B-128244, SEP. 12, 1963
Highlights
TO THE GENERAL ELECTRIC COMPANY: WE ARE PLEASED TO INFORM YOU THAT YOUR REQUEST FOR RECONSIDERATION OF OUR DECISION DATED MAY 23. SINCE THE APPLICABILITY OF THE LAW TO SUBCONTRACTS WAS NOT READILY APPARENT FROM THE LANGUAGE OF THE STATUTE ITSELF. SINCE THE REGULATIONS IN EFFECT AT THE TIME THE CONTRACT WAS ENTERED INTO DID NOT EXPLICITLY RESOLVE THE AMBIGUITY. IT IS FELT THAT EQUITY REQUIRES THE MODIFICATION OF OUR DECISION SO AS TO GIVE THE RULE THAT THE STATUTORY LIMITATIONS UPON THE MAGNITUDE OF FEES UNDER COST REIMBURSEMENT CONTRACTS APPLIES TO SUBCONTRACTS AS WELL AS PRIME CONTRACTS. THE CLAIMS DIVISION OF THIS OFFICE IS BEING NOTIFIED TO ALLOW YOUR CLAIM.
B-128244, SEP. 12, 1963
TO THE GENERAL ELECTRIC COMPANY:
WE ARE PLEASED TO INFORM YOU THAT YOUR REQUEST FOR RECONSIDERATION OF OUR DECISION DATED MAY 23, 1963, HAS BEEN GRANTED.
UPON REVIEW OF THE ISSUE INVOLVED IN THIS CASE, VIZ., THE ALLOWABILITY OF FIXED FEES PAID SUBCONTRACTORS IN EXCESS OF THE LIMITATION IMPOSED BY SECTION 4 (B) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 23, THIS OFFICE NOW DEEMS THE APPLICATION, ON A RETROACTIVE BASIS, OF THE FEE LIMITATIONS CONTAINED IN THIS STATUTE TO SUBCONTRACTS TO BE UNFAIR TO YOUR COMPANY. SINCE THE APPLICABILITY OF THE LAW TO SUBCONTRACTS WAS NOT READILY APPARENT FROM THE LANGUAGE OF THE STATUTE ITSELF, AND SINCE THE REGULATIONS IN EFFECT AT THE TIME THE CONTRACT WAS ENTERED INTO DID NOT EXPLICITLY RESOLVE THE AMBIGUITY, IT IS FELT THAT EQUITY REQUIRES THE MODIFICATION OF OUR DECISION SO AS TO GIVE THE RULE THAT THE STATUTORY LIMITATIONS UPON THE MAGNITUDE OF FEES UNDER COST REIMBURSEMENT CONTRACTS APPLIES TO SUBCONTRACTS AS WELL AS PRIME CONTRACTS, PROSPECTIVE EFFECT ONLY.
THE CLAIMS DIVISION OF THIS OFFICE IS BEING NOTIFIED TO ALLOW YOUR CLAIM.