B-126226, JAN. 24, 1956

B-126226: Jan 24, 1956

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INC.: REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 16. AS DAMAGES ALLEGED TO HAVE BEEN SUSTAINED DUE TO THE DELAY ON THE PART OF THE GOVERNMENT IN ACCEPTING AND PAYING FOR CERTAIN SUPPLIES UNDER CONTRACT NO. 9 AND 10 WERE NOT ACCEPTABLE TO THE GOVERNMENT DUE TO CERTAIN BROWN SPOTS APPEARING ON THE TABLETS UNTIL AFTER TESTS WERE MADE WHICH DETERMINED THAT THEY MET THE SPECIFICATION. YOU MADE CLAIM FOR DAMAGES ALLEGED TO HAVE BEEN SUSTAINED DUE TO THE DELAY OF THE GOVERNMENT IN ACCEPTING THE TABLETS. WAS CONSIDERED INEXCUSABLE AND TO THIS EXTENT YOUR APPEAL WAS DENIED. WAS NOT EXCUSABLE. THE QUESTION CONSIDERED BY THE BOARD WAS WHETHER THE ACTION OF THE CONTRACTING OFFICER IN TERMINATING THE CONTRACT WITH RESPECT TO THE SHIPMENTS DUE ON MAY 5 AND 20.

B-126226, JAN. 24, 1956

TO MANN CHEMICAL LABORATORIES, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 16, 1955, REQUESTING REVIEW OF SETTLEMENT DATED OCTOBER 26, 1955, WHICH DISALLOWED YOUR CLAIM FOR $9,151.69, AS DAMAGES ALLEGED TO HAVE BEEN SUSTAINED DUE TO THE DELAY ON THE PART OF THE GOVERNMENT IN ACCEPTING AND PAYING FOR CERTAIN SUPPLIES UNDER CONTRACT NO. DA-11-009-QM-8742, DATED MARCH 30, 1951.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO DELIVER CERTAIN QUANTITIES OF WATER PURIFICATION TABLETS ON CERTAIN DATES. LOTS 7, 9 AND 10 WERE NOT ACCEPTABLE TO THE GOVERNMENT DUE TO CERTAIN BROWN SPOTS APPEARING ON THE TABLETS UNTIL AFTER TESTS WERE MADE WHICH DETERMINED THAT THEY MET THE SPECIFICATION. YOU MADE CLAIM FOR DAMAGES ALLEGED TO HAVE BEEN SUSTAINED DUE TO THE DELAY OF THE GOVERNMENT IN ACCEPTING THE TABLETS.

YOU ALLEGE THAT THE ARMED SERVICES BOARD OF CONTRACT APPEALS AWARDED YOU DAMAGES AND THAT OUR OFFICE HAS NO RIGHT "TO NULLIFY AND OVERRULE" SUCH DECISION.

THE RECORD SHOWS THAT ON JUNE 30, 1953, THE ARMED SERVICES BOARD OF CONTRACT APPEALS RENDERED A DECISION THAT THE GOVERNMENT IMPROPERLY TERMINATED YOUR RIGHTS TO MAKE THE TWO SHIPMENTS DUE ON MAY 5 AND 20, 1951, AND DIRECTED THAT YOUR APPEAL TO THIS EXTENT BE SUSTAINED. FAILURE TO DELIVER THE QUANTITY DUE ON JUNE 5, 1951, WAS CONSIDERED INEXCUSABLE AND TO THIS EXTENT YOUR APPEAL WAS DENIED. UPON THE GOVERNMENT'S MOTION FOR A REHEARING, THE ARMED SERVICES BOARD OF CONTRACT APPEALS BY A SUPPLEMENTAL DECISION ON JUNE 11, 1954, REVISED ITS ORIGINAL DECISION AND FOUND THAT YOUR DELAY AS TO SHIPMENTS DUE ON MAY 5 AND 20, 1951, AS WELL AS THE SHIPMENT DUE ON JUNE 5, 1951, WAS NOT EXCUSABLE. THE QUESTION CONSIDERED BY THE BOARD WAS WHETHER THE ACTION OF THE CONTRACTING OFFICER IN TERMINATING THE CONTRACT WITH RESPECT TO THE SHIPMENTS DUE ON MAY 5 AND 20, AND JUNE 11, 1951, WAS PROPER. THE BOARD DID NOT CONCERN ITSELF AS TO WHETHER YOU WERE ENTITLED TO THE DAMAGES ALLEGED TO HAVE BEEN SUSTAINED BECAUSE OF DELAY BY THE GOVERNMENT IN ACCEPTING LOTS 7, 9 AND 10. LETTER OF AUGUST 31, 1954, THE ADMINISTRATIVE OFFICER ADVISED YOU TO THIS EFFECT AND FURTHER ADVISED THAT YOUR CLAIM FOR DAMAGES DUE TO THE ALLEGED DELAYED ACCEPTANCE BY THE GOVERNMENT WOULD REQUIRE SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE. THUS, CONTRARY TO YOUR STATEMENT THAT IN VARIOUS CONFERENCES HELD BETWEEN YOU AND THE SUCCESSOR CONTRACTING OFFICERS THAT THERE NEVER WAS ANY DOUBT THAT DAMAGES HAD BEEN SUSTAINED AND THAT IT MERELY WAS A MATTER OF FORMALLY DETERMINING THE MONETARY VALUE, IT APPEARS THAT THE ADMINISTRATIVE OFFICE HAS NEVER CONCERNED ITSELF WITH YOUR CLAIM FOR DAMAGES BUT ADVISED YOU THAT SUCH CLAIM WAS FOR SETTLEMENT BY OUR OFFICE. HOWEVER, IN THE COURSE OF FORWARDING YOUR CLAIM HERE, THE PURCHASING OFFICE CONCURRED IN THE RECOMMENDATIONS OF THE SUCCESSOR CONTRACTING OFFICER THAT THE ENTIRE AMOUNT OF YOUR CLAIM BE DISALLOWED.

WITH REGARD TO YOUR CLAIM FOR INTEREST, YOU ARE ADVISED THAT PAYMENT OF INTEREST BY THE GOVERNMENT ON ITS UNPAID CLAIMS MAY NOT BE MADE EXCEPT WHERE INTEREST IS STIPULATED FOR IN LEGAL AND PROPER CONTRACTS, OR WHERE THE ALLOWANCE OF INTEREST IS SPECIFICALLY DIRECTED BY STATUTE. YOUR CLAIM FOR INTEREST DOES NOT FALL WITHIN THESE EXCEPTIONS. ANGARICA V. BAYARD, 127 U.S. 251, 260; SEABOARD AIR LINE RY. CO. V. UNITED STATES, 261 U.S. 299, 304; DRESSER V. UNITED STATES, 84 F.SUPP. 993, 995; 27 COMP. GEN. 690, 691.

ALSO, WITH REGARD TO YOUR CLAIM FOR LEGAL FEES PAID BY YOU IN CONNECTION WITH YOUR CLAIM, YOU ARE ADVISED THAT IT IS THE GENERAL RULE THAT ATTORNEY'S FEES ARE NOT ALLOWED IN SUITS AGAINST THE UNITED STATES WITHOUT AN EXPRESS STATUTORY PROVISION ALLOWING THEM. PIGGLY WIGGLY CORP. V. UNITED STATES, 112 C.CLS. 391. FURTHERMORE, THE SUM OF $1,500 PAID FOR LEGAL FEES WAS FOR SERVICES CONNECTED WITH YOUR APPEAL TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS AND IS NOT RELATED TO THE DELAYS HERE INVOLVED.

IN CONNECTION WITH YOUR ALLEGATION THAT YOU LOST $25,000 WORTH OF BUSINESS DUE TO THE DELAY IN PAYMENT BY THE GOVERNMENT, YOU HAVE FURNISHED NO PROOF TO SHOW THAT SUCH BUSINESS WAS ACTUALLY LOST OR, THAT IF IT WAS, YOU WERE ENTITLED TO THREE PERCENT THEREOF. IN FACT A REPORT BY THE ARMY AUDIT AGENCY HAS FOUND SPECIFICALLY THAT THERE WAS NO DECLINE IN YOUR BUSINESS VOLUME FOR THE LAST HALF OF 1951 AS COMPARED TO OTHER YEARS, THUS INDICATING THAT THE ALLEGED LOSS OF BUSINESS IS NOT SUPPORTED BY YOUR OWN RECORDS. FURTHERMORE, THE AUDIT SHOWS THAT THE MONTHLY SALE VOLUME FOR THE LAST HALF OF 1951 WAS COMPARABLE TO THE SAME PERIOD IN 1950 AND 1952 AND THAT FACTORY PAYROLLS FOR THE PERIOD WERE EQUAL TO THE SAME PERIOD IN 1952 AND 27 PERCENT HIGHER THAN THE 1950 LABOR COSTS. NO DOWNWARD TREND OR DECLINE IN BUSINESS WAS INDICATED FOR THE LAST HALF OF 1951, THUS PROVING THAT AN ALLOCATION OF 25 PERCENT OF THE OVERHEAD AS EXPENSES INCURRED BY THE ALLEGED BREACH IS NOT WARRANTED.

NO PROOF HAS BEEN FURNISHED THAT THE OTHER EXPENSES WERE INCURRED AS A DIRECT RESULT OR AS A NECESSARY CONSEQUENCE OF THE BREACH ALLEGED. FACT, WITH REGARD TO THAT PART OF THE CLAIM FOR TRAVELING EXPENSES, IT IS NOTED THAT THE 93 ODD DOCUMENTS MAKING UP THIS EXHIBIT WERE SUBMITTED IN BULK WITHOUT ANNOTATION AND SUPPORTED ONLY BY THE ALLEGATION THAT THE TRAVEL "WAS NECESSITATED IN ORDER TO OBTAIN COLLECTION ON THE ORIGINAL CLAIM FOR LOTS 7, 9 AND 10.' A PERUSAL OF THE DOCUMENTS THAT ARE LEGIBLE INDICATE THAT AT LEAST $1,526.46 OF THE TOTAL EXPENSE INDICATED WAS INCURRED PRIOR TO JULY 1, 1951, MORE THAN A MONTH BEFORE AUTHORIZATION WAS REQUESTED TO SHIP LOT 7 AND CERTAIN OF THE ITEMS DATE BACK TO 1950, THAT IS BEFORE THE CONTRACT WAS MADE.

WITH REGARD TO YOUR REQUEST THAT YOU BE ADVISED AS TO ANY ADDITIONAL FORMAL REQUIREMENTS THAT YOU MUST FULFILL BEFORE TAKING COURT ACTION TO RECOVER YOUR CLAIM, YOU ARE ADVISED THAT NO FORMAL REQUIREMENTS ARE NECESSARY PRIOR TO THE INSTITUTION OF SUIT IN THE APPROPRIATE DISTRICT COURT OF THE UNITED STATES OR IN THE COURT OF CLAIMS OF THE UNITED STATES.

ACCORDINGLY, ON THE PRESENT RECORD THE SETTLEMENT OF OCTOBER 26, 1955, IS SUSTAINED.