ARCHER, Circuit Judge.
Elmore Moving and Storage, Inc. (El-more) appeals from the decision of the Armed Services Board of Contract Appeals (ASBCA or board), Elmore Moving & Storage, Inc., ASBCA Nos. 29990 and 30136, 87-1 BCA (CCH) If 19, 383 (Sept. 3, 1986), which sustained the contracting officer’s decision finding Elmore liable to the Government in the amount of $94,085 for fire damage to household goods stored in Elmore’s warehouse and denying Elmore’s claim for $7,836.17 for work done to avoid or mitigate the damage. We reverse and remand.
I.
On December 1, 1979, Elmore entered into Contract No. DAHC21-80-G-1509S with the Department of the Army for the storage of household goods owned by military personnel. On May 9,1984, a fire was discovered in the overseas shipping crates stored in Elmore’s outside open storage area located at the rear of its warehouse at 324 Springfield Road, San Antonio, Texas. The parties stipulated that this fire was started by “arsonists.” The board found that the use of this term was meant to convey that the two juveniles involved intentionally set the fire; however, they were not prosecuted. The children, who had been playing in the shipping crates, had obtained access to them through a hole in a fence surrounding the property. The crates were stacked at least 50 feet from the warehouse, which was constructed of corrugated metal with fiberglass insulation. Although flames from the burning crates never reached the warehouse, radiated heat from the fire was sufficiently intense to traverse the 50 foot gap and to ignite the stored goods inside the warehouse.
The contracting officer and the board determined that Elmore was liable to the Government in the amount of $94,085 for the damaged or destroyed household goods stored inside the warehouse. Liability was based on Elmore’s failure to exercise reasonable care with regard to the goods because of the manner in which the crates were stored in the open storage area behind the warehouse and because children were not adequately prevented from playing in the open storage area.
II.
The scope of our review of the board’s decision is limited by statute. 41 U.S.C. § 609(b) (1982). While the board’s conclusions of law are freely reviewable, United States v. Boeing Co., 802 F.2d 1390, 1393 (Fed.Cir.1986), our review of its findings of fact is restricted to a determination of whether those findings are fraudulent, arbitrary, capricious, so grossly erroneous as to necessarily imply bad faith, or unsupported by substantial evidence. Id.; Erickson Air Crane Co. of Washington, Inc. v. United States, 731 F.2d 810, 814 (Fed.Cir.1984). See also Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)) (substantial evidence means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion”). One of our predecessor courts has held that a determination of whether a contractor is free from fault or negligence is a finding of fact. Automatic Screw Products Co. v. United States, 169 F.Supp. 951, 145 Ct.Cl. 94, 97 (1959); Whitlock Corp. v. United States, 159 F.Supp. 602, 607, 141 Ct.Cl. 758 (1958).
The extent of Elmore’s liability for care of the goods and the standard of care to be exercised was set forth in section CA-4a of the contract, which states in pertinent part:
Except as hereafter provided ... the contractor shall be liable ... for any loss or [1003]*1003damage to household goods deposited with it caused by its failure to exercise such care in regard to them as a reasonably careful owner of similar goods would exercise, but the contractor shall not be liable for any loss or damage to household goods which is caused by acts or conditions beyond its control and without its fault or negligence....
Under this provision Elmore was required, in order to avoid liability, to show that the loss of the goods was not caused by its fault or negligence. See 4A McBride and Wachtel, Government Contracts, § 30.150[5] (Release 227, 1983). See also Meeks Transfer Co., ASBCA No. 11819, 67-2 BCA (CCH) If 6567, 30468, 30472-73 (1967); Sloan’s Moving & Storage Co., ASBCA No. 10187, 65-1 BCA (CCH) 114685, 22373, 22379-80 (1965).
III.
A. Storage of the overseas shipping crates.
Elmore contends that it exercised reasonable care with respect to the household goods stored in the warehouse and that loss of the goods was not due to its fault or negligence. It claims specifically that there was not substantial evidence to support the board’s findings that it was negligent in the manner in which it stored overseas packing crates or that the rapid spread of the fire through the entire storage area could have been anticipated.
At the time of the fire approximately 450 wooden storage crates were being stored in Elmore’s open storage area, a rectangular black top area about 100 feet wide and about 85 feet long located behind the warehouse that was damaged. The crates, which had all the used packing material and other trash removed from them and the tops nailed shut, were stacked closely together, with aisles less than 2 feet wide. The stacks were located at a distance of about 50 feet from the rear wall of the warehouse.
The storage contract required Elmore to comply with recognized local and national fire ordinances or codes. Ms. Risinger, the sole owner of Elmore's stock shares at the time of the board hearing, and Mr. Webster, the former contracting officer, testified, and the board concluded, that the contract required that the crates be stored no closer than 20 feet from the warehouse.1 The board found that Section 12 of the fire code applicable to Elmore recommended, but did not require, that materials stored in outside storage areas “be stored in unit piles as low in height and small in area as is consistent with good practice for the materials stored,” and that “aisles be maintained between individual piles, between piles and buildings and between piles and the boundary line of the storage site.” The purpose of these aisles was to “reduce danger of spread of fire from pile to pile and to permit ready access for fire fighting, emergency removal of material or for salvage purpose.” Section 14 of the code recommended a clearance of at least 15 feet between buildings and “open yard storage,” but further recommended maintaining as much clear space as practicable. A clearance of 50 feet was recommended for warehouses of wood frame construction, or containing hazardous operations. However, Elmore’s warehouse was constructed of corrugated metal.
The record shows that Elmore’s premises were inspected regularly by the Government and by the San Antonio Fire Department and, although minor discrepancies were occasionally found, no serious safety hazards were reported.
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ARCHER, Circuit Judge.
Elmore Moving and Storage, Inc. (El-more) appeals from the decision of the Armed Services Board of Contract Appeals (ASBCA or board), Elmore Moving & Storage, Inc., ASBCA Nos. 29990 and 30136, 87-1 BCA (CCH) If 19, 383 (Sept. 3, 1986), which sustained the contracting officer’s decision finding Elmore liable to the Government in the amount of $94,085 for fire damage to household goods stored in Elmore’s warehouse and denying Elmore’s claim for $7,836.17 for work done to avoid or mitigate the damage. We reverse and remand.
I.
On December 1, 1979, Elmore entered into Contract No. DAHC21-80-G-1509S with the Department of the Army for the storage of household goods owned by military personnel. On May 9,1984, a fire was discovered in the overseas shipping crates stored in Elmore’s outside open storage area located at the rear of its warehouse at 324 Springfield Road, San Antonio, Texas. The parties stipulated that this fire was started by “arsonists.” The board found that the use of this term was meant to convey that the two juveniles involved intentionally set the fire; however, they were not prosecuted. The children, who had been playing in the shipping crates, had obtained access to them through a hole in a fence surrounding the property. The crates were stacked at least 50 feet from the warehouse, which was constructed of corrugated metal with fiberglass insulation. Although flames from the burning crates never reached the warehouse, radiated heat from the fire was sufficiently intense to traverse the 50 foot gap and to ignite the stored goods inside the warehouse.
The contracting officer and the board determined that Elmore was liable to the Government in the amount of $94,085 for the damaged or destroyed household goods stored inside the warehouse. Liability was based on Elmore’s failure to exercise reasonable care with regard to the goods because of the manner in which the crates were stored in the open storage area behind the warehouse and because children were not adequately prevented from playing in the open storage area.
II.
The scope of our review of the board’s decision is limited by statute. 41 U.S.C. § 609(b) (1982). While the board’s conclusions of law are freely reviewable, United States v. Boeing Co., 802 F.2d 1390, 1393 (Fed.Cir.1986), our review of its findings of fact is restricted to a determination of whether those findings are fraudulent, arbitrary, capricious, so grossly erroneous as to necessarily imply bad faith, or unsupported by substantial evidence. Id.; Erickson Air Crane Co. of Washington, Inc. v. United States, 731 F.2d 810, 814 (Fed.Cir.1984). See also Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)) (substantial evidence means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion”). One of our predecessor courts has held that a determination of whether a contractor is free from fault or negligence is a finding of fact. Automatic Screw Products Co. v. United States, 169 F.Supp. 951, 145 Ct.Cl. 94, 97 (1959); Whitlock Corp. v. United States, 159 F.Supp. 602, 607, 141 Ct.Cl. 758 (1958).
The extent of Elmore’s liability for care of the goods and the standard of care to be exercised was set forth in section CA-4a of the contract, which states in pertinent part:
Except as hereafter provided ... the contractor shall be liable ... for any loss or [1003]*1003damage to household goods deposited with it caused by its failure to exercise such care in regard to them as a reasonably careful owner of similar goods would exercise, but the contractor shall not be liable for any loss or damage to household goods which is caused by acts or conditions beyond its control and without its fault or negligence....
Under this provision Elmore was required, in order to avoid liability, to show that the loss of the goods was not caused by its fault or negligence. See 4A McBride and Wachtel, Government Contracts, § 30.150[5] (Release 227, 1983). See also Meeks Transfer Co., ASBCA No. 11819, 67-2 BCA (CCH) If 6567, 30468, 30472-73 (1967); Sloan’s Moving & Storage Co., ASBCA No. 10187, 65-1 BCA (CCH) 114685, 22373, 22379-80 (1965).
III.
A. Storage of the overseas shipping crates.
Elmore contends that it exercised reasonable care with respect to the household goods stored in the warehouse and that loss of the goods was not due to its fault or negligence. It claims specifically that there was not substantial evidence to support the board’s findings that it was negligent in the manner in which it stored overseas packing crates or that the rapid spread of the fire through the entire storage area could have been anticipated.
At the time of the fire approximately 450 wooden storage crates were being stored in Elmore’s open storage area, a rectangular black top area about 100 feet wide and about 85 feet long located behind the warehouse that was damaged. The crates, which had all the used packing material and other trash removed from them and the tops nailed shut, were stacked closely together, with aisles less than 2 feet wide. The stacks were located at a distance of about 50 feet from the rear wall of the warehouse.
The storage contract required Elmore to comply with recognized local and national fire ordinances or codes. Ms. Risinger, the sole owner of Elmore's stock shares at the time of the board hearing, and Mr. Webster, the former contracting officer, testified, and the board concluded, that the contract required that the crates be stored no closer than 20 feet from the warehouse.1 The board found that Section 12 of the fire code applicable to Elmore recommended, but did not require, that materials stored in outside storage areas “be stored in unit piles as low in height and small in area as is consistent with good practice for the materials stored,” and that “aisles be maintained between individual piles, between piles and buildings and between piles and the boundary line of the storage site.” The purpose of these aisles was to “reduce danger of spread of fire from pile to pile and to permit ready access for fire fighting, emergency removal of material or for salvage purpose.” Section 14 of the code recommended a clearance of at least 15 feet between buildings and “open yard storage,” but further recommended maintaining as much clear space as practicable. A clearance of 50 feet was recommended for warehouses of wood frame construction, or containing hazardous operations. However, Elmore’s warehouse was constructed of corrugated metal.
The record shows that Elmore’s premises were inspected regularly by the Government and by the San Antonio Fire Department and, although minor discrepancies were occasionally found, no serious safety hazards were reported. Chief Fuentes, a fire chief for the city of San Antonio, testified that he inspected Elmore’s warehouses on August 22,1983 and found no violations of any city ordinances. Mr. Whittaker, the Government inspector, noted no instances [1004]*1004of “hazards ... within 50 feet of [the] warehouse,” “inadequate security,” or “improper aisle and/or stacking clearance” in an inspection conducted on January 2,1984, some four months before the fire, and gave Elmore the highest possible rating on the Warehouse Inspection Report indicating that no deficiencies were observed. In addition, the board stated that “[Elmore] was not required to provide aisles among the crates over the years” and that it was simply not credible that this condition would not have been observed by the inspectors. The board concluded that the inspectors had not observed a recognizable fire hazard over a period of ten years and had not made any adverse comment on their inspection reports as to Elmore’s method of storing and stacking the crates or as to the width of the aisles.
Undisputed testimony in the record also shows that the set-back distance used by Elmore was in conformance with the practice of others in the warehousing industry. Mr. Taber, owner of Sherwood Van Lines, testified that his staff was familiar with Elmore’s facilities and that they considered Elmore to be a high quality operation which followed all safety procedures. He also stated that, with respect to his firm, he required combustible materials, such as wooden crates, to be stored at least 50 feet away from a warehouse. Mr. Andis testified that his employer, Burnham Service Corporation, was a large United States carrier and that it similarly required wooden crates to be stored at least 50 feet away from a warehouse. Mr. Andis further stated that Elmore was rated among the best of Burnham’s franchisees and that, during routine inspections of Elmore’s facilities, he had observed Elmore’s compliance with the 50 foot distance requirement. The board specifically found that the gap between the crates placed in the open storage area and the rear wall of the warehouse was about 50 feet. This was more than twice the distance required by the contract or recommended by the applicable fire code. Cf. H & R Transfer & Storage Co., ASBCA No. 8079, 1964 BCA (CCH) II4315 (1964) (wooden shipping crates stacked no more than four feet from its warehouse constituted negligence); Simpson Transfer and Storage Corp., ASBCA No. 24750, 82-2 BCA (CCH) ¶ 15949 (1982) (violation of requirement that wooden crates not be stored within 20 feet of warehouse constituted negligence).
Notwithstanding this evidence of compliance with the fifty foot set-back required by others in the industry and with the set-back requirements of the contract and the fire code, the board concluded that the failure to maintain aisles, as recommended by the fire code, was negligent. It reasoned that the purpose of the aisles was to reduce the danger of a fire spreading and to permit access of fire fighting equipment, and that the lack of any aisles, therefore, created a firestorm hazard and a foreseeable risk of harm to goods located in the warehouse 50 feet away.
Even if the board’s conclusion that a firestorm was the foreseeable consequence of Elmore’s method of stacking the shipping crates were correct, it does not follow that Elmore was negligent in its storage and handling of goods inside the warehouse. While neither the mandatory requirements of the contract nor the recommendations of the fire code would fix the limits for a finding of negligence, in order for an act to be considered negligent, it must involve a risk which could or should have been foreseen by the actor. Restatement (Second) of Torts § 289 comment b (1965). We find nothing in the record to indicate that fire damage to household goods inside the warehouse could or should have been foreseen from the location and manner of stacking the crates in the outside storage area even if a fire should rapidly spread among them. Elmore had substantially exceeded the requirements of the contract and the recommendation of the fire code in placing the wooden crates approximately 50 feet from the warehouse and, in doing so, had followed set-back requirements acceptable to others in the warehousing industry. As to the lack of aisles, Mr. Andis testified that the recommended aisle widths represented an ideal very seldom achieved in actual practice. The fire code provisions relating to aisles [1005]*1005were not enforced and the periodic inspections had not disclosed any fire or safety hazards. Finally, Mr. Webster testified that, under general conditions, he would not expect a hazard located 50 feet away to have any effect on a building and that the amount of heat generated by the burning crates at Elmore’^ facility was “unsuspected.”
Despite the fact that Elmore did not provide for aisles of the recommended widths in its outside storage area, we conclude that there is not substantial evidence to support the board’s finding that the loss or damage to the household goods stored inside of the warehouse was caused by El-more’s fault or negligence.
B. The fence and the children.
The applicable fire code also recommended, but did not require, that “the entire property be surrounded by a fence or other suitable means to prevent access of any unauthorized persons.” Elmore’s property was fenced, but evidence established that at the time of the fire there was a hole in the fence a short distance away from where the fire had been started and that a well worn path led from a neighboring public housing complex to the hole. The board found that Elmore had a problem with children repeatedly gaining access to the outside storage area and using the crates as a clubhouse. It also found that efforts were made to repair the fence, although not by professionals. The evidence showed that when the hole in the fence was repaired by Elmore’s employees, the children from the housing complex would cut it open again.
Elmore tried in several ways to prevent unauthorized access to its property. In addition to fencing the property and attempting to keep the fence repaired, the testimony indicates that Elmore employed security devices such as silent alarms and motion detectors on its warehouses. It considered the possibility of acquiring guard dogs to patrol the property or of electrifying its fence, but was advised by the police and insurance agents against pursuing either of these options because of potential tort liability. It also employed a security guard service for a short time, but found the guard service to be unreliable. It notified the police when it became aware that children were playing in an adjoining vacant lot and, at the suggestion of the police, directed its employees to clean off that lot. Moreover, there was no indication that Elmore’s warehouses were located in a high crime area or that arson had been a problem in the past. See Simpson Transfer & Storage, 82-2 BCA (CCH) at 79,070.
The board concluded that Elmore’s owners “knew or should have known about the condition of the fence and the use being made of their property by the children.” Although there was no finding by the board, and apparently no evidence, that the trespassing children previously had been playing with matches or starting fires on Elmore’s premises or elsewhere, the board opined that “[i]t is common knowledge that children will play with matches and will often start fires,” and that “it could be anticipated that the children might start a fire.” Even assuming it was proper for the board to notice judicially such facts, and assuming that the crates were not adequately protected despite Elmore’s repeated attempts to prevent trespassers from entering its property, it is not the loss of the crates which is at issue. As we stated earlier, there is nothing in the record to indicate that damage to goods inside the warehouse could have been foreseen even if a fire spread among the crates. To impose a liability for negligence on Elmore under the circumstances is unwarranted.
CONCLUSION
Based on our analysis and review of the record, we are unable to conclude that substantial evidence supports the board’s finding that Elmore “failed to exercise such care ... as a reasonably prudent owner would ... and that the fire ... was not beyond the control or without the fault or negligence of [Elmore].” Accordingly, we reverse the decision of the board holding Elmore liable for damages and remand for a consideration of Elmore’s claim.
[1006]*1006COSTS
Costs to Elmore.
REVERSED AND REMANDED.