B-151832, AUG. 5, 1963

B-151832: Aug 5, 1963

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CHAIN AND FORGE DIVISION OF THE BOSTON METALS COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JUNE 6. UNDER THE TERMS OF THE ABOVE CONTRACT THE GOVERNMENT WAS PERMITTED TO SHIP UP TO 25 PERCENT IN EXCESS OF THE ESTIMATED QUANTITY. THE TOTAL QUANTITY ACTUALLY SHIPPED WAS 238. WHICH WAS 25. THIS EXCESS WAS RETURNED. EXCEPT FOR TRANSPORTATION CHARGES WHEN A RETURN OF PROPERTY AT GOVERNMENT COST IS AUTHORIZED BY THE GOVERNMENT. THE MEASURE OF THE GOVERNMENT'S LIABILITY IN ANY CASE WHERE LIABILITY OF THE GOVERNMENT TO THE PURCHASER HAS BEEN ESTABLISHED SHALL NOT EXCEED REFUND OF SUCH PORTION OF THE PURCHASE PRICE AS THE GOVERNMENT MAY HAVE CEIVED.'. THE LANGUAGE OF THE CONTRACT RECOGNIZES THAT QUANTITIES ARE ESTIMATED AND MAY VARY UP OR DOWN.

B-151832, AUG. 5, 1963

TO BALDT ANCHOR, CHAIN AND FORGE DIVISION OF THE BOSTON METALS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 6, 1963, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED JUNE 4, 1963, WHICH DISALLOWED YOUR CLAIM FOR $256, REPRESENTING HANDLING CHARGES ON 25,600 POUNDS OF STEEL CHAIN SHIPPED IN EXCESS OF THE ALLOWABLE VARIATION UNDER SALES CONTRACT NO. DSA-11-S-379.

YOU PURCHASED AN ESTIMATED 170,000 POUNDS OF STEEL CHAIN, AND UNDER THE TERMS OF THE ABOVE CONTRACT THE GOVERNMENT WAS PERMITTED TO SHIP UP TO 25 PERCENT IN EXCESS OF THE ESTIMATED QUANTITY, OR A TOTAL OF 212,500 POUNDS. THE TOTAL QUANTITY ACTUALLY SHIPPED WAS 238,100 POUNDS, WHICH WAS 25,600 IN EXCESS OF THE ALLOWABLE VARIATION, AND THIS EXCESS WAS RETURNED, WITH THE GOVERNMENT PAYING ALL TRANSPORTATION CHARGES.

IT APPEARS FROM COPIES OF INVOICES IN THE FILE THAT YOU HAD THE CHAIN SHIPPED TO AMERICAN ANCHOR AND CHAIN CORPORATION, FIELDSBORO, NEW JERSEY, AND THAT THE CONSIGNEE CHARGED YOU ONE-HALF OF ONE CENT PER POUND TO "RECEIVE AND STORE" THE MATERIAL. YOUR CLAIM FOR $256 REPRESENTS THIS CHARGE ON THE EXCESS, PLUS A LIKE CHARGE FOR HANDLING THE EXCESS ON THE RETURN SHIPMENT.

PARAGRAPH NO. 11 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT READS AS FOLLOWS:

"LIMITATION ON GOVERNMENT'S LIABILITY. EXCEPT FOR TRANSPORTATION CHARGES WHEN A RETURN OF PROPERTY AT GOVERNMENT COST IS AUTHORIZED BY THE GOVERNMENT, THE MEASURE OF THE GOVERNMENT'S LIABILITY IN ANY CASE WHERE LIABILITY OF THE GOVERNMENT TO THE PURCHASER HAS BEEN ESTABLISHED SHALL NOT EXCEED REFUND OF SUCH PORTION OF THE PURCHASE PRICE AS THE GOVERNMENT MAY HAVE CEIVED.'

THE CONTRACT PROVISION QUOTED ABOVE APPEARS CLEARLY TO PRECLUDE PAYMENT OF THE AMOUNT CLAIMED.

THE LANGUAGE OF THE CONTRACT RECOGNIZES THAT QUANTITIES ARE ESTIMATED AND MAY VARY UP OR DOWN, AND WHEN THE VARIATION IS ON THE HIGH SIDE AND EXCEEDS THE AMOUNT THAT THE PURCHASER IS REQUIRED TO ACCEPT, HE MAY STILL RETAIN THE FULL SHIPMENT, IF HE CONSIDERS IT TO BE IN HIS INTEREST TO DO SO, OR HE MAY RETURN THE EXCESS. PROVISION IS MADE FOR AN ADJUSTMENT IN THESE CASES, BUT THE CONTRACT SPECIFICALLY LIMITS THE GOVERNMENT'S LIABILITY TO PAYMENT OF TRANSPORTATION CHARGES AND REFUND OF ANY AMOUNT PAID FOR THE EXCESS QUANTITY.

THE CHARGES FOR WHICH CLAIM IS MADE ARE NOT PAYABLE TO A CARRIER AND CLEARLY MAY NOT BE CONSIDERED AS TRANSPORTATION CHARGES. SINCE THE PURCHASE PRICE OF THE EXCESS HAS BEEN REFUNDED TO YOU AND ALL TRANSPORTATION CHARGES ON THE EXCESS HAVE BEEN PAID BY THE GOVERNMENT, THERE IS NO AUTHORITY FOR PAYMENT OF ANY ADDITIONAL AMOUNT TO YOU.