Page images

(End of Rules)

Subpart 5-60.2-Processing Contract


pellant (the prime contractor making the appeal) or by an officer of the appellant corporation, or member of the appellant firm, or by the contractor's duly authorized representative or attorney.

8 5-60.201 Notice of appeal.

(a) Unresolved disputes arising under the Disputes clause of a contract must be decided initially by the contracting officer. An aggrieved contractor may appeal any final decision of the contracting officer.

(b) Notices of appeal are to be addressed to the Administrator of General Services, in care of the contracting officer, and mailed or otherwise delivered to the contracting officer who issued the final decision being appealed within 30 days from the date the decision of the contracting officer is received. Any request for an extension of the 30-day appeal period shall be denied.

(c) If the notice of appeal was mailed or otherwise submitted in an untimely manner, a separate letter, signed by the procuring director, shall be sent to the Assistant General Counsel, Claims and Litigation Division (LC), requesting that a motion for dismissal of the appeal be submitted to the GSA Board of Contract Appeals (the Board). The letter shall state the name of the appellant, contract number, and date of contracting officer's final decision, and shall be accompanied by (1) the certified mail receipt showing the date on which the appellant received the contracting officer's final decision, and (2) the envelope which contained the notice of appeal or other evidence of late submission of the notice of appeal.

8 5-60.203 Appeal files.

(a) Appeal files shall be prepared in accordance with this section and Rule 4 of the Board's preliminary procedures (see § 5-60.101), and forwarded, after concurrence by assigned counsel, to LC within 20 calendar days after receipt of the notice of appeal or advice that an appeal has been filed.

(b) Upon receipt of the notice of appeal, the procuring activity shall establish a record to ensure the timely preparation and submission of appeal cases. The record shall show, as minimum, the name of the appellant, the date of the contracting officer's final decision, the date the appeal was filed, contract number, docket number, and name of the contracting officer.

(c) The Office of Contract Settlements (FCS) shall be responsible for maintaining a followup record for Federal Supply Service Central Office cases.


8 5-60.202 Contents of notices of appeal.

A notice of appeal should indicate that an appeal is thereby intended, should identify the decision and the date thereof from which the appeal is taken, the GSA office cognizant of the dispute, and the number of the contract in question. The appeal should describe the nature of the dispute and the relief sought, the contract provisions involved, and any other additional information or comments relating to the dispute which are considered to be important. The notice of appeal should be signed personally by the ap

8 5-60.203-1 Preparation of the appeal

file. (a) Appeal files shall be prepared in quadruplicate. Each file shall be identified by the name of the appellant, contract number, and docket number. All copies of the appeal file must be identical both as to content and position of items. If more than one appeal is filed under the same contract, upon request to, and waiver by, the Board, the appeal file for the second and subsequent appeals need not duplicate the documents included in the first appeal file, but shall make reference to the appeal file which contained such documents, including the docket and item numbers. Such files shall also include any documents pertinent to the later appeal but not previously furnished.

(b) Content of appeal file.

(1) Each appeal file shall be assembled by using a two-piece red pressboard binder 11 by 842-inches punched with a 3-inch capacity fastener (NSN

7510-00-582-4201). A gummed label (NSN 7510-00-264-5460) shall be used on top of the file to identify the case by contractor, contract number, and docket number.

(2) Individual appeal files shall not be more than 1 inch in thickness. If the file will be more than 1 inch in thickness, two or more consecutive binders shall be used and identified with the appropriate exhibit numbers contained in each.

(3) Each document to be included in the appeal file (i.e., letter, telegram, memo, report, invoice, etc.) shall be legible, complete, included as a separate exhibit in the file, and listed in the "Index of Exhibits” by exhibit number and brief description. If a document cannot be legibly reproduced, the unaltered document shall be submitted with an attached accurate typewritten transcription thereof. Assigned counsel will assist the contracting officer in determining which documents are relevant to the issue in the appeal or not privileged for inclusion in the appeal file. (4)

ch appeal file shall contain division sheets separating the different documents listed in the "Index of Exhibits.” Division sheets shall be tabbed and numbered consecutively commencing with number one.

(c) Arrangement of documents.

(1) The first (top) document in the appeal file shall be the “Index of Exhibits.” The index shall list, opposite each exhibit number, a brief description of the document. Each document shall be filed (exhibited) in chronological order beginning with the most recent document. For example:

division sheet (e.g., 1.1, 2.1, 5.2.5, etc.) but not shown in the “Index of Exhibits.” In addition to the exhibits listed in paragraph (c)(1) of this section, other pertinent exhibits, such as the following, should be included and exhibited in chronological order:

(i) Copy of the basic contract, including referenced terms and conditions.

(ii) Copy of the repurchase contract, including referenced terms and conditions.

(iii) Copies of specifications/drawings applicable to the dispute.

(iv) Copy of the abstract of offers and list of all offerors solicited for the repurchase contract.

(v) Copy of letter of assessment, including worksheet showing determination of excess costs.

(vi) Copies of defaulted purchase/delivery orders.

(vii) Copies of purchase/delivery orders issued under the repurchase contract.

(viii) Proof of payment and a detailed disbursement listing annotated and certified, if applicable. (Note: The information and documents needed shall be obtained from the appropriate GSA accounting center. The finance information will include a detailed disbursement listing annotated with the check number and date, and the amount applicable to the repurchase order if different than the check amount. The disbursement listing will be certified by an appropriate finance division official whose title of signature will also be shown.)

[blocks in formation]

§ 5-60.203-2 Transmittal of the appeal file.

(a) The original and two copies of the appeal file shall be forwarded to LC by a transmittal letter from the procuring director. The appeal file shall be accompanied by the contracting officer's detailed statement of facts in a memorandum of position as a separate document which shall be concurred in by assigned counsel who shall also prepare and attach a statement of legal position. A point of contact must be given LC; name of individual, position, title, and telephone number. (See § 5-60.206.)


[blocks in formation]

not interfere with timely processing of the memorandum of position. The name, position, affiliation, address, and telephone number of each witness or other individual listed shall be included.

(b) In the case of FSS Central Office contracts, FCS shall forward the appeal file to LC, together with the documentation required in paragraph (a) of this section.

(c) One copy of the appeal file shall be retained by the contracting officer for examination by the appellant. The contracting officer's memorandum of position including assigned counsel's statement of legal position or documents which are not part of the appeal file, furnished separately as background information, are not for examination by the appellant.

(d) In FSS, unless the appeal file and contracting officer's memorandum of position are prepared by FCS, a copy of each letter transmitting the appeal file to LC and a copy of the contracting officer's memorandum of position shall be sent to FCS.

(e) After reviewing the appeal file for adequacy, the trial attorney in LC will transmit the appeal file to the Board.

8 5-60.204 Contracting officer's memoran

dum of position. In addition to preparing the appeal file, the contracting officer (FCS in the case FSS of Central Office appeal files) shall prepare a memorandum of position (see § 5-60.206) with concurrence of assigned counsel and with the approval of the procuring director. Assigned counsel concurring in the contracting officer's memorandum of position shall also prepare and attach to the memorandum of position a statement of legal position. The memorandum of position is a chronological summary of the actions leading to the dispute and a rationale of the contracting officer's actions for the information of the trial attorney. The memorandum of position shall be submitted to LC simultaneously with the appeal file but as a separate document; i.e., it shall not be included as part of the appeal file, or included in the index. The memorandum of position should include a proposed list of witnesses for a hearing as well as a list of other individuals, whether employees of the Government, appellant, or others, with personal knowledge of the facts concerning the appeal, provided such a list is readily available and does

8 5-60.205 Procedure following decision of

the GSA Board of Contract Appeals. (a) Decisions of the Board shall be promptly implemented. However, it must be recognized that the contractor may decide to bring suit regarding a Board decision in the United States Court of Claims or the Federal District Court. It is also possible for either party to file a motion for reconsideration by the Board within 30 calendar days from the date of the receipt of a copy of the Board decision.

(b) The contracting officer need take no further action (other than administrative) if the Board affirms the contracting officer's original decision, provided a recovery of costs is not due from the contractor. Where a recovery is due, collection shall be initiated by the contracting officer either by (1) a contract amendment adjusting the contract price or (2) a written demand for immediate payment, as appropriate. (In excess cost cases, the Financial Management Division, Office of Fi. nance, (BCF), or regional counterpart, as appropriate, will normally pursue the necessary collection.) Any written demand shall instruct the contractor to make payment to the General Serv. ices Administration and address it to the appropriate GSA accounting center. A copy of any written demand shall be provided to the appropriate GSA accounting center for information and followup.

(c) When the Board does not uphold the contracting officer's original decisions and the Board's decision provides for payment in favor of the contractor, the contracting officer shall prepare a supplemental agreement with concurrrence of assigned counsel. The supplemental agreement will ensure against further litigation of the same dispute. The contracting officer shall forward the recommendation for pay. ment to the appropriate accounting center with the original of the supple

mental agreement and a copy of the Board's decision.

8 5-60.206 Sample of the contracting officer's memorandum of position.


After the second termination, three sources were solicited on ---. There was no requirements contract yet established for the new period. Offers were due by --- A copy of abstract of bids is Exhibit – and request for approval of awards is exhibit – A copy of repurchase contract is Exhibit

Appeal of the John Doe Corporation Contract No. Docket No.

Other excess costs supporting data are under Exhibit

Discussion Appellant contends it could not get suffi. cient raw material from its suppliers to meet its contract obligations. Appellant has not shown that it exhausted all sources of supply before it ceased its efforts to perform or that unavailable material from its normal sources was not available from other sources. The material was unquestionably available because other suppliers offered it a short time after termination.

Background This is a requirement contract for dishwashing compound for the period through -- Shipment was required to be made within 45 days after receipt of order. It was necessary to terminate for default four purchase orders, one on

and three on --- Repurchases were accomplished in a timely manner on a competitive basis at considerably higher prices resulting in excess costs of $-.

The First Termination (date ---) Material submitted on purchase order

for 484 bags was rejected on based on laboratory test number When the material was rejected, a 10-day cure letter was issued on --- to which the appellant replied on

After considering the reply, the purchase order was terminated.

Appellant requested a deviation on to supply liquid detergent for powder detergent which was considered and denied on

Conclusion The default and reprocurement actions of the contracting officer are supported by the facts and evidence. The appellant has not shown that either action should not be sustained. The appeal should be denied. Prepared By: Contracting Officer Date:

Assigned Counsel*
Procuring Director

NOTE.-Include names of witnesses and other persons having knowledge of the case.

(End of sample memorandum of position)


Subpart 5-63.1-Audit of Contractors' Records

The Second Termination (date ---)

Appellant became delinquent on three additional orders and was issued a 10-day cure letter on -. Appellant replied on After full consideration of the reply, the three delinquent purchase orders were terminated for default. Before terminating, the contracting officer checked with quality control personnel to ascertain whether the contractor had submitted material on the three orders involved.

Appellant requested approval to change the formulation by using olefin sulfonate instead of alkyl benzene as a means of resolving its problems. Appellant was advised that the specification permitted this change.

Reprocurement After the first termination, five sources were solicited on including those who bid on the original solicitation. There was no requirements contract yet established for the new period. Offers were due by - A copy of the abstract of bids is attached as Exhibit and request for approval of awards is Exhibit –. A copy of repurchase contract is Exhibit

Sec. 5-63.101 General. 5-63.102 Purpose of audit. 5-63.103 Types of contracts subject to

audit. 5-63.104 Contract clause. 5-63.105 Payments under contracts subject

to audit. 5-63.105-1 General. 5-63.105-2 Submission and processing of

invoices or vouchers. 5-63.105-3 Action upon receipt of an audit


*Assigned counsel's statement of legal position will be attached by the counsel.

Sec. 5-63.105-4 Suspensions and disapprovals of

amounts claimed. 5-63.106 Additional internal controls. 5-63.107 Limitation. 5-63.108 Releasing or withholding of audit

reports. AUTHORITY: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c).

SOURCE: 47 FR 11019, Mar. 15, 1982, unless otherwise noted.

Subpart 5-63.1

Audit of Contractors' Records

(c) Compliance by contractors with contractual provisions having financial implications such as progress payments, advance payments, guaranteed loans, cash return provisions, and price adjustments. The adequacy of a contractor's accounting system and controls shall be evaluated by contract audit before inclusion of a Progress Payments clause (see $ $ 1-30.506 and 5-30.550(b)(3)). A similar evaluation shall be made prior to the making of any advance payments or guaranteed loans pursuant to Parts 1-30 and 5-30;

(d) Reasonableness of contractors' settlement proposals in termination of contracts (see § 1-8.207);

(e) Compliance with contract provisions; and

(f) Contractors' financial condition and ability to perform or to continue to perform under Government contracts.

8 5-63.101 General.

The Assistant Inspector GeneralAuditing and the Field Audit Offices conduct contract audits of contractors' records to the extent that such audits are required by law, regulation, or sound business judgment. These audits include the conduct of periodic or special request audits of contractors deemed warranted because of such matters as the financial condition, integrity, and reliability of the contractor and prior audit experience, adequacy of the accounting system, and the amount of unaudited claims. So that the Government can benefit to the maximum extent from these audits, a coordinated and cooperative effort shall be made by contracting of. ficers, technical specialists, and finance and audit personnel (see $$ 13.801 and 5-63.102). It is the responsibility of the contracting officer to have an audit clause inserted in all contracts subject to audit pursuant to § 5-63.103.

8 5-63.103 Types of contracts subject to

audit. (a) The following types of contracts in excess of $10,000 shall include the Examination of Records by GSA clause in § 5-63.104:

(1) Cost-reimbursement type contracts (see § 1-3.405);

(2) Advertised or negotiated contracts involving the use or disposition of Government-furnished property;

(3) When advance payments, progress payments based on costs, or guaranteed loans are to be made;

(4) Contracts for supplies or services containing a price warranty or price reductions clause;

(5) Contracts or leases involving income to the Government when the income is based on operations that are under the control of the contractor or lessee;

(6) Fixed-price contracts with escalation (see $ $ 1-2.104-3 and 1-3.404-3), with incentives (see $ $ 1-3.404-4 and 13.407), and with redetermination (see $ $ 1-3.404-5 and 1-3.404-7);

(7) Requirements and indefinite quantity (call-type) contracts (see $ $ 1-2.104-4 and 1-3.409);

(8) Time and materials and labor. hour contracts (see $ $ 1-3.406-1 and 13.406-2); and

8 5-63.102 Purpose of audit.

In addition to the provisions of § 13.809, Contract audit as a pricing aid, audits are conducted to advise and make recommendations to the contracting officer concerning the following:

(a) Propriety of amounts paid, or to be paid, by GSA to contractors where such amounts are based on a cost or time determination or on variable features related to the results of contractors' operations;

(b) Adequacy of measures taken by contractors regarding the use and safeguarding of Government assets under their custody or control;

« PreviousContinue »