B-163431, FEB. 21, 1968

B-163431, FEB. 21, 1968

CONTRACTS - $2,500 LIMITATION DEFENSE SUPPLY AGENCY IS CAUTIONED TO MINIMIZE CLAIMS FOR PAYMENT FOR EXCESS DELIVERIES WITHIN THE QUANTITY VARIATION WHEN THEY CAUSE TOTAL COST TO EXCEED $2,500 PURCHASE ORDER LIMITATION. IT IS SUGGESTED THAT PURCHASE ORDERS UNDER 10 U.S.C. 2304 (A) (3) SHOULD CONTAIN EXPRESS WARNING THAT MAXIMUM IS $2,500 WITHOUT REGARD TO ANY QUANTITY VARIATION OR OTHER INCONSISTENT PROVISION.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER DATED JANUARY 25, 1968, WITH ATTACHMENTS, FROM THE CHIEF, ACCOUNTING AND FINANCE DIVISION, OFFICE OF THE COMPTROLLER, REQUESTING AN ADVANCE DECISION AS TO THE CLAIM OF STANDARD LOCKNUT AND LOCKWASHER, INC., IN THE AMOUNT OF $123.00 UNDER PURCHASE ORDER DSA-500-67-M-W714. THE CLAIM REPRESENTS THE PRICE OF ADDITIONAL UNITS DELIVERED UNDER THE ORDER PURSUANT TO THE EXERCISE OF A 5 PERCENT UPWARD QUANTITY VARIATION AUTHORIZED BY THE ORDER, PAYMENT FOR WHICH WAS WITHHELD SO THAT THE TOTAL AMOUNT PAID UNDER THE ORDER WOULD NOT EXCEED $2,500.

IN ORDER TO MINIMIZE THE OCCURRENCE OF CLAIMS OF THE KIND HERE INVOLVED, WE SUGGEST THAT FUTURE PURCHASE ORDERS NEGOTIATED UNDER THE AUTHORITY OF 10 U.S.C. 2304 (A) (3) SHOULD CONTAIN AN EXPRESS WARNING, EITHER ON THE FACE OF THE ORDER OR IN A CONDITION INCLUDED IN REFERENCED GENERAL PROVISIONS, THAT THE MAXIMUM AMOUNT AUTHORIZED TO BE PAID UNDER THE ORDER IS $2,500, WITHOUT REGARD TO ANY QUANTITY VARIATION OR OTHER INCONSISTENT PROVISION WHICH MAY APPEAR IN THE PROCUREMENT DOCUMENTS.

ENCLOSED FOR YOUR INFORMATION IS A COPY OF OUR DECISION OF TODAY TO THE ACCOUNTING AND FINANCE DIVISION AUTHORIZING PAYMENT OF THE CLAIM.