B-13755, MARCH 6, 1941, 20 COMP. GEN. 503

B-13755: Mar 6, 1941

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CONTRACTS - INCREASED COSTS - DEFAULTING CONTRACTOR - IMPOSSIBILITY OF PERFORMANCE WHERE THE NAME AND LOCATION OF THE CONTRACTOR'S FACTORY WERE DESIGNATED IN THE CONTRACT SO THAT IT REASONABLY MAY BE PRESUMED THAT THE PARTIES CONTRACTED WITH REFERENCE TO SUPPLIES PRODUCED AT THAT PARTICULAR FACTORY. AS FOLLOWS: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 11. WAS COMPLETELY DESTROYED BY FIRE. M. HOLLINGSHEAD CORPORATION ADVISED THIS OFFICE OF THE EXPLOSION AND FIRE STATING THAT THE BUILDING IN WHICH THE GREASE WAS MANUFACTURED WAS COMPLETELY DEMOLISHED AND THAT THEY HAD NO OTHER PLANT WHERE THE GREASE COULD BE MANUFACTURED. THE GREASE COVERED BY THE CONTRACT WAS A SPECIAL LUBRICANT AND WAS NOT CARRIED IN STOCK.

B-13755, MARCH 6, 1941, 20 COMP. GEN. 503

CONTRACTS - INCREASED COSTS - DEFAULTING CONTRACTOR - IMPOSSIBILITY OF PERFORMANCE WHERE THE NAME AND LOCATION OF THE CONTRACTOR'S FACTORY WERE DESIGNATED IN THE CONTRACT SO THAT IT REASONABLY MAY BE PRESUMED THAT THE PARTIES CONTRACTED WITH REFERENCE TO SUPPLIES PRODUCED AT THAT PARTICULAR FACTORY, AND A FIRE, OCCURRING WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, AN EXCUSABLE CAUSE OF DELAY UNDER THE CONTRACT, DESTROYED THE PLANT SO DESIGNATED, THE CONTRACTOR MAY BE RELEASED FROM LIABILITY FOR ANY EXCESS COSTS INCURRED BY THE GOVERNMENT IN PURCHASING THE SUPPLIES IN THE OPEN MARKET. 16 COMP. GEN. 983, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, MARCH 6, 1941:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF JANUARY 9, 1941, AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 11, 1940, RELATIVE TO THE CONTRACT WITH THE R. M. HOLLINGSHEAD CORPORATION FOR LUBRICATING GREASES.

THE HOLABIRD QUARTERMASTER DEPOT UNDER DATE OF JULY 1, 1940, ENTERED INTO A CONTRACT NO. W-398-QM-7970 WITH THE R. M. HOLLINGSHEAD CORPORATION FOR CERTAIN GREASES FOR THE PERIOD ENDING DECEMBER 31, 1940. DURING THE LATTER PART OF JULY, THE PLANT IN WHICH THIS COMPANY MANUFACTURED GREASE AT CAMDEN, NEW JERSEY, WAS COMPLETELY DESTROYED BY FIRE. GREASE HAD NOT BEEN REQUIRED BY ANY OF THE STATIONS COVERED BY THE CONTRACT UP TO THE TIME OF THE FIRE AND NO ORDERS HAD BEEN PLACED. THE R. M. HOLLINGSHEAD CORPORATION ADVISED THIS OFFICE OF THE EXPLOSION AND FIRE STATING THAT THE BUILDING IN WHICH THE GREASE WAS MANUFACTURED WAS COMPLETELY DEMOLISHED AND THAT THEY HAD NO OTHER PLANT WHERE THE GREASE COULD BE MANUFACTURED. THE GREASE COVERED BY THE CONTRACT WAS A SPECIAL LUBRICANT AND WAS NOT CARRIED IN STOCK. THEY REQUESTED THAT THEY BE RELEASED FROM THE CONTRACT.

IN VIEW OF DECISION A-84472, MAY 1937, VOLUME 16, PAGE 983, THE CASE WAS NOT SUBMITTED FOR DECISION, BUT THE CONTRACTOR WAS CALLED UPON TO PERFORM UNDER THE CONTRACT AND ADVISED THAT IF HE FAILED TO MAKE DELIVERIES AS CALLED FOR, THAT PURCHASE WOULD BE MADE AGAINST HIS ACCOUNT.

COPY OF CONTRACT BULLETIN NUMBER 123 AND PERTINENT PAPERS ARE ATTACHED.

CONTRACT NO. W-398-QM-7970, ENTERED INTO UNDER DATE OF JULY 1, 1940, BY THE PURCHASING AND CONTRACTING OFFICER, HOLABIRD QUARTERMASTER DEPOT, ON BEHALF OF THE UNITED STATES, WITH THE R. M. HOLLINGSHEAD CORPORATION, COVERS THE FURNISHING OF AN INDEFINITE QUANTITY OF MINERAL LUBRICATING GREASES FOR AUTOMOTIVE USE FOR THE PERIOD JULY 1 TO DECEMBER 31, 1940, IN ACCORDANCE WITH CERTAIN DESIGNATED SPECIFICATIONS, SCHEDULES, AND CONDITIONS ATTACHED TO AND MADE A PART OF THE CONTRACT. SCHEDULE "A" DIVIDES THE DELIVERY AREA, COMPRISING CONTINENTAL UNITED STATES, INTO 10 REGIONS, AND SETS FORTH THE PRICE OF EACH ITEM OF LUBRICATING GREASE IN EACH REGION, AND ARTICLE 1 OF THE CONTRACT REQUIRES DELIVERY F. O. B. ANY DESTINATION WITHIN A REGION WITHIN 10 DAYS AFTER RECEIPT OF ORDER. THE SCHEDULE OF SUPPLIES STATES THE CONTRACTOR'S FACTORY NAME AND LOCATION AS "R. M. HOLLINGSHEAD CORP. CAMDEN, N.J., " AND THERE IS ATTACHED TO THE CONTRACT A LIST OF STATES SHOWING THE WAREHOUSES, FOUR IN NUMBER, FROM WHICH DELIVERY CAN BE MADE, SUCH LIST HAVING BEEN REQUIRED BY PARAGRAPH 17 OF THE INVITATION FOR BIDS, WHICH PROVIDED THAT DISTRIBUTION FACILITIES AND ACCESSIBILITY WOULD NECESSARILY BE DETERMINING FACTORS IN MAKING AWARDS.

WITH RESPECT TO THE QUANTITIES OF SUPPLIES TO BE FURNISHED UNDER THE CONTRACT, PARAGRAPH 1 OF THE APPLICABLE CONDITIONS PROVIDES:

1. SUPPLIES WILL BE ORDERED FROM TIME TO TIME BY ACTIVITIES OF THE QUARTERMASTER CORPS AND WAR DEPARTMENT CIVILIAN CONSERVATION CORPS IN SUCH QUANTITIES AS MAY BE NEEDED. AS IT IS IMPOSSIBLE TO DETERMINE THE PRECISE QUANTITIES OF DIFFERENT ITEMS DESCRIBED IN THIS CONTRACT THAT WILL BE REQUIRED DURING THE CONTRACT TERM, THE CONTRACTOR WILL BE OBLIGATED TO DELIVER ALL SUPPLIES OF THE KIND CONTRACTED FOR, THAT MAY BE ORDERED DURING THE CONTRACT TERM. THE ESTIMATED ANNUAL REQUIREMENTS OF EACH ARTICLE ARE GIVEN FOR INFORMATION ONLY, AND WILL NOT RELIEVE THE AGENCIES AND ACTIVITIES OF THE UNITED STATES ARMY AND THE CIVILIAN CONSERVATION CORPS FOR THE USE OF WHICH THE CONTRACT IS MADE, OF THE OBLIGATION TO ORDER FROM THE CONTRACTOR ALL ARTICLES COVERED BY THE CONTRACT THAT MAY, IN THE JUDGMENT OF THE ORDERING OFFICERS, BE NEEDED; AND SHALL NOT RELIEVE THE CONTRACTOR OF HIS OBLIGATION TO FILL ALL SUCH ORDERS.

WITH RESPECT TO THE RIGHTS OF THE GOVERNMENT IN THE EVENT THE CONTRACTOR REFUSES OR FAILS TO DELIVER THE SUPPLIES WITHIN THE TIME SPECIFIED, ARTICLE 5 OF THE CONTRACT PROVIDES:

DELAYS--- DAMAGES.--- IF THE CONTRACTOR REFUSES OR FAILS TO MAKE DELIVERIES OF THE MATERIALS OR SUPPLIES WITHIN THE TIME SPECIFIED IN ARTICLE 1, OR ANY EXTENSION THEREOF, THE GOVERNMENT MAY BY WRITTEN NOTICE TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED WITH DELIVERIES OR SUCH PART OR PARTS THEREOF AS TO WHICH THERE HAS BEEN DELAY. IN SUCH EVENT, THE GOVERNMENT MAY PURCHASE SIMILAR MATERIALS OR SUPPLIES IN THE OPEN MARKET OR SECURE THE MANUFACTURE AND DELIVERY OF THE MATERIALSAND SUPPLIES BY CONTRACT OR OTHERWISE, AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COST OCCASIONED THE GOVERNMENT THEREBY: PROVIDED, THAT THE CONTRACTOR SHALL NOT BE CHARGED WITH ANY EXCESS COST OCCASIONED THE GOVERNMENT BY THE PURCHASE OF MATERIALS OR SUPPLIES IN THE OPEN MARKET OR UNDER OTHER CONTRACTS WHEN THE DELAY OF THE CONTRACTOR IN MAKING DELIVERIES IS DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, UNUSUALLY SEVERE WEATHER, AND DELAYS OF A SUBCONTRACTOR DUE TO SUCH CAUSES UNLESS THE CONTRACTING OFFICER SHALL DETERMINE THAT THE MATERIALS OR SUPPLIES TO BE FURNISHED UNDER THE SUBCONTRACT ARE PROCURABLE IN THE OPEN MARKET, IF THE CONTRACTOR SHALL NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSE OF ANY SUCH DELAY, WITHIN 10 DAYS FROM THE BEGINNING THEREOF, OR WITHIN SUCH FURTHER PERIOD AS THE CONTRACTING OFFICER SHALL, WITH THE APPROVAL OF THE HEAD OF THE DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVE, PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT, GRANT FOR THE GIVING OF SUCH NOTICE. THE CONTRACTING OFFICER SHALL THEN ASCERTAIN THE FACTS AND EXTENT OF DELAY, AND HIS FINDINGS OF FACT THEREON SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO, SUBJECT ONLY TO APPEAL WITHIN 30 DAYS BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION ON SUCH APPEAL AS TO THE FACTS OF DELAY SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO.

IN VIEW OF THE ABOVE-QUOTED PROVISION REQUIRING THE CONTRACTOR TO DELIVER AND THE DESIGNATED GOVERNMENT AGENCIES TO ORDER FROM THE CONTRACTOR ALL ARTICLES COVERED BY THE CONTRACT THAT MAY, IN THE JUDGMENT OF THE ORDERING OFFICERS, BE NEEDED, THE CONTRACT WAS VALID AND BINDING ON BOTH PARTIES NOTWITHSTANDING NO DEFINITE QUANTITIES WERE SPECIFIED THEREIN, AND THE CONTRACTOR WAS BOUND TO FURNISH ANY SUPPLIES ORDERED UNDER THE CONTRACT UNLESS EXCUSED BY THE PROVISIONS THEREOF OR BY OPERATION OF LAW. SEE WILLARD, SUTHERLAND, AND COMPANY V. UNITED STATES, 262 U.S. 489, AND CASES THEREIN CITED.

BY LETTER OF AUGUST 1, 1940, THE CONTRACTOR ADVISED THE CONTRACTING OFFICER AS FOLLOWS:

WE HAVE YOUR CONTRACT EXPIRING DECEMBER 31, 1940, FOR VARIOUS KINDS OF LUBRICATING GREASE. WE HAVE HAD ONE OF THE WORST CATASTROPHIES THAT HAS EVER HAPPENED IN THE CITY OF CAMDEN. WE DO NOT KNOW HOW SOON WE CAN GET OUR FILLING DEPARTMENT TOGETHER FOR GREASES BUT WE WOULD APPRECIATE BEING RELEASED FROM THIS CONTRACT. WILL YOU KINDLY LET US HAVE A NOTICE TO THAT EFFECT.

THE CONTRACT BEGAN ON JULY ST AND WE HAVE NOT TO DATE, RECEIVED AN ORDER. WE HAVE NOT STOCKED ANY OF THIS GREASE IN THE WAREHOUSE DUE TO THE FACT THAT WE HAVE NOT RECEIVED ANY ORDERS OR INQUIRIES AT ANY POINT.

WE WILL APPRECIATE YOUR RETAINING OUR NAME ON YOUR MAILING LIST TO RECEIVE BID FORMS BECAUSE WE EXPECT TO BE IN A POSITION IN THE NEAR FUTURE TO SUPPLY THESE ARTICLES. THE FIRE, HOWEVER, DID NOT HANDICAP US FROM MANUFACTURING ALL ARTICLES AS WE HAVE ANOTHER SET OF BUILDINGS LOCATED ABOUT NINE SQUARES FROM OUR REGULAR FILLING DEPARTMENT.

IN LETTERS OF AUGUST 8, 1940, THE CONTRACTOR FURTHER ADVISED THE CONTRACTING OFFICER THAT THE LUBRICANT CALLED FOR UNDER THE CONTRACT WAS A SPECIAL LUBRICANT NOT CARRIED AS A STOCK ITEM; THAT IT WAS NOT THEN IN A POSITION TO MAKE ANY KIND OF GREASE, AND THAT THE FIRE PREVIOUSLY REFERRED TO TOOK PLACE ON JULY 30, 1940; AND THE CONTRACTOR AGAIN REQUESTED RELEASE FROM THE OBLIGATION OF ITS CONTRACT. IN RESPONSE TO AN INQUIRY FROM THE CONTRACTING OFFICER AS TO WHETHER IT HAD ANY OTHER FACTORY IN WHICH THE GREASES COULD BE MANUFACTURED, THE CONTRACTOR IN LETTER OF AUGUST 19, 1940, STATED:

WE VERY DEEPLY REGRET TO ADVISE YOU THAT WE MANUFACTURED GREASE AT ONE PLANT, NAMELY, 9TH AND MARKET STREETS, CAMDEN, NEW JERSEY. THIS BUILDING HOUSED ALL OUR STEAM-JACKETED MIXING KETTLES AND FILLING EQUIPMENT FOR THE PRODUCTION AND FILLING OF LUBRICANTS. THIS PARTICULAR BUILDING WAS COMPLETELY DEMOLISHED, BURNED DOWN TO THE STREET LEVEL, RENDERING ALL EQUIPMENT POSITIVELY USELESS. WE VERY DEEPLY REGRET THAT WE DO NOT HAVE ANY OTHER PLANT THAT CAN MANUFACTURE THIS MERCHANDISE.

AS IT WILL BE APPROXIMATELY NINETY DAYS BEFORE WE WILL AGAIN BE IN THE PROCESS OF MANUFACTURING LUBRICANTS, WE THINK IT WOULD BE TO THE BEST INTEREST OF THE GOVERNMENT TO RELIEVE US OF OUR RESPONSIBILITY ON THIS CONTRACT AND PURCHASE SAME FROM SOME OTHER SOURCE. THIS IS THE FIRST TIME IN ALL OUR FIFTY YEARS OF DOING BUSINESS WITH THE U.S. GOVERNMENT THAT WE HAVE ASKED FOR ANY SUCH RELIEF. IT HAS ALWAYS BEEN OUR POLICY TO ACCEPT AND FULFILL ALL CONTRACTS WITH THE U.S. GOVERNMENT. HOWEVER, AT A TIME LIKE THIS, WE HAVE NO OTHER ALTERNATIVE THAN TO ASK FOR RELIEF. THEREFORE REQUEST THAT WE BE RELIEVED OF OUR OBLIGATIONS UNDER THE ABOVE REFERRED TO CIRCUMSTANCES.

IT APPEARS FROM OTHER EVIDENCE OF RECORD THAT THE CONTRACTOR'S REQUESTS FOR RELIEF WERE REFERRED BY THE CONTRACTING OFFICER TO THE QUARTERMASTER GENERAL FOR ADVICE AS TO THE PROPER ACTION TO BE TAKEN, AND THAT ON SEPTEMBER 18, 1940, THE CONTRACTOR WAS ADVISED BY THE CONTRACTING OFFICER THAT IN VIEW OF THE DECISION OF THE COMPTROLLER GENERAL, 16 COMP. GEN. 983, IT WAS CALLED UPON TO PERFORM, AND THAT IN THE EVENT IT FAILED TO MAKE DELIVERIES AS CALLED FOR PURCHASES WOULD BE MADE AGAINST ITS ACCOUNT.

IN THE MEANTIME, THE QUARTERMASTER GENERAL, ON SEPTEMBER 14, 1940 ISSUED CONTRACT BULLETIN NO. 123, NOTIFYING ORDERING OFFICERS OF THE EXECUTION AND PROVISIONS OF CONTRACT NO. W-398-QM-7970, AND OF THE PROCEDURE TO BE FOLLOWED IN PLACING ORDERS THEREUNDER. BY SUPPLEMENT NO. 1 TO SAID BULLETIN, THE QUARTERMASTER GENERAL, ON NOVEMBER 13, 1940, DIRECTED CONTRACTING OFFICERS TO PURCHASE IN THE OPEN MARKET THEIR REQUIREMENTS OF LUBRICATING GREASES CALLED FOR UNDER THE CONTRACT, ANY EXCESS COST TO BE CHARGED TO THE CONTRACTOR.

IT IS EVIDENT FROM THE LETTER OF THE CONTRACTING OFFICER DATED SEPTEMBER 18, 1940, REFERRED TO ABOVE, AND FROM YOUR LETTER OF JANUARY 9, 1941, THAT THE COLLECTION OF EXCESS COSTS FROM THE CONTRACTOR IN THIS CASE WAS CONSIDERED BY THE ADMINISTRATIVE OFFICERS AS REQUIRED BY THE DECISION OF THIS OFFICE DATED MAY 6, 1937, 16 COMP. GEN. 983, WHICH HELD--- QUOTING FROM THE SYLLABUS--- AS FOLLOWS:

WHERE THE SUPPLIES INVOLVED WERE POSSIBLE OF PROCUREMENT ELSEWHERE, THE FACT THAT A RIVER AT FLOOD STAGE MAY HAVE INTERFERED WITH, OR EVEN PREVENTED, THE OPERATION OF THE CONTRACTOR'S PLANT AFFORDS NO LEGAL JUSTIFICATION FOR THE FAILURE TO MAKE DELIVERIES AS REQUIRED BY THE TERMS OF THE CONTRACT, AND THE CONTRACTOR IS CHARGEABLE WITH THE INCREASED COST TO THE GOVERNMENT BECAUSE OF THE CONSEQUENT NECESSITY FOR SUCH OTHER PROCUREMENT.

HOWEVER, IT DOES NOT APPEAR FROM EXAMINATION OF SAID DECISION THAT THE CONTRACT THERE INVOLVED CONTEMPLATED THE OBTAINING OF THE SUPPLIES FROM ANY PARTICULAR SOURCE, OR THAT SUCH CONTACT MADE ANY PROVISION FOR RELIEVING THE CONTRACTOR FROM ITS OBLIGATIONS FOR ANY CAUSE WHATSOEVER. COMPARE 17 COMP. GEN. 466; ID. 864. IN THE INSTANT CASE, ON THE OTHER HAND, THE NAME AND LOCATION OF THE CONTRACTOR'S FACTORY WERE DESIGNATED IN THE CONTRACT ITSELF, AND IT REASONABLY MAY BE PRESUMED THAT THE PARTIES CONTRACTED WITH REFERENCE TO SUPPLIES PRODUCED AT THAT PARTICULAR FACTORY.

IT IS A WELL-RECOGNIZED EXCEPTION TO THE ABSOLUTE OBLIGATION OF A CONTRACT THAT, IN CONTRACTS WHERE THE PERFORMANCE DEPENDS ON THE CONTINUED EXISTENCE OF A GIVEN PERSON OR THING, A CONDITION IS IMPLIED, THAT THE IMPOSSIBILITY OF PERFORMANCE ARISING, WITHOUT THE FAULT OF THE CONTRACTOR, FROM THE PERISHING OF THE PERSON OR THING, SHALL EXCUSE THE PERFORMANCE. THE TORNADO, 108 U.S. 342, 351; THE CLAVERESK ( C.C.A. 2), 264 FED. 276; NORTH AMERICAN OIL CO. V. GLOBE PIPE LINE CO. ( C.C.A. 8), 6 FED. (2D) 564; STEWART V. STONE, 127 N.Y. 500, 28 N.E. 595; PEARSON V. MCKINNEY, 160 CAL. 649, 117 PAC. 919.

MOREOVER, THE CONTRACT IN THIS CASE PROVIDES IN ARTICLE 5, QUOTED ABOVE, THAT THE CONTRACTOR SHALL NOT BE CHARGED WITH ANY EXCESS COST WHEN THE DELAY OF THE CONTRACTOR IN MAKING DELIVERIES IS DUE TO UNFORESEEABLE CAUSES BEYOND ITS CONTROL AND WITHOUT ITS FAULT OR NEGLIGENCE, INCLUDING FIRES, PROVIDED NOTICE IS GIVEN THE CONTRACTING OFFICER IN WRITING WITHIN TEN DAYS FROM THE BEGINNING OF THE DELAY. SUCH PROVISION RESTRICTS THE RIGHT OF THE GOVERNMENT TO COLLECT EXCESS COSTS FOR DELAY IN DELIVERY, AND MUST BE GIVEN EFFECT TO THE EXTENT APPLICABLE. SEE GRECO CANNING CO. V. P. PASTENE AND CO., INC. ( C.C.A. 9), 277 FED. 877; MAXWELL ET AL. V. ZENITH LIMESTONE CO., 142 OKLA. 286, 286 PAC. 879; 17 COMP. DEC. 881. THIS CONNECTION, WHILE THE RECORD SHOWS THAT THE REQUISITE NOTICE OF DELAY WAS GIVEN BY THE CONTRACTOR, WITHIN TWO DAYS AFTER THE DESTRUCTION OF ITS PLANT BY FIRE, IT DOES NOT SHOW THAT THE CONTRACTING OFFICER HAS EVER ACTED UPON SUCH NOTICE IN THE MANNER PROVIDED IN SAID ARTICLE 5 OF THE CONTRACT; THAT IS, BY ASCERTAINING THE FACTS AND EXTENT OF DELAY, THE INSTRUCTIONS BY THE QUARTERMASTER GENERAL DIRECTING THE CHARGING OF EXCESS COST AGAINST THE CONTRACTOR NOT BEING THE FINDINGS OF FACT BY THE CONTRACTING OFFICER MADE FINAL AND CONCLUSIVE UPON THE PARTIES BY SAID ARTICLE. SEE 18 COMP. GEN. 870; 19 ID. 358, AND CASES THEREIN CITED.

WHILE IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICER UNDER THE PROVISIONS OF THE CONTRACT TO FIND THE FACTS AND EXTENT OF THE DELAY, IT MAY BE NOTED THAT NOTWITHSTANDING THE CONTRACT WAS ENTERED INTO UNDER DATE OF JULY 1, 1940, AND LISTED CERTAIN WAREHOUSES FROM WHICH DELIVERY COULD BE MADE, IT APPEARS FROM YOUR LETTER THAT GREASE HAD NOT BEEN REQUIRED OR ORDERED BY ANY OF THE STATIONS COVERED BY THE CONTRACT UP TO THE TIME OF THE FIRE. ALSO, THE RECORD DOES NOT SHOW THAT ANY NOTICE OF THE CONTRACT WAS GIVEN THE SERVICE IN GENERAL PRIOR TO THE ISSUANCE OF CONTRACT BULLETIN NO. 123, DATED SEPTEMBER 14, 1940, NEARLY 7 WEEKS AFTER THE FIRE AND MORE THAN 11 WEEKS AFTER THE BEGINNING OF THE CONTRACT PERIOD, OR THAT THE CONTRACTOR COULD NOT HAVE DELIVERED GREASE FROM ITS FACTORY WITHIN THE 10 DAYS ALLOWED BY THE CONTRACT, HAD IT NOT BEEN FOR THE FIRE.

IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES DISCLOSED, IF IT HAS BEEN OR SHOULD BE FOUND BY THE CONTRACTING OFFICER, OR BY YOU UPON APPEAL, IN RESPECT OF ANY SUPPLIES ORDERED UNDER THE CONTRACT, THAT THE CONTRACTOR'S DELAY IN MAKING DELIVERY WAS DUE TO THE FIRE WHICH OCCURRED IN ITS PLANT AND WAS WITHOUT ITS FAULT OR NEGLIGENCE, THE CONTRACTOR MAY BE RELEASED FROM ITS OBLIGATION TO DELIVER SUCH SUPPLIES WITHOUT LIABILITY FOR ANY EXCESS COSTS WHICH MAY HAVE BEEN INCURRED BY THE GOVERNMENT IN PURCHASING THE SUPPLIES IN THE OPEN MARKET.