B-154179, SEP. 30, 1964

B-154179: Sep 30, 1964

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GOVERNMENT PRINTING OFFICE: REFERENCE IS MADE TO YOUR LETTER OF MAY 13. THE WHOLE CASE CENTERS AROUND WHETHER THE CONTRACTOR WAS REQUIRED TO HAVE SOME SPECIAL TAB OR NOTCH FOR THE REMOVAL OF INTERLEAVING CARBON PAPER FROM CERTAIN SETS OF MULTIPART VOUCHER FORMS MANUFACTURED UNDER THE CONTRACT. IT WAS DETERMINED THAT. 054.03 IN TIME LOST IN REMOVING CARBONS FROM THE SETS OF FORMS FURNISHED AND THE CONTRACT PRICE WAS ADJUSTED ADMINISTRATIVELY BY A DEDUCTION IN THAT AMOUNT. - (-) CORNER TAB (-) CENTER TAB PARTS 1-7 1/2 SHORT AT (X) RIGHT (X) LEFT (X) CONTRACTOR'S OPTION THE CONTRACTOR GUARANTEES THAT THE METHOD OF EXTRACTING CARBONS WHICH HE SUPPLIES WILL CONFORM TO THE REQUIREMENTS OF THIS SPECIFICATION.

B-154179, SEP. 30, 1964

TO THE HONORABLE JAMES L. HARRISON, PUBLIC PRINTER, U.S. GOVERNMENT PRINTING OFFICE:

REFERENCE IS MADE TO YOUR LETTER OF MAY 13, 1964, REQUESTING A DECISION REGARDING A DEDUCTION OF $10,054.03 FROM A PAYMENT MADE TO WALLACE BUSINESS FORMS, INC., CONTRACTOR UNDER JACKET 705-609, PURCHASE ORDER 44816, ISSUED OCTOBER 4, 1963.

THE WHOLE CASE CENTERS AROUND WHETHER THE CONTRACTOR WAS REQUIRED TO HAVE SOME SPECIAL TAB OR NOTCH FOR THE REMOVAL OF INTERLEAVING CARBON PAPER FROM CERTAIN SETS OF MULTIPART VOUCHER FORMS MANUFACTURED UNDER THE CONTRACT. IT WAS DETERMINED THAT, AS A RESULT OF THE OMISSION OF THE SPECIAL FEATURE, IT COST THE GOVERNMENT $10,054.03 IN TIME LOST IN REMOVING CARBONS FROM THE SETS OF FORMS FURNISHED AND THE CONTRACT PRICE WAS ADJUSTED ADMINISTRATIVELY BY A DEDUCTION IN THAT AMOUNT. THE CONTRACTOR HAS PRESENTED A CLAIM FOR THE $10,054.03 DEDUCTED. ADDITION, AS A RESULT OF THE DELAY IN ACCEPTING DELIVERY OF THE FORMS BECAUSE OF THE CONTROVERSY OVER WHETHER THEY MET THE CONTRACT REQUIREMENTS, THE CONTRACTOR CLAIMS $671.68 FOR FINANCING, STORAGE AND INTEREST.

THE ORIGINAL SPECIFICATION WHICH ACCOMPANIED THE INVITATION FOR BIDS, AMONG OTHER PROVISIONS, STATED:

CHART

"CARBON EXTRACTION--- (-) CORNER TAB (-) CENTER TAB

PARTS 1-7 1/2 SHORT AT (X) RIGHT (X) LEFT (X) CONTRACTOR'S OPTION

THE CONTRACTOR GUARANTEES THAT THE METHOD OF EXTRACTING CARBONS WHICH HE SUPPLIES WILL CONFORM TO THE REQUIREMENTS OF THIS SPECIFICATION; THAT IT IS A FEATURE REGULARLY SUPPLIED BY HIM AS SATISFACTORY AND HAS BEEN SO FOR SUCH PERIOD OF TIME AS TO DEMONSTRATE ITS PRACTICABILITY. *PART (8) RIGHT 1 INCH LEFT 1/2 INCH"

BEFORE THE BID OPENING DATE, AN AMENDMENT TO THE SPECIFICATIONS WAS ISSUED AND FORWARDED TO ALL PROSPECTIVE BIDDERS. THE AMENDMENT, INSOFAR AS PERTINENT, PROVIDED:

"CARBON EXTRACTION: CONTRACTOR'S OPTION. DELETE ALL OTHER INFORMATION CARRIED ON ORIGINAL SPECIFICATIONS UNDER THIS HEADING.'

IN OUR OPINION, THE EFFECT OF THE AMENDATORY LANGUAGE WAS TO DELETE EVERYTHING CONTAINED IN THE FOREGOING PARAGRAPH IN THE ORIGINAL SPECIFICATION AND TO LEAVE THE CHOICE AS TO THE MANNER OF CARBON PAPER REMOVAL UP TO THE CONTRACTOR, I.E., THE CONTRACTOR UNDER THE TERMINOLOGY EMPLOYED HAD THE RIGHT TO PROVIDE ANY KIND OF CARBON DELEAVING IT WISHED. AS A MATTER OF FACT, THE SPECIFICATION WAS SO VAGUE THAT IT DID NOT INDICATE WHETHER A MANUAL OR POWER METHOD OF DELEAVING THE CARBON WAS REQUIRED. IT WAS ONLY THROUGH INQUIRY BY THE CONTRACTOR AFTER AWARD THAT IT WAS ADVISED THAT DELEAVING WOULD BE BY HAND. WHILE IT HAD ASCERTAINED THAT DELEAVING WOULD BE PERFORMED MANUALLY, IT WAS NOT TOLD THAT SPECIAL FEATURES SHOULD BE PROVIDED FOR THE DELEAVING AND IT HAD UNDER THE CONTRACT AN OPTION TO DO AS IT WISHED SO THAT IT COULD HAVE PROVIDED FOR MANUAL DELEAVING BY TAB OR NOTCH OR IT COULD HAVE LEFT THE EXTRACTION TO A SHEET-BY-SHEET REMOVAL AS IT DID. THEREFORE, THE CONTRACTOR IS ENTITLED TO BE REIMBURSED THE $10,054.03 WHICH WAS DEDUCTED FROM THE CONTRACT PRICE.

THE CONTRACTOR'S CHARGE OF $671.68 IS ITEMIZED AS FOLLOWS:

TABLE

"STORAGE AND FINANCING AT 1 1/4 PERCENT FOR TWO MONTHS

OF UNSHIPPED BALANCE OF FORMS-VALUE $15,566.21 389.16

"INTEREST AT 1/2 PERCENT FOR TWO MONTHS ON INITIAL

SHIPMENT-VALUE $28,251.58 282.52"

THE CONTRACTOR HAS NOT SHOWN THAT IT ACTUALLY HAD TO INCUR ANY EXPENDITURE FOR STORAGE OR FINANCING COSTS AS A RESULT OF THE GOVERNMENT'S DELAY IN ACCEPTING THE FORMS BECAUSE OF THE CONTROVERSY WHICH AROSE OVER WHAT THE CONTRACTOR WAS TO FURNISH. IN THAT CONNECTION, IT IS NOTED THAT THE CHARGES ARE BASED UPON THE VALUE OF THE FORMS RATHER THAN UPON ACTUAL EXPENSES INCURRED. BUT, IN ANY EVENT, EVEN IF THE CONTRACTOR WAS REQUIRED TO PAY STORAGE AND FINANCING CHARGES, THOSE CHARGES DO NOT APPEAR TO BE REIMBURSABLE SINCE CONTRACT APPROPRIATIONS ARE AVAILABLE FOR EXPENSE FOR THE VALUE OF PERFORMANCE FURNISHED UNDER CONTRACTS AND NOT FOR THE EXPENSE RESULTING FROM THE REFUSAL TO PERMIT SUCH PERFORMANCE. SEE 19 COMP. GEN. 933.

AS TO THE CLAIM FOR INTEREST, IT IS EQUALLY WELL SETTLED THAT THE PAYMENT OF INTEREST BY THE UNITED STATES ON ITS UNPAID ACCOUNTS OR CLAIMS MAY NOT BE MADE EXCEPT WHERE INTEREST IS STIPULATED BY CONTRACT OR IS DIRECTED BY STATUTE. 37 COMP. GEN. 485, 487.

ACCORDINGLY, THE CONTRACTOR'S CLAIM FOR FINANCING, STORAGE AND INTEREST IS FOR DISALLOWANCE.

A COPY OF THIS LETTER IS BEING FURNISHED TO MR. JOHN P. RYAN, JR., ATTORNEY FOR THE CONTRACTOR, WHO REPRESENTED THE CONTRACTOR BEFORE OUR OFFICE IN THIS MATTER. A COPY OF OUR LETTER TO MR. RYAN ..END :