B-153638, MAY 11, 1964

B-153638, MAY 11, 1964

TO SOUTHERN SCRAP MATERIAL CO., LTD.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 17, 1964, WHICH, IN EFFECT, REQUESTS REVIEW OF THAT PART OF OUR SETTLEMENT DATED FEBRUARY 3, 1964, WHICH DISALLOWED $168.09 OF THE TOTAL AMOUNT OF$298.13 CLAIMED BY YOU UNDER DEFENSE SUPPLY AGENCY CONTRACT NO. DSA 24-S-1787, DATED JUNE 10, 1963.

IN RESPONSE TO INVITATION NO. 24-S-63-92, ISSUED ON MAY 13, 1963, BY THE DEFENSE SURPLUS SALES OFFICE, BROOKLEY AIR FORCE BASE, YOU SUBMITTED A BID DATED JUNE 4, 1963, OFFERING TO PURCHASE, AMONG OTHERS, ITEMS NOS. 11, 12 AND 29, COVERING VARIOUS QUANTITIES OF COPPER AND BRASS SCRAP AT THE PRICES SET FORTH IN YOUR BID FOR THE RESPECTIVE ITEMS. YOUR BID WAS ACCEPTED AS TO ITEMS NOS. 11, 12 AND 29 ON JUNE 10, 1963, IN THE TOTAL AMOUNT OF $3,600.65 THEREBY CONSUMMATING CONTRACT NO. DSA-24-S-1787 AND FINAL PAYMENT WAS MADE BY YOU IN THIS AMOUNT ON JUNE 18, 1963. BY LETTER DATED JUNE 26, 1963, YOU ADVISED THE SALES OFFICE THAT THERE WAS INCLUDED IN ITEM NO. 29, DESCRIBED IN THE INVITATION AS COVERING 10,000 POUNDS OF BRASS SCRAP, NINE WOODEN BOXES WEIGHING A TOTAL OF 675 POUNDS AND A BOX OF IRON SHELLS AND, THEREFORE, THE ACTUAL AMOUNT OF BRASS SHELLS RECEIVED BY YOU WAS ONLY 8,470 POUNDS. BY LETTER DATED JULY 16, 1963, YOU FILED A CLAIM WITH THE SALES OFFICE FOR $298.13 WHICH APPARENTLY WAS INTENDED TO BE BASED ON A REFUND OF THE TOTAL POUNDAGE OF THE WOODEN BOXES AND THE BOX OF IRON SHELLS RECEIVED BY YOU AT THE UNIT PRICE PER POUND SET FORTH IN YOUR BID FOR THIS ITEM. IN CONSIDERING YOUR CLAIM IT APPEARS THAT YOU WERE AUTHORIZED TO, AND DID, RETURN TO THE GOVERNMENT THE WOODEN BOXES AND THE BOX OF IRON SHELLS. MOREOVER, A SUPPLEMENTAL AGREEMENT WAS ISSUED ON AUGUST 29, 1963, BY THE CONTRACTING OFFICER TO CONTRACT NO. DSA-24-S-1787 REDUCING THE WEIGHT OF ITEM NO. 29 ACCORDINGLY. UPON A SUBSEQUENT TRANSFER OF THE CONTRACT TO THE DEFENSE SURPLUS SALES OFFICE, MEMPHIS ARMY DEPOT, THE OFFICE OF COUNSEL DETERMINED THAT THE SUPPLEMENTAL AGREEMENT PREVIOUSLY ISSUED TO THE CONTRACT WAS INVALID, IN THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO SETTLE A CLAIM BASED UPON AN ALLEGED MISDESCRIPTION OF THE PROPERTY. THEREFORE, THE CLAIM WAS FORWARDED TO OUR OFFICE FOR CONSIDERATION WHICH RESULTED IN OUR SETTLEMENT DATED FEBRUARY 3, 1964, AUTHORIZING PAYMENT TO YOU OF $85.46--- $130.04 ALLOWED, LESS AN AMOUNT OF $44.58 OTHERWISE PROPERLY DUE THE GOVERNMENT--- FOR THE WEIGHT OF THE WOODEN BOXES.

WITH RESPECT TO THAT PART OF YOUR CLAIM BASED ON THE WEIGHT INVOLVED IN THE BOX OF IRON SHELLS, THERE CAN BE NO DOUBT THAT THE SUPPLEMENTAL AGREEMENT, WHICH WAS ISSUED TO CONTRACT NO. DSA-24-S-1787 BY THE CONTRACTING OFFICER ONLY AFTER ADVICE OF COUNSEL, WAS ISSUED IN GOOD FAITH. LIKEWISE, IT IS SHOWN THAT THE AGREEMENT WAS ACCEPTED AND COMPLETELY RELIED UPON BY YOU IN THE RETURN OF THIS PART OF THE PROPERTY TO THE GOVERNMENT. MOREOVER, THE BOX OF IRON SHELLS IS PROBABLY UNAVAILABLE FOR RETURN TO YOU AT THIS TIME. IN VIEW OF THESE CIRCUMSTANCES, AND NOTWITHSTANDING THE QUESTIONABLE VALIDITY OF THE SUPPLEMENTAL AGREEMENT ITSELF, WE ARE TODAY ISSUING INSTRUCTIONS TO OUR CLAIMS DIVISION TO ALLOW YOU, IN THIS PARTICULAR CASE, AN ADDITIONAL AMOUNT FOR THE WEIGHT INVOLVED IN THE BOX OF IRON SHELLS. SUCH ADDITIONAL AMOUNT IS BASED ON THE FOLLOWING WEIGHTS FURNISHED BY THE DEFENSE SUPPLY AGENCY AND THAT AGENCY'S RECOMMENDATION IN THE MATTER:

CHART "ITEM NO. WEIGHT UNIT PRICE TOTAL 11 11,580 POUNDS .1029 $1,191.58 12 3,364 POUNDS .1759

591.73 29 (10,180 LBS 8,591 POUNDS .1829 1,571.29

LESS 1,589 LBS) --------------

$3,354.60

TOTAL PAYMENT $3,600.65

TOTAL DELIVERED 3,354.60

REFUND $ 246.05"

THUS, THERE IS HEREBY AUTHORIZED TO BE PAID TO YOU THE ADDITIONAL AMOUNT OF $116.01--- TOTAL REFUND DUE OF $246.05 LESS THE AMOUNT OF $130.04 PREVIOUSLY ALLOWED YOU IN OUR SETTLEMENT DATED FEBRUARY 3, 1964.

THE DIFFERENCE BETWEEN THE TOTAL AMOUNT OF $298.13 CLAIMED BY YOU AND THE TOTAL AMOUNT OF $246.05 ALLOWED, OR $52.08, IS DISALLOWED, SINCE SUCH AMOUNT IS IN EXCESS OF THE AMOUNT RECOMMENDED BY THE DEFENSE SUPPLY AGENCY, WHICH RECOMMENDATION IS BASED ON THE SHIPPING WEIGHTS INVOLVED IN ALL THREE ITEMS INCLUDED IN CONTRACT NO. DSA-24-S 1787.