B-146757, NOV. 30, 1964

B-146757: Nov 30, 1964

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OFFICE OF THE ASSISTANT SECRETARY OF THE AIR FORCE (INSTALLATIONS AND LOGISTICS): REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 16. ONE OF THE SUBCONTRACTS DISCUSSED IN THE REPORT SATISFYING THE GENERAL OFFICE THAT THE PRICE IS FAIR AND SATISFYING THE GENERAL ACCOUNTING OFFICE THAT THE PRICE IS FAIR AND REASONABLE.'. THE REFUND OFFER APPEARS TO REDUCE THE PRICE TO THAT WHICH MIGHT HAVE BEEN CONSIDERED REASONABLE AT THE TIME THIS PURCHASE ORDER WAS AWARDED. WE HAVE NO OBJECTION TO YOUR ACCEPTING VARIAN'S OFFER.

B-146757, NOV. 30, 1964

TO MR. AARON J. RACUSIN, DEPUTY FOR PROCUREMENT MANAGEMENT, OFFICE OF THE ASSISTANT SECRETARY OF THE AIR FORCE (INSTALLATIONS AND LOGISTICS):

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 16, 1964, IN CONNECTION WITH OUR FINAL REPORT TO THE CONGRESS OF JANUARY 1963, "EXAMINATION OF THE CATALOG PRICES CHARGED FOR KLYSTRON TUBES UNDER NONCOMPETITIVE PROCUREMENTS NEGOTIATED BY THE MILITARY DEPARTMENTS AND THEIR PRIME CONTRACTORS WITH VARIAN ASSOCIATES, PALO ALTO, CALIFORNIA.' ONE OF THE SUBCONTRACTS DISCUSSED IN THE REPORT SATISFYING THE GENERAL OFFICE THAT THE PRICE IS FAIR AND SATISFYING THE GENERAL ACCOUNTING OFFICE THAT THE PRICE IS FAIR AND REASONABLE.' YOU ATTACHED A LETTER FROM VARIAN OFFERING TO REFUND $225,000 IN SETTLEMENT OF ITS OVERPRICING UNDER THIS SUBCONTRACT.

YOUR DEPARTMENT RECOMMENDS ACCEPTANCE OF THE CONTRACTOR'S PROPOSAL. BASED ON THE INFORMATION DEVELOPED BY OUR REVIEW, THE REFUND OFFER APPEARS TO REDUCE THE PRICE TO THAT WHICH MIGHT HAVE BEEN CONSIDERED REASONABLE AT THE TIME THIS PURCHASE ORDER WAS AWARDED. THEREFORE, WE HAVE NO OBJECTION TO YOUR ACCEPTING VARIAN'S OFFER.

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