U. S. GOVERNMENT PRINTING OFFICE BOARD OF CONTRACT APPEALS Microform Data System Inc. February 1, 1980 CAB No. 79-3 Lawrence W. Kennelly, Chairman William Klugh, Member John F. Cavanaugh, Member Re: Respondent's Motion to Dismiss This motion was made by the Respondent alleging that the disputes clause of the contract excludes breach of contract claims from its coverage. Background On June 8, 1979, the Appellant wrote to the Public Printer and appealed the final decision of the Contracting Officer. In his decision, the Contracting Officer made the following determination: "a. The Contract was properly terminated for convenience, inasmuch as the equipment was never accepted. It did not meet the condition of the contract that it be operational for a period of 30 days with no more than 10 percent total down-time (Section F), and this condition was never waived. The equipment was not integrated into the normal operation of the GPO, but was used in tandem with existing equipment because it was necessary that the original system remain fully operational until a replacement system was functioning properly. b. Settlement of the contract costs will be based on an amount of rent equivalent to 2.5 percent of the purchase price of the equipment, per month, for the period of April 6 through July 16, 1978, for a total of $8,065.71. This has been determined to be the average rent charged for equipment of this complexity, and is therefore considered fair and reasonable. Settlement expenses of $3,000, operator training and manuals costing $2,000, and crating and shipping expenses of $550 will also be allowed, for a total of $13,615.71. The equipment will be crated and returned to Microform at Government expense. c. Microform Data Systems, Inc., remains liable for rental of the space occupied by this equipment, as provided by letter of October 31, 1978, from December 1, 1978 until such time as it is removed." On August 24, 1979, Counsel for the Appellant.filed his complaint and requested a preliminary conference to establish procedures and other matters. The conference was held on September 7, 1979 at the Government Printing Office and Counsel for the Appellant, Respondent and Contracting Officer were present with the full Appeals Board. The discussion at this meeting centered around the situs of where the appeal would be heard and some discussion of the question of whether there was jurisdiction to hear the appeal. The Appellant raised the question of whether the Respondent was going to answer the complaint. There was some discussion concerning an audit and it was suggested this be done by the General Accounting Office. The Respondent's attorney indicated that he was going to make a Motion For A More Definite Statement. There was an attempt to have the GAO do the audit but this failed. There was another prehearing conference on October 10, 1979. At this conference the attorney for the Appellant, attorney for the Contracting Officer and the Contracting Officer were present with the Chairman of the Appeals Board. A motion was made by the Respondent for a more definite statement and the Appellant was given an opportunity to respond in 10 days. The Respondent then indicated that there would be another motion that the Board lacks jurisdiction. The Board denied the motion for a more definite statement and on November 19, 1979, the Respondent made a Motion to Dismiss or a General Denial. The Respondent stated in his motion that the complaint of the Appellant appears to question the termination rather than the Contracting Officer's decision. The jurisdiction of the Government Printing Office Board of Contract Appeals depends upon the contract itself. In the contract, jurisdiction of the Board is limited to the consideration of factual issues in disputes "arising under this contract." The Respondent cited as his authority U.S. v. Utah Construction and Mining Co., 384 US 394 (1966) that states: ". . . the settled construction of the disputes clause excludes breach of contract claims form its coverage . . ." He then cited a number of cases that were decided by Boards of Contract Appeals that consistently found that breach of contract claims were beyond the jurisdiction of the Board. Jack Clark (1957) ASBCA No. 3672, 57-2 BCA ¶ 1402; Alco Lumber Co. Inc. (1964) ASBCA No. 9461, 1964 BCA ¶ 4349; E. & E. J. Pfotzer (1965) Eng BCA No. 2656, 65-2 BCA ¶ 5144. He also cited a decision of the Government Printing Office Board of Contract Appeals that was decided in 1977. Harbor Printing & Copy Service, Inc., GPO CAB CA 77-5 (1977) in which the Contract Appeals Board dismissed a claim for a breach of contract on the basis that the Board had no jurisdiction to decide such a claim, see also Information Systems Inc. GPO CAB CA-78-11(1979). The Appellant's response to the Motion to Dismiss states: 1.Appellants complaint identifies two contracts that are subject to the present dispute. 2. Inspection, Testing and Acceptance in Section F, of the contract is a subject of dispute. 3. The Government putative termination of the contact pursuant to the respective "Termination for Convenience Clause." 4. Appellant's complaint refers to the Contracting Officer's final decision and Appellant's timely appeal, both actions taken under the Disputes Clause of the contract. 5. Other portions of the Appellant's complaint identifying miscellaneous terms of the disputed contract such as the price of the delivered equipment, contract specifications and contract delivery terms. The Appellant takes the position that Respondent's reliance on Utah Mining Co., supra, is not applicable here because the case dealt with a holding concerning a Court of Claims procedure and should be understood as such. The Appellant states: "The ultimate success of Respondent's Motion depends on Respondent's self-serving interpretation of the facts underlying the present appeal. However, the Respondent's factual assertions (made without benefit of source citation) are irrelevant since for the purpose of ruling on Respondent's Motion to Dismiss, the Board is bound by the facts alleged in Appellant's complaint and the terms of the underlying contract to determine whether a decision favorable to Appellant could be rendered . . ." The Appellant then cited a number of cases. (Citations omitted) In a footnote the Appellant stated: . "The Disputes Act of 1978, in force when the present appeal was docketed, effectively reversed by congressional action the holding in the Utah case. See, Baltimore Contractors Inc. v. United States, U.S. Court of Claims Trial Division, No. 272-70 (September 18, 1979).'' The Appellant then made a cross Motion For A Summary Judgment. Discussion The Board is confronted with the task of deciding whether the appeal of a contractor to action taken by a Government Contracting Officer should be considered within its jurisdiction. What occurred in the case was that two contracts were made by the Appellant with the Government Printing Office for seven operational independent "Ultrafiche Systems" including masters, print frames, readers, copiers, control modules, and training manuals for support. One contract was terminated for the convenience of the Government under paragraph 27 of the General provisions of the contract by a letter dated July 13, 1978. When such termination occurs, the contract provides that the compensation due the contractor is actual costs and reasonable profits, overhead and settlement expenses. In his brief, the Appellant alleged that he was entitled to the full contract price of $97,830 plus interest thereon, settlement expenses and attorney fees. (The total contract price was $145,414.41 including $47,592.41 for conversion of GPO data base to "ultrafiche" format which is not a subject of the present dispute). The Appellant alleges that the contract had been completed when the Contracting Officer terminated the contract for the convenience of the Government. On that basis, the Appellant claims that he is entitled to the full contract price. The Respondent's position is that is was not a completed contract because the GPO had not accepted the equipment. The purchase order number 8556 was issued on September 30, 1977. The equipment was scheduled for delivery on March 30, 1978, and arrived April 5 and 6, 1978. The Respondent states it was not accepted at that time because, as a condition of acceptance, the contract requires that the equipment be operated in accordance with the specifications for a period of 30 consecutive days with no more than 10 percent total down time. The Contracting Officer was notified by memorandum dated June 21, 1978, from the Documents Sales Service, the using organization, that although vendor considered the installation complete on May 2, 1978, the Service Report had not been signed due to numerous instances where the system had proven to be inoperable more than 10 percent of the time since installation. After due consideration in a letter dated July 13, 1978, the Appellant was notified of the termination of the contract for the convenience of the Government. Subsequent to this, there were discussions between the parties as to the amount of money due the Appellant. After various attempts on the part of the Contracting Officer, over the period December 1978 - May 1979 to secure an audit, the Contracting Officer, on May 14, 1979, issued a final decision determining the quantum at $13,615.71. The Appellant filed his appeal seeking the full contract price. Opinion It is apparent that we have a basic question that must be answered; was the contract completed, and if so, was the failure on the part of the Government to live up to its part of the contract, namely to pay the full price, a breach of that contract? It is a question that must be answered before this Board can take jurisdiction. Our jurisdiction under the Dispute Clause, Section 12 of General Provision is: (a) ". . . any dispute concerning a question of fact arising under this contract which is not disposed of by agreement. (b) This Disputes clause does not preclude consideration of law questions in connection with decisions provided for in paragraph (a) above: Provided, that nothing in the contract shall be construed as making final the decision of any administrative official, representative or board on a question of law." In U.S. v. Utah Mining Co., supra, the Court held that the or a Government contract "Disputes" clause does not extend to breach of contract claims not redressable under other clauses of the contract. When the Court discussed this it said: "An illustration of the disestablishment of breach of contract claims through the fashioning of additional contract adjustment provisions is provided by contractual provisions designed to deal with such claims for delay damages as are presented here." 384 US 394 at p. 415. The Court gave an example of such a clause: "A more extensive clause for 'Price Adjustment for Suspension Delays, or Interruption of Work' . . . was promulgated in 1961 for optional use in Department of Defense fixed price construction contracts." 384 US 394, 416. The Court also pointed out that an Interagency Task Group is currently reviewing the clauses in the standard contract form including the changes, changed Conditions and Suspension of work clauses to determine whether they should be expanded in coverage to prevent fragmentation of remedies. The Court said: "While in one respect it can be said that clauses broadening remedies under the contract have been adopted in response to restrictive interpretation of the Disputes clause and express dissatisfaction with the unavailability of one administrative remedy, the fact that the response has taken this measured form has manifested the parties' reliance on the prior interpretation and has properly tendered to reinforce it. As the ASBCA remarked in Simmel Industries , supra, '[i]t is noteworthy that when intended to provide an administrative remedy for Government delays, specific contract clauses have been developed and set forth for that purpose' 1961-1 BCA at 15, 234." 384 U.S. 394 at 417. It is our opinion that what the Court is saying in this case is that unless there is specific language in the contract to convert what would otherwise be claims for damages for breach of contract into claims payable under such contract and hence to be regarded as "arising under the contract," the Appeals Board does not have authority to entertain a breach of contract case. There is no language in this contract that would convert a pure breach of contract claim into one that would bring it under the provisions of the Disputes clause. Therefore, this case comes squarely under the rule set down in U.S. v..Utah Mining Co., supra where at p. 412 it states: "Thus the settled construction of disputes clause excludes breach of contract claims from its coverage . . ." This is the same position taken by the U.S. Government Printing Office Contract Appeals Board in Information Systems Inc. v. U.S. Government Printing Office, supra and Harbor Printing & Copy Service Inc. v. U.S., Jacket 229-626, Program 404M, Print Order 67. Appellant in his response has stated that the Disputes Act of 1978 effectively reversed by Congressional action the holding in the Utah case. He cites Baltimore Contractors, Inc. v. U.S.. Court of Claims, Trial Division No. 272-70 (September 18, 1979). In Baltimore Contractors, supra , the Court said: "The issue in this case is whether or not, given the nature of these contract claims and the character and composition of the available administrative procedures, plaintiff is entitled to a trial in this court on the substantive matters presented by the claims. [l] That issue has been central to this case since long prior to the filing of the petition herein on August 6, 1970. It is an issue which could not have arisen under the present governing legal principles because the Contract Disputes Act of 1978  authorizes a Government Contractor to 'bring an action directly on [a contract] claim in the United States Court of Claims, notwithstanding any contract provision, regulation, or rule of law to the contrary.  Prior to passage of the Disputes Act, this issue was governed by the so called Wunderlich Act  as thereafter interpreted by the U. S. Supreme Court in a trilogy of Opinions." 1. Jurisdiction is conferred by 28 U. S. C. § 1491(1976). "The court of Claims shall have jurisdiction to render judgment upon any claim against the United States founded * * * upon any express or implied contract with the United States * * *." 2. Pub. L. No. 95-563, 92 Stat. 2383 (codified at 41 U. S. C. A. §§ 601-613 (West Supp. 1979)). 3. Sec. 10 (a) (i) of the Contract Disputes Act, 41 U. S. C. A. § 609 (a) (i) (West Supp. 1979). 14 4. 41 U. S. C. §§ 321-322 (1976). Section 321 provides: "No provision of any contract entered into by the United States, relating to the finality or conclusiveness of any decision of the head of any department or agency or his duly authorized representative or board in a dispute involving a question arising under such contract, shall be pleaded in any suit now filed or to be filed as limiting judicial review of any such decision to cases where fraud by such official or his said representative or board is alleged: Provided, however, that any such decision shall be final and conclusive unless the same is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence." Under the Wunderlich Act, when there was a Disputes Clause in a Government Contract, the proper forum to have a factual issue decided was through the Appeals Board. A decision on the facts would be final unless there was fraud, or it was capricious, arbitrary or so grossly erroneous as to necessarily imply bad faith or not supported by substantial evidence (41 USC 321). 41 USC 322, part of the same act, provides that Government contracts shall not contain a provision that makes a decision of any administrative official final on a question of law. 15 The Disputes Act of 1978 provided that a contractor could go directly to the Court of Claims in lieu of appealing to the Contract Appeals Board. It retained the language on questions of law and provided in 41 USC 609 (b): "In the event of an appeal by a contractor or the the Government from a decision of any agency board pursuant to section 607 of this title, notwithstanding any contract provision, regulation or rules of law to the contrary, the decision of the agency board on any question of law shall not be final or conclusive, but the decision on any question of fact shall be final and conclusive and shall not be set aside unless the decision is fraudulent, or arbitrary, or capricious or so grossly erroneous as to necessarily imply bad faith, or if such decision is not supported by substantial evidence." If the Disputes Act of 1978 was in effect prior to Utah Mining, supra, there may have been a difference in the some aspects of the the decision, but it would not have affected a question similar to the one before this Board. We are not considering a fact question, but one of law, and both the Wunderlich Act and the Disputes Act of 1978 are consistent with regard to decisions by Contract Boards of Appeal on questions of Law and that is they are not final when an Appeals Board decides them. In our situation, we have a termination for convenience, and an Appeal alleging the contract was complete, which.makes it a breach of contract question. In Colonial Metals Co. v. U.S., 204 Ct. Cl. 320 at p. 330 the Court said: "The Convenience-termination clause provides for termination "whenever the Contracting Officer shall determine that such termination is in the best interest of the Government."  It is designed to provide a mechanism whereby the Government may end its obligation on a contract and yet limit its liability to the contractor's costs and profits on the preparations made and work done . . ." (footnote omitted) In Commercial Cable Co. v. The United States, 170 Ct. Cl. 813 (1965) at p. 821-822: "The Plaintiff submitted alleged costs in the negotiations about termination which are substantially similar in character and amount to those now asserted. This understandable coincidence does not mean that the Assistant Secretary was considering a breach of contract claim or even a dispute of the character contemplated in the disputes clause. He is barred by statute from any final decision on the former. He could consider the latter only if that clause was invoked, as where, for instance, there was a termination and a difference of opinion arose on allowable costs. The contractor could appeal an adverse decision thereon under the procedures of the disputes clause . . . Plaintiff's claim here is for breach of contract and depends for its resolution upon interpretation of the contract which is a question of law asserted now by plaintiff for the first time. Claims for unliquidated damages are outside the disputes clause and not properly a subject for unilateral administrative determination. . . .It has been repeatedly held that the disputes clause is not applicable to claims for damages for breach of contract against the Government . . . It cannot be said in this situation that plaintiff has any administrative remedy it had the responsibility to pursue. Ekco Products, supra; Railroad Waterproofing, supra. Plaintiff was not given and could not be granted relief administratively for the alleged breach. To be compelled now to go through expensive and time-consuming, fact-finding procedures administratively, under the circumstances of this case, would be an exercise in futility which would not expedite the administration of justice. Such procedures are not required by the contract, nor by statute, court decision or reason." If there was a dispute as to costs and profits that were due under the termination for convenience, that and that alone would be considered, but here we are faced with a claim of a completed contract and that is a legal question that this Board has no jurisdiction over. Therefore it is the opinion of this Appeals Board that the Appellant has presented a legal question to this Board, and we have no jurisdiction to hear it. Decision Motion to dismiss granted. Motion for summary judgment denied.