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and will serve to store the bottles until they are sent to
more immediate areas of use. The bottle will store and
identify the contents before and during the dispensation
of the tablets to patients. The tablets function separately
to serve the prescribed medical purpose.

Here, the article needed by the United States is the drug sulfadiazine prepared in a tablet form to be used as a medicine for human consumption. The bottling and packaging functions, as well as the materials used in connection therewith, to be performed by Chase would provide merely a convenient means for shipping, distributing and storing the tablets until removed from the bottle and administered to patients. Chase would not add anything to the tablet or change its physical appearance or characteristics, nor would any of the materials used by that firm constitute a part of an integrated unit for the accomplishment of the intended medical purpose. We feel that the legislative history of the act requires the conclusion that the process of packaging or packing previously manufactured end articles to be used by the Government, or the placing of such articles into storage containers which do not serve a special function in the actual use of the article by the Government, should not be regarded as an additional "manufacturing'' process so as to remove an otherwise foreign end product from the restrictions of the act. On February 3, 1933, as appears in 76 Cong. Rec. 3267, the Senate considered an amendment which would have omitted the provision that articles manufactured in the United States be substantially all from materials or articles which likewise had been produced or manufactured in the United States. In commenting on the suggested amendment, Senator Hiram W. Johnson, the sponsor of the provision, made the following statement and illustration:

From my standpoint, the vice of his amendment is that
from outside, from a foreign country, could be brought into
this country the material which could be manufactured as
seen fit, and then it would not be within the prohibition
of the law.

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For instance, as I have repeatedly stated upon the
floor, the impelling cause of this measure was the situ-
ation at the Boulder Dam, where it was expected that the
lowest bid would be from Germany for the turbines or gene-
rating machinery and the like--a transaction involving about
$6,000,000. Now, assume that they brought over from Germany
part of the machinery, and assume that they brought over
then in another ship another part of it, and in another ship
another part of it, and then, in some factory in this country
it was assembled and manufactured. Then, there would be no
prohibition upon it such as I desire to put in this bill
upon bids of that sort.

It is clearly evident from the above illustration that if a subsequent packing of the assembled turbines or generating machinery in containers, for shipping to and storing at the dam site until such equipment could be installed to perform its planned purpose, was regarded as constituting an additional "manufacture" of such equipment, the desired effect of the provision as intended by the Congress would be defeated.

The Buy American Act clause incorporated into the RFP (ASPR 6-104.5) defines 'end products" as "those articles, materials, and supplies which are to be acquired under this contract for public use." (Italic supplied.] In stating a similar definition for end products, ASPR 6-001(a) further provides that as to a given contract "the end products are the items delivered to the Government, as specified in the contract * * * ." In a reduction of such provision from its plural terms to the singular form it would state that as to a given contract the end product is the item to be delivered to the Government, as specified in the contract. Thus, consistent with the above stated views, we believe proper administration of the act requires that the end product in a contract containing the above Buy American Act clause be regarded as the basic item to be delivered to the Government for actual use by the United States, exclusive of packaging materials or containers serving only to effect delivery of the item in the manner as specified in the contract and which have no function in the ultimate use of the item.


In view of the foregoing we must conclude that the essential need of the Government was for sulfadiazine tablets, not bottles, and that Chase would not have been a manufacturer, within the contemplation of the Buy American Act, of the required product (sulfadiazine tablets). The tablets, being foreign articles under the act, could not be transformed into American items by being put into American bottles. Your proposal was therefore properly determined by the Defense Supply Agency to be subject to the restrictions of that act. In this connection, and with reference to the manufacture of drugs generally, it is noted that the Bureau of Enforcement, Department of Health, Education, and Welfare, Food and Drug Administration, issued a Guideline, BE-103, on November 7, 1962, for enforcement of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 301, stating in part:

We believe that a person or firm that purchases tablets or
capsules, etc. in bulk and repackages the product is not
entitled to claim that he is the manufacturer of the article.
Section 1.102(a) of the general regulations (21 CFR 1.102(a)]
states "If a drug or device is not manufactured by the person
whose name appears on the label, the name shall be qualified
by a phrase which reveals the connection such person has with
such drug or device, such as 'Manufactured for and packed by

i Distributed by ' or other similar phrase which
expresses the facts."

To the extent that 43 Comp. Gen. 306, and subsequent decisions based thereon, may be contrary to the position here stated, they are hereby overruled.

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The record in this case consists of a notice of appeal, a letter from the contracting officer to the Board, including a copy of a prior letter to appellant, and the pleadings. No copy of the contract or other Rule 4 papers have been filed and appellant has not been asked if it desires a hearing. However, under the circumstances outlined below, neither further documentation nor a hearing are considered necessary to the disposition presently being made of the appeal.

The contracting officer's letter states, inter alia:

"3. The matter being appealed by the Contractor evolves
about denial by AFLC of his request for contractual
adjustment under Public Law 85-804. This claim did not
involve material of contractual nature under the Disputes
clause of the contract; but involved a request by the
Contractor for belief resulting from enactment of Public
Law 89-601 increasing the minimum wage from $1.25 to
$1.40 per hour effective 1 February 1967.

"4. No final decision of the Contracting Officer has
been issued pursuant to the Disputes clause of the basic
contract as no question of contractual nature was involved."

Attached to the contracting officer's letter is a copy of a letter from the Government to appellant, Subject: MEMORANDUM OF DECISION - Request of Kleen-Rite Janitorial Service, Inc. for Contractual Adjustment under Public Law 85-804 - Contract AF 38 (601) - 3614. The request for relief was denied.

The complaint makes the following allegations:

On or about July 1, 1966, appellant entered into a contract with the United States of America by its contracting officer, Virgil V. Carlsen, pursuant to which appellant agreed to perform custodial services at Shaw Air Force Base, South Carolina for a period of one year at a total contract price of $72,228.00.

12. The agreed contract price was premised upon payment
by the appellant to its employees in accordance with the
Federal Minimum Wage Law setting a rate at the time of
the contract of $1.25 per hour.

"3. Appellant fully and ably performed its obligations
under that contract for a period of seven months, and
during that period of time its expenses in performing
the contract were equal to payments received pursuant
to it.

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On or about February 1, 1967, a raise from the
Federal Minimum Wage Law went into effect requiring
payment by the appellant to its employees of the mini-
mum wage of $1.40 per hour, constituting an increase of
154 per hour for each employee. This legislation was
not anticipated by the appellant or respondent at the
time of the making of the contract, and has resulted and
will further result in the sustaining by the appellant
of substantial losses in the performance of the subject

"5. On or about January 12, 1967 and February 17, 1967,
appellant corresponded with the Procurement Office of
Shaw Air Force Base requesting an increase in the con-
tract price of $634.23 per month based upon the raise in
the Federal Minimum Wage Law.

"6. On or about March 7, 1967, appellant received corre-
spondence from the Procurement Office of Shaw Air Force
Base indicating that the request for an increase in the
contract price was denied.

"7. On or about March 7, 1967, appellant received from
the Department of the Air Force, Wright-Patterson Air
Force Base, Ohio, a copy of the decision by the respond-
ent, W. C. Jarmuth, affirming the denial of the request
of the appellant for the increase in the contract price.
This appeal followed.

"8. Appellant respectfully submits that it has and is
suffering a loss (not merely a diminution of anticipated
profits) as a direct result of action taken by the Govern-
ment of the United States increasing the cost of perfor-
mance of the subject contract. Considerations of fairness
and fundamental equity require that appellant's request for
adjustment of the contract price be granted."

The answer admits all of the allegations of the complaint except numbers 2 and 8. The answer also states:

"2. The Respondent denies paragraph 2 of the Appellant's
Complaint. The subject contract did not contain any
escalation clause.

"3. The Respondent denies that such loss as Appellant
may have suffered is as a result of action by the
Government in its contractual capacity.

"4. Appellant's petitions for increase in contract price
of 12 January 1967 and 17 February 1967 were base on
Public Law 85-804. That statute and the departmental
regulation implementing it contemplate that the determi-
nations of the designee of the Secretary of the Air Force
shall be final and binding.

"5. Since the Contractor is not appealing from a
decision of the contracting officer within the meaning of
the Disputes clause, the Government respectfully suggests
that this Honorable Board is without jurisdiction to
consider the matter.

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"6. Therefore, the Respondent submits the appeal should
be dismissed."

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Our reading of appellant's complaint is that it is asking this Board to overrule a decision previously made under Public Law 85-804 and Section XVII of the Armed Services Procurement Regulation. Paragraph 8 of the complaint uses language similar to that found in ASPR 17-204.2(b), Amendments Without Consideration, quoted in the letter to appellant advising of the denial of its request. Based on that understanding we must dismiss the appeal. This Board has not been delegated any authority to decide cases under P.L. 85-804.

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We note, however, that in denying allegation No. 2 of the complaint, the Government went on to allege: "The subject contract did not contain any escalation clause. We do not read allegation No. 2 as stating that there was any such clause in the contract. We assume appellant is alleging no more than the fact that it or both parties based the contract price upon an expectation that the employees would be paid in accordance with the old minimum wage rate. If appellant is alleging that the contract price was arrived at as the result of a mistaken belief that the old wage rate would continue and contends that the particular set of facts warrants relief for such a mistake, then that type of relief is also beyond our jurisdiction. That, too, would be a matter for decision by officials authorized to act under P.L. 85-804 or by the Comptroller General or the Courts.

But if appellant is contending that there was a contract provision that expressly or impliedly did provide for an adjustment in price on accout of a minimum wage increase, then we make no decision on that issue. If there is such an issue, or if appellant considers that, on any other ground, relief can be granted pursuant to the terms of the contract, then to that extent the appeal is remanded to the parties for further consideration and, if needed, for a decision under the Disputes clause.

We think it appropriate, however, to call to appellant's attention our decision in L. J. Whitfield Co. and Alarida Construction Co., Inc., ASBCA No. 8156, 1962 BCA 4 3570, as follows:

"In ASBCA No. 8156 appellant simply seeks the additional amount of wages, alleged to be $6,079.84,

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