A-96717, AUGUST 17, 1938, 18 COMP. GEN. 174

A-96717: Aug 17, 1938

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CONTRACTS - INCREASED COSTS - DEFAULTING CONTRACTOR - CONTRACTOR'S LIABILITY FOR DELAYS CAUSED BY MARITIME STRIKE WHERE AFTER FAILURE TO DELIVER SUPPLIES WITHIN THE CONTRACT TIME THE CONTRACTOR WAS GIVEN ADDITIONAL TIME FOR DELIVERY BUT ADVISED THAT IF THE SUPPLIES WERE NOT FURNISHED WITHIN A SPECIFIED TIME PURCHASE WOULD BE MADE ELSEWHERE AND CONTRACTOR CHARGED WITH THE EXCESS COST INVOLVED. THE CONTRACTOR MAY NOT BE RELIEVED OF LIABILITY FOR EXCESS COST OCCASIONED BY SUCH PURCHASE NOTWITHSTANDING HIS ALLEGATION THAT DEFAULT WAS OCCASIONED BY A MARITIME STRIKE WHICH HELD UP DELIVERY OF THE SUPPLIES ORDERED FROM A SUPPLIER AT A POINT OF CONSIDERABLE DISTANCE FROM THE POINT OF DELIVERY AND THE CONTRACTOR'S PLACE OF BUSINESS.

A-96717, AUGUST 17, 1938, 18 COMP. GEN. 174

CONTRACTS - INCREASED COSTS - DEFAULTING CONTRACTOR - CONTRACTOR'S LIABILITY FOR DELAYS CAUSED BY MARITIME STRIKE WHERE AFTER FAILURE TO DELIVER SUPPLIES WITHIN THE CONTRACT TIME THE CONTRACTOR WAS GIVEN ADDITIONAL TIME FOR DELIVERY BUT ADVISED THAT IF THE SUPPLIES WERE NOT FURNISHED WITHIN A SPECIFIED TIME PURCHASE WOULD BE MADE ELSEWHERE AND CONTRACTOR CHARGED WITH THE EXCESS COST INVOLVED, THE CONTRACTOR MAY NOT BE RELIEVED OF LIABILITY FOR EXCESS COST OCCASIONED BY SUCH PURCHASE NOTWITHSTANDING HIS ALLEGATION THAT DEFAULT WAS OCCASIONED BY A MARITIME STRIKE WHICH HELD UP DELIVERY OF THE SUPPLIES ORDERED FROM A SUPPLIER AT A POINT OF CONSIDERABLE DISTANCE FROM THE POINT OF DELIVERY AND THE CONTRACTOR'S PLACE OF BUSINESS, AND THE CONTRACT STIPULATION WHICH PROVIDED THAT EXCESS COSTS SHOULD NOT BE CHARGED FOR DELAYS DUE TO "UNFORSEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, * * *; " THE BID NOT HAVING INDICATED THAT DELIVERY WAS TO BE MADE FROM THE MORE DISTANT POINT, BY WATER OR OTHERWISE; THE CONTRACT NOT REQUIRING DELIVERY OF THE PRODUCT OF A PARTICULAR SUPPLIER; AND THE STRIKE NOT HAVING MADE PERFORMANCE IMPOSSIBLE, DELIVERY HAVING BEEN POSSIBLE WITHIN THE TIME REQUIRED, EVEN AFTER THE STRIKE OCCURRED, FROM OTHER POINTS AND EVEN FROM THE SUPPLIER'S SHIPPING POINT IF SHIPPED BY RAIL.

ACTING COMPTROLLER GENERAL ELLIOTT TO C. J. ZINTHEO, AUGUST 17, 1938:

YOUR LETTER OF MAY 24, 1938, REQUESTS REVIEW OF SETTLEMENT DATED MAY 18, 1938, WHICH DISALLOWED YOUR CLAIM FOR REMISSION OF $6.84 DEDUCTED FROM MONEYS OTHERWISE DUE YOU AS EXCESS COSTS INCURRED BY THE UNITED STATES AS A RESULT OF YOUR DEFAULT UNDER AN UNNUMBERED CONTRACT DATED OCTOBER 15, 1936 (PURCHASE ORDER NO. DSO-244), FOR DELIVERY OF APRICOTS TO THE WAR DEPARTMENT, VANCOUVER BARRACKS, WASH.

THE CONTRACT OBLIGATED YOU TO DELIVER APPROXIMATELY 600 NO. 10 CANS OF APRICOTS TO VANCOUVER BARRACKS, WASH., AS CALLED FOR DURING THE MONTH OF NOVEMBER 1936 FOR A PRICE OF $0.515 PER CAN, LESS A DISCOUNT OF ONE-FOURTH OF 1 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS. BY DELIVERY ORDER DATED OCTOBER 16, 1936, YOU WERE DIRECTED TO DELIVER THE APRICOTS NOVEMBER 5, 1936. THE CONTRACT PROVIDED, ALSO, THAT IN THE EVENT OF DELAY IN DELIVERY THE GOVERNMENT COULD TERMINATE YOUR RIGHT TO PROCEED AND PURCHASE THE GOODS ELSEWHERE, CHARGING YOU WITH THE AMOUNT OF ANY EXCESS COSTS INCURRED, EXCEPT THAT YOU WERE NOT TO BE CHARGED WITH EXCESS COSTS FOR DELAY IN DELIVERY DUE TO---

UNFORSEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER, BUT NOT INCLUDING DELAYS CAUSED BY SUBCONTRACTORS.

THE RECORD SHOWS THAT DELIVERY WAS NOT MADE ON NOVEMBER 5, 1936, AS REQUIRED; THAT YOU WERE INFORMED ON THAT DATE THAT UNLESS DELIVERY WAS MADE BY NOON, NOVEMBER 9, 1936, PURCHASE OF THE APRICOTS WOULD BE MADE FROM ANOTHER SOURCE AND YOU WOULD BE CHARGED ANY EXCESS COSTS OCCASIONED THEREBY; AND THAT ON NOVEMBER 12, 1936, BECAUSE OF YOUR CONTINUED FAILURE TO DELIVER THE APRICOTS, THE GOVERNMENT OBTAINED THEM FROM ANOTHER SOURCE AT AN EXCESS COST OF $6.84. THIS SUM WAS COLLECTED BY SET-OFF AGAINST AMOUNTS OTHERWISE DUE YOU.

YOU NOW URGE THAT THE CONTRACT RELIEVES YOU FROM LIABILITY FOR THE EXCESS COSTS BECAUSE THE FAILURE TO DELIVER WITHIN THE REQUIRED TIME WAS DUE TO A MARITIME STRIKE. IT APPEARS THAT YOU PLACED AN ORDER WITH HUNT BROS. PACKING CO., SAN FRANCISCO, CALIF., FOR DELIVERY OF THE APRICOTS; THAT SAID COMPANY DELIVERED THE APRICOTS TO A STEAMSHIP COMPANY ON OCTOBER 27, 1936; AND THAT DUE TO A MARITIME STRIKE BECOMING EFFECTIVE AT MIDNIGHT, OCTOBER 29, 1936, THE GOODS WERE NOT DELIVERED AT DESTINATION.

THE ORDER FOR DELIVERY WAS SENT TO YOU AT SEATTLE, WASH., AND DIRECTED DELIVERY AT VANCOUVER BARRACKS, WASH., AND THERE WAS NOTHING IN YOUR BID INDICATING THAT YOU INTENDED TO MAKE DELIVERY FROM SAN FRANCISCO, CALIF., BY WATER OR OTHERWISE. IT WAS YOUR DUTY TO MAKE DELIVERY BY NOVEMBER 5, 1936, UNLESS YOU WERE PREVENTED FROM DOING SO BY CERTAIN UNAVOIDABLE OCCURRENCES. OBVIOUSLY, DELIVERY COULD HAVE BEEN EFFECTED WITHIN THE TIME REQUIRED NOTWITHSTANDING THE STRIKE. THERE WAS NO REQUIREMENT IN THE CONTRACT THAT YOU DELIVER THE PARTICULAR APRICOTS YOU PURCHASED FROM HUNT BROS. PACKING CO., AND WHICH BECAME TIED UP IN THE STRIKE. EVEN AFTER THE STRIKE OCCURRED ON OCTOBER 29, 1936, YOU COULD HAVE EFFECTED DELIVERY OF OTHER APRICOTS FROM SAN FRANCISCO BY RAIL IN TIME TO HAVE AVOIDED DEFAULT UNDER YOUR CONTRACT. ALSO, YOU COULD HAVE EFFECTED DELIVERY AS REQUIRED UNDER YOUR CONTRACT BY PURCHASING APRICOTS FOR DELIVERY TO VANCOUVER BARRACKS, WASH., FROM SEATTLE, WASH.; PORTLAND, OREG.; OR ELSEWHERE, AND THUS HAVE OBVIATED THE NECESSITY FOR THE PURCHASE BY THE GOVERNMENT AGAINST YOUR ACCOUNT. WHILE THE STRIKE MAY HAVE MADE PERFORMANCE UNDER YOUR CONTRACT LESS PROFITABLE IT DID NOT MAKE PERFORMANCE IMPOSSIBLE. SEE IN THIS CONNECTION 16 COMP. GEN. 983.

ACCORDINGLY, THE SETTLEMENT DISALLOWING YOUR CLAIM MUST BE AND IS SUSTAINED.