Apa maksud willing to be contracted base

Page 2

Board of Contract Appeals Decisions

715 5-83 17. APPELLANT'S LEGAL FEES. Appellant's legal fee for the presentation

“C.V. King, In his capacity as Resident of its case to the Board was $7,000.00 plus

Officer in Charge of Construction, U.S.

Naval Base, Subic Bay, Philippines, USN appearance fees [unspecified]. [Tr. 233-234] Appellant seeks to be paid those costs in this

“Appellees" appeal.

[Board File, Vol I] APPELLANT'S CONTENTIONS

By letter of 19 January 1980 appellant

moved that the Board enter General Appellant seeks several things from the

Denials for the three named individuals Board:

inasmuch as they had not filed answers to 1. It wants us to rule that the termination

appellant's complaint. This motion was of appellant's right to proceed with contract

denied by the Board on 27 February 1980 in performance was improper.

the following language: 2. It wants to be paid the unpaid balance

“There is only one respondent in this of the contract price; i.e., $38,648.00.

appeal and that is the United States Govern

ment. Your allegations against employees of 3. It wants to be paid, $10,893.12 for the United States and your inclusion of materials, tools and equipment which were them in your complaint are without legal taken while on the Navy Base.

effect before this Board. Your contract per4. It also wants to be paid, $13,400, the

mitted you to present a claim against the cost of replacing the stolen items.

other contracting party, which was the

United States Government not its em5. It also wants to be paid $12,273 which

ployees in their individual capacities. Your represents the value of appellant's tools, ma

motion to enter a general denial for the adterial and equipment which it left on the ditional appellees as listed in your complaint Navy Base after the termination action.

is inappropriate and is denied.” 6. It also wants to be paid $100,450.52

That ruling was correct and is affirmed. which represents loss of earnings.

7. It also wants to be paid interest in the II SYNDICATE. amount of $57,886.34.

Appellant alleges in its complaint, and in 8. It also wants $62,951.00 for moral

various letters in the record, that there was damages.

a syndicate operating at Subic Bay Naval 9. Finally, it wants $50,000.00 for exem

Base which did everything in its power to plary damages.

place obstacles in appellant's path and pre

clude it from becoming a base contractor. Decision 82

These allegations are very vague as to the

composition of the syndicate and how and There are several ancillary matters which

when it caused problems for appellant. we wish to dispose of before addressing the critical issues in this appeal.

The record is devoid of any proof of either

the existence of the syndicate or its alleged I COMPLAINT.

activities against appellant. More impor

tant, there is no evidence of any connection When appellant filed its complaint it was

between it, if any syndicate existed, and the denominated as Globe Engineering Corpora

U.S. Government. tion versus:

This allegation does not afford any basis "Department of the Navy

for determining that the termination for "Robert J. Robertory, In his capacity as default action was improper. “Head, Contract Procedure Branch and

III BAD FAITH. "Contracting Officer,

Appellant has made accusations against “Naval Facilities Engineering Command,

virtually all of the U.S. Government personUSN

nel having any connection with the con"J.E. McNeill, In his capacity as

tract. The charges range from total incompe"Officer in Charge of Construction, Naval tence to deliberate fraud and wrongdoing Facilities

which includes the manufacturing of evi

dence to support the Government's action in "Command Contracts, Southwest Pacific,

this case. These allegations of intentional USN

wrongdoing are extremely serious charges "and

for they allege that employees of the U.S. | 16,370

©1983, Commerce Clearing House, Inc.

Page 3

g Co., ENGBCA 2920, 72-1 BCA 1 9316, started until all materials were on-site. ApPd, 207 Ct.Cl. 1010 [1975].”

pellant was free to start, and did start, the Discount Company, Inc. v. United States

exterior work before all materials had been 3 CCF 181,250], 213 Ct.Cl. 567, 575-76,

delivered to the job site. 4 F.2d 435, cert. denied 434 U.S. 938

There was nothing unreasonable in re977]. See also RFI Shield-Rooms, ASBCA

stricting the start of interior work until all s. 17374, 17991, 77-2 BCA 112,714.

materials were on-site. The facility involved Thus in this appeal it does not make any was the Navy Exchange and Commissary. ference that the termination took place

This facility could not be closed for an inCore the extended completion date if the definite period of time for it was an essential tracting officer reasonably believed that facility for the military personnel and their pellant's lack of diligence in prosecuting

dependents at Subic Bay. The only reason- work would not permit the timely com

able way to obtain some assurance that distion of the work.

ruption to the facility operations would be

minimal was to have all the necessary "he only real issues are whether there

materials stockpiled and ready for installa- a demonstrated lack of diligence on ap

tion. ant's part and whether the contracting cer reasonably believed that the demon- This restriction was in the IFB before ted lack of diligence indicated that the award of the contract. Appellant knew or ernment could not be assured of timely certainly should have known that in the pletion.

face of this restriction it would have to take here can be no doubt from this record

special precautions to obtain all of the rethere was a demonstrated lack of dili

quired materials for the interior work as e on appellant's part. Appellant seeks to

quickly as possible. There is no evidence se its lack of diligence by pointing to a

that appellant took any special precautions

in this regard. ber of alleged reasons why it did not olete the project by the initial comple- Appellant has argued repeatedly that it date or the various other completion was "delayed” eleven months before it could 3 which had been established.

start construction. This argument is spedoubtedly the project was delayed

cious. No one reasonably could have beuse of some of the reasons advanced by

lieved that construction would start on the lant but that fact alone is not sufficient

date of contract award as appellant argues. ake the termination action improper.

From the very nature of the procurement ne "Termination for Default-Damages

process specified in the contract it was clear elay-Time Extensions” clause of the

that the bulk of the materials had to be act provides, these reasons must be

ordered from the United States. Obviously, ut the fault or negligence of the con

due to the geographical separation of the or and its subcontractors/ suppliers.

United States and the Republic of the is the key issue.

Philippines some passage of time would be

encountered between the ordering of the will now address the principle reasons materials and their arrival in the Philipced by appellant. The first of these

pines. 3 to the obtaining of the materials and nent from the United States.

Appellant blames all of the delay on the

OICC on the basis that instead of approving note first that the IFB contained clear the bill of materials at one time the OICC

of the Buy American requirement approved it on a “staggered” basis. What apnecessitated the purchase of the bulk

pellant does not take into consideration is materials in the United States. Appel

that it took appellant about five months to lew of this requirement before it bid

submit a fully acceptable bill of materials. contract and has no cause to com

That was totally appellant's fault; not the hat it had to purchase its materials

Government's. ne United States.

The “staggered” approval of the bill of appellant avers that a special provi

materials was caused by appellant. The ted "before the initial work could be

OICC approved as much of the submitted all equipment and materials had

bill of materials as could be approved and re- be completely delivered to the

turned it for correction of those portions

which could not be approved. Had appellant llant's allegation is only partly submitted a correct bill of materials at the There is a special provision but it outset no “staggered” approval would have hat only interior work could not be been required. The responsibilities for any

Page 4

For our purposes here we will assume that stolen materials and tools. This claim is the tools for which the claim was submitted denied. belonged to appellant. This is not clear from

This allegation was also offered as an exthe record. For example, appellant claims

cusable cause for the delay in the comple$433,61 for a Volt Meter 5 KV maximum.

tion of the project. Under the “Termination The bill of materials prepared by appellant

for Default-Damage for Delay-Time Extencontains a Volt Meter 5 KV maximum. If ap- sions” clause of the contract for a cause to be pellant ordered that tool and was paid for it,

excusable it must have arisen through no t became the property of the Government,

fault or negligence on the part of the ccording to the contract, and appellant

contractor. vould not be entitled to be paid for its loss. lowever, we will assume that the tools were

The thefts of all of the materials, tools ppellant's.

and equipment, from appellant's bodega

were not without the fault or negligence of There is no clause in the contract which

appellant. It employed a guard to guard its equired the U.S. Government to reimburse

belongings but when the guard left the ne contractor for any loss of appellant's bodega someone else entered it, on several quipment. That equipment was appellant's

occasions appellant's own employees, and le responsibility. If it was stolen, that was

stole its property. For two reasons appellant pellant's cost.

must be held responsible. It did not adeIn Strate Construction Co., supra, the con- quately protect its property and its own emactor claimed for damage inflicted to his ployees caused the loss. In neither case can uipment. That contractor contended that this be held to be without appellant's fault e work was accomplished on a Govern- or negligence. ent base and the Government should have

We have found as a fact that appellant has otected his equipment. We denied his

failed to prove that it actually lost any tools im saying:

or material from the work site. The evi*There is no clause in this contract requir- dence also established that appellant's tools the Government to assume liability for and materials were left unprotected on the

damage to or loss of appellant's equip- roofs of the buildings involved. If the items nt. In the absence of a provision in the were stolen from there appellant's neglitract specifically providing liability on gence would have made their theft possible.

Government's part, we must hold that These thefts cannot be categorized as exs claim is not cognizable under the con

cusable causes of delay and thus cannot et and must be denied.” [at 48,360]

serve to render an otherwise proper termile cannot see any reason why a different nation improper.

should be applied to the theft of a con-
tor's tools than we applied to damage in- VIII MATERIAL LEFT AT SITE.
ed to a contractor's equipment.

Appellant seeks the sum of $12,273.00 to opellant was not helpless to protect its compensate it for the cost of the tools, rests. When it asked to be permitted to equipment and materials left at the site of a guard at the work site and was denied the work at the direction of the Government ission to do so, it could have done inspector. ral things. The first, and perhaps most

In our findings of fact we found that apical action, was to store all small items,

pellant's claim in regard to these items was -rials and tools, in its bodega where it

factually inaccurate. It has claimed for items post a guard. We point out that appel

which were not left at the site of the work. bodega was located only 20 meters

Appellant's claim was divided into two secthe work site. The second was to

tions. The first related to items appellant n insurance to protect the items it

had imported. The second related to items ed to leave on the work site. Appellant appellant had purchased locally. either.

In connection with the items in the first s claim is denied.

section we found that appellant imported note that in addition to claiming ten tools for this contract and not eleven as 33.12 for the stolen materials and tools claimed. Five of these items were stolen ant also claims the sum of $13,500, from appellant's bodega and never replaced it

says rep ents the value of the re- while one of them was listed on the postents for the stolen items. Appellant is termination inventory as being present. We g double payment and clearly would also found that four of these items were entitled to the latter amount even if unaccounted for after the termination. Since re to find it entitled to recover for the there was no evidence that appellant had

Page 5

he General Provisions, the Contractor, within 60 Philippines may be obtained by telephone from alendar days after award of the contract, shall ROICCPAC Area Code 415, 466-5531. Material, urnish the name and address of the manufacturer less than van load, shall be consolidated to the f each item of material and equipment which he fullest extent practical for handling and shall be ontemplates incorporating in the work together packed in accordance with manufacturer's stanith the equipment performance capacities and dard commercial practices...”[R4, tab 1] cher pertinent information. The Contractor shall

15 The following is a pertinent provision of rnish eight [8] copies for approval, giving full in

Clause 46: rmation, such as: identifying description, catalog imbers, catalog cuts, and data sheets as may be "46.1 All materials and equipment to be incorpoquired for the following materials and equip- rated into the work and listed in the specification ent:

to be shipped by U.S. Government transportation,

at U. S. Government expense, shall be shipped Water chillers

from Oakland, California to Subic Bay, PhilipAir cooled condensers

pines. The cost of shipment from the Purchase dir handling units

point to Oakland, California will be at the expense

of the Contractor. For material and/or equipment Exhaust fans

to be incorporated into the work for projects at nsulations [all kinds]

U.S. Navy Complex Subic the expense for tran

sporting these materials and/or equipment from anelboards

the U.S. Navy Complex Marine Terminal Yard to

the job site shall be at the Contractor's expense. Vire and cables

The Contractor will furnish all labor and equiputlets [registers, grilles and diffusers]

ment to remove the material and/or equipment

from the Marine Terminal immediately after an emperature controls

inventory is completed. ...”[R4, tab 1] hilled water pumps

16 The following is a pertinent provision of re dampers

Clause 46: quid receivers

"46.6 Upon delivery of the material to the

jobsite the ROICC will make an inventory of the -pansion tank

boxes or crates in the presence of the Contractor. Llves & fittings

In the event of damage, the box or crate will be un

packed by the Contractor's representative, and an ck flow preventer

agreement must be reached immediately between strainer

the ROICC and the receiving Contractor as to the

cause of damage, that is, whether damage resulting exible pipe connections

from Government negligence in shipping or Conme and fittings

tractor's negligence [such as poor packing].” [R4,

tab 1] ancing & plug cock

17 The following is a pertinent provision of nduit and fittings

Clause 46: gnetic starter

“46.8 For planning purposes, shipping time from tches

NSC Oakland, California to the Subic Complex

Marine Terminal or to the jobsite at Clark Air 7s submitted for review or approval shall be Base will normally not exceed 70 days. For ship- identified by reference to the item number

ments exceeding 70 days; the Contractor may be approved Bill of Materials and as to their entitled to additional time if it can be shown that Led use.”

the additional time did in fact delay the overall me following is a pertinent provision of

completion of the contract.” [R4, tab i] 46, “Consignment Shipping":

18 “Paragraph 1A.30.3 provided that the Con2 The Contractor's supplier will deliver to

tractor shall not start interior work in buildings d all materials and/or equipment for con

until all contractor-furnished materials and equipnt loaded in vans except materials and/or

ment needed for the work are at hand. All other nent that cannot be loaded in vans due to

work outside of buildings or on the roof and pree or overweight. If less than van load, the

fabrication maybe [sic- may be] scheduled by the ctor/Supplier must arrange for all materi- Contractor at anytime.'” [R4, tab 1] t are to be shipped via U.S. Government

19 The following is a pertinent provision of ed surface transportation to be delivered to

Clause 46: al point in the San Francisco Bay area. The tor, after notifying the Resident Officer in "46.7 The United States Government will be reof Construction, Pacific, San Bruno, Cali- sponsible for lost boxes, crates and other items achereinafter referred to as 'ROICCPAC", cepted by ROICCPAC for U. S. Government shiphis proportionate share for all van loading ment if the items involved were for the contract the San Francisco Area by the van loading intended and were required for completion of the ignated by the ROICCPAC. The name and work. Determination as to lost shipments will be

Page 6

"[2] Times for installation and erection. Materials shall include all materials and "[3] Times for testing and inspection.

equipment [including spare parts when ap

plicable] that are to be incorporated into the “b. The work completed and the work re

work. Whenever there are subsequent maining to be done to complete the project.

changes to the contract which require addi"c. Any items of work which will delay tional or changed quantities of materials, a the start or completion of other major items new submittal shall be made to the Officer of work so as to delay completion of the in Charge of Construction indicating the adwhole project.

ditional or changed quantities listed under "The Contractor shall submit three [3]

columns [1] to [6], as amendment to the orig

inal Bill of Materials. Within thirty [30] updated copies of his schedule with each nvoice, and when required by major days after approval of the Bill of Materials, hanges in the work. If the Contractor fails

the Contractor shall submit a material submit a progress schedule within the

status report by utilizing the same MSR ime herein prescribed, the Contracting

forms containing the approved Bill of fficer may withhold approval of progress

Materials, and shall indicate thereon all ayments until such time as the Contractor

available information concerning the status ubmits the required progress schedule.

of procurement of all materials and equip

ment to be incorporated in the contract. “66.2 If, in the opinion of the Contracting

This material status report shall be updated Fficer, the Contractor falls behind the

monthly thereafter at the time of submittal ogress schedule, the Contractor shall take

of the payment invoice. Additional pages ch steps as may be necessary to improve

shall be added to the report corresponding 5 progress and the Contracting Officer

to approved amendments to the Bill of zy require him to increase the number of

Materials. The information required under fts, or overtime operations, days of work,

column [8] “Date Required at Site” shall be the amount of construction planned or all

added to the Material Status Report as soon them, and to submit for approval such -plementary schedule or schedules in

as the Schedule of Progress has been aprt form as may be deemed necessary to

proved and shall reflect delivery requiremonstrate the manner in which the

ments as shown on the Schedule of Progress.

Dates indicated under column [10], “RDD eed rate of progress will be regained, all nout additional cost to the United States

Oakland”, shall normally be at least seventy ernment.

[70] days prior to the corresponding date

under column [8]. The same item number 6.3 Failure of the Contractor to comply and description shown for the material on

the requirements of the Contracting the Bill of Materials will be used on the pureer under this provision shall be grounds chase order for that particular material. determination by the Contracting [OICCSWP] er that the Contractor is not prosecutChe work with such diligence as will

“CLAUSE 68 e completion within the time specified. such determination the Contracting

“PROPOSED MATERIAL SUBMITTALS er may terminate the Contractor's to proceed with the work, or any sepa

"REQUIRED OF THE

CONTRACTOR part thereof, in accordance with the - of the contract entitled “Termination efault-Damages for Delay-Time Exten

"[1972 JUN] [ASPR 7-603.48]

“68.1 Proposed material submittals re“CLAUSE 67

quired of the Contractor shall be made al

lowing sufficient time for processing, "BILL OF MATERIALS/

reviews, approval, and procurement before "STATUS REPORTS

the Contractor is ready to use the material.

No material shall be used prior to written "[1976 JAN]

approval. Submittals shall be prepared and

assembled as follows: Within 30 calendar days following award under the contract, the Con

“a. Submit 8 copies of each submittal. shall submit twelve [12] certified “b. Clearly mark each item in volume of a complete Bill of Materials [BM] with specification paragraph number and pleting columns [1] thru [6] of the the item number corresponding to the apStatus Report [MSR], DICCSWP proved Bill of Materials to which it per1813/3 [Rev. 9-72]. The Bill of tains.

Page 7

Cited "83-1 BCA I

81,401 4. On April 2, 1982, Howard Schindler, a the contract [Tr. 30]. She admitted that she UD Realty Specialist, met with Ethel needed ten days to "cure” the default on the pari, the General Manager of Appellant, basic contract work [Tr. 140]. bert Lipari, and a representative from pecifications Consultants to discuss a possi

9. Based upon his observations of the e amendment to the contract that had

work completed, Steffek did not believe that en proposed by Appellant. The proposed

Appellant could complete the contract in mendment would have changed the con

fifteen days, with or without performance of nct specification for floor covering from

the work described in the proposed amend-peting to vinyl asbestos tile. [Schindler

ment. He determined that there were no exEp. at 12-13.]

cusable reasons for Appellant's failure to

complete the contract, and ascertained from 5. Schindler lacked authority to extend the HUD job logs and files that Appellant e time for performance of the contract or had a history of requesting repeated extenapprove the proposed amendment [Tr. 4, sions of time to complete its contracts. 3, 180]. Ethel Lipari knew that Schindler Steffek concluded that it would not be in the not have Contracting Officer authority best interest of HUD to continue Appel

128]. Schindler agreed to recommend lant's contract, already in default for a week. t the Contracting Officer approve the [Tr. 66, 74, 145-148.] posed amendment and extend the time performance so that Appellant could

10. Clause 5 of the General Provisions ain the new floor covering materials

[Construction] of the contract provides for mindler Dep. at 12, 20-21]. Although the

termination for default if a contractor fails Hence in the record is in conflict, we find

to complete the work within the time speciSchindler told Ethel Lipari in the pres

fied in the contract or any extensions. The 2 of Albert Lipari that she would not

clause does not require that the Contracting

Officer issue a cure notice before terminatto send in a written request for an exsion of time to perform the work de

ing the contract. However, it provides that bed in the proposed amendment. [Tr.

the contractor's right to proceed shall not be -130, 153].

terminated for default if the "delay in the

completion of the work arises from unforeSchindler did not discuss the proposed seeable causes beyond the control and ndment with Steffek, nor did he advise without the fault or negligence of the confek that he had told Ethel Lipari that a tractor," and the “... contractor notified ten request for an extension of time

the Contracting Officer in writing of the ld not be necessary [Tr. 46, 178; Schin

causes of delay.” [AF, Tab 2.] Appellant did Dep. at 15]. Steffek did not meet Ethel not notify the Contracting Officer in writing ri until the first week of April, 1982, of any causes for delay after its March 5 2 she came to his office to request an ex- request resulted in an extension of the conon of time on another contract. At that

tract to April 8, 1982 [AF, Tab 3]. she did not mention the proposed ing amendment to Steffek, who was not

11. On April 16, 1982, Steffek issued a e of it. [Tr. 72-73.]

written notice of termination for default,

listing all of the contract work not completOn or about April 14, 1982, Steffek dis- ed or not acceptable [AF, Tab 1]. ed that the performance time on the act had expired on April 8, 1982. He 12. Appellant requested a reconsideration his discovery in the process of check

of Steffek's decision. Steffek refused to re

consider the termination for default, even ppellant's contracting history in conon with another contract. He decided after Ethel Lipari told him that Schindler nduct an inspection of the repair site on

had led her to act in reliance on an assur15, 1982. During the inspection, ance that the proposed amendment would k found that the repairs were only be approved and that a written request for hirds complete and some of the repairs

an extension of time was unnecessary. [Tr. improperly performed, including the 44, 178-179.] masonry and paint work. He also found orkmen and virtually no materials on

Discussion ite. Ethel Lipari, who accompanied

The Termination for Default clause k during the inspection, acknowledged

allows the Government to pursue certain he roof and masonry needed correc

remedies against a contractor who fails to Tr. 26-30, 66, 143.]

complete a contract on time if the failure to uring the inspection of April 15, 1982, perform is not excusable within the terms of Lipari made an oral request to Steffek the contract. Appellant had until April 8, 15-day extension of time to complete 1982 to complete performance of its con

Page 8

Cited "83-1 BCA 1 ....."

81,407 president admitted. depicted a split coil The appeal is denied. system—was merely illustrative finds no support in the contract. Nothing in the specifications or drawings can reasonably be construed as indicating that the detail did

[16,375] John Bransby Productions,

Ltd. not have to be followed by manufacturers which did not normally make a split coil

ASBCA No. 26913. March 3, 1983. Conystem.

tract No. DAAD07-81-D-0127. The description of the detail as “Typical" Indirect Costs-Allocation General learly meant that it applied to all four air and Administrative Expense_Travel andling units. As we said in a recent deci- Costs on-rejecting a Government contention nat “Typical” drawings were not binding

Because previous contracts had been in

terpreted by a contractor and the governIf the drawings were not intended to be fol

ment as allowing reimbursement of general -wed there was no need to include them as

and administrative expenses related to ut of the contract package”. Ziebarth and

travel costs, a contractor was entitled to Iper, ASBCA No. 25040, 82-1 BCA

recover those costs under his firm fixed15,777 at 78,134. Also see Eddie's Con

price contract with travel as a cost reimbursruction, Inc., ASBCA No. 22116, 78-1 BCA able item. On motion for reconsideration of 12,938.

the original decision [82-2 BCA 116,050], Nor has appellant shown any standard

the government argued that this decision sactice whereby detailed Government

placed an unfair burden on contracting officawings do not have to be followed strict

ers who would be on constructive notice of -in the absence of an express provision to

the acts of other contracting officers some

distance away. It also argued that the conat effect. The testimony of the subconctor's president was very general and un

tracts were not worded identically and that

there was an absolute prohibition against suasive. In particular, he did not state

applying G&A to travel costs in this cont drawings in previous instances which picted multiple coil heights also depicted

tract. However, the decision was limited to

the facts of this record and imposed only a - dual valves and piping depicted on

miniscule burden on contracting officers. awing M-10. Neither is there any proof of

Moreover, the government had given at, if anything, the specifications and

similar contract provisions different interwing notes stated in those instances re

pretations and the contractor's interpretaHing the necessity of complying with the

tion of the provisions was reasonable. While wing details. Finally, he did not indicate the contract stated that only actual expenses E Government drawings were involved. would be reimbursed, G&A was part of the e conclude that the clear depiction of a

contractor's actual travel expenses because coil system requiring two valves and

these included secretarial time and similar

costs. Furthermore, the government had pipes—bound appellant to furnish that em. Appellant's interpretation of the

filed an affidavit in which it admitted that

G&A was associated with travel and should vings as merely a non-binding illustra

be included in the contractor's bid. of one manufacturer's system may have in good faith but was not reasonable.

For the appellant: William J. Gibbons, is well settled that under a Shop

vice president. For the government: Col. vings clause such as included in this

C.T. Lakes, JAGC, Chief Trial Attorney, act-unwitting Government approval

Major Richard A. Gallivan, JAGC, Trial Atnoncomplying submittal does not

torney. ge the contract or estop the Govern

Opinion by Administrative Judge Schepfrom demanding strict conformance to

ers with Administrative Judge Arons conontract. See Community Science Tech

curring. y Corp., Inc., ASBCA No. 20244, 77-1 | 12,352, and cases cited therein. Ap

[Text of Opinion on Motion for Reconat did not give the notice of variances

sideration] red by the clause nor show that the

The Government filed a motion for reconnment representatives who reviewed ubmittal were otherwise consciously

sideration in this appeal premised primarily of such variances. See Noah Lewis

on three arguments: ractor, VACAB 1349, 81-2 BCA 1. The decision places an unfair burden on 9.

contracting officers in that it charges them

Page 9

his leads to Appellant's next contention [116,377] McDonnell Douglas Corpot Respondent did not follow proper ration cedures in terminating the contracts and,

ASBCA No. 26747. February 28, 1983. refore, Respondent's action was “illegal”

Contract No. F33657-760C-0385. . Brief, at 3]. Both parties refer to risions of the PCM, but the contract isions control. GP16[aX12] specifically Contract Disputes-Election of Conhorizes default termination where the tract Disputes Act Coverage-GovernTractor is disqualified by law or regula- ment Claim from performing services under the con

A contractor was entitled to elect Con, and requires notice and the opportu

tract Disputes Act coverage for his pre-Act to remove the disqualification. Thus, Contractor is to receive a notice and op

contract dispute under Section 16 of the Act anity to respond before the contract is

on the basis of a government claim was initi

ated after the effective date of the Act. The inated. GP 16[a][7] provides for default ination where the Contractor is con

government argued that election to proceed of a crime during the term of the con

under the Act was not available to the conHowever, it also contemplates notice

tractor because the dispute involved a govan opportunity for the Contractor to ernment claim and not a contractor's claim,

he has been rehabilitated and become and cited Woods Hole Oceanographic Insti-onsible citizen.

tution v. United States [29 CCF 1 82,502] in

support of its argument. However, the ere was no prior notice to Appellant of

Armed Services Board of Contract Appeals isqualification to provide services

chose to follow its established practice, the contracts, nor any notice and op

which was consistent with that of the nity given to show that he was ilitated. Therefore, the default termi

Claims Court and the other boards and inI was not in accordance with the terms

terpreted Section 16 of the Act to allow the = contracts. See Donald L. Markley,

election by the contractor for government A No. 831 [Nov. 7, 1980]. The conten

claims as well as for his own claims. The lanRespondent that rehabilitation is not guage and legislative history of Section 16 e is rejected. That Appellant asserts

showed that Congress intended to allow connocence of the criminal charge does tractors to make such elections. gate rehabilitation. He offered proof w his good behavior and reputation onviction. Respondent has not shown ntractual obligation of Appellant to Respondent of his indictment and

Contract Disputes-Relief Available ion. See Donald L. Markley, supra.

Declaratory Judgments dent's contention that there was con- The Armed Services Board of Contract nt has no merit. Thus, Respondent's Appeals had jurisdiction to hear a contracto follow procedures contemplated tor's appeal from a government claim, even contracts renders the default termi- though the dispute did not involve any mondefective.

etary relief, because the board was not elief, Appellant requests an award of

subject to the same jurisdictional limitations e contracts or a similar contract, or

as the Court of Claims [now U.S. Claims be financially reimbursed for past, Court]. The boards are quasi-judicial adt and future monetary losses.

ministrative tribunals that do not derive r, relief is controlled here by the

their authority from the Declaratory Judgprovisions. By GP 16[c], Appel

ments Act. The legislative history of the ghts are the same as if the contracts

Contract Disputes Act showed that Section n terminated for Respondent's cone under GP 17. The indemnity

8[d] of the Act was intended to enlarge the under GP 17 is the only relief which

boards' authority by granting them authorgranted under the contracts. See

ity to resolve “all disputes,” and this authorL. Markley, supra. Therefore, Ap- ity was supported by the regulations pro

request for relief is denied except mulgated under the Act. Finally, the Act allowed pursuant to GP 16[c] and supplemented the authority the boards

already had under the pre-Act Disputes Jingly, the appeal is sustained clause, and the boards had historically and or Appellant's request for relief traditionally interpreted contract provisions hat allowed under the contracts. and determined the rights and obligations of

parties under government contracts.

Page 10

81,416

Board of Contract Appeals Decisions
Contentions of the Parties

compliance through subpoena and judicial

proceedings. The Government's Position

Moreover, if the Comptroller General The Government argues, first, that the

would be required to proceed through the Board does not have jurisdiction to grant declaratory or injunctive relief and since ap

contracting officer, the argument continues

,

this would unnecessarily prolong the process pellant does not ask any monetary relief,

since any contracting officer's decision is rethere is no jurisdiction in the Board over

viewable only in the BCA or the Claims the subject matter of this appeal.

Court and the District Courts would be cirThe Government emphasizes that under

cumvented. But even more importantly, the section 8[d] of the Contract Disputes Act the

exercise of the Comptroller General's auBoard can grant the same remedy as the

thority to examine records would be made Court of Claims. Since it is well established

completely dependable of the contracting that the Court of Claims, prior to the enact

officer with no apparent recourse should the ment of the Act, did not have jurisdiction to issue declaratory judgments [United States

contracting officer disagree with the Comp

troller General. “To so interpret the Conv. King, 395 U.S. 1 [1969]], and the Act did

tract Disputes Act of 1978 is to ignore the not grant this authority, the Board is likewise excluded from granting declaratory

provisions and purposes of Congressional relief.2

legislation regarding the GAO and Comp“Moreover, the Act eliminated whatever

troller General.” [Govt. br. at 29] jurisdiction this Board might have previous- Furthermore, the Government argues,

the ly exercised to issue declaratory-type deci- U.S. District Courts have been expressly sions”, such as in Airesearch Mfg. Co., granted jurisdiction to enforce compliance ASBCA No. 20988, 76-2 BCA 112,150, aff"d with the Comptroller General's subpoenas on motion for reconsid., 77-1 BCA 1 12,546 and they cannot be divested of this jurisdic[Govt. br. at 14]3

tion by compelling the Comptroller General The Government cites to us the decision to seek relief under the Contract Disputes in Charles Hummel Co., AGBCA No. 81- Act. “It can hardly be supposed that Con147-4, 81-1 BCA | 14,968, where the Agricul- gress, strengthening GAO's authority to ture BCA concluded that it had no jurisdic- examine contractor records by providing a tion to grant a declaratory judgment.

prompt judicial remedy, nevertheless has In the Government's opinion, the essence vested jurisdiction over such cases in forums of appellant's case is that the Comptroller from which Congress withheld declaratory General and the United States, through the and injunctive relief powers.” [Govt. br. at subpoena enforcement action, are seeking 36-37] injunctive-type relief and that appellant cannot convert this “to merely a declaratory

The Government also argues that since type relief proceeding by only asking for de

this is a pre-Act contract, appellant cannot claratory relief” [Govt. br. at 22].

elect to have an appeal involving a GovernThe Government points out that the

ment claim processed under the provisions Board clearly does not have authority to

of the Contract Disputes Act of 1978, citing grant injunctive type of relief or relief in the

Woods Hole Oceanographic Institution v: nature of mandamus or specific perform

United States [29 CCF 182,502], 677 F.2d ance, citing Maria Manges, ASBCA No.

149 [1st Cir. 1982]. [Govt. reply br. at 2] 25350, 81-2 BCA 1 15,398 and Arcon/Pacific Contractors, ASBCA No. 25057, 80-2 BCA

Appellant's Position | 14,709.

Briefly stated, appellant argues that the As its second ground for dismissal, the

Comptroller General's requests for records Government argues that the 1980 Act

constitute Government claims which under granted the Comptroller General an inde

the Contract Disputes Act must be submitpendent right to seek enforcement of his ted to the contracting officer for decision subpoenas in a U.S. District Court and he

from which an appeal could be taken. But cannot be deprived of this right by a proce

appeal would also lie from the contracting dure that would force the Comptroller

officer's failure or refusal to render a deciGeneral to seek the contracting officer's ap

sion which appellant considers to be the case

here. proval before he exercises this right. In the Government's opinion such construction of

According to appellant, the Contract Disthe Act and the “Records” clause would

putes Act of 1978 vested exclusive jurisdicdistort the statutory framework regarding tion over all contract claims [with excepthe authority of the Comptroller General to tions not relevant to the instant case] in the examine contractor records and enforce boards of contract appeals and the Court of

Page 11

Act did not automatically apply to a Govern- procurement costs]; De-Luxe Vans, Inc., ment counterclaim raised under a pre-Act ASBCA No. 25080, 81-2 BCA | 15,421 [ascontract after the effective date of the Act. sessment of excess reprocurement costs]; Cl. Software Design, Inc., ASBCA Nos. Norcoast-Beck Aleutian, a joint venture, 23616 and 24897, 82-2 BCA | 16,073 at ASBCA No. 25469, 81-1 BCA | 15,072 [de79,740-41, aff'd on motion for reconsid. 83-1 ductive change claim]; cf. Holly CorporaBCA 116,260 [decided 21 January 1983]. tion, ASBCA No. 24975, 80-2 BCA | 14,675; A further reason why the contractor

Jackson Lumber Company, AGBCA No. 80should have the same election or choice of

160-1,81-1 BCA , 14,998.6 procedure with respect to claims the Gov- For the reasons discussed we choose to ernment is pursuing against the contractor follow our established practice and hold as it has with respect to claims submitted or

that appellant properly elected to have this initiated by the contractor is that such an appeal processed under the provisions of the unwarranted dichotomy could cause prob- Contract Disputes Act and our 1980 Rules. lems when a Government claim against the contractor is included in the same contract

The Alleged Lack of “Declaratory Judging officer's decision which denies a contractor's claim. See Chandler Manufacturing

ment" Authority in the Board and Supply, ASBCA Nos. 27030, 27031, 82-2 The Government's primary challenge to BCA 115,997.

the Board's jurisdiction is that the reIf this was a pre-Act contract, the contrac

quested relief entails declaratory or injunc

tive relief which in the Government's or could elect to proceed with the appeal rom the denial of its claim under the provi

opinion is beyond the Board's jurisdiction to ions of the Contract Disputes Act but must

grant. Ollow the old Board Rules with respect to Inasmuch as we have no dispute with the he Government claim. In addition to prob- Government's statement that the Board is ems created by having to comply with two not authorized to grant injunctive relief or Eifferent sets of Rules, the contractor could direct specific performance? [Maria Manges, xperience some disadvantages under the ASBCA No. 25350, 81-2 BCA 115,398; d Rules. For example, the Board has au

Arcon-Pacific Contractors, ASBCA No. nority to issue subpoenas only in proceed

25057, 80-2 BCA 114,709], our discussion gs under the Act. We doubt that Congress

will be limited to that aspect of the Governtended such a disparate treatment for con

ment's argument relating to “declaratory actor and Government claims.

judgments”. The First Circuit's view is also inconsis

We disagree, however, with the Governnt with the practice of the Court of Claims

ment that the Board does not have jurisdicd the boards of contract appeals where

tion in cases where no monetary relief is e contractor routinely has been allowed to

sought. ct to proceed under the Act on GovernEnt claims against the contractor.

In this respect the Government argues

that since the Board, under section 8[d] of n Tester Corporation v. United States, CI. No. 191-80C, order of 7 April 1981, 28

the Contract Disputes Act, has the authorF 181,288, the court assumed jurisdic

ity to grant “any relief that would be availa7 in a direct access suit pursuant to

ble to a litigant asserting a contract claim in

the Court of Claims [now Claims Court]”, tion 10[a][1] of the Act in an appeal from contracting officer's decision assessing

the boards are precluded from issuing

awards in the form of a declaratory judgess reprocurement costs against the conetor under a pre-Act contract; opinion on

ment as is the Court of Claims [U.S. Claims merits by the Claims Court dated 22 No

Court] in view of the Supreme Court aber 1982, 30 CCF 170,544.

holding in King v. United States, 395 U.S. 1

[1969]. In that case the Court held that the o the same effect are: Charles H. Siever

Declaratory Judgment Act did not give the Ja Charles 11. Siever Company, ASBCA

Court of Claims the authority to issue de25730 and 25855, 83-1 BCA 1 16,242

claratory judgments because the Act was not ision dated 30 December 1982] [assess

intended to expand the jurisdiction of the t of excess reprocurement costs];

court beyond cases seeking relief other eral Dynamics Corporation, Electric

than money damages" [395 U.S. 4]. Division, ASBCA No. 25919, 82-1 BCA 616 [disallowance of cost]; Donahines In Austin v. United States, 206 Ct.Cl. 719, stment Company, ASBCA No. 23825, 722-23, cert. denied 423 U.S. 911 [1975], the BCA 1 15,791 [assessment of excess re- Court of Claims described the limitation of

Page 12

arguments on this point at the oral argu- VABCA No. 1531, 82-2 BCA 115,897 at ment. We will now proceed to consider this 78,823-8.13 remaining jurisdictional issue.

However, in appellant's opinion the lack The Contract Disputes Act of 1978 pro-ides in section 8[d] that “[ejach agency

of a contracting officer's decision asserting a

Government claim against appellant should oard shall have jurisdiction to decide any not preclude the Board from assuming jurisppeal from a decision of a contracting diction because of authority conferred upon fficer [1] relative to a contract made by its the Board by subsections [6][c][4] and [5] of gency. and in section 6[a] that “[a]ll the Act [Tr. 15-17]. Laims by the government against a contracor relating to a contract shall be subject of a

Section 6[c][4] authorizes the Board “to zcision by the contracting officer.”

direct a contracting officer to issue a deci

sion in a specified period of time" in the The import of these provisions is that a

event there has been an undue delay on the ontracting officer's decision is a prerequite for the Board's assumption of jurisdic

part of the contracting officer in the issu

ance of a decision on a “submitted claim”. on. We stated this as follows in Chandler

Section 6[c][5] provides that a failure of a anufacturing and Supply, ASBCA Nos.

contracting officer to issue "a decision on a 030 and 27031, 82-2 BCA 115,997 [at

contract claim within the period required ,312]:

will be deemed to be a decision by the conIn this regard we note that with respect tracting officer denying the claim and will

contractor's claims it is well established authorize commencement of the appeal or at under the Contract Disputes Act a con- suit on the claim as otherwise provided in acting officer's decision pursuant to this Act”. Alternatively, the Board may stay tion 6 of the Act is the “linchpin" and a the proceedings to obtain a decision on the cessary prerequisite for the Board's juris- claim by the contracting officer. tion. Paragon Energy Corporation v.

This Board and other BCA's have made ited States [28 CCF 181,290], 227 Ct.CI. 98-80C; 645 F.2d 966 [1981]; White

use of the authority in section 6[c][4] and ins Iron Works, Inc. v. United States,

ordered the issuance of a decision by the CI. No. 232-81C, order of 24 November

contracting officer. However, in all these 1, 29 CCF 182,054; Federal Electric Cor

cases the contracting officer had failed to act ation, ASBCA No. 24002, 82-1 BCA

on a claim submitted by the contractor pur2-2 BCA 115,862] [decided 14 June 1982]

suant to the provisions of the Act. Kolar,

Inc., ASBCA No. 23252, 82-2 BCA 116,013; cases cited there.

American Industries, ASBCA No. 26930-15, This is equally applicable to claims the 82-1 BCA 1 15,753; McDonnell Douglas Corernment is pursuing against a contractor poration, ASBCA No. 23826, 80-2 BCA suant to section 6[a] of the Act. Space 114,807; The Dewey Electronics CorporaEngineering, Inc., ASBCA No. 26028, tion, DOTCAB No. 1224, 82-2 BCA BCA 115,766; Unimatic Manufacturing 115,828; Harrington Associates, Inc., ASBCA No. 25212, 81-1 BCA | 15,095; GSBCA No. 6795, 82-2 BCA | 16,103; see y Corporation, ASBCA No. 24975, 80-2 also W.H. Moseley Company, ASBCA No. - 114,675; cf. Tester Corporation v. 27370-18, 83-1 BCA 116,272 [decided 13 ed States, Ct.Cl. No. 191-800, order of 7

January 1983]. I 1981, 28 CCF 1 81,288. ccordingly, for this Board to acquire ju

Likewise, all reported cases regarding ction of a

appeals or suits from the failure of a conernment's claim gainst a

tracting officer to issue a decision involved Factor, there must be a valid and effec

claims submitted by a contractor to the concontracting officer's decision within the

tracting officer. None of them is concerned ing of section 6[a] of the Contract Dis

with a Government claim against a contracAct.”

tor. SCM Corporation v. United States, ulso Tri-Central, Inc., and Key Con

Ct.Cl. No. 576-79C, order entered 10 Eors, Inc., a Joint Venture v. United

October 1980, 28 CCF 1 80,789; Briggs Engi5, Ct.Cl. No. 275-81C, order of 23

neering and Testing Co., Inc. v. United - 1982, 29 CCF [1 82,341].

States, Ct.Cl. No. 645-81C, order entered 19 ellant does not contend that there has March 1982, 29 CCF 182,338; Federal Eleca contracting officer's decision assert- tric Corporation, ASBCA No. 24002, 82-2 claim against appellant. Without such BCA 915,862; Professional Carpet Service, sion the appeal would be premature.

GSBCA Nos. 6411-6451 et al., 82-2 BCA R. Hundley, ASBCA No. 26689, 82-1 15,977; Western Roads, Inc., AGBCA No. | 15,691; AB-Tech Construction, Inc., 81-184-1, 82-1 BCA 15,646.

Page 13

Cited "83-1 BCA |

81,429 number. References to the Appeal File will or Federal Highway Administration be designated AF, followed by the page [FHWA] mix design. number within that file without regard to pagination of included documents.

4. On October 21, 1981, the Contracting

Officer's Representative [COR] received At the time of hearing [Tr. 215], the from the contractor a document stated to be parties limited proofs to entitlement and re- a Washington State Class B mix [Appellant's quested that if entitlement be found, the Exhibit 4]. This design mix was from a prematter be remanded to the Contracting vious [1977] project, using the same stockOfficer for negotiation of the amount of re- pile. The Government rejected the proposed covery. The Board's decision is therefore so mix [referred to by the parties as mix imited.

number one] in that the Government did At the time of hearing [Tr. 281-282] the

not consider the mix to be complete. The -arties also agreed to a statement of the

contractor then requested the COR obtain a ssues to be decided as follows:

job mix design from FHWA. The Govern

ment made a timely request for the mix Claim one, as presented by the appellant, design. - that the contract specifications are defecve in two particulars:

5. On October 22, 1981, the COR received

a mix design from Federal Highway Ad“A. The specifications are defective in

ministration. The mix design had been used egard to the asphalt and gradation in that

by the contractor in 1980 and 1981 on a ne specification is impossible to perform. project for the FHWA. The contractor had hould the Board conclude that there is an

asked the FHWA for the design, but the possibility, then the consequence of that FHWA would not give it to the contractor. possibility is also in contention].

Temperature viscosity curves and informa*B. The specifications are defective in

tion about a required anti-pavement bond at the compaction requirement is ambigu- were not provided. s. [Should it be so determined, it is ques-ned whether the parties worked out an

The government concluded the design mix

did not meet the requirement for the reason commodation under which the contract

that it did not provide temperature viscosis performed].”

ty curves and information about the antiThe second claim concerns whether or not strip agent. The contractor was notified that e actions of the Government delayed the it was incomplete for such reasons. [This atractor in the acceptance of a mix design mix was referred to by the parties as mix approval for the contractor proceeding

number two]. h work, and if so, what was the extent of

6. On October 27, 1981, the contractor was delay.

provided a job mix formula. This was con"he Board will consider the claims in the firmed October 28, 1981, through the COR zrse of the order here stated.

[Appellant's Exhibit 7]. The COR discussed

the possibility of having the oil supplier Findings of Fact-Delay

certify that the temperature viscosity curve The Forest Service [Government]

of the asphalt being supplied was the same ered into Contract No. 50-04H1-1-8637C,

as the oil used when the mix design was used tember 24, 1981, with Timberland

in 1980. This certification was sought and ing & Construction Co., Yakima, Wash

obtained by the contractor October 29, 1981 on [Contractor]. The contract was for

[Appellant's Exhibit 8]. paving of 1.2 miles of road in the

7. On October 28, 1981, the Forest Service ord Pinchot National Forest, Lewis decided that the design mix must be inspecthty, Washington [AF pp. 21, 135].

ed, so must have the temperature viscosity On October 8, 1981, the parties agreed curves, and that the certification, referencally on contract modification “A” dated ing Appellant's Exhibit 8, would not be conber 14, 1981, approving a single pile sidered. Epile source. [Findings of Fact Nos. 2

8. On October 29, 1981, the COR notified ugh 15 are based on stipulations of the

the contractor that mix design number two es [Tr. 42-46]].

was not within the contract specifications On October 15, 1981, a prework meeting

because of no temperature viscosity curve, neld with the contractor at which time and if the FHWA could not find the temperfication “A” was signed by the contrac- ature viscosity curves, information for a new The contractor verbally requested ap- design mix would be required, and that the I of either Washington State Class B Forest Service would also need the following

Page 14

35. The bituminous content [asphalt] No. 12]. The Government did not substansamples were taken by appellant and sent to tially dispute such evidence [Tr. 262-264] the Federal Highway Administration in and evidence in the Appeal File indicates Vancouver for testing [Tr. 253, 254]. The the possibility that at least 2 of 3 of the gratest results indicated that for lot 1, appel- dation sample points are statistically outlant deviated from the target values for liers [AF p. 105]. bitumen content and for the y" gradation. Therefore, the pay factor in lot 1 was reduced from 100% to 70%. For lot 2 appel

Discussion Impossibility lant was within the allowable target limits Appellant contends that the specifications for all samples and received 100% of the for asphalt and gradation of material in the contract value of the quantities represented asphalt paving is impossible to perform [Tr. by lot 2. For lot 3, appellant deviated from 281, 282; Appellant's Post Hearing Brief]. the target range for gradation sizes 4 and 10 Appellant did, in fact, perform, and what is and was paid 90% of the contract value for actually asserted is that the specifications the quantities represented by lot 3. Appel- were impossible to perform to the extent lant achieved a 100% pay factor on 1 of the 3 that a 100% pay factor could not be lots.

achieved. Appellant's expert testified that 36. At the hearing appellant presented the

even if the bitumen samples were right on testimony of an expert witness. The witness target regarding the percent of bitumen in had a Masters degree in Chemistry and was

the sample, normal test error would result a consultant whose business was devoted en- in appellant's being tested within specificatirely to asphalt problems [Tr. 74, 75]. The tions [for a 100% pay factor, we presume] witness volunteered that he had “a good

only 1 in 6 times. mathematics background [Tr. 79]” although

The specifications permit a tolerance of £ he was not a statistician and never testified as an expert statistician [Tr. 155]. Neverthe

.3 beyond the target value for bitumen

content for the 100% pay factor. If tolerance less, the witness evaluated the probability

for testing is 2.28 as asserted by appellant, it that a contractor could meet the Forest Service specifications based upon two as

is difficult to perceive why appellant would sumptions. They were that, [1] the samples

have only 1 in 6 chances of meeting this rebeing evaluated were right at target value,

quirement [see FF 36] if all samples were acand [2] normal variability existed in the

tually at the target value. In fact, the actual sampling and testing [Tr. 122]. Appellant

results indicate that appellant achieved the concluded that a contractor working under

result on 1 of 3 lots and on 12 of 15 samples the Forest Service specification had only a 1

without regard to whether the test samples chance in 6 of being tested within the

were right on target. We conclude that apspecification [Tr. 122, 123; Appellant's

pellant has not met its burden of proving Exhibit 12].

that the specifications are impossible to

achieve. On the other hand the Government 37. The expert witness testified that a

has not shown as to gradation testing that .28 deviation occurred in normal testing of there was a valid basis for pay reduction [FF the percent asphalt [Tr. 143]. This was

38]. Where there is no showing that the based upon texts referenced in footnotes 5

product failed to meet the specifications, deand 6 of Appellant's Exhibit 12. Neither the

duction from payment otherwise due is imtexts nor excerpts relied upon from the texts were made a part of the record. The witness

proper. Paul Bunyan Lumber Company,

AGBCA No. 77-145, 79-2 BCA [13,959. did not indicate what, if any, normal deviation was considered for the gradation sampling tests or for the compaction tests. The

Decision standard deviation for percent asphalt of .28 Appellant's claims regarding delay and happens to be less than .30 variation permit

compaction are denied. Appellant's claim reted by the specifications for the 100% pay garding "impossibility” is sustained as to factor. The Forest Service's project

gradation testing. The matter is remanded manager, a civil engineer [Tr. 252], had little

to the Contracting Officer to make payment understanding of the expert witness's testi

in accord with this decision. mony [Tr. 263].

38. Gradation sampling for lot 1 sample 4 was shown to be in error [Tr. 133, 135, 141, 170-171; Appellant's Exhibit No. 12]. Lot 3

[116,379] OAO Corporation sample 1 was also demonstrated to be of DOT CAB No. 1280. March 21, 1983. Conquestionable credibility [Appellant's Exhibit tract No. DTOS59-80-C-00083.

Page 15

15. Totalling the amounts invoiced [uncorrected] yields the following2: a. Direct labor

23,499.97 b. Overhead

15,298.48 c. Travel

3,171.39 d. Subcontract

207,502.89 e. Other

1,003.93 f. G&A

38,573.41

18,015.16 16. On January 16, 1981, appellant submit- fied its claim in accordance with the Conted a Form 60, “Contract Pricing Proposal” tract Disputes Act. [AF, Tab 3]. [Resp. Ex. 10], seeking an additional $62,799 reimbursement, without additional fee. As a

18. By final decision dated May 17, 1982 result of a need for additional details of

[AF, Tab 2], the claim was denied, essencosts claimed [AF, Tab 6], a meeting was

tially on the basis that appellant did not held between the parties on February 11,

give notice 60 days prior to the expected 1981. [AF, Tab 5; Nutter Aff., para 16]. After

date on which costs incurred would exceed a two month delay, which appellant at

75% of the contract ceiling, as required by tributed to the need to obtain data from sub

the Limitations of Cost clause. There folcontractor offices in England, Italy, Spain, lowed a timely appeal to the Board and our and Germany, additional data was submit

remand as described in the opening parated by letter of April 9, 1981. [AF, Tab 5]. graph of this Opinion.

17. On March 25, 1982, not having re- 19. Comparing the proposal cost items ceived any response, appellant requested a [Finding 5] to the invoiced costs [Findings Contracting Officer Final Decision and certi- 14 and 15] reveals:

Proposal

Actual

Overage [underage] Direct labor

55,963 23,499.97

[32,463.03] Labor overhead

36,432 15,298.48

[21,133.52] Travel

14,823 3,171.39

[11,651.61] Subcontracts

87,440 207,265.45

+119,825.45 Other

2,060 1,003.93

[1,056.07] G&A

30,295 38,573.41

+8,278.41 20. Reviewing the amounts set forth in cause incurrence of costs beyond the con-

Finding 19 above, we see that appellant un- tract ceiling. Systems Associates, Inc., DOT

derran the direct labor [including labor CAB No. 72-40, 74-1 BCA 910,403; see also overhead] and travel budgets by $65,248.16. the Limitation of Cost clause of the contract It overran the subcontract budget amount of General Provisions. If it does so, it is at its $87,440 by $119,825.45. What is significant own risk absent the existence of one of these is that this overrun exceeded the total pro- exceptions. posed for the other line items of direct cost [labor, labor overhead, travel, other]. Thus,

The Contracting Officer has elected not to the overrun could not have been offset by

waive the ceiling and fund the overrun. reducing other costs. The Board concludes

Such being her discretionary act, the issue

we now have before us is whether as a that on July 24 when it entered the two additional consulting agreements [Finding 10,

matter of legal obligation, rather than of disabove], appellant must have known, or in

cretion, the respondent must fund the the exercise of any reasonable degree of care should have known, that it would not and The cases in which the courts or contract could not perform within the contract appeal boards have carved out exceptions to ceiling.

the general rule are generally situations in

which: Discussion

[i] the cause of the overrun was a GovernThe general rule is that the Government ment failure to conduct timely audits reis not obligated to fund an overrun, al- quired by the contract. Scherr & McDerthough the Contracting Officer may elect to mott v. United States [11 CCF 1 80,439], 175 do so. General Electric Company v. United Ct.Cl. 440, 360 F.2d 966 [1966]. States [13 CCF 1 82,881], 188 Ct.CI. 620, 412

[ii] the Government, knowing of an F. 2d 1215 [1969]. As will be discussed below, there are some exceptions to the general

overrun, constructively directs a contractor

to continue performance and thereafter rule.

accepts full delivery of the work called for Conversely, a contractor is not obligated by a contract. Consolidated Electrodynamto continue performance if to do so will

ics Corp., ASBCA No. 6732, 1963 BCA

Page 16

ble statutes, regulations, case law and con- interrogatory before us here may serve the tract provisions.

parties by narrowing the legal issues in

volved and thereby shortening the upcomIn its response of June 15, 1982, the Gov. ernment stated the following: “The direc

ing hearing in this matter. Thus, we order tion would have been a constructive change

the Government to disclose its legal theory and appellant would have been entitled to

for the contention stated by its affirmative an equitable adjustment therefor.

answer to Interrogatory 32[a]. “With respect to the remainder of Inter- We limit this order, however, to disclorogatory 32, it is the Government's position sure of the theory upon which the Governthat, while ‘options and legal theories' may ment's position is based, including citations be discoverable under the Federal Rules of

to contract clauses that the Government Civil Procedure ... the attorney's 'work

relies on. We do not require the Government product', i.e., actual cases, etc., is not discov

to do legal research for the appellant in reerable.

sponding to this interrogatory. Further, if

the response already provided by the Gov. In its August 1982 response to appellant's

ernment is the sole legal theory upon which Motion to Compel, respondent stated:

it now relies, it shall so state, citing the con“The Board's September 1, 1976, letter tract provision, if any, in support thereof. does state that legal theories are discovera- Recognizing that there is some time still reble. However, contrary to appellant's above maining in the discovery process, the Govassertion, that position is not supported by ernment shall update its response to the law.”

conform with subsequently discovered inforThe Government claims that the attorney

mation. work-product privilege protects any information it may have that would be respon

Request for Production 1[gg] sive to this interrogatory. The Government

Some time in mid-1976, Mr. John Rider, relies upon several federal cases, including Upjohn Co. v. United States, 449 U.S. 383

an employee of the General Accounting

Office, was detailed to the Subcommittee on [1981], and Rule 26 of the Federal Rules of

Government Activities and Transportation Civil Procedure as authority for the with- of the United States House of Representaholding of such information from appellant. We find that the cases cited by the Govern

tives, Committee on Government Operament do not control the issue before us and

tions, to review the procurement procedures

of the Federal Aviation Administration are factually distinguishable.

[FAA]. Rule 33 of the Federal Rules of Civil Procedure assists our determination. This rule

The subcommittee requested that the states, in pertinent part: “An interrogatory

FAA produce numerous documents to Mr. otherwise proper is not necessarily objec

Rider. The FAA voluntarily released the tionable merely because an answer to the in

documents to Mr. Rider without assertion terrogatory involves an opinion or conten

of a privilege. Subsequently, in public testition that relates to fact or the application of

mony before the subcommittee, Mr. Rider law to fact, but the court may order that

disclosed the contents of many of these such an interrogatory need not be answered

documents. Pursuant to Interrogatory 26, until after designated discovery has been

the appellant requested that the Governcompleted or until a pre-trial conference or

ment identify each and every document furother later time.”

nished or shown to Mr. Rider in preparation

for, during, or as a result of the interviews or Courts have held that requests by one communications Mr. Rider had with party for the legal contentions of the other

persons in or employed by the Government are discoverable. See Leumi Financial Corp. or under contract to the Government per». Hartford Accident & Indemnity Co., 295 taining to the subject contract “including, F. Supp. 539 [S.D. N.Y. 1969]; Carrier Mfg.

but not limited to, all documents of which Co. v. Rex Chainbelt, Inc., 281 F. Supp. 717

respondent has knowledge that were relied E.D. Wisc. 1968]; Luey v. Sterling Drug,

upon by Mr. Rider in preparing his statenc., 240 F. Supp. 632 [W.D. Mich. 1965];

ment...” before the subcommittee. Appelnd the prior opinion of this Board in this

lant's request for production No. 1 [gg] matter, dated September 1, 1976.

sought the production of all documents idenThe cases generally hold that a party may tified in response to Interrogatory Nos. 26[b] e required to give a legal opinion or conclu- and 26[c]. The Government has agreed to on if the answer would serve any substan- provide appellant with documents responal purpose. We find that a response to the sive to Interrogatory 26 with the exception

| 16,381 ontract Appeals Decisions

Page 17

rogatories. Interrogatory 80 seeks informa

covery information relating to the Federal tion regarding appellant's statement in an Aviation Agency counsel's advice to the interoffice memo of November 1975 that it FAA regarding the agency's right to withrequired an “additional relaxation of the hold payments under a contract. The govspecifications.” Respondent asserts that the ernment had previously waived the priviinterrogatory relates to the issue of whether lege as to all communications on the entire appellant so failed to perform as to warrant subject matter when it disclosed various the termination for default. Appellant related documents to a congressional suballeges that this does not relate to the issues committee and the subcommittee then pubbefore the Board as the contract was not ter- lished a report containing statements apparminated for lack of progress, but rather was ently based on these documents. terminated after appellant ceased work. The issue before the Board, appellant contends, is whether respondent's actions permitted For the appellant: McKenna, Conner & appellant to stop work.

Cuneo, Washington, DC, by D. Michael As set forth above, one of the issues before

Fitzhugh. For the government: John R. us is appellant's cost of performing the con

McCaw, Federal Aviation Administration, tract. We find that a response to this inter

Washington, DC. rogatory may lead to information concern- Opinion by Administrative Judge Stern. ing appellant's performance that has a bearing on this issue. Thus, we direct appel

[Text of Opinion] lant to respond to interrogatory and request for production number 80.

By motion dated December 2, 1982, reThe hearing in this matter is scheduled to

spondent moved the Board to limit the commence on January 31, 1983. The time

scope of inquiry by appellant at the deposiperiod for discovery closes on December 31,

tion of a Government employee. In this two1982. Due to the short time remaining in

page, handwritten motion, the Government he discovery period, appellant is directed to

failed to adequately present the facts and act in accordance with the foregoing by close

issues surrounding this dispute. The Board of business on December 13, 1982.

will attempt to reconstruct the facts based

on information presented during a phone -Footnotes,

conversation between the Board and counsel

for appellant and respondent on December 1 General Dynamics Corp. v. United States [29 CF 982,234], 229 Ct.CI. No. 352-80C, 671 F.2d

1, 1982. 74 [1982].

The Board, by Order dated November 16, 2 Respondent subsequently withdrew this inter- 1982, delivered orally to the parties on Sepgatory. [Motion to Deny Appellant's Objections tember 17, 1982, directed respondent to

Respondent's Interrogatories and Requests for release various documents, referred to as Foduction of Documents dated October 26, 1982.]

“Rider" documents, on the basis that re3 Since we need only find that the discovery has spondent had waived any right it had to Levancy as to any issue before us we will only assert an attorney-client privilege to those dress a single issue. We are not thereby exclud

documents as a result of prior disclosure of its relevancy to other issues in the case.

those documents to a Congressional subcomSee Note 3

mittee. A report prepared and made public We note that appellant responded to other

by that subcommittee contained the followbilar interrogatories regarding events occurring ing statement apparently disclosing the subor to contract restructuring, without objection. stance of one or more of the Rider docue e.g., interrogatories 30, 33, 34, and 36.]

ments: See Note 3.

“FAA's Logistics Service asked General Counsel if they had the right to withhold

payments under the contract, to which the 6,383] General Dynamics Corpo- General Counsel's office replied that under a ion

cost type contract, they did not have the POT CAB No. 1232. December 3, 1982.

right while the contract continued to be in tract No. DOT-FA73-WA-3228.

effect.”

[Report by the Subcommittee on Governcedure, Boards-Discovery- ment Activities and Transportation, U.S. iver of Privilege

House of Representatives, Committee on he government could not assert the Government Operations, FAA Procurement rney-client privilege to protect from dis- Activities, November 18, 1977, P. 43.]

116,383 Fract Appeals Decisions

Page 18

of the meeting on September 11, 1975, state Further, the Government's notes of its

that respondent informed appellant that October 28, 1975 meeting with appellant

lack of progress was the reason for withholdstate, “FAA's position is still-General Dy

ing payment and that appellant stated that namics has a contract-proceed.” [AF, Tab

there was no provision for withholding pay98]

ments and that any such withholding was a

breach of contract. [AF, Tabs 91, 92] The Again, a Government memorandum of a

record indicates and respondent does not meeting on November 12, 1975, sets forth

deny that the only reason appellant was that the Government made various propos- given for withholding payments was appelals to attempt to solve the contract difficul

lant's alleged lack of progress.3 Further, a ties. [AF, Tab 100]

notice of disallowance or final decision disalAlso, throughout this period the parties lowing any of appellant's claimed costs was discussed possible termination of the con- not issued by the Government. The parties' tract at an agreed-upon amount. The parties minutes of the October 28, 1975 meeting were not able to reach agreement on this also state that appellant informed responproposal, which was apparently first raised dent that respondent was in breach of conby the respondent during a meeting with ap- tract due to non-payment of its voucher and pellant on July 16, 1975. [AF, Tab 73]

that immediate resolution was required. The restructured contract [Modification

[AF, Tabs 98, 99] On November 24, 1975, ap9] required respondent to pay appellant's pellant notified respondent that it was discosts up to a ceiling of approximately $12.8

continuing all work under the contract as a million. Appellant submitted nine invoices

result of respondent's failure to: 1] reimfor costs incurred pursuant to the terms of

burse it for costs incurred under the conthe restructured contract. The first four in

tract, and 2] increase the estimated cost of voices were dated March 31, 1975, April 14,

the contract to fund contract line item 14. 1975, May 13, 1975, and June 18, 1975, and

[AF, Tab 101] In its notification of default were in the amounts of $2,376,938,

termination dated November 25, 1975, re$501,396, $245,110, and $495,585, respec

spondent stated that it had withheld tively. The first invoice was paid by respon

payment of four vouchers totalling dent on April 16, 1975, 12 days after receipt

$728,487, “[a]s a result of General Dynamics by the Government. The next three invoices suspending work ..." and that the contract were held up for a period of time because an

was being terminated for default because of engineer for respondent did not certify the appellant's refusal to continue work. [AF, invoices as he felt that appellant was not

Tab 102] [The notification of default termimeeting its schedule of events and that

nation did not reference the non-payment of certain of appellant's costs on a military con- appellant's last invoice.] On December 5, tract were not segregated from the costs on 1975, appellant appealed this decision to the the subject contract. [AF, Tab 70] These in- Board. voices were subsequently certified and paid

At the request of the parties the Board on July 15, 1975. [AF, Tab 72; See Attach

severed the issue as to which of two default ment to “Respondent's Reply to Arguments

clauses was determinative of the rights and in Appellant's Memorandum to the Board

responsibilities of the parties with respect to Regarding a Hearing on Appellant's Motion

the termination for default. Respondent for Partial Summary Judgment.”] The parties agree that, subsequently, appellant

alleged that the fixed-price termination submitted five invoices for additional costs

clause, as contained in the contract prior to

restructuring, governed the determination and that respondent did not pay these invoices. The invoices' amounts with their

of the amount of damages due appellant. ApHates are set forth below:

pellant claimed that the cost-type “Termi

nation for Default or for Convenience of the Dale of Invoice

Government” clause of the restructured con7/15/75 $393,019

tract [Appendix A] applied. Further, the re8/22/75

254,163

spondent relied on paragraph 39[h] of the 9/9/75

24,895

contract as the basis for its claim that it was 10/9/75

50,410

entitled to common law damages arising out 11/13/75

69,835

of appellant's failure to complete. That

clause stated, in pertinent part: Respondent withheld payment of these voices. On at least two occasions, on Sep- "[h] In arriving at the amount due the ember 11, 1975, and October 28, 1975, the Contractor under this clause there shall be ontract

Page 19

ne time of the alleged breach, it is preclud- from raising appellant's alleged breach I from alleging the breach thereafter. before the Board at this time. These cases make clear that when one The Government cites College Point Boat rty breaches a contract, the contract does Corp. v. United States, 267 U.S. 12 [1925] as -t automatically end. The injured party support for its position that a party who is ust make an overt act to declare the con- sued for a breach can defend on the ground ct over. If this party does not act, but, that there existed a legal ground for its nonats the contract as continuing, it will be performance, though it was ignorant of the ecluded from asserting such a breach in a fact at that time. That case involved a tersequent action against it for breach. mination of a contract by the Government n the case before us, the Government on

and merely stands for the proposition that eral occasions demanded continued per

where the Government attempts to termi

nate a contract for the wrong reason, the termance from appellant. As late as October 975, it informed appellant that it consid

mination will be upheld if a valid reason d the contract to be in full force and

existed, even if the party did not know of ct. The Government treated the contract

that reason, "unless some intervening n full force up to the time of appellant's change in the position of the other party k stoppage. Prior to appellant's work

renders that course inequitable.” 267 U.S. at page, the Government never alleged

16. That case is not applicable because, if the t appellant had committed a breach. The

Government breached the contract, the convember 25, 1975 letter from the Govern

tract ended upon appellant's notice of Noat terminating the contract for default

vember 24, 1975, and the Government's rences the appellant's November 24,

attempt to terminate on November 25, 1975, 5 notice of work stoppage as the appel

was a nullity. See Nolan Bros., Inc. v. 's repudiation of the contract and the

United States [13 CCF 1 82,495], 186 Ct.CI. s for the termination for default. These

602, 609 n. 5, 405 F.2d 1250, 1255 n. 5. are inconsistent with respondent's Based on the foregoing, we find no basis n of breach and obligated the Govern

for respondent's assertion that appellant's t to perform its part of the bargain; i.e.,

failure to perform raises a question of fact to hent in accordance with the terms of

be considered by this Board in the determicontract. If respondent at this point

nation of whether the Government's failure ched the contract, then appellant could

to pay constituted a breach justifying appelfully call it at an end.

lant's stoppage of work. We find, as a matter d the Government informed appellant of law, respondent is precluded from raising it considered a breach to have been such repudiation or breach at this time. nitted, we can only speculate as to

2. Allowability of Invoiced Costs her appellant would have terminated rmance and stopped incurring addi- Respondent also alleges that the allowa| costs. The Government failed to act bility of the costs invoiced by the appellant nably or fairly toward appellant when raises questions of fact and render this situantinued to demand performance,

tion inappropriate for summary judgment. d to pay appellant's costs of perform

There is no disagreement that appellant and failed to allege its claim of breach

submitted five invoices to the Government attempts to assert today,

for approximately $800,000 in costs, comellant is not precluded from asserting mencing with invoice dated July 15, 1975, overnment's breach since it placed the and ending with invoice dated November nment on notice of its claim of breach 13, 1975, and that the Government made no least two occasions. Respondent was payment on any of these invoices. Responware of appellant's position. Further, dent made its last payment to appellant July d appellant acted promptly and took 18, 1975. ert act of calling the contract at an

Respondent claims, however, that many Torthern Helex Co. v. United States

of these costs were questioned in audits by F 181,069], 197 Ct.Cl, 118, 125-31,

the Defense Contract Audit Agency ed 546, 551-54 [1972].

[DCAA]. Respondent has referred to several ind that the Government's failure to differing amounts that were questioned. In ne contract as ended, as well as the ap- the “Government's Response to Appellant's es reliance on the Government's con- Motion for Partial Summary Judgment” reassertion that the contract was in full spondent asserted that $425,918 of the costs nd effect, preclude the Government billed by appellant were questioned in the

Page 20

Conclusion

Officer's reason for withholding payments was

based on any questioned costs. [Tr. 41-2] Once appellant acted upon and called the Government's breach by ceasing performance it was relieved of all further obligations under the contract. In light of this breach, [f 16,387] Institute of Modern Proce. we find that appellant's stoppage of work

dures was legally justified and that appellant did

DOT CAB No. 1274. March 22, 1983. Connot breach its obligation to complete per

tract No. COW-1-90110. formance for $12.8 million. The Govern- ment's termination for default was improp-

Defaults, Grounds-Failure to Prog

ress—Testing-Defaults, ExcusesAppellant's motion for partial summary

Fault or Negligence judgment is granted.

The government properly terminated a

contract for default because the contractor -Footnotes

failed to submit a test batch that was accept1 In an accompanying decision of this date, we able under the contract's requirements, reject, as untimely, the Federal Aviation Adminis- refused to continue work, and did not prove tration's “Supplemental Memorandum in Opposi- that his failures were not the result of his tion to Appellant's Motion for Partial Summary

own fault or negligence. Under the contract Judgment." Nevertheless, in order to view the Federal Aviation Administration's position in the

for data conversion services, the contractor most favorable light, since it opposes a Motion for

submitted three test batches, all of which Summary Judgment [see discussion, infra], we will, contained more than the maximum acceptin deciding this motion, consider all the pertinent able number of errors, and refused to material and arguments set forth in that Memo- proceed with a fourth test batch. Although randum.

the bidding schedule was shorter than The hearing on this appeal commenced

recommended in the regulations, the conMarch 8, 1983. Appellant has requested that the tractor did not show that this caused his Board include the testimony of respondent's first performance failures. The training aids mawitness in our determination of this motion. Re- terially changed the contract requirements spondent argues that the testimony of all wit

in only one instance, which did not excuse nesses whose testimony is part of the record when the motion is decided must be considered if the

the performance failure. Similarly, a modifiBoard grants appellant's request and, in that

cation which the contractor signed without event, it should be given the opportunity to brief

objection was no

excuse for the failure. the issue. We deny appellant's request and find the

Neither a demand by the government for actestimony unnecessary for our determination. celerated performance nor any wrongfully 2 Portions of the background presentation are

charged errors were proved. based on our prior decision in this matter, Docket No. 76-9A, 78-2 BCA 113,281 [1978], discussed Defaults, Waiver-Waiver of Schedinfra.

ule-Delay in Terminating 3 Further, Government's counsel refused to state

The government's delay in terminating a at oral argument, in response to a question from the Board, whether it is the Government's posi

contract for default was not a waiver of its tion that the Contracting Officer withheld the

right to terminate because the contractor payments for reasons other than appellant's had discontinued performance and was not alleged lack of progress. [Tr. 41-2]

prejudiced by the delay. Under the contract 4 General Dynamics Corp. v. United States [29

for data conversion services, the contractor CCF 182,234], 229 Ct.CI. No. 352-80C, 671 F.2d

had refused to prepare a fourth test batch 474 [1982]

after his first three batches were properly o We note that respondent's initial memoran

rejected for having more errors than allowed

under the contract. dum stated that the November 1982 audit report revealed this alleged improper subcontractor accrual while its Supplemental Memorandum states the FAA discovered this accrual by the

For the appellant: Elizabeth C. Proctor, audit of September 1975.

vice president, and Robert Miller, secretary

treasurer, Washington, DC. For the govern; 6 See the “Allowable Cost, Fixed Fee, and

ment: William P. Joyce, Associate General Payment” article [General Provision 4] that permits the Government to recoup overpayments

Counsel, Immigration and Naturalization

Service, Washington, DC. after audit.

7 Government counsel refused to answer the Opinion by Administrative Judge Snyder Board's inquiry at oral argument as to whether it with Administrative Judges Ware and Rowas respondent's position that the Contracting bertory concurring.

Page 21

Cited "83-1 BCA |

81,469 “D. If all else fails but country-of- resulted in a maximum of 33 of the 124 sidence can be inferred reasonably well errors found in appellant's first test batch om other parts of the address [e.g., from submission [see Finding 16, infra]. e city], use this. If not, leave blank.

11. Included in the blue book given to apContract

pellant at training was a “Listing of Nation

ality and Country of Citizenship Codes” to‘M2.3.13 STATE OF DESTINATION taling 494 codes. A similar listing in the con“This element appears in the U.S. address

tract package contained only 219 codes. ock. This field is to be keyed in accordance

[Complaint, Tabs 1 and 13, Tr. 50-51, 131] th numeric codes set forth in Exhibit 11–

Mr. Johnson, respondent's Deputy Chief of ate Abbreviations and Codes.

Records Administration, testified that this FLISTING OF EXHIBITS EXHIBIT 5

increase reflected a more detailed break

down of countries [i.e., Falkland Islands disThe SODwe use state abbreviations [;] tinguished from British Empire], and that

city is the only indication [,] key in the appellant was not penalized for keying one te of the city [if you know what it is]. of the original 219 codes rather than a e ‘Miami' and 'Orlando', because they revised code designed to result in the output

cities in Florida [FL]. When 'transit is of a more specifically defined nation [Tr. tten, there is no need for a SOD.

131]. Appellant did not refute this testi

mony. ue Book

12.a. On November 6, 1981, following the 4. Key what state appears on the docu- training sessions, respondent issued Modifiat.

cation No. 1 to revise certain codes which 3. If there is no state, leave blank. Do

were to appear on output tapes [AF, Tab 9, key city names.

Complaint, Tab 15, Tr. 33, 58]. Modification

No. I did not change the contract price [AF, C. If multiple states are listed, key first

Tab 10, Tr. 62]. The modification changed e."

the Port-of-Entry field code to be keyed ppellant's Exhibit 1]. We find that the from a three position mixed field code to a book material, with one exception ex- three position alphabetic code which had ed infra, did not materially alter the already been included in the contract docu- keying instructions contained in the ments. The modification also contained ract. The blue book material provided revisions of Tables M.1, M.2, and M.5—the oration but did not change the basic

NIDC Arrival and Departure Output ng requirements. We also note that Specifications and the SRS G-187 Record

of the algorithms related to informa- Output Specification, respectively. The reviappearing on the I-94 documents with sions affected changes in the positions of ive infrequency [Tr. 119-120]. We are certain data fields, changes in the data persuaded that the changes prejudiced formats in which certain fields were to be lant in its performance. See Decision processed, and, in the case of Tables M.1 and

M.2, an increase in the number of positions The State of Destination [“SOD”]

from 40 to 44. [Appellant's Exhibit 1] g procedures were materially altered b. Appellant contends that Modification ne instructions contained in the blue No. 1 increased the number of per record

The Listing of Exhibits [Exhibit 5] of keystrokes [Complaint, Page 6], and that all ontract package instructed appellant to previous contract work had been negated

state code if the proper state could [AF, Tab 12, Tr. 33, 61]. Appellant further erred from a city name. Instruction B argues that most of the keying needed to the blue book is, at best, ambiguous. It produce the required test batch of 100,000 that “If there is no state, leave blank. documents had been completed at this point t key city names.” The blue book ap- [Tr. 59-61]. Ely instructs appellant not to infer the

c. Although appellant's project leader tes- state from a city name.

tified that most test batch keying had been Although the blue book created an am- completed by the time Modification No. 1 u in regard to keying of SOD codes, re- was issued, she had become involved with ent explained on several occasions that the project on October 26, 1981, the first day odes were not to be inferred from city of training [Finding 7, supra], and did not

[Tr. 122-123]. These explanations know when keypunching had begun [Tr. ffered by respondent with regard to 103-104]. Mr. Miller, appellant's Secretaryd documents from appellant's test Treasurer, testified that keying on the submittals [Tr. 122]. The ambiguity initial batch of documents began on October

Page 22

Cited "83-1 BCA 1 ....

81,477 [Blinne] agrees to accept the above terms, pellant amounted to $29,445 or $12,816 less then he may proceed for such period of time than 15% of the contract value. until it becomes apparent that he cannot or will not complete . The terms offered by

29. The Corps estimated Appellant's this teletype are on the condition that they

overall progress at approximately 25% comencompass all contractual claims which

plete as of 8 August 1978. This would Blinne now has or may have as a result of

amount to $78,260 [25% x 313,040] after the work to date...”

10% retainage, and would have required a

payment of $70,434 [$78,260 – 7,826]. On 16 23. On 13 October 1978, the Corps pre- August 1978, progress payments to Appelpared a sixth progress payment recognizing lant totalled $60,089 or $10,345 less than performance of $6,972.00 of contract work 25% of contract value. on Wrecks and Debris No. 14 and on Wooden Vessel No. 3. Appellant refused to

30. The Corps estimated that Appellant accept the payment because he was told by

had completed approximately 30% of the

work as of 19 October 1978. This would Corps personnel that acceptance of the

amount to $93,912 [30% x 313,040] and payment meant acceptance of all of the erms of the 6 October 1978 telegram.

would have required payment of $84,521,

after a 10% retainage [$93,912 9,391]. 24. On 17 October 1978 Appellant's Total payments to Appellant amounted to ounsel sent a telegram to the Corps reject- $60,089 or $24,432 less than 30% of contract ng the Corps' offer of 6 October 1978, re- value. cuesting payment for underwater cutting nd rigging and estimating the delays caused

31. Nothing was ever paid for Steel Vessel

No. 16 [Islander 310] or for Steel Vessel No. y the Corps to be 6-7 weeks in duration.

15 [Islander 309] after 15 May 1978. Neither 25. On 18 October 1978 the Corps asserted do the Corps' estimates of work completed pat it required Appellant's assurance that include this work on Vessels Nos. 15 and 16. ne work would be satisfactorily completed Daily logs contain the following entries: a reasonable time and that if such assur

16 May 1978. nce [in the form of subcontracts, schedules,

started cutting around

the windows of the Islander 309. ts of equipment and personnel to be used c.] was not received in 10 days, the con

9 Aug. 1978–... started strapping pieces act would be terminated. The Corps knew

of the Islander 310... these pieces had been aat equipment Appellant was operating previously cut by Blinne's subcontractor ... d knew that Appellant had a 90 ton crane 10 Aug. 1978Continued to rig up pieces ailable for use 5 days per week. [Exh. J of the Islander 310 ... Blinne plans to use a Tab E, AA].

90 ton crane to load these pieces on the 6. On 7 November 1978, the Corps ter

barge. [Tab 2 ASA]. nated the contract for default because of a 19 Aug. 1978... readying workboats and ure to make progress so that the work diving equipment to work on Islander 309 ld be completed within the contract com- and 310. Eion date plus any reasonable extension.

22 Aug. 1978... continued cutting and 7. The Corps made progress payments to rigging on Islander 309 and 310. pellant as follows:

24 Aug. 1978–... cutting and rigging on Gross Retainage

Net Islander 309 and 310. lar. 78 - [17,828 1,782.80]

$16,045 25 Aug. 1978—Diving, cutting and rigging Lay 78 - [14,889 1,488.90]

13,400 on Islander 309 and 310 early morning. aly 78 - [11,650

1,165]

10,485 28 Aug. 1978—Half day work on cutting ly 78 [14,191 1,419]

12,772 and rigging barge... ug. 78 - [ 8,207 820]

7,387

29 Aug. 1978–Crew continued cutting and $66,766 $ 6,676

$60,089 rigging on Islander 309 and 310. undisputed that these progress pay- 30 Aug. 1978... crew continued cutting Es included payment for underwater

and welding on barge—Islander 309 and 310. ng and rigging

1 Sept. 1978Crew rigging and cutting on The Corps estimated Appellant's barges [Islander 309 and 310] in Gregarie all progress at approximately 15% com- Channel. as of 4 May 1978. This would amount 6,956 [15% ~ $313,040] and, after re

2 Sept. 1978–Rigging up underwater og 10%, require a progress payment of

pieces to lift. 61 [$46,956

4,695]. On 15 May 1978 4 Sept. 1978–... crew continued cutting otal of progress payments made to Ap- on barge.

Page 23

er and listed onto a barge in its pre-award

On

October 1881, the officer in charge timate. [App. Supp. Rule 4 File, Tabs 13, refused to make payment for the work per9, 20].

formed in September on the ground that the

work was not progressing as it should, and 40. The largest item of work, Steel Vessel

that he would retain not only the ten o. 12 [the Contessa Senior] which Appel

percent permitted by the contract but all nt had bid at $117,700 and which the orps had estimated at $ 104,800, was

compensation for the work as an indemnity

for the Corps of Engineers against the leted from the contract by direction of the

chances of probable failure on the part of ntracting officer on 26 March 1979. [Tab

the contractor. The officer also refused to - Govt. Supp. App. File]. Ocean Salvors

assure the contractor that he would be paid d worked four [4] days on the Contessa

for the work he might do in October and Nonior before receiving the 26 March 1979

vember. At this point the contractor refused p work order. This deletion resulted in a

to proceed with the work and nothing dit of $25,071.25 to the Corps. [Modifica

further was done. The Corps of Engineers n P005.]

"annulled” the contract and declared all 1. The Corps actually paid $282,196.27 amounts remaining unpaid to be forfeited. ler Appellant's contract_$60,089 to Ap

In a suit to recover the 10 percent retained, lant and $222,107.27 to the Bonding

the amount due for work done but not paid mpany. [Pay Est. 9].

for and profits for the portion remaining un

performed, the Court held: 2. The Corps, with the approval of the nptroller General, remitted $33,311.52 of

"The law requires the right of forfeiture $42,484.00 of liquidated damages it

to be exercised in strict pursuance of the held, to the Bonding Company, citing

power and in apt time. It can not be founded reasons the fact that the Bonding

upon a fault once forgiven, and upon the pany completed approximately 70% of

faith of which forgiveness the derelict party work in 119 days3; the fact that the

has ventured forward in the performance of

his duty. ding Company rescheduled its work at cost to the Corps after the Contessa “This controversy, crystallized into its or was deleted; and the fact that the legal essence, involves the question whether Hing Company had not hindered termi- the refusal of the Corps of Engineers] to on for default but had actually demon- pay in monthly installments gave the iconed a willingness to take over the project tractor] the right to abandon the further to termination.

performance of the contract so as to save all

his legal rights.... The $33,311.52 remitted was said to st of $20,468 for the diligent, beneficial "... He had the right to assume from the -rmance by the Bonding Company inception of the work that he would be paid g the actual 119 days of performance according to the requirement of the con$12,843.52 due to lack of inspection tract; and the failure of the Government to during a period [7 Nov. 78-21 Feb. 79] pay justified him in refusing to proceed on

there was no work going on and the the 5th of October 1881. Whatever might -nment had negligible expenses for in- have been his faults up to that time, the on. [Tab 51-GSAA].

Government having permitted him to

proceed, having accepted the performance of Decision

the contract during the month of Septem

ber, and having received the benefit of his 'rank Pigeon v. The United States, 27 labor during that period, it was not in its 167 [1892] the Corps of Engineers had power to withhold the pay in order that it Ontract for dredging in the Schuylkill might be secured against the consequence of near Philadelphia. Although the con- a probable or possible failure. The 10 as made on 25 October 1880 and was percent which by the terms of the agreecompleted by 30 June 1881, nothing ment it had the right to retain measures the ne in the prosecution of the work limit of its power to secure indemnity.” bout 1 May 1881. The delay was not

The Court of Claims quoted, with apin any way by the Corps of EngiThere was dissatisfaction with the ca

proval, what the Supreme Court had said in of the contractor's equipment and he

Canal Company v. Gordon, [6 Wall. 561]: ed to increase it but did not materi- “In a contract to make and complete a 50. The contract completion date was structure with agreements for monthly pay-d in June and in September again ex- ments, a failure to make a payment at the to 30 November 1881.

time specified is a breach, which justifies

Page 24

cars on Earth in general. I was devastated A contractor was debarred for arranging -... the trial, the conviction, the incarcer- for a false bid through a straw party acting ion and all of their collective repercus- as an owner-occupant under the U.S. Deons. ... I have lost all that I have worked

partment of Housing and Urban Developry hard for and am now starting all over."

ment program for the sale of HUD-acquired The fact that none of these mutually rein

properties. This action was in direct viola-cing assertions by either the Probation tion of HUD's policies of which the contracicer or the Appellant has been affirma- tor had actual knowledge. Evidence offered ely or specifically disputed by the Gov. in mitigation of the proposed five year deiment would, under appropriate circum- barment period did not warrant a significant nces, tend to enhance their significance in reduction in that period but the contractor tigation. See David L. Hamilton, had no history of misconduct. Under the cirUDALJ 82-827-DB [Aug. 2, 1982]. Consid- cumstances, the five year debarment period ng the serious nature of the offenses for was reduced by the period of time the conich the Appellant was convicted, those tractor had been in suspended status. siderations, the supporting letters to ch the Probation Officer refers among er factors, and perhaps the quality of the For the appellant: Thomas E. Schneider, lence against him and his defense, may Ann Arbor, Michigan. For the government: e influenced the sentencing judge to Joan J. Saloschin, Office of General Counsel, ose a relatively light sentence. Compare U.S. Department of Housing and Urban mas Mack Crossland [29 CCF 1 86,031], Development, Washington, DC. D BCA 80-466-D14 [Jan. 22, 1981] ssland, a named co-conspirator, was sen

Opinion by Administrative Judge Miller. ed to twenty-five years confinement.] re is no indication that the Department

Text of Opinion] specifically familiar with any of this erial when it proposed to debar the Ap

Statement of the Case nt.

By letter dated June 9, 1982, General vertheless, after weighing these sub

Deputy Assistant Secretary for Housing ons I conclude that the record before

Philip Abrams notified Appellant, William s insufficient to overcome the very

R. Absalom, that the Department was cong inference, tantamount to a presump

sidering debarring him for cause under 24 of continuing lack of responsibility

C.F.R. $ 24.6 from participating in HUD inevitably derives from Appellant's ction by a jury of crimes of such inher

programs for a five-year period from Sep

tember 17, 1981. The notice cited Appelegregious and irresponsible nature af

lant's conviction in the U.S. District Court og business responsibility as those ed in the three relevant counts of the

for the Eastern District of Michigan for vio-ment. I therefore conclude that debar

lation of 18 U.S.C. $ $ 1010 and 2. Appellant until March 25, 1985, as proposed by

has been suspended since September 17, overnment, is appropriate and reason

1981. Appellant made a timely request for a protect the public interest.

hearing which, because the action is based

on a conviction, is limited under 24 C.F.R. Conclusion

§ 24.5[c][2] to submission of documentary ev

idence and briefs. The Government's brief ellant shall be debarred from par- cited 24 C.F.R. § 24.6[a][1], [4], [6] and [9] as ing in HUD programs until and in

the enumerated causes for the proposed g March 25, 1985, with credit given

debarment. - period of his suspension from March 0.

The documentary evidence filed with the Government's brief consists of copies of the indictment, the Judgment and Commitment

Order, the Motion and Order Dismissing Re90] William R. Absalom

maining Counts, and the Assistant SecreBCA No. 82-746-D45. March 22, tary's notice of June 9, 1982. The sole docu

mentary evidence in support of Appellant's brief was

an affidavit of William R. sion from Contracting-Present

Absalom, dated October 18, 1982. This case onsibility Determination- has been determined upon the submitted tion-Period of Debarment

record considered as a whole.

Page 25

ins no such evidence. It contains no evi

Findings of Fact nce that Appellant appreciates the signifi

1. On October 22, 1982, Michael L. Davis, nce of his misconduct. While there is no

d/b/a GTG Carriers [Appellant], bid on a rsuasive indication that this Appellant

transportation service contract [Solicitation -uld abide by HUD's regulations in the

No. 190-45-82] with the Postal Service [Recure, there is no evidence of any history or

spondent] [AF, 41]. Etern of misconduct. Any suggestion that pellant's misconduct should be mitigated

2. On November 12, 1982, the bids were the fact that such conduct might have

opened and Appellant was determined to be the socially beneficial effect of genera

the low bidder [AF, 54]. g more rehabilitated housing than might 3. By letter dated November 30, 1982, Aperwise have been the case, however, is pellant was advised that its bid was rejected ected. See Winnie Faye Owings, supra; by the Contracting Officer as it was deterginia Fried, HUDBCA 79-362-D18 [Apr. mined to be nonresponsible in accordance 1979].

with Postal Contracting Manual Section 1.

900, and that the Contracting Officer's deciConclusion

sion was final but appealable to this Board have therefore determined that Appel

[AF, 1]. 's debarment until September 16, 1984, 4. Appellant timely appealed the rejection adequately protect the public interest, of its bid to this Board. A Complaint has it having been given for the time during been filed which alleges that Appellant has ch this Appellant has remained in sus- been deprived of the profits which it would led status.

have realized had its bid not been improperly rejected. However, the Complaint only re

quests that the Board find Appellant to be 3,391] GTG Carriers, Michael responsible and require acceptance of the is d/b/a

bid. BCA No. 1110. March 16, 1983. Solici

Decision n No. 190-45-82.

Respondent argues, in its motion to edies of Potential Contractors,

dismiss, that Appellant's rights in this etary Relief-Bid Preparation appeal are those of a disappointed bidder

and that, at most, a wronged bidder can only Hisappointed bidder was granted leave

recover bid preparation costs in a Board pro

ceeding, citing Jones E. Davis, PSBCA No. end his complaint to request an award 1004 82-1 | 15,695 [Mar. 12, 1982]. Responpreparation costs following rejection

dent asserts that since Appellant has not relow bid. The only relief requested in

quested this relief, the appeal must be disomplaint was that the board find the

missed for lack of jurisdiction. r responsible and that the government quired to accept his bid. Because the

In Davis, relying on Court of Claims preclacked the authority to grant the re

edent, we found jurisdiction under Section -d relief, the bidder was afforded the

3[a] of the Contract Disputes Act, 41 U.S.C. cunity to amend to request relief the

$ 602, to consider a claim brought by a disappointed bidder based on an implied condition that each offer received in response to a

solicitation be fairly and honestly considthe appellant: Kasen & Kasen, Cherry

ered. However, we also found that under Jew Jersey, by Robert N. Braverman.

Section 8[d] of the Act, 41 U.S.C. $ 607[d], e government: Michael J. Vandamm,

we could only award a wronged bidder reDepartment, U.S. Postal Service,

covery of its bid preparation costs, since this ngton, DC.

was the only relief granted by the Court of ion by Administrative Judge Horo- Claims.* See also Jones E. Davis, PSBCA th Administrative Judges Cohen and No. 1004 [Opinion On Motion For ReconsidJr., concurring.

eration, May 13, 1982]; Heyer Prods. Co.,

Inc. v. United States, 135 Ct.Cl. 63 [1956]; of Opinion on Motion to Dismiss] Keco Indus., Inc. v. United States [15 CCF llant contests Respondent's rejection

183,778], 192 Ct.Cl. 773 [1970]. d on the ground of nonresponsibility. Appellant argues, in responding to the Opinion addresses Respondent's motion, that the parties agreed—through an to dismiss the appeal for lack of ju- implied contract—to accept Appellant's bid

in the event it was the low bidder. Appellant

Page 26

For the appellant: Ronald W. Schillinger, tracting Officer and is therefore not subject Mineral, Washington. For the government: to appeal." Jim Kauble, Assistant Regional Attorney, Office of the General Counsel, U.S. Dept. of

In its response, Appellant acknowledges Agriculture, Portland, Oregon.

that in addition to seeking release of the

sums earned but withheld under the conOpinion by Administrative Judge Pullara, tract [Claims [1] and [2] above], it is also Jr.

seeking as yet undetermined damages for

the Government's alleged wrongdoing in [Text of Opinion]

this matter. Appellant contends that only This appeal is taken from a decision of the

after it has the opportunity to conduct disForest Service Contracting Officer which

covery will it be able to determine what, if terminated for default Contract No. 52

any, portion of its third claim is substantiat0109-2-00086, awarded to Appellant on May

ed by the facts and what elements of 26, 1982.

damages may properly be sought. Appellant The “Show Cause Notice” issued Septem- right to discovery and allow us to prove

requests that the Board “not cut off our ber 24, 1982, states that the contract was for

damages [if any] by denying" the Governprecommercial thinning of 103 acres

ment's Motion to Strike. Kruzof and Baranof Islands, and Notice to Proceed was effective May 27, 1982. All

Discussion work was due to be completed in 100 calendar days, or by September 3, 1982. As of Sep- The rule in this situation is well-settled tember 24, 1982, only 72 acres had been and simply stated in Swinging Hoedads, completed. By letter dated October 6, 1982, AGBCA No. 81-239-3, 82-1 BCA | 15,730, the Contracting Officer issued his final deci- also a ruling on the Government's Motion to sion terminating the contract for default Strike portions of an Appellant's complaint, and advising the Contractor of its liability

as follows: for additional costs of reprocurement as well as liquidated damages. It was indicated that

“It is clear that the jurisdiction of the one deduction for liquidated damages [$210]

Board is appellate only and claims not conhad already been made in connection with a

sidered and decided by the Contracting payment estimate and invoice processed on

Officer will be dismissed. Facilities ConSeptember 24, 1982.

struction Company, AGBCA No. 79-161-1, 80-2 BCA 114,678; Peterson-Bunker, Inc.,

AGBCA No. 79-110, 79-2 BCA |14,154; In its Complaint, Appellant claimed: John Murphy Construction Co., AGBCA "[1] That the delay in completing the con

No. 418, 79-1 BCA 913,836. A review of Apract was excusable, as it arose from unfor

pellant's claim letter of June 14, 1980, indieeable causes beyond Appellant's control

cates that while the Newport solicitation nd without its fault or negligence, that the

was mentioned, no claim based upon the so

licitation and Appellant's failure to receive a ermination for default should be converted to a termination for convenience of the

contract was asserted [Appeal File, Tab E, overnment, and that Appellant be paid the

page 2 of letter]. Nor did the Contracting

Officer's final decision consider or decide arned 10% retention of $1,480.25, plus in

such a claim [Appeal File, Tab A]. Accordrest at 16% from October 25, 1982 [date of peal] to date of payment;

ingly, we conclude that the Board is without

jurisdiction to consider this portion of Ap"[2] That Appellant should be paid the pellant's Complaint." 10 withheld for liquidated damages from e last payment invoice.

In the instant case, the only claims clearly

within the scope of the Contracting Officer's "[3] That during negotiations for this con- final decision are claims [1] and [2] above. act, the Forest Service misrepresented The third claim is not within the scope of rtain information and misled Appellant said decision and must be stricken from the garding the effort required, that other

Complaint. Appellant should understand, ntractors have similarly failed to perform however, that this action in no way prejue work, and that Appellant's damages will

dices its right to present such claim to the submitted later and proven at hearing.” Contracting Officer, obtain a final decision, The Government moved to strike Appel- and appeal that decision to this Board. Apt's third claim above, or “any claim of pellant's attention is invited to Board Rule pellant for damages on account of alleged 1[b], which permits appeal to the Board in ntracting Officer failure as no such claim the event the Contracting Officer fails or damages has been considered by the Con- refuses to issue a written decision 60 days

1 16,393 ntract Appeals Decisions