B-153418, MAR. 19, 1964

B-153418: Mar 19, 1964

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TO THE LUNTZ IRON AND STEEL COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 21. WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $2. TWO ITEMS OF IRON AND STEEL SCRAP WERE OFFERED FOR SALE. THE WAREHOUSE AT WHICH THE PROPERTY WAS LOCATED WAS OPERATED AND MAINTAINED FOR THE GOVERNMENT BY UNI-SERVICES CORPORATION AND BECAUSE OF THE CONTRACTUAL RESPONSIBILITY OF THAT CORPORATION FOR THE WAREHOUSE. THE INVITATION PROVIDED THAT THE PURCHASER WOULD BE REQUIRED TO OBTAIN THE REMOVAL AND LOADING SERVICES FROM UNI- SERVICES WHICH WAS SET AT $25. YOU WERE THE HIGH BIDDER ON THE TOTAL QUANTITY OF SCRAP. HAVING OFFERED $5 PER GROSS TON FOR EACH ITEM AND YOU WERE AWARDED THE CONTRACT ON MAY 7. LOADING AND REMOVAL OF THE SCRAP WAS COMPLETED ON JULY 7.

B-153418, MAR. 19, 1964

TO THE LUNTZ IRON AND STEEL COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 21, 1964, REQUESTING A REVIEW OF SETTLEMENT DATED JANUARY 17, 1964, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $2,652 AS LOSS OF PROFIT ALLEGED TO BE DUE BECAUSE OF A SHORTAGE IN THE QUANTITY OF IRON AND STEEL SCRAP PURCHASED UNDER CONTRACT NO. DSA- 27-S-1697, DATED MAY 7, 1963.

THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO, BY INVITATION NO. 27-S-63-57, DATED APRIL 11, 1963, INVITED BIDS ON THE SALE OF GOVERNMENT PROPERTY LOCATED AT GOVERNMENT WAREHOUSE NO. 2, GRAND BLANC, MICHIGAN. TWO ITEMS OF IRON AND STEEL SCRAP WERE OFFERED FOR SALE. ITEM 1, STORED IN THE INSIDE OF THE WAREHOUSE, CONSISTED OF AN ESTIMATED 580 GROSS TONS, AND ITEM 2, STORED ON THE PREMISES ADJOINING THE WAREHOUSE, CONSISTED OF AN ESTIMATED 2,271 GROSS TONS. THE WAREHOUSE AT WHICH THE PROPERTY WAS LOCATED WAS OPERATED AND MAINTAINED FOR THE GOVERNMENT BY UNI-SERVICES CORPORATION AND BECAUSE OF THE CONTRACTUAL RESPONSIBILITY OF THAT CORPORATION FOR THE WAREHOUSE, THE INVITATION PROVIDED THAT THE PURCHASER WOULD BE REQUIRED TO OBTAIN THE REMOVAL AND LOADING SERVICES FROM UNI- SERVICES WHICH WAS SET AT $25,548.12 WITH NO PROVISION FOR ADJUSTMENT IN THE COST OF THE LOADING SERVICES IN THE EVENT OF A VARIATION IN QUANTITY FROM THE ESTIMATED AMOUNT.

YOU WERE THE HIGH BIDDER ON THE TOTAL QUANTITY OF SCRAP, HAVING OFFERED $5 PER GROSS TON FOR EACH ITEM AND YOU WERE AWARDED THE CONTRACT ON MAY 7, 1963. LOADING AND REMOVAL OF THE SCRAP WAS COMPLETED ON JULY 7, 1963, AND THE FINAL TOTAL WEIGHT WAS SHOWN TO HAVE BEEN 2,693.0089 GROSS TONS OR 157.9911 GROSS TONS LESS THAN THE ESTIMATED QUANTITY. BEFORE THE OUTLOADING HAD BEEN COMPLETED, OR ON JUNE 6, 1963, YOU CLAIMED THAT 130 GROSS TONS OF CAST IRON WHICH YOU PRESUMED HAD BEEN INCLUDED IN ITEM 2 HAD BEEN REMOVED BY THE GOVERNMENT AND SHIPPED ELSEWHERE, MAKING IT UNAVAILABLE TO YOU. YOU STATED THAT YOU HAD SOLD THIS PORTION OF THE SCRAP TO A THIRD PARTY FOR $35 PER GROSS TON AND THAT YOU WOULD HAVE REALIZED A PROFIT OF $1,560, LATER REVISED TO $2,652 BECAUSE OF ADDITIONAL TONNAGE CLAIMED TO HAVE BEEN IMPROPERLY REMOVED BY THE GOVERNMENT.

THE ADMINISTRATIVE OFFICE STATES THAT IN THE NEAR VICINITY OF 2,271 GROSS TONS OF SCRAP STORED ON THE OUTSIDE OF THE WAREHOUSE WAS AN ADDITIONAL QUANTITY OF APPROXIMATELY 2,000 TONS WHICH WAS NOT INCLUDED IN THE SALE. WHILE THE RECORD SHOWS THAT TWO VISITS TO THE SITE OF THE PROPERTY INVOLVED WERE MADE BY YOUR REPRESENTATIVE IN APRIL 1963, THERE IS NO SHOWING THAT ANY GOVERNMENT EMPLOYEE MADE ANY MISREPRESENTATION IN THIS MATTER. DURING THESE VISITS AN EMPLOYEE OF THE CUSTODIAL CONTRACTOR WAS ASSIGNED TO ESCORT YOUR REPRESENTATIVE AND NO ATTEMPT WAS MADE TO SPECIFICALLY POINT OUT ITEMS FOR SALE, AS EACH ITEM INCLUDED IN THE SALE HAD BEEN SO MARKED.

ASIDE FROM THE FOREGOING, PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS CONTAINED THE USUAL DISCLAIMER OF WARRANTY AS TO QUANTITY, ETC., AND THE PROPERTY WAS SOLD ON A UNIT-PRICE BASIS. ALSO, UNDER PARAGRAPH 8 OF THE SAME TERMS AND CONDITIONS THE PURCHASER AGREED TO ACCEPT ANY QUANTITY WHICH DID NOT VARY BY MORE THAN 10 PERCENT FROM THE ESTIMATED QUANTITY. THE GOVERNMENT ADMITS THAT THE QUANTITY OF MATERIAL OFFERED FOR SALE WAS OVERESTIMATED BY APPROXIMATELY 6 PERCENT.