B-155557, FEB. 16, 1965

B-155557: Feb 16, 1965

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM DATED NOVEMBER 9. THE GENERAL SERVICES REGIONAL CONTRACTING OFFICERS WERE ORDERING ITEMS IN QUANTITIES SEVERAL TIMES THAT STATED IN THE INVITATIONS AND IN THE CONTRACTS AS THE ESTIMATED ANNUAL REQUIREMENTS. YOU URGE THAT THIS IS UNFAIR ON THE PART OF THE GOVERNMENT AND REQUEST CANCELLATION OF THE CONTRACTS. ONE OF THE ENCLOSURES WITH YOUR LETTER IS A TABULATION. IT IS REPORTED. THAT THE CONTRACT IS FOR SUPPLY REQUIREMENTS FOR A SPECIFIED PERIOD. ORDERS WERE PLACED FOR SIX ITEMS. THREE HAVE TOTALLED LESS THAN THE ESTIMATED QUANTITIES. THE REMAINING THREE ITEMS WERE ORDERED IN QUANTITIES SUBSTANTIALLY GREATER THAN THE TOTAL ESTIMATED ANNUAL REQUIREMENT.

B-155557, FEB. 16, 1965

TO MIDWAY ELECTRIC SUPPLY COMPANY, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM DATED NOVEMBER 9, 1964, AND YOUR LETTER DATED DECEMBER 11, 1964, WITH ENCLOSURES, PROTESTING THE CONTINUATION OF GENERAL SERVICES ADMINISTRATION CONTRACTS NOS. GS-04S 11551, ATLANTA, GEORGIA; GS-10S-17562, SEATTLE, WASHINGTON; AND GS-03S 24778, WASHINGTON, D.C.

YOU STATE THAT FOLLOWING THE AWARD TO YOUR COMPANY OF THE ABOVE CONTRACTS FOR VARIOUS TYPES OF ELECTRICAL HARDWARE, WIRE, CABLE AND SUPPLIES, NOTWITHSTANDING A PRIOR STABLE MARKET, COPPER BECAME IN SHORT SUPPLY REQUIRING YOUR SUPPLIERS TO OBTAIN COPPER IN THE OPEN MARKET AT MUCH ADVANCED PRICES; THAT THE INCREASE IN THE PRICE OF COPPER, A MAJOR COMPONENT OF THE ITEMS TO BE SUPPLIED UNDER THE CONTRACTS, INCREASED YOUR COSTS BEYOND THE CONTRACT PRICES; THAT DESPITE THIS SITUATION, ON SOME ITEMS OF THE CONTRACTS, THE GENERAL SERVICES REGIONAL CONTRACTING OFFICERS WERE ORDERING ITEMS IN QUANTITIES SEVERAL TIMES THAT STATED IN THE INVITATIONS AND IN THE CONTRACTS AS THE ESTIMATED ANNUAL REQUIREMENTS. YOU URGE THAT THIS IS UNFAIR ON THE PART OF THE GOVERNMENT AND REQUEST CANCELLATION OF THE CONTRACTS. ONE OF THE ENCLOSURES WITH YOUR LETTER IS A TABULATION, BY CONTRACTS, SHOWING THE ITEMS REQUIRED UNDER EACH CONTRACT, THE STATED ESTIMATED ANNUAL REQUIREMENT, AND THE ACTUAL QUANTITY SUPPLIED FROM DATE OF CONTRACT TO DATE OF YOUR LETTER (APPROXIMATELY SEVEN MONTHS).

IT IS REPORTED, AND ALL THREE CONTRACTS CONTAIN A CLAUSE PROVIDING, THAT THE CONTRACT IS FOR SUPPLY REQUIREMENTS FOR A SPECIFIED PERIOD. IN THE WASHINGTON, D.C. AND ATLANTA CONTRACTS, THE CLAUSE PROVIDED FOR "NORMAL SUPPLY REQUIREMENTS.' IN THE SEATTLE CONTRACT THE CLAUSE PROVIDED FOR "ESTIMATED SUPPLY REQUIREMENTS.' EACH SUCH CLAUSE EMPHASIZED THAT EXCEPT FOR EMERGENCY SITUATIONS THE CONTRACTOR WOULD BE OBLIGATED TO DELIVER ALL SUCH QUANTITIES AS MIGHT BE NEEDED FROM TIME TO TIME.

AS TO THE SEATTLE CONTRACT, IT APPEARS THAT OF THE SEVEN ITEMS IN GROUP I, ORDERS WERE PLACED FOR SIX ITEMS. OF THE SIX ITEMS ORDERED, THREE HAVE TOTALLED LESS THAN THE ESTIMATED QUANTITIES. THE REMAINING THREE ITEMS WERE ORDERED IN QUANTITIES SUBSTANTIALLY GREATER THAN THE TOTAL ESTIMATED ANNUAL REQUIREMENT. THE RECORD SHOWS THAT UPON YOUR PROTEST THE SEATTLE CONTRACTING OFFICER RELIEVED YOU OF THE OBLIGATION TO FURNISH FURTHER QUANTITIES OF THE THREE ITEMS ORDERED IN PARTICULARLY LARGE AMOUNTS. HENCE THE SEATTLE CONTRACT NEED NOT BE CONSIDERED FURTHER HERE.

THE ATLANTA CONTRACT, IN PARAGRAPH 1, SCOPE OF CONTRACT, STATES, IN PART, AS FOLLOWS:

"* * * THE QUANTITIES SHOWN REPRESENT THE ESTIMATED REQUIREMENTS FOR EACH ITEM DURING THE CONTRACT PERIOD, BUT SHALL NOT BE CONSTRUED TO REPRESENT ANY AMOUNT WHICH THE GOVERNMENT SHALL BE OBLIGATED TO ORDER UNDER THE CONTRACT. HOWEVER, THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, REGION 4, IS OBLIGATED, EXCEPT IN EMERGENCIES, TO ORDER HEREUNDER SUCH QUANTITIES AS MAY BE NEEDED FROM TIME TO TIME TO FILL REGION 4 REQUIREMENTS DETERMINED IN ACCORDANCE WITH THE CURRENTLY APPLICABLE PROCUREMENT AND SUPPLY PROCEDURES. EXCEPT AS OTHERWISE HEREIN PROVIDED, THE CONTRACTOR IS OBLIGATED TO DELIVER HEREUNDER ALL SUCH QUANTITIES AS MAY BE SO ORDERED FROM TIME TO TIME. THE ESTIMATED QUANTITIES SHOWN ARE FOR INFORMATION OF BIDDERS ONLY, AND SHALL NOT RELIEVE THE CONTRACTOR OF HIS OBLIGATION TO FILL ALL ORDERS WHICH MAY BE PLACED HEREUNDER. UNLESS OTHERWISE DIRECTED BY THE CONTRACTING OFFICER, CONTRACTORS SHALL FILL DELIVERY ORDERS IN THE SAME ORDER IN WHICH THEY ARE RECEIVED. THE URGENCY OF PARTICULAR ORDERS MAY JUSTIFY THE CONTRACTING OFFICER DIRECTING THE FILLING OF SUCH ORDERS ON A PRIORITY BASIS.' PARAGRAPH 12 OF THE CONTRACT PROVIDES:

"BIDDER WILL INDICATE:--- MAXIMUM QUANTITY OF EACH ITEM HE CAN CAN FURNISH WITHIN 30 DAYS AFTER RECEIPT OF AN ORDER: ALL" THE WORD "ALL" WAS INSERTED IN THE BLANK PROVIDED, BY MIDWAY. THE CONTRACT PROVIDED NO QUALIFYING LANGUAGE PLACING A LIMITATION ON ANY ORDER OR TOTAL REQUIREMENT. MIDWAY, ITSELF, STATED THAT IT WOULD SUPPLY "ALL" NEEDED REQUIREMENTS. FURTHER, AN EXAMINATION OF THE ESTIMATED REQUIREMENTS AND THE AMOUNTS ORDERED SHOWS THAT OF 23 ITEMS IN THE CONTRACT, FOUR ITEMS WERE NOT ORDERED, SEVEN WERE IN THE APPROXIMATE AMOUNT OF THE ESTIMATE, EIGHT WERE ORDERED IN SUBSTANTIALLY LOWER QUANTITIES THAN ESTIMATED, AND ONLY FOUR IN A SUBSTANTIALLY GREATER QUANTITY THAN ESTIMATED, AND OF THESE LATTER FOUR, ONLY ONE ITEM APPEARS TO BE COMPLETELY OUT OF PROPORTION. THIS ONE ITEM, NO. 6145-184-5350, THERMOPLASTIC WIRE, AWG12, HAD AN ESTIMATED REQUIREMENT OF 708 UNITS, AND 1970 UNITS WERE ORDERED. ON THE OTHER HAND, IN THE SAME CATEGORY-- THERMOPLASTIC WIRE, AW012 ITEMS NOS. 6145-184-5347 AND 6145-184-5344 WERE ORDERED IN QUANTITIES OF 323 AND 130 AS AGAINST ESTIMATED REQUIREMENTS OF 1968 AND 216, RESPECTIVELY. CANNOT AGREE THAT THE GOVERNMENT TOOK AN UNFAIR ADVANTAGE OF THE SITUATION OR THAT MIDWAY'S DIFFICULTIES ARISE FROM AN INABILITY TO PERFORM THIS CONTRACT. IT APPEARS THAT MIDWAY'S DIFFICULTIES STEM SOLELY FROM THE UNEXPECTED INCREASE IN THE COST OF RAW COPPER.

THE WASHINGTON, D.C. CONTRACT ALSO CONTAINED A CLAUSE PROVIDING FOR "NORMAL SUPPLY UIREMENTS," BUT UNLIKE THE OTHER CONTRACTS PERMITTED THE BIDDER TO INSERT A MAXIMUM MONTHLY QUANTITY, BEYOND WHICH THE BIDDER WOULD NOT BE BOUND TO SUPPLY GSA REQUIREMENTS.

IT APPEARS THAT PARAGRAPH 17/2) OF THE INVITATION FOR BIDS FOR THE WASHINGTON D.C. CONTRACT STATES THAT IF A BIDDER FAILS TO INSERT A MAXIMUM MONTHLY QUANTITY, THE BID SHALL BE DEEMED TO OFFER "A MAXIMUM MONTHLY QUANTITY IN AN AMOUNT NO LESS THAN THE MONTHLY ESTIMATED REQUIREMENT INDICATED" IN THE INVITATION FOR BIDS. MIDWAY DID NOT INSERT A MAXIMUM MONTHLY QUANTITY ON ANY BID ITEM.

THE GENERAL SERVICES ADMINISTRATION REPORTS THAT IT BELIEVES THE SAID PARAGRAPH 17/2) IS AMBIGUOUS, AND "FEEL THAT THIS LANGUAGE MUST BE INTERPRETED AS SAYING THAT WHERE THE BIDDER HAS NOT INSERTED A MAXIMUM MONTHLY QUANTITY, THE GOVERNMENT WILL SUPPLY THAT FIGURE, AND THAT IT SHALL BE THE MONTHLY ESTIMATED REQUIREMENT. THIS CONSTRUCTION DOES PERMIT * * * RELIEVING MIDWAY OF ANY OBLIGATION TO DELIVER AMOUNTS FOR ANY ITEM IN EXCESS OF THE GOVERNMENT'S MONTHLY ESTIMATED REQUIREMENT FOR THAT ITEM, WHERE MIDWAY DID NOT ITSELF INDICATE A MAXIMUM MONTHLY QUANTITY.'

WE CONCUR IN THE BELIEF OF THE GENERAL SERVICES ADMINISTRATION THAT UNDER THE WASHINGTON D.C. CONTRACT MIDWAY CANNOT BE REQUIRED TO DELIVER AMOUNTS OF ANY ITEM IN EXCESS OF THE MONTHLY ESTIMATED REQUIREMENT.

ALTHOUGH THE DELIVERY SCHEDULE APPEARS TO HAVE BEEN A PROBLEM ON A FEW ITEMS, YOUR PRINCIPAL REASON FOR SEEKING RELIEF IS THE RISE IN RAW COPPER PRICES. IN THIS CONNECTION, IT IS WELL SETTLED THAT WHERE A CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION TO BE PAID AND NO PROVISION IS MADE FOR ANY INCREASE IN THE EVENT PERFORMANCE BECOMES MORE EXPENSIVE OR DIFFICULT, THE FACT THAT THE COST OF PERFORMANCE IS INCREASED DOES NOT ENTITLE THE CONTRACTOR TO ADDITIONAL COMPENSATION. SEE COLUMBUS RAILWAY AND POWER COMPANY V. COLUMBUS, 249 U.S. 399; AND BLAUNER CONSTRUCTION COMPANY V. UNITED STATES, 94 CT.CL. 503. ALSO, SEE 19 COMP. GEN. 903; AND 15 ID. 861. INCREASED COST OF PERFORMANCE, WHETHER FORESEEN OR UNFORESEEN, IS ONE OF THE HAZARDS OF THE CONTRACT WHICH NEITHER EXCUSES PERFORMANCE NOR ENTITLES A CONTRACTOR TO ADDITIONAL COMPENSATION. SEE SATTERLEE, ADMINISTRATRIX V. UNITED STATES, 30 CT.CL. 31; AND CHOUTEAU V. UNITED STATES, 95 CT.CL. 62, 68. IT WAS STATED IN THE CASE OF FARMERS' FERTILIZER COMPANY V. LILLIE, 18 F.2D 197, 199, THAT AN ABNORMAL RISE IN THE PRICE OF GOODS, OR IN TRANSPORTATION CHARGES, DUE TO THE EXISTENCE OF WAR, OR UNUSUAL TRADE CONDITIONS, SUCH THAT THE DEFENDANT COULD NOT PERFORM ITS CONTRACT WITHOUT GREATER EXPENSE THAN ANTICIPATED, IS NOT SUCH AN IMPOSSIBILITY AS WILL EXCUSE PERFORMANCE.

ACCORDINGLY, SINCE EXAMINATION OF THE CONTRACTS FAILS TO DISCLOSE A PROVISION FOR AN ADJUSTMENT IN PRICE IN THE EVENT OF AN INCREASE IN COST, THERE IS NO RELIEF WHICH OUR OFFICE MAY GRANT YOU IN THE MATTER, EXCEPT TO THE EXTENT INDICATED IN CONNECTION WITH THE WASHINGTON, D.C. CONTRACT.