B-122101, JUN. 21, 1955

B-122101, JUN. 21, 1955

TO C. H. SCOTT LUMBER COMPANY:

REFERENCE IS MADE TO YOUR LETTERS DATED OCTOBER 28 AND NOVEMBER 2, 1954, REQUESTING REVIEW OF SETTLEMENT DATED SEPTEMBER 27, 1954, DISALLOWING YOUR CLAIM FOR $1,550.74, REPRESENTING DISCOUNT ADMINISTRATIVELY DEDUCTED IN MAKING PAYMENTS TO YOU FOR LUMBER FURNISHED THE DEPARTMENT OF THE ARMY UNDER CONTRACT NO. DA-11-184-ENG 4208, DATED SEPTEMBER 28, 1950, AS AMENDED; AND TO YOUR LETTER OF MARCH 7, 1955, REQUESTING REVIEW OF SETTLEMENT DATED AUGUST 5, 1954, DISALLOWING YOUR CLAIM FOR $211.26, COVERING THE VALUE OF CERTAIN LUMBER DELIVERED UNDER THE CONTRACT AND REJECTED BY THE GOVERNMENT.

CONCERNING THE DISCOUNT PORTION OF YOUR CLAIMS, IT HAS BEEN CONCLUDED, AFTER A CAREFUL ANALYSIS OF THE ENTIRE RECORD IN THE CASE, THAT THE CONDUCT OF THE PARTIES TO THIS TRANSACTION EVIDENCED A MANIFEST INTENTION UPON THEIR PART TO REGARD THE PERFORMANCE AND PAYMENT TERMS INCORPORATED INTO MODIFICATION NO. 1, ISSUED OCTOBER 24, 1950, AS BEING APPLICABLE NOT ONLY TO THOSE QUANTITIES OF FASIF OR OTHER SELECT GRADES OF LUMBER DELIVERED AND ACCEPTED UNDER REQUISITION 22-51-82 MIPR, LOT NO. 1, AS THEREIN SPECIFIED, BUT TO ALL OTHER ITEMS OF THE CONTRACT, AS WELL. THE CIRCUMSTANCES, AND SINCE THE RECORD ALSO ESTABLISHES THAT THE PAYMENTS EVIDENCED BY D.O. VOUCHERS NOS. 36420, 49637 AND 63121 OF THE DECEMBER 1950 AND JANUARY 1951 ACCOUNTS OF LIEUTENANT COLONEL M. L. JOHNSON WERE NOT EFFECTED WITHIN THE SPECIFIED DISCOUNT PERIOD OF 20 DAYS, COMPUTED EITHER FROM DATE OF EXECUTION OF MODIFICATION NO. 1, OR FROM THE RESPECTIVE DATES OF DELIVERY, OR THE DATES OF RECEIPT OF THE COVERING INVOICES, WHICHEVER WAS LATER, IT IS CONSIDERED THAT THE DISCOUNTS DEDUCTED FROM THE PROCEEDS OF THESE VOUCHERS WERE NOT EARNED BY THE GOVERNMENT, AND APPROPRIATE INSTRUCTIONS, THEREFORE, ARE BEING ISSUED TODAY AUTHORIZING REFUND TO YOU OF THE DISCOUNTS IMPROPERLY TAKEN ON THESE ACCOUNTS.

IN SUPPORT OF YOUR CLAIM FOR $211.26, ASSERTED UNDER THE SAME CONTRACT, YOU CONTEND, IN SUBSTANCE, THAT YOU DID MAKE TIMELY ARRANGEMENTS WITH ANOTHER FIRM TO REMOVE THE QUANTITIES OF LUMBER WHICH HAD BEEN DELIVERED TO AND REJECTED BY THE BROOKLEY AIR FORCE BASE, MOBILE, ALABAMA, DURING NOVEMBER 1951, BUT THAT UPON THE ARRIVAL OF YOUR AGENTS AT THAT BASE, THE REJECTED STOCK COULD NOT BE LOCATED, AND PRESUMABLY HAD BEEN LOST OR CONFISCATED BY THE GOVERNMENT.

THE RECORD IN THE CASE AFFIRMATIVELY ESTABLISHES THAT THE REJECTED LUMBER FAILED TO MEET THE SPECIFIC LENGTHS PRESCRIBED THEREFOR IN THE CONTRACT SPECIFICATIONS, BY REASON OF WHICH THE STOCK IN QUESTION WAS UNEQUIVOCALLY REJECTED. FURTHERMORE, IT IS SHOWN BY THE RECORD THAT YOU FIRST WERE NOTIFIED OF THE GOVERNMENT'S REJECTION OF THIS LUMBER IN NOVEMBER 1951, WHEREUPON YOU MADE SEVERAL UNSUCCESSFUL ATTEMPTS DURING THE ENSUING MONTHS TO NEGOTIATE WITH THE CONTRACTING OFFICER FOR THE ACCEPTANCE OF THIS LUMBER BY THE GOVERNMENT AT A REDUCTION IN PRICE. THE GOVERNMENT HAVING DEFINITELY REJECTED THE STOCK, AND HAVING NO FURTHER NEED THEREFOR, MADE NUMEROUS DEMANDS UPON YOU FOR ITS REMOVAL, INCLUDING THOSE MADE IN THE CONTRACTING OFFICER'S LETTERS DATED MARCH 11, APRIL 4 AND MAY 6, 1952, WHEREIN YOU SPECIFICALLY WERE ADVISED THAT A COMPROMISE OF THE MATTER WOULD NOT BE ENTERTAINED; THAT IF THE MATERIALS WERE NOT REMOVED WITHIN A REASONABLE TIME THEY WOULD BE CONSIDERED ABANDONED BY YOU AND DISPOSED OF BY SALE, OR OTHERWISE; AND THAT THE REJECTED LUMBER WAS CONSIDERED BY THE CONTRACTING OFFICER TO HAVE BEEN ABANDONED BY YOU AFTER MAY 6, 1952.

IN CONNECTION WITH THIS CLAIM, YOUR ATTENTION IS SPECIFICALLY DIRECTED TO THE TERMS OF ARTICLE 5 (B), GENERAL PROVISIONS OF THE CONTRACT, PROVIDING FOR THE REMOVAL OF REJECTED SUPPLIES BY AND AT THE EXPENSE OF THE CONTRACTOR "PROMPTLY AFTER NOTICE" OF THEIR REJECTION. ALSO, ATTENTION IS DIRECTED TO ARTICLE 6 (II) OF THE SAID PROVISIONS, WHICH EXPRESSLY PLACES UPON THE CONTRACTOR THE BURDEN OF "ALL RISKS AS TO REJECTED SUPPLIES AFTER NOTICE OF REJECTION.' ASIDE FROM THE FACT THAT TITLE TO THE REJECTED MATERIALS NEVER PASSED TO THE GOVERNMENT, BUT REMAINED SOLELY IN YOU, IT SHOULD ALSO BE BORNE IN MIND THAT DESPITE YOUR EXPLICIT PROMISE MADE IN JANUARY AND AGAIN IN JUNE OF 1952 TO REMOVE THIS LUMBER, AND THE GOVERNMENT'S REPEATED REMINDERS AND NOTICES ISSUED TO YOU PERIODICALLY THROUGHOUT THE MONTHS FROM NOVEMBER 1951 THROUGH MAY 1952, YOU CONTINUOUSLY DELAYED IN REMOVING THE LUMBER. IT WAS NOT UNTIL YOUR LETTER OF OCTOBER 23, 1952, AND AFTER THIS UNREASONABLE DELAY IN COMPLYING WITH YOUR CONTRACTUAL OBLIGATION TO PROMPTLY REMOVE THIS STOCK, THAT THE CONTRACTING OFFICER WAS ADVISED THAT YOUR BELATED ATTEMPT TO PICK UP THE LUMBER WAS UNSUCCESSFUL.

UNDER THE FACTS AND EVIDENCE OF RECORD, IT MUST BE CONCLUDED THAT THE LOSS OR DISAPPEARANCE OF THE LUMBER WAS DIRECTLY ATTRIBUTABLE TO YOUR UNREASONABLE DELAY IN ACTING UPON THE REPEATED REQUESTS TO PICK UP THE LUMBER; THAT THE GOVERNMENT IN NOWISE FAILED TO EXERCISE THAT DEGREE OF CARE REQUIRED UNDER THE CIRCUMSTANCES; AND THAT, IN ANY EVENT, UNDER THE SPECIFIC TERMS OF THE CONTRACT ALL RISKS--- WITHOUT EXCEPTION OR LIMITATION--- WERE ASSUMED BY YOU UPON RECEIPT OF NOTICE OF REJECTION OF THE LUMBER.