B-164271, MAY 31, 1968

B-164271, MAY 31, 1968

TO THE GEORGE HYMAN CONSTRUCTION COMPANY:

RECEIPT IS ACKNOWLEDGED OF YOUR LETTER OF MAY (, 1968, WITH ENCLOSURES, WRITTEN ON BEHALF OF YOUR ELECTRICAL SUBCONTRACTOR, THE WALTER TRULAND CORPORATION AND ITS SUPPLIER OF CIRCUIT BREAKERS, THE ALLIS-CHALMERS COMPANY.

ESSENTIALLY, YOU REQUEST OUR OPINION AS TO WHETHER CANADIAN CIRCUIT BREAKERS THAT WERE DELIVERED TO THE CONSTRUCTION SITE AT THE U.S. NAVAL ACADEMY UNDER YOUR CONSTRUCTION CONTRACT NBY-58105, AND WHICH WERE REJECTED BY THE RESIDENT OFFICER IN CHARGE OF CONSTRUCTION FOR VIOLATION OF THE REQUIREMENTS OF THE BUY AMERICAN ACT CLAUSE OF THE CONTRACT, DID IN FACT VIOLATE SUCH CONTRACT PROVISIONS. THE RESIDENT OFFICER'S DECISION WAS SUSTAINED BY THE NAVAL FACILITIES ENGINEERING COMMAND, AND THE CANADIAN CIRCUIT BREAKERS ARE BEING REPLACED WITH CIRCUIT BREAKERS OF DOMESTIC ORIGIN, THEREBY ENTAILING ADDITIONAL COSTS. IT APPEARS THAT YOUR REQUEST IS MADE FOR THE PRINCIPAL PURPOSE OF DETERMINING WHETHER YOU WILL BE ENTITLED TO AN INCREASE IN THE CONTRACT PRICE FOR REPLACING THE CIRCUIT BREAKERS IN COMPLIANCE WITH THE RESIDENT OFFICER'S AND THE CONTRACTING OFFICER'S DECISIONS.

SINCE THE MATTER WAS NOT SUBMITTED HERE BY THE CONTRACTING AGENCY FOR ADVANCE DECISION BEFORE THE ACTION WAS TAKEN, AND YOU ARE COMPLYING WITH THE AGENCY DIRECTIVE, BUT HAVE NOT SUBMITTED YOUR CLAIM FOR THE ADDITIONAL COSTS INVOLVED, THERE IS NO PROPER BASIS ON WHICH WE MAY REVIEW IT AT THIS TIME.

IF THE CLAIM WHICH YOU PRESUMABLY INTEND TO PRESENT IS DENIED BY THE CONTRACTING AGENCY YOU MAY THEN PRESENT IT TO THIS OFFICE AND THE ADMINISTRATIVE ACTION WILL BE REVIEWED. HOWEVER, TO THE EXTENT THAT THERE MAY BE INVOLVED A FACTUAL DISPUTE OR THE AMOUNT OF AN EQUITABLE ADJUSTMENT FOR A CHANGE, IT WOULD BE SUBJECT TO THE PROCEDURE PROVIDED IN THE CONTRACT FOR RESOLUTION OF SUCH DISPUTES, AND THE ADMINISTRATIVE FINDINGS OF FACT WOULD BE BINDING UPON US UNLESS THEY ARE DETERMINED TO BE FRAUDULENT OR ARBITRARY OR CAPRICIOUS OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. SEE THE ACT OF MAY 11, 1954, 68 STAT. 1, 41 U.S.C. 321.

WITH REFERENCE TO THE DECISIONS OF THIS OFFICE CITED IN THE ENCLOSURES SUBMITTED WITH YOUR LETTER, IT SEEMS PERTINENT TO NOTE THAT A CAREFUL READING OF SUCH DECISIONS WILL SHOW THAT THE DETERMINATIONS MADE THEREIN AS TO WHAT CONSTITUTED CONSTRUCTION MATERIAL, COMPONENTS, ETC., WERE BASED PRINCIPALLY UPON THE SPECIFIC DEFINITIONS SET FORTH IN THE BUY AMERICAN ACT CLAUSE OF THE CONTRACT RATHER THAN UPON AN INDUSTRY CONCEPT OF SUCH TERMS, OR THE FUNCTIONAL OPERATION OF SUCH ITEMS IN RELATION TO OTHER ITEMS BROUGHT TO THE CONSTRUCTION SITE FOR INCORPORATION INTO THE BUILDING OR WORK IN FULFILLMENT OF THE CONTRACT REQUIREMENTS.