B-149536, SEP. 27, 1962

B-149536, SEP. 27, 1962

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF JULY 24, 1962, WITH ENCLOSURES, FROM THE OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING OUR DECISION AS TO THE AMOUNT PROPERLY PAYABLE TO THE TABULATING CARD COMPANY, DIVISION OF WHITING PAPER COMPANY, FOR A QUANTITY OF TABULATING CARDS FURNISHED UNDER A TERM CONTRACT WITH THE GOVERNMENT PRINTING OFFICE FOR THE PERIOD JULY 1 TO DECEMBER 31, 1961.

THE RECORD DISCLOSES THAT SOME CONTROVERSY AROSE UNDER THE CONTRACT IN REGARD TO THE CORRECT BILLING METHOD APPLICABLE UNDER THE TERMS THEREOF. THE DIRECTOR OF PURCHASES OF THE GOVERNMENT PRINTING OFFICE ADVISED ONE OF THE CONTRACTORS, UNDER DATE OF NOVEMBER 17, 1961, AS FOLLOWS: ,WHEN PRICING CARDS TO BE PROCURED UNDER THESE CONTRACTS, EACH CARD SPECIFICATION MUST BE PRICED IN ACCORDANCE WITH THE RATES QUOTED FOR A GIVEN PRICE CLASS. IT IS OUR INTENTION THAT A ,SPECIFICATION" BE DEFINED AS A BLANK CARD OR A FORM (OR PLATE). WHEN A SINGLE ORDER IS PROCESSED FOR A NUMBER OF DIFFERENT FORMS THE QUANTITY ORDERED FOR EACH FORM MUST BE PRICED AT THE APPLICABLE CONTRACT RATE FOR THE NUMBER OF CARDS REQUIRED ON EACH, RATHER THAN THE TOTAL QUANTITY OF THE SEVERAL FORMS.'

IT IS THE CONTENTION OF YOUR CONTRACTING OFFICER IN THE INSTANT PROCUREMENT THAT PAYMENT FOR THE CARDS SUPPLIED UNDER THE THREE DELIVERY ORDERS PLACED WITH THIS CONTRACTOR SHOULD BE PRICED FOR EACH CARD SPECIFICATION ON THE BASIS OF THE TOTAL QUANTITY OF CARDS SHIPPED INTO A GIVEN AREA, REGARDLESS OF THE NUMBER OF CARD SPECIFICATIONS OR THE NUMBER OF DESTINATIONS WITHIN AN AREA. IT IS STATED THAT SUCH METHOD IS CONSISTENT WITH THE PRICING POLICY HERETOFORE FOLLOWED BY THE CONTRACTORS AND THE VARIOUS PROCUREMENT AGENCIES.

UNDER THE PRICING PROVISIONS OF THE INSTRUCTIONS TO USING AGENCIES WHICH ACCOMPANY THE CONTRACT, IT IS STATED THAT--- "THREE DIFFERENT PRICE CLASSES ARE PROVIDED IN THE SCHEDULE OF PRICES. WHEN PRICING CARDS TO BE PROCURED UNDER THESE CONTRACTS, EACH CARD SPECIFICATION MUST BE PRICED IN ACCORDANCE WITH THE PRICES QUOTED FOR A GIVEN AND APPLICABLE PRICE CLASS. PRICES QUOTED UNDER ONE PRICE CLASS ARE NOT TO BE USED WITH PRICES QUOTED UNDER ANOTHER PRICE CLASS FOR THE PURPOSE OF DETERMINING COST.' ON APRIL 2, 1962, THE GOVERNMENT PRINTING OFFICE ISSUED AMENDMENT NO. 1, TO THE CONTRACT WHICH PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"A CARD SPECIFICATION IS DEFINED AS A BLANK CARD OR AS ANY CARD OR GROUP OF CARDS SPECIFIED ON AN ORDER WHICH CAN BE PRODUCED FROM THE SAME PRINTING PLATE, NOTWITHSTANDING ANY CHANGES IN STOCK OR ADDITIONAL FEATURES WHICH MAY BE REQUIRED.'

THE SHIPPING PROVISIONS OF A PREVIOUS BUT SIMILAR CONTRACT ENDING DECEMBER 31, 1958, WERE THE SUBJECT OF OUR DECISION OF MARCH 28, 1960, TO THE INTERNAL REVENUE SERVICE. IN THAT CASE IT WAS CONCLUDED THAT THE CONTRACT PROPERLY SHOULD BE CONSTRUED AS REQUIRING COMPUTATION OF SHIPPING CHARGES ON THE BASIS OF THE NUMBER OF CARDS DELIVERED TO EACH DESTINATION WITHIN AN AREA RATHER THAN ON THE BASIS OF THE TOTAL NUMBER OF CARDS TO A SPECIFIC AREA. WE THINK THAT REASONING IS FOR GENERAL APPLICATION TO THE PRICING PROVISIONS.

IN THE INSTANT CASE WE FEEL THAT THE STIPULATIONS SET FORTH IN AMENDMENT NO. 1 CONSTITUTE A CLARIFICATION OF THE MATTERS SET FORTH IN THE ACCOMPANYING INSTRUCTIONS TO USING AGENCIES, RATHER THAN A MODIFICATION OF THE TERMS AND CONDITIONS OF THE ORIGINAL CONTRACT. ACCORDINGLY, WE BELIEVE THAT PAYMENT SHOULD BE COMPUTED IN ACCORDANCE WITH THE SAID AMENDMENT AND THE PREVIOUS INTERPRETATION OF THE PRICING PROVISIONS BY THE GOVERNMENT PRINTING OFFICE, AS REFLECTED IN THE COPIES OF CORRESPONDENCE TRANSMITTED WITH REQUEST FOR DECISION. UNDER THE CIRCUMSTANCES WE DO NOT VIEW THE MATTER AS INVOLVING RETROACTIVE PRICING.

THIS DECISION RELATES TO UNPAID INVOICES. IN THE EVENT FUTURE SIMILAR CLAIMS ARE MADE FOR ADDITIONAL AMOUNTS ON COMPLETED CONTRACTS, SUCH CLAIMS MAY BE FORWARDED TO THE CLAIMS DIVISION OF OUR OFFICE FOR DIRECT SETTLEMENT.