B-128988, SEPT. 11, 1956

B-128988: Sep 11, 1956

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INC.: REFERENCE IS MADE TO A LETTER DATED AUGUST 1. THE PURCHASE WAS ORIGINATED BY WRITTEN OFFER FROM YOU DATED OCTOBER 1. DELIVERY OF THE SILK WASTE WAS MADE BY YOU TO COVER THE TYPE H LAP SPECIFIED. SINCE THE DELIVERY WAS MADE FROM MATERIAL IMPORTED FROM JAPAN AN IMPORT DUTY OF $1. 511.65 WAS LATER ASSESSED AND PAID. THE CLAIM NOW BEFORE US IS FOR A REFUND OF THIS AMOUNT. " WHICH WAS PLAINLY MARKED TO SHOW ITS JAPANESE ORIGIN. IT IS PERTINENT TO NOTE. BISU LAPS" YOU WERE AWARE OF THE GENERAL TERMS AND CONDITIONS APPLICABLE TO THE PROCUREMENT OF SILK WASTE FOR THE STOCK PILE. IS A REPETITION. MIDDLE EASTERN AND PERSIAN TYPE G - EAST INDIAN TYPE H - WASTE FROM DOMESTIC INDUSTRY (INCLUDING CANADA) " THE GENERAL SERVICES ADMINISTRATION HAS REPORTED THAT CLASSIFICATION OF SILK WASTE AND NOILS AS TO TYPE IS BASED ENTIRELY ON GEOGRAPHIC LOCATION AND IS NOT BASED ON.

B-128988, SEPT. 11, 1956

TO WILCOX AND COMPANY, INC.:

REFERENCE IS MADE TO A LETTER DATED AUGUST 1, 1956, FROM MR. PHILIP NICHOLS, JR., REQUESTING, IN YOUR BEHALF, RECONSIDERATION OF OUR SETTLEMENT DATED JULY 25, 1956, WHICH DISALLOWED YOUR CLAIM FOR $1,511.65 INCURRED AS CUSTOM DUTIES IN CONNECTION WITH THE IMPORTATION OF SILK LAPS FURNISHED THE GENERAL SERVICES ADMINISTRATION UNDER CONTRACT NO. GS-00P- 2331-/SCM), DATED FEBRUARY 7, 1952.

THE CONTRACT COVERS THE PROCUREMENT PURCHASE OF SILK WASTE FOR THE NATIONAL STOCK PILE NEGOTIATED UNDER AUTHORITY OF THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, 60 STAT. 596. THE PURCHASE WAS ORIGINATED BY WRITTEN OFFER FROM YOU DATED OCTOBER 1, 1951, ACCEPTED BY TELEGRAM OF OCTOBER 4, 1951, AND DOCUMENTED BY FORMAL CONTRACT EXECUTED ON FEBRUARY 7, 1952. DELIVERY OF THE SILK WASTE WAS MADE BY YOU TO COVER THE TYPE H LAP SPECIFIED--- WASTE FROM DOMESTIC INDUSTRY (INCLUDING CANADA). HOWEVER, SINCE THE DELIVERY WAS MADE FROM MATERIAL IMPORTED FROM JAPAN AN IMPORT DUTY OF $1,511.65 WAS LATER ASSESSED AND PAID. THE CLAIM NOW BEFORE US IS FOR A REFUND OF THIS AMOUNT.

MR. NICHOLS' REQUEST FOR RECONSIDERATION APPEARS TO BE BASED SOLELY ON HIS CONTENTION THAT THE CONTRACT DESCRIBED THE SILK LAPS TO BE FURNISHED AS "TYPE H, LOT 317" AND, THEREFORE, SINCE PERFORMANCE COULD NOT BE EFFECTED BY THE TENDER OF ANY MATERIAL OTHER THAN "LOT 317," WHICH WAS PLAINLY MARKED TO SHOW ITS JAPANESE ORIGIN, THE APPLICABLE CLAUSE OF THE CONTRACT MAKING IMPORT DUTIES FOR THE ACCOUNT OF THE GOVERNMENT BECOMES OPERATIVE.

IT IS PERTINENT TO NOTE, IN THE FIRST INSTANCE, THAT WHEN YOU MADE THE OFFER TO FURNISH "TYPE H, BISU LAPS" YOU WERE AWARE OF THE GENERAL TERMS AND CONDITIONS APPLICABLE TO THE PROCUREMENT OF SILK WASTE FOR THE STOCK PILE, HAVING PREVIOUSLY EXECUTED FORMAL CONTRACTS WITH THE GOVERNMENT, (CONTRACT GS-OOP-1426-/SCM), DATED AUGUST 3, 1951, AND CONTRACT GS-OOP- 1653-/SCM), DATED SEPTEMBER 18, 1951), COVERING THE SALE TO THE GOVERNMENT OF OTHER LOTS OF SILK WASTE PURCHASED UNDER THE SAME GENERAL TERMS AND CONDITIONS.

THE SUBJECT CONTRACT DESCRIBED THE MATERIAL TO BE DELIVERED AS FOLLOWS:

"SILK BISU LAPS, TYPE H, LOT 317 ABOVE TO BE IN ACCORDANCE WITH NATIONAL STOCKPILE SPECIFICATION P83B, DATED JULY 11, 1951, AS AMENDED, WHICH SPECIFICATION SHALL BE MADE A PART OF THIS CONTRACT BY REFERENCE.'

REFERENCE TO NATIONAL STOCKPILING SPECIFICATION P-83B, IS A REPETITION, VERBATIM, OF LANGUAGE USED IN PRIOR CONTRACT GS-OOP-1653 /SCM) WITH YOU DATED SEPTEMBER 18, 1951.

SPECIFICATION P-83B COVERS EIGHT TYPES OF SILK WASTE AND NOILS, NAMELY:

TABLE

"TYPE A - CHINESE

TYPE B - JAPANESE

TYPE C - ITALIAN (AND EUROPEAN)

TYPE D - BRAZILIAN

TYPE E - SWISS

TYPE F - LEVANTINE, MIDDLE EASTERN AND PERSIAN

TYPE G - EAST INDIAN

TYPE H - WASTE FROM DOMESTIC INDUSTRY (INCLUDING CANADA) "

THE GENERAL SERVICES ADMINISTRATION HAS REPORTED THAT CLASSIFICATION OF SILK WASTE AND NOILS AS TO TYPE IS BASED ENTIRELY ON GEOGRAPHIC LOCATION AND IS NOT BASED ON, OR INDICATIVE OF, QUALITY OR UTILITY. THE ADMINISTRATION DIRECTS ATTENTION TO AND NOTES THAT UNDER SECTION 2B, QUALITY REQUIREMENTS THE SPECIFICATIONS FURTHER PROVIDE:

"TYPES A, B, C, D, E, F, G AND H SHALL CONSIST ENTIRELY OF COMMERCIAL GRADES OF SILK WASTE, AS ACCUMULATED, GRADED, AND SOLD IN THE COUNTRIES OF ORIGIN. FOR THE PURPOSE OF THIS SPECIFICATION SUCH NOILS AS ARE ACCUMULATED, GRADED, AND SOLD AS A BY-PRODUCT OF SILK SPINNING IN COUNTRIES OTHER THAN THAT OF PRIMARY PRODUCTION, WILL BE CONSIDERED NOILS OF THE IMMEDIATE COUNTRY OF SHIPMENT.'

WHAT IS STILL MORE IMPORTANT TO THE ISSUE WITH WHICH WE ARE HERE CONCERNED HOWEVER, IS THE QUESTION AS TO THE VALIDITY OF THE ACCEPTANCE OF THE BID UNDER THE CIRCUMSTANCES REPORTED. IN THIS CONNECTION, IT WAS CONCLUDED, FOR THE REASONS SET FORTH IN OUR SETTLEMENT DATED JULY 25, 1956, THAT THE PROCESSING WITHIN THE CONTINENTAL UNITED STATES, OF CERTAIN RAW MATERIAL INTO THE FORM OF LAPS WOULD, FOR THE PURPOSE OF THE APPLICABLE SPECIFICATIONS, BE CORRECTLY CLASSIFIED AS BISU LAPS, TYPE H. THEREFORE, IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE REASONABLENESS OF THIS CONCLUSION IT APPEARS THAT THERE WAS NO REASON FOR THE PURCHASING OFFICER TO BELIEVE THAT MATERIAL OFFERED F.O.B. PROVIDENCE, RHODE ISLAND, WAS NOT WASTE FROM DOMESTIC INDUSTRY OR TO QUESTION THE VALIDITY OF CLASSIFYING THIS MATERIAL AS "TYPE H.' UNDER THE CIRCUMSTANCES IT PROPERLY WAS HELD IN EFFECT THAT THE BID WAS ACCEPTED IN GOOD FAITH THEREBY CONSUMMATING A VALID AND BINDING OBLIGATION WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES AND THE GOVERNMENT'S RIGHT IN THIS RESPECT--- TO HAVE DELIVERY OF SILK LAPS THAT CONFORMED TO THE SPECIFICATIONS AT THE CONTRACT PRICE--- MAY NOT BE AFFECTED BY THE DELIVERY OF SILK LAPS IMPORTED FROM JAPAN WHICH NECESSARILY CARRIED THE ADDITIONAL IMPORT DUTY.

THE FACT, AS CONTENDED BY MR. NICHOLS, THAT YOU MAY HAVE BEEN REQUIRED TO FURNISH THE SPECIFIC LOT NO. 317 UNDER THE SUBJECT CONTRACT DOES NOT APPEAR TO BE PARTICULARLY MATERIAL SINCE IT IS CLEAR THAT AT THE TIME THE CONTRACT WAS ENTERED INTO THE GENERAL SERVICES ADMINISTRATION HAD THE RIGHT TO, AND DID, EXPECT THAT DELIVERY WOULD BE MADE OF A DOMESTIC SILK LOT WHICH IT BELIEVED WAS REPRESENTED BY THE SAMPLE PREVIOUSLY SUBMITTED, AND THE LOT NUMBER APPARENTLY WAS USED ADMINISTRATIVELY MORE TO ASSOCIATE OR IDENTIFY THE LOT ITSELF WITH THE SAMPLE THAN TO OTHERWISE DISTINGUISH ONE LOT FROM ANOTHER. MOREOVER, WHILE LOT NO. 317 MAY HAVE BEEN PLAINLY MARKED TO SHOW ITS JAPANESE ORIGIN, THERE IS NOTHING IN THE RECORD TO SHOW OR INDICATE THAT THE GOVERNMENT CONTRACTING OFFICER WAS AWARE OF THIS ALLEGED FACT AT THE TIME OF ACCEPTANCE OF THE BID AND CONSUMMATION OF THE CONTRACT, SINCE SUCH INFORMATION APPARENTLY ONLY BECAME KNOWN UPON THE SUBSEQUENT INSPECTION AND ACCEPTANCE OF THE LOT UPON DELIVERY.

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