B-127850, JUL. 5, 1956

B-127850: Jul 5, 1956

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BEAM COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 20. THE RECORD SHOWS THAT THE MATERIAL WAS RECEIVED ON OCTOBER 10. YOU WERE NOTIFIED OF THE DAMAGE ON OCTOBER 20. NEGOTIATIONS WERE COMPLETED ON DECEMBER 12. THEREUPON A VOUCHER WAS PROCESSED IN YOUR FAVOR FOR $8. YOU CONTEND THAT THE DELAY ENCOUNTERED IN THE REPAIR OF THE DAMAGE WAS NOT CAUSED BY YOU BUT WAS THE FAULT OF THE PROJECT ENGINEER. APPARENTLY YOU FEEL THAT OUR OFFICE DOES NOT HAVE THE FULL INFORMATION WITH REGARD TO YOUR CLAIM. AS FOLLOWS: "REFERENCE IS MADE TO YOUR LETTER OF JANUARY 16. "AS WILL BE SEEN FROM THE CORRESPONDENCE REFERRED TO IN YOUR JANUARY 16 LETTER. WE WERE ATTEMPTING TO WORK OUT A REASONABLE REPAIR CHARGE FOR THE MATERIAL DURING THE PERIOD IN WHICH MR.

B-127850, JUL. 5, 1956

TO JOHN W. BEAM COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 20, 1956, WITH ENCLOSURE, REQUESTING REVIEW OF OUR SETTLEMENT DATED APRIL 16, 1956, WHICH DISALLOWED YOUR CLAIM FOR $42.05 AS A REFUND OF DISCOUNT DEDUCTED IN CONNECTION WITH THE FURNISHING OF METALWORK UNDER CONTRACT NO. 14 06-D-1363, DATED JUNE 20, 1955.

UNDER THE TERMS OF THE CONTRACT, YOU AGREED TO FURNISH THE SUPPLIES FOR $8,410, LESS A DISCOUNT OF ONE-HALF OF ONE PERCENT FOR PAYMENT WITHIN 20 DAYS. THE RECORD SHOWS THAT THE MATERIAL WAS RECEIVED ON OCTOBER 10, 1955, IN A DAMAGED CONDITION. YOU WERE NOTIFIED OF THE DAMAGE ON OCTOBER 20, 1955, AND BY LETTER OF OCTOBER 21 YOU AUTHORIZED THE REPAIR OF THE DAMAGE AND THE DEDUCTION OF THE COST OF SUCH REPAIRS FROM YOUR INVOICE. NEGOTIATIONS WERE COMPLETED ON DECEMBER 12, 1955, FOR THE REPAIR OF THE DAMAGE FOR THE SUM OF $50. THEREUPON A VOUCHER WAS PROCESSED IN YOUR FAVOR FOR $8,410, LESS THE DISCOUNT OF $42.05 AND THE LUMP-SUM REPAIR PRICE OF $50, OR A NET OF $8,317.95.

YOU CONTEND THAT THE DELAY ENCOUNTERED IN THE REPAIR OF THE DAMAGE WAS NOT CAUSED BY YOU BUT WAS THE FAULT OF THE PROJECT ENGINEER. ALSO, APPARENTLY YOU FEEL THAT OUR OFFICE DOES NOT HAVE THE FULL INFORMATION WITH REGARD TO YOUR CLAIM.

YOU FILE, FORWARDED HERE BY THE BUREAU OF RECLAMATION IN CONNECTION WITH YOUR CLAIM AND WHICH APPEARS TO BE COMPLETE, CONTAINS YOUR LETTER OF JANUARY 12, 1956, TO THE REGIONAL FINANCE OFFICER, SACRAMENTO, CALIFORNIA. IN REGARD TO YOUR COMMENTS IN THAT LETTER, THE PROJECT CONSTRUCTION ENGINEER IN A REPORT DATED JANUARY 17, 1956, TO THE REGIONAL DIRECTOR STATED, IN PART, AS FOLLOWS:

"REFERENCE IS MADE TO YOUR LETTER OF JANUARY 16, 1956, SUBJECT AS ABOVE, REQUESTING OUR COMMENTS ON A LETTER OF JANUARY 12 FROM THE SUBJECT CONTRACTOR.

"AS WILL BE SEEN FROM THE CORRESPONDENCE REFERRED TO IN YOUR JANUARY 16 LETTER, WE WERE ATTEMPTING TO WORK OUT A REASONABLE REPAIR CHARGE FOR THE MATERIAL DURING THE PERIOD IN WHICH MR. BEAM APPARENTLY FEELS WE WERE DILATORY.

"ACTUALLY, THE CONSTRUCTION CONTRACTOR WAS NOT ANXIOUS TO MAKE THE REPAIRS AT THIS TIME DUE TO THE WORK INVOLVED IN REHANDLING AND SORTING THE MATERIAL WHICH HAD BEEN PLACED IN STORAGE IN ITS DAMAGED CONDITION. THE MATTER WILL NOW BE HANDLED BY THE MATERIAL BEING REPAIRED AS IS TAKEN FROM STORAGE FOR INSTALLATION. AS SET FORTH IN OUR LETTER OF OCTOBER 28, 1955, COST OF REPAIRS WOULD HAVE BEEN SEVERAL TIMES AS HIGH AS THE $50 FOR WHICH THE CONSTRUCTION CONTRACTOR WAS WILLING TO AGREE IN ADVANCE TO MAKE THE REPAIRS AT A FUTURE DATE. REALIZING THAT MR. BEAM WAS APPARENTLY A SMALL CONTRACTOR, WE WERE ATTEMPTING TO KEEP THE REPAIR COST AT A MINIMUM. APPARENTLY, HOWEVER, WE SHOULD HAVE HAD EITHER THE GENERAL CONTRACTOR OR SOME PRIVATE MACHINE SHOP IN THE AREA MAKE THE REPAIRS IMMEDIATELY, REGARDLESS OF COST.

"MR. BEAM'S FEELINGS IN THIS MATTER ARE UNDERSTANDABLE. IT IS OUR FEELING, HOWEVER, THAT EVEN WITH THE DISALLOWANCE OF THE 1/2 PERCENT DISCOUNT, MR. BEAM IS FINANCIALLY AHEAD DUE TO THE VERY LOW PRICE WE WERE ABLE TO NEGOTIATE WITH THE GENERAL CONTRACTOR FOR FUTURE PERFORMANCE OF THE WORK.'

THUS, IT DOES NOT APPEAR THAT THE PROJECT CONSTRUCTION ENGINEER WAS GUILTY OF "CARELESSNESS, NEGLIGENCE, INEFFICIENCY" AS YOU CONTENDED IN YOUR LETTER OF JANUARY 12, 1956. ON THE CONTRARY, IT IS APPARENT FROM THE PROJECT CONSTRUCTION ENGINEER'S LETTER OF OCTOBER 28, 1955, REFERRED TO IN THE ABOVE REPORT, THAT EVERY EFFORT WAS MADE TO KEEP THE COST OF REPAIR OF THE DAMAGE AT A MINIMUM, IN ORDER TO PROTECT YOUR INTEREST. THEREFORE, OUR OFFICE CANNOT ACCEPT YOUR STATEMENT THAT THERE WAS AN UNREASONABLE DELAY IN REPAIRING THE DAMAGE. UNDER THE CIRCUMSTANCES AND SINCE UNDER THE TERMS OF THE CONTRACT YOU WERE REQUIRED TO DELIVER THE SUPPLIES AT DESTINATION IN AN UNDAMAGED CONDITION, IT APPEARS THAT THE DISCOUNT WAS PROPERLY DEDUCTED.

ACCORDINGLY, THE SETTLEMENT OF APRIL 16, 1956, IS SUSTAINED.

WITH RESPECT TO YOUR CLAIM FOR INTEREST, YOU ARE ADVISED THAT THE UNITED STATES IS NOT LIABLE FOR THE PAYMENT OF INTEREST ON ANY OF ITS OBLIGATIONS EXCEPT IN THOSE CASES WHERE INTEREST IS EXPRESSLY PROVIDED BY STATUTE OR LAWFULLY ASSUMED BY CONTRACT. SINCE NEITHER OF SUCH PREREQUISITES EXISTS IN THIS CASE THERE IS NO LEGAL BASIS FOR THE ALLOWANCE OF INTEREST. SEE ANGARICA V. BAYARD, 127 U.S. 251; SEABOARD AIRLINE RAILWAY COMPANY V. UNITED STATES, 261 U.S. 299; 27 COMP. GEN. 690, AND CASES THERE CITED.