B-141435, DEC. 21, 1959

B-141435: Dec 21, 1959

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 8. REQUESTING OUR DECISION AS TO WHETHER YOU ARE AUTHORIZED TO CERTIFY FOR PAYMENT TO THE HEAVY MINERALS COMPANY. AMONG THE PAPERS TRANSMITTED BY YOU WAS A COPY OF AN AGREEMENT ENTERED INTO BETWEEN GSA AND CRAMET. WAS TERMINATED UNDER THE CONDITIONS THEREIN SET FORTH. IT IS OUR UNDERSTANDING THAT THE CRAMET CONTRACT WAS TERMINATED BECAUSE OF THE FACT THAT THE GOVERNMENT NO LONGER NEEDED THE REMAINING TITANIUM SPONGE WHICH IT WAS OBLIGATED TO PURCHASE UNDER THE CONTRACT. THE PARTIES HERETO HAVE DETERMINED THAT IT WILL BE TO THE MUTUAL BENEFIT AND ADVANTAGE OF THE PARTIES TO TERMINATE CONTRACT NO. INCLUDED IN EXHIBIT "B" IS THE CONTRACT OF JANUARY 10.

B-141435, DEC. 21, 1959

TO MR. H. A. WILKINSON, AUTHORIZED CERTIFYING OFFICER, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 8, 1959 (CAC), WITH ENCLOSURES, REQUESTING OUR DECISION AS TO WHETHER YOU ARE AUTHORIZED TO CERTIFY FOR PAYMENT TO THE HEAVY MINERALS COMPANY, CHATTANOOGA, TENNESSEE, THE SUM OF $100,000, REPRESENTING THE AMOUNT OF AN OFFER BY THE GENERAL SERVICES ADMINISTRATION IN FULL SETTLEMENT OF THE COMPANY'S CLAIM ARISING OUT OF THE CIRCUMSTANCES HEREINAFTER SET FORTH.

UNDER DATE OF JULY 31, 1953, THE GENERAL SERVICES ADMINISTRATION ENTERED INTO CONTRACT NO. DMP-75 WITH CRAMET, INC., UNDER WHICH THE LATTER AGREED TO FURNISH A QUANTITY OF TITANIUM SPONGE. THE RECORD INDICATES THAT THEREAFTER THE CONTRACTOR ENTERED INTO A NUMBER OF CONTRACTS FOR THE PRODUCTION OF RUTILE, A RAW MATERIAL USED IN THE PRODUCTION OF TITANIUM. ONE OF SUCH CONTRACTS ENTERED INTO ON JANUARY 10, 1957, WITH THE HEAVY MINERALS COMPANY, PROVIDED FOR THE PURCHASE BY CRAMET, INC., OF 5,000 TONS OF RUTILE AT $190 PER TON, SHIPMENTS TO BE MADE IN APPROXIMATELY EQUAL MONTHLY QUANTITIES AND TO BE COMPLETED BY DECEMBER 31, 1958. AMONG THE PAPERS TRANSMITTED BY YOU WAS A COPY OF AN AGREEMENT ENTERED INTO BETWEEN GSA AND CRAMET, INC., ON MARCH 7, 1958, UNDER WHICH THE CONTRACT OF JULY 31, 1953, AS AMENDED, WAS TERMINATED UNDER THE CONDITIONS THEREIN SET FORTH. IT IS OUR UNDERSTANDING THAT THE CRAMET CONTRACT WAS TERMINATED BECAUSE OF THE FACT THAT THE GOVERNMENT NO LONGER NEEDED THE REMAINING TITANIUM SPONGE WHICH IT WAS OBLIGATED TO PURCHASE UNDER THE CONTRACT. THIS AGREEMENT CONTAINED THE FOLLOWING PARAGRAPH:

"WHEREAS, THE PARTIES HERETO HAVE DETERMINED THAT IT WILL BE TO THE MUTUAL BENEFIT AND ADVANTAGE OF THE PARTIES TO TERMINATE CONTRACT NO. DMP- 75 ON THE BASIS HEREINAFTER SET FORTH (AND IN LIEU OF PROCEEDING PURSUANT TO THE TERMINATION PROVISIONS OF CONTRACT NO. DMP-75) AND TO SEVER THE RELATIONSHIP BETWEEN THE PARTIES, AND * * *"

IN CONSIDERATION OF THE PROMISES AND THE COVENANTS OF THE PARTIES AS SET FORTH IN THE AGREEMENT, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES AGREED (PARAGRAPH 11. THAT THE GOVERNMENT AGREED AS OF THE ACCOUNTING DATE TO ASSUME ALL OF CRAMET'S OBLIGATIONS UNDER THE CONTRACTS LISTED IN EXHIBIT "B" ATTACHED THERETO AND TO INDEMNIFY AND HOLD CRAMET HARMLESS FROM ALL COSTS, CHARGES, EXPENSES AND LIABILITIES WITH RESPECT THERETO, AND WITH RESPECT TO ANY SETTLEMENT OR TERMINATION THEREOF. INCLUDED IN EXHIBIT "B" IS THE CONTRACT OF JANUARY 10, 1957, WITH THE HEAVY MINERALS COMPANY.

THE RECORD SHOWS THAT THERE WERE CONSIDERABLE NEGOTIATIONS BETWEEN THE PARTIES LEADING UP TO THE OFFER OF GSA TO PAY HEAVY MINERALS COMPANY THE SUM OF $100,000 IN FULL SETTLEMENT OF ITS CLAIM. THE OFFER OF SETTLEMENT HAS BEEN ACCEPTED BY THE CLAIMANT AND A RELEASE EXECUTED, THE LATTER BEING CONDITIONED UPON PAYMENT OF THE AMOUNT ON OR BEFORE DECEMBER 21, 1959. SINCE THE AGREEMENT OF MARCH 7, 1958, APPEARS TO BE SUPPORTED BY A GOOD CONSIDERATION, AND SINCE THE PAYMENT IS ADMINISTRATIVELY RECOMMENDED, YOU ARE ADVISED THAT THE AMOUNT OF $100,000 MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.