B-155488, JAN. 26, 1965

B-155488, JAN. 26, 1965

TO KINGSBURY MACHINE WORKS, INCORPORATED:

WE REFER TO YOUR LETTERS DATED OCTOBER 26, 1964, WITH ENCLOSURES, AND JANUARY 4, 1965, REGARDING YOUR CLAIM FOR ADDITIONAL COMPENSATION UNDER PURCHASE ORDER NO. SPCC-2A-35003, ISSUED BY THE SHIPS PARTS CONTROL CENTER, DEPARTMENT OF THE NAVY, MECHANICSBURG, PENNSYLVANIA.

THIS PURCHASE ORDER FOR THE PROCUREMENT OF TWO SLEEVE COUPLINGS IN ACCORDANCE WITH APPLICABLE DRAWINGS AND PACKAGING REQUIREMENTS WAS FORWARDED TO YOU ON JUNE 26, 1962. THE NAVY DID NOT LIST ANY PRICE FOR THE ITEMS ON THE PURCHASE ORDER. CLAUSE 5.1 OF THE PURCHASE ORDER STATED AS FOLLOWS:

"5.1 MONETARY LIMITATION: THIS IS A FIRM ORDER IF PRICE IS

$1000.00 OR LESS.

IF TOTAL PRICE OF THIS ORDER WILL EXCEED THE ABOVE MONETARY LIMITATION OR IF YOU CANNOT FURNISH MATERIAL IN EXACT ACCORDANCE WITH THE TERMS OF THIS ORDER, IMMEDIATELY NOTIFY THE CONTRACTING OFFICER, SPCC, CODE 774A, MECHANICSBURG, PA., GIVING YOUR QUOTATION OR PROPOSED SUBSTITUTION OR CHANGES, AND WITHHOLD ACTION PENDING REPLY.'

ON JULY 5, 1962, YOU ACKNOWLEDGED THE PURCHASE ORDER AND INDICATED THAT THE APPROXIMATE SHIPPING DATE FOR THE ITEMS WOULD BE NOVEMBER 2, 1962. YOU DID NOT FILL IN THE BLANK IN THE ORDER ACKNOWLEDGMENT CARD FOR INDICATING THE ESTIMATED PRICE FOR THE ITEMS. ON DECEMBER 19, 1962, THE ITEMS WERE INSPECTED AND ACCEPTED BY THE INSPECTOR OF NAVAL MATERIAL. THERE IS NO INDICATION THAT ANY APPROPRIATE GOVERNMENT REPRESENTATIVE WAS ADVISED PRIOR TO THE INSPECTION AND ACCEPTANCE OF YOUR MATERIAL THAT YOUR PRICE FOR THE ITEMS WOULD EXCEED $1,000. A LETTER DATED JANUARY 16, 1964, FROM THE INSPECTOR OF NAVAL MATERIAL, PHILADELPHIA, TO THE COMMANDING OFFICER, SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA, REGARDING THIS PROCUREMENT STATES:

"1. IN REPLY TO REFERENCE (A) YOU ARE ADVISED THIS OFFICE WAS NOT AWARE SUBJECT CONTRACT WOULD EXCEED THE $1,000.00 LIMITATION.

"2. THE MATERIAL WAS TECHNICALLY INSPECTED AT KINGSBURY MACHINE WORKS AND RELEASED TO EXPORT PACKAGING SERVICE FOR PACKAGING ON A PACKING LIST PREPARED BY KINGSBURY MACHINE WORKS PERSONNEL. REPRESENTATIVE OF THIS OFFICE STAMPED THIS PACKING LIST BUT HAD NO REASON TO QUESTION THE VALUE OF $920.00 TYPED ON IT BY THE CONTRACTOR.'

THE NAVY HAD ADVISED THAT THE PRICE HISTORY CARD FOR THIS ITEM SHOWED A PRICE OF $410 PER UNIT. PURSUANT TO A REVIEW OF THE PRICE HISTORY CARD SUBSEQUENT TO YOUR REQUEST FOR ADDITIONAL COMPENSATION, IT WAS FOUND THAT THE PRICE OF $410 WAS BASED ON A PROCUREMENT OF 67 OF THE COUPLINGS IN 1951. IT WAS ALSO FOUND THAT THE ITEMS PURCHASED IN 1951 WERE MANUFACTURED FROM MATERIALS DIFFERENT FROM THE ITEMS IN THIS PROCUREMENT.

ON APRIL 2, 1963, YOU ADVISED THE PROCURING ACTIVITY THAT YOU HAD OVERLOOKED THE $1,000 LIMITATION IN THE PURCHASE ORDER AND YOU ADVISED THE NAVY THAT THE PRICE FOR EACH OF THE ITEMS SHOULD BE $1,335. BY LETTER TO THE PROCURING ACTIVITY DATED APRIL 23, 1964, YOU PROPOSED THAT THIS MATTER BE SETTLED FOR $1,735.30. YOUR CLAIM FOR ADDITIONAL COMPENSATION WAS DENIED BY THE NAVY AND ON OCTOBER 26, 1964, YOU DIRECTED YOUR LETTER TO OUR OFFICE.

UNDER THE PROVISIONS OF THE PURCHASE ORDER WHICH YOU ACCEPTED AND PURSUANT TO WHICH DELIVERY OF THE ITEMS WAS MADE, IT WAS STIPULATED THAT THERE WAS A MONETARY LIMITATION OF $1,000. YOUR ACCEPTANCE OF THE PURCHASE ORDER AND DELIVERY THEREUNDER RESULTED IN A VALID AND BINDING AGREEMENT ON YOUR PART TO PERFORM IN ACCORDANCE WITH ITS TERMS. SEE 36 COMP. GEN. 191 AND B-140104, JULY 20, 1959. THERE IS NO INDICATION THAT THE NAVY WAS AWARE THAT THERE WAS A QUESTION REGARDING THE ACCURACY OF THE INFORMATION ON THE PRICE HISTORY CARD PRIOR TO THE TIME YOUR AGREEMENT WAS CONSUMMATED BY YOUR DELIVERY OF THE ITEMS. THE MISTAKE WHICH IS THE BASIS FOR YOUR CLAIM WAS YOUR FAILURE TO NOTICE THE $1,000 LIMITATION IN THE PURCHASE ORDER AND TO BRING TO THE NAVY'S ATTENTION THAT YOU COULD NOT SUPPLY THE ITEMS FOR $1,000. NAVY IN NO WAY CONTRIBUTED TO THIS MISTAKE ON YOUR PART. IN THESE CIRCUMSTANCES WE FIND NO BASIS TO QUESTION NAVY'S DETERMINATION THAT YOUR CLAIM WAS BASED ON A UNILATERAL ERROR.

IN CONNECTION WITH THE INSTANT MATTER WE HAVE ALSO CONSIDERED OUR CERTIFICATE OF SETTLEMENT DATED SEPTEMBER 14, 1953, REGARDING YOUR CLAIM UNDER NEGOTIATED CONTRACT NO. N104S-14886, DATED OCTOBER 13, 1950. THAT SITUATION BECAUSE OF A TYPOGRAPHICAL ERROR YOU QUOTED A PRICE OF $45 UNDER ITEM 3 INSTEAD OF $75. THE CONTRACTING OFFICER ADMITTED THAT IN A PRIOR CONTRACT FOR THE SAME TYPE ITEM MADE FROM IDENTICAL MATERIAL AND IT WAS CONCLUDED THAT ANY MISTAKE WAS MUTUAL. IN VIEW OF THE FINDING THAT NAVY DID NOT CONTRIBUTE TO THE MISTAKE ON WHICH YOU BASE YOUR PRESENT CLAIM, OUR SETTLEMENT UNDER CONTRACT NO. N104S-14886, DATED OCTOBER 13, 1950, WOULD NOT BE AUTHORITY FOR PAYMENT IN THE INSTANT MATTER.