[Protest of HUD Solicitation for Subterranean Termite Protection]
Highlights
A firm protested a Department of Housing and Urban Development (HUD) solicitation for subterranean termite protection of single family homes, contending that: (1) HUD unreasonably imposed maximum liability for termite damage which occurs after spot or partial treatment, since such treatment might not provide full protection; (2) it was not industry practice to provide such a warranty; and (3) the government technical representative (GTR) might not be properly qualified to make the treatment determination. GAO held that: (1) there was no legal requirement that the government entirely eliminate risk from the specifications, and bidders were expected to exercise business judgement in preparing their bids in such cases; (2) the contractor had the right to request that the GTR's recommended treatment be modified if more extensive treatment was needed; and (3) any disputes concerning the contractor's liability could be resolved under the disputes clause included in the contract. Accordingly, the protest was denied.
B-221447, NOV 21, 1986, OFFICE OF GENERAL COUNSEL
APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - RELIEF - PHYSICAL LOSSES - GAO DECISIONS - RECONSIDERATION DIGEST: REQUEST FOR RECONSIDERATION BY VETERANS ADMINISTRATION OF DECISION DENYING RELIEF OF ACCOUNTABLE OFFICER FOR UNEXPLAINED LOSS OF PATIENT FUNDS FROM TWO PART DROP SAFE IS DENIED WHERE NEW INFORMATION DOES NOT PROVIDE THE TYPE OF AFFIRMATIVE EVIDENCE, LACKING IN THE INITIAL REQUEST, SUFFICIENT TO REBUT PRESUMPTION OF NEGLIGENCE RAISED BY SHORTAGE.
MR. CONRAD R. HOFFMAN:
THIS IS ON RESPONSE TO YOUR LETTER REQUESTING RECONSIDERATION OF OUR DECISION B-221347, APRIL 2, 1986, IN WHICH WE DECLINED TO RELIEVE MR. DAVID C. FOULK, MEDICAL ADMINISTRATIVE ASSISTANT, FOR THE LOSS OF $2,000 IN CASH ACCEPTED BY MR. FOULK FROM A PATIENT UPON ADMITTANCE TO THE VETERANS ADMINISTRATION (VA) MEDICAL CENTER IN SAN FRANCISCO. UPON RECONSIDERING THIS MATTER, INCLUDING NEW ISSUES RAISED BY YOU, WE AFFIRM THE PREVIOUS DENIAL.
IN OUR EARLIER DECISION, WE EXPLAINED THAT MR. FOULK WAS AN ACCOUNTABLE OFFICER WHO HAD INCURRED AN UNEXPLAINED LOSS FOR WHICH HE IS PERSONALLY LIABLE. WE ARE ABLE TO GRANT RELIEF IF WE CAN INDEPENDENTLY AGREE WITH THE VA'S RECOMMENDATION THAT MR. FOULK BE RELIEVED. WE EXPLAINED THAT TO PERMIT US TO RELIEVE HIM FROM PECUNIARY LIABILITY, WE MUST HAVE AFFIRMATIVE EVIDENCE THAT THE LOSS WAS NOT THE RESULT OF HIS NEGLIGENCE. SUCH EVIDENCE WAS LACKING IN THE SUBMISSION SINCE THE ACCOUNTABLE OFFICER'S STATEMENT DISCOUNTING ANY PERSONAL NEGLIGENCE DID NOT PROVIDE ANY EXPLANATION OF HOW THE LOSS COULD HAVE OCCURRED. THIS WAS NOT A SUFFICIENT BASIS FOR RELIEF. THE POSSIBILITY THAT LAX PROCEDURES OR A MALFUNCTIONING DROP SAFE COULD HAVE BEEN THE PROXIMATE CAUSE OF THE SHORTAGE WAS ELIMINATED BY HIS STATEMENT SINCE HE WAS CERTAIN THAT THE MONEY DROPPED FROM THE DEMONSTRABLY UNSECURE TOP PART OF THE SAFE TO THE SECURE BOTTOM PART OF THE SAFE.
IN YOUR RECONSIDERATION REQUEST YOU FAIL TO INCLUDE ANY NEW EVIDENCE WHICH WOULD EXPLAIN THE LOSS. NEITHER YOUR REFERENCE TO THE LAX PROCEDURES PERTAINING TO THE SAFE NOR YOUR IMPLICATION THAT THE HOSPITAL INVESTIGATION MAY HAVE BEEN INADEQUATE, PROVIDES US WITH THE TYPE OF AFFIRMATIVE EVIDENCE WHICH IS SUFFICIENT TO REBUT THE PRESUMPTION OF NEGLIGENCE. WE STILL ARE UNABLE TO DETERMINE UNDER WHAT CIRCUMSTANCES THE SHORTAGE OCCURRED.
YOU MAKE REFERENCE IN YOUR LETTER TO OUR DECISION, B-214080, MARCH 25, 1986, GRANTING RELIEF TO AN ACCOUNTABLE OFFICER. YOU SUGGEST THAT THE FACTS IN THAT CASE ARE SIMILAR TO MR. FOULK'S CASE. IN THAT DECISION, HOWEVER, WE BASED OUR CONCLUSION UPON THE EVIDENCE THAT THE ACCOUNTABLE OFFICER LOCKED THE SAFE BEFORE THE LOSS OCCURRED AS WELL AS THE FACT THAT OTHERS HAD ACCESS TO THE SAFE IN WHICH THE FUNDS WERE PLACED. COMPARING THESE TWO CASES, WE FIND THEM SUFFICIENTLY DISSIMILAR TO JUSTIFY THE DIFFERENT OUTCOMES.
IN THE MARCH 25 CASE, THE ACCOUNTABLE OFFICER PLACED THE MONEY IN THE SAFE AND HAD LOCKED IT. TWO OTHER INDIVIDUALS HAD INDEPENDENT ACCESS TO THE COMBINATION AND THE SAFE. IN MR. FOULK'S SITUATION, ALL THAT HAS BEEN OFFERED AS EVIDENCE IS HIS STATEMENT THAT HE DEPOSITED THE MONEY PROPERLY AND THAT IT DID IN FACT DROP TO THE BOTTOM OF THE SAFE.
IN THE MARCH 25 CASE, IT COULD NOT BE ESTABLISHED WHETHER OR NOT ONE OF THE OTHER PERSONS WHO HAD ACCESS TO THE SAFE HAD IN FACT OPENED IT AND REMOVED THE MONEY. IN MR. FOULK'S CASE, THE PROCEDURE REQUIRING TWO INDIVIDUALS, ONE WITH A KEY AND THE OTHER WITH THE COMBINATION, TO JOINTLY OPEN THE LOWER PORTION OF THE DROP SAFE, IS A PROCEDURE WHICH INSURES ACCOUNTABILITY. WITHOUT SOME SUCH CROSS-CHECK, IT IS DIFFICULT TO SEE HOW ACCOUNTABILITY CAN BE RETAINED IN A DROP SAFE SYSTEM. IN ACCEPTING MR. FOULK'S TESTIMONY THAT HE HEARD THE MONEY DROP TO THE LOWER COMPARTMENT OF THE SAFE, WE ELIMINATE THE POSSIBILITY THAT THE MONEY REMAINED IN THE TOP PORTION THROUGH AND SAGE MALFUNCTION. THEREFORE, THE FACT THAT EIGHT PEOPLE WITH COMBINATIONS TO THE TOP OF THE SAFE HAD ACCESS TO THE MONEY IS IRRELEVANT.
ACCORDINGLY, WHILE THERE IS NO AFFIRMATIVE EVIDENCE OF MR. FOULK'S NEGLIGENCE, THE UNEXPLAINED SHORTAGE GIVES RISE TO A PRESUMPTION OF NEGLIGENCE WHICH HAS NOT BEEN REBUTTED BY ANY EVIDENCE EXPLAINING UNDER WHAT CIRCUMSTANCES THE SHORTAGE OCCURRED. AS SUCH WE CAN NOT RELIEVE HIM OF LIABILITY. SEE B-187139, JULY 1, 1980; AND B-213427, MARCH 14, 1984.