unessential Government contract requirements and to profit by doing so. The procurement phase is the last opportunity to reduce construction cost before the work is actually accomplished, and is very often the last opportunity to have a significant impact on ownership costs before they are solidified by construction. This clause applies to any cost reduction proposal initiated and developed by the contractor for the purpose of changing any requirement of the contract. However, contractors must identify

their proposals as submitted pursuant to this clause.

The types of Value Engineering changes contemplated are those that would result in net savings to the Government by providing either: (1) a decrease in the cost of performance of the present contract, or (2) a reduction in the cost of ownership of the work provided by the present contract regardless of acquisition costs.

The clause contains details about the processing procedures, sharing arrangements and computation methods for proposed Value Engineering changes.

Contractors are urged to become familiar with this clause and to make use of it, because it benefits them and the Government.

APPEALS AND THE DISPUTES CLAUSE

PBS enters into nearly 1500 construction contracts each year. During the administration of these contracts thousands of pieces of correspondence are exchanged between the Government and the contractors. This correspondence concerns the conditions of the contract between the parties. Yet only about 400 letters written by the Government are final decisions of the contracting officer. Of these, only about 200 are appealed by contractors.

The right of a contractor to appeal a decision of the contracting officer is provided in Clause 6 of the General Provisions (EXHIBIT 31) of the contract documents. This clause has been the conduit for settlement of millions of dollars in claims between Government and contractor. By signing a contract with the Government, which contains this clause, the contractor agrees that all controversies, which arise during the performance of the contract, will be resolved through the procedures provided by the clause i.e. the

contracting officer is required to render a decision on any controversy falling within the clause. The decision is sent certified mail, return receipt requested.

The letter states in part that the decision is final and conclusive as provided in the Disputes Clause, unless a written Notice of Appeal, addressed to the Administrator of General Services is mailed or other

wise furnished to the contracting officer, within 30 days from receipt

of this decision. The letter will also contain, as an enclosure,

copies of GSA Form 2465, Notice of Appeal (EXHIBIT 45). If the contractor intends to appeal the decision of the contracting officer, he may do so either in letter form or use the enclosed GSA Form 2465. All of the items of information requested on the GSA Form 2465 must be supplied. After completion of information and signature by the contractor, or an attorney acting on contractor's behalf, the Notice of Appeal should be sent to the contracting officer. It is vital

that contractors file within the 30 day time limit, or the appeal is considered untimely.

Pending decision of the Board of Contract Appeals the contractor, quoting from clause 6, "shall proceed diligently with the performance of the contract and in accordance with the contracting officer's decision."

Once the Board of Contract Appeals receives the notice of Appeal,
a letter is sent to the contractor acknowledging receipt of the
appeal and forwarding a copy of the Board's rules of practice
(EXHIBIT 46) which will govern the appeal procedures.

Contractors need not be represented by counsel when they
appear before the Board. Under Rule 11, Submission Without a

Hearing, either party may elect to have the matter decided on the available record, without oral argument. Rule 12 covers the optional accelerated procedure for appeals involving $25,000 or less. Rule 17 covers location and scheduling of hearings. The Board of Contract Appeals is more flexible than you might think in this regard, giving due regard to the desires of the parties and to the requirement for just and inexpensive determination of appeals without unnecessary delay.

It is possible to witness the finest legal talent in the United States represent their clients before the Board. Many cases stretch over several weeks of testimony, with the litigation costs running into thousands of dollars.

On the other hand, an appellant may argue his own case successfully. One young contractor who came before the Board without legal counsel brought a dispute concerning the removal of approximately 4500 square feet of existing wood floors and sleepers, then filling the void space with concrete to the level of the floor of the adjoining rooms. In bidding on the contract, the appellant stated he had relied upon two provisions in the contract documents to determine the extent of the work that would be necessary to remove the flooring and sleepers.

Those two provisions were "Note 3" on Drawing 3-2, which read,
"Remove existing wood floor and sleepers", and the framed opening
detail of Drawing 3-3 which showed a three inch dimension between
the top of the structural (concrete) slab upon which the sleepers
were resting and the surface of the finished floor. The detail
indicated that the flooring was nailed directly to the sleepers,
since only the sleepers, which run 1-5/8 inches to 2-1/8 inches
thick, plus the one-inch maple flooring, would fit within the
defined three inches shown on the detail. The appellant alleged
that when he proceeded to remove the flooring as he had planned
by cutting through the floor and running parallel to the sleepers
with electric hand saws, he discovered a subfloor running
diagonal to the finished floor, with the finished floor randomly
nailed to the subfloor. As a result, appellant contended that it
was unable to use the hand saws for fear of hitting nails, and
the task was made more difficult and expensive.

The Government argued that in "removal or demolition" contracts, it is not necessary to recite, in detail, the work to be accomplished

by the contractor, but only the basic description of the limitations of the work. The Government also claimed that it would have been "superfluous" to specify removal of the subfloor. Moreover, the definition of the term "wood floor" means "component parts" of a floor and may include one or several layers of subflooring, provided they