B-172959, JUN 1, 1972

B-172959, JUN 1, 1972

CONTRACTORS - EXCESS COSTS - WAIVER DECISION THAT THE COMP. GEN. WILL NOT OBJECT TO THE PROPOSED RESOLUTION OF THE PROBLEMS CONSIDERED IN DECISION, B-172959, DECEMBER 10, 1971, SINCE THE RECOMMENDATIONS OF GAO ARE BEING APPLIED TO PREVENT A RECURRENCE OF THIS SITUATION, AND SINCE THE MONETARY AMOUNT INVOLVED IS RELATIVELY SMALL.

TO MR. JAMES R. SCHLESINGER:

THIS IS IN REPLY TO A LETTER DATED MAY 4, 1972, AND ENCLOSURES, FROM YOUR GENERAL MANAGER, RELATIVE TO THE DECISION OF THIS OFFICE, B 172959, DECEMBER 10, 1971, WHICH WAS ISSUED IN CONNECTION WITH THE BID PROTEST BY CAYUGA MACHINE AND FABRICATING COMPANY UNDER A SOLICITATION ISSUED BY UNION CARBIDE CORPORATION, ACTING FOR THE GOVERNMENT UNDER PRIME CONTRACT NO. W-7405-ENG-26 WITH THE AEC.

THE GENERAL MANAGER'S LETTER IS IN RESPONSE TO THE RECOMMENDATIONS IN OUR DECISION AND REQUESTS OUR CONCURRENCE IN THE PROPOSED RESOLUTION OF THE MATTER. THE GENERAL MANAGER ADVISES THAT AEC PROPOSES TO FOLLOW OUR RECOMMENDATIONS EXCEPT THAT, FOR THE REASONS DISCUSSED BETWEEN OUR RESPECTIVE OFFICES OF THE GENERAL COUNSEL AND WHICH ARE SET OUT IN A MEMORANDUM ATTACHED TO THE MAY 4 LETTER, IT IS PROPOSED NOT TO ATTEMPT TO RECOVER CERTAIN EXCESS COSTS (APPROXIMATELY $900) INCURRED BY UNION CARBIDE.

IN VIEW OF THE REASONS STATED IN THE REFERENCED MEMORANDUM, AND THE BELIEF EXPRESSED BY THE GENERAL MANAGER THAT AN ATTEMPT TO RECOVER SUCH FUNDS WOULD RAISE SUBSTANTIAL QUESTIONS AS TO THE INTENDED RELATIONSHIP OF THE PARTIES GENERALLY OPERATING UNDER AEC MANAGEMENT-TYPE CONTRACTS THROUGHOUT THE AEC SYSTEM, TOGETHER WITH THE RELATIVELY SMALL DOLLAR AMOUNT INVOLVED AND THE FACT THAT ADOPTION OF OUR OTHER RECOMMENDATIONS SHOULD PRECLUDE A REPETITION OF THIS SITUATION IN FUTURE PROCUREMENTS, WE WILL NOT OBJECT TO THE GENERAL MANAGER'S PROPOSED RESOLUTION OF THIS MATTER.