B-153529, JUN. 11, 1964

B-153529: Jun 11, 1964

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YOU WERE DELINQUENT IN MAKING DELIVERIES UNDER EACH OF THE CONTRACT ITEMS. THE TIME FOR COMPLETION OF DELIVERIES UNDER ITEM NO. 8A WAS EXTENDED TO MARCH 15. THE TIME FOR COMPLETION OF DELIVERIES UNDER ITEMS NOS. 4 AND 4A WAS EXTENDED TO MARCH 31. YOU OFFERED 222 UNITS OF ITEM NO. 8A FOR INSPECTION AND THEY WERE REJECTED ON MAY 28. 199 UNITS OF ITEM NO. 8A WERE OFFERED FOR INSPECTION. THOSE UNITS WERE ACCEPTED ON JULY 1. AT SUCH TIME YOU WERE DELINQUENT IN MAKING DELIVERY OF 36 UNITS UNDER ITEM NO. 8A AND IT IS ADMINISTRATIVELY REPORTED THAT YOU DID NOT ATTEMPT TO PRODUCE AND DELIVER THE REQUIRED ADDITIONAL 36 UNITS UNDER ITEM NO. 8A. THOSE ITEMS WERE MADE THE SUBJECT OF YOUR LETTER DATED APRIL 5.

B-153529, JUN. 11, 1964

TO CAPEWAY INSTRUMENT CORPORATION:

IN ACCORDANCE WITH A REQUEST MADE BY THE HONORABLE LEVERETT SALTONSTALL, UNITED STATES SENATE, THIS OFFICE HAS CONSIDERED A CLAIM OF YOUR COMPANY IN THE AMOUNT OF $789.48 UNDER AIR FORCE CONTRACT NO. AF 34 (601/-13450, DATED JUNE 18, 1962, IN THE TOTAL AMOUNT OF $1,212.49, COVERING AWARDS MADE TO YOUR COMPANY UNDER ITEMS NOS. 1, 1A, 4, 4A, 8A, AND 9 OF TINKER AIR FORCE BASE, OKLAHOMA, INVITATION FOR BIDS NO. 34-601-62-555, ISSUED ON APRIL 20, 1962.

THE RECORD INDICATES THAT AS OF DECEMBER 1, 1962, YOU WERE DELINQUENT IN MAKING DELIVERIES UNDER EACH OF THE CONTRACT ITEMS. YOU COMPLETED DELIVERIES UNDER ITEMS NOS. 1, 1A, AND 9 ON OR ABOUT JANUARY 23, 1963. THE TIME FOR COMPLETION OF DELIVERIES UNDER ITEM NO. 8A WAS EXTENDED TO MARCH 15, 1963, AND THE TIME FOR COMPLETION OF DELIVERIES UNDER ITEMS NOS. 4 AND 4A WAS EXTENDED TO MARCH 31, 1963. ON MAY 24, 1963, YOU OFFERED 222 UNITS OF ITEM NO. 8A FOR INSPECTION AND THEY WERE REJECTED ON MAY 28, 1963. SUBSEQUENTLY, 199 UNITS OF ITEM NO. 8A WERE OFFERED FOR INSPECTION. THOSE UNITS WERE ACCEPTED ON JULY 1, 1963, AND SHIPPED ON JULY 15, 1963. AT SUCH TIME YOU WERE DELINQUENT IN MAKING DELIVERY OF 36 UNITS UNDER ITEM NO. 8A AND IT IS ADMINISTRATIVELY REPORTED THAT YOU DID NOT ATTEMPT TO PRODUCE AND DELIVER THE REQUIRED ADDITIONAL 36 UNITS UNDER ITEM NO. 8A.

ITEMS NOS. 4 AND 4A HAD A TOTAL CONTRACT VALUE OF $789.48 AND COVERED THE RESPECTIVE QUANTITIES OF 400 AND 331 UNITS PRICED AT $1.08 EACH. THOSE ITEMS WERE MADE THE SUBJECT OF YOUR LETTER DATED APRIL 5, 1963, TO THE BOSTON CONTRACT MANAGEMENT DISTRICT, UNITED STATES AIR FORCE, WHICH READS AS FOLLOWS:

"THE SUBJECT PART WAS HEAT TREATED AND SENT TO GREENMAN STEEL TREATING CO., 284 GROVE STREET, WORCESTER, MASS., FOR MALCOMIZING. WE RECEIVED A CALL BY TELEPHONE, THIS DATE, THAT THE PIECE WAS IMPOSSIBLE TO MALCOMIZE WITHOUT ENTAILING A PROHIBITIVE COST, UNLESS THE FACES OF THE PIECE WERE SPECIFIED AS "OPTIONAL" WHICH WILL ENTAIL EXTRA WORK CLEANING THESE FACES.

"WE REQUEST THAT THIS BE SPECIFIED AND THE ADDITIONAL COST BE ALLOWED.'

NO ACTION WAS IMMEDIATELY TAKEN BY THE GOVERNMENT IN REGARD TO THIS REQUEST OF YOUR COMPANY, ALTHOUGH INTER-OFFICE COMMUNICATIONS IN THE MATTER INDICATED A BELIEF THAT NO CONTRACT PRICE ADJUSTMENT SHOULD BE GRANTED BECAUSE YOUR BID PRICES ON ITEMS NOS. 4 AND 4A OF THE CONTRACT WERE IN LINE WITH OTHER QUOTATIONS ON THE SAME ITEMS AND IT DID NOT APPEAR THAT THE GOVERNMENTS'S SPECIFICATIONS FOR THOSE ITEMS WERE FAULTY IN ANY RESPECT. WHEN THE SITUATION WAS EVENTUALLY BROUGHT TO THE ATTENTION OF THE TERMINATION CONTRACTING OFFICER HE CONCLUDED THAT THE FAILURE TO MAKE ANY RESPONSE TO YOUR APRIL 5, 1963, LETTER MIGHT HAVE HAD THE EFFECT OF WAIVING THE DELIVERY SCHEDULE FOR ITEMS NOS. 4 AND 4A; THAT THE GOVERNMENT SHOULD REVIEW ITS CURRENT NEED FOR THOSE ITEMS AND FOR THE 36 DELINQUENT UNITS OF ITEM NO. 8A; AND THAT, IF IT WAS DETERMINED THAT A NEED STILL EXISTED FOR THE VARIOUS UNITS, YOU SHOULD BE ADVISED AS TO THE GRANT OR DENIAL OF YOUR REQUEST FOR SPECIFICATION DEVIATION RELATING TO ITEMS 4 AND 4A OF THE CONTRACT, AT WHICH POINT A NEW DELIVERY SCHEDULE WOULD BE FOR ESTABLISHMENT IN RELATION TO ITEMS NOS. 4 AND 4A AND FOR THE DELINQUENT QUANTITY OF 36 UNITS UNDER ITEM NO. 8A.

THE RECORD OTHERWISE INDICATES THAT IN AUGUST 1963 EFFORTS ON THE PART OF THE GOVERNMENT TO OBTAIN ASSURANCES OF FURTHER PERFORMANCE UNDER THE CONTRACT PROVED TO BE UNSUCCESSFUL AND THAT YOU WOULD NOT AGREE TO A "NO COST TERMINATION" RELATING TO ITEMS NO. 4 AND 4A. THE CONTRACT WAS TERMINATED FOR DEFAULT BY TELEGRAPHIC NOTICE ISSUED ON DECEMBER 17, 1963. YOU TOOK EXCEPTION TO STATEMENTS MADE IN THE DEFAULT TERMINATION NOTICE AND REQUESTED FULL PAYMENT FOR ITEMS NOS. 4 AND 4A. ON MARCH 25, 1964, THE CONTRACTING OFFICER ISSUED A NONASSESSMENT NOTICE TO YOU, STATING HIS JUSTIFICATION FOR THE DEFAULT TERMINATION ACTION AND DENYING YOUR REQUEST FOR PAYMENT OF THE CONTRACT PRICES FOR ITEMS 4 AND 4A.

IN HIS LETTER TO YOU OF MARCH 25, 1964, THE TERMINATION CONTRACTING OFFICER DETERMINED THAT THE SPECIFICATIONS FOR ITEMS NOS. 4 AND 4A "WERE NOT ERRONEOUS AND WERE CAPABLE OF PERFORMANCE," AND THAT YOUR BID PRICES ON THOSE ITEMS DID NOT INDICATE ANY ERROR TO THE PROCURING CONTRACTING OFFICER WHEN COMPARING SAME WITH OTHER BIDS FOR THOSE ITEMS. FURTHERMORE, YOUR ATTENTION WAS INVITED TO THE FACT THAT THE DRAWINGS FOR ITEMS NOS. 4 AND 4A DESIGNATED AN APPROVED SOURCE FOR THE MALCOMIZING PROCESS (LINDBERG STEEL TREATING COMPANY), BUT YOU SELECTED ANOTHER VENDOR AS YOUR SUBCONTRACTOR; AND YOU WERE ADVISED THAT THE CORRESPONDENCE IN THE CASE INDICATED THAT THE REASON FOR NONCOMPLIANCE WITH THE SPECIFICATIONS WAS YOUR REFUSAL TO INCUR THE COST INVOLVED RATHER THAN IMPOSSIBILITY OF PERFORMANCE IN ACCORDANCE WITH THE APPLICABLE SPECIFICATIONS.

IT HAS BEEN ADMINISTRATIVELY REPORTED THAT CERTAIN METAL ENGINEERS AND METALLURGISTS OF AIR FORCE SYSTEMS AND LOGISTICS COMMANDS HAVE BEEN CONSULTED AS TO THEIR OPINIONS OF THE MALCOMIZING PROCESS. IT WAS DETERMINED THAT MALCOMIZING IS A HEAT TREATING PROCESS EMPLOYING A NITRIDE WHICH INDUCES A CASE-HARDENED SURFACE IN STEEL AND IMPARTS A CORROSION RESISTANCE PROPERTY TO SUCH METALS. IT WAS ASCERTAINED THAT ANY GOOD RELIABLE HEAT TREATING FIRM COULD ACCOMPLISH THIS WORK IF ADEQUATELY EQUIPPED AND THAT THERE ARE AT LEAST FIVE FIRMS IN THE DAYTON, OHIO, AREA WHICH PERFORM THIS TYPE OF WORK IN THE NORMAL COURSE OF THEIR DAILY BUSINESS.

UPON ENTERING INTO THE CONTRACT INVOLVED, YOU ASSUMED THE RESPONSIBILITY OF FURNISHING THE REQUIRED ARTICLES IN ACCORDANCE WITH THE APPLICABLE SPECIFICATIONS AT THE AGREED UPON PRICES AND THE GOVERNMENT WOULD NOT HAVE BEEN OBLIGATED TO PAY ADDITIONAL AMOUNTS FOR CONTRACT PERFORMANCE SOLELY BY REASON OF DIFFICULTIES YOU MIGHT HAVE EXPERIENCED IN PRODUCING ARTICLES MEETING THOSE SPECIFICATIONS. YOU ABANDONED CONTRACT PERFORMANCE AND THERE IS NO EVIDENCE TO INDICATE THAT THE SPECIFICATIONS WERE ERRONEOUS IN ANY RESPECT. IN VIEW THEREOF, THERE MUST BE APPLIED THE RULE THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN, AND THE FACT THAT UNFORESEEN DIFFICULTIES ARE ENCOUNTERED WHICH RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASION A PECUNIARY LOSS, WILL NEITHER EXCUSE A PARTY FROM PERFORMANCE OF AN ABSOLUTE AND UNQUALIFIED UNDERTAKING TO DO A THING THAT IS POSSIBLE OR LAWFUL, NOR ENTITLE HIM TO AN ADJUSTMENT IN THE CONTRACT PRICE. SIMPSON V. UNITED STATES, 172 U.S. 372; COLUMBUS RAILWAY, POWER AND LIGHT COMPANY V. CITY OF COLUMBUS, 249 U.S. 399; BLAUNER CONSTRUCTION COMPANY V. UNITED STATES, 94 CT.CL. 503; 19 COMP. GEN. 903; 31 ID. 251.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR AUTHORIZING PAYMENT OF ANY PART OF YOUR CLAIM FOR $789.48 AND SUCH CLAIM IS HEREBY DENIED.