B-136334, JUL. 7, 1959

B-136334: Jul 7, 1959

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TO THE COOLEY ELECTRIC MANUFACTURING CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 28. WE ARE UNABLE TO ALLOW ANY ADDITIONAL COSTS ATTRIBUTABLE TO THE CHANGED PACKING REQUIREMENTS. THE COST OF COMMERCIAL PACKING 12 EACH OF ITEM 1 UNDER THE CONTRACT HAS BEEN REPORTED TO HAVE BEEN ABOUT $25 LESS PER UNIT THAN EXPORT PACKING. IT IS NOT UNDERSTOOD HOW THE CHANGE IN PACKING REQUIREMENTS FROM EXPORT TO COMMERCIAL PACK COULD HAVE RESULTED IN ANY ADDITIONAL COSTS. WHICH WAS INCORPORATED INTO AND MADE A PART OF THE CONTRACT. IT WOULD APPEAR THAT YOU WERE OBLIGATED TO PRESERVE AND PACKAGE ALL THE ITEMS FOR EXPORT SHIPMENT AND THAT ANY LATER CHANGE TO A LESS EXPENSIVE PACKAGING REQUIREMENT CERTAINLY WOULD HAVE EFFECTED A SAVINGS IN COST TO YOUR COMPANY.

B-136334, JUL. 7, 1959

TO THE COOLEY ELECTRIC MANUFACTURING CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 28, 1958, AND SUBSEQUENT CORRESPONDENCE, REQUESTING RECONSIDERATION OF OUR DECISION OF AUGUST 25, 1958, WHICH SUSTAINED THE DISALLOWANCE OF YOUR CLAIM FOR INCREASED COSTS OCCASIONED BY CHANGED PACKING REQUIREMENTS UNDER CONTRACT NO. AF 09/603/-32330, AS AMENDED.

AS STATED IN OUR LETTER OF OCTOBER 1, 1958, TO YOU, WE INSTRUCTED THE CLAIMS DIVISION OF OUR OFFICE TO DETERMINE THE EXTENT THE EXCESS COSTS RESULTING FROM THE SHIPPING INSTRUCTIONS WHICH CHANGED THE CONTRACT PACKING REQUIREMENTS AND TO ALLOW SUCH AMOUNT AS MAY BE APPROPRIATE UNDER THE CIRCUMSTANCES. SUCH FURTHER DEVELOPMENT OF YOUR CLAIM HAS BEEN MADE AND, FOR THE REASONS SET FORTH BELOW, WE ARE UNABLE TO ALLOW ANY ADDITIONAL COSTS ATTRIBUTABLE TO THE CHANGED PACKING REQUIREMENTS.

A FURTHER REVIEW OF THIS MATTER REVEALS THAT THE SHIPPING INSTRUCTIONS IN THE INVITATION FOR BIDS REQUIRED EXPORT PACKAGING AND THAT YOUR BID INCLUDED AN ITEM OF COST FOR SUCH PACKAGING. THE COST OF COMMERCIAL PACKING 12 EACH OF ITEM 1 UNDER THE CONTRACT HAS BEEN REPORTED TO HAVE BEEN ABOUT $25 LESS PER UNIT THAN EXPORT PACKING. HENCE, IT IS NOT UNDERSTOOD HOW THE CHANGE IN PACKING REQUIREMENTS FROM EXPORT TO COMMERCIAL PACK COULD HAVE RESULTED IN ANY ADDITIONAL COSTS. STANDARD FORM "PRESERVATION PACKAGING AND PACKING REQUIREMENTS" MCP 71-163, PAGE 1, WHICH WAS INCORPORATED INTO AND MADE A PART OF THE CONTRACT, SPECIFICALLY PROVIDED FOR EXPORT PACKING AND SHIPPING CONTAINERS. THEREFORE, IT WOULD APPEAR THAT YOU WERE OBLIGATED TO PRESERVE AND PACKAGE ALL THE ITEMS FOR EXPORT SHIPMENT AND THAT ANY LATER CHANGE TO A LESS EXPENSIVE PACKAGING REQUIREMENT CERTAINLY WOULD HAVE EFFECTED A SAVINGS IN COST TO YOUR COMPANY.