B-114283, APRIL 20, 1953, 32 COMP. GEN. 466

B-114283: Apr 20, 1953

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COMMON CARRIER CONTRACTOR'S PLANT" PROVIDED FOR DELIVERY AT NEAREST RAIL FACILITY IF RAIL SHIPMENT WAS SPECIFIED AND WHO AT THE DIRECTION OF THE GOVERNMENT DELIVERED SUPPLIES FROM HIS PLANT SITE WHERE ONLY COMMON CARRIER TRUCKS ARE AVAILABLE TO NEAREST RAILHEAD. IS ENTITLED TO HAVE CONTRACT ADJUSTED PURSUANT TO " CHANGES CLAUSE" OF THE CONTRACT TO COVER THE EXPENSES INCURRED IN DELIVERING THE SUPPLIES TO RAILROAD CARS OVER THE COST OF LOADING ON THE COMMON CARRIER TRUCKS. 1953: REFERENCE IS MADE TO THE UNDERSECRETARY'S LETTER DATED MARCH 15. IT IS UNDERSTOOD THAT SIMILAR QUESTIONS MAY ARISE UNDER 19 OTHER CURRENT CONTRACTS WITH THE SAME CONTRACTOR. FROM THE RECORD FURNISHED IT APPEARS THAT AWARD OF THE CITED CONTRACT WAS MADE ON STANDARD FORM 33 ( NOVEMBER 1949) ON JUNE 20.

B-114283, APRIL 20, 1953, 32 COMP. GEN. 466

CONTRACTS - F.O.B. DELIVERIES - GOVERNMENT - LIABILITY - CONTRACT PRICE ADJUSTMENT CONTRACTOR, WHOSE CONTRACT FOR FURNISHING SUPPLIES "FOR DELIVERY, F.O.B. COMMON CARRIER CONTRACTOR'S PLANT" PROVIDED FOR DELIVERY AT NEAREST RAIL FACILITY IF RAIL SHIPMENT WAS SPECIFIED AND WHO AT THE DIRECTION OF THE GOVERNMENT DELIVERED SUPPLIES FROM HIS PLANT SITE WHERE ONLY COMMON CARRIER TRUCKS ARE AVAILABLE TO NEAREST RAILHEAD, TEN MILES DISTANT, IS ENTITLED TO HAVE CONTRACT ADJUSTED PURSUANT TO " CHANGES CLAUSE" OF THE CONTRACT TO COVER THE EXPENSES INCURRED IN DELIVERING THE SUPPLIES TO RAILROAD CARS OVER THE COST OF LOADING ON THE COMMON CARRIER TRUCKS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE ARMY, APRIL 20, 1953:

REFERENCE IS MADE TO THE UNDERSECRETARY'S LETTER DATED MARCH 15, 1953, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF PAYMENT OF INVOICES NOS. 4291 AND 4292 OF THE ALGONAC MANUFACTURING COMPANY, ALGONAC, MICHIGAN, COVERING COSTS OF TRANSPORTATION FROM ITS PLANT AT ALGONAC, MICHIGAN, TO MARINE (CITY, MICHIGAN, OF CERTAIN SUPPLIES FURNISHED UNDER CONTRACT NO. DA-20-113 ORD-10179. IT IS UNDERSTOOD THAT SIMILAR QUESTIONS MAY ARISE UNDER 19 OTHER CURRENT CONTRACTS WITH THE SAME CONTRACTOR, CONTAINING IDENTICAL PROVISIONS AS TO DELIVERY POINT.

FROM THE RECORD FURNISHED IT APPEARS THAT AWARD OF THE CITED CONTRACT WAS MADE ON STANDARD FORM 33 ( NOVEMBER 1949) ON JUNE 20, 1952, ON THE CONTRACTOR'S BID, IN ACCORDANCE WITH THE TERMS OF THE INVITATION, FOR FURNISHING THE SPECIFIED ITEMS "FOR DELIVERY, F.O.B. COMMON CARRIER CONTRACTOR'S PLANT.' UNDER ARTICLE 32," F.O.B. POINT," THERE WAS CHECKED "B. F.O.B. COMMON CARRIER, CONTRACTOR'S OR SUBCONTRACTOR'S PLANT.'

ARTICLE 33," INSPECTION AND ACCEPTANCE," CONTAINED THE FOLLOWING:

C. WHEN DELIVERY IS TO BE F.O.B. COMMON CARRIER, CONTRACTOR'S OR SUBCONTRACTOR'S PLANT, FINAL INSPECTION AND ACCEPTANCE OF ITEMS WILL BE AT CONTRACTOR'S OR SUBCONTRACTOR'S PLANT AND SHIPMENT WILL BE MADE ON GOVERNMENT BILL OF LADING BY RAIL OR TRUCK AS SPECIFIED. CONTRACTOR WILL MAKE DELIVERY AT NEAREST RAIL FACILITY IF RAIL SHIPMENT IS SPECIFIED.

ALGONAC, MICHIGAN, WHERE THE CONTRACTOR'S PLANT IS LOCATED, IS NOT ON A RAILROAD, THE NEAREST RAIL FACILITIES BEING AT MARINE CITY, MICHIGAN, TEN MILES DISTANT. THE PLANT IS SERVED BY COMMON CARRIERS BY TRUCK, AND IT IS INDICATED THAT SHIPMENTS ON PREVIOUS GOVERNMENT CONTRACTS HAVE BEEN MADE UNIFORMLY BY TRUCK. HOWEVER, UPON A COMPARISON BETWEEN TRUCK AND RAIL RATES TO DESTINATIONS DESIRED, THE CONTRACTING OFFICER IN THE INSTANT CASE DIRECTED THE CONTRACTOR TO DELIVER THE SUPPLIES TO RAIL CARS AT MARINE CITY. UNDER VIGOROUS PROTEST THAT TRANSPORTATION FROM ITS PLANT TO MARINE CITY WAS NOT REQUIRED BY THE CONTRACT AND WOULD BE AT THE EXPENSE OF THE GOVERNMENT, THE CONTRACTOR COMPLIED WITH THESE DIRECTIONS AND SUBMITTED THE SUBJECT INVOICES TO OBTAIN REIMBURSEMENT FOR THE COST INVOLVED.

IT IS THE CONCLUSION OF THE CONTRACTING OFFICER AND THE DETROIT ORDNANCE DISTRICT THAT THE ABOVE-QUOTED PROVISION OF ARTICLE 33C OF THE CONTRACT "IS CLEAR AND UNAMBIGUOUS AND THAT UNDER THIS PROVISION THE CONTRACTING OFFICER MAY REQUIRE THAT SHIPMENT BE MADE ON GOVERNMENT BILL OF LADING BY RAIL FROM THE NEAREST RAIL FACILITY.' THE CONTRACTOR CONTENDS ON THE CONTRARY THAT THE REQUIREMENT OF RAIL SHIPMENT FROM MARINE CITY IS INCONSISTENT WITH THE CONTRACT PROVISION FOR DELIVERY F.O.B. COMMON CARRIER, CONTRACTOR'S PLANT, AND THEREFORE VARIES THE CONTRACT PRICE AND TERMS.

AS STATED IN YOUR SUBMISSION, THE BASIC ISSUES ARE "WHETHER (1) PARTIES TO THE CONTRACT INTENDED THE F.O.B. POINT TO BE LIMITED TO "CONTRACTOR'S OR SUBCONTRACTOR'S PLANT," (2) THE TERMS AND CONDITIONS ARE INCONSISTENT SO AS TO BE CONSTRUED STRICTLY AGAINST THE GOVERNMENT, (3) AND WHETHER THE CHANGES CLAUSE IN THE CONTRACT PERMITS TH CONTRACTING OFFICER TO AUTHORIZE LEGALLY COSTS OF TRANSPORTATION FROM ALGONAC TO MARINE CITY IN THE FORM OF AN EQUITABLE ADJUSTMENT.'

ON THE FIRST QUESTION, IT IS A FUNDAMENTAL PRINCIPLE WHERE THE LANGUAGE IS CLEAR AND EXPLICIT THERE IS NO CALL FOR CONSTRUCTION, AND INQUIRY INTO THE INTENTION OF THE PARTIES IS NOT REQUIRED. CALDERON V. ATLAS SS CO., 170 U.S. 272, 280. IN THE CONTRACT HERE IN QUESTION, THE DELIVERY TERMS ARE CLEARLY EXPRESSED, AND NO AMBIGUITY APPEARS UNLESS THE PROVISIONS OF ARTICLE 33C ARE NECESSARILY REPUGNANT THERETO. ALL PROVISIONS OF A CONTRACT ARE TO BE CONSTRUED TOGETHER, AND MUST IF POSSIBLE BE SO INTERPRETED AS TO HARMONIZE WITH EACH OTHER AND TO AVOID REPUGNANCY OR INCONSISTENCY. 12 AM. JUR. 773; BANK OF COMMERCE AND TRUST CO. V. NORTHWESTERN MUTUAL LIFE INS. ., 160 TENN. 551, 26 S.W. 2D 135, 68 A.L.R. 1380.

EVEN WHEN VIEWED ALONE, ARTICLE 33C DOES NOT APPEAR CLEARLY TO PROVIDE THAT THE GOVERNMENT HAS A RIGHT TO REQUIRE SHIPMENT BY RAIL OR TRUCK AT ITS DISCRETION. THE LANGUAGE IS,"SHIPMENT WILL BE MADE * * * BY RAIL OR TRUCK AS SPECIFIED; " ALSO THAT CONTRACTOR WILL DELIVER TO NEAREST RAIL FACILITY "IF RAIL SHIPMENT IS SPECIFIED.' THE MOST NATURAL UNDERSTANDING OF THE PHRASE "IF SPECIFIED" WOULD BE THAT IT REFERRED TO THE TERMS OF SHIPMENT SPECIFIED ELSEWHERE IN THE CONTRACT. WHEN IT IS FOUND THAT THIS ENTIRE ARTICLE IS A PORTION OF A PRINTED FORM, WHEREAS ELSEWHERE IN THE FORM USED THE DELIVERY TERMS ARE LEFT BLANK TO BE FILLED IN FOR EACH INDIVIDUAL CONTRACT, THIS UNDERSTANDING IS STRENGTHENED. WHERE THE DELIVERY TERMS ARE "F.O.B. COMMON CARRIER," AT A CERTAIN POINT, AND BOTH RAIL AND TRUCK COMMON CARRIERS ARE AVAILABLE AT THAT POINT, ARTICLE 33C MAY BE CONSTRUED AS AUTHORIZING THE GOVERNMENT TO SPECIFY ONE OR THE OTHER; BUT IF ONLY ONE FORM OF CARRIER IS AVAILABLE AT THE NAMED POINT SPECIFICATION OF ANOTHER FORM AT A DIFFERENT POINT WOULD BE CLEARLY IN CONFLICT WITH THE CONTRACT TERMS OF DELIVERY.

CONSIDERING ALSO THE PROVISIONS OF ARTICLE 23, THAT "UNIT PRICES WILL INCLUDE * * * TRANSPORTATION CHARGES TO F.O.B. POINT" IT IS CONCLUDED THAT THE CONTRACTOR COULD NOT PROPERLY BE REQUIRED UNDER THE CONTRACT TO BEAR THE EXPENSE OF TRANSPORTATION FROM ALGONAC, WHERE COMMON CARRIER TRANSPORTATION WAS AVAILABLE, TO MARINE CITY, IN ORDER TO MAKE USE OF ANOTHER FORM OF COMMON CARRIER. SEE FARMERS COTTON OIL CO. V. T. H. BROOKE AND CO., 14 GA. APP. 778, 82 S.E. 372, WHERE IT WAS HELD THAT UNDER A CONTRACT FOR DELIVERY F.O.B. CARS THE BUYER COULD NOT SELECT ONE OF SEVERAL RAIL LINES AVAILABLE AT THE PLACE WHERE THE SELLER'S MILL WAS LOCATED IN THE ABSENCE OF AN EXPRESS RESERVATION OF THE RIGHT TO DO SO. SEE ALSO WASHINGTON ELECTRIC COOPERATIVE V. NORRY CORPORATION, 193 F.2D 411.

ACCORDINGLY, YOU ARE ADVISED THAT THE CONTRACTOR'S EXPENSES INCURRED IN DELIVERING THE SUPPLIES TO CARS AT MARINE CITY, OVER AND ABOVE ITS COST OF LOADING ON COMMON CARRIER TRUCKS AT ALGONAC, ARE PROPERLY FOR EQUITABLE ADJUSTMENT UNDER THE " CHANGES" ARTICLE OF STANDARD FORM 32 INCORPORATED IN THE CONTRACT.