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B-147608, SEP. 21, 1962

B-147608 Sep 21, 1962
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IN THE PRIOR DECISIONS WE ACCEPTED THE ADMINISTRATIVE DETERMINATION THAT THE ITEMS WHICH THE PROCURING ACTIVITY COULD HAVE ORDERED THROUGH THE FSS FROM A. WERE NOT. WE AGREED THAT YOUR ACCOUNT WAS PROPERLY CHARGED FOR $228.71. YOU NOW ALLEGE THAT THE TEN ITEMS PROCURED FROM HUDSON WERE IN TURN PURCHASED FROM BRANDT BY HUDSON. YOU FURTHER ALLEGE THAT FIVE OF THESE ITEMS COULD HAVE BEEN PURCHASED AT CHEAPER PRICES DIRECTLY FROM BRANDT THROUGH THE FSS. COULD HAVE BEEN PROCURED AT LESS COST THROUGH THE FSS. YOU ALSO ARGUE THAT THE PROCURING ACTIVITY SHOULD HAVE PURCHASED THE REMAINING FIVE ITEMS DIRECTLY FROM BRANDT AT "FACTORY WHOLESALE PRICES" RATHER THAN THROUGH HUDSON. ASSUMING ARGUENDO THAT BRANDT WOULD (1) SELL PRODUCTS DIRECTLY TO THE GOVERNMENT WHICH WERE NOT LISTED ON THE FSS AND (2) WOULD SELL THEM WITHOUT CHARGING A DEALER'S PROFIT THAT HUDSON PRESUMABLY DID CHARGE.

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B-147608, SEP. 21, 1962

TO HABITANT SHOPS, INC.:

IN YOUR LETTER OF AUGUST 23, 1962, YOU REQUEST THAT WE RECONSIDER OUR DECISION DATED AUGUST 10, 1962, WHICH SUSTAINED PRIOR DECISIONS DENYING AN ADJUSTMENT OF YOUR INDEBTEDNESS TO THE GOVERNMENT AS A RESULT OF YOUR DEFAULT UNDER FEDERAL SUPPLY SCHEDULE (FSS) CONTRACT NO. GS-00S-33439.

IN THE PRIOR DECISIONS WE ACCEPTED THE ADMINISTRATIVE DETERMINATION THAT THE ITEMS WHICH THE PROCURING ACTIVITY COULD HAVE ORDERED THROUGH THE FSS FROM A. BRANDT COMPANY, INC., WERE NOT, AS YOU ALLEGED, AS COMPARABLE TO THE ITEMS YOU CONTRACTED TO SUPPLY AS THOSE THE ACTIVITY DID ORDER FROM J. L. HUDSON COMPANY UPON YOUR DEFAULT. THEREFORE, WE AGREED THAT YOUR ACCOUNT WAS PROPERLY CHARGED FOR $228.71, THE AMOUNT OF THE EXCESS COST INCURRED BY ORDERING FROM HUDSON.

HOWEVER, YOU NOW ALLEGE THAT THE TEN ITEMS PROCURED FROM HUDSON WERE IN TURN PURCHASED FROM BRANDT BY HUDSON. YOU FURTHER ALLEGE THAT FIVE OF THESE ITEMS COULD HAVE BEEN PURCHASED AT CHEAPER PRICES DIRECTLY FROM BRANDT THROUGH THE FSS. REFERENCE TO FSS, RSC GROUP 71, PART 1, FEBRUARY 1, 1961, THROUGH JANUARY 31, 1962, CONFIRMS THE VERACITY OF THIS ALLEGATION. IN THE LIGHT OF THIS NEW EVIDENCE, THE ISSUE OF THE COMPARABILITY OF FIVE OF THE TEN ITEMS BECOMES IRRELEVANT, SINCE FIVE ITEMS IDENTICAL TO THOSE ACTUALLY PURCHASED FROM HUDSON, WHETHER OR NOT ,COMPARABLE" TO YOUR PRODUCTS, COULD HAVE BEEN PROCURED AT LESS COST THROUGH THE FSS.

YOU ALSO ARGUE THAT THE PROCURING ACTIVITY SHOULD HAVE PURCHASED THE REMAINING FIVE ITEMS DIRECTLY FROM BRANDT AT "FACTORY WHOLESALE PRICES" RATHER THAN THROUGH HUDSON. ASSUMING ARGUENDO THAT BRANDT WOULD (1) SELL PRODUCTS DIRECTLY TO THE GOVERNMENT WHICH WERE NOT LISTED ON THE FSS AND (2) WOULD SELL THEM WITHOUT CHARGING A DEALER'S PROFIT THAT HUDSON PRESUMABLY DID CHARGE, THE RECORD INDICATES THAT THE PROCURING ACTIVITY HAD NO KNOWLEDGE OR REASON TO BELIEVE THAT BRANDT MANUFACTURED THE PRODUCTS ALLEGEDLY PURCHASED BY HUDSON FOR RESALE TO THE GOVERNMENT.

FOR THE FOREGOING REASONS YOUR INDEBTEDNESS OF $228.71 IS REDUCED BY $105.78, THE AMOUNT WHICH WOULD HAVE BEEN SAVED HAD THE GOVERNMENT PURCHASED FIVE ITEMS DIRECTLY FROM BRANDT THROUGH THE FSS. WE REQUEST THAT YOU REMIT TO OUR CLAIMS DIVISION WITHIN 20 DAYS FROM THE DATE OF THIS LETTER THE BALANCE OF $122.93. IN THE EVENT OF YOUR REFUSAL TO PAY THESE EXCESS COSTS, OUR OFFICE WILL TAKE SUCH FURTHER ACTION AS DEEMED NECESSARY TO EFFECT COLLECTION.

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