B-173925, OCT 12, 1971

B-173925, OCT 12, 1971

CONTRACTS - INCREASED COSTS - RELIEF REQUESTED DECISION CONCERNING REQUEST FOR RELIEF UNDER A CONTRACT WITH GSA FOR STEEL PIPE DUE TO INCREASED COSTS INCIDENT TO INDUSTRY-WIDE PRICE INCREASES IN EXCESS OF THOSE ESTIMATED BY ROBERTS SUPPLY COMPANY. WHERE NO MISTAKE OCCURRED IN THE BID PRICE AND NO INCREASE IS AUTHORIZED BY THE TERMS OF THE CONTRACT, THERE IS NO LEGAL BASIS FOR COMPLIANCE WITH A REQUEST FOR RELIEF, NOTWITHSTANDING ROBERTS' ESTIMATE THAT A TOTAL LOSS OF $8,000 WILL OCCUR. IT IS NOTED, HOWEVER, THAT GSA MAY GRANT EXTRAORDINARY CONTRACTUAL RELIEF TO FACILITITATE THE NATIONAL DEFENSE PURSUANT TO PUBLIC LAW 85 804, AND THE REGULATIONS GOVERNING SUCH REQUESTS ARE PUBLISHED AT SECTION 1-17 OF THE FPR.

TO ROBERTS SUPPLY COMPANY:

WE REFER TO YOUR LETTER OF AUGUST 19, 1971, AND ENCLOSURES, CONCERNING CONTRACT GS-04S-18701, PURSUANT TO WHICH YOU ARE FURNISHING TO THE GENERAL SERVICES ADMINISTRATION (GSA), ATLANTA, GEORGIA, REQUIREMENTS FOR STEEL PIPE FOR THE PERIOD JANUARY 27, 1971, THROUGH JANUARY 26, 1972.

YOU STATE THAT THE PRICES AT WHICH YOU CONTRACTED TO FURNISH THE PIPE, WHICH ARE NOT SUBJECT TO ESCALATION, WERE BASED ON YOUR ESTIMATE THAT THE PRICE OF STEEL PIPE WOULD INCREASE BY NO MORE THAN $10 PER TON DURING THE CALENDAR YEAR 1971. YOU FURTHER STATE THAT ON MAY 1, 1971, THE STEEL MILLS, WHOSE SALES ARE BASED ON THE PRICE IN EFFECT AT TIME OF SHIPMENT, ANNOUNCED A PRICE INCREASE OF $14 PER TON AND THAT AN ADDITIONAL INDUSTRY WIDE INCREASE OF $18 PER TON EFFECTIVE AUGUST 5, 1971, FOLLOWED A WAGE SETTLEMENT BETWEEN THE INDUSTRY AND STEEL WORKERS.

THE EFFECT OF THE INCREASES, YOU STATE, HAS BEEN TO INCREASE YOUR COSTS TO THE EXTENT THAT IF YOU ARE COMPELLED TO FILL OUTSTANDING ORDERS, WHICH COVER A TOTAL OF 145.7 TONS, AS WELL AS ESTIMATED FUTURE ORDERS FOR APPROXIMATELY 300 TONS, AT YOUR CONTRACT PRICES, YOU WILL INCUR AN ESTIMATED TOTAL LOSS OF MORE THAN $8,000. YOU FURTHER STATE THAT A REQUEST SUBMITTED TO GSA FOR MODIFICATION OF YOUR CONTRACT HAS BEEN DENIED, AND YOU THEREFORE REQUEST THE ASSISTANCE OF OUR OFFICE IN OBTAINING RELIEF IN THE FORM OF ESCALATED PRICES FOR THE ACTUAL INCREASE IN COST TO YOU UNDER THE CONTRACT.

YOU DO NOT ALLEGE THAT ANY MISTAKE WAS MADE IN YOUR BID, OF WHICH GSA SHOULD HAVE TAKEN NOTICE, NOR DO YOU CONTEND THAT THE INCREASE IN PRICE WHICH YOU SEEK IS AUTHORIZED BY THE TERMS OF THE CONTRACT. IT APPEARS, THEREFORE, THAT THERE IS NO LEGAL BASIS FOR COMPLIANCE WITH YOUR REQUEST. ACCORDINGLY, AND SINCE OUR OFFICE IS WITHOUT AUTHORITY TO CONSIDER AND SETTLE CLAIMS AGAINST THE UNITED STATES ON THE BASIS OF EQUITABLE CONSIDERATIONS, WE DO NOT SEE ANY BASIS ON WHICH WE COULD BE OF ASSISTANCE TO YOU IN OBTAINING THE REQUESTED RELIEF.

FOR YOUR INFORMATION, GSA IS ONE OF SEVERAL GOVERNMENT AGENCIES WHICH IS AUTHORIZED TO GRANT EXTRAORDINARY CONTRACTUAL RELIEF TO FACILITATE THE NATIONAL DEFENSE PURSUANT TO PUBLIC LAW 85-804, 50 U.S.C. 1431 1435, AS IMPLEMENTED BY EXECUTIVE ORDER 10789. THE REGULATIONS GOVERNING REQUESTS FOR SUCH RELIEF ARE PUBLISHED AT SECTION 1-17 OF THE FEDERAL PROCUREMENT REGULATIONS. SEE 41 CFR 1-17.

WE REGRET THAT WE ARE UNABLE TO BE OF ANY GREATER ASSISTANCE.