B-127708, JUN. 28, 1956

B-127708: Jun 28, 1956

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INCORPORATED: REFERENCE IS MADE TO A LETTER OF APRIL 4. FINALLY IT WAS AGREED. DELIVERY HAD BEEN MADE TO THE GOVERNMENT BUT PAYMENT FOR THE SUPPLIES WAS WITHHELD PENDING DETERMINATIONS REGARDING CERTAIN REPORTED OVERPAYMENTS. 046.40 ULTIMATELY WAS MADE TO YOU ABOUT AUGUST 15. YOU NOW ARE CLAIMING INTEREST ON THIS PAYMENT OF $31. THE ATTORNEY'S REQUEST FOR REVIEW IS BASED ON HIS CONTENTION THAT THE CLAIM FOR INTEREST IS NOT PREDICATED ON OVERSIGHT OR NEGLIGENCE OF THE GOVERNMENT IN MAKING PAYMENT BUT RATHER THAT THE WITHHOLDING OF PAYMENT WAS WILLFUL. MAY NOT HAVE BEEN HANDLED AS EXPEDITIOUSLY AS POSSIBLE BY THE GENERAL SERVICES ADMINISTRATION. IT IS NOT SHOWN. THAT SUCH PAYMENT WAS DELAYED BY WILLFUL AND DELIBERATE ACTS OF GOVERNMENT OFFICIALS.

B-127708, JUN. 28, 1956

TO BARCLAY HOME PRODUCTS, INCORPORATED:

REFERENCE IS MADE TO A LETTER OF APRIL 4, 1956, IN YOUR BEHALF, FROM MR. IRVING E. MELLER, REQUESTING REVIEW OF OUR SETTLEMENT DATED NOVEMBER 1, 1955, WHICH DISALLOWED YOUR CLAIM FOR $2,638.95, UNDER CONTRACT NO. GS-OOP -2822-/SCM), DATED FEBRUARY 18, 1952.

UNDER THE CONTRACT YOU AGREED TO FURNISH TO THE GENERAL SERVICES ADMINISTRATION APPROXIMATELY 20,000 POUNDS OF EUROPEAN GOOSE DOWN AT $7.20 PER POUND, OR FOR A TOTAL PRICE OF $144,000. IT APPEARS THAT UPON DELIVERY OF LOT NO. F-4 ON OR ABOUT JUNE 3, 1952, WHICH CONSISTED OF 4,400 POUNDS OF THE GOOSE DOWN, A LABORATORY ANALYSIS THEREOF REVEALED A CERTAIN SHORTAGE OF THE GOOSE DOWN DUE TO A VARIANCE IN THE PROPORTIONATE AMOUNT OF DOWN AND FEATHERS. AS A RESULT OF THIS NONCOMPLIANCE WITH THE SPECIFICATIONS THERE FOLLOWED UNSUCCESSFUL NEGOTIATIONS BETWEEN YOU AND THE GOVERNMENT OVER A CONSIDERABLE PERIOD OF TIME WITH RESPECT TO THE ACCEPTANCE OF THE GOOSE DOWN WITH CERTAIN ADJUSTMENTS, REPROCESSING, AND THE RELEASE OF THE REJECTED MATERIAL. FINALLY IT WAS AGREED, ON OR ABOUT DECEMBER 14, 1953, THAT THE GOVERNMENT WOULD ACCEPT THE GOOSE DOWN WITH AN ADJUSTMENT IN PRICE. DELIVERY HAD BEEN MADE TO THE GOVERNMENT BUT PAYMENT FOR THE SUPPLIES WAS WITHHELD PENDING DETERMINATIONS REGARDING CERTAIN REPORTED OVERPAYMENTS, PROCUREMENT PROCEDURES, ETC., UNDER VARIOUS OTHER CONTRACTS IN EFFECT AT THAT TIME. PAYMENT IN THE AMOUNT OF $31,046.40 ULTIMATELY WAS MADE TO YOU ABOUT AUGUST 15, 1955. YOU NOW ARE CLAIMING INTEREST ON THIS PAYMENT OF $31,046.40 AT 6 PERCENT PER ANNUM FOR A PERIOD OF 17 MONTHS.

THE ATTORNEY'S REQUEST FOR REVIEW IS BASED ON HIS CONTENTION THAT THE CLAIM FOR INTEREST IS NOT PREDICATED ON OVERSIGHT OR NEGLIGENCE OF THE GOVERNMENT IN MAKING PAYMENT BUT RATHER THAT THE WITHHOLDING OF PAYMENT WAS WILLFUL, DELIBERATE AND WITHOUT JUSTIFICATION AS LATER HELD BY THE BOARD OF APPEALS, GENERAL SERVICES ADMINISTRATION.

AN EXAMINATION OF THE FACTS IN THE CASE INDICATES THAT WHILE NEGOTIATIONS WITH RESPECT TO THE FINAL ACCEPTANCE--- WITH PRICE ADJUSTMENT--- OF THAT PART OF THE EUROPEAN GOOSE DOWN COVERED BY LOT NO. F-4, MAY NOT HAVE BEEN HANDLED AS EXPEDITIOUSLY AS POSSIBLE BY THE GENERAL SERVICES ADMINISTRATION, IT IS NOT SHOWN, WHEN CONSIDERING THE COMPLICATED NATURE OF THE VARIOUS OTHER TRANSACTIONS AFFECTING FINAL PAYMENT FOR LOT NO. F-4, EITHER IN THE RECOMMENDATION OF THE BOARD OF APPEALS, OR OTHERWISE, THAT SUCH PAYMENT WAS DELAYED BY WILLFUL AND DELIBERATE ACTS OF GOVERNMENT OFFICIALS. IT APPEARS THAT THE DELAY IN, OR WITHHOLDING OF, PAYMENT FOR THIS PARTICULAR LOT OF GOOSE DOWN WAS DUE PRIMARILY TO CONSIDERATION OF REPORTED OVERPAYMENTS UNDER VARIOUS OTHER GENERAL SERVICES ADMINISTRATION CONTRACTS FOR GOOSE DOWN--- PARTICULARLY CONTRACT NO. GS-OOP-1573-/SCM/--- AND TO AN INVESTIGATION INTO THE OVER-ALL OPERATION OF THE FEATHERS AND DOWN PURCHASE PROGRAM OF THE GENERAL SERVICES ADMINISTRATION. HENCE, THERE IS SERIOUS DOUBT THAT THE WITHHOLDING BY THE GOVERNMENT OF REIMBURSEMENT TO YOU FOR LOT NO. F-4 CAN BE SAID TO HAVE BEEN UNREASONABLE OR WITHOUT JUSTIFICATION.

EVEN IF IT BE ASSUMED THAT IT COULD BE ESTABLISHED THAT SUCH DELAY WAS UNREASONABLE IN THE LIGHT OF THE AUTHORITIES HEREINAFTER SET FORTH YOUR CLAIM MUST BE DISALLOWED.

AS WAS STATED IN THE SETTLEMENT OF NOVEMBER 1, 1955, IT IS SETTLED THAT THE UNITED STATES IS NOT LIABLE FOR INTEREST ON ITS OBLIGATIONS EXCEPT WHERE INTEREST IS STIPULATED FOR IN LEGAL AND PROPER CONTRACTS, OR WHERE THE ALLOWANCE OF INTEREST IS SPECIFICALLY DIRECTED BY STATUTE. ANGARICA V. HAYARD, 127 U.S. 251; SEABOARD AIR LINE RAILWAY COMPANY V. UNITED STATES, 261 U.S. 299. NO SUCH STIPULATION APPEARS IN THE CONTRACT HERE INVOLVED AND NO STATUTORY AUTHORITY EXISTS FOR THE PAYMENT OF INTEREST IN THIS CASE. WHILE OTHER AUTHORITIES REGARDING THE NONLIABILITY OF THE GOVERNMENT FOR PAYMENTS OF INTEREST UNDER SUCH CIRCUMSTANCES ARE TOO NUMEROUS TO MENTION HERE YOUR ATTENTION IS INVITED ALSO TO THE CASE OF RUDOLPH AXMAN V. UNITED STATES, 47 C.CLS. 538, 553, WHEREIN, NOTWITHSTANDING A FINDING THAT THE WITHHOLDING OF PAYMENTS FROM A CONTRACTOR WAS UNREASONABLE AND ARBITRARY, THE COURT REFUSED TO ALLOW RECOVERY OF INTEREST ON MONEYS REQUIRED TO BE BORROWED BY THE CONTRACTOR TO CONTINUE THE CONTRACT WORK.

IN THE LIGHT OF THE FOREGOING AUTHORITIES, THERE CLEARLY APPEARS TO BE NO BASIS UPON WHICH OUR OFFICE WOULD BE WARRANTED IN AUTHORIZING THE ALLOWANCE OF ANY PART OF THE AMOUNT CLAIMED.

ACCORDINGLY, THE SETTLEMENT OF NOVEMBER 1, 1955, IS SUSTAINED.