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B-124643, OCT. 26, 1955

B-124643 Oct 26, 1955
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TO COLUMBIA ELECTRIC AND MANUFACTURING COMPANY: REFERENCE IS MADE TO LETTER OF JUNE 3. 393.68 AS REIMBURSEMENT FOR LOSSES ALLEGED TO HAVE BEEN SUSTAINED IN THE PERFORMANCE OF CONTRACT NO. IT IS CONTENDED THAT YOU WERE INDUCED TO ENTER INTO THE CONTRACT WITHOUT EXAMINING THE DRAWINGS AND SPECIFICATIONS UPON REPRESENTATIONS BY THE GOVERNMENT EMPLOYEE WITH WHOM YOU NEGOTIATED THAT THE EXIGENCIES OF THE SERVICE REQUIRED AN IMMEDIATE DECISION. THAT THE NATIONAL AVERAGE PRICE OF FINS OF THE TYPE INVOLVED WAS $0.31 EACH. ASSERTING THAT YOUR COST OF $0.4422 EACH IS IN LINE WITH CONTRACTS. THAT THE GOVERNMENT'S REPRESENTATION AS TO THE NATIONAL AVERAGE PRICE WAS ERRONEOUS. YOU REQUEST RECONSIDERATION ON THE BASIS THAT THE GOVERNMENT IS LIABLE FOR THE LOSS SUSTAINED BY YOU AS THE RESULT OF SUCH MISREPRESENTATION.

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B-124643, OCT. 26, 1955

TO COLUMBIA ELECTRIC AND MANUFACTURING COMPANY:

REFERENCE IS MADE TO LETTER OF JUNE 3, 1955, FROM ALVORD AND ALVORD,ATTORNEYS, REQUESTING REVIEW OF THE SETTLEMENT DATED MAY 5, 1955, WHICH DISALLOWED YOUR CLAIM FOR $144,393.68 AS REIMBURSEMENT FOR LOSSES ALLEGED TO HAVE BEEN SUSTAINED IN THE PERFORMANCE OF CONTRACT NO. DA-04- 200-ORD-153, DATED APRIL 22, 1952.

IT IS CONTENDED THAT YOU WERE INDUCED TO ENTER INTO THE CONTRACT WITHOUT EXAMINING THE DRAWINGS AND SPECIFICATIONS UPON REPRESENTATIONS BY THE GOVERNMENT EMPLOYEE WITH WHOM YOU NEGOTIATED THAT THE EXIGENCIES OF THE SERVICE REQUIRED AN IMMEDIATE DECISION, AND THAT THE NATIONAL AVERAGE PRICE OF FINS OF THE TYPE INVOLVED WAS $0.31 EACH. ASSERTING THAT YOUR COST OF $0.4422 EACH IS IN LINE WITH CONTRACTS, AWARDED BY THE GOVERNMENT IN 1953, AND, THEREFORE, THAT THE GOVERNMENT'S REPRESENTATION AS TO THE NATIONAL AVERAGE PRICE WAS ERRONEOUS, YOU REQUEST RECONSIDERATION ON THE BASIS THAT THE GOVERNMENT IS LIABLE FOR THE LOSS SUSTAINED BY YOU AS THE RESULT OF SUCH MISREPRESENTATION.

THE RECORDS BEFORE OUR OFFICE INDICATE THAT THE FOLLOWING CIRCUMSTANCES WERE INVOLVED IN THE EXECUTION OF CONTRACT NO. DA-04-200 ORD-153. REQUESTS FOR PROPOSALS ACCOMPANIED BY DRAWINGS WERE FORWARDED TO YOU, AS WELL AS OTHER PROSPECTIVE BIDDERS, BY LETTER OF NOVEMBER 7, 1951. YOU DID NOT SUBMIT A BID IN RESPONSE TO SUCH REQUEST. EARLY IN MARCH 1952, AFTER IT WAS DETERMINED THAT THE BIDDER WHO SUBMITTED THE LOWEST BID OF $0.2521 IN RESPONSE TO THE REQUEST COULD NOT MAKE NECESSARY FINANCIAL ARRANGEMENTS, YOU WERE ADVISED THAT YOU COULD STILL SUBMIT A BID IF YOU COULD MEET SUCH LOW BID PRICE. THEREAFTER YOU SUBMITTED A BID DATED MARCH 27, 1952, IN WHICH YOU QUOTED A PRICE OF $0.2551, SUBJECT TO AN UPWARD REVISION OF 25 PERCENT AND UPON THE CONDITION THAT THE GOVERNMENT FURNISH FACILITIES AT AN ESTIMATED COST OF $86,610.30. IT APPEARS THAT AT THE TIME YOUR BID WAS SUBMITTED YOU HAD NOT BEEN APPRAISED OF THE INSPECTION PROCEDURE WHICH REQUIRED MAGNAFLUX AFTER SCREW MACHINE OPERATIONS AND THAT IN VIEW OF THIS FACT YOU ENTERED INTO NEGOTIATIONS IN WHICH YOU AGREED TO FURNISH THE FINS AT A PRICE OF $0.31 EACH, SUBJECT TO AN UPWARD REVISION NOT TO EXCEED 15 PERCENT AND AN UNLIMITED DOWNWARD REVISION AND UPON THE CONDITION THAT THE GOVERNMENT FURNISH FACILITIES AT A COST NOT TO EXCEED $90,000. SUCH AGREEMENT, CONFIRMED BY YOU IN A TELEGRAM DATED APRIL 5, 1952, CONSTITUTED THE BASIS FOR THE LETTER CONTRACT OF APRIL 17, 1952, FORWARDED TO YOU WITH LETTER OF TRANSMITTAL DATED APRIL 19, 1952, PROVIDING FOR YOU TO PROCEED WITH THE WORK, FOR FURTHER NEGOTIATIONS AND THE EXECUTION OF A FORMAL CONTRACT. YOU ACCEPTED THE LETTER CONTRACT ON APRIL 22, 1952. ALL PLANS, DRAWINGS AND SPECIFICATIONS WERE FORWARDED TO YOU WITH THE LETTER CONTRACT. A COST BREAKDOWN CONFIRMING YOUR AGREEMENT TO FURNISH THE FINS AT THE PRICE OF $0.31 EACH WHICH INCLUDED A PROFIT OF 6.38 PERCENT WAS SUBMITTED BY YOU AND RECEIVED IN THE ADMINISTRATIVE OFFICE ON APRIL 25, 1952.

SUPPLEMENTAL AGREEMENT NO. 1, DATED MAY 14, 1952, CONSTITUTED THE FORMAL CONTRACT. IT PROVIDED THAT THE PRICE MIGHT BE INCREASED OR DECREASED ON THE BASIS OF FURTHER NEGOTIATIONS AFTER COMPLETION AND DELIVERY OF 30 PERCENT OF THE FINS, BUT THAT IN NO EVENT SHOULD ANY UPWARD REVISION OF THE PRICE EXCEED $0.3565 EACH ($0.31 PLUS 15 PERCENT OR AN AGGREGATE OF $944,725. YOU EXECUTED THE SUPPLEMENTAL AGREEMENT AND RETURNED IT WITH A LETTER DATED MAY 19, 1952.

DURING PERFORMANCE UNDER THE CONTRACT CHANGES WERE REQUIRED, AND SUPPLEMENTAL AGREEMENTS NOS. 2 TO 17, INCLUSIVE, WERE EXECUTED BY YOU, COVERING THE ADDITIONAL COSTS INVOLVED IN SUCH CHANGES. BY SUPPLEMENTAL AGREEMENT NO. 7, IT WAS AGREED THAT THE UPWARD LIMITATION ON THE UNIT PRICE SHOULD BE ELIMINATED AND THAT REVISION UPWARD OF THE TOTAL CONTRACT PRICE SHOULD NOT EXCEED THE AMOUNT OF $944,725, SPECIFIED IN SUPPLEMENTAL AGREEMENT NO. 1. THE TOTAL PRICE FOR THE CONTRACT, AS AMENDED, WAS FINALLY FIXED IN SUPPLEMENTAL AGREEMENT NO. 17, AT $1,002.435.75.

THE CONTRACTING OFFICER HAS REPORTED THAT THERE IS NOTHING IN THE RECORD OF HIS OFFICE TO INDICATE THAT YOU WERE INDUCED TO ENTER INTO THE CONTRACT THROUGH MISREPRESENTATIONS OR THROUGH LACK OR DETAILED INFORMATION AS TO THE GOVERNMENT'S REQUIREMENTS. IN FACT HE HAS REPORTED THAT YOU WERE FURNISHED INFORMATION WHICH ENABLED YOU TO MORE FULLY ANALYZE THE COSTS INVOLVED. FURTHERMORE HE HAS REPORTED THAT IN THE EXTENSIVE NEGOTIATIONS THROUGHOUT THE LIFE OF THE CONTRACT RELATIVE TO CHANGES ORDERED BY THE GOVERNMENT NO INDICATIONS WERE GIVEN BY YOU OF ANY BELIEF THAT YOU HAD BEEN MISLED BY ANY GOVERNMENT REPRESENTATION. ALSO, HE HAS STATED THAT THE FIRST TIME YOU GAVE NOTICE OF THE ALLEGED MISREPRESENTATION WAS IN FEBRUARY 1954, APPROXIMATELY TWO MONTHS AFTER YOU HAD COMPLETED SHIPMENT OF THE FINS COVERED BY THE CONTRACT. IN VIEW OF THE FOREGOING AND SINCE THE RECORD INDICATES THAT YOU HAVE RECEIVED THE FULL CONSIDERATION SPECIFIED IN THE CONTRACT, AS AMENDED, THERE APPEARS NO LEGAL BASIS FOR THE ALLOWANCE OF ANY ADDITIONAL AMOUNT.

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