B-135066, MAR. 21, 1958

B-135066: Mar 21, 1958

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JANUARY 28. TRANSMITTED WITH THE LETTER WERE INVOICES OF THE CLAIMANT AGGREGATING $2. DECISION IS REQUESTED AS TO WHETHER PAYMENT ON THE INVOICES IS AUTHORIZED. IT IS STATED THAT AS A RESULT OF ADVERSE REPORTS ON SIMILAR GREASES DELIVERED BY THIS CONTRACTOR UNDER A PRIOR CONTRACT. NOT TO MAKE ANY SHIPMENTS UNDER THE CONTRACT UNTIL TESTS WERE MADE TO DETERMINE CONFORMANCE WITH THE SPECIFICATIONS. SUBMITTED A SATISFACTORY TEST REPORT WHICH SUBSEQUENTLY WAS CONSIDERED INCONCLUSIVE DUE TO DEFECTS IN SAMPLES. THE CONTRACTOR WAS AUTHORIZED TO CONTINUE THE MANUFACTURE AND DELIVERY OF THE GREASES COVERED BY THE CONTRACT AND FINAL DELIVERIES WERE MADE DURING JANUARY 1957.

B-135066, MAR. 21, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 28, 1058, FROM THE ASSISTANT SECRETARY OF THE NAVY (FINANCIAL MANAGEMENT), RELATIVE TO THE CLAIM OF LEHIGH CHEMICAL PRODUCTS COMPANY OF CHESTERTOWN, MARYLAND, UNDER CONTRACT NO. ASP-14962, DATED MAY 16, 1956, WITH THE ARMED SERVICES PETROLEUM PURCHASING AGENCY. TRANSMITTED WITH THE LETTER WERE INVOICES OF THE CLAIMANT AGGREGATING $2,668.22, INCLUDING $2,186.92 FOR COST OF STORAGE AND $481.30 FOR MARYLAND STATE INVENTORY TAX. DECISION IS REQUESTED AS TO WHETHER PAYMENT ON THE INVOICES IS AUTHORIZED.

THE CONTRACT REQUIRED LEHIGH CHEMICAL PRODUCTS COMPANY TO DELIVER LUBRICATING GREASES TO VARIOUS GOVERNMENT ACTIVITIES ON OR ABOUT JULY 10, 1956. IT CONTAINS A PROVISIONS THAT "ALL INSPECTIONS AND TESTS BY THE GOVERNMENT SHALL BE PERFORMED IN SUCH A MANNER AS NOT TO UNDULY DELAY THE WORK.'

IN THE LETTER OF JANUARY 28, 1958, IT IS STATED THAT AS A RESULT OF ADVERSE REPORTS ON SIMILAR GREASES DELIVERED BY THIS CONTRACTOR UNDER A PRIOR CONTRACT, THE BUREAU OF AERONAUTICS (THE QUALIFYING AGENCY), DEPARTMENT OF THE NAVY, VERBALLY REQUESTED THE CONTRACTOR ON JULY 13, 1956, NOT TO MAKE ANY SHIPMENTS UNDER THE CONTRACT UNTIL TESTS WERE MADE TO DETERMINE CONFORMANCE WITH THE SPECIFICATIONS. BY LETTER DATED AUGUST 17, 1956, THE CONTRACTING OFFICER REQUESTED THE CONTRACTOR TO WITHHOLD SHIPMENTS PENDING COMPLETION OF TESTS. UNDER DATE OF SEPTEMBER 24, 1956, THE CONTRACTOR SUBMITTED A COPY OF TEST RESULTS MADE BY AN INDEPENDENT COMMERCIAL LABORATORY SHOWING THAT THE GREASES TESTED MET CONTRACTUAL SPECIFICATIONS. ON OCTOBER 23, 1956, THE U.S. NAVAL LABORATORY, ANNAPOLIS, MARYLAND, SUBMITTED A SATISFACTORY TEST REPORT WHICH SUBSEQUENTLY WAS CONSIDERED INCONCLUSIVE DUE TO DEFECTS IN SAMPLES. FINAL TESTS CONDUCTED BY REPRESENTATIVES OF THE ARMY, NAVY AND AIR FORCE ON NOVEMBER 27 AND 28, 1956, SHOWED THAT THE GREASES MET SPECIFICATIONS. ACCORDINGLY, BY LETTER DATED DECEMBER 3, 1956, THE CONTRACTOR WAS AUTHORIZED TO CONTINUE THE MANUFACTURE AND DELIVERY OF THE GREASES COVERED BY THE CONTRACT AND FINAL DELIVERIES WERE MADE DURING JANUARY 1957.

THE REFERRED-TO INVOICES COVER EXPENSES INCURRED BY THE CONTRACTOR IN STORING THE THERETOFORE MANUFACTURED GREASES DURING THE PERIOD FROM JULY 28, 1956, TO NOVEMBER 28, 1956, AND IN PAYING THE MARYLAND STATE INVENTORY TAX ON THE GREASES. IT IS STATED IN THE LETTER OF JANUARY 28, 1958, THAT THE AMOUNT OF THE CLAIM IS REPORTED BY THE CONTRACTING OFFICER TO BE FAIR AND REASONABLE; ALSO, THAT THE CONTRACTING OFFICER EXPRESSES THE OPINION THAT THE GOVERNMENT HAD AMPLE TIME BETWEEN JULY 13 AND JULY 28, 1956, TO CONDUCT THE NECESSARY INSPECTION TESTS.

IT APPEARS THAT THE EXPENSES IN QUESTION WERE INCURRED BY THE CONTRACTOR WITHOUT ITS FAULT AND AS A DIRECT RESULT OF THE DELAY IN DELIVERY UNDER THE CONTRACT UNNECESSARILY AND UNREASONABLY CAUSED BY INVOICES IS PROPER. SEE UNITED STATES V. SMITH. 94 U.S. 214; UNITED STATES V. MUELLER, 113 U.S. 156; UNITED STATES V. WYCKOFF PIPE AND CREOSOTING COMPANY, 271 U.S. 263; KEHM CORPORATION V. UNITED STATES, 119 C.CLS. 472. ..END :