B-124390, MAY 24, 1956

B-124390, MAY 24, 1956

TO DEWALD RADIO MANUFACTURING CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 12, 1956, WITH ENCLOSURES, REQUESTING INFORMATION AS TO THE PROCEDURE THAT SHOULD BE FOLLOWED IN ORDER TO EFFECT COLLECTION OF ADDITIONAL COMPENSATION CLAIMED TO BE DUE UNDER CONTRACT NO. LC/B/-263, DATED SEPTEMBER 12, 1955.

UNDER THE TERMS OF THE CONTRACT YOU WERE REQUIRED TO FURNISH TO THE LIBRARY OF CONGRESS 6,000 TALKING BOOK REPRODUCERS AT A PRICE OF $27.80 FOR EACH UNIT OR FOR A TOTAL CONSIDERATION OF $166,800, DELIVERY TO BE SPREAD EVENLY THROUGHOUT THE FISCAL YEAR BEGINNING JULY 1, 1955, AND ENDING JUNE 30, 1956. PARAGRAPH 15 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS WHICH SUBSEQUENTLY BECAME A PART OF THE CONTRACT PROVIDED THAT:

"15. THE RIGHT IS RESERVED BY THE DIVISION FOR THE BLIND, LIBRARY OF CONGRESS TO INCORPORATE MINOR CHANGES OR DEVELOPMENTS IN THE CONSTRUCTION OF TALKING BOOK REPRODUCERS MANUFACTURED AS A RESULT OF THIS INVITATION TO BID, AS SUCH CHANGES OR DEVELOPMENTS BECOME AVAILABLE OR DESIRABLE AS A RESULT OF ADVANCEMENTS IN THE FIELD OF ELECTRONICS AND THE ART OF DISC REPRODUCTION. SUCH CHANGES, IF ANY, WILL BE IN THE NATURE OF IMPROVED PICK-UP CARTRIDGES, ESPECIALLY SUITABLE FOR USE BY BLIND USERS OF THE MACHINES, AND SLIGHT CHANGES IN THE INPUT EQUALIZATION NETWORK TO COMPENSATE FOR THE REPRODUCTION CHARACTERISTICS OF SUCH PICK-UP CARTRIDGES. THE RIGHT IS ALSO RESERVED BY THE DIVISION FOR THE BLIND, LIBRARY OF CONGRESS, TO ORDER A CERTAIN PORTION OF THE REPRODUCERS MANUFACTURED AS A RESULT OF THIS INVITATION WITH A TWO-SPEED MOTOR- TURNTABLE COMBINATION, CAPABLE OF OPERATING AT BOTH 16 2/3 AND 33 1/3 R.P.M., IN PLACE OF THE SINGLE SPEED 33 1/3 R.P.M. MOTOR-TURNTABLE COMBINATION DETAILED IN THE SPECIFICATIONS. ADJUSTMENTS IN THE CONTRACTED PRICE OF FINISHED UNITS INCORPORATING ANY SUCH CHANGES WILL BE MADE BY MUTUAL AGREEMENT BETWEEN THE LIBRARY OF CONGRESS AND THE SUCCESSFUL BIDDER OR BIDDERS FOR THE MANUFACTURE OF THE REPRODUCERS IN ACCORDANCE WITH THE ACTUAL ADDITIONAL OR REDUCED COST OF SUCH UNITS. NO CHANGES WILL BE ORDERED IN SUCH MAJOR COMPONENTS AS CARRYING CASES OR GENERAL DESIGN OF THE AMPLIFIER.'

PARAGRAPH 18 OF THE TERMS AND CONDITIONS, WHICH ALSO WAS MADE A PART OF THE SUBSEQUENTLY EXECUTED CONTRACT, ADVISED BIDDERS THAT THE TALKING BOOK REPRODUCERS WERE TO BE SECURELY PACKED IN A STURDY CORRUGATED PAPER CONTAINER WITH SEPARATE INNER CRADLE TYPE CONSTRUCTION; THAT A SAMPLE OF THE CONTAINER TO BE USED WAS ON DISPLAY AT THE DIVISION FOR THE BLIND, LIBRARY OF CONGRESS, WASHINGTON, D.C.; AND THAT THE COST OF THE CONTAINER AND THE LABOR TO SECURELY PACK THE REPRODUCERS IN THE CONTAINERS WAS TO BE INCLUDED IN THE BID PRICE OF THE REPRODUCERS. THERE WAS ALSO ATTACHED TO AND MADE A PART OF THE CONTRACT STANDARD FORM 32 ENTITLED "GENERAL PROVISIONS," ARTICLE 2 OF WHICH AUTHORIZED THE CONTRACTING OFFICER TO MAKE CHANGES WITHIN THE SCOPE OF THE CONTRACT AND PROVIDED FOR EQUITABLE ADJUSTMENTS IN THE CONTRACT PRICE. IT WAS PROVIDED ALSO THAT FAILURE TO AGREE TO ANY ADJUSTMENT WOULD BE A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF THE CONTRACT ENTITLED "DISPUTES.' THIS CLAUSE PROVIDED THAT ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THE CONTRACT WHICH WAS NOT DISPOSED OF BY AGREEMENT WOULD BE DECIDED BY THE CONTRACTING OFFICER WHO WOULD REDUCE HIS DECISION TO WRITING AND FURNISH A COPY TO THE CONTRACTOR. THE CONTRACTOR WAS GIVEN A RIGHT TO APPEAL FROM SUCH DECISION WITHIN 30 DAYS TO THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE, IN THIS CASE THE LIBRARIAN OF CONGRESS, WHOSE DECISION OR THAT OF HIS REPRESENTATIVE WOULD BE FINAL AND CONCLUSIVE.

IN YOUR LETTER OF NOVEMBER 21, 1955, YOU NOTIFIED THE LIBRARIAN OF CONGRESS THAT YOUR BID PRICE WAS BASED UPON THE PRICE LEVELS FOR RAW MATERIALS, COMPONENTS AND LABOR PREVAILING AT THE TIME YOUR BID WAS SUBMITTED; THAT DURING THE PERIOD FROM MAY 5, 1955, DATE OF ISSUANCE OF THE INVITATION FOR BIDS, TO SEPTEMBER 12, 1955, THE DATE OF THE CONTRACT, YOU EXPERIENCED A RISING MARKET AND THAT THIS, COUPLED WITH INCREASES AS A RESULT OF THE ENGINEERING CHANGES MADE FROM TIME TO TIME BY THE ENGINEERING DEPARTMENT OF THE LIBRARY, OVER WHICH YOU HAD NO CONTROL, HAD FURTHER INCREASED YOUR BASIC COSTS. ALTHOUGH YOU ADMITTED THAT THE LIBRARY HAD REDUCED SOME OF THE MATERIAL COSTS BY ELIMINATIONS AND CHANGES YOU NEVERTHELESS CLAIMED THAT "THE INCREASES EFFECTED MORE THAN OFFSET ALL THE REDUCTIONS" AND THAT THERE WAS A DIFFERENTIAL OF 95 CENTS WHICH YOU BELIEVED YOU WERE "ENTITLED TO ADD TO THE CONTRACT PRICE OF $27.80 EACH.' IN THE CORRESPONDENCE WHICH FOLLOWED YOUR ORIGINAL CLAIM THE LIBRARY TOOK THE POSITION THAT THE CHANGES REQUIRED BY IT RESULTED IN BOTH INCREASES AND DECREASES IN COSTS WHICH OFFSET ONE ANOTHER AND THAT YOU WERE NOT ENTITLED TO ANY ADJUSTMENT IN YOUR CONTRACT PRICE WITH RESPECT TO THE COST OF CARTON AND MOTOR. IN YOUR LETTER OF JANUARY 20, 1956, TO OUR OFFICE YOU CLAIMED A TOTAL INCREASE IN THE UNIT PRICE OF $1.09 BUT YOU ALLOWED A CREDIT OF 58 CENTS LEAVING A BALANCE DUE YOU OF 51 CENTS. THE LIBRARIAN OF CONGRESS REPORTS THAT PURSUANT TO PARAGRAPH 15 SUPRA, HE AGREES THAT THE FOLLOWING ITEMS OF YOUR CLAIM ARE PROPERLY ALLOWABLE:

CHART

"CHANGE IN PICKUP, TONE ARM, AND SHIELDED

PICKUP LEADS .......................................... $ .27

ADDED GROMMET FOR PICKUP ................................ .027

ADDED ONE HUNDRED THOUSAND OHM RESISTOR ................. .015

ASSEMBLY OF PICKUP ...................................... .15

LABOR TO INSTALL GROMMET AND ONE HUNDRED THOUSAND

OHM RESISTOR .......................................... .07

TOOLS REQUIRED FOR NEW ARM REST AMORTIZED AT ............ .05

TOTAL $ .582 " HE STATES HOWEVER THAT YOU HAVE ADMITTED CERTAIN SAVINGS WHICH ACCRUED TO YOUR BENEFIT AS A RESULT OF OTHER CHANGES REQUESTED BY THE LIBRARIAN. THESE SAVINGS ARE AS FOLLOWS:

ELIMINATION OF CHOKE ?41

CHANGE OF TUBE .17

TOTAL ?58

THE ITEMS OF YOUR CLAIM WHICH ARE THE SUBJECT OF DISAGREEMENT ARE AS FOLLOWS:

INCREASED COST OF CARTON ?17

INCREASED COST OF MOTOR .12

LABOR OVERHEAD .22

TOTAL ?51

THE FIRST TWO ITEMS NOTED ABOVE, NAMELY INCREASED COST OF CARTON AND MOTOR INVOLVE QUESTIONS OF LAW AND ARE FOR DETERMINATION BY OUR OFFICE. 17 COMP. GEN. 503. IN OTHER WORDS THE QUESTION FOR DETERMINATION AS TO THESE ITEMS IS WHETHER SUCH ITEMS ARE COVERED BY YOUR CONTRACT. THE LIBRARIAN REPORTS THAT THERE HAS BEEN NO CHANGE FROM THE ORIGINAL REQUIREMENTS OF THE CONTRACT SO FAR AS THE COST OF THE CARTONS IS CONCERNED. IT IS STATED FURTHER THAT YOU DID NOT AVAIL YOURSELF OF THE OPPORTUNITY TO INSPECT THE SAMPLE ON DISPLAY AT THE DIVISION OF THE BLIND OR OTHERWISE TO ASCERTAIN THE TYPE OF CARTON REQUIRED. IT WAS YOUR DUTY TO INSPECT THE SAMPLE TO ASCERTAIN WHAT WAS REQUIRED BEFORE SUBMITTING YOUR BID AND YOUR FAILURE TO ASCERTAIN THE REQUIREMENTS MAY NOT IMPOSE UPON THE GOVERNMENT AN OBLIGATION TO PAY YOU ADDITIONAL COMPENSATION FOR WORK ALREADY COVERED BY THE CONTRACT.

AS TO YOUR CLAIM FOR INCREASED COST OF MOTOR IN THE AMOUNT OF ?12 PER UNIT, THE LIBRARIAN REPORTS THAT FOLLOWING AN ADMINISTRATIVE DETERMINATION THAT YOU HAD SUBMITTED THE LOWEST BID AS TO PRICE A LETTER OF INTENT WAS ISSUED ON JUNE 21, 1955, ADVISING YOU THAT A CONTRACT WOULD BE AWARDED TO YOU WHEN FUNDS WERE MADE AVAILABLE. YOUR ACKNOWLEDGMENT IS DATED JUNE 22. THE APPROPRIATION FOR THE LIBRARY FOR THE FISCAL YEAR 1956 WAS APPROVED ON AUGUST 5, 1955. HOWEVER, IN THE MEANTIME TWO PROTESTS AGAINST THE PROPOSED AWARD TO YOU WERE MADE AND FILED WITH OUR OFFICE AND THOSE PROTESTS WERE NOT DISPOSED OF UNTIL SEPTEMBER 2, 1955. THE AWARD TO YOU WAS MADE ON SEPTEMBER 12, 1955. THE DELAY IN AWARDING THE CONTRACT TO YOU DOES NOT APPEAR TO HAVE BEEN UNREASONABLE; AND THE QUESTION OF INCREASED COST WAS NOT RAISED UNTIL YOUR LETTER OF NOVEMBER 21. MOREOVER, IT APPEARS THAT THE ALLEGED INCREASE IN THE COST OF MOTOR DID NOT RESULT FROM ANY CHANGE IN THE ORIGINAL CONTRACT PROVISIONS BUT WAS DUE TO A GENERAL INCREASE IN THE MARKET. THE CONTRACT WHICH IS PRESUMED IN LAW TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES, DOES NOT PROVIDE FOR PAYMENT OF SUCH AN INCREASE. INCREASED COST OF PERFORMANCE, WHETHER FORESEEN OR UNFORESEEN, IS ONE OF THE HAZARDS OF A CONTRACT WHICH NEITHER EXCUSES PERFORMANCE NOR ENTITLES A CONTRACTOR TO ADDITIONAL COMPENSATION. SEE 19 COMP. GEN. 903 AND THE COURT CASES THERE CITED.

ACCORDINGLY, YOUR CLAIMS FOR INCREASED COST OF CARTON AND MOTOR ARE DISALLOWED.

YOUR CLAIM FOR OVERHEAD IN THE AMOUNT OF ?22 PER UNIT INVOLVES A QUESTION OF FACT WHICH UNDER THE TERMS OF THE DISPUTES CLAUSE OF THE CONTRACT IS FOR DETERMINATION BY THE CONTRACTING OFFICER OR THE LIBRARIAN ON APPEAL FROM AN ADVERSE FINDING BY THE CONTRACTING OFFICER. THE LIBRARIAN OF CONGRESS IS BEING ADVISED OF THAT FACT AND IT IS ASSUMED THAT YOU WILL BE INFORMED BY THE CONTRACTING OFFICER OF HIS DECISION ON YOUR CLAIM FOR THAT ITEM WITHIN THE NEAR FUTURE.