B-15941, MAY 1, 1941, 20 COMP. GEN. 703

B-15941, MAY 1, 1941, 20 COMP. GEN. 703

SALES - SURPLUS PROPERTY - EFFECT OF GOVERNMENT PRICE-FIXING ORDERS JUST AS THE SOVEREIGN IS NOT AFFECTED UNLESS EXPRESSLY NAMED OR INCLUDED BY NECESSARY IMPLICATION IN STATUTORY PROVISIONS, ESPECIALLY WHERE THE EFFECT WOULD BE TO RESTRICT OR DEPRIVE OF EXISTING RIGHTS OR INTERESTS, ALL THE MORE WOULD THIS APPEAR TO BE TRUE OF ADMINISTRATIVE PRICE-FIXING ORDERS. THE UNITED STATES AS A CONTRACTOR IS NOT LIABLE FOR ITS ACTS AS A SOVEREIGN. A SUCCESSFUL BIDDER MAY NOT BE RELIEVED OF ITS OBLIGATION TO PURCHASE MISCELLANEOUS SCRAP METALS OFFERED FOR SALE BY THE GOVERNMENT BECAUSE PRICE-FIXING ORDERS FOR SUCH METALS WERE ISSUED BY A GOVERNMENT AGENCY SUBSEQUENT TO THE OPENING OF BIDS WHICH MIGHT RESULT IN THE PURCHASER SUSTAINING A LOSS ON THE TRANSACTION. THE RULE THAT IN THE ABSENCE OF A STATUTE SO PROVIDING NO OFFICERS OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER A RIGHT VESTED IN OR ACQUIRED BY THE GOVERNMENT UNDER A CONTRACT IS APPLICABLE TO THE ACCOUNTING OFFICERS AS WELL AS THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, MAY 1, 1941:

I HAVE YOUR LETTER OF APRIL 14, 1941, AS FOLLOWS:

ON MARCH 18, 1941, BIDS WERE OPENED AT THE NORFOLK NAVY YARD, PORTSMOUTH, VIRGINIA, FOR THE SALE OF MISCELLANEOUS SCRAP MATERIALS UNDER CATALOG NO. B-185.

A COPY OF THE CATALOG IS ENCLOSED, PARTICULAR ATTENTION BEING INVITED TO LOT NO. 239 THEREOF, WHICH READS:

"1 LOT METALS, FERROUS AND NONFERROUS SCRAP, MIXED IRON, STEEL, BRASS, ZINC, AND ALUMINUM, APPROX. 50,000 LBS.'

AT THE OPENING B. SHAPIRO AND COMPANY, 824-828 S. EUTAW ST., BALTIMORE, MARYLAND, WAS THE HIGHEST OF SEVEN BIDDERS AND WAS AWARDED LOT NO. 239 UNDER DATE OF MARCH 25, 1941 ( CONTRACT N181S-35486) AT ITS BID OF $0.0461 PER POUND.

THE SIX OTHER BIDS RECEIVED FOR THIS LOT RANGED FROM $0.0051 TO $0.0309 PER POUND. ON MARCH 25, 1941, THE OFFICE OF PRODUCTION MANAGEMENT PUBLISHED CEILING PRICES FOR ALUMINUM CLIPS.

ON RECEIVING INFORMAL NOTIFICATION THAT THEIR BID WAS HIGH AND THAT THEY WOULD RECEIVE FORMAL AWARD, B SHAPIRO AND COMPANY BY LETTER OF MARCH 25, 1941 (COPY HEREWITH) REQUESTED RELIEF EITHER:

(A) BY THE ELIMINATION OF 25,000 POUNDS OF IRON FROM THE LOT OR,

(B) BY RELEASE FROM AWARD ON CONTRACT WITH THE RETURN OF DEPOSIT OF $2,650.00 THAT ACCOMPANIED THE BID

THE BUREAU OF SUPPLIES AND ACCOUNTS INFORMED MR. MORTON M. SHAPIRO OF B. SHAPIRO AND COMPANY, BY TELEPHONE ON MARCH 29, 1941, THAT IT WAS PREPARED TO ISSUE INSTRUCTIONS TO THE NORFOLK NAVY YARD TO CONSIDER THE TERMS OF THE CONTRACT FULFILLED UPON THE ACCEPTANCE BY THE COMPANY OF A TOTAL OF 55,000 POUNDS REPRESENTING THE "RUN" OF THE LOT. MR. SHAPIRO WAS ALSO INFORMED THAT SEGREGATION OR SORTING OF THE METALS IN THE LOT COULD NOT BE AUTHORIZED.

THIS OFFER WAS NOT ACCEPTABLE TO THE COMPANY AS INDICATED BY ITS LETTERS OF APRIL 1 AND APRIL 2, 1941 (COPIES HEREWITH), REQUESTING THE RESCISSION OF THE CONTRACT AND REFUND OF DEPOSIT.

THE ATTACHED COPY OF " AMERICAN METAL MARKET," ISSUE OF MARCH 19, 1941, GIVES A FULL DESCRIPTION OF THE REGULATION BY THE GOVERNMENT OF PRICES ON SCRAP, ZINC, AND ALUMINUM. FURTHER EXPLANATION OF THE PRICES ESTABLISHED FOR ALUMINUM BY THE PRICE STABILIZATION DIVISION OF THE NATIONAL DEFENSE ADVISORY COMMISSION IS SHOWN IN THE ATTACHED CLIPPING FROM THE " NEW YORK TIMES" OF MARCH 23, 1941.

IN VIEW OF THE CHANGED MARKET CONDITIONS DUE TO ESTABLISHMENT OF CEILING PRICES BY A GOVERNMENT AGENCY OCCURRING BETWEEN THE DATE OF OPENING, MARCH 18, 1941, AND THE AWARD ON MARCH 25, 1941, THE REQUESTS OF B. SHAPIRO AND COMPANY FOR RELIEF ARE FORWARDED WITH REQUEST FOR DECISION AS TO WHETHER OR NOT, BY THE ESTABLISHMENT OF CEILING PRICES FOR ALUMINUM CLIPS, BIDDING CONDITIONS WERE ALTERED TO A DEGREE THAT WOULD WARRANT THE CANCELLATION OF CONTRACT N181S-35486 AND THE REFUND OF $2,650.00 THAT ACCOMPANIED THE BID.

THE NAVY DEPARTMENT WILL INTERPOSE NO OBJECTION TO THE CANCELLATION OF THE CONTRACT.

THE RETURN OF THE PAPERS IS REQUESTED.

THE CONDITIONS AND TERMS OF SALE, ISSUED AS A PART OF CATALOG NO. B 185, REFERRED TO IN YOUR LETTER, TO BE MADE AN INTEGRAL PART OF BIDS SUBMITTED ON THE SCRAP MATERIALS COVERED BY THE CATALOG, PROVIDED IN PERTINENT PART AS FOLLOWS:

6. FROM DATE OF ISSUE OF THIS CATALOG, UNLESS OTHERWISE STIPULATED, ALL SALES MATERIAL MAY BE INSPECTED ON ANY WEEKDAY BETWEEN THE HOURS OF 8 A.M. AND 3 P.M. ( SATURDAYS, SUNDAYS, AND HOLIDAYS EXCEPTED). FAILURE TO INSPECT THE MATERIAL WILL NOT CONTRACT.

7. ALL MATERIAL LISTED IN THIS CATALOG IS OFFERED BY SEALED BID SALE "AS IS," "WHERE IS," AND ,IF IS," WITHOUT RECOURSE. THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION, BUT NO WARRANTY OR GUARANTY IS GIVEN BY THE NAVY AS TO THE EXACT QUANTITY, QUALITY, CONDITION, WEIGHT, SIZE, OR DESCRIPTION, OR THAT THE MATERIAL IS IN CONDITION TO BE USED FOR THE PURPOSE FOR WHICH IT WAS ORIGINALLY INTENDED OR MAY BE INTENDED OR DESIRED TO BE USED BY THE PURCHASER. NO CLAIM FOR ALLOWANCE UPON ANY OF THE GROUNDS AFORESAID WILL BE CONSIDERED. IN EVERY CASE WHERE SAMPLES OF THE LOTS ARE SHOWN, THESE SAMPLES ARE TRUE AND FAIR, TO THE BEST OF THE NAVY'S BELIEF, BUT THE BIDDERS ARE CAUTIONED THAT THEY SHOULD MAKE AN EXAMINATION OF THE LOTS BEFORE THE SALE, AS NO ALLOWANCE WILL BE MADE ON ACCOUNT OF ANY DIFFERENCE BETWEEN THE SAMPLE AND THE LOT. THIS IS NOT A SALE BY SAMPLE.

8. NO REPRESENTATIVE OF THE NAVY IS AUTHORIZED TO MAKE ANY STATEMENT OR REPRESENTATION AS TO QUALITY, CHARACTER, CONDITION, SIZE, WEIGHT, OR KIND OF ANY MATERIAL OFFERED AT THIS SALE, AND ANY REPRESENTATION OR STATEMENT MADE BY ANY REPRESENTATIVE OF THE NAVY, CONCERNING ANY SUCH MATERIAL, WILL NOT BE BINDING ON THE NAVY; NOR WILL IT BE CONSIDERED AS GROUNDS FOR ANY CLAIM FOR ADJUSTMENT OR RESCISSION OF ANY SALE.

9. THE ESTIMATES OF QUANTITY OR WEIGHT OF THE VARIOUS LOTS, AS SHOWN IN THIS CATALOG, ARE FOR THE GENERAL GUIDANCE OF BIDDERS AND HAVE NO EFFECT UPON THE SALE. ANY DISCREPANCY BETWEEN ESTIMATED AND ACTUAL QUANTITY OR WEIGHT WILL NOT INVALIDATE A SALE NOR BE CONSIDERED THE BASIS OF A CLAIM. THE SALE WILL BE OF THE ENTIRE LOT, AND PURCHASER WILL BE REQUIRED TO PAY FOR AND ACCEPT THE ACTUAL QUANTITY OR WEIGHT AVAILABLE FOR DELIVERY AS DISPLAYED FOR INSPECTION AT THE TIME OF SALE. WHEN LOTS ARE SOLD ON A QUANTITY OR WEIGHT BASIS THE PURCHASER WILL BE REQUIRED TO PAY ON THE BASIS OF THE PURCHASE PRICE FOR WHAT HE ACTUALLY RECEIVES. WHEN LOTS ARE SOLD ON A LOT BASIS, THE PURCHASER WILL BE REQUIRED TO PAY THE PRICE BID FOR THE LOT, REGARDLESS OF ACTUAL WEIGHT OR QUANTITY. THE TON SHALL BE 2,000 POUNDS.

11. BIDS MUST BE ACCOMPANIED BY DEPOSITS AS FOLLOWS:

(A) WHEN THE TOTAL AMOUNT BID IS $50 OR LESS, DEPOSIT OF THE FULL AMOUNT WILL BE REQUIRED.

(B) WHEN THE AMOUNT BID IS $50 UP TO $200, A DEPOSIT OF $50 WILL BE REQUIRED.

(C) BIDS OVER $200 UP TO $50,000, 25 PERCENT OF THE AMOUNT BID, BUT NOT MORE THAN $10,000.

12. DEPOSITS OF UNSUCCESSFUL BIDDERS WILL BE RETURNED PROMPTLY. DEPOSITS OF SUCCESSFUL BIDDERS WILL BE HELD AS SECURITY FOR THE PAYMENT OF THE BALANCE OF THE PURCHASE PRICE WITHIN TEN (10) DAYS FROM DATE OF AWARD; WHEN THIS TERM IS COMPLIED WITH, DEPOSITS MAY BE APPLIED IN MAKING FINAL PAYMENT. IN CASE OF FAILURE TO CARRY OUT THE TERMS OF PAYMENT, THE DEPOSIT WILL BE FORFEITED TO THE UNITED STATES GOVERNMENT AS LIQUIDATED DAMAGES AND THE BIDDER WILL LOSE ALL RIGHT AND INTEREST IN THE MATERIAL.

THE BASIS OR THEORY OF THE CONTRACTOR'S REQUEST FOR RELIEF FROM OBLIGATION UNDER ITS ACCEPTED BID ON LOT NO. 239 IS SET FORTH IN ITS LETTER OF MARCH 25, 1941, AS FOLLOWS:

ON MARCH 18, 1941, AT THE NORFOLK NAVY YARD, PORTSMOUTH, VIRGINIA, WE WERE HIGH ON LOT NO. 239 CONSISTING OF ONE LOT OF FERROUS AND NONFERROUS METALS, MIXED IRON, STEEL, ALUMINUM, ZINC, AND BRASS, APPROXIMATELY 50,000 POUNDS. THIS LOT OF MATERIAL CONSISTED OF 75 PERCENT IRON AND STEEL, AND THE BALANCE ALUMINUM AND ZINC. THERE IS PRACTICALLY NO BRASS IN THIS LOT AT ALL.

ON MARCH 19TH, ONE DAY AFTER THE BIDS WERE OPENED, THE GOVERNMENT ANNOUNCED AS WAS REPORTED IN THE AMERICAN METAL REPORTER AND TRADE JOURNAL THAT CEILING PRICES FOR REMELTING AND SCRAP ZINC WOULD BE ISSUED BY WASHINGTON. AT THE TIME WE BID ON THE MATERIAL, WE HAD BEEN OFFERED 28 CENTS PER POUND FOR ALUMINUM CLIPS AND 9-1/2 CENTS FOR SCRAP ZINC. THE TWO OUTFITS THAT QUOTED US THESE PRICES ARE LOCAL FIRMS WHO WERE SHORT OF MATERIAL. THE ONE NEEDED THE ALUMINUM TO RETURN TO THE ALUMINUM COMPANY OF AMERICA IN ORDER TO GET NEW ALUMINUM, AND THUS KEEP THEIR PLANT GOING. THE OTHER A GALVANIZING CONCERN WHO COULDN-T GET ZINC AND ALSO NEEDED THE ZINC.

ON MARCH 18TH, WE PUT IN OUR BID ACCORDINGLY. AFTER THIS STATEMENT HAD BEEN ISSUED FROM WASHINGTON, A NOMINAL PERIOD OF PRICES AROSE IN THE SCRAP INDUSTRY IN WHICH THERE WERE NO QUOTATIONS ISSUED ON ALUMINUM AND ZINC, PENDING THE RELEASE OF PRICES FROM WASHINGTON. DURING THIS PERIOD ON FRIDAY, MARCH 21ST, WE WERE AWARDED LOT NO. 239.

ON MARCH 24TH, MR. HENDERSON ISSUED HIS PRICES IN WHICH HE FIXED A MAXIMUM PRICE ON THE ALUMINUM CLIPS OF 14-1/2 CENTS PER POUND WHICH IS A PART OF THE LOT OF THE NONFERROUS MATERIAL IN LOT NO. 239. AT THE PRESENT TIME THE PRICES HAVE NOT BEEN ISSUED ON ZINC, BUT IT WILL PROBABLY BE 3 CENTS OR SO LESS THAN THE PRICES WE HAVE BEEN OFFERED BEFORE THE CEILING PRICES WERE ANNOUNCED.

AFTER CONTACTING COMMANDER PALATTY IN NORFOLK AND COMMANDER WALLACE IN WASHINGTON, WE ARE PRESENTING THESE FACTS TO YOU WITH THE HOPE OF ONE OF THE FOLLOWING REMEDIES.

THE LOT NO. 239, THOUGH ON THE CATALOG IS APPROXIMATELY 50,000 POUNDS WILL GO CLOSER TO 75,000 POUNDS IN WEIGHT. INASMUCH AS THE MAJORITY OF THIS MATERIAL IS IRON, WE FEEL IT WOULD BE FAIR IF THE NORFOLK NAVY YARD IS WILLING THAT WE WOULD NOT BE FORCED TO ACCEPT 25,000 POUNDS OF IRON AT .0460 CENTS PER POUND; THUS MINIMIZING OUR LOSS IN THE DIFFERENCE OF THE ALUMINUM PRICE. INASMUCH AS THE ALUMINUM IN THE LOT WOULD BE APPROXIMATELY 7,500 POUNDS, AND THE DIFFERENCE IS ALMOST 14 CENTS A POUND FROM WHAT WE WERE OFFERED AND WHAT WE WOULD HAVE TO ACCEPT, NOT HAVING TO TAKE ALL THE IRON, WOULD MINIMIZE OUR LOSS.

BECAUSE OF THE UNUSUAL CIRCUMSTANCES, WE FEEL INASMUCH AS THE GOVERNMENT HAD SOLD THE MATERIAL THE DAY BEFORE CEILING PRICES WERE ISSUED, AND AS WE ARE FORCED TO SELL OUR MATERIAL FOR MUCH LESS THAN WE COULD HAVE RECEIVED, WE FEEL JUSTIFIED IN ASKING FOR A FORM OF RELIEF THAT WOULD BE ACCEPTABLE AND FAIR TO ALL.

HOWEVER, IF YOU DO NOT FEEL ABLE TO MAKE THIS FORM OF RELIEF, WE FEEL THAT INASMUCH AS WE BOUGHT THE MATERIAL FROM THE GOVERNMENT A DAY BEFORE THE GOVERNMENT ANNOUNCED ANY SCRAP ALUMINUM AND ZINC WOULD BE FORCED TO BE SOLD AT LOWER PRICES, THUS PREVENTING US FROM MAKING ANY PROFIT AND BEING FORCED TO ACCEPT A LOSS, WE TRUST THAT YOU WILL RELEASE US FROM THE AWARD AND REFUND OUR DEPOSIT.

EXAMINATION OF THE FEDERAL REGISTER SHOWS THAT ON MARCH 24, 1941, THE PRICE STABILIZATION DIVISION OF THE ADVISORY COMMISSION TO THE COUNCIL OF NATIONAL DEFENSE ISSUED PRICE SCHEDULE NO. 2--- ALUMINUM SCRAP AND SECONDARY ALUMINUM INGOT--- 6 FED. REG. 1593, PROVIDING IN PART AS FOLLOWS:

1. MAXIMUM PRICES ON SALES OF ALUMINUM SCRAP BY THE MAKER OF THE SCRAP.-- - ON AND AFTER MARCH 25, 1941, REGARDLESS OF THE TERMS OF ANY COMMITMENT THERETOFORE ENTERED INTO, NO MAKER OF ALUMINUM SCRAP SHALL SELL, OFFER TO SELL, DELIVER, OR TRANSFER AT A PRICE, ALUMINUM SCRAP MADE BY HIM AT PRICES HIGHER THAN THE PRICES SET FORTH IN COLUMN I OF APPENDIX A, ATTACHED TO THIS SCHEDULE, AND NO PERSON SHALL BUY, OR OFFER TO BUY, ALUMINUM SCRAP FROM THE MAKER OF SUCH ALUMINUM SCRAP AT HIGHER PRICES; * *

2. MAXIMUM PRICES ON SALES OF ALUMINUM SCRAP BY DEALERS.--- ON AND AFTER MARCH 27, 1941, REGARDLESS OF THE TERMS OF ANY COMMITMENT THERETOFORE ENTERED INTO, ANY PERSON WHO IS NOT THE MAKER OF THE ALUMINUM SCRAP SOLD, OFFERED FOR SALE, DELIVERED, OR TRANSFERRED AT A PRICE, SHALL NOT SELL, OFFER TO SELL, DELIVER, OR TRANSFER AT A PRICE, ALUMINUM SCRAP AT PRICES HIGHER THAN THE PRICES SET FORTH IN COLUMN II OF APPENDIX A, ATTACHED TO THIS SCHEDULE, AND NO PERSON SHALL BUY, OR OFFER TO BUY, ALUMINUM SCRAP FROM ANY PERSON WHO IS NOT THE MAKER OF ALUMINUM SCRAP AT HIGHER PRICES; EXCEPT THAT ANY PERSON NOT THE MAKER OF THE ALUMINUM SCRAP WHO HAD PURCHASED ALUMINUM SCRAP PRIOR TO MARCH 24, 1941, TO MEET A PREVIOUSLY MADE FIRM COMMITMENT OF SALE OR DELIVERY OF SUCH SCRAP TO ANOTHER PERSON MAY, UPON APPLICATION TO THE PRICE STABILIZATION DIVISION, BE PERMITTED TO SELL, OR DELIVER, SUCH SCRAP IN ACCORDANCE WITH THE TERMS OF SUCH FIRM COMMITMENT.

5. EVASION.--- THE PRICE LIMITATIONS SET FORTH IN THIS SCHEDULE SHALL NOT BE EVADED WHETHER BY DIRECT OR INDIRECT METHODS IN CONNECTION WITH A PURCHASE, SALE, OR TRANSFER AT A PRICE, OF ALUMINUM SCRAP OR SECONDARY ALUMINUM INGOT, OR OF ANY OTHER MATERIALS, OR BY WAY OF ANY SERVICE OR OTHER CHARGE OR DISCOUNT, PREMIUM OR OTHER PRIVILEGE, OR BY TYING- AGREEMENT OR OTHER TRADE UNDERSTANDING, OR OTHERWISE.

8. ENFORCEMENT.--- IN THE EVENT OF REFUSAL OR FAILURE TO ABIDE BY THE PRICE LIMITATIONS, RECORD REQUIREMENTS, AND OTHER PROVISIONS CONTAINED IN THIS SCHEDULE, OR IN THE EVENT OF ANY EVASION OR ATTEMPT TO EVADE THE PRICE LIMITATIONS OR OTHER PROVISIONS CONTAINED IN THIS SCHEDULE, THIS DIVISION WILL MAKE EVERY EFFORT TO ASSURE (A) THAT THE CONGRESS AND THE PUBLIC ARE FULLY INFORMED OF ANY FAILURE TO ABIDE BY THE PROVISIONS OF THIS SCHEDULE; AND (B) THAT THE POWERS OF THE GOVERNMENT ARE FULLY EXERTED IN ORDER TO PROTECT THE PUBLIC INTEREST AND THE INTERESTS OF THOSE PERSONS WHO CONFORM WITH THIS SCHEDULE IN THE MAINTENANCE OF THE CEILING PRICES HEREIN SET FORTH. PERSONS WHO HAVE EVIDENCE OF THE DEMAND OR RECEIPT OF PRICES ABOVE THE LIMITATIONS SET FORTH, OR OF ANY EVASION OF OR EFFORT TO EVADE SUCH REQUIREMENTS, OR OF SPECULATION, OR MANIPULATION OF PRICES OF ALUMINUM SCRAP OR SECONDARY ALUMINUM INGOT, OR OF THE HOARDING OR ACCUMULATING OF UNNECESSARY INVENTORIES THEREOF, ARE URGED TO COMMUNICATE WITH THE PRICE STABILIZATION DIVISION. * * * * * * *

10. MODIFICATION OF THE PRICE SCHEDULE.--- PERSONS COMPLAINING OF HARDSHIP OR INEQUITY IN THE OPERATION OF THIS SCHEDULE MAY APPLY TO THE PRICE STABILIZATION DIVISION FOR APPROVAL OF ANY MODIFICATION THEREOF OR EXCEPTION THEREFROM.

11. DEFINITIONS.--- WHEN USED IN THIS SCHEDULE:

(A) THE TERM "PERSON" INCLUDES AN INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP, OR OTHER BUSINESS ENTITY;

(B) THE TERM "MAKER OF ALUMINUM SCRAP" MEANS ANY

(I) MANUFACTURER, FABRICATOR, OR OTHER INDUSTRIAL USER OF ALUMINUM WHO, AS AN INCIDENT TO HIS MANUFACTURING PROCESS, FABRICATING, OR OTHER INDUSTRIAL USE, PRODUCES ALUMINUM SCRAP; AND

(II) AUTOMOBILE CEMETERY OPERATOR, WRECKER, OR OTHER PERSON WHO, IN HIS BUSINESS OR AS AN INCIDENT TO HIS BUSINESS, COLLECTS AND SORTS ALUMINUM SCRAP. * * *

APPENDIX A TO SAID ORDER SET MAXIMUM PRICES OF $0.13 PER POUND FOR SALE BY THE MAKER AND $0.145 FOR SALE BY DEALERS, OF ALUMINUM SCRAP GRADED AS PURE CLIPS AND CABLE.

ON MARCH 31, 1941, THE PRICE STABILIZATION DIVISION ISSUED PRICE SCHEDULE NO. 3--- ZINC SCRAP MATERIALS AND SECONDARY SLAB ZINC--- 6 FED. REG. 1871, SIMILARLY PROVIDING THAT ON AND AFTER MARCH 31, 1941, REGARDLESS OF THE TERMS OF ANY CONTRACT OF SALE OR PURCHASE, OR OTHER COMMITMENT, ENTERED INTO PRIOR TO SUCH DATE, NO PERSON SHOULD SELL, OFFER TO SELL, DELIVER OR TRANSFER AT A PRICE, ZINC SCRAP MATERIALS TO ANY DISTILLER, REMELTER, FOUNDRY, BRASS MILL, GALVANIZER, DEALER, OR ANY OTHER PERSON, AT PRICES HIGHER THAN THE MAXIMUM PRICES SET FORTH IN APPENDIX A--- VARYING ACCORDING TO GRADE AND PLACE OF DELIVERY FROM $0.0425 TO $0.0675 PER POUND --- AND THAT NO PERSON SHOULD BUY, OR OFFER TO BUY, OR ACCEPT DELIVERY OF ZINC SCRAP MATERIALS FROM ANY PERSON AT HIGHER PRICES. ON APRIL 2, 1941, PRICE SCHEDULE NO. 4, 6 FED. REG. 1767, WAS ISSUED BY THE SAME AGENCY SETTING MAXIMUM PRICES FOR THE SALE OR DELIVERY, ON AND AFTER APRIL 3, 1941, OF IRON AND STEEL SCRAP, REGARDLESS OF THE TERMS OF PREVIOUS COMMITMENTS, EXCEPT IN CERTAIN LIMITED CASES NOT PERTINENT HERE.

BY EXECUTIVE ORDER NO. 8734, ISSUED APRIL 11, 1941, 6 FED. REG. 1917, THE PRESIDENT ESTABLISHED THE OFFICE FOR EMERGENCY MANAGEMENT OF THE EXECUTIVE OFFICE OF THE PRESIDENT, TO BE HEADED BY AN ADMINISTRATOR CHARGED, AMONG OTHER DUTIES, WITH THE PREVENTION OF PRICE SPIRALING AND RELATED ECONOMIC EVILS GROWING OUT OF THE DEFENSE EMERGENCY, THE DETERMINATION AND PUBLICATION, AFTER PROPER INVESTIGATION, OF SUCH MAXIMUM PRICES, ETC., AS THE ADMINISTRATOR MIGHT FROM TIME TO TIME DEEM FAIR AND REASONABLE, AND THE TAKING OF ALL LAWFUL AND APPROPRIATE STEPS TO FACILITATE THEIR OBSERVANCE, THE ADMINISTRATOR BEING EMPOWERED FOR SUCH PURPOSES TO RECOMMEND TO THE PRESIDENT THE EXERCISE OF AUTHORITY VESTED IN HIM BY CERTAIN ACTS, AND TO PERFORM THE FUNCTIONS VESTED IN THE PRESIDENT BY CERTAIN OTHER ACTS, SET FORTH IN THE EXECUTIVE ORDER. BY AN ORDER DATED APRIL 15, 1941, 6 FED. REG. 1965, THE ADMINISTRATOR RATIFIED, ADOPTED, AND CONTINUED IN EFFECT UNTIL SUPERSEDED, ALL PRICE SCHEDULES ISSUED BY THE PRICE STABILIZATION DIVISION OF THE ADVISORY COMMISSION TO THE COUNCIL OF NATIONAL DEFENSE.

THE PRICE OF $0.0461 PER POUND NAMED IN THE CONTRACT WITH B. SHAPIRO AND COMPANY COVERING LOT NO. 239 DOES NOT EXCEED THE MAXIMUM PRICES FIXED BY THE FOREGOING ORDERS IN THE CASE OF ALUMINUM AND ZINC SCRAP. IT DOES EXCEED THE MAXIMUM PRICES FIXED FOR IRON AND STEEL SCRAP, SUCH MAXIMUM PRICES GENERALLY BEING LESS THAN ONE CENT PER POUND. HOWEVER, WHETHER THE TOTAL PRICE FOR THE WHOLE MASS OF MATERIAL UNDER LOT NO. 239 IS IN EXCESS OF THE TOTAL MAXIMUM PRICES UNDER THE VARIOUS ORDERS FOR THE KINDS AND QUANTITIES OF MATERIALS IN THE LOT IS A QUESTION OF FACT NOT ASCERTAINABLE FROM THE PRESENT RECORD, WHICH DOES NOT SHOW TO ANY DEGREE OF CERTAINTY THE QUANTITIES OF THE VARIOUS MATERIALS IN THIS LOT OF MIXED SCRAP METALS.

FURTHERMORE, WHILE THE MAXIMUM PRICE ORDERS WERE ISSUED FOR THE AVOWED PURPOSE OF OBTAINING COOPERATION WITH THE GOVERNMENT IN MAINTAINING PRICE STABILITY, THERE IS NOTHING THEREIN EVEN PURPORTING TO BIND THE GOVERNMENT, IN SELLING ITS ACCUMULATED SCRAP MATERIALS, TO THE PRICES FIXED THEREIN, OR TO MODIFY THE PROVISIONS OF EXISTING GOVERNMENT CONTRACTS COVERING SUCH SALES, THE DUTIES OF THE ADMINISTRATOR IN THIS RESPECT UNDER PARAGRAPH D OF EXECUTIVE ORDER NO. 8734 APPARENTLY CONSISTING OF ADVISING AND MAKING RECOMMENDATIONS TO OTHER DEPARTMENTS AND AGENCIES IN RESPECT TO SUCH OF THEIR ACTIVITIES AS MAY AFFECT THE PRICE OF MATERIALS AND COMMODITIES. SEE 25 COMP. DEC. 918; 19 COMP. GEN. 453, AND CASES THEREIN CITED, PARTICULARLY, DOLLAR SAVINGS BANK V. UNITED STATES, 19 WALL. 227; UNITED STATES V. HERRON, 20 WALL. 251; AND IN RE TIDEWATER COAL EXCHANGE, 280 FED. 648, TO THE EFFECT THAT THE SOVEREIGN IS NOT AFFECTED UNLESS EXPRESSLY NAMED OR INCLUDED BY NECESSARY IMPLICATION IN STATUTORY PROVISIONS, ESPECIALLY WHERE THE EFFECT WOULD BE TO RESTRICT OR DEPRIVE THE SOVEREIGN OF EXISTING RIGHTS OR INTERESTS. A FORTIORI WOULD THUS APPEAR TO BE TRUE OF ADMINISTRATIVE PRICE-FIXING ORDERS. IN THE PRESENT CASE IT DOES NOT APPEAR HOW THE DELIVERY BY THE GOVERNMENT OF THE SCRAP METALS COVERED BY LOT NO. 239 AT THE PRICE NAMED IN ITS CONTRACT WITH THIS DEALER CONCEIVABLY COULD INTERFERE WITH THE PURPOSE OF THE PRICE -FIXING ORDERS TO KEEP PRICES DOWN TO REASONABLE LEVELS, SINCE THE PRICES AT WHICH THE DEALER COULD RESELL THE MATERIALS ARE LIMITED BY THE PROVISIONS OF SUCH ORDERS, WITH THE EXCEPTIONS THEREIN ENUMERATED. ACCORDINGLY, THERE APPEARS NO REASON ON THE GOVERNMENT'S SIDE ARISING OUT OF THE MAXIMUM PRICE ORDERS, TO PREVENT DELIVERY OF LOT NO. 239 AT THE CONTRACT PRICE.

ON THE CONTRACTOR'S SIDE, WHILE THE FACTS ARE NOT ENTIRELY CLEAR, IT APPEARS FROM THE CONTRACTOR'S LETTER OF MARCH 25, 1941, QUOTED ABOVE, THAT ITS PROPOSAL IN FACT MAY HAVE BEEN ACCEPTED ON MARCH 21, 1941, AND THAT, THEREFORE, A BINDING CONTRACT MAY HAVE BEEN IN EFFECT FROM THAT DATE, NOTWITHSTANDING THE FORMAL CONTRACT IS DATED MARCH 25, 1941. UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP CO., 239 U.S. 88; UNITED STATES V. PURCELL ENVELOPE CO., 249 U.S. 313. IN THAT EVENT, IF THE CONTRACTOR CAN SHOW A PREVIOUS FIRM COMMITMENT IN CONNECTION WITH THE OFFER WHICH IT REPORTED IT HAD RECEIVED FOR ALUMINUM CLIPS, IT MAY BE PERMITTED BY THE PROPER AUTHORITIES TO SELL OR DELIVER THE MATERIAL IN ACCORDANCE THEREWITH, PURSUANT TO THE PROVISIONS OF PARAGRAPH 2 OF THE MAXIMUM PRICE ORDER DATED MARCH 24, 1941, COVERING SUCH MATERIAL. LEAST, IN THE CIRCUMSTANCES IN THIS CASE IT MIGHT BE POSSIBLE FOR THE CONTRACTOR TO OBTAIN EQUITABLE RELIEF UNDER PARAGRAPH 10 OF SAID ORDER.

IN ANY EVENT, ASSUMING THAT NO SUCH RELIEF COULD BE OBTAINED, AND ASSUMING, BUT NOT DECIDING, THAT THE CONTRACTOR WOULD THEN BE BOUND BY THE RESPECTIVE MAXIMUM PRICE SCHEDULES AS TO ANY RESALE OF THE MATERIALS IN LOT NO. 239, UNDER THE PRINCIPLES OF UNITED STATES V. COHEN GROCERY CO., 255 U.S. 81; SMALL CO. V. AMERICAN SUGAR REFINING CO., 267 U.S. 233; HIGHLAND V. RUSSELL CAR AND SNOW PLOW CO., 279 U.S. 253; NEBBIA V. NEW YORK, 291 U.S. 502; UNITED STATES V. ROCK ROYAL COOPERATIVE, INC., 307 U.S. 533; SUNSHINE ANTHRACITE COAL CO. V. ADKINS, 310 U.S. 381, AND OTHER CASES RESPECTING THE VALIDITY AND BINDING EFFECT OF PRICE CONTROL ORDERS AND LEGISLATION, OR BY SOME OF THE SANCTIONS SET FORTH IN EXECUTIVE ORDER NO. 8734, THAT RESULT COULD NOT AFFECT THE RIGHT OF THE UNITED STATES TO RECEIVE THE FULL PURCHASE PRICE UNDER ITS CONTRACT.

THE SALE WAS OF THE ENTIRE LOT OF SCRAP MATERIAL, AND THE GOVERNMENT EXPRESSLY REFRAINED FROM MAKING ANY REPRESENTATIONS AS TO QUALITY, CHARACTER, OR KIND OF MATERIAL OFFERED, OR AS TO ANY OTHER FACT WHICH MIGHT BE USED AS A BASIS FOR A CONCLUSION AS TO THE VALUE OF THE MATERIAL. THE NAVY DEPARTMENT IN NO WAY GUARANTEED THAT THE MATERIAL COULD BE RESOLD AT A PROFIT, NOR DOES IT APPEAR TO HAVE BEEN INFORMED BEFORE THE OPENING OF THE BIDS, OF THE INTENT OF THE BIDDER WITH RESPECT TO THE DISPOSITION OF THE PROPERTY IF IT SHOULD BE AWARDED A CONTRACT. THE FACT THAT THE MARKET VALUE OF THE PROPERTY MAY HAVE DEPRECIATED BEFORE THE TIME FOR DELIVERY DOES NOT GIVE THE PURCHASER ANY EQUITY TO IMPOSE THE LOSS UPON THE SELLER. VIRGINIA SHIPBUILDING CORP. ET AL. V. UNITED STATES, 22 FED. (2D) 38, CERTIORARI DENIED, 276 U.S. 625. ALSO, IT APPEARS THAT THE MAXIMUM PRICE ORDERS WERE NOT ISSUED BY THE GOVERNMENT WITHOUT WARNING, BUT AFTER CONSULTATION WITH MEMBERS OF THE RESPECTIVE INDUSTRIES AND AFTER THE FAILURE OF EFFORTS TO KEEP PRICES DOWN BY VOLUNTARY COOPERATION OF DEALERS AND SCRAP USERS.

BUT BE THAT AS IT MAY, THE MAXIMUM PRICE ORDERS WERE ISSUED BY THE UNITED STATES NOT AS A CONTRACTOR, BUT AS A SOVEREIGN, AND THE ORDERS AFFECTED EQUALLY ALL WITHIN THEIR SCOPE. IT IS THE ESTABLISHED RULE THAT THE UNITED STATES AS A CONTRACTOR IS NOT LIABLE FOR ITS ACTS AS A SOVEREIGN. IN THE CASE OF HOROWITZ V. UNITED STATES, 267 U.S. 458, THE CLAIMANT HAD BROUGHT SUIT TO RECOVER DAMAGES FROM THE UNITED STATES FOR THE GOVERNMENT'S FAILURE, BY REASON OF AN EMBARGO ORDERED BY THE RAILROAD ADMINISTRATION, TO SHIP PROMPTLY SURPLUS SILK PURCHASED FROM THE GOVERNMENT BY THE CLAIMANT, THE MARKET VALUE OF THE SILK HAVING DECLINED BETWEEN THE TIME OF THE SALE AND THE TIME OF THE SHIPMENT. THE SUPREME COURT OF THE UNITED STATES, IN DENYING RECOVERY, SAID:

IT HAS LONG BEEN HELD BY THE COURT OF CLAIMS THAT THE UNITED STATES WHEN SUED AS A CONTRACTOR CANNOT BE HELD LIABLE FOR AN OBSTRUCTION TO THE PERFORMANCE OF THE PARTICULAR CONTRACT RESULTING FROM ITS PUBLIC AND GENERAL ACTS AS A SOVEREIGN. DEMING V. UNITED STATES, 1 CT.1CL. 190. 191; JONES V. UNITED STATES, 1 CT.1CL. 383, 384; WILSON V. UNITED STATES, 11 CT.1CL. 513, 520. IN THE JONES CASE, SUPRA, THE COURT SAID: " THE TWO CHARACTERS WHICH THE GOVERNMENT POSSESSES AS A CONTRACTOR AND AS A SOVEREIGN CANNOT BE THUS FUSED; NOR CAN THE UNITED STATES WHILE SUED IN THE ONE CHARACTER BE MADE LIABLE IN DAMAGES FOR THEIR ACTS DONE IN THE OTHER. WHATEVER ACTS THE GOVERNMENT MAY DO, BE THEY LEGISLATIVE OR EXECUTIVE, SO LONG AS THEY BE PUBLIC AND GENERAL, CANNOT BE DEEMED SPECIALLY TO ALTER, MODIFY, OBSTRUCT OR VIOLATE THE PARTICULAR CONTRACTS INTO WHICH IT ENTERS WITH PRIVATE PERSONS. * * * IN THIS COURT, THE UNITED STATES APPEAR SIMPLY AS ONTRACTORS; AS THEY ARE TO BE HELD LIABLE ONLY WITHIN THE SAME LIMITS THAT ANY OTHER DEFENDANT WOULD BE IN ANY OTHER COURT. THOUGH THEIR SOVEREIGN ACTS PERFORMED FOR THE GENERAL GOOD MAY WORK INJURY TO SOME PRIVATE CONTRACTORS, SUCH PARTIES GAIN NOTHING BY HAVING THE UNITED STATES AS THEIR DEFENDANTS.'

IN THE CASE OF FRANK ET AL., ADMRS. V. UNITED STATES, 79 CT.1CLS. 516, THE COURT OF CLAIMS HELD THAT A CONTRACT BETWEEN THE UNITED STATES AND THE PLAINTIFFS' DECEDENT COVERING THE SALE OF SURPLUS WAR DEPARTMENT DRUGS, NOT GUARANTEED BY THE GOVERNMENT AS EXPORTABLE, WAS NOT VOID BECAUSE OF THE EXISTENCE OF AN EMBARGO BY THE GOVERNMENT ON EXPORTATION OF SUCH MATERIAL TO RUSSIA, NOTWITHSTANDING THE PURCHASER HAD INFORMED THE AGENTS OF THE GOVERNMENT AT THE TIME THE BID WAS SUBMITTED THAT THE MATERIAL WAS BEING PURCHASED FOR RESALE TO THE RUSSIAN GOVERNMENT. SEE, ALSO, AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75, WHERE THE CLAIMANT WAS HELD TO ITS CONTRACT PRICE UNDER A CONTRACT FOR DELIVERY OF COPPER TO THE GOVERNMENT, ALTHOUGH A HIGHER PRICE FOR COPPER WAS FIXED BY THE GOVERNMENT BEFORE DELIVERY OF A PORTION THEREOF; MAXWELL V UNITED STATES, 3 FED. (2D) 906, AFFIRMED 271 U.S. 647; 24 COMP. DEC. 746; ID 777; 1 COMP. GEN. 380; 8 ID. 25; 19 ID. 903.

IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER A RIGHT VESTED IN OR ACQUIRED BY THE GOVERNMENT UNDER A CONTRACT. SIMPSON V. UNITED STATES, 172 U.S. 372; UNITED STATES V. AMERICAN SALES CORP., 27 FED. (2D) 389, AFFIRMED IN 32 FED. (2D) 141, AND CERTIORARI DENIED, 280 U.S. 574. STATED BY THE COURT OF CLAIMS IN PACIFIC HARDWARE CO. V. UNITED STATES, 49 CT.1CLS. 327, 335:

IT IS UNQUESTIONABLY TRUE THAT AN OFFICIAL OF THE GOVERNMENT IS NOT AUTHORIZED TO GIVE AWAY OR REMIT A CLAIM DUE THE GOVERNMENT. THIS RULE IS GROUNDED IN A SOUND PUBLIC POLICY AND IS NOT TO BE WEAKENED. * * *

THE RULE IS APPLICABLE TO THE ACCOUNTING AS WELL AS THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT AND CONSIDERATIONS OF SYMPATHY FOR THE POSSIBLE MISFORTUNE OF A CONTRACTOR DO NOT AUTHORIZE THE WAIVING OF THE RULE.

IN VIEW OF THE FOREGOING AUTHORITIES, THERE APPEARS NO LEGAL BASIS FOR RESCISSION OF THE CONTRACT WITH B. SHAPIRO AND CO., AND IN VIEW OF THE SPECIFIC PROVISIONS OF PARAGRAPH 9 OF THE CONDITIONS AND TERMS OF SALE, REQUIRING THE PURCHASER TO PAY FOR AND ACCEPT THE ACTUAL QUANTITY OR WEIGHT AVAILABLE FOR DELIVERY, THERE WOULD BE NO AUTHORITY FOR CONSIDERING THE CONTRACT SATISFIED BY THE ACCEPTANCE OF ANYTHING LESS THAN THE TOTAL QUANTITY OF MATERIALS CATALOGED UNDER LOT NO. 239. BRAWLEY V. UNITED STATES 96 U.S. 168.

ACCORDINGLY, THE CONTRACTOR SHOULD BE ADVISED THAT IF IT FAILS OR REFUSES TO ACCEPT DELIVERY OF THE ENTIRE QUANTITY OF MATERIAL AND MAKE PAYMENT THEREFOR AT THE CONTRACT PRICE, THAT PORTION OF ITS BID DEPOSIT APPLICABLE TO LOT NO. 239 WILL BE FORFEITED TO THE UNITED STATES AS LIQUIDATED DAMAGES UNDER THE PROVISIONS OF PARAGRAPH 12 OF THE CONDITIONS AND TERMS OF SALE.