B-155609, JAN. 26, 1965

B-155609: Jan 26, 1965

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ESQ.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17. IT APPEARS THAT UNDER THE CONTRACT INVOLVED YOU WERE REQUIRED TO FURNISH 7. THAT THE CONTRACT WAS TERMINATED FOR DEFAULT BY THE CONTRACTING OFFICER'S LETTER OF OCTOBER 13. WHICH WAS INCORPORATED IN THE CONTRACT. WHETHER THE PREPRODUCTION MODELS OF THE REFRIGERATORS WERE IMPROPERLY TESTED AND REJECTED AND WHETHER THE CONTRACT WAS. IS FOR RESOLUTION ON THE BASIS OF THE FACTS ADMINISTRATIVELY DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE "DISPUTES" CLAUSE OF THE CONTRACT. WE HAVE NO JURISDICTION IN REGARD THERETO AT THIS POINT. FOR REPROCUREMENT OF THE ITEMS NOT FURNISHED BY YOU CONTAINS TERMS AND CONDITIONS WHICH ARE DIFFERENT FROM THOSE SET FORTH IN THE ALLEGED DEFAULTED CONTRACT.

B-155609, JAN. 26, 1965

TO PRENTICE E. EDRINGTON, ESQ.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17, 1964, WITH ENCLOSURES, PROTESTING, ON BEHALF OF GENERAL BUILDERS SUPPLY CO., INC., CERTAIN ALLEGED IRREGULARITIES BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, IN CONNECTION WITH THE PROCUREMENT OF REFRIGERATORS ORIGINALLY REQUIRED TO BE FURNISHED BY YOUR CLIENT UNDER CONTRACT NO. GS-008-51197, AWARDED JULY 1, 1964.

IT APPEARS THAT UNDER THE CONTRACT INVOLVED YOU WERE REQUIRED TO FURNISH 7,859 REFRIGERATORS FOR USE BY THE ARMY AND AIR FORCE IN GERMANY AT A UNIT PRICE OF $199, OR FOR THE TOTAL AMOUNT OF $935,221; THAT THE CONTRACT WAS TERMINATED FOR DEFAULT BY THE CONTRACTING OFFICER'S LETTER OF OCTOBER 13, 1964, BECAUSE OF THE ALLEGED FAILURE OF GENERAL BUILDERS SUPPLY CO., INC., TO FURNISH PREPRODUCTION MODELS WHICH COMPLIED WITH THE SPECIFICATION; AND THAT BY LETTER OF NOVEMBER 10, 1964, THE CONTRACTOR APPEALED TO THE ADMINISTRATOR OF GENERAL SERVICES FROM THE CONTRACTING OFFICER'S DECISION THAT IT HAD FAILED TO COMPLY WITH THE CONTRACT REQUIREMENTS IN THIS RESPECT, AS PROVIDED FOR UNDER CLAUSE 12,"DISPUTES," OF GENERAL PROVISIONS (SUPPLY CONTRACT), STANDARD FORM 32, SEPTEMBER 1961 EDITION, WHICH WAS INCORPORATED IN THE CONTRACT.

WHETHER THE PREPRODUCTION MODELS OF THE REFRIGERATORS WERE IMPROPERLY TESTED AND REJECTED AND WHETHER THE CONTRACT WAS, THEREFORE, IMPROPERLY TERMINATED FOR DEFAULT, AS CONTENDED BY YOUR CLIENT, IS FOR RESOLUTION ON THE BASIS OF THE FACTS ADMINISTRATIVELY DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE "DISPUTES" CLAUSE OF THE CONTRACT, AND WE HAVE NO JURISDICTION IN REGARD THERETO AT THIS POINT. SEE, GENERALLY, B. H. DEACON COMPANY V. UNITED STATES (U.S. DIST.CT.E.D.PA., 1960), 189 F.SUPP. 146; AND HAPPEL V. UNITED STATES (U.S.DIST.CT.E.D.MO., 1959), 176 F.SUPP. 787, AFFIRMED 279 F.2D 88.

WITH RESPECT TO YOUR CONTENTION THAT, INASMUCH AS THE NEW INVITATION ISSUED ON NOVEMBER 6, 1964, FOR REPROCUREMENT OF THE ITEMS NOT FURNISHED BY YOU CONTAINS TERMS AND CONDITIONS WHICH ARE DIFFERENT FROM THOSE SET FORTH IN THE ALLEGED DEFAULTED CONTRACT, GENERAL BUILDERS SUPPLY CO., C., WOULD BE UNDER NO LIABILITY TO THE GOVERNMENT FOR ANY EXCESS COSTS INCURRED IN CONNECTION WITH ANY CONTRACT AWARDED UNDER THE NEW INVITATION, WE HAVE BEEN ADVISED BY THE GENERAL COUNSEL OF THE GENERAL SERVICES ADMINISTRATION AS FOLLOWS:

"WE HAVE CAREFULLY EXAMINED THE GENERAL BUILDERS' CONTRACT AND THE NEW INVITATION. IT IS OUR CONCLUSION THAT NO SUBSTANTIVE CHANGES HAVE BEEN MADE WHICH WOULD HAVE TENDED TO INCREASE THE CONTRACT PRICE.

"WHILE WE BELIEVE THE ABOVE TO BE TRUE AND ARE ENCLOSING A DETAILED ANALYSIS OF THE CHANGES MADE BETWEEN ISSUANCE OF THE TWO INVITATIONS, WE BELIEVE THAT THE QUESTION OF THE SUBSTANTIVENESS OF THE CHANGES IS MOOT AS A PRACTICAL MATTER, SINCE PRICES UNDER THE SECOND INVITATION WERE IN FACT LOWER THAN THOSE UNDER THE GENERAL BUILDERS' CONTRACT. PLEASE NOTE THAT GENERAL BUILDERS' CONTRACT WAS AT A NET UNIT PRICE OF $119. UNDER THE NEW INVITATION, CONTRACT GS-00S-54244 HAS NOW BEEN AWARDED TO THE HOTPOINT DIVISION OF GENERAL ELECTRIC COMPANY AT A NET UNIT PRICE OF $115.43. HENCE, NO PROBLEM EXISTS AS TO THE INCURRENCE OF EXCESS COSTS.'

IN VIEW OF THE ABOVE INFORMATION, IT WOULD NOT APPEAR THAT THE RECORD PRESENTS ANY VALID BASIS ON WHICH THIS OFFICE MAY QUESTION THE PROPRIETY OF THE CONTRACTING AGENCY'S ACTION IN THIS PROCUREMENT, AND YOUR CLIENT'S PROTEST MUST THEREFORE BE DENIED.