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April 29, 1964
for the dismissal of this appeal and for summary judgment thereon in favor of the Government. The ground for those motions was that appellant had not submitted to the contracting officer timely notices of its claims, or timely protests against the administrative action that allegedly gave rise to such claims. The Board's reasons for denial of
. the motions were that the notice and protest requirements of the contract could be waived by the contracting officer, that the correctness of his determination not to waive them could be reviewed by the Board, and that pertinent factual issues had been joined which could not properly be resolved without according appellant an opportunity for a hearing pursuant to the “Disputes" clause (Clause 6) of the contract.3
A motion for reconsideration of the decisions just mentioned has been filed with the Board by the Department Counsel. The motion, which is dated February 7, 1964, asserts that those decisions are in conflict with a decision of the Comptroller General, which was rendered after our decisions had been issued. The decision thus invoked is Dec. Comp. Gen. B-152346 (November 22, 1963).
The decision of the Comptroller General, in so far as here relevant, dealt with a claim for an equitable adjustment on account of an alleged change in the specifications. The claim arose under a Coast Guard contract which contained a “Changes" clause identical with Clause 3 of the contract here involved.4
3 That clause-Clause 6 of Standard Form 23A (March 1953) as amended to conform to the Wunderlich Act-reads as follows:
"DISPUTES-Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the contracting officer, who shall furnish to the contractor a written copy of his decision. Such decision shall be final and conclusive unless within 30 days from the date of receipt thereof, the contractor appeals therefrom by mailing or otherwise furnishing to the contracting officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representatives upon such appeal shall be final and conclusive unless the decision is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence. In connection with any appeal proceeding under the ‘Disputes' clause, the contractor shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the contractor shall proceed diligently with the performance of the contract and in accordance with the contracting officer's decision,"
* That clause-Clause 3 of Standard Form 23A (March 1953)-reads as follows:
"CHANGES—The Contracting Officer may at any time, by a written order, and without notice to the sureties, make changes in the drawings and/or specifications of this contract and within the general scope thereof. If such changes cause an increase or decrease in the amount due under this contract, or in the time required for its performance, an equitable adjustment shall be made and the contract shall be modified in writing accordingly. Any claim of the Contractor for adjustment under this clause must be asserted in writing within 30 days from the date of receipt by the Contractor of the notification of change : Provided, however, That the Contracting Officer, if he determines that the facts justify such action, may receive and consider, and adjust any such claim asserted at any time prior to the date of final settlement of the contract. If the parties fail to agree upon the adjustment to be made the dispute shall be determined as provided in Clause 6 hereof. But nothing provided in this clause shall excuse the Contractor from proceeding with the prosecution of the work as changed. Except as otherwise herein provided, no charge for any extra work or material will be allowed."
The contracting officer denied the claim upon the ground that there had been no change in the substance of the specifications, and also on the ground that the claim had not been presented within the 30 days allowed by the "Changes" clause. An appeal was taken to a Coast Guard Board of Contract Appeals that had recommendatory authority only. The Board recommended that the claim be denied upon the ground that there had been no change, seemingly without discussing the question of whether consideration of the claim was barred by the lateness of its presentation. This recommendation was adopted by the head of the Department, whereupon the contractor submitted the claim to the General Accounting Office. The Comptroller General rejected the claim on the ground that it was untimely, saying:
The Board proceeded to hear, consider and, upon request, recommend denial of the contractor's claim on the merits. Irrespective of the merits of the claim, the record shows no dispute as to the fact that the contractor did not present its claim for adjustment within the period required by the contract, i.e., 30 days of the issuance of the change in the specifications. The question of whether a claim is timely and in conformity with the contract provisions is one of law. Poloron Products, Inc. v. United States, 126 Ct. Cl. 816; 116 F. Supp. 588 (1953). Therefore, it may be decided by this office. See 42 Comp. Gen. 357, B-150173, dated January 11, 1963.
It is clear under the language of the Changes clause of the contract that an untimely claim is barred unless the contracting officer chooses to waive the defense of untimeliness. The Arundel Corporation v. United States, 96 Ct. Cl. 77 (1942), and cases cited therein. The Board itself cannot waive the defense. See P.L.S. Coat & Suit Corp. v. United States, 148 Ct. Cl. 296, 300-301 ; 180 F. Supp. 400, 403 (1960). In the instant case, the contracting officer has not only not waived the defense, but has consistently relied upon it. Accordingly, since claim No. 1 for $13,605.30 was not presented in accordance with the prorisions of the contract to which the contractor had agreed, we find no legal basis on which the claim might be allowed. See 18 Comp. Gen. 232, citing Plumley v. United States, 226 U.S. 545 (1913), and B-140907, dated November 6, 1960, citing Yuhasz v. United States, 109 F. 2d 467 (7th Cir. 1940).
The asserted conflict in decisions springs, of course, from the statement in the foregoing quotation that "The Board itself cannot waive the defense.” The Government's concept of the applicability of this statement to the two claims involved in the instant appeal is explained by Department Counsel in the following words:
As to Claim No. 1, the first notice that the Government received was in the letter of October 26, 1951 which was received almost 4 months after completion of all work under the contract (July 3, 1961). As to Claim No. 2, the first indication of claim was a vague reference in a letter dated July 31, 1961. The details were not supplied until February 17, 1962. In the Findings of Fact of February 28, 1962, the contracting officer specifically invoked the provisions of Paragraph 9, Protests, and denied Claim No. 1 on that basis. Similarly, as to Claim No. 2, the contracting officer denied the claim on the same basis in the letter decision of March 27, 1962. The contractor has never controverted these facts. In all pertinent respects, the facts in this April 29, 1964
appeal are identical with those in B-152346 except that the contracting officer here relied upon Paragraph 9, Protests, rather than Clause 3, Changes. These provisions are identical in meaning and substance as to the necessity for the filing of written protests within 30 days of any action by an officer of the Government which he considers requires him to do work outside the scope of the contract or which he considers unfair. No such protests were made. The rule of B-152346 is equally applicable to Paragraph 9, Protests."
These contentions necessitate an exploration of the foundations for the statement that “The Board itself cannot waive the defense." The reasons—whether logical or practical—for the adoption of such a rule are not specified in the decision of the Comptroller General.
If we look at the language of the “Disputes” clause (Clause 6), we see it says that "any dispute concerning a question of fact arising under this contract” (Italics supplied) shall be decided, in the first instance, by the contracting officer and, on appeal, by the Secretary or his duly authorized representatives. If we then look at the language of the "Changes" clause, we see it says that when the parties fail to agree upon the adjustment to be made for an alleged change, "the dispute shall be determined as provided in Clause 6 hereof." The meaning naturally to be drawn from these provisions is that any dispute which the contracting officer has authority to decide under the “Disputes” clause may be made the subject of an appeal to the Secretary or his duly authorized representatives, and that the disputes which the contracting officer has authority to decide under that clause include disputes over matters that have to do with equitable adjustments under the “Changes" clause.
Furthermore, the “Changes” clause also says that the contracting officer may consider late claims “if he determines that the facts justify such action" (Italics supplied). The natural meaning of this phrase is that the contracting officer shall be guided by “the facts” whenever he decides the question of whether to waive the defense of untimeliness, and, consequently, that the contracting officer makes a determination concerning a question of fact arising under this contract,” within the meaning of the “Disputes” clause, whenever he decides that question.
8 That paragraph--Paragraph 9 of the General Conditions of the contract-reads as follows:
“Protests. If the contractor considers any work demanded of him to be outside of the requirements of the contract, or considers any record or ruling of the contracting officer or of the inspectors to be unfair, he shall immediately upon such work being demanded or such record or ruling being made, ask, in writing, for written instructions or decision, whereupon he shall proceed without delay to perform the work or to conform to the record or rullng, and, within thirty (30) calendar days after date of receipt of the written instructions or decision (unless the contracting officer shall grant a further period of time prior to commencement of the work affected) he shall file a written protest with the contracting officer, stating clearly and in detail the basis of his protest. Except for such protests as are made of record in the manner herein specified and within the time limit stated, the records, rulings, instructions, or decisions of the contracting officer shall be final and conclusive. Instructions and/or decisions of the contracting officer contained in letters transmitting drawings to the contractor shall be considered as written instructions or decisions subject to protest as herein provided."
The “Protests” paragraph provides for two distinct types of action by a contractor who believes that extra work is being required of him or that he is being treated unfairly. The first is the submission of a request for written instructions. This is to be done "immediately” upon the making of the demand or ruling to which the contractor objects. The second is the submission of a protest to the written instructions. This is to be done within 30 days after their receipt “unless the contracting officer shall grant a further period of time prior to commencement of the work affected.” The language just quoted has no counterpart in the provision which enjoins the contractor to ask for written instructions “immediately." Authority to waive lack of compliance with that provision is neither expressly conferred no expressly withheld by the terms of the “Protests" paragraph.
The decisions relating to "Protests” provisions consistently hold, however, that a failure to comply with their terms may be waived, notwithstanding the absence of an express authorization for so doing. These holdings may be explained on the ground that the requirements imposed by “Protests” provisions are procedural, rather than substantive, in nature and, not being prescribed by law, may be waived by the agents of the party intended to be benefited thereby, that is, the Government. Thus, it has been said that “The provision requiring protest within ten days was a provision inserted for the benefit of the defendant and, of course, could be waived by it." Nor has the presence of an express authorization been deemed a necessary prerequisite for the waiver of other forms of contract notices.
With respect to the “Protests” paragraph, then, we see that waiver of a failure to request written instructions is impliedly authorized, and that waiver of a failure to protest written instructions is expressly authorized. The contracting officer is mentioned only in connection with situations of the second type, and the wording used—“unless the contracting officer shall grant a further period of time prior to commencement of the work affected”_ is not materially different from
« Grier-Lowrance Construction Company, Inc. v. United States, 98 Ct. Cl. 434, 461-62 (1943); J. D. Armstrong Company, Inc., IBCA-40 (August 17, 1956), 63 I.D. 289, 316-17, 56-2 BCA par. 1043; Jack Willson, IBCA-7 (June 14, 1955), 62 I.D, 225, 228, 6 CCF par. 61,675 ; see McWaters and Bartlett, IBCA-56 (October 31, 1956), 56–2 BCA par. 1140 ; Korshoj Construction Company, IBCA-9 (May 2, 1956), 63 I.D. 129, 134, 6 CCF par. 61,867.
? Arundel Corporation v. United States, 96 Ct. Cl. 77, 110 (1942).
The Board expresses no opinion upon the question whether the presence of this phrase negates the existence of an implied authority whereby a failure to protest written instructions could be waived after commencement of the work affected. Cf. P.L.S. Coat & Suit Corporation, 148 Ct. Cl. 296, 298-301 (1960).
April 29, 1964
the wording used throughout the contract to confer authority upon that official over matters within the scope of the “Disputes" clause.
It must be concluded that the terminology of the “Changes" and “Protests” provisions of the instant contract offers no valid reason for a holding that waiver determinations by the contracting officer constitute a class of determinations to which the appeal provisions of the “Disputes" clause do not apply.
Department Counsel seems to find a reason for such a holding in the statement, which appears in the foregoing quotation from Dec. Comp. Gen. B-152346, that “The question of whether a claim is timely and in conformity with the contract provisions is one of law.” But the question with which we are confronted, when a contractor appeals to us from a failure or refusal of the contracting officer to waive the defense of untimeliness, is not whether the claim is timely and in conformity with the contract provisions. It is the entirely different question of whether, as a matter of fact, the Government has or will be prejudiced by reason of the lateness of the assertion of the claim and whether, as matter of fact, consideration of the claim is justified, notwithstanding its lateness.
The Court of Claims has, upon occasion, distinguished between determinations as to whether particular circumstances do or do not exist, which it regards as determinations upon questions of fact, and determinations as to whether the contract does or does not attach particular consequences to given sets of circumstances, which it regards as determinations upon questions of law. .
The leading case of Shepherd v. United States 10 illustrates the application of this distinction to the subject of timeliness. One issue there raised was whether the contractor had complied with the notice provisions of articles 3 and 4 of the contract, relating, respectively, to "Changes" and "Changed Conditions.” 11 With respect to that issue, the decision states:
* * * the contracting officer held that plaintiff was not entitled to maintain his claim because it had not been filed until after all the work had been completed. His finding that the claim was not filed until after all the work had been completed, unreversed on appeal, is binding on us, but his conclusion that for this reason plaintiff is not entitled to recover is not binding.
Also, the finding of the [War Department] Board [of Contract Appeals) that plaintiff did not tell the Chief of Operations and the resident engineer that he intended to make a claim for extra compensation under article 4 is binding on u8; but its conclusion that for that reason plaintiff cannot recover is not binding,
10 125 Ct. Cl. 724 (1953).
u The contract was a Corps of Engineers contract that included the same “Changes" and "Changed Conditions" clauses as Standard Form 23 (Revised April 3, 1942), except that the provision requiring approval by the head of the department for changes exceeding $500 was omitted.