B-146501, SEP. 7, 1961

B-146501: Sep 7, 1961

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 11. 066.24 REPRESENTING ADDITIONAL COSTS WHICH YOU ALLEGE WERE INCURRED IN PERFORMING THE LAST-MENTIONED CONTRACT. IT WAS PROVIDED IN PARAGRAPH 2 AS FOLLOWS: "2. WHERE THE SUPPLIES TO BE FURNISHED ARE TO BE SPECIALLY MANUFACTURED FOR THE GOVERNMENT IN ACCORDANCE THEREWITH. YOU STATED THAT CHANGES IN DESTINATION WERE MADE BY THE GOVERNMENT REQUIRING ADDITIONAL COSTS IN EXPORT PACKING MATERIALS AND YOU REQUESTED ASSISTANCE IN DETERMINING THE DIFFERENCE FACTOR IN SUCH INSTANCES. A SPECIFIC CLAIM ON ACCOUNT OF SUCH ALLEGED COSTS WAS NOT PRESENTED BY YOU TO THE CONTRACTING OFFICER PURSUANT TO THE ABOVE QUOTED PROVISIONS OF THE CONTRACT.

B-146501, SEP. 7, 1961

TO BRILL BROS. INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 11, 1961, ADDRESSED TO THE CHIEF, DEBT SECTION OF THE CLAIMS DIVISION OF OUR OFFICE, REGARDING YOUR REPORTED INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $476.51 REPRESENTING SAVINGS EFFECTED ON TWO CONTRACTS, DA 30-280-QM-10117 AND QM- 10942, AND A COUNTERCLAIM FOR $1,066.24 REPRESENTING ADDITIONAL COSTS WHICH YOU ALLEGE WERE INCURRED IN PERFORMING THE LAST-MENTIONED CONTRACT.

UNDER THE GENERAL PROVISIONS CONTAINED IN CONTRACT QM-10942, IT WAS PROVIDED IN PARAGRAPH 2 AS FOLLOWS:

"2. CHANGES

"THE CONTRACTING OFFICER MAY AT ANY TIME, BY A WRITTEN ORDER, AND WITHOUT NOTICE TO THE SURETIES, MAKE CHANGES, WITHIN THE GENERAL SCOPE OF THIS CONTRACT, IN ANY ONE OR MORE OF THE FOLLOWING: (I) DRAWINGS,DESIGNS, OR SPECIFICATIONS, WHERE THE SUPPLIES TO BE FURNISHED ARE TO BE SPECIALLY MANUFACTURED FOR THE GOVERNMENT IN ACCORDANCE THEREWITH; (II) METHOD OF SHIPMENT OR PACKING; AND (III) PLACE OF DELIVERY. IF ANY SUCH CHANGE CAUSES AN INCREASE OR DECREASE IN THE COST OF, OR THE TIME REQUIRED FOR, PERFORMANCE OF THIS CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE IN THE CONTRACT PRICE OR DELIVERY SCHEDULE, OR BOTH, AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY. ANY CLAIM BY THE CONTRACTOR FOR ADJUSTMENT UNDER THIS CLAUSE MUST BE ASSERTED WITHIN 30 DAYS FROM THE DATE OF RECEIPT BY THE CONTRACTOR OF THE NOTIFICATION OF CHANGE: PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, IF HE DECIDES THAT THE FACTS JUSTIFY SUCH ACTION, MAY RECEIVE AND ACT UPON ANY SUCH CLAIM ASSERTED AT ANY TIME PRIOR TO FINAL PAYMENT UNDER THIS CONTRACT. FAILURE TO AGREE TO ANY ADJUSTMENT SHALL BE A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF THIS CONTRACT ENTITLED "DISPUTES.' HOWEVER, NOTHING IN THIS CLAUSE SHALL EXCUSE THE CONTRACTOR FROM PROCEEDING WITH THE CONTRACT AS CHANGED.'

THE RECORD SHOWS THAT IN A LETTER DATED NOVEMBER 5, 1957, TO THE PHILADELPHIA QUARTERMASTER DEPOT, DEPARTMENT OF THE ARMY, WITH RESPECT TO THE QUESTION OF POSSIBLE SAVINGS UNDER THE CONTRACTS INVOLVED, YOU STATED THAT CHANGES IN DESTINATION WERE MADE BY THE GOVERNMENT REQUIRING ADDITIONAL COSTS IN EXPORT PACKING MATERIALS AND YOU REQUESTED ASSISTANCE IN DETERMINING THE DIFFERENCE FACTOR IN SUCH INSTANCES. A SPECIFIC CLAIM ON ACCOUNT OF SUCH ALLEGED COSTS WAS NOT PRESENTED BY YOU TO THE CONTRACTING OFFICER PURSUANT TO THE ABOVE QUOTED PROVISIONS OF THE CONTRACT. IN A LETTER DATED JANUARY 31, 1959, TO THE UNITED STATES ATTORNEY, MILWAUKEE, WISCONSIN, HOWEVER, YOU ALLEGED THAT THESE ADDITIONAL COSTS AMOUNTED TO $1,066.24 AND REQUESTED THAT YOUR CLAIM IN THIS AMOUNT BE SET OFF AGAINST THE CLAIM FOR SAVINGS AMOUNTING TO $476.51 MADE BY THE GOVERNMENT.

THE RECORD CLEARLY ESTABLISHES THAT YOU HAVE NOT COMPLIED WITH THE PROVISIONS OF THE CONTRACT COVERING THE PRESENTATION AND CONSIDERATION OF CLAIMS FOR INCREASED COSTS DUE TO CHANGES IN THE CONTRACT SPECIFICATIONS AND THEREFORE YOUR CLAIM MAY NOT BE ALLOWED UNDER THE TERMS OF THE CONTRACT. HOWEVER, IT HAS BEEN DETERMINED THAT YOUR CLAIM MAY BE CONSIDERED IN RECOUPMENT OF THE SAVINGS CLAIMED BY THE GOVERNMENT. SEE IN THIS CONNECTION L. W. FOSTER SPORTSWEAR CO. V. UNITED STATES, DECIDED BY THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA SEPTEMBER 10, 1956, 145 F.SUPP. 148.

ACCORDINGLY, INSTRUCTIONS ARE BEING ISSUED TODAY FOR THE TRANSMITTAL TO YOU OF THE CHECK IN THE AMOUNT OF $476.51 WHICH WAS FORWARDED TO US BY THE DEPARTMENT OF THE ARMY FOR LIQUIDATION OF YOUR REPORTED INDEBTEDNESS AND THE FILES IN THE MATTER WILL BE CLOSED.