B-124445, MAY 28, 1957

B-124445, MAY 28, 1957

TO EASTERN TOOL AND MANUFACTURING COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 4, 1957, WITH ENCLOSURES, REQUESTING A REVIEW OF THE ENTIRE TRANSACTION COVERED BY CONTRACT NO. DA- 36-038-ORD-18903, DATED MARCH 14, 1955, WHEREBY YOU AGREED TO FURNISH TO THE DEPARTMENT OF THE ARMY CERTAIN TYPES AND ESTIMATED QUANTITIES OF A M1A1 THRUSTER IN CONNECTION WITH THE ARMY'S CARTRIDGE ACTUATED DEVICE PROGRAM.

IN THE PREVIOUS DECISION OF OUR OFFICE DATED NOVEMBER 10, 1955, TO THE SECRETARY OF THE ARMY, COPY OF WHICH WAS FORWARDED TO YOU, WHEREIN THERE WAS CONSIDERED AND DENIED YOUR PREVIOUS REQUEST DATED JUNE 24, 1955, FOR RELIEF UNDER THE SUBJECT CONTRACT BY REASON OF YOUR MISINTERPRETATION OF THE SPECIFICATION REQUIREMENTS, THERE WERE SET FORTH IN CONSIDERABLE DETAIL ALL PERTINENT FACTS ATTENDING THE QUESTION INVOLVED. IN VIEW OF THIS, IT IS UNNECESSARY TO REITERATE ANY OF THOSE FACTS AT THIS TIME. NOW APPEARS THAT SUBSEQUENT TO OUR DECISION OF NOVEMBER 10, 1955, OR ON MARCH 14, 1956, YOU WERE DECLARED IN DEFAULT BY THE DEPARTMENT OF THE ARMY AND THAT THE ARMY NOW IS CLAIMING $37,251 AS THE AMOUNT OF EXCESS COSTS IT EXPERIENCED BY REASON OF THE REPLACEMENT PURCHASES MADE AGAINST YOUR ACCOUNT.

YOUR LETTER OF FEBRUARY 4, 1957, APPARENTLY REQUESTS REVIEW OR RECONSIDERATION OF OUR DECISION OF NOVEMBER 10, 1955, REGARDING THE VALIDITY OF THE SUBJECT CONTRACT, AND ALSO A REVIEW OF THE JUSTIFICATION FOR THE CLAIM FOR EXCESS COSTS.

WITH RESPECT TO THE CIRCUMSTANCES ATTENDING THE ORIGINAL ACCEPTANCE OF YOUR BID, IN A MORE RECENT REPORT DATED APRIL 2, 1957, THE DEPARTMENT OF THE ARMY ADMITS THAT SOME ERRORS WERE MADE IN THE TECHNICAL PORTION OF THE PRE-AWARD SURVEY. HOWEVER, SINCE SUCH ERRORS DO NOT APPEAR TO HAVE BEEN OF SUCH NATURE OR DEGREE AS TO CHARGE THE CONTRACTING OFFICER EITHER WITH PROBABLE NOTICE OF THE ALLEGED MISINTERPRETATION BY YOU OF THE SPECIFICATION REQUIREMENTS, OR WITH ANY BAD FAITH IN THE ACCEPTANCE OF YOUR BID, AND SINCE NO ADDITIONAL MATERIAL FACTS HAVE BEEN REPORTED EITHER BY YOU OR THE DEPARTMENT OF THE ARMY, OUR DECISION DATED NOVEMBER 10, 1955, MUST BE AFFIRMED.

REGARDING THE MATTER OF EXCESS COSTS, THIS IS TO ADVISE YOU THAT THE DEPARTMENT OF THE ARMY HAS NOT, AS YET, REPORTED ANY CLAIM FOR EXCESS COSTS TO OUR OFFICE FOR APPROPRIATE DEBT COLLECTION ACTION, OR REQUESTED A DECISION AS TO THE PROPRIETY OF CHARGE IN SUCH EXCESS COSTS AGAINST YOU. THE QUESTION IS THEREFORE NOT PROPERLY BEFORE US AT THIS TIME, AND IN FACT THE RECORD INDICATES THAT NO FINAL ADMINISTRATIVE ACTION HAS YET BEEN TAKEN IN THE MATTER. IF, AS INDICATED IN YOUR LETTER, YOU WISH TO APPEAL ANY EXCESS COST DETERMINATION ON THE BASIS OF DISPUTED QUESTIONS OF FACT ARISING OUT OF THE PROCEDURES, ETC., EMPLOYED BY THE DEPARTMENT OF THE ARMY IN DETERMINING OR ASSESSING THE EXCESS COSTS, YOUR ADMINISTRATIVE REMEDIES IN THIS CONNECTION UNDER ARTICLE 28 OF THE SUBJECT CONTRACT SHOULD BE EXHAUSTED BEFORE WE COULD PROPERLY CONSIDER THE CLAIM. IF ON THE OTHER HAND THE QUESTIONS YOU DESIRE TO PRESENT ARE SOLELY AS TO THE LEGALITY OF THE EXCESS COST CLAIM WE SHALL BE GLAD TO CONSIDER THEM EITHER AT THE REQUEST OF THE DEPARTMENT OF THE ARMY OR, AFTER FINAL ACTION BY THAT DEPARTMENT, UPON YOUR REQUEST.

A COPY OF THIS DECISION IS TODAY BEING FORWARDED TO THE DEPARTMENT OF THE ARMY FOR ITS ..END :