B-128580, AUG. 9, 1956

B-128580: Aug 9, 1956

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TO HUDSON PULP AND PAPER CORP.: REFERENCE IS MADE TO YOUR LETTER OF JUNE 26. DELIVERY WAS TO BE MADE. THE SHIPPING POINT WAS SHOWN AS PALATKA. YOU WERE ADVISED THAT THE DESTINATION POINT FOR 197. 200 UNITS WAS CHANGED FROM OAKLAND. YOU WERE FURTHER ADVISED OF ADDITIONAL DIVERSION OF 400. THESE CHANGES WERE COVERED BY MODIFICATION NO. 2 DATED MAY 28. IT WAS NECESSARY TO EXTEND THE CONTRACT DELIVERY SCHEDULE WHEN PRODUCTION WAS RESUMED. THE CONTRACT DELIVERY SCHEDULE WAS EXTENDED TO PROVIDE FOR THE DELIVERY OF 40. IN THIS REGARD IT IS NOTED THAT MODIFICATION NO. 1. YOU STATED THAT YOU WERE ADVISED YOU COULD NOT SHIP BY WATER AND HAD TO SHIP BY RAIL. THIS OFFER WAS ACCEPTED BY THE GOVERNMENT.

B-128580, AUG. 9, 1956

TO HUDSON PULP AND PAPER CORP.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 26, 1956, REQUESTING REVIEW OF OUR SETTLEMENT DATED JUNE 7, 1956, WHICH DISALLOWED YOUR CLAIM FOR EXCESS TRANSPORTATION COSTS IN THE AMOUNT OF $4,059.41, UNDER CONTRACT NO. DA-30- 280-QM-32385, DATED FEBRUARY 2, 1953.

YOU CONTEND, AMONG OTHER THINGS, THAT YOU FAIL TO SEE WHEREIN YOU AGREED TO DELIVER IN ACCORDANCE WITH THE REVISED DELIVERY SCHEDULE AND WITHOUT EXTRA COST TO THE GOVERNMENT. ALSO, YOU CONTEND YOU DID NOT WAIVE, RELINQUISH OR RELEASE THE GOVERNMENT OF ANY AND ALL CLAIMS ARISING OUT OF THE CHANGES IN THE DELIVERY SCHEDULE.

THE CONTRACT PROVIDED FOR THE FURNISHING AND DELIVERY OF 1,200,000 PAPER SACKS AT A UNIT PRICE OF $109.98 PER THOUSAND FOR A TOTAL CONTRACT PRICE OF $131,976. DELIVERY WAS TO BE MADE, F.O.B. DESTINATION, SAN FRANCISCO PORT OF EMBARKATION, OAKLAND, CALIFORNIA, AND THE SHIPPING POINT WAS SHOWN AS PALATKA, FLORIDA. UNDER DATE OF APRIL 30, 1953, YOU WERE ADVISED THAT THE DESTINATION POINT FOR 197,200 UNITS WAS CHANGED FROM OAKLAND, CALIFORNIA, TO MOBILE, ALABAMA. BY LETTER OF MAY 11, 1953, YOU WERE FURTHER ADVISED OF ADDITIONAL DIVERSION OF 400,000 UNITS FROM OAKLAND, CALIFORNIA, TO MOBILE, ALABAMA. THESE CHANGES WERE COVERED BY MODIFICATION NO. 2 DATED MAY 28, 1953.

THE RECORD FURTHER SHOWS THAT AS A RESULT OF A REQUEST OF THE GOVERNMENT FOR CURTAILMENT OF PRODUCTION PENDING REVIEW OF THE CONTRACT REQUIREMENTS, IT WAS NECESSARY TO EXTEND THE CONTRACT DELIVERY SCHEDULE WHEN PRODUCTION WAS RESUMED. BY MODIFICATION NO. 1 DATED APRIL 13, 1953, THE CONTRACT DELIVERY SCHEDULE WAS EXTENDED TO PROVIDE FOR THE DELIVERY OF 40,000 SACKS PER WEEK BEGINNING APRIL 13, THROUGH APRIL 27, 1953, AND 80,000 SACKS PER WEEK BEGINNING MAY 4, 1953, AND CONTINUING AT THIS LATTER RATE UNTIL COMPLETION. IN THIS REGARD IT IS NOTED THAT MODIFICATION NO. 1, PROVIDED, IN PART, AS FOLLOWS:

"THE CONTRACTOR HEREBY WAIVES, RELINQUISHES AND RELEASES THE GOVERNMENT FROM ANY AND ALL CLAIMS ARISING OUT OF SUBJECT CHANGES IN DELIVERY SCHEDULE.'

UNDER DATE OF MAY 28, 1953, YOU GAVE NOTICE THAT YOU EXPECTED TO BE REIMBURSED FOR THE COSTS WHICH YOU ALLEGED YOU HAD INCURRED IN THE SHIPMENT OF THE SACKS BY RAIL INSTEAD OF BY WATER. YOU STATED THAT THE CONTRACT DID NOT REQUIRE SHIPMENT BY EITHER RAIL OR WATER BUT THAT YOU CONTEMPLATED SHIPMENT BY WATER. ALSO, YOU STATED THAT YOU WERE ADVISED YOU COULD NOT SHIP BY WATER AND HAD TO SHIP BY RAIL; AND THAT IN SHIPPING BY RAIL YOU INCURRED ADDITIONAL FREIGHT COSTS IN THE AMOUNT OF $3,919.39, LATER INCREASED TO $4,059.41. IN A LETTER DATED MAY 14, 1953, YOU SUBMITTED INFORMATION SHOWING THE DIFFERENCES IN TRANSPORTATION COSTS BY SHIPPING TO MOBILE, ALABAMA, RATHER THAN TO OAKLAND, CALIFORNIA, AND INDICATED THAT YOU HAD RECEIVED SAVINGS OF $0.96 PER HUNDRED POUNDS AND OFFERED TO RETURN SUCH SAVINGS TO THE GOVERNMENT. THIS OFFER WAS ACCEPTED BY THE GOVERNMENT.

THE ADMINISTRATIVE AGENCY HAS REPORTED THAT IT HAS CONTACTED THE FORMER PURCHASING AGENT FOR THE GOVERNMENT ASSIGNED TO THE SUBJECT CONTRACT WHO INDICATED THAT THE GOVERNMENT IN NEGOTIATING THIS CONTRACT, WAS NOT CONCERNED WITH THE MODE TRANSPORTATION UTILIZED BY YOU. ALSO, HE STATED THAT SO FAR AS HE KNEW SHIPMENTS BY RAIL WERE NECESSITATED IN ORDER TO MEET THE DELIVERY SCHEDULE OF THE REQUISITIONING AGENCY AND INSPECTOR TO YOUR PLANT DIRECTING OR REQUESTING SHIPMENT BY RAIL RATHER THAN BY WATER. THUS, THE RECORDS IN THE CASE ARE NOT CONCLUSIVE AS TO WHETHER, IN FACT, YOU HAD BEEN DIRECTED BY THE GOVERNMENT TO SHIP BY RAIL INSTEAD OF WATER AND, IF SO, WHETHER THE FASTER METHOD WAS NECESSARY IN ORDER TO MEET THE REVISED DELIVERY SCHEDULE. THE PURCHASING AGENT, HAVING RESPONSIBILITY FOR ADMINISTRATION OF THE SUBJECT CONTRACT, DID NOT INDICATE, HOWEVER, THAT HE HAD GIVEN SUCH INSTRUCTION. THE INSPECTOR ASSIGNED TO YOUR PLANT ALSO GIVES NO INDICATION THAT HE INSTRUCTED YOU TO SHIP BY RAIL RATHER THAN BY WATER.

AS STATED ABOVE, YOU DID NOT COMPLETE DELIVERIES UNTIL AFTER THE LAST SCHEDULED DATE OF DELIVERY. BY THE TERMS OF THE CONTRACT IT WAS INCUMBENT UPON YOU TO MEET THE DELIVERY REQUIREMENTS SET FORTH IN THE CONTRACT, AS AMENDED. IF YOU HAD BEEN ADVISED BY GOVERNMENT AGENTS TO UTILIZE A FASTER MODE OF TRANSPORTATION IN ORDER TO ACCOMPLISH TIMELY DELIVERIES, THE GOVERNMENT WAS ONLY ACTING AS THE OTHER PARTY TO THE CONTRACT LOOKING FORWARD TO PROMPT DELIVERY OF THE CONTRACT ITEMS.

SINCE IT IS NOT ESTABLISHED THAT THE GOVERNMENT ORDERED YOU TO ACCOMPLISH DELIVERY BY RAIL FOR ITS OWN CONVENIENCE AND SINCE IT APPEARS THAT DELIVERY BY RAIL WAS NECESSARY IN ORDER TO MEET THE DELIVERY SCHEDULE, THERE IS NO LEGAL BASIS FOR PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE FOR MEETING SUCH DELIVERY SCHEDULE.