B-146536, AUG. 14, 1961

B-146536: Aug 14, 1961

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TO OLD DOMINION IRON AND STEEL CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF JULY 24. ALLEGING AN ERROR IN YOUR COMPUTATION OF THE PRICE OF A COPPER SILICON HOT WATER STORAGE TANK HEATER WHICH YOU ARE OBLIGATED TO FURNISH AS SUBCONTRACTOR TO THE PRIME CONTRACTOR. 482.96 WHICH YOU ERRONEOUSLY QUOTED TO THE THOMAS SOMERVILLE COMPANY SHOULD HAVE BEEN $3. WE HAVE BEEN ADVISED BY THE GENERAL SERVICES ADMINISTRATION THAT THE PRIME CONTRACTOR WITH THE THOMAS SOMERVILLE COMPANY IS A FIXED PRICE CONTRACT AND THEREFORE THE CONSIDERATION PAID BY THE GOVERNMENT UNDER THE CONTRACT WILL NOT BE AFFECTED IN ANY WAY BY THE AMOUNT THE PRIME CONTRACTOR PAYS YOU FOR THE HOT WATER STORAGE TANK HEATER COVERED BY YOUR SUBCONTRACT.

B-146536, AUG. 14, 1961

TO OLD DOMINION IRON AND STEEL CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JULY 24, 1961, ALLEGING AN ERROR IN YOUR COMPUTATION OF THE PRICE OF A COPPER SILICON HOT WATER STORAGE TANK HEATER WHICH YOU ARE OBLIGATED TO FURNISH AS SUBCONTRACTOR TO THE PRIME CONTRACTOR, THOMAS SOMERVILLE COMPANY, UNDER GENERAL SERVICES ADMINISTRATION CONTRACT NO. WA 90329.

YOU STATE THAT YOU INCORRECTLY FIGURED THE WEIGHT OF THE COPPER SILICON PLATE, USED IN FABRICATING THE UNIT, AT 16.1 POUNDS PER SQUARE FOOT RATHER THAN 21.4 POUNDS PER SQUARE FOOT. YOU FURTHER STATE THAT THE PRICE OF $3,482.96 WHICH YOU ERRONEOUSLY QUOTED TO THE THOMAS SOMERVILLE COMPANY SHOULD HAVE BEEN $3,992.26.

WE HAVE BEEN ADVISED BY THE GENERAL SERVICES ADMINISTRATION THAT THE PRIME CONTRACTOR WITH THE THOMAS SOMERVILLE COMPANY IS A FIXED PRICE CONTRACT AND THEREFORE THE CONSIDERATION PAID BY THE GOVERNMENT UNDER THE CONTRACT WILL NOT BE AFFECTED IN ANY WAY BY THE AMOUNT THE PRIME CONTRACTOR PAYS YOU FOR THE HOT WATER STORAGE TANK HEATER COVERED BY YOUR SUBCONTRACT.

IT IS AN ESTABLISHED RULE OF LAW THAT CONTRACTS OR AGREEMENTS TO PERFORM WORK FOR OR TO FURNISH SUPPLIES TO PRIME CONTRACTORS ENGAGED IN THE PERFORMANCE OF CONTRACTS WITH THE GOVERNMENT DO NOT CREATE PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTOR AND THE UNITED STATES. SEE UNITED STATES V. DRISCOLL SEC. 1877) 96 U.S. 421; MERRITT V. UNITED STATES (1925) 267 ID. 338, ARMSTRONG V. UNITED STATES (1959) 169 F.SUPP. 259.

SINCE YOU ARE NOT A PARTY TO THE PRIME CONTRACT, YOU HAVE NO BASIS FOR SUBMITTING A CLAIM TO THE GOVERNMENT IN THIS MATTER. THE GOVERNMENT'S ONLY OBLIGATION HERE IS TO PAY THE PRIME CONTRACTOR THE AMOUNT SPECIFIED IN HIS CONTRACT WITH THE GOVERNMENT.

IN VIEW OF THE FACT THAT YOUR CONTRACT IS WITH THE THOMAS SOMERVILLE COMPANY, YOUR REQUEST FOR PAYMENT OF AN AMOUNT GREATER THAN YOUR ESTIMATE SHOULD BE DIRECTED TO THAT COMPANY. THE PRICE OF PERFORMING YOUR OBLIGATION IS A MATTER WHICH YOU, AS A SUBCONTRACTOR, MUST SETTLE WITH THE PRIME CONTRACTOR AND NOT WITH THE GOVERNMENT.