B-126018, JAN. 18, 1956

B-126018: Jan 18, 1956

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 4. NUMEROUS CONTRACTS WERE LET TO PRODUCERS OF CHROME ORE INTENDED FOR USE IN CONNECTION WITH THE GRANTS PASS CHROME PROGRAM IN OREGON. THESE CONTRACTS WERE EXECUTED ON GSA FORM 415 APPROVED BY YOUR ADMINISTRATION ON MARCH 28. GS 10P- 9 (SCM) WAS AWARDED. IT APPEARS THAT THERE ARE TWO PRINCIPAL METHODS OF ANALYZING THIS ORE. IS UNDERSTOOD TO HAVE USED THE PERMANGANATE METHOD. IT APPEARS THAT ITS ANALYSES WERE ACCURATE AND GENERALLY ACCEPTABLE TO PRODUCERS IN THAT AREA. A COMPLETE INVESTIGATION WAS CONDUCTED BY YOUR ADMINISTRATION. NUMEROUS RERUNS OF THE SAMPLES WERE MADE BY THE PITTSBURGH TESTING LABORATORY.

B-126018, JAN. 18, 1956

TO HONORABLE EDMUND F. MANSURE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 4, 1955, WITH ENCLOSURES, WHEREIN YOU REQUEST A DECISION AS TO THE PROPRIETY OF AUTHORIZING ADJUSTMENTS IN THE AMOUNTS PAID TO PRODUCERS OF CHROME ORE TO COMPENSATE FOR INACCURACIES DISCOVERED IN THE ASSAY RESULTS ORIGINALLY REPORTED BY THE PITTSBURGH TESTING LABORATORY, THE GOVERNMENT'S ASSAYING CONTRACTOR.

IT APPEARS THAT, FOR THE PURPOSE OF ACCOMPLISHING CERTAIN OF THE OBJECTIVES CONTEMPLATED BY THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, 60 STAT. 596, NUMEROUS CONTRACTS WERE LET TO PRODUCERS OF CHROME ORE INTENDED FOR USE IN CONNECTION WITH THE GRANTS PASS CHROME PROGRAM IN OREGON. THESE CONTRACTS WERE EXECUTED ON GSA FORM 415 APPROVED BY YOUR ADMINISTRATION ON MARCH 28, 1952. ARTICLE 3, GENERAL CONDITIONS, OF THE CONTRACTS, PROVIDED THAT ALL MATERIALS OFFERED BY THE PRODUCERS WOULD BE SUBJECT TO WEIGHING, SAMPLING AND ANALYSIS BY THE GOVERNMENT AT ITS OWN EXPENSE PRIOR TO ACCEPTANCE, AND THAT SUCH SAMPLING WOULD BE MADE AT THE TIME OF UNLOADING AT THE DESIGNATED DEPOT BY A QUALIFIED SAMPLER TO BE SELECTED BY THE GOVERNMENT. THE SAID ARTICLE ALSO STIPULATED THAT,"THE ASSAY RESULTS SHALL BE FINAL AND SHALL CONSTITUTE THE BASIS OF PAYMENT.'

THE RECORD SHOWS THAT ON NOVEMBER 17, 1954, ASSAYING CONTRACT NO. GS 10P- 9 (SCM) WAS AWARDED, AFTER COMPETITION, TO THE PITTSBURGH TESTING LABORATORY FOR THE SAMPLING OF ORES PROPOSED TO BE ACQUIRED FOR STOCK PILING OR OTHER USE UNDER THE GRANTS PASS CHROME PROJECT. IT APPEARS THAT THERE ARE TWO PRINCIPAL METHODS OF ANALYZING THIS ORE, THE PERMANGANATE AND THE DICHROMATE METHODS, THE PITTSBURGH LABORATORY UTILIZING THE LATTER. ITS PREDECESSOR, HOWEVER, THE NORTHWEST TESTING LABORATORY, IS UNDERSTOOD TO HAVE USED THE PERMANGANATE METHOD, AND IT APPEARS THAT ITS ANALYSES WERE ACCURATE AND GENERALLY ACCEPTABLE TO PRODUCERS IN THAT AREA.

HOWEVER, DUE TO COMPLAINTS BY PRODUCERS AS TO THE RESULTS OF THE ASSAYS COMPLETED BY THE PITTSBURGH TESTING LABORATORY, A COMPLETE INVESTIGATION WAS CONDUCTED BY YOUR ADMINISTRATION, AND NUMEROUS RERUNS OF THE SAMPLES WERE MADE BY THE PITTSBURGH TESTING LABORATORY. THE RESULTS OF THESE TESTS DISCLOSED A VARIATION OF MORE THAN 0.5 PERCENT FROM THE RESULTS OBTAINED BY USE OF THE DICHROMATE METHOD. AS THE RESULT OF ADDITIONAL TESTS CONDUCTED BY VARIOUS DISINTERESTED LABORATORIES USING THE PERMANGANATE METHOD, IT WAS ESTABLISHED THAT THE ORIGINAL ASSAYS CONDUCTED BY THE PITTSBURGH LABORATORY WERE INACCURATE AND, FURTHER, THAT THEY RESULTED IN APPROXIMATELY 140 UNDERPAYMENTS TO THE PRODUCERS, TOTALING APPROXIMATELY $23,000, AND 25 OVERPAYMENTS AMOUNTING IN THE AGGREGATE TO ABOUT $3,400.

IN VIEW OF THE FOREGOING, IT IS MANIFEST THAT AT THE TIME THE ORIGINAL PAYMENTS WERE MADE WITH THE PRODUCERS UNDER THESE AGREEMENTS, BOTH PARTIES THERETO WERE LABORING UNDER A COMMON MISUNDERSTANDING OR MISAPPREHENSION AS TO THE TRUE ORE CONTENT OF THE SAMPLES WHICH HAD BEEN ANALYZED BY THE PITTSBURGH TESTING LABORATORY. HENCE, THE SETTLEMENTS MADE PURSUANT TO THE ORIGINAL ASSAY REPORTS FURNISHED BY THE SAID LABORATORY NECESSARILY WERE ERRONEOUS AND DID NOT REFLECT THE AMOUNTS PROPERLY DUE THESE CONTRACTORS. IN THE CIRCUMSTANCES, AND SINCE IT HAS BEEN RECOGNIZED THAT MUTUAL MISTAKE WILL AFFORD LEGAL JUSTIFICATION FOR THE REFORMATION OF AN OTHERWISE VALID CONTRACT, YOU ARE ADVISED THAT WE WOULD NOT BE REQUIRED TO OBJECT TO ADJUSTMENTS OF THE PAYMENTS SO AS TO REFLECT THE AMOUNTS PROPERLY DUE UPON THE BASIS OF THE CORRECT ANALYSES REPORTS, NOTWITHSTANDING THE "FINALITY" CLAUSE IN ARTICLE 3, GENERAL CONDITIONS, OF THE CONTRACTS. CF. HARRISON ENGINEERING AND CONSTRUCTION CORPORATION V. UNITED STATES, 107 C.CLS. 205. ..END :