B-134852, FEB. 28, 1958

TO BALFRE GEAR AND MANUFACTURING CO.: REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 30. YOU WERE LEASED 10 ITEMS OF GOVERNMENT-OWNED EQUIPMENT AT A MONTHLY RATE OF ONE PERCENT OF THEIR "AGREED VALUATION.'. ARTICLE 2 OF THE CONTRACT PROVIDES THAT THE EQUIPMENT IS LEASED "IN ITS PRESENT CONDITION. AS IS. YOU WILL REIMBURSE THE GOVERNMENT FOR ALL PACKING. YOU STATE THAT (1) THE 1952 AGREED VALUATION OF CERTAIN EQUIPMENT WAS IN EXCESS OF THE ORIGINAL ACQUISITION COST AND IS IN EXCESS OF THE 1957 USED MARKET PRICE. A MACHINE WAS ENTIRELY UNSUITABLE. (3) YOU WERE OVERCHARGED RENT. (4) UNREASONABLE AND EXORBITANT CHARGES WERE ASSESSED FOR THE PREPARATION OF THE EQUIPMENT FOR STORAGE. THE TERM "AGREED VALUATION" IS NOT SYNONYMOUS WITH "ACQUISITION COST" OR "MARKET VALUE OF EQUIPMENT FIVE YEARS AFTER IT IS LEASED.'.