B-104288, AUGUST 24, 1951, 31 COMP. GEN. 51

B-104288: Aug 24, 1951

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ARE BINDING ON THE UNITED STATES. SO THAT A CONTRACTOR WHO PURCHASED SCRAP IRON FROM THE GOVERNMENT UNDER A CONTRACT EXECUTED PRIOR TO THE DATE OF SAID REGULATIONS AT A PRICE IN EXCESS OF THE MAXIMUM PRICE ESTABLISHED THEREFOR IS ENTITLED TO A REFUND OF THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE MAXIMUM ESTABLISHED PRICE FOR DELIVERIES MADE ON AND AFTER THE EFFECTIVE DATE OF THE REGULATION. 1951: I HAVE YOUR LETTER OF JUNE 22. WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $800. WAS ACCEPTED AS TO ITEMS 1 AND 2 ON JANUARY 30. IT IS STATED THAT THE BALANCE OF $2. 813.80 DUE UNDER THE CONTRACT AT THE RATES PROVIDED IN THE CONTRACT WAS RECEIVED ON FEBRUARY 1. THE CONTRACT WAS TERMINATED BY MUTUAL CONSENT OF THE CONTRACTING OFFICER AND CORPORATION.

B-104288, AUGUST 24, 1951, 31 COMP. GEN. 51

SALES - SURPLUS PROPERTY - GOVERNMENT PRICE FIXING ORDERS CEILING PRICES ESTABLISHED BY CEILING PRICE REGULATION 5 PROMULGATED PURSUANT TO THE AUTHORITY CONTAINED IN SECTION 402 (B) (1) OF THE ACT OF SEPTEMBER 8, 1950, AND EXECUTIVE ORDER NO. 10161, DATED SEPTEMBER 9, 1950, ARE BINDING ON THE UNITED STATES, SO THAT A CONTRACTOR WHO PURCHASED SCRAP IRON FROM THE GOVERNMENT UNDER A CONTRACT EXECUTED PRIOR TO THE DATE OF SAID REGULATIONS AT A PRICE IN EXCESS OF THE MAXIMUM PRICE ESTABLISHED THEREFOR IS ENTITLED TO A REFUND OF THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE MAXIMUM ESTABLISHED PRICE FOR DELIVERIES MADE ON AND AFTER THE EFFECTIVE DATE OF THE REGULATION.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE ARMY, AUGUST 24, 1951:

I HAVE YOUR LETTER OF JUNE 22, 1951, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER AMOUNTS PAID IN EXCESS OF THE MAXIMUM CEILING PRICES PRESCRIBED IN CEILING PRICE REGULATION 5, DATED FEBRUARY 5, 1951, BY THE WALLABOUT SCRAP IRON AND METAL COMPANY, INC., BROOKLYN, NEW YORK, FOR SCRAP IRON PURCHASED UNDER CONTRACT NO. OI-192-SALV-51 PROPERLY MAY BE REFUNDED TO THE CORPORATION.

BY INVITATION NO. 30-182-S-51-43, THE PROPERTY DISPOSAL DIVISION, NEW YORK PORT OF EMBARKATION, BROOKLYN, NEW YORK, REQUESTED BIDS--- TO BE OPENED JANUARY 29, 1951--- FOR THE PURCHASE FROM THE GOVERNMENT OF APPROXIMATELY 75 GROSS TONS OF MIXED HEAVY SCRAP IRON AND STEEL (UNPREPARED) NOT INCLUDING SCRAP CAST IRON, ITEM 1, AND OF APPROXIMATE 15 GROSS TONS OF MIXED LIGHT SCRAP IRON, BALING WIRE AND CABLE (UNPREPARED) ITEM 2. PARAGRAPH D OF THE ALTERNATE AND ADDITIONAL PROVISIONS OF THE INVITATION PROVIDED THAT THE CONTRACT PERIOD WOULD EXTEND FROM FEBRUARY 1, 1951, TO FEBRUARY 28, 1951, FOR THE PICK-UP OF QUANTITIES AS SHOWN ON PAGE 1, THEREOF. IN RESPONSE TO THE INVITATION, THE WALLABOUT SCRAP IRON AND METAL COMPANY, INC., SUBMITTED A BID DATED JANUARY 29, 1951, WHEREIN IT OFFERED TO PURCHASE ITEMS 1 AND 2 AT PRICES OF $41.32 AND $34.32 PER GROSS TON, RESPECTIVELY. THE BID OF THE CORPORATION, WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $800, WAS ACCEPTED AS TO ITEMS 1 AND 2 ON JANUARY 30, 1951. IN A REPORT DATED MAY 23, 1951, FROM THE CONTRACTING OFFICER, IT IS STATED THAT THE BALANCE OF $2,813.80 DUE UNDER THE CONTRACT AT THE RATES PROVIDED IN THE CONTRACT WAS RECEIVED ON FEBRUARY 1, 1951.

THE RECORD SHOWS THAT THE CORPORATION REMOVED APPROXIMATELY 21 GROSS TONS OF SCRAP IRON PRIOR TO FEBRUARY 7, 1951--- THE EFFECTIVE DATE OF CEILING PRICE REGULATIONS 5; THAT ON FEBRUARY 6, THE CORPORATION ADVISED THE CONTRACTING OFFICER THAT BECAUSE OF THE CONTEMPLATED CEILING PRICE ON SCRAP IRON WHICH WOULD GO INTO EFFECT ON FEBRUARY 7, 1951, IT WOULD NOT REMOVE ANY MORE SCRAP IRON PENDING INFORMATION FROM THE OFFICE OF PRICE STABILIZATION; AND THAT ON MARCH 7, 1951, THE CONTRACTING OFFICER ADVISED THE CORPORATION THAT THE RESTRICTIONS IMPOSED ON FEBRUARY 7, 1951, PERTAINING TO THE REMOVAL OF SCRAP IRON HAD BEEN LIFTED AND THAT THE CONTRACT ENTERED INTO ON JANUARY 30, 1951, SHOULD NOW BE COMPLETED. ALSO, THE RECORD SHOWS THAT DURING THE PERIOD MARCH 8 TO 22, 1951, THE CORPORATION REMOVED APPROXIMATELY 57 GROSS TONS OF SCRAP IRON; THAT ON MARCH 23, THE CONTRACT WAS TERMINATED BY MUTUAL CONSENT OF THE CONTRACTING OFFICER AND CORPORATION; AND THAT ON APRIL 10, 1951, THE CORPORATION WAS REFUNDED THE AMOUNT OF $436.92 REPRESENTING THE DIFFERENCE BETWEEN THE CONTRACT PRICE OF THE QUANTITY OF SCRAP IRON SPECIFIED IN THE CONTRACT AND THE PRICE OF THE QUANTITY OF SCRAP IRON ACTUALLY DELIVERED TO THE CORPORATION BY THE GOVERNMENT.

IN HIS REPORT, THE CONTRACTING OFFICER STATES---

8. INASMUCH AS THIS CONTRACT IS CONSIDERED A ONE TIME CONTRACT FOR APPROXIMATELY 75 GROSS TONS OF MIXED HEAVY SCRAP IRON (UNPREPARED) AND APPROXIMATELY 15 GROSS TONS OF MIXED LIGHT SCRAP IRON (UNPREPARED), TO BE ACCUMULATED FOR REMOVAL DURING THE PERIOD OF 1 FEBRUARY TO 28 FEBRUARY 1951, INCLUSIVE, AND THAT PAYMENT IN FULL HAD BEEN RECEIVED BY THE GOVERNMENT ON 1 FEBRUARY 1951, THE CONTRACTING OFFICER FELT THAT BID PRICES SUBMITTED BY THE CONTRACTOR PRIOR TO 7 FEBRUARY 1951, WERE STILL IN EFFECT EVEN THOUGH CEILING PRICES HAD BEEN ESTABLISHED BY THE OFFICE OF PRICE STABILIZATION, EFFECTIVE 7 FEBRUARY 1951. THIS INTERPRETATION WAS MADE BY THE CONTRACTING OFFICER, IN COMPLIANCE WITH PARAGRAPH 4A (3) OF LETTER OF DEPARTMENT OF THE ARMY DATED 2 MARCH 1951 ( INCL NUMBER 12) WHICH STATES AS FOLLOWS:

"WHERE AWARDS WERE MADE AND FULL PAYMENT RECEIVED PRIOR TO 7 FEBRUARY 1951, TRANSACTION WILL BE COMPLETED EVEN THOUGH SUCCESSFUL BID WAS HIGHER THAN CEILING PRICE.'

IT IS CONTENDED BY THE CONTRACTOR THAT INASMUCH AS THE ENTIRE QUANTITY OF SCRAP IRON CONTRACTED FOR WAS NOT AVAILABLE FOR REMOVAL PRIOR TO FEBRUARY 7, 1951, ALL SCRAP REMOVED AFTER THAT DATE SHOULD BE PAID FOR AT THE CEILING PRICE AS ESTABLISHED BY THE OFFICE OF PRICE STABILIZATION UNDER CEILING PRICE REGULATION 5, DATED FEBRUARY 5, 1951, EFFECTIVE FEBRUARY 7, 1951, AND NOT AT THE CONTRACTED PRICES. THE CORPORATION HAS SUBMITTED A PHOTOSTATIC COPY OF A LETTER DATED APRIL 4, 1951, IN WHICH THE OFFICE OF PRICE STABILIZATION, NEW YORK, NEW YORK, ADVISED THE CORPORATION THAT REGARDLESS OF ANY CONTRACT OR OTHER OBLIGATION, IT WAS NOT PERMITTED TO TAKE DELIVERY OF THE SCRAP IRON AT ABOVE CEILING PRICES.

THE REFERRED-TO CEILING PRICE REGULATION 5, 16 FED. REG. 1061, WAS ISSUED BY THE DIRECTOR OF PRICE STABILIZATION PURSUANT TO THE AUTHORITY CONTAINED IN SECTION 402 (B) (1) OF TITLE IV OF PUBLIC LAW 774, 81ST CONGRESS, APPROVED SEPTEMBER 8, 1950, 64 STAT. 803, AND EXECUTIVE ORDER NO. 10161, DATED SEPTEMBER 9, 1950, 15 FED. REG. 6105. SECTION 713 OF PUBLIC LAW 774, 64 STAT. 821, EXPRESSLY PROVIDES THAT THE PROVISIONS OF THAT ACT SHALL BE APPLICABLE TO THE UNITED STATES. SECTION 1 (C) OF SAID REGULATION, PROVIDES AS FOLLOWS:

(C) NO INDUSTRIAL PRODUCER OR RAILROAD OR GOVERNMENTAL AGENCY (WHETHER FEDERAL, STATE OR LOCAL) SHALL SELL OR DELIVER UNPREPARED IRON OR STEEL SCRAP TO ANY PERSON AT PRICES HIGHER THAN THE APPLICABLE CEILING PRICES ESTABLISHED BY THIS REGULATION. NO PERSON SHALL BUY OR RECEIVE UNPREPARED IRON OR STEEL SCRAP FROM SUCH INDUSTRIAL PRODUCER OR RAILROAD OR GOVERNMENTAL AGENCY AT PRICES HIGHER THAN THE APPLICABLE CEILING PRICES ESTABLISHED BY THIS REGULATION; ALSO, SEE SEC. 405 (A) OF PUBLIC LAW 774, 64 STAT. 807, SUPRA.

SINCE IT IS EVIDENT FROM THE PROVISIONS OF SECTION 1 (C) OF CEILING PRICE REGULATION 5 THAT IT IS UNLAWFUL FOR THE UNITED STATES TO DELIVER, UNDER ANY CONTRACT THERETOFORE OR THEREAFTER ENTERED INTO, ANY SCRAP IRON AT A PRICE IN EXCESS OF THE MAXIMUM CEILING PRICE ESTABLISHED THEREFOR UNDER SAID REGULATION AND SINCE THE RECORD SHOWS THAT IN THE PRESENT CASE THE GOVERNMENT DID NOT ACTUALLY DELIVER THE LARGEST PORTION OF THE SCRAP IRON TO THE CORPORATION UNTIL AFTER THE EFFECTIVE DATE OF SAID REGULATION, THE GOVERNMENT IS NOT ENTITLED TO RETAIN ANY AMOUNTS PAID BY THE WALLABOUT SCRAP IRON AND METAL COMPANY, INC., FOR THE SCRAP IRON REMOVED AFTER THE EFFECTIVE DATE OF SAID REGULATION WHICH ARE IN EXCESS OF THE CEILING PRICES SET BY THAT REGULATION. ACCORDINGLY, AMOUNTS PAID IN EXCESS OF THE CEILING PRICES ESTABLISHED BY CEILING PRICE REGULATION 5, BY THE WALLABOUT SCRAP IRON AND METAL COMPANY, INC., FOR SCRAP IRON REMOVED AFTER THE EFFECTIVE DATE OF SAID REGULATION MAY BE REFUNDED. REFERENCE SHOULD BE MADE TO THIS DECISION ON THE VOUCHER COVERING SAID REFUND. CF. 21 COMP. GEN. 1046 AND 22 ID. 484.