B-164062, MAY 15, 1968

B-164062, MAY 15, 1968

TO MR. SECRETARY:

WE REFER TO YOUR LETTER OF APRIL 16, 1968, REQUESTING OUR DECISION WHETHER A REFUND IN THE AMOUNT OF $3,922.39 SHOULD BE MADE TO IDAPINE TENANTS-IN-COMMON AND ITS SUBSIDIARY, IDAPINE MILLS, INCORPORATED, FOR EXCESS SCALING CHARGES LEVIED UNDER NINE LISTED CONTRACTS FOR THE PURCHASE OF TIMBER LOCATED ON THE NEZPERCE NATIONAL FOREST.

THE CONTRACTS IN QUESTION HAVE SUBSTANTIALLY SIMILAR CLAUSES PROVIDING THAT SCALING SERVICES, WHICH INVOLVE THE ESTIMATING OF THE VOLUME OF TIMBER REMOVED, WOULD BE FURNISHED BY THE GOVERNMENT AT NO COST TO IDAPINE UNDER CERTAIN STIPULATED CONDITIONS.

SECTION 6E (1) OF THE CONTRACT OBLIGATED THE FOREST SERVICE TO FURNISHING SCALING SERVICES AS FOLLOWS:

"THE FOREST SERVICE WILL PROVIDE EIGHT (8) HOUR SCALING SERVICES FIVE (5) DAYS PER WEEK, EXCLUSIVE OF SUNDAYS AND HOLIDAYS, AT EACH SCALING POINT REQUIRING SEPARATE SCALING SERVICES WHERE A VOLUME OF AT LEAST 720 M FT. B.M. IS PRESENTED FOR SCALING DURING A FORESTSERVICE PAY PERIOD OF TWO (2) WEEKS.'

SECTION 6E (2) AND 6F FURTHER PROVIDED THAT IDAPINE WAS TO BEAR THE COST OF SCALING DONE AT OTHER TIMES OR WHEN THE MINIMUM VOLUMES WERE NOT MET. THESE WERE TERMED ADDITIONAL SCALING SERVICES BY SECTION 6F.

IN ADDITION, SECTION 6A (2) STIPULATED THAT:

"2. * * * PLACES, METHODS OF PRESENTING AND ARRANGEMENTS FOR SCALING SHALL BE SUCH THAT SCALING MAY BE DONE ECONOMICALLY AND SAFELY.'

FROM JULY 1, 1961, THE COMMENCEMENT OF THE FIRST CONTRACT, THROUGH OCTOBER 11, 1964, THE FOREST SERVICE PROVIDED SCALING SERVICES AT TRUCK SCALING RAMPS WITHOUT ADDITIONAL CHARGE WHENEVER THE MINIMUM VOLUME OF 720 THOUSAND FEET BOARD MEASURE FOR ONE SCALING POINT WAS MET, DESPITE THE FACT THAT TRUCK SCALING ENTAILS THE SERVICES OF TWO MEN TO HANDLE THE SAME VOLUME AS COULD BE HANDLED BY ONE MAN WORKING ON THE GROUND OR ON A ROLLWAY.

THE FOREST SUPERVISOR ADVISED IDAPINE BY LETTERS OF JULY 16, 1964, AND SEPTEMBER 28, 1964, THAT THIS DID NOT ACCORD WITH ESTABLISHED FOREST SERVICE PRACTICE, AND THAT COMMENCING OCTOBER 11, 1964, ADDITIONAL SCALING SERVICE CHARGES WOULD BE LEVIED FOR THE ADDITIONAL MAN NEEDED FOR SCALING AT TRUCK RAMPS EXCEPT WHERE TWICE THE MINIMUM VOLUME WAS HANDLED AT THE SCALING POINT.

ADDITIONAL SCALING CHARGES WERE ACCORDINGLY ASSESSED UNDER THE CORRECTED SCALING PROCEDURES FROM OCTOBER 11, 1964, THROUGH THE EXPIRATION OF THE CONTRACTS.

IDAPINE, BY ITS LETTER OF OCTOBER 10, 1964, OBJECTED TO THIS MODIFIED PROCEDURE FOR ASSESSING ADDITIONAL SCALING CHARGES. IDAPINE THEN APPEALED FIRST TO THE REGIONAL FORESTER, MISSOULA, MONTANA, AND WHEN IT WAS DENIED, TO THE CHIEF OF THE FOREST SERVICE FOR A FORMAL HEARING.

THE CHIEF GRANTED THIS REQUEST AND HIS DECISION OF NOVEMBER 7, 1967, ON PAGE SIX, CONCLUDED THAT:

"* * * THE FOREST SERVICE HAS THE CONTRACTUAL RESPONSIBILITY TO PROVIDE FREE LOG SCALING WHENEVER THE APPELLANT PRESENTS 720 M FT. B.M. IN ACCORDANCE WITH SECTION 6E OF THE CONTRACT. THE FOREST SERVICE CANNOT UNILATERALLY INCREASE THE CONTRACT MINIMUM VOLUME SPECIFIED IN SECTION 6E

THE CHIEF OF THE FOREST SERVICE ORDERED A RECALCULATION OF THE DEFICIT SCALING CHARGES ASSESSED AFTER OCTOBER 10, 1964, ON THE BASIS OF THE SCALING PROCEDURES USED PRIOR TO THAT DATE. WE UNDERSTAND THAT THE REFUND AMOUNT, $3,922.39, REPRESENTS THE EXCESS SCALING CHARGES SO ASSESSED IDAPINE DURING THE LATTER PERIOD OF CONTRACT PERFORMANCE. HOWEVER, BECAUSE THE CHIEF OF THE FOREST SERVICE WAS OF THE OPINION THAT IDAPINE'S APPEAL WAS ESSENTIALLY A CLAIM FOR A REFUND, HE CONCLUDED THAT THE MATTER WAS FOR FINAL SETTLEMENT BY THE COMPTROLLER GENERAL OF THE UNITED STATES.

PERHAPS THE MOST IMPORTANT FACTOR PRESENT HERE IS THE FACT THAT FOR A PERIOD OF OVER THREE YEARS, THE FOREST SERVICE PROVIDED IDAPINE WITH TRUCK SCALING SERVICES WITHOUT REQUESTING ADDITIONAL SCALING CHARGES FOR THOSE SITES WHICH HANDLED THE MINIMUM VOLUME OF 720 THOUSAND FEET BOARD MEASURE DURING THE STIPULATED TIME PERIOD. THIS CONTINUED PATTERN OF OPERATION BY BOTH PARTIES REPRESENTS THEIR MUTUAL INTERPRETATION OF THE CONTRACT TERMS FOR A PERIOD IN EXCESS OF THREE YEARS. IT CAN THEREFORE BE CONCLUDED THAT DURING THIS PERIOD BOTH PARTIES TO THE CONTRACTS CONSIDERED TRUCK SCALING AS A SCALING POINT WHICH SATISFIED THE REQUIREMENTS OF SECTION 6A (2), DESPITE THE FACT THAT TRUCK SCALING REQUIRED THE USE OF MORE MAN-HOURS THAN GROUND OR ROLLWAY SCALING TO HANDLE A COMPARABLE VOLUME OF TIMBER.

IT ALSO FOLLOWS THAT BOTH PARTIES INTENDED THAT A TRUCK SCALING POINT SHOULD BE CONSIDERED AS ONE SCALING POINT FOR THE PURPOSE OF FURNISHING GOVERNMENT SCALERS WITHOUT COST AS SET OUT IN SECTION 6E OF THE CONTRACT.

THE RESTATEMENT OF CONTRACTS, SECTION 235 (E), STATES THE FOLLOWING RULE FOR INTERPRETING CONTRACTS ON THE BASIS OF THE PARTIES' ACTS:

"IF THE CONDUCT OF THE PARTIES SUBSEQUENT TO A MANIFESTATION OF INTENTION INDICATES THAT ALL PARTIES PLACED A PARTICULAR INTERPRETATION UPON IT, THAT MEANING IS ADOPTED IF A REASONABLE PERSON WOULD ATTACH IT TO THE MANIFESTATION.' SEE ALSO THE SAME EFFECT, 4 WILLISTON ON CONTRACTS, THIRD EDITION, SECTION 623 AND OUR DECISIONS, B-146750, APRIL 14, 1964, AND B- 145836, JUNE 14, 1961.

WE BELIEVE THAT THE CONTRACTS IN QUESTION ARE REASONABLY OPEN TO THE INTERPRETATION PLACED UPON THEM BY THE PARTIES' CONDUCT DURING THE PERIOD JULY 1, 1961, THROUGH OCTOBER 10, 1964. THIS BEING THE CASE THE CHANGE IN THE BASIS FOR GOVERNMENT FURNISHED SCALING SERVICE WHICH RESULTED FROM THE FOREST SUPERVISOR'S LETTERS OF JULY 16, 1964, AND SEPTEMBER 28, 1964, MUST BE VIEWED AS A UNILATERAL ACTION INCONSISTENT WITH THE AGREEMENT OF THE PARTIES.

ACCORDINGLY, IF OTHERWISE CORRECT, THE $3,922.39 MAY BE REFUNDED TO IDAPINE.