B-157047, JUL. 8, 1965

B-157047: Jul 8, 1965

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AGENCY FOR INTERNATIONAL DEVELOPMENT: REFERENCE IS MADE TO YOUR LETTER OF JUNE 17. THE MAY 28 LETTER STATED FURTHER THAT THE SITUATION WAS BEING BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICE SO THAT THERE WOULD BE AN UNDERSTANDING OF ITS POSITION IN THE EVENT FUNDS AND TIME COMMITTED FOR COMPLETION PROVED TO BE INSUFFICIENT. YOUR LETTER INDICATES THAT THE CONTRACT WAS EXECUTED AS PREPARED AND BECAME EFFECTIVE JUNE 3. THAT AS THE CONTRACT PROGRESSED IT WAS AMENDED FROM TIME TO TIME TO ADJUST THE CONTRACT CEILING. YOU INDICATE THAT THERE IS A CLAUSE IN THE CONTRACT WHICH SPECIFIES THAT A WRITTEN ADVANCE NOTICE SHALL BE GIVEN BY THE CONTRACTOR IF THE OBLIGATED FUNDS WILL NOT BE SUFFICIENT TO MEET COST AND FEE PAYMENTS FOR AN ENSUING 120-DAY PERIOD.

B-157047, JUL. 8, 1965

TO MR. MURRAY GRAY, CONTRACTING OFFICER, AGENCY FOR INTERNATIONAL DEVELOPMENT:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 17, 1965, INQUIRING WHETHER PAYMENT OF AN AMOUNT IN EXCESS OF THE CEILING PROVIDED IN COST-PLUS-A FIXED-FEE CONTRACT AID/AFR-113 MAY BE MADE TO THE CONTRACTOR, AMERICAN ENGINEERING CONSULTANTS INC.

YOUR SUBMISSION INDICATES THAT ON MAY 28, 1963, THE CONTRACTOR WROTE TO THE CONTRACTING OFFICE AND CALLED ATTENTION TO THE FACT THAT THE CONTRACT PREPARED FOR ITS SIGNATURE SHOWED THE ESTIMATED COST OF THE WORK, EXCLUSIVE OF FEE, AS $5,000 LESS THAN IT ESTIMATED IN ITS PROPOSAL AND SHOWED THE TIME TO COMPLETE THE WORK AS FIVE TO SIX WEEKS LESS THAN THE TIME IT ESTIMATED IT WOULD TAKE TO COMPLETE THE WORK. THE MAY 28 LETTER STATED FURTHER THAT THE SITUATION WAS BEING BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICE SO THAT THERE WOULD BE AN UNDERSTANDING OF ITS POSITION IN THE EVENT FUNDS AND TIME COMMITTED FOR COMPLETION PROVED TO BE INSUFFICIENT.

YOUR LETTER INDICATES THAT THE CONTRACT WAS EXECUTED AS PREPARED AND BECAME EFFECTIVE JUNE 3, 1963, AND THAT AS THE CONTRACT PROGRESSED IT WAS AMENDED FROM TIME TO TIME TO ADJUST THE CONTRACT CEILING, THE FIXED FEE AND TIME FOR COMPLETION. HOWEVER, YOU INDICATE THAT THERE IS A CLAUSE IN THE CONTRACT WHICH SPECIFIES THAT A WRITTEN ADVANCE NOTICE SHALL BE GIVEN BY THE CONTRACTOR IF THE OBLIGATED FUNDS WILL NOT BE SUFFICIENT TO MEET COST AND FEE PAYMENTS FOR AN ENSUING 120-DAY PERIOD. IN THAT CONNECTION, YOU POINT OUT THAT TOWARD THE END OF THE CONTRACT THE CONTRACTOR EXCEEDED THE TOTAL CEILING PRICE IN THE AMENDED CONTRACT, BUT DID NOT APPRISE THE CONTRACTING OFFICE APPARENTLY RELYING UPON THE MAY 28 LETTER AS A STANDING NOTICE THAT THE CONTRACT HAD PROVIDED INSUFFICIENT FUNDS AND TIME FOR COMPLETION. MOREOVER, YOU STATE THAT AT THE END OF THE FISCAL YEAR THERE WAS SOME CHANGE OF, AND ILLNESS AMONG, AGENCY PERSONNEL, BESIDES THE USUAL END OF THE FISCAL YEAR RUSH OF BUSINESS, WITH THE RESULT THAT THE CONTRACT EXPIRATION DATE, HAVING PREVIOUSLY BEEN AMENDED TO JUNE 15, 1964, PASSED WITHOUT ANY STEPS BEING TAKEN TO PROVIDE FOR A FURTHER EXTENSION OF CONTRACT TIME OR SET-ASIDE OF ADDITIONAL FUNDS TO COMPLETE THE WORK. YOU INDICATE THAT, IF THE MATTER HAD BEEN OBSERVED BEFORE THE EXPIRATION OF THE CONTRACT, REIMBURSEMENT OF ALL ALLOWABLE COSTS INCURRED TO COMPLETE THE CONTRACT WOULD HAVE BEEN AUTHORIZED. THEREFORE, YOU RECOMMEND THAT YOU BE AUTHORIZED TO MAKE REIMBURSEMENT NOW.

OUR OFFICE HAS PERMITTED REIMBURSEMENT TO A CONTRACTOR WHO DID NOT GIVE NOTICE REQUIRED BY THE TERMS OF THE CONTRACT WHEN APPROVAL IN WRITING WOULD HAVE BEEN FORTHCOMING IF FORMALLY REQUESTED AND THE GOVERNMENT RECEIVED THE BENEFIT OF THE SERVICES PERFORMED. B-123139, MAY 18, 1955. ACCORDINGLY, IN THE CIRCUMSTANCES OF THE IMMEDIATE CASE, OUR OFFICE WILL HAVE NO OBJECTION IF THE CONTRACTOR'S CLAIM IS CONSIDERED AT THIS TIME AND AVAILABLE APPROPRIATIONS ARE EMPLOYED IN THE SETTLEMENT OF THE MATTER.