B-156176, APR. 5, 1965

B-156176, APR. 5, 1965

TO MAJOR P. W. MORGAN, FC, THROUGH CHIEF OF FINANCE, DEPARTMENT OF THE ARMY:

BY FIRST INDORSEMENT DATED FEBRUARY 18, 1965, THE FINANCE CENTER, UNITED STATES ARMY, INDIANAPOLIS, INDIANA, FORWARDED YOUR LETTER OF JANUARY 7, 1965, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO THE LEGALITY OF MAKING PAYMENT ON A VOUCHER STATED IN FAVOR OF JEPPESEN AND COMPANY, DENVER, COLORADO, IN THE AMOUNT OF $7,569.53, REPRESENTING THE COST OF SERVICES PERFORMED BY THE COMPANY FOR THE DEPARTMENT OF THE ARMY DURING THE PERIOD JULY 1, 1962, THROUGH JANUARY 10, 1963, UNDER NEGOTIATED CONTRACT NO. DA 36-039-SC-70196, AS AMENDED.

UNDER THE ORIGINAL CONTRACT THE COMPANY AGREED TO HANDLE, STORE, RENOVATE, OR REPAIR, AS NEEDED, AND ACCOUNT MONTHLY FOR LEATHER FLIGHT BAGS (JEPPESEN FLIGHT BAGS, MODEL AM 55-1) BEING SUPPLIED BY THE GOVERNMENT TO THE CONTRACTOR AS GOVERNMENT-FURNISHED PROPERTY DURING THE PERIOD BEGINNING JULY 1, 1956, AND ENDING JUNE 30, 1957. THE CONTRACT SPECIFIED A TOTAL PRICE OF $3,000.

IT APPEARS THAT THE VALIDITY OF MAKING PAYMENT OF THE VOUCHER FOR $7,569.53 IS QUESTIONED BY YOU, NOT BECAUSE OF ANY DOUBT AS TO THE ENTITLEMENT OF THE PAYEE AS TO THE AMOUNT INVOLVED, BUT BECAUSE PAYMENT IS PROPOSED UNDER CONTRACT MODIFICATIONS ISSUED SUBSEQUENT TO THE EXPIRATION OF THE ORIGINAL CONTRACT WHICH EXPIRED OR TERMINATED ON JUNE 30, 1962.

IT IS NOTED THAT ONLY A FEW PAGES OF THE ORIGINAL CONTRACT WERE TRANSMITTED WITH YOUR SUBMISSION AND THAT NONE OF THE REFERRED-TO AMENDMENTS ACCOMPANIED THE SUBMISSION. IT IS REQUESTED THAT IN FUTURE CASES COMPLETE COPIES OF THE ORIGINAL CONTRACT AND ANY AMENDMENTS THERETO ACCOMPANY THE SUBMISSION.

IN A LEGAL OPINION DATED AUGUST 17, 1964, THE LEGAL OFFICER, WPD, STATES THAT THE USUAL GENERAL PROVISIONS INCLUDING A CHANGES ARTICLE AND A GOVERNMENT-FURNISHED PROPERTY CLAUSE WERE MADE PART OF THE ORIGINAL CONTRACT; THAT THE CONTRACT CONTAINED NO PROVISION AUTHORIZING THE EXTENSION OF THE CONTRACT PERIOD ENDING JUNE 30, 1957; AND THAT THE CONTRACT AS AWARDED WAS THEREAFTER MODIFIED 11 TIMES. IT ALSO IS STATED THAT NOTWITHSTANDING THE LACK OF SPECIFIC CONTRACT AUTHORITY, MODIFICATIONS NOS. 2, 6, 7, 8 AND 9, AMONG OTHER MATTERS, MADE PROVISIONS FOR EXTENDING THE CONTRACT PERIOD AND THAT IN EACH OF THESE INSTANCES, THE MODIFICATION INSTRUMENTS WERE NOT EXECUTED BY THE PARTIES UNTIL AFTER THE CONTRACT PERIOD INVOLVED HAD EXPIRED; AND THAT THE EFFECT OF THESE MODIFICATIONS AND MODIFICATIONS NOS. 3 AND 5 WAS TO INCREASE THE CONTRACT PRICE FROM $3,000 TO $55,125. IT IS FURTHER STATED THAT NOTWITHSTANDING THE FACT THAT THE CONTRACT AS MODIFIED EXPIRED ON JUNE 30, 1962, AN ADDITIONAL 61 ORDERS WERE PLACED DURING THE PERIOD JULY 1, 1962, THROUGH JANUARY 7, 1963.

SINCE THE CONTRACT EXPIRED ON JUNE 30, 1962, ANY ORDERS PLACED THEREAFTER OBVIOUSLY MAY NOT BE CONSIDERED AS HAVING BEEN ISSUED PURSUANT TO THE CONTRACT. SEE B-138745, DECEMBER 11, 1959.

HOWEVER, SINCE THE GOVERNMENT HAS RECEIVED THE BENEFIT OF THE SERVICES FURNISHED BY THE COMPANY UNDER CIRCUMSTANCES CLEARLY INDICATING THAT THE GOVERNMENT EXPECTED TO PAY AND THE CONTRACTOR EXPECTED TO RECEIVE PAYMENT AT THE RATES SPECIFIED IN THE CONTRACT WHICH APPEAR TO BE REASONABLE, WE WOULD NOT BE REQUIRED TO OBJECT AT THIS TIME TO PAYMENT BEING MADE TO THE CONTRACTOR AT THE RATES SPECIFIED ON THE INVOICES.

ACCORDINGLY, PAYMENT OF THE VOUCHER FOR $7,569.53 IS AUTHORIZED. THE VOUCHER AND ITS ACCOMPANYING PAPERS ARE RETURNED HEREWITH.