B-106154, NOVEMBER 21, 1951, 31 COMP. GEN. 186

B-106154: Nov 21, 1951

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IS UNABLE TO FURNISH THE TYPE OF EQUIPMENT CONTRACTED FOR MAY NOT BE PERMITTED TO SUBSTITUTE A DIFFERENT KIND OF MATERIAL THAN REQUIRED BY THE CONTRACT SPECIFICATIONS. THE CONTRACTOR IS NOT LIABLE FOR DAMAGES RESULTING FROM COMPLIANCE WITH THE GOVERNMENT RESTRICTION AND THE CONTRACT SHOULD BE CANCELED. 1951: THIS OFFICE IS IN RECEIPT OF A LETTER DATED OCTOBER 16. THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION. 26 COMP. SINCE A PROMPT DECISION IN THE MATTER IS REQUIRED. IT IS BEING RENDERED TO YOU. SEVEN OTHER BIDS WERE RECEIVED ON THE TRUCKS. WHICH WAS AN ALTERNATE BID. APPEARS TO HAVE BEEN IN THE TOTAL PRICE OF $180.50. WAS ACCEPTED ON AUGUST 31. THE CONTRACTOR ALSO ADVISED THAT ITS REQUESTS DURING THE PAST FEW MONTHS FOR PERMISSION TO CONTINUE THE USE OF THIS TYPE OF STAINLESS STEEL IN SPECIAL CASES WERE DENIED.

B-106154, NOVEMBER 21, 1951, 31 COMP. GEN. 186

CONTRACTS - SUBSTITUTIONS - NATIONAL PRODUCTION AUTHORITY RESTRICTIONS ON USE OF MATERIALS A CONTRACTOR WHO, DUE TO A NATIONAL PRODUCTION AUTHORITY RESTRICTION UPON THE USE OF CERTAIN MATERIAL IN THE MANUFACTURE OF EQUIPMENT, IS UNABLE TO FURNISH THE TYPE OF EQUIPMENT CONTRACTED FOR MAY NOT BE PERMITTED TO SUBSTITUTE A DIFFERENT KIND OF MATERIAL THAN REQUIRED BY THE CONTRACT SPECIFICATIONS; HOWEVER, THE CONTRACTOR IS NOT LIABLE FOR DAMAGES RESULTING FROM COMPLIANCE WITH THE GOVERNMENT RESTRICTION AND THE CONTRACT SHOULD BE CANCELED.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR OF VETERANS AFFAIRS, NOVEMBER 21, 1951:

THIS OFFICE IS IN RECEIPT OF A LETTER DATED OCTOBER 16, 1951, WITH ENCLOSURES, FROM THE CONTRACTING OFFICER, VETERANS ADMINISTRATION HOSPITAL, FRAMINGHAM, MASSACHUSETTS, REQUESTING A DECISION AS TO WHETHER THERE MAY BE SUBSTITUTED BY S. BLICKMAN, INC., WEEHAWKEN, NEW JERSEY, A DIFFERENT TYPE OF STAINLESS STEEL IN FURNISHING UTILITY TRUCKS TO THE HOSPITAL UNDER CONTRACT NO. V5169P-204.

SINCE THE CONTRACT HAS BEEN AWARDED, THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION. 26 COMP. GEN. 993; AND 28 ID. 401. HOWEVER, SINCE A PROMPT DECISION IN THE MATTER IS REQUIRED, IT IS BEING RENDERED TO YOU.

IN RESPONSE TO AN INVITATION ISSUED BY THE VETERANS ADMINISTRATION HOSPITAL AT FRAMINGHAM, S. BLICKMAN, INC., SUBMITTED A BID DATED AUGUST 27, 1951, OFFERING TO FURNISH 22 UTILITY TRUCKS, IN ACCORDANCE WITH CERTAIN SPECIFICATIONS, AT $119.39 EACH, OR FOR A TOTAL PRICE OF $2.626.58. SEVEN OTHER BIDS WERE RECEIVED ON THE TRUCKS, SIX OF WHICH RANGED FROM $140 TO $180 EACH, AND THE OTHER, WHICH WAS AN ALTERNATE BID, APPEARS TO HAVE BEEN IN THE TOTAL PRICE OF $180.50. THE BID OF S. BLICKMAN, INC., WAS ACCEPTED ON AUGUST 31, 1951.

BY LETTER DATED SEPTEMBER 28, 1951, THE CONTRACTOR ADVISED THE HOSPITAL THAT NATIONAL PRODUCTION AUTHORITY LIMITATION ORDER M-80 DATED AUGUST 15, 1951, RESTRICTED THE USE OF 18/8 TYPE 302 STAINLESS STEEL ON MOST ITEMS OF HOSPITAL EQUIPMENT. THE CONTRACTOR ALSO ADVISED THAT ITS REQUESTS DURING THE PAST FEW MONTHS FOR PERMISSION TO CONTINUE THE USE OF THIS TYPE OF STAINLESS STEEL IN SPECIAL CASES WERE DENIED; THAT THE SUBSTITUTION RECOMMENDED BY THE NATIONAL PRODUCTION AUTHORITY AT THIS TIME IS TYPE 430, WHICH IS A NON NICKEL-BEARING STAINLESS STEEL ALLOY; AND THAT IT IS IN A POSITION TO SUPPLY THIS SUBSTITUTE TYPE OF ALLOY. THEREFORE, THE CONTRACTOR REQUESTED PERMISSION TO MAKE THE SAID SUBSTITUTION IN FURNISHING THE UTILITY TRUCKS UNDER THE CONTRACT.

IT IS WELL ESTABLISHED THAT WHERE PLANS AND SPECIFICATIONS ARE FURNISHED A CONTRACTOR BY THE OTHER PARTY, THERE IS AN IMPLIED WARRANTY THAT THEY ARE ADEQUATE TO ENABLE THE CONTRACTOR TO BUILD THE FINISHED PRODUCT CONTEMPLATED BY THE PARTIES. IN THE PRESENT CASE THE NATIONAL PRODUCTION AUTHORITY LIMITATION ORDER M-80 BECAME EFFECTIVE ON AUGUST 15, 1951, AND THE INVITATION WAS ISSUED ON AUGUST 17, 1951. THUS, NOTWITHSTANDING THAT THE INVITATION WAS ISSUED 2 DAYS SUBSEQUENT TO THE LIMITATION ORDER, IT SPECIFIED THE USE OF A TYPE OF STAINLESS STEEL THE USE OF WHICH APPEARS TO HAVE BEEN PROHIBITED BY THE SAID ORDER. UNDER SUCH CIRCUMSTANCES, AND NOTWITHSTANDING THAT THE CONTRACTOR'S BID WAS DATED AUGUST 27, 1951, OR 12 DAYS SUBSEQUENT TO THE ISSUANCE OF THE NATIONAL PRODUCTION AUTHORITY LIMITATION ORDER, IT IS BELIEVED THE CONTRACTOR COULD NOT PROPERLY BE CHARGED WITH NOTICE OF THE SAID ORDER, WITHOUT LIKEWISE CHARGING THE GOVERNMENT WITH NOTICE OF THE ORDER WHICH WAS ISSUED BY ONE OF ITS OWN AGENCIES. THE PROHIBITION PLACED ON STAINLESS STEEL BY NATIONAL PRODUCTION AUTHORITY LIMITATION ORDER M-80 APPEARS TO RESTRICT THE USE OF STAINLESS STEEL IN MANUFACTURING, ETC., AND TO THIS EXTENT IT WOULD SEEM THAT THIS MATERIAL COULD NOT BE USED IN FABRICATING THE UTILITY TRUCKS, AS APPARENTLY CONTEMPLATED BY THE INVITATION, UNLESS THE MATERIALS WERE INCLUDED IN THE CONTRACTOR'S INVENTORY ON MARCH 1, 1951, OR HAD BEEN ORDERED AS SET FORTH IN SECTION 3 OF SCHEDULE A TO M-80.

IN VIEW OF THE FOREGOING IT REASONABLY MAY BE CONCLUDED THAT IF THE CONTRACTOR DID NOT HAVE THE MATERIAL ON HAND ON MARCH 1, 1951, OR ORDERED AS SET FORTH ABOVE, COMPLIANCE WITH THE SPECIFICATIONS WOULD RESULT IN A DIRECT VIOLATION OF THE PROVISIONS OF NATIONAL PRODUCTION AUTHORITY LIMITATION ORDER M-80.

MOREOVER, IT APPEARS THAT THE CIRCUMSTANCES HERE PRESENTED FALL WITHIN THE PROVISIONS OF SECTION 707, PUBLIC LAW 774, 81ST CONGRESS, DATED SEPTEMBER 8, 1950, 64 STAT. 818, WHEREIN IT IS PROVIDED THAT NO PERSON SHALL BE HELD LIABLE FOR DAMAGES FOR ANY ACT OR FAILURE TO ACT RESULTING DIRECTLY OR INDIRECTLY FROM HIS COMPLIANCE WITH A RULE, REGULATION OR ORDER ISSUED PURSUANT TO THE ACT.

ACCORDINGLY, THE REQUEST OF THE CORPORATION TO BE PERMITTED TO MAKE THE UTILITY TRUCKS FROM A DIFFERENT KIND OF MATERIAL THAN REQUIRED BY THE SPECIFICATIONS DOES NOT APPEAR TO BE WARRANTED IN THE PRESENT CASE. CONSEQUENTLY, CONTRACT NO. V5169P-204 SHOULD BE CANCELED.

THE PAPERS FORWARDED WITH THE LETTER OF OCTOBER 16, 1951, INCLUDING A CARBON COPY THEREOF, ARE TRANSMITTED HEREWITH.