B-140335, AUG. 17, 1959

B-140335: Aug 17, 1959

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THE CLAIM WAS ADMINISTRATIVELY DISAPPROVED. OUR CLAIMS DIVISION DISALLOWED THE CLAIM GENERALLY ON THE GROUNDS THAT THE PROPERTY INVOLVED WAS OFFERED FOR SALE AS A LOT AND THAT UNDER THE PROVISIONS OF PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS THERE WAS A DISCLAIMER OF ANY GUARANTY OR WARRANTY AS TO THE QUANTITY. WE HAVE ALSO RECEIVED FROM HONORABLE JOHN YOUNG. THE BASIS FOR THE CLAIM IS THAT THE CONTRACTOR SUBMITTED A BID ON A UNIT PRICE BASIS OF $1.06 EACH FOR THE APPROXIMATELY 4. THAT DELIVERY WAS MADE OF ONLY 221 SINGLE DECK BUNKS AND 1. THERE IS ENCLOSED A PHOTOSTATIC COPY OF THE MATERIALS ALLEGEDLY RECEIVED BY THE CONTRACTOR. A COMPUTATION WILL SHOW THE AMOUNT OF THE CLAIM TO BE IN ERROR ON THE BASIS INDICATED.

B-140335, AUG. 17, 1959

TO THE SECRETARY OF THE NAVY:

WITH LETTER DATED MARCH 26, 1959 (FR-10 (MK MW) L6 (R) N CL 181718), THE U.S. NAVY REGIONAL ACCOUNTS OFFICE REFERRED TO OUR CLAIMS DIVISION FOR DIRECT SETTLEMENT A CLAIM BY THE TEXAS WASTE MATERIALS COMPANY, INC., 3616 AGNES STREET, CORPUS CHRISTI, TEXAS, IN THE AMOUNT OF $2,640, REPRESENTING A REFUND OF A PORTION OF THE AMOUNT PAID FOR CERTAIN SURPLUS PROPERTY PURCHASED BY THE CLAIMANT UNDER CONTRACT NO. N216S-20138, DATED NOVEMBER 17, 1958. THE CLAIM WAS ADMINISTRATIVELY DISAPPROVED.

BY SETTLEMENT DATED MAY 8, 1959, OUR CLAIMS DIVISION DISALLOWED THE CLAIM GENERALLY ON THE GROUNDS THAT THE PROPERTY INVOLVED WAS OFFERED FOR SALE AS A LOT AND THAT UNDER THE PROVISIONS OF PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS THERE WAS A DISCLAIMER OF ANY GUARANTY OR WARRANTY AS TO THE QUANTITY, ETC. WITH LETTER DATED JULY 20, 1959, HONORABLE LYNDON B. JOHNSON, UNITED STATES SENATE, TRANSMITTED HERE A LETTER DATED JULY 17, 1959, FROM HAROLD ALBERTS, ESQUIRE, ATTORNEY FOR THE CLAIMANT, IN EFFECT REQUESTING RECONSIDERATION OF THE SETTLEMENT OF MAY 8, 1959. WE HAVE ALSO RECEIVED FROM HONORABLE JOHN YOUNG, HOUSE OF REPRESENTATIVES, A LETTER DATED JULY 21, 1959, TRANSMITTING A COPY OF A SIMILAR LETTER FROM MR. ALBERTS.

THE BASIS FOR THE CLAIM IS THAT THE CONTRACTOR SUBMITTED A BID ON A UNIT PRICE BASIS OF $1.06 EACH FOR THE APPROXIMATELY 4,000 BUNKS COVERED BY ITEM 2 OF THE INVITATION, OR FOR A TOTAL OF $4,240, AND THAT DELIVERY WAS MADE OF ONLY 221 SINGLE DECK BUNKS AND 1,163 DOUBLE DECK BUNKS, PLUS 428 EXTRA INDIVIDUAL SPRINGS. THERE IS ENCLOSED A PHOTOSTATIC COPY OF THE MATERIALS ALLEGEDLY RECEIVED BY THE CONTRACTOR, TOGETHER WITH A COPY OF THE CONTRACTOR'S LETTER OF JANUARY 27, 1959, TO THE SALES CONTRACTING OFFICER, SUBMITTING A CLAIM IN THE AMOUNT OF $2,640, THE SAME BEING BASED UPON AN ALLEGED SHORTAGE OF "SIXTY-SIX PERCENT" IN THE ADVERTISED QUANTITY. A COMPUTATION WILL SHOW THE AMOUNT OF THE CLAIM TO BE IN ERROR ON THE BASIS INDICATED. OMITTING FROM THE COMPUTATION ANY CHARGE FOR THE 428 EXTRA INDIVIDUAL SPRINGS DELIVERED TO THE CONTRACTOR--- TO WHICH REFERENCE WILL HEREINAFTER BE MADE--- IT WILL BE SEEN THAT IF THE CONTRACTOR IS CHARGED FOR ONLY THE TOTAL OF 1,384 BUNKS ALLEGEDLY ACTUALLY DELIVERED AT THE UNIT PRICE OF $1.06, THE TOTAL CHARGE WILL BE THE SUM OF $1,467.04, AND ON THAT BASIS THE CONTRACTOR WOULD BE ENTITLED TO A REFUND OF $2,772.96--- $4,240 LESS $1,467.04, IF CLAIMED.

TRANSMITTED HEREWITH IS A PHOTOSTATIC COPY OF THE INDICATED CONTRACT, CERTIFIED BY LIEUTENANT COMMANDER R. E. LINK, SC., USN., SALES CONTRACTING OFFICER, AS A TRUE COPY, AND TRANSMITTED HERE WITH THE LETTER OF MARCH 26, 1959. IT APPEARS THEREFROM THAT THE CLAIMANT'S BID WAS SUBMITTED ON A "LOT" BASIS WITH AN EXTENDED TOTAL OF $4,240. IT IS ASSUMED THAT THE ADMINISTRATIVE RECOMMENDATION FOR DISALLOWANCE WAS BASED UPON THE SHOWING THUS MADE THAT THE BID WAS SUBMITTED ON A "LOT" BASIS AND WAS SO ACCEPTED BY THE SALES CONTRACTING OFFICER. THIS APPEARS TO BE CONTRARY TO THE FACTS OF RECORD IN OUR OFFICE. THERE IS ENCLOSED A PHOTOSTATIC COPY OF THE CONTRACT ON FILE HERE, THERE BEING INCLUDED THEREIN THE ORIGINAL BID SUBMITTED BY THE CLAIMANT PURSUANT TO INVITATION NO. B-21-59-216, DATED OCTOBER 23, 1958, ISSUED BY THE U.S. NAVAL AIR STATION AT CORPUS CHRISTI, TEXAS. IT WILL BE SEEN THAT THE ORIGINAL CONTRACT SUPPORTS THE CONTRACTOR'S CLAIM THAT ITS BID IN THIS CASE WAS ON A UNIT PRICE BASIS.

IN THE CONTRACTING OFFICER'S STATEMENT OF FACTS RELATING TO THIS CLAIM--- IT IS UNDERSTOOD YOU HAVE A COPY--- IT WAS STATED THAT THE BUNKS WERE OFFERED FOR SALE ON A "LOT" BASIS, AND THAT THE TOTAL AMOUNT ($4,240) WAS THE ONLY FIGURE READ AT THE BID OPENING IN THE PRESENCE OF MR. ADLER AND CONSIDERED IN MAKING THE AWARD. THERE APPEARS TO BE NO QUESTION THAT THE SALE OF ITEM 2 WAS INTENDED TO BE ON A "LOT" BASIS. HOWEVER, IT IS ALSO TRUE THAT THE BID BY THE TEXAS WASTE MATERIALS COMPANY WAS SUBMITTED ON A "UNIT PRICE" BASIS--- IN EFFECT A COUNTEROFFER. SINCE THE OFFER AS SUBMITTED WAS NOT RESPONSIVE TO THE BID INVITATION IT APPEARS THAT THE CONTRACTING OFFICER WOULD HAVE BEEN JUSTIFIED IN REJECTING IT. THIS HE DID NOT DO. ON THE CONTRARY, HE ACCEPTED THE BID AS MADE--- HE HAD NO ALTERNATIVE OTHER THAN TO REJECT THE BID--- AND IT IS OUR VIEW THAT SUCH ACCEPTANCE CONSUMMATED A CONTRACT BINDING ON THE PARTIES ON THE TERMS STATED.

UPON THE BASIS OF THE FACTS SET FORTH ABOVE, WE ARE OF THE VIEW THAT THE CONTRACTOR IS ENTITLED TO A REFUND OF AN AMOUNT AS YET UNDETERMINED. SINCE THE CONTRACT WAS ON A UNIT PRICE BASIS AND SINCE THERE WAS FAILURE ON THE PART OF THE GOVERNMENT TO DELIVER THE ENTIRE QUANTITY OF PROPERTY AS ADVERTISED, IT APPEARS THERE IS FOR CONSIDERATION PARAGRAPH 20 OF THE "ADDITIONAL PROVISIONS" PROVIDING, IN PART, AS FOLLOWS:

"* * * IN THE EVENT OF A SHORTAGE THE GOVERNMENT WILL REFUND TO THE PURCHASER THE DIFFERENCE BETWEEN THE QUANTITY PAID FOR AND THE QUANTITY DELIVERED, CALCULATED UPON THE BASIS OF THE UNIT PRICES SET FORTH IN THE CONTRACT.'

THERE IS PRESENTLY FOR CONSIDERATION THE QUESTION AS TO THE AMOUNT OF THE REFUND TO BE MADE IN THIS CASE. UNDER THE DESCRIPTIVE LANGUAGE OF ITEM 2 IT APPEARS THERE IS SOME BASIS FOR CONTENDING THAT THE CONTRACTOR IS NOT ENTITLED TO A REFUND ON THE BASIS INDICATED IN THE LETTER OF JANUARY 27, 1959. THAT IS TO SAY, THERE WAS NO BREAKDOWN IN THE DESCRIPTION AS TO THE NUMBER OF DOUBLE DECK BUNKS AND SINGLE DECK BUNKS INVOLVED. IN OTHER WORDS, THE GOVERNMENT DID NOT UNDERTAKE OR PROMISE TO MAKE DELIVERY OF ANY SPECIFIED NUMBER OF BUNKS OF EITHER TYPE. ITIS UNDERSTOOD THAT A "DOUBLE DECK" BUNK CONSISTS OF TWO "SINGLE DECK" BUNKS. THE CONTRACTOR ACKNOWLEDGED THE RECEIPT OF 1,163 DOUBLE DECK BUNKS AND, IF OUR UNDERSTANDING IS CORRECT, THAT WOULD CONSTITUTE 2,326 SINGLE DECK BUNKS FOR WHICH IT APPEARS THE GOVERNMENT MIGHT BE JUSTIFIED IN CLAIMING PAYMENT AT THE UNIT PRICE OF $1.06 PER BUNK. ON SUCH BASIS THE GOVERNMENT WOULD BE ENTITLED TO CLAIM THE SUM OF $2,669.82 FOR THE MATERIALS DELIVERED--- EXCLUSIVE OF ANY AMOUNT DUE FOR THE INDIVIDUAL SPRINGS--- 221 PLUS 2,326 MULTIPLIED BY $1.06. YOUR COMMENT ON THE SUGGESTED COMPUTATION WILL BE APPRECIATED.

THERE REMAINS FOR CONSIDERATION THE QUESTION AS TO THE VALUE OF THE 428 INDIVIDUAL SPRINGS RECEIVED BY THE CONTRACTOR. SINCE THE CLAIMANT'S BID WAS ON A UNIT PRICE BASIS IT APPEARS THAT HE IS CHARGEABLE FOR THE BUNKS DELIVERED AS HEREINBEFORE INDICATED, AND THAT HE IS ALSO LIABLE FOR THE VALUE OF THE ADDITIONAL SPRINGS RECEIVED. WE HAVE NO INFORMATION AS TO THE VALUE OF THESE SPRINGS AND WE ARE, THEREFORE, UNABLE TO ASSERT A CLAIM FOR A DEFINITE AMOUNT. IT WILL BE APPRECIATED IF WE MAY BE FURNISHED WITH AN ESTIMATE BY YOUR DEPARTMENT AS TO THE AMOUNT FOR WHICH WE SHOULD STATE A CLAIM FOR THESE SPRINGS.