B-130068, FEB. 18, 1957

B-130068, FEB. 18, 1957

TO MAUST COAL AND COKE CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 19, 1956, REQUESTING REVIEW OF SETTLEMENT DATED SEPTEMBER 26, 1956, WHICH DISALLOWED YOUR CLAIM FOR $1,559.40, ALLEGED TO BE DUE AS A PARTIAL REFUND OF LIQUIDATED DAMAGES ASSESSED AGAINST YOUR FIRM BY THE DEPARTMENT OF THE ARMY UNDER CONTRACT NO. N424S-149, DATED MAY 8, 1953.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO DELIVER A CERTAIN QUANTITY OF COAL TO FORT DIX, NEW JERSEY, FOR A STIPULATED PRICE. YOU WERE PERMITTED TO SHIP COAL FROM THE CALLAHAN AND MCINTOSH MINES AND IT APPEARS THAT SHIPMENTS WERE MADE ONLY FROM THESE TWO MINES. THE CONTRACT PROVIDED THAT, IF THE COAL DID NOT MEET CERTAIN REQUIREMENTS, LIQUIDATED DAMAGES WOULD BE ASSESSED IN ACCORDANCE WITH A GIVEN FORMULA. YOU CONTEND THAT LIQUIDATED DAMAGES SHOULD NOT BE ASSESSED ON THE SHIPMENTS INVOLVED, DUE TO THE FACT THAT THE SAMPLES TAKEN CONTAINED COAL FROM TWO OR MORE MINES.

THE RECORD SHOWS THAT THE COAL REPRESENTED BY SAMPLES NOS. 15-U AND 19-U WAS TAKEN FROM THE MCINTOSH ONLY. HOWEVER, ASSUMING THAT ALL THE SAMPLES INVOLVED CONTAINED COAL TAKEN FROM TWO OR MORE MINES, SUCH FACT WOULD NOT APPEAR TO PRECLUDE THE USE OF THE ANALYSES OF THE SAMPLES FOR THE PURPOSE OF ASSESSING LIQUIDATED DAMAGES. THE CONTRACT PROVIDES THAT THE COLLECTING AND PREPARING OF SAMPLES SHOULD BE IN ACCORDANCE WITH "BUREAU OF MINES HANDBOOK ON COAL SAMPLING.' THERE IS NO AFFIRMATIVE REQUIREMENT IN THE BUREAU OF MINES HANDBOOK ON COAL SAMPLING OR IN THE GENERAL PROVISION OF THE CONTRACT THAT SAMPLES SHALL BE RESTRICTED TO COAL FROM SINGLE MINES. IT HAS BEEN DETERMINED THAT THE SAMPLES, HAVING BEEN PROPERLY COLLECTED AND PREPARED FOR ANALYSES BY THE BUREAU OF MINES, ACCURATELY REPRESENT THE QUALITY OF COAL DELIVERED. SINCE UNDER THE TERMS OF THE CONTRACT THE ANALYSES MADE BY THE BUREAU OF MINES IS FINAL AND CONCLUSIVE UPON THE PARTIES, THE GOVERNMENT HAS THE RIGHT TO ASSESS LIQUIDATED DAMAGES FOR COAL NOT MEETING THE CONTRACT REQUIREMENTS.

THE FACT THAT THE UNITED STATES NAVY FUEL SUPPLY OFFICE TAKES THE POSITION THAT SAMPLES CONTAINING COAL TAKEN FROM TWO OR MORE MINES SHOULD BE DELETED FROM ITS PERMANENT RECORDS AS TO THE QUALITY OF COAL FROM EACH OF THE MINES INVOLVED FOR PROCUREMENT PURPOSES, DOES NOT AFFECT THE RIGHT OF THE GOVERNMENT TO ASSESS LIQUIDATED DAMAGES FOR DELIVERY OF INFERIOR COAL, IN THE ABSENCE OF A SPECIFIC CONTRACTUAL PROVISION MAKING THE SAME LIMITATIONS APPLICABLE FOR PURPOSES OF ACCOUNTING AND PAYMENT.

IT APPEARS THAT THROUGH CLERICAL ERROR THE RECORDS SHOWED THAT THE COAL IN SAMPLE 19-U WAS TAKEN FROM CAR PRR-156758, WHICH INVOLVED COAL SHIPPED BY ANOTHER CONTRACTOR. HOWEVER, THE RECORDS NOW SHOW THAT THE COAL IN THAT SAMPLE WAS NOT TAKEN FROM CAR PRR-156758, AND THAT THE SAMPLE WAS PROPERLY TAKEN FROM COAL DELIVERED BY YOU FROM THE MCINTOSH MINE UNDER THE CONTRACT INVOLVED.