B-162100, OCT. 17, 1967
Highlights
MOREOVER IT IS SHOWN THAT SUBSEQUENT TO SUBMISSION OF CLAIM. " WHICH PROVIDES THAT WHEN AN EQUITABLE ADJUSTMENT IS MADE IN THE CIRCUMSTANCES INVOLVED IT WILL BE LIMITED SOLELY TO MONETARY ADJUSTMENT FOR THE VALUE OF THE MATERIAL. ARTICLE 41C IS NOT A UNILATERAL PROVISION. IT ALSO OPERATES TO PRECLUDE THE GOVERNMENT FROM COLLECTING FREIGHT SAVINGS WHEN THE REQUIRED MATERIAL IS REDUCED AS WAS THE CASE IN CONTRACT MODIFICATION P005. IT IS REPORTED THAT ON AUGUST 4. YOUR COMPANY EXECUTED WITHOUT RESERVATION CONTRACT MODIFICATION P003 WHICH PROVIDES THAT IT IS "A FULL AND FINAL EQUITABLE ADJUSTMENT" TO COVER THE EXCESS IN MATERIAL USAGE RESULTING FROM THE SIZE CHANGE. " AND THAT "THERE ARE NO COLLATERAL AGREEMENTS.
B-162100, OCT. 17, 1967
CONTRACTS - INCREASED COSTS - CHANGES DECISION TO FOSTER INDUSTRIES, INC. RE CLAIM FOR FREIGHT AS RESULT OF CHANGE IN SIZES OF SHIRTS BEING MANUFACTURED FOR DEFENSE SUPPLY AGENCY. UNDER CONTRACT WHICH PROVIDED THAT MONETARY ADJUSTMENT FOR CHANGE IN SIZE OF SHIRTS BE LIMITED TO VALUE OF MATERIAL, CLAIM FOR ADDITIONAL FREIGHT COST AS RESULT OF CHANGE MUST BE DENIED SINCE GAO CANNOT VARY TERMS OF CONTRACT. MOREOVER IT IS SHOWN THAT SUBSEQUENT TO SUBMISSION OF CLAIM, CONTRACTOR EXECUTED CONTRACT MODIFICATION TO COVER EXCESS MATERIAL WHICH PROVIDED A FULL AND FINAL EQUITABLE ADJUSTMENT.
TO FOSTER INDUSTRIES, INC.:
IN LETTER OF JULY 20, 1967, YOU STATE THAT, ALTHOUGH THE CONTRACTING OFFICER HAS AGREED TO CREDIT YOUR COMPANY FOR ADDED MATERIAL REQUIRED AS A RESULT OF A CHANGE IN THE SIZES OF SHIRTS BEING MANUFACTURED BY YOUR COMPANY UNDER CONTRACT DSA100-67-C-3716, YOUR CLAIM FOR $292.80 FOR THE ADDITIONAL COST FOR FREIGHT IN OF GOVERNMENT-FURNISHED CLOTH AND FOR $548.10 FOR FREIGHT OUT OF THE COMPLETED END ITEMS TO DESTINATION HAS BEEN DENIED. YOU THEREFORE APPEAL TO OUR OFFICE FOR RELIEF.
THE DEFENSE SUPPLY AGENCY HAS REPORTED THAT CONTRACT MODIFICATION P003 HAS BEEN ISSUED PURSUANT TO CONTRACT ARTICLE 41,"SIZED ITEMS," WHICH PROVIDES THAT WHEN AN EQUITABLE ADJUSTMENT IS MADE IN THE CIRCUMSTANCES INVOLVED IT WILL BE LIMITED SOLELY TO MONETARY ADJUSTMENT FOR THE VALUE OF THE MATERIAL. CONTRARY TO YOUR CONTENTION, ARTICLE 41C IS NOT A UNILATERAL PROVISION. RATHER, IT ALSO OPERATES TO PRECLUDE THE GOVERNMENT FROM COLLECTING FREIGHT SAVINGS WHEN THE REQUIRED MATERIAL IS REDUCED AS WAS THE CASE IN CONTRACT MODIFICATION P005.
IN ANY EVENT, OUR OFFICE CANNOT VARY THE TERMS OF THE CONTRACT ARTICLE. MOREOVER, IT IS REPORTED THAT ON AUGUST 4, 1967, OR SUBSEQUENT TO YOUR CLAIM LETTER OF JULY 20, 1967, TO OUR OFFICE, YOUR COMPANY EXECUTED WITHOUT RESERVATION CONTRACT MODIFICATION P003 WHICH PROVIDES THAT IT IS "A FULL AND FINAL EQUITABLE ADJUSTMENT" TO COVER THE EXCESS IN MATERIAL USAGE RESULTING FROM THE SIZE CHANGE; THAT IT CONTAINS THE "COMPLETE AGREEMENT OF THE PARTIES," AND THAT "THERE ARE NO COLLATERAL AGREEMENTS, RESERVATIONS OR UNDERSTANDINGS OTHER THAN EXPRESSLY SET FORTH HEREIN.'