B-126511, B-135224, AUG. 17, 1965

B-126511,B-135224: Aug 17, 1965

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GENERAL SERVICES ADMINISTRATION: WE HAVE A LETTER DATED JULY 26. WE HAVE NO OBJECTION TO EXTENDING THE USE OF THAT CLAUSE TO SUPPLY CONTRACTS. IT APPEARS THAT THE CLAUSE IS STILL AUTHORIZED FOR USE ONLY AT THE OPTION OF THE PROCURING AGENCY. ALTHOUGH ITS USE IN FIXED PRICE CONSTRUCTION CONTRACTS IS MADE MANDATORY UPON THE DEFENSE AGENCIES BY ASPR 7-602.46. IT IS NOT CLEAR FROM THE LETTER OF JULY 26. WHETHER IT IS PROPOSED TO PRESCRIBE THE CLAUSE FOR SUPPLY CONTRACTS ON A MANDATORY OR OPTIONAL BASIS. IF IT IS TO BE AUTHORIZED ONLY AS AN OPTION WE SUGGEST THAT CONSIDERATION BE GIVEN TO THE FURNISHING OF SOME GUIDELINES OR CRITERIA TO BE OBSERVED BY THE AGENCIES IN DETERMINING WHETHER OR NOT TO USE THE CLAUSE.

B-126511, B-135224, AUG. 17, 1965

TO THE HONORABLE LAWSON B. KNOTT, JR., ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

WE HAVE A LETTER DATED JULY 26, 1965, FROM YOUR ASSISTANT GENERAL COUNSEL, REGULATIONS AND GENERAL LAW DIVISION, REQUESTING OUR COMMENTS ON THE PROPOSED USE IN GOVERNMENT SUPPLY CONTRACTS OF THE "PRICE ADJUSTMENT FOR SUSPENSION, DELAY, OR INTERRUPTION OF THE WORK" CLAUSE NOW PRESCRIBED FOR USE IN GOVERNMENT CONSTRUCTION CONTRACTS BY PARAGRAPH 1-7.602-1 OF THE FEDERAL PROCUREMENT REGULATIONS.

WE HAVE NO OBJECTION TO EXTENDING THE USE OF THAT CLAUSE TO SUPPLY CONTRACTS. HOWEVER, AS INDICATED IN OUR LETTER OF JANUARY 6, 1959, COMMENTING UPON THE ORIGINAL PROPOSAL FOR AUTHORIZATION OF THIS CLAUSE IN CONSTRUCTION CONTRACTS, WE BELIEVE THAT IMPLEMENTING REGULATIONS REQUIRE THE CONTRACTING OFFICER TO MAINTAIN A RECORD OF ALL NEGOTIATIONS LEADING TO THE ADJUSTMENT, INCLUDING FINANCIAL AND COST DATA ADEQUATE TO SUPPORT ANY ADJUSTMENT MADE PURSUANT TO THE CLAUSE.

IN REVIEWING THIS MATTER, WE NOTE THAT UNDER DATE OF NOVEMBER 21, 1961, THE ASSISTANT COMMISSIONER FOR PROCUREMENT POLICY OF YOUR AGENCY REQUESTED OUR VIEWS AS TO THE DESIRABILITY OF MAKING THE USE OF THE CLAUSE MANDATORY IN CONSTRUCTION CONTRACTS, AND BY REPLY DATED DECEMBER 11, 1961, WE ADVISED THAT WE HAD NO OBJECTION TO THIS PROPOSAL. HOWEVER, IT APPEARS THAT THE CLAUSE IS STILL AUTHORIZED FOR USE ONLY AT THE OPTION OF THE PROCURING AGENCY, ALTHOUGH ITS USE IN FIXED PRICE CONSTRUCTION CONTRACTS IS MADE MANDATORY UPON THE DEFENSE AGENCIES BY ASPR 7-602.46. IT IS NOT CLEAR FROM THE LETTER OF JULY 26, 1965, WHETHER IT IS PROPOSED TO PRESCRIBE THE CLAUSE FOR SUPPLY CONTRACTS ON A MANDATORY OR OPTIONAL BASIS. IF IT IS TO BE AUTHORIZED ONLY AS AN OPTION WE SUGGEST THAT CONSIDERATION BE GIVEN TO THE FURNISHING OF SOME GUIDELINES OR CRITERIA TO BE OBSERVED BY THE AGENCIES IN DETERMINING WHETHER OR NOT TO USE THE CLAUSE, AS TO BOTH CONSTRUCTION AND SUPPLY CONTRACTS.