B-143474, AUG. 3, 1960

B-143474, AUG. 3, 1960

TO MRS. LOUISE C. CLARK, AUTHORIZED CERTIFYING OFFICER, NATIONAL INSTITUTES OF HEALTH:

REFERENCE IS MADE TO YOUR LETTER OF JULY 7, 1960, TRANSMITTING AN UNPAID INVOICE IN THE AMOUNT OF $5,225 SUBMITTED BY WM. S. MERRELL COMPANY, CINCINNATI, OHIO, AND COVERING RESEARCH WORK PERFORMED BY THE COMPANY UNDER COST TYPE CONTRACT NO. SA-43-PH-1902 DURING THE PERIOD JANUARY 1, 1959, THROUGH MAY 6, 1959. IT IS REPORTED THAT $96 OF THE $5,225 COVERS CERTAIN ALLOWABLE COSTS FOR DECEMBER 29, 30, AND 31, 1958, WHICH HAVE NOT BEEN PAID BUT WHICH ARE A PART OF THE TOTAL AMOUNT CLAIMED AND DUE AND THAT THE BALANCE REPRESENTS COSTS INCURRED BY THE COMPANY FOR RESEARCH WORK CARRIED ON BEYOND DECEMBER 1, 1958, THE EXPIRATION DATE OF THE CONTRACT.

UNDER THE CONTRACT THE COMPANY AGREED TO CONDUCT RESEARCH WORK IN THE SCREENING OF CHEMICALS AND ANTIBIOTIC FILTRATES AS ANTICANCER AGENTS AGAINST TUMORS IN EXPERIMENTAL ANIMALS. THE PERIOD OF PERFORMANCE OF THE BASIC CONTRACT WAS FROM DECEMBER 2, 1957, TO DECEMBER 1, 1958, AND THE TOTAL COST OF THE RESEARCH WORK WAS ESTIMATED AS $18,985. BY SUPPLEMENTAL AGREEMENT NO. 1 DATED DECEMBER 1, 1958, THE PERIOD OF PERFORMANCE WAS EXTENDED TO DECEMBER 31, 1958.

IN HIS REPORT OF JANUARY 8, 1960, THE CONTRACTING OFFICER STATES THAT BOTH THE COMPANY AND THE GOVERNMENT FULLY INTENDED TO CONTINUE WORK BEYOND DECEMBER 31, 1958, UNDER A SUPPLEMENTAL AGREEMENT (PROPOSED SUPPLEMENT NO. 2) TO THE BASIC CONTRACT; THAT THE COMPANY PROCEEDED ON THIS BASIS TO INCUR COSTS; AND THAT WHEN BOTH PARTIES WERE UNABLE TO AGREE ON THE TERMS FOR CONTINUING THE RESEARCH PROJECT, THE COMPANY WAS INSTRUCTED TO STOP ALL WORK AS OF MAY 6, 1959. IN CONNECTION WITH THE AMOUNT OF WORK PERFORMED BY THE COMPANY DURING THE PERIOD OF JANUARY 1, 1959, TO MAY 6, 1959, IT IS REPORTED THAT DURING THIS PERIOD THE COMPANY PERFORMED 196 TESTS AS COMPARED WITH 136 TESTS PERFORMED BY THE COMPANY DURING THE CALENDAR YEAR 1958.

IT IS UNDERSTOOD INFORMALLY THAT THE PROPOSED SUPPLEMENT NO. 2 WOULD HAVE INCREASED THE EXPENDITURE LIMITATION TO $23,060. THE RECORD INDICATES THAT THE COMPANY INCURRED COSTS AMOUNTING TO $22,046 IN THE PERFORMANCE OF THE CONTRACT WORK. THE RECORD ALSO SHOWS THAT FINAL PAYMENT OF ALL THE EXPENSES INCURRED BY THE COMPANY UNDER THE BASIC CONTRACT, AS AMENDED BY SUPPLEMENT NO. 1, HAS NOT BEEN MADE BY THE GOVERNMENT. SINCE BOTH PARTIES INTENDED THAT THE WORK PERFORMED DURING THE PERIOD JANUARY 1, 1959, THROUGH MAY 6, 1959, WAS TO BE COVERED BY A CONTRACT SUPPLEMENT AND SINCE THE EXPENDITURE LIMITATION AS STATED IN THE PROPOSED SUPPLEMENT NO. 2 WILL NOT BE EXCEEDED, OUR OFFICE WILL INTERPOSE NO OBJECTION TO THE ISSUANCE OF A SUPPLEMENT TO THE CONTRACT TO COVER THE WORK PERFORMED BY THE COMPANY DURING THE PERIOD JANUARY 1, 1959, THROUGH MAY 6, 1959. ALSO, THE VOUCHER MAY BE CERTIFIED FOR PAYMENT FROM 1959 FISCAL YEAR FUNDS, AS RECOMMENDED BY THE CONTRACTING OFFICER.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING PAYMENT OF THE ADDITIONAL AMOUNT.

THE CORRESPONDENCE AND DOCUMENTS FORWARDED WITH YOUR LETTER ARE RETURNED HEREWITH.