B-123392, DEC. 1, 1955

B-123392: Dec 1, 1955

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TO THE VENDO COMPANY: REFERENCE IS MADE TO YOUR REQUEST FOR REVIEW OF SETTLEMENT DATED FEBRUARY 25. WERE DELIVERED AS A SUBSTITUTE FOR RISERS. 462 OF WHICH WERE TO BE FURNISHED AS COMPONENTS OF 231 AERIAL DELIVERY KIT ASSEMBLES. THE 462 RISERS WERE ULTIMATELY DELIVERED AND THE QUESTION AROSE AS TO PAYMENT FOR THE 224 SLINGS PREVIOUSLY ACCEPTED BY THE GOVERNMENT AND FOR 225 SLINGS OF THE SAME TYPE WHICH WERE ON HAND IN YOUR SUPPLIER'S PLANT. IT WAS STIPULATED THAT SUCH AGREEMENT "ENTIRELY EXCLUDES CONSIDERATION OF THE CONTRACTOR'S CLAIM FOR REIMBURSEMENT FOR 449 SLINGS P/N 48C7265-5 MANUFACTURED BY THE CONTRACTOR FOR THE GOVERNMENT ON THE BASIS OF AN ALLEGED INFORMAL MMITMENT.'. WAS DISALLOWED BY THE SETTLEMENT OF FEBRUARY 28.

B-123392, DEC. 1, 1955

TO THE VENDO COMPANY:

REFERENCE IS MADE TO YOUR REQUEST FOR REVIEW OF SETTLEMENT DATED FEBRUARY 25, 1955, CONCERNING YOUR CLAIM FOR $15,543.57, WHICH REPRESENTS THE BALANCE ALLEGED TO BE DUE FOR 449 SLINGS, PART NO. 48C7265-5, DELIVERED IN CONNECTION WITH THE PERFORMANCE OF CONTRACT NO. AF33/038/-20998, DATED FEBRUARY 27, 1951, BUT NOT REQUIRED FOR DELIVERY UNDER THE TERMS OF THAT CONTRACT.

THROUGH SOME MISUNDERSTANDING, 224 SLINGS, P/N 48C7265-5, WERE DELIVERED AS A SUBSTITUTE FOR RISERS, P/N 51C6738, 462 OF WHICH WERE TO BE FURNISHED AS COMPONENTS OF 231 AERIAL DELIVERY KIT ASSEMBLES, 105 MM. HOWITZER, COMBAT, TYPE D-1, REQUIRED FOR DELIVERY UNDER ITEM 9 OF THE CONTRACT. THE 462 RISERS WERE ULTIMATELY DELIVERED AND THE QUESTION AROSE AS TO PAYMENT FOR THE 224 SLINGS PREVIOUSLY ACCEPTED BY THE GOVERNMENT AND FOR 225 SLINGS OF THE SAME TYPE WHICH WERE ON HAND IN YOUR SUPPLIER'S PLANT. YOU PRESENTED A CLAIM FOR $22,293.57 AND IN SUPPLEMENTAL AGREEMENT NO. 7, WHICH RELATES TO A PRICE REVISION MATTER CONSIDERED IN ACCORDANCE WITH SECTION 37 OF THE GENERAL PROVISIONS OF THE CONTRACT, IT WAS STIPULATED THAT SUCH AGREEMENT "ENTIRELY EXCLUDES CONSIDERATION OF THE CONTRACTOR'S CLAIM FOR REIMBURSEMENT FOR 449 SLINGS P/N 48C7265-5 MANUFACTURED BY THE CONTRACTOR FOR THE GOVERNMENT ON THE BASIS OF AN ALLEGED INFORMAL MMITMENT.'

SUBSEQUENTLY, BY SUPPLEMENTAL AGREEMENT NO. 8 TO THE CONTRACT, THE GOVERNMENT AGREED TO PURCHASE THE 225 SLINGS ON HAND IN YOUR SUPPLIER'S PLANT AT A UNIT PRICE OF $30 AND A TOTAL PRICE OF $6,750. THE CLAIM FOR $15,543.57, COVERING THE DIFFERENCE BETWEEN THE SUM OF $22,293.57, ORIGINALLY CLAIMED FOR THE 449 SLINGS, AND THE SUM OF $6,750, PAID UNDER SUPPLEMENTAL AGREEMENT NO. 8, WAS DISALLOWED BY THE SETTLEMENT OF FEBRUARY 28, 1955, ON THE BASIS OF THE CONCLUSION THAT SUPPLEMENTAL AGREEMENT NO. 7 WAS NOT IN ACCORDANCE WITH AN UNDERSTANDING REACHED AT A PRICE REDETERMINATION CONFERENCE HELD ON NOVEMBER 1, 1952. SOME OF THE GOVERNMENT NEGOTIATORS HAD EXPRESSED THE OPINION THAT IT WAS UNDERSTOOD THAT NO PAYMENT SHOULD BE MADE FOR THE 449 SLINGS, THUS RAISING THE QUESTION AS TO THE VALIDITY OF BOTH OF THE ABOVE SUPPLEMENTAL AGREEMENTS. STATEMENTS HAVE SINCE BEEN OBTAINED FROM THE CONTRACTING OFFICER AND FROM TWO OF THE INDIVIDUALS WHO, AS ALLEGED BY YOUR COMPANY, WERE PRESENT AT THE CONFERENCE ON NOVEMBER 1, 1952, AND AT A LATER MEETING RELATING TO YOUR CLAIM FOR $22,293.57 WHICH TOOK PLACE BEFORE THE EXECUTION OF SUPPLEMENTAL AGREEMENT NO. 7.

ALTHOUGH THERE IS SOME INDICATION THAT THE CONTRACTING OFFICER WAS NOT FULLY INFORMED WITH RESPECT TO THE PRIOR NEGOTIATIONS, WE FEEL THAT THERE IS INSUFFICIENT EVIDENCE TO WARRANT THE TAKING OF ANY EXCEPTION TO THE EXPRESS TERMS OF THE TWO SUPPLEMENTAL AGREEMENTS. IT IS A FUNDAMENTAL RULE THAT A WRITTEN AGREEMENT SHOULD ORDINARILY BE PRESUMED TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES AND THAT PREVIOUS TRANSACTIONS AND FACTS MAY NOT BE RESORTED TO FOR THE PURPOSE OF ALTERING OR VARYING THE EXPRESS TERMS OF THE AGREEMENT. BRAWLEY V. UNITED STATES 96 U.S. 168, 173; SIMPSON V. UNITED STATES, 172 U.S. 372, 379.

APPARENTLY, THERE WAS NO MUTUAL MISTAKE IN THE EXECUTION OF SUPPLEMENTAL AGREEMENT NO. 8 SINCE, IN HIS RECENT STATEMENT, THE CONTRACTING OFFICER HAS FURNISHED THE FOLLOWING INFORMATION:

"I DID HANDLE THE PURCHASE OF THE 225 SLINGS THEN IN THE POSSESSION OF VENDO. MR. PAUL SELZER CONTACTED ME AND INFORMED ME THAT VENDO WAS DISCONTINUING ITS CLAIM FOR THE 225 SLINGS THEN IN ITS POSSESSION, BUT REQUESTED THAT THE GOVERNMENT BUY THE SLINGS AT THE CONTRACT PRICE, IN FAIRNESS TO VENDO. I INFORMED MR. SELZER THAT WE HAD NO AUTHORITY TO TAKE SUCH ACTION AND THAT IN ANY EVENT THE PRICE OF THE RAW MATERIALS HAD SO DECREASED THAT THE MARKET PRICE FOR THE ITEM WOULD BE BELOW THE UNIT PRICE OF THE CONTRACT. MR. SELZER INDICATED THAT THE SLINGS WERE VALUELESS TO VENDO AND OFFERED TO SELL THEM AT A PRICE VERY ADVANTAGEOUS TO THE GOVERNMENT. ON THAT BASIS, I CONTACTED THE QUARTERMASTER CORPS, WHICH, AFTER DETERMINING A NEED EXISTED FOR THE ITEMS, ISSUED AN MIPR TO TAKE ADVANTAGE OF THE LOW PRICE AND IMMEDIATE DELIVERY, AND I PURCHASED THE SLINGS. THERE WAS NO INTENT ON MY PART THAT THIS WAS ANYTHING OTHER THAN A SIMPLE PURCHASE, AND MR. SELZER SO UNDERSTOOD. I DID LEARN LATER, TO MY SURPRISE, THAT VENDO WAS RENEWING ITS CLAIM IN RELATION TO THE 225 SLINGS PURCHASED.'

THERE REMAINS FOR CONSIDERATION THE AMOUNT PAYABLE FOR THE 224 SLINGS WHICH WERE DELIVERED DURING THE EARLY PART OF THE CONTRACT PERFORMANCE PERIOD. BEFORE ANY QUESTION WAS RAISED WITH RESPECT TO THE VALIDITY OF THE TWO SUPPLEMENTAL AGREEMENTS, IT WAS ADMINISTRATIVELY DETERMINED THAT A PRICE OF $44 EACH WOULD HAVE BEEN A FAIR AND REASONABLE PRICE FOR THE ITEMS AS OF THE TIME OF DELIVERY IN 1951.

ACCORDINGLY, SETTLEMENT WILL ISSUE IN FAVOR OF YOUR COMPANY FOR THE AMOUNT OF $9,856, COMPUTED AT A UNIT PRICE OF $44 FOR THE 224 SLINGS, AS IN FULL AND FINAL SETTLEMENT OF ALL CLAIMS ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OF YOUR CONTRACT.