B-128375, APR. 2, 1962
Highlights
TO THE SECRETARY OF THE ARMY: THIS IS IN REFERENCE TO YOUR LETTER OF DECEMBER 5. WAS RESERVED FROM THE OTHERWISE COMPLETE RESOLUTION OF THE MATTER EFFECTED BY THE FINAL SUPPLEMENTAL AGREEMENT FOR SETTLEMENT ENTERED INTO JULY 11. GENERAL AND ADMINISTRATIVE COSTS FOR A PERIOD OF THREE MONTHS AFTER THE CLAIMANT WAS DIRECTED TO SUSPEND WORK UNDER THE CONTRACT. IT WAS STATED: "WE CONCLUDE. THAT THERE IS NO REASON WHY STANDBY COSTS ACTUALLY INCURRED AND ATTRIBUTABLE TO PERFORMANCE PRIOR TO TERMINATION FOR CONVENIENCE MAY NOT BE INCLUDED IN A SETTLEMENT FOR CONVENIENCE WHENEVER THEIR INCLUSION IS PROPER WITHIN THE PURVIEW OF ASPR 8-301. - THAT IS. IF THEY ARE NECESSARY TO FAIRLY COMPENSATE THE CONTRACTOR FOR WORK DONE AND PREPARATIONS MADE FOR THE TERMINATED PORTION OF THE CONTRACT. * * *.'.
B-128375, APR. 2, 1962
TO THE SECRETARY OF THE ARMY:
THIS IS IN REFERENCE TO YOUR LETTER OF DECEMBER 5, 1961, WITH ENCLOSURES, IN RESPONSE TO OUR REQUEST OF JULY 12, 1961, FOR A REPORT AND RELATED DATA CONCERNING A CLAIM BY ELECTRIC PLASTIC FABRICS, INC., ARISING OUT OF THE TERMINATION FOR CONVENIENCE OF CONTRACTS NOS. QM 5558, QM-5559, QM-5901 AND QM-5903 BETWEEN THE UNITED STATES AND THE DOUGLAS CORPORATION.
THE CLAIMANT, A LOWER TIER SUBCONTRACTOR, HAS, IN THE PERSON OF ITS ATTORNEY, SUBMITTED A CLAIM UNDER LETTER OF JUNE 18, 1961, IN THE TOTAL AMOUNT OF $101,680.12. THE MAJOR PORTION OF THIS AMOUNT, $84,341, WAS RESERVED FROM THE OTHERWISE COMPLETE RESOLUTION OF THE MATTER EFFECTED BY THE FINAL SUPPLEMENTAL AGREEMENT FOR SETTLEMENT ENTERED INTO JULY 11, 1960, BY THE GOVERNMENT AND THE PRIME CONTRACTOR. OF THIS LATTER AMOUNT, $18,200 REPRESENTS EXPERIMENTAL WORK, TRAVEL EXPENSES, REPROCESSING COSTS, AND GENERAL AND ADMINISTRATIVE COSTS FOR A PERIOD OF THREE MONTHS AFTER THE CLAIMANT WAS DIRECTED TO SUSPEND WORK UNDER THE CONTRACT. THE DIFFERENCE BETWEEN THE TWO FIGURES REPRESENTS GENERAL AND ADMINISTRATIVE COSTS FOR AN ADDITIONAL PERIOD OF TWELVE MONTHS PRIOR TO TERMINATION OF THE PRIME CONTRACTS EFFECTIVE MARCH 28, 1957.
IN OUR DECISION 41 COMP. GEN. - , B-128375, DECEMBER 5, 1961, CONCERNING THE CLAIM OF THE PRIME CONTRACTOR, IT WAS STATED:
"WE CONCLUDE, HOWEVER, THAT THERE IS NO REASON WHY STANDBY COSTS ACTUALLY INCURRED AND ATTRIBUTABLE TO PERFORMANCE PRIOR TO TERMINATION FOR CONVENIENCE MAY NOT BE INCLUDED IN A SETTLEMENT FOR CONVENIENCE WHENEVER THEIR INCLUSION IS PROPER WITHIN THE PURVIEW OF ASPR 8-301--- THAT IS, IF THEY ARE NECESSARY TO FAIRLY COMPENSATE THE CONTRACTOR FOR WORK DONE AND PREPARATIONS MADE FOR THE TERMINATED PORTION OF THE CONTRACT. * * *.'
IN VIEW OF THE FOREGOING AND THE UNDERSTANDING BETWEEN THE CLAIMANT'S ATTORNEY AND THE CONTRACTING OFFICER CONTAINED IN CORRESPONDENCE (INCLUDED IN THE ATTACHMENTS TO YOUR REPORT) DATED MARCH 8 AND MAY 2, 1961, WE ARE RETURNING YOUR FILE FOR APPROPRIATE ACTION ON THIS ITEM. ACTUAL PAYMENT WOULD, OF COURSE, BE INAPPROPRIATE SO LONG AS A REASONABLE POSSIBILITY REMAINS THAT THE GOVERNMENT WOULD NOT THEREBY OBTAIN A COMPLETE ACQUITTANCE.
AS TO THE REMAINDER OF THE CLAIM, IT IS OUR POSITION THAT THE CLAIMANT IS PRECLUDED EITHER BY PRIOR PAYMENT OR THE GENERAL WAIVER OF AMOUNTS NOT EXPRESSLY EXCEPTED IN THE REFERENCED SETTLEMENT OF JULY 11, 1960.