B-124754, AUG. 18, 1955

B-124754: Aug 18, 1955

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ROY KEELEY: REFERENCE IS MADE TO YOUR LETTER OF APRIL 22. OFFERING TO PURCHASE "AS IS" AND . WHERE IS" AN APPROXIMATE QUANTITY OF SURPLUS COAL. WHICH BID WAS ACCEPTED BY THE GOVERNMENT ON MARCH 10. THE ACCEPTED BID WAS ACCOMPANIED BY YOUR PAYMENT IN FULL OF THE BID PRICE AND YOU WERE REQUIRED UNDER THE PROVISIONS OF PARAGRAPH 5 TO REMOVE THE COAL FROM THE SEVERAL VESSELS LISTED IN THE SCHEDULE WITHIN SIX MONTHS FROM THE DATE OF NOTICE OF AWARD OR BY SEPTEMBER 10. YOU WERE ON NOTICE THAT ANY ENTRANCE FEES ASSESSED BY THE COLLECTOR OF CUSTOMS SHOULD BE BORNE BY YOU. WHICH ALLEGEDLY WERE RETAINED FOR SEVERAL DAYS IN A "STAND-BY STATUS.'. YOU PROPERLY WERE INFORMED REGARDING THE CONTRACT REQUIREMENTS FOR THE DISPOSITION OF CUSTOMS MATTERS.

B-124754, AUG. 18, 1955

TO MR. ROY KEELEY:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 22, 1955, FORWARDED BY THE DEPARTMENT OF COMMERCE, CIVIL AERONAUTICS ADMINISTRATION, AND WHICH, IN EFFECT, REQUESTS REVIEW OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $5,786.39, AS STATED IN OUR CLAIMS DIVISION LETTER DATED AUGUST 19, 1952, TO YOU.

THE INDEBTEDNESS AROSE IN CONNECTION WITH CONTRACT NO. MC-3-4581, DATED MARCH 10, 1949, CONSISTING OF SALE PROPOSAL NO-DS-49-59 ISSUED BY THE GULF COAST BRANCH, DIVISION OF SUPPLY, BUREAU OF MARINE OPERATIONS, UNITED STATES MARITIME COMMISSION, NEW ORLEANS, LOUISIANA, IN RESPONSE TO WHICH YOU SUBMITTED A BID DATED MARCH 10, 1949, OFFERING TO PURCHASE "AS IS" AND ,WHERE IS" AN APPROXIMATE QUANTITY OF SURPLUS COAL, LISTED UNDER SCHEDULE "A" ATTACHED THERETO, FOR A TOTAL CONSIDERATION OF $344.65, WHICH BID WAS ACCEPTED BY THE GOVERNMENT ON MARCH 10, 1949. THE ACCEPTANCE OF THE BID, UNDER THESE CIRCUMSTANCES, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 239 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 295 U.S. 75.

THE ACCEPTED BID WAS ACCOMPANIED BY YOUR PAYMENT IN FULL OF THE BID PRICE AND YOU WERE REQUIRED UNDER THE PROVISIONS OF PARAGRAPH 5 TO REMOVE THE COAL FROM THE SEVERAL VESSELS LISTED IN THE SCHEDULE WITHIN SIX MONTHS FROM THE DATE OF NOTICE OF AWARD OR BY SEPTEMBER 10, 1949. PARAGRAPH 6 OF THE CONTRACT PROVIDED THAT IN THE EVENT OF YOUR FAILURE TO REMOVE THE ITEMS, OR YOUR DEFAULT IN PERFORMANCE, THE GOVERNMENT MIGHT, UPON GIVING THE REQUIRED NOTICE, RESCIND THE SALE, OR RESELL THE PROPERTY UPON SUCH TERMS AND CONDITIONS AS IT DEEMED PROPER, CHARGING YOUR ACCOUNT WITH ANY EXCESS COSTS RESULTING THEREFROM. IN ADDITION TO ASSUMING THE EXPENSE OF REMOVAL OF THE COAL YOU AGREED, UNDER PARAGRAPH 9, TO INDEMNIFY AND SAVE THE GOVERNMENT HARMLESS FROM ANY LOSS OR EXPENSE CAUSED BY DAMAGES OR INJURIES TO PERSONS OR PROPERTIES INCURRED DURING REMOVAL OPERATIONS. WHILE YOU PURCHASED THE COAL OF A FOREIGN ORIGIN, DUTY FREE, YOU WERE ON NOTICE THAT ANY ENTRANCE FEES ASSESSED BY THE COLLECTOR OF CUSTOMS SHOULD BE BORNE BY YOU.

THE ADMINISTRATIVE REPORTS DISCLOSE THAT ON MARCH 28, 1949, YOU DISPATCHED A TUG AND BARGES, TOGETHER WITH PERSONNEL, TO THE RESERVE FLEET FOR THE PURPOSE OF REMOVING THE COAL. UPON ADVICE THAT THE COAL COULD NOT BE REMOVED WITHOUT THE SUPERVISION OF A CUSTOMS INSPECTOR, YOU WITHDREW YOUR FACILITIES, WHICH ALLEGEDLY WERE RETAINED FOR SEVERAL DAYS IN A "STAND-BY STATUS.' BY LETTER OF MARCH 30, 1949, YOU ADVISED THE DISPOSAL AGENT, IN SUBSTANCE, THAT IT APPEARED THAT FINAL ARRANGEMENTS BETWEEN THE ADMINISTRATIVE OFFICE AND CUSTOM OFFICIALS HAD NOT BEEN COMPLETED AND THAT YOUR STAND-BY EXPENSES AT THE TIME APPROXIMATED $672.60; HENCE, YOU REQUESTED INFORMATION AS TO THE SETTLEMENT THEREOF. IN THE ADMINISTRATIVE REPLY DATED MAY 17, 1949, YOU PROPERLY WERE INFORMED REGARDING THE CONTRACT REQUIREMENTS FOR THE DISPOSITION OF CUSTOMS MATTERS, PARTICULARLY ATTENTION BEING INVITED TO THE PROVISIONS OF PARAGRAPHS 6 AND 9 OF THE CONTRACT CONDITIONS, AND TO THE RESPONSIBILITY FOR THE REMOVAL OF THE PROPERTY AT YOUR EXPENSE. SINCE AT THAT TIME TITLE TO THE COAL HAD VESTED IN YOU THERE WOULD APPEAR NO QUESTION REGARDING YOUR REQUIREMENT UNDER THE AGREEMENT TOWARD EFFECTING THE NECESSARY ARRANGEMENTS FOR THE INDEMNITY COVERAGE AND THE CUSTOMS ENTRY PERMIT. IT IS APPARENT THAT YOUR LETTER OF MAY 17, 1949, PURPORTING TO RENOUNCE YOUR CONTRACT AND REQUESTING RETURN OF YOUR DEPOSIT, AS WELL AS PAYMENT OF YOUR EXPENSES IN CONNECTION WITH THE TRANSACTION, WAS PREPARED AND DISPATCHED PRIOR TO YOUR RECEIPT OF THE ADMINISTRATIVE LETTER OF THE SAME DATE.

ASIDE FROM THE FOREGOING, NUMEROUS EFFORTS SUBSEQUENTLY WERE MADE TO REACH YOU BUT IT WAS NOT UNTIL AUGUST 1949 WHEN CONTACT WAS MADE WITH YOUR REPRESENTATIVE AND THEREUPON ARRANGEMENTS CLEARED WITH THE CUSTOMS AUTHORITIES. HOWEVER, YOUR FAILURE TO REMOVE THE COAL OR TO RESPOND TO ADMINISTRATIVE LETTERS DATED SEPTEMBER 14 AND OCTOBER 4, 1949, GRANTING YOU A FINAL OPPORTUNITY TO ADHERE TO YOUR EXISTING OBLIGATIONS RESULTED IN THE FORMAL DECLARATION OF YOUR DEFAULT OF CONTRACT EFFECTIVE OCTOBER 10, 1949.

NEVERTHELESS, IN CONSIDERATION OF ALL OF THE EVIDENCE OF RECORD AND IN THE ABSENCE OF ANY RESALE OF THE COAL IN QUESTION, OUR OFFICE HAS DETERMINED THAT THE EXCESS COSTS PROPERLY CHARGEABLE AGAINST YOUR ACCOUNT AS A RESULT OF YOUR DEFAULT IS CONFINED TO THE EXPENDITURE OF $700 BY THE GOVERNMENT, REPRESENTING THE COST OF REDISTRIBUTION OF THE VARIOUS QUANTITIES OF THE COAL WITHIN THE RESERVE FLEET, IN ORDER TO MINIMIZE THE HAZARD OF FIRE.

ACCORDINGLY, UPON REVIEW OF THE ENTIRE TRANSACTION, YOUR INDEBTEDNESS IS COMPUTED IN THE AMOUNT OF $700, LESS THE BID PRICE DEPOSIT OF $344.65, OR IN THE NET SUM OF $355.35. THEREFORE, UNLESS OUR OFFICE IS ADVISED BY YOUR WITHIN 30 DAYS FROM THE DATE OF THIS LETTER OF APPROPRIATE ARRANGEMENTS FOR THE COMPLETE LIQUIDATION OF THE INDEBTEDNESS, THE MATTER WILL BE REPORTED TO THE DEPARTMENT OF JUSTICE FOR THE INSTITUTION OF APPROPRIATE COLLECTION PROCEEDINGS.