B-125910, DEC. 29, 1955

B-125910, DEC. 29, 1955

TO KUHLMAN ELECTRIC COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 12, 1955, REQUESTING REVIEW OF SETTLEMENT DATED AUGUST 19, 1955, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $51,771.96 UNDER CONTRACT NO. AF 33/138/-23180, DATED APRIL 6, 1951.

UNDER THE CONTRACT YOU AGREED TO FURNISH TO THE DEPARTMENT OF THE AIR FORCE, IN ACCORDANCE WITH THE SPECIFICATIONS, 2,319 AIRCRAFT ENGINE PREOILERS AT $63.57 EACH, OR FOR A TOTAL CONTRACT PRICE OF $147,418.83. AFTER RECEIPT OF BIDS IN THIS CASE THE CONTRACTING AGENCY REQUESTED THAT THE SECOND LOWEST BIDDER AND YOU (THE LOWEST BIDDER) REVIEW YOUR BIDS WHICH WERE IN THE AMOUNTS OF $72.90 AND $63.57 PER UNIT, RESPECTIVELY. BOTH QUOTATIONS WERE CONFIRMED. IT IS REPORTED THAT THE SUBJECT ITEM HAD BEEN PROCURED PREVIOUSLY BY THE GOVERNMENT FROM ANOTHER SOURCE AT A PRICE OF $72.13 PER UNIT. IT APPEARS THAT AFTER YOU CONFIRMED YOUR BID THE CONTRACT WAS AWARDED TO YOU. DUE TO YOUR INABILITY TO PROCURE STEEL AND SOME OTHER PARTS YOU WERE UNABLE TO START THE JOB UNTIL LATE IN OCTOBER 1951, ABOUT WHICH TIME YOU DISCOVERED THAT YOUR ESTIMATE OF THE MATERIAL COSTS WAS TOO LOW. AFTER EXPLAINING THIS CONDITION TO THE CONTRACTING AGENCY YOU WENT FORWARD WITH THE WORK AND COMPLETED THE CONTRACT. YOU LATER FILED A CLAIM FOR $51,771.96 WHICH IS ALLEGED TO REPRESENT THE LOSSES SUFFERED BY YOU UNDER THIS CONTRACT.

IN THE LETTER OF OCTOBER 12, 1955, YOU SPECIFICALLY STATE THAT YOU ARE NOT CONTESTING THE FACT THAT THE CONTRACT WAS A LEGITIMATE AND VALID INSTRUMENT BUT RATHER THAT YOUR REQUEST FOR REVIEW IS BASED ENTIRELY ON THE FACT THAT AFTER YOU INFORMED THE CONTRACTING OFFICER THAT YOUR MATERIAL COST WAS FAR IN EXCESS OF THAT WHICH YOU HAD ESTIMATED HE ASSURED YOU THAT THE CONTRACT PRICE WOULD BE ADJUSTED TO COMPENSATE FOR THE ADDITIONAL COSTS WHICH RESULTED.

WHILE YOU STRESS THE ALLEGED ASSURANCES OR PROMISES MADE TO YOU BY THE CONTRACTING OFFICER IT IS NOTED IN PARAGRAPH NO. 6 OF YOUR LETTER DATED JUNE 3, 1954, ADDRESSED TO THE CLAIMS DIVISION, GENERAL ACCOUNTING OFFICE, THAT THE CONTRACTING OFFICER DID NOT, AT LEAST AT THE TIME REFERRED TO THERE, GIVE ANY ASSURANCE WITH RESPECT TO THE ALLOWANCE OF YOUR CLAIM BUT RATHER MERELY STATED THAT UPON THE SUBMISSION OF YOUR COST FIGURES AFTER COMPLETION OF THE CONTRACT THAT HE, THE CONTRACTING OFFICER, WOULD MAKE A REQUEST FOR AN AMENDMENT TO THE CONTRACT. MOREOVER, YOU STATE IN PARAGRAPH NO. 7 OF THAT LETTER THAT ON ANOTHER OCCASION WHEN THE LOW ESTIMATE WAS BROUGHT TO THE ATTENTION OF THE CONTRACTING AGENCY THAT YOU WERE FURNISHED WITH A COPY OF DIRECTORATE OFFICE INSTRUCTIONS NO. 70-116 OF THE DEPARTMENT OF THE AIR FORCE. SINCE ADMINISTRATIVE OFFICES HAVE NO AUTHORITY TO ALLOW CLAIMS SUCH AS THAT WITH WHICH WE ARE HERE CONCERNED, SUCH INSTRUCTIONS UNDOUBTEDLY CONTAINED NO ASSURANCES OR DIRECTIVES WITH RESPECT TO THE ALLOWANCE OF THE CLAIM BUT APPARENTLY MERELY SET FORTH, AS DO ALL COMPARABLE INSTRUCTIONS, THE USUAL PROCEDURE NECESSARY TO BE FOLLOWED IN PRESENTING YOUR CLAIM IN PROPER ORDER TO THE GENERAL ACCOUNTING OFFICE FOR CONSIDERATION.

BE THAT AS IT MAY, HOWEVER, THE MORE CONTROLLING ISSUE IN THIS CASE IS THAT EVEN IF DEFINITE PROOF WERE AVAILABLE TO SHOW THAT YOU WERE ASSURED BY THE CONTRACTING OFFICER OF FAVORABLE ACTION WITH RESPECT TO YOUR CLAIM, IN THE ABSENCE OF SOME PARTICULAR UNUSUAL CIRCUMSTANCES THAT FACT ALONE WOULD NOT WARRANT THE RELIEF REQUESTED BY YOU. IN THIS CONNECTION, IT CONSISTENTLY HAS BEEN HELD BY OUR OFFICE AND THE COURTS THAT WHERE, AS HERE, A BID HAS BEEN ACCEPTED IN GOOD FAITH THERE COMES INTO BEING, AS ADMITTED BY YOU, A VALID CONTRACT AND THAT SUCH A CONTRACT CONFERS CERTAIN RIGHTS AND OBLIGATIONS UPON THE CONTRACTING PARTIES WHICH NEITHER OUR OFFICE NOR ANY OTHER OFFICER OF THE GOVERNMENT, INCLUDING OF COURSE CONTRACTING OFFICERS OF THE VARIOUS ADMINISTRATIVE OFFICES, IS AUTHORIZED TO VARY TO THE DETRIMENT OF THE UNITED STATES WITHOUT ADEQUATE CONSIDERATION.