B-129855, FEB. 5, 1957

B-129855, FEB. 5, 1957

TO FRANK SAMUEL AND COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 30, 1956, AND ENCLOSURE, REQUESTING REVIEW OF THE DETERMINATION, AS SET FORTH IN A LETTER OF JULY 17, 1956, FROM THE CLAIMS DIVISION OF OUR OFFICE, OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $3,378.69, REPRESENTING EXCESS COSTS INCURRED BY THE GOVERNMENT BY REASON OF YOUR DEFAULT UNDER CONTRACT NO. GS -00S-26234 (SCM), DATED SEPTEMBER 18, 1950.

UNDER THE CONTRACT YOU AGREED TO DELIVER TO THE GENERAL SERVICES ADMINISTRATION 500 LONG DRY TONS OF METALLURGICAL GRADE MANGANESE, F.O.B. CAR, UNITED STATES EASTERN PORTS. THE RECORD SHOWS THAT ONLY 184.68 LONG DRY TONS WERE DELIVERED AND THAT ON JANUARY 4, 1952, YOU WERE NOTIFIED THAT YOUR RIGHT TO PROCEED WITH DELIVERIES WAS TERMINATED. THE GENERAL SERVICES ADMINISTRATION PURCHASED THE UNDELIVERED BALANCE FROM H. GOLODETZ AND COMPANY AT AN EXCESS COST TO THE GOVERNMENT OF $3,378.69.

YOU CONTEND IN YOUR LETTER OF OCTOBER 30, 1956, THAT YOU SHOULD NOT BE CHARGED WITH THE EXCESS COST DUE TO THE FACT THAT ON OR ABOUT NOVEMBER 15, 1950, YOU ADVISED (PRESUMABLY THE GENERAL SERVICES ADMINISTRATION IN WASHINGTON) THAT YOU HAD AFLOAT ORE FROM TURKEY IN SUFFICIENT AMOUNTS TO MEET THE CONTRACT REQUIREMENTS AND REQUESTED PERMISSION TO MAKE DELIVERY. ALSO, YOU ALLEGE THAT, SINCE AT THAT TIME THE ORE WAS IN DEMAND FOR COMMERCIAL CONSUMPTION, YOU WERE ADVISED BY THE ADMINISTRATION TO SELL THE ORE TO THE UNION CARBIDE AND CARBON CORPORATION, WHICH YOU DID. YOUR LETTER AND ENCLOSURE WERE FORWARDED TO THE GENERAL SERVICES ADMINISTRATION WITH THE REQUEST THAT A REPORT WITH REGARD TO THE CONTENTIONS RAISED THEREIN BE MADE TO OUR OFFICE. THE REPORT NOW HAS BEEN RECEIVED TO THE EFFECT THAT THE GENERAL SERVICES ADMINISTRATION HAS NO RECORD THAT YOU WERE ADVISED AS ALLEGED.

OUR OFFICE, HAVING NO FIRST-HAND KNOWLEDGE OF THE FACTS, MUST NECESSARILY RELY ON THE REPORT OF THE ADMINISTRATIVE OFFICE WITH RESPECT TO THE FACTUAL SITUATIONS ARISING UNDER THE CONTRACT. IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF, IT IS THE INVARIABLE RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO ACCEPT THE STATEMENT OF FACTS AS REPORTED BY THE ADMINISTRATIVE OFFICERS. THERE IS NOTHING IN THE PRESENT RECORD TO JUSTIFY THE APPLICATION OF A DIFFERENT RULE TO THIS CASE.

IT HAS BEEN HELD REPEATEDLY BY THE COURTS THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN AND THAT THE FACT THAT SUPERVENING OR UNFORESEEN CAUSES RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASION A LOSS, IS NOT SUFFICIENT TO EXCUSE PERFORMANCE. AMONG THE MANY DECISIONS RENDERED, SEE SUN PUBLISHING CO. V. MOORE, 183 U.S. 642; PENN BRIDGE CO. V. UNITED STATES, 31 C.CLS. 244; PENNSYLVANIA HARDWARE CO. V. UNITED STATES, 49 C.CLS. 327. IF A PARTY CHARGES HIMSELF WITH AN OBLIGATION WHICH AT THE TIME WAS POSSIBLE OF PERFORMANCE HE MUST ABIDE BY IT UNLESS PERFORMANCE IS RENDERED IMPOSSIBLE BY AN ACT OF GOD, BY THE LAW, OR BY THE OTHER PARTY, OR IS EXCUSED UNDER THE EXPRESS TERMS OF THE CONTRACT. IT CANNOT BE SAID THAT ANY ONE OF THE FIRST-MENTIONED REASONS WAS THE CAUSE OF YOUR DEFAULT NOR DOES IT APPEAR THAT THE BASIS OF YOUR REFUSAL TO PERFORM THE CONTRACT COMES WITHIN ANY EXCUSABLE OR UNFORESEEABLE CAUSES ARISING BEYOND YOUR CONTROL AS SET FORTH IN ARTICLE 12 OF THE GENERAL CONDITIONS OF THE CONTRACT. SEE, GENERALLY, UNITED STATES V. GLEASON, 175 U.S. 588; CARNEGIE STEEL CO. V. UNITED STATES, 240 U.S. 156. IN THIS REGARD, IT IS NOTED THAT YOU IMPLY THAT THE CONTRACT REQUIRED YOU TO DELIVER TURKISH ORE ONLY AND THAT SINCE THE AREA IN TURKEY FROM WHICH YOU INTENDED TO FURNISH THE ORE INVOLVED WAS EXHAUSTED, YOU SHOULD BE EXCUSED FOR YOUR FAILURE TO DELIVER. THE RECORDS SHOW THAT ON SEPTEMBER 25, 1951, YOU WERE ADVISED BY PHONE THAT UNLESS YOU FURNISHED THE REQUIRED TONNAGE ,EITHER FROM TURKEY OR SOME OTHER SOURCE" PURCHASE WOULD BE MADE AGAINST YOUR ACCOUNT. THIS NEGATIVES THE ALLEGED REQUIREMENT FOR TURKISH ORE ONLY. ALSO, IN YOUR LETTER OF AUGUST 28, 1951, TO THE PURCHASING OFFICE YOU STATED THAT YOU FAILED TO SECURE ORE FROM A SECOND SOURCE IN TURKEY BECAUSE SOME ORE BROKERS OFFERED A HIGHER PRICE FOR THE ORE AND THEN RECEIVED THAT ORE.

ALSO, YOU CONTEND THAT IN THE EVENT YOU ARE LIABLE FOR THE EXCESS COSTS DUE TO YOUR DEFAULT, THE AMOUNT OF THE DAMAGES SHOULD BE REDUCED BY 10 PERCENT. WHILE ARTICLE 9 OF THE CONTRACT DOES PROVIDE THAT ANY VARIATION IN THE QUANTITIES DELIVERED UNDER THE CONTRACT, NOT EXCEEDING 10 PERCENT, WOULD BE ACCEPTED, WHEN CAUSED BY CONDITIONS OF LOADING, SHIPPING, PACKING OR ALLOWANCE IN MANUFACTURING PROCESSES, SUCH PROVISION IN NO WAY WAS INTENDED TO MITIGATE THE EXCESS COST ARISING UNDER THE CONTRACT. YOU DELIVERED ONLY A FRACTION OF THE QUANTITY REQUIRED UNDER THE CONTRACT AND, CONSEQUENTLY, THE VARIATION PROVISION WAS NOT FOR APPLICATION. FOR THE SAME REASON THE ALLEGED CUSTOMARY TRADE VARIATION WOULD NOT BE APPLICABLE HERE.

ACCORDINGLY, THERE EXISTS NO LEGAL BASIS UPON WHICH OUR OFFICE MAY RELIEVE YOU OF THE EXCESS COSTS INCURRED BY THE GENERAL SERVICES ADMINISTRATION BY REASON OF THE DEFAULT UNDER YOUR CONTRACT. UNLESS PROMPT ARRANGEMENTS ARE MADE WITH OUR OFFICE FOR THE SATISFACTION OF THE FULL AMOUNT OF YOUR INDEBTEDNESS, THE MATTER NECESSARILY WILL BE REFERRED TO THE ATTORNEY GENERAL FOR SUCH FURTHER COLLECTION ACTION AS MAY BE REQUIRED.