B-141881, MAR. 15, 1960

B-141881: Mar 15, 1960

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TO NEFF AUTO SALES: REFERENCE IS MADE TO A LETTER DATED JANUARY 14. YOUR ATTORNEY STATED THAT THE BASIS FOR YOUR CLAIM WAS CLEARLY AND FAIRLY SET FORTH IN PREVIOUS CORRESPONDENCE AND HE SUGGESTED THAT IN DISPOSING OF THE MATTER OUR OFFICE DISREGARDED THE EVIDENCE SUBMITTED BY YOU IN SUPPORT OF YOUR CLAIM BUT ACCEPTED AS TRUE THE REPRESENTATIONS MADE BY GOVERNMENT PERSONNEL REGARDING THE MATTER. YOUR CLAIM APPEARS TO BE PREDICATED UPON ALLEGATIONS THAT YOU WERE MISINFORMED AS TO THE ACTUAL QUANTITY OF SCRAP MATERIAL AVAILABLE FOR DELIVERY. THAT IS TO SAY. IT WAS AGREED BETWEEN YOU AND THE GOVERNMENT REPRESENTATIVES THAT YOU WOULD RETURN "APPROXIMATELY 280 TONS OF MATERIAL OF MY (YOUR) DESIGNATION AND CHOICE" TO THE TOOELE ORDNANCE DEPOT AND THAT THEREAFTER YOU WOULD FILE A CLAIM FOR THE AMOUNTS YOU HAD EXPENDED "BECAUSE OF THIS MISUNDERSTANDING.'.

B-141881, MAR. 15, 1960

TO NEFF AUTO SALES:

REFERENCE IS MADE TO A LETTER DATED JANUARY 14, 1960, FROM YOUR ATTORNEY, ROBERT E. SOUTHERN, ESQUIRE, REQUESTING ON YOUR BEHALF RECONSIDERATION OF SETTLEMENT DATED NOVEMBER 10, 1959, BY WHICH OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM IN THE AMOUNT OF $1,803.60, REPRESENTING EXPENSES ALLEGEDLY INCURRED BY YOU IN CONNECTION WITH AN EXCESS SHIPMENT (OVERAGE) OF SCRAP MATERIALS UNDER CONTRACT NO. N665A 37403, DATED APRIL 21, 1958.

AS A BASIS FOR REQUESTING RECONSIDERATION OF THE SETTLEMENT ACTION TAKEN IN THIS CASE, YOUR ATTORNEY STATED THAT THE BASIS FOR YOUR CLAIM WAS CLEARLY AND FAIRLY SET FORTH IN PREVIOUS CORRESPONDENCE AND HE SUGGESTED THAT IN DISPOSING OF THE MATTER OUR OFFICE DISREGARDED THE EVIDENCE SUBMITTED BY YOU IN SUPPORT OF YOUR CLAIM BUT ACCEPTED AS TRUE THE REPRESENTATIONS MADE BY GOVERNMENT PERSONNEL REGARDING THE MATTER.

BY REFERENCE TO YOUR LETTER OF MARCH 7, 1959, TO THE U.S. NAVAL SUPPLY DEPOT CLEAR FIELD, OGDEN, UTAH, YOUR CLAIM APPEARS TO BE PREDICATED UPON ALLEGATIONS THAT YOU WERE MISINFORMED AS TO THE ACTUAL QUANTITY OF SCRAP MATERIAL AVAILABLE FOR DELIVERY; THAT YOU NEVER AUTHORIZED THE DELIVERY OF MATERIAL IN EXCESS OF THE QUANTITY REQUIRED TO BE ACCEPTED BY YOU UNDER THE TERMS OF THE CONTRACT, THAT IS TO SAY, TWENTY-FIVE PERCENT OVER THE STATED CONTRACT QUANTITY OF 665 GROSS ONES; ALSO, THAT AT A CONFERENCE HELD AT THE U.S. NAVAL AIR STATION ON AUGUST 1, 1958, IT WAS AGREED BETWEEN YOU AND THE GOVERNMENT REPRESENTATIVES THAT YOU WOULD RETURN "APPROXIMATELY 280 TONS OF MATERIAL OF MY (YOUR) DESIGNATION AND CHOICE" TO THE TOOELE ORDNANCE DEPOT AND THAT THEREAFTER YOU WOULD FILE A CLAIM FOR THE AMOUNTS YOU HAD EXPENDED "BECAUSE OF THIS MISUNDERSTANDING.'

UNDER THE TERMS OF THE CONTRACT IN THIS CASE YOU AGREED TO PURCHASE 665 GROSS TONS OF METAL SCRAP LOCATED AT THE TOOELE ORDNANCE DEPOT AT THE PRICE OF $23.77 PER GROSS TON, OR FOR A TOTAL OF $15,807.05. THE RECORD INDICATES THAT YOU MADE A BID DEPOSIT OF $3,200, AND THAT THEREAFTER YOU MADE A PAYMENT IN THE AMOUNT OF $12,607.05 TO COVER THE TOTAL CONTRACT OBLIGATION EXCLUSIVE OF ANY OVERAGE. PARAGRAPH 21 OF THE "ADDITIONAL PROVISIONS" OF THE CONTRACT PROVIDES, IN PART, AS FOLLOWS:

"21. ADJUSTMENT FOR VARIATION IN QUANTITY: * * * WHEN PROPERTY IS SOLD ON A UNIT PRICE BASIS THE GOVERNMENT RESERVES THE RIGHT TO VARY THE QUANTITY TENDERED OR DELIVERED TO THE PURCHASER BY TWENTY-FIVE (25) PERCENT. THE GOVERNMENT TENDERS OR DELIVERS A QUANTITY UP TO TWENTY-FIVE (25) PERCENT IN EXCESS OF THAT STATED IN THE INVITATION TO BID, THE PURCHASER AGREES TO ACCEPT SUCH QUANTITY AND PAY THE GOVERNMENT THEREFORE AT THE UNIT PRICE SET FORTH IN THIS CONTRACT. * * "

IN THE THIRD PARAGRAPH ON PAGE TWO OF YOUR LETTER OF MARCH 7, 1959, YOU STATED THAT MR. CLAY--- YOUR REPRESENTATIVE AT THE ORDNANCE DEPOT- - CALLED YOU AFTER HE HAD REMOVED APPROXIMATELY THE ,ORIGINAL 665 TONS," STATING THAT HE WAS NOT PERMITTED TO REMOVE THE BALANCE UNTIL YOU HAD FURNISHED A LETTER OF ACCEPTANCE; THAT AS THE RESULT OF A TELEPHONE CONVERSATION WITH MR. FRANK BROWN OF THE TOOELE ORDNANCE DEPOT, DURING WHICH YOU WERE ADVISED THAT THE BALANCE DUE THE GOVERNMENT WOULD BE APPROXIMATELY $5,950, YOU ADVISED MR. BROWN THAT UPON RECEIPT OF CONFIRMATION THAT THE INDICATED AMOUNT WAS CORRECT YOU WOULD SEND A LETTER ACCEPTING THE OVERAGE. YOU THEN STATED THAT YOU RECEIVED A TELEGRAM FROM MR. BROWN ON THE FOLLOWING SATURDAY--- PRESUMABLY CONFIRMING THE AMOUNT OF THE BALANCE DUE--- AND THAT THEREAFTER YOU SENT A "LETTER OF AUTHORITY" TO THE NAVAL SUPPLY DEPOT CLEAR FIELD, OGDEN, UTAH. THE RECORD INDICATES THAT ALL OF THE FOREGOING TOOK PLACE BEFORE ANY OF THE EXPENSES CONSTITUTING YOUR CLAIM WERE INCURRED BY YOU.

THE CONTROVERSY IN THIS CASE APPEARS TO ARISE OUT OF THE FACT THAT AFTER THE CHECK FOR $5,949.93 HAD BEEN DRAWN, COVERING THE BALANCE OF THE AMOUNT YOU BELIEVED TO BE PAYABLE UNDER THE CONTRACT, YOU WERE ADVISED BY COMMANDER POWELL THAT THAT AMOUNT WOULD NOT COVER THE ENTIRE AMOUNT DUE UNDER THE CONTRACT IN THAT YOU STILL OWED THE GOVERNMENT FOR TWENTY-FIVE PERCENT ABOVE THE ORIGINAL 665 GROSS TONS, OR THE SUM OF $3,951.01. YOU APPEAR TO INSIST THAT THE "LETTER OF AUTHORITY" MR. NEFF VERBALLY AUTHORIZED REMOVAL OF THE 250.3125 GROSS TONS BEYOND THE 25 PERCENT OVERAGE. MR. CLAY THEN IMMEDIATELY COMPLETED THE REMOVAL. MR. CLAY SIGNED FOR THE MATERIAL AND WAS PRESENT WHEN THE CONVERSATION CONCERNING THE OVERAGE TOOK PLACE; HE WAS AWARE THAT THE OVERAGE WAS BEYOND THE 25 PERCENT OVERAGE ALREADY DELIVERED.'

UNDER DATE OF MARCH 19, 1959, CAPTAIN BIEGANSKI MADE A FURTHER STATEMENT REGARDING THE INFORMATION GIVEN TO MR. NEFF BY MR. BROWN CONCERNING THE PAYMENT OF $5,950, THE STATEMENT BEING, IN PART, AS FOLLOWS:

"2. * * * WHEN MR. NEFF CALLED MR. BROWN, HE WAS TOLD BY MR. BROWN THAT THE $5950.00 ADDITIONAL WAS FOR THE OVERAGE BEYOND THE 25 PERCENT OVERAGE. MR. CLAY WAS PRESENT WHEN THE CALL WAS MADE AND KNEW THE SITUATION; IF IT WAS NOT CLEAR, HE SHOULD HAVE TRIED TO CLEAR IT UP AT THAT TIME. IT IS BELIEVED THAT THE COMPLETE INFORMATION WAS GIVEN MR. NEFF IN THE TELEPHONE CONVERSATION AND IT WAS CLEAR TO BOTH MR. NEFF AND MR. CLAY.'

THE RECORD BEFORE OUR OFFICE INDICATES THAT NOTWITHSTANDING THE "LETTER OF AUTHORITY" ISSUED IN THIS CASE, AS WELL AS THE VERBAL AUTHORIZATION FOR REMOVAL GIVEN BY MR. NEFF, YOUR CONCERN SUBSEQUENTLY TOOK THE POSITION, UPON BEING ADVISED THAT ADDITIONAL FUNDS WOULD BE NECESSARY TO COMPLETE THE TRANSACTION, THAT YOU SHOULD NOT BE REQUIRED TO TAKE THE ADDITIONAL "OVERAGE" SINCE YOU WERE UNDER THE BELIEF THAT PAYMENT OF THE SUMS OF $15,807.05 AND $5,949.93 WOULD FULLY DISCHARGE YOUR OBLIGATION. IN ANY EVENT, YOU STATED THAT THE PARTIES MR. NEFF VERBALLY AUTHORIZED REMOVAL OF THE 250.3125 GROSS TONS BEYOND THE 25 PERCENT OVERAGE. MR. CLAY THEN IMMEDIATELY COMPLETED THE REMOVAL. MR. CLAY SIGNED FOR THE MATERIAL AND WAS PRESENT WHEN THE CONVERSATION CONCERNING THE OVERAGE TOOK PLACE; HE WAS AWARE THAT THE OVERAGE WAS BEYOND THE 25 PERCENT OVERAGE ALREADY DELIVERED.'

UNDER DATE OF MARCH 19, 1959, CAPTAIN BIEGANSKI MADE A FURTHER STATEMENT REGARDING THE INFORMATION GIVEN TO MR. NEFF BY MR. BROWN CONCERNING THE PAYMENT OF $5,950, THE STATEMENT BEING, IN PART, AS FOLLOWS:

"2. * * * WHEN MR. NEFF CALLED MR. BROWN, HE WAS TOLD BY MR. BROWN THAT THE $5950.00 ADDITIONAL WAS FOR THE OVERAGE BEYOND THE 25 PERCENT OVERAGE. MR. CLAY WAS PRESENT WHEN THE CALL WAS MADE AND KNEW THE SITUATION; IF IT WAS NOT CLEAR, HE SHOULD HAVE TRIED TO CLEAR IT UP AT THAT TIME. IT IS BELIEVED THAT THE COMPLETE INFORMATION WAS GIVEN MR. NEFF IN THE TELEPHONE CONVERSATION AND IT WAS CLEAR TO BOTH MR. NEFF AND MR. CLAY.'

THE RECORD BEFORE OUR OFFICE INDICATES THAT NOTWITHSTANDING THE "LETTER OF AUTHORITY" ISSUED IN THIS CASE, AS WELL AS THE VERBAL AUTHORIZATION FOR REMOVAL GIVEN BY MR. NEFF, YOUR CONCERN SUBSEQUENTLY TOOK THE POSITION, UPON BEING ADVISED THAT ADDITIONAL FUNDS WOULD BE NECESSARY TO COMPLETE THE TRANSACTION, THAT YOU SHOULD NOT BE REQUIRED TO TAKE THE ADDITIONAL "OVERAGE" SINCE YOU WERE UNDER THE BELIEF THAT PAYMENT OF THE SUMS OF $15,807.05 AND $5,949.93 WOULD FULLY DISCHARGE YOUR OBLIGATION. IN ANY EVENT, YOU STATED THAT THE PARTIES AGREED THAT YOU COULD RETURN THE "OVERAGE" AND THEREAFTER FILE A CLAIM FOR YOUR EXPENSES. IN VIEW OF THE RECORD WE MUST AGAIN POINT OUT THAT IT IS NOT CLEAR JUST HOW YOU COULD HAVE BEEN UNDER ANY MISAPPREHENSION AS TO YOUR TOTAL OBLIGATION.

THE FOREGOING COVERS THE FACTS AS THEY APPEAR FROM THE RECORD IN THIS CASE. YOUR CONTENTION, HOWEVER, APPEARS TO BE THAT YOU NEVER AUTHORIZED DELIVERY OF MATERIAL IN EXCESS OF THE QUANTITY REQUIRED TO BE ACCEPTED BY YOU UNDER THE TERMS OF THE CONTRACT, IT BEING STATED, IN EFFECT, THAT THE "LETTER OF AUTHORITY" SENT BY YOU TO THE NAVAL SUPPLY DEPOT CLEAR FIELD WAS ISSUED ON THE BASIS OF ERRONEOUS INFORMATION GIVEN YOU RESPECTING THE BALANCE DUE UNDER THE CONTRACT. EVEN IF WE ACCEPTED YOUR CONTENTION AS TRUE, IT IS NOT CLEAR JUST HOW SUCH FACT COULD GIVE RISE TO A CLAIM AGAINST THE UNITED STATES. IF THERE WAS AN ACTUAL MISUNDERSTANDING BETWEEN THE PARTIES, AS YOU APPEAR TO CONTEND, THEN IT APPEARS THERE WAS NO CONTRACT COVERING THE "OVERAGE" IN EXCESS OF THE CONTRACT QUANTITY REQUIRED TO BE ACCEPTED AND CONSEQUENTLY THERE COULD, UNDER THE CIRCUMSTANCES, BE NO BREACH OF CONTRACT BY THE UNITED STATES GIVING RISE TO A CLAIM COGNIZABLE BY THE GENERAL ACCOUNTING OFFICE.

IN ADDITION TO THE FOREGOING OBJECTION TO THE ALLOWANCE OF YOUR CLAIMS, IT MAY BE POINTED OUT THAT, IN PART, THEY REPRESENT PAYMENTS CLEARLY MADE BY YOU FOR THE PROTECTION OF YOUR OWN INTERESTS. IN AT LEAST ONE INSTANCE IT APPEARS THE EXPENDITURE WAS UNNECESSARY. RESPECTING THE FIRST ITEM OF YOUR CLAIM FOR SUMS AGGREGATING $339.46, COVERING THE TRAVEL OF MR. NEFF AND YOUR ATTORNEY TO THE NAVAL SUPPLY DEPOT AND RETURN, CAPTAIN BIEGANSKI REPORTS THAT THIS WAS A VOLUNTARY ACT ON YOUR PART AND THAT THE MATTER COULD READILY HAVE BEEN HANDLED BY MAIL. ALSO, EVEN IF YOUR CLAIM WERE OTHERWISE ALLOWABLE, NO ALLOWANCE COULD BE MADE ON ACCOUNT OF ATTORNEY'S FEES.

ACCORDINGLY, WE CONCLUDE THAT THE ACTION TAKEN IN THE SETTLEMENT OF NOVEMBER 10, 1959, WAS CORRECT, AND IS SUSTAINED.