE TERMINATION FOR CONVENIENCE CLAUSE IN THE CONTRACT INVOLVED APPEARS TO HAVE BEEN DUE, NOT TO A MERE OVERSIGHT OR INADVERTENCE, BUT RATHER TO A DELIBERATE AND CONSIDERED POLICY NOT TO USE THAT CLAUSE IN CONTRACTS FOR MILITARY HOUSING.

FOR THE REASONS STATED, WE WOULD SUGGEST THAT ANY REGULATION WHICH IS DIRECTED TO THIS SUBJECT SHOULD APPLY, ON A SELECTIVE BASIS, ONLY TO SUCH FORMS AND PRESCRIBED CLAUSES AS TO THE USE OF WHICH IT IS BELIEVED THAT SOME ADMINISTRATIVE DISCRETION SHOULD BE PERMITTED. WE ALSO SUGGEST THAT ANY SUCH REGULATION BE SO DRAWN AS TO PROVIDE SOME DIFFERENTIATION BETWEEN CASES OF INADVERTENT OR NEGLIGENT OMISSION OF A PRESCRIBED STANDARD FORM OR CLAUSE AND CASES IN WHICH THE OMISSION WAS BY CONSIDERED AND DELIBERATE ADMINISTRATIVE CHOICE.