A-17593, MARCH 16, 1927, 6 COMP. GEN. 583

A-17593: Mar 16, 1927

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CONTRACTS - DELIVERY - COAL WHERE A CONTRACTOR AGREED TO DELIVER COAL TO THE GOVERNMENT AT A CERTAIN POINT AND DUE TO ITS FAILURE TO ACCOMPLISH SAID DELIVERY AN ADDITIONAL EXPENSE WAS INCURRED BY THE GOVERNMENT IN COMPLETING THE DELIVERY. THE AMOUNT OF SUCH ADDITIONAL EXPENSE IS CHARGEABLE TO THE CONTRACTOR. THERE WAS DEDUCTED THE SUM OF $1. WHERE SAID COAL WAS TO BE USED. PROPOSALS WERE REQUESTED BY THE UNITED STATES ENGINEER OFFICE. BIDS WERE RECEIVED AT THE FOLLOWING PRICES PER TON: CHART DELIVERY BY WAGON OR TRUCK AT THE SITE OF DAM 49 . WAS ACCEPTED AS BEING THE LOWEST RECEIVED WHEN POINT OF DELIVERY WAS TAKEN INTO CONSIDERATION. IN THE REQUEST FOR PROPOSALS BIDDERS WERE SPECIFICALLY ADVISED THAT THE QUANTITY STATED.

A-17593, MARCH 16, 1927, 6 COMP. GEN. 583

CONTRACTS - DELIVERY - COAL WHERE A CONTRACTOR AGREED TO DELIVER COAL TO THE GOVERNMENT AT A CERTAIN POINT AND DUE TO ITS FAILURE TO ACCOMPLISH SAID DELIVERY AN ADDITIONAL EXPENSE WAS INCURRED BY THE GOVERNMENT IN COMPLETING THE DELIVERY, THE AMOUNT OF SUCH ADDITIONAL EXPENSE IS CHARGEABLE TO THE CONTRACTOR.

DECISION BY COMPTROLLER GENERAL MCCARL, MARCH 16, 1927:

THE WEST KENTUCKY COAL CO. HAS REQUESTED REVIEW OF SETTLEMENT NO. 0127530 -W, DATED AUGUST 14, 1926, WHEREIN FROM THE AMOUNT OF $4,524, CLAIMED TO BE DUE SAID COMPANY FOR 1,740 TONS OF COAL FURNISHED THE WAR DEPARTMENT UNDER PROPOSAL DATED MAY 20, 1925, THERE WAS DEDUCTED THE SUM OF $1,516.72, REPRESENTING THE COST TO THE UNITED STATES OF TRANSPORTING SAID COAL FROM THE RAILROAD AT UNIONTOWN, KY., TO DAM NO. 49, OHIO RIVER, WHERE SAID COAL WAS TO BE USED.

ON MAY 20, 1925, PROPOSALS WERE REQUESTED BY THE UNITED STATES ENGINEER OFFICE, LOUISVILLE, Y., FOR THE FURNISHING OF 5,000 TONS OF RUN OF THE MINE COAL TO BE DELIVERED FREIGHT PREPAID IN EITHER OF THE FOLLOWING WAYS:

DELIVERY BY WAGON OR TRUCK AT THE SITE OF DAM 49, OHIO RIVER.

DELIVER BY CONTRACTOR'S BARGE AT THE SITE OF DAM 49, OHIO RIVER.

DELIVERY F.O.B. GOVERNMENT BARGE AT COAL CO.'S TIPPLE LOCATED AT -- --.

DELIVERY BY RAIL C/O U.S. SIDING, UNIONTOWN, KY.

BIDS WERE RECEIVED AT THE FOLLOWING PRICES PER TON:

CHART

DELIVERY BY WAGON OR TRUCK AT THE SITE OF DAM 49 --- $2.60 $3.00

DELIVERY BY CONTRACTOR'S BARGE AT THE SITE OF DAM

49 ----------------------------------------------- 2.60 2.85

DELIVERY F.O.B. GOVERNMENT BARGE AT COAL CO.'S

TIPPLE LOCATED AT -------- ---------------------- 2.35

DELIVERY BY RAIL, UNIONTOWN, KY -------------------- 1.75 1.85

2.00 2.25

THE BID OF $2.60 PER TON FOR DELIVERY BY CONTRACTOR'S BARGE AT THE SITE OF DAM NO. 49 SUBMITTED BY THE WEST KENTUCKY COAL CO. WAS ACCEPTED AS BEING THE LOWEST RECEIVED WHEN POINT OF DELIVERY WAS TAKEN INTO CONSIDERATION. IN THE REQUEST FOR PROPOSALS BIDDERS WERE SPECIFICALLY ADVISED THAT THE QUANTITY STATED; THAT IS, 5,000 TONS, WAS ESTIMATED FOR THE WORKING SEASON AND THE RIGHT WAS RESERVED BY THE UNITED STATES TO INCREASE OR DECREASE SAID QUANTITY AS THE DEMAND REQUIRED. THE CLAIMANT WAS ADVISED ON JUNE 2, 1925, THAT ITS BID HAD BEEN ACCEPTED AND IT WAS REQUESTED TO MAKE DELIVERY. ON SEPTEMBER 19, 1925, A LETTER WAS ADDRESSED THE CLAIMANT BY THE DISTRICT ENGINEER CALLING ITS ATTENTION TO THE SHIPMENTS MADE BY IT TO UNIONTOWN, KY., BY RAIL AND THE BILLING OF SUCH SHIPMENTS AT THE AGREED PRICE FOR DELIVERY BY ITS BARGES AT THE SITE OF DAM 49. IT WAS FURTHER ADVISED THAT THE DELIVERY AT UNIONTOWN SERIOUSLY INCONVENIENCED THE GOVERNMENT IN HANDLING OTHER SHIPMENTS AND INVOLVED ADDITIONAL EXPENSE ON THE PART OF THE GOVERNMENT. ATTENTION WAS ALSO CALLED TO THE FACT THAT BIDS RECEIVED FOR DELIVERY AT UNIONTOWN AT THE SAME TIME ITS BID WAS RECEIVED FOR DELIVERY AT THE SITE OF DAM 49 HAD BEEN AS LOW AS $1.75 PER TON, AND IT WAS ADVISED THAT PAYMENT AT A HIGHER PRICE THAN THIS FOR DELIVERIES AT UNIONTOWN WOULD NOT BE MADE. IN REPLY TO THIS LETTER THE CONTRACTOR ADVISED THAT IT WAS IMPOSSIBLE FOR IT TO DELIVER THE COAL AT $1.75 PER TON F.O.B. UNIONTOWN, AND STATED THAT WHILE THE CONTRACT CALLED FOR BARGE DELIVERY AND ITS BID PRICE WAS PREDICATED ON BARGE DELIVERY THAT WHEN THE RIVER "GOT IN SUCH SHAPE" THAT IT WAS UNABLE TO MAKE BARGE DELIVERY IT CALLED THE DISTRICT ENGINEER'S OFFICE AND WAS ADVISED TO MAKE RAIL DELIVERY AND THAT ITS UNDERSTANDING WAS THAT IT WOULD RECEIVE THE SAME PRICE FOR THE COAL DELIVERED AT UNIONTOWN AS IT HAD AGREED TO FURNISH IT DELIVERED AT DAM NO. 49. ON SEPTEMBER 24, 1925, THE DISTRICT ENGINEER ACKNOWLEDGED RECEIPT OF THIS LETTER AND INFORMED THE CONTRACTOR THAT PAYMENT AT THE PRICE CLAIMED BY IT WOULD BE DIRECTLY CONTRARY TO LAW AND THAT THIS WAS NOT AFFECTED BY ITS CLAIM THAT IT HAD VERBAL PERMISSION OF THE GOVERNMENT OFFICE AT DAM NO. 49 TO MAKE SHIPMENT BY RAIL AS NEITHER THAT OFFICE NOR HIMSELF HAD ANY AUTHORITY TO PERMIT A CHANGE IN THE CONTRACT UNLESS THE UNITED STATES WAS BENEFITED THEREBY.

THE CLAIMANT, BY LETTER DATED SEPTEMBER 26, 1925, THEN CONTENDED THAT THE COAL DELIVERED AT UNIONTOWN WAS NOT FURNISHED UNDER THE CONTRACT REPRESENTED BY THE PROPOSAL OF MAY 20, BUT WAS AN ,OPEN MARKET PURCHASE" AND HENCE IT WAS ENTITLED TO THE PRICE CLAIMED. THE DISTRICT ENGINEER REFUSED PAYMENT AT THE PRICE OF $2.60 PER TON DELIVERED AT UNIONTOWN AND THE MATTER WAS REFERRED TO THIS OFFICE WHERE, BY THE SETTLEMENT HERE UNDER REVIEW, A DEDUCTION WAS MADE TO COVER THE COST TO THE GOVERNMENT OF TRANSPORTING THE COAL FROM UNIONTOWN TO DAM NO. 49, FOR THE REASON THAT AS THE CONTRACTOR WAS OBLIGATED TO DELIVER THE COAL AT DAM NO. 49 IT WAS CHARGEABLE WITH THE COST TO THE UNITED STATES OF COMPLETING SUCH DELIVERY.

IN PRESENTING ITS REQUEST FOR REVIEW THE CONTRACTOR CONTENDS THAT IT WAS OBLIGATED TO MAKE DELIVERY IN ITS OWN BARGES ONLY AND THAT THIS BECAME IMPOSSIBLE ON ACCOUNT OF LOW WATER, A CONDITION WHICH CONSUMERS OF COAL UP AND DOWN THE OHIO RIVER KNEW WAS A YEARLY OCCURRENCE, AND THEREFORE, IF THE GOVERNMENT'S REPRESENTATIVE THROUGH LACK OF FORESIGHT OR OTHERWISE ALLOWED THE SUPPLY OF COAL TO BECOME EXHAUSTED, IT WAS NOT THE FAULT OF THE CONTRACTOR. THE ANSWER TO SUCH CONTENTION IS THAT THE CONTRACTOR MAY BE PRESUMED TO BE AS FAMILIAR WITH THE CONDITIONS ALONG THE OHIO RIVER AS WERE THE GOVERNMENT REPRESENTATIVES AND COULD HAVE PROTECTED ITSELF AGAINST SUCH A CONTINGENCY AS HAVING TO MAKE DELIVERIES DURING THE LOWER- WATER PERIOD BY A PROVISION TO THAT EFFECT IN THE CONTRACT; BUT BE THAT AS IT MAY, THE PRICE OF $2.60 PER TON WAS AGREED UPON FOR COAL DELIVERED AT DAM NO. 49, AND SUCH DELIVERY NOT BEING MADE BY THE CONTRACTOR THE GOVERNMENT IS ENTITLED TO REIMBURSEMENT OF THE COST TO IT OF COMPLETING THE DELIVERIES.

NOR CAN THE CONTENTION THAT THE COAL HERE IN QUESTION WAS AN OPEN MARKET PURCHASE BE SUSTAINED. IT DOES APPEAR THAT 5,000 TONS OF COAL WERE DELIVERED IN BARGES IN ADDITION TO THE RAIL SHIPMENTS HERE IN QUESTION. AT THE TIME THE 1,740 TONS WERE DELIVERED, DELIVERY HAD NOT BEEN MADE OF THE ENTIRE QUANTITY OF 5,000 TONS. FURTHERMORE, THE CONTRACT SPECIFICALLY PROVIDED THAT THE QUANTITY OF 5,000 TONS WAS ONLY APPROXIMATE, AND THE RIGHT WAS RESERVED TO INCREASE OR DECREASE THE AMOUNT TO BE FURNISHED UNDER SAID CONTRACT. THEREFORE THE COAL DELIVERED BY RAIL WAS PROPERLY APPLIED AGAINST SAID CONTRACT. UPON REVIEW THE SETTLEMENT IS SUSTAINED.