B-162072, MAY 20, 1970

B-162072: May 20, 1970

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NOTICE CLAIM FOR MONIES DEDUCTED ON BASIS CONTRACTOR WAS NOT NOTIFIED OF LUMBER SHORTAGE IN ACCORDANCE WITH WWPA 10-DAY RULE WAS PROPERLY DISALLOWED SINCE SUCH RULE IS SUPERSEDED BY DCSC CONTRACT CLAUSE REQUIRING NOTICE OF DAMAGE OR LOSS TO BE GIVEN PROMPTLY. ADVICE OF PAYMENT WAS SUFFICIENT TO CONSTITUTE PROMPT NOTICE. " WHETHER NOTICE OF SHORTAGE MAILED BY GOVERNMENT 14 DAYS AFTER RECEIPT OF SHIPMENT CONSTITUTES "PROMPT NOTICE" IS OPEN TO QUESTION SINCE WHAT CONSTITUTES "PROMPTLY" IS NOT SUSCEPTIBLE OF EXACT DEFINITION. TO J & M LUMBER INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 17. YOUR CLAIM WAS BASED ON THE CONTENTION THAT THE DEDUCTION WAS IMPROPER SINCE YOU HAD NOT BEEN NOTIFIED OF THE SHORTAGE IN ACCORDANCE WITH THE WESTERN WOOD PRODUCTS ASSOCIATION (WWPA) RULES.

B-162072, MAY 20, 1970

CONTRACTS--DELIVERIES--SHORTAGES--NOTICE CLAIM FOR MONIES DEDUCTED ON BASIS CONTRACTOR WAS NOT NOTIFIED OF LUMBER SHORTAGE IN ACCORDANCE WITH WWPA 10-DAY RULE WAS PROPERLY DISALLOWED SINCE SUCH RULE IS SUPERSEDED BY DCSC CONTRACT CLAUSE REQUIRING NOTICE OF DAMAGE OR LOSS TO BE GIVEN PROMPTLY. UNDER SUCH LANGUAGE AND ABSENT CONTRACT REQUIREMENT THAT LUMBER BE KEPT INTACT FOR SPECIFIC PERIOD, ADVICE OF PAYMENT WAS SUFFICIENT TO CONSTITUTE PROMPT NOTICE, AND FAILURE TO NOTIFY CONTRACTOR IN LESS THAN 14 DAYS CANNOT PROVIDE BASIS FOR ALLOWING CLAIM, THERE BEING NO ASSURANCE LUMBER WOULD BE AVAILABLE FOR RE-TALLY EVEN HAD EARLIER NOTIFICATION BEEN EFFECTED. WORDS AND PHRASES--"PROMPTLY" WHERE CONTRACT CLAUSE REQUIRED ONLY THAT NOTICE TO CONTRACTOR OF LOSS OR DAMAGE BE GIVEN "PROMPTLY," WHETHER NOTICE OF SHORTAGE MAILED BY GOVERNMENT 14 DAYS AFTER RECEIPT OF SHIPMENT CONSTITUTES "PROMPT NOTICE" IS OPEN TO QUESTION SINCE WHAT CONSTITUTES "PROMPTLY" IS NOT SUSCEPTIBLE OF EXACT DEFINITION, HAVING BEEN GIVEN VARIOUS INTERPRETATIONS BY COURTS.

TO J & M LUMBER INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 17, 1970, REQUESTING RECONSIDERATION OF THE SETTLEMENT CERTIFICATE OF APRIL 8, 1970, DISALLOWING YOUR CLAIM FOR $20.74, DEDUCTED BY THE DEFENSE CONTROL ADMINISTRATION SERVICES REGION, SAN FRANCISCO, FROM INVOICE JM 7785-1, UNDER CONTRACT NO. DSA 720-69-C-1228, FOR SHORTAGE IN A LUMBER SHIPMENT.

INITIALLY, YOUR CLAIM WAS BASED ON THE CONTENTION THAT THE DEDUCTION WAS IMPROPER SINCE YOU HAD NOT BEEN NOTIFIED OF THE SHORTAGE IN ACCORDANCE WITH THE WESTERN WOOD PRODUCTS ASSOCIATION (WWPA) RULES, WHICH YOU BELIEVED A PART OF THE CONTRACT. HOWEVER, AS WAS POINTED OUT IN DISALLOWING YOUR CLAIM, THE CONTRACT PROVIDED THAT THE APPLICABLE ASSOCIATION RULES WOULD NOT GOVERN WHERE MODIFIED BY THE DCSC CONTRACT CLAUSE BOOK, WHICH WAS INCORPORATED IN THE CONTRACT. PARAGRAPH 5.102 OF THE BOOK PROVIDES THAT ACCEPTANCE OR REJECTION BY THE GOVERNMENT WILL BE MADE AT THE TIME OF INSPECTION, AND THAT SUCH INSPECTION SHALL BE FINAL AND CONCLUSIVE IRRESPECTIVE OF ANY PROVISIONS OF THE APPLICABLE ASSOCIATION RULES. WITH RESPECT TO LOSS OR DAMAGE, PARAGRAPH 5.102 PROVIDES THAT UPON DISCOVERY THEREOF THE GOVERNMENT WILL "PROMPTLY NOTIFY" THE CONTRACTOR.

YOU NOW CONTEND THAT YOU WERE NEVER NOTIFIED OF THE SHORTAGE, HAVING LEARNED OF IT ONLY UPON RECEIVING PAYMENT AND AN ADVICE OF PAYMENT INDICATING THE SHORTAGE SOME 20 DAYS AFTER THE SHIPMENT HAD BEEN RECEIVED. YOU ALSO CONTEND THAT BY THIS TIME IT WAS TOO LATE TO DISPUTE THE SHORTAGE AS SOME OF THE LUMBER HAD BEEN USED.

THE ISSUE IN THIS CASE IS WHETHER THERE WAS NOTICE OF THE SHORTAGE IN ACCORDANCE WITH THE CONTRACT TERMS. SINCE NO METHOD OR FORM OF NOTICE IS SPECIFIED, WE BELIEVE THAT THE ADVICE OF PAYMENT WAS SUFFICIENT TO CONSTITUTE "NOTICE." UNLIKE THE WWPA RULES, WHICH REQUIRE THAT NOTICE BE GIVEN WITHIN 10 DAYS, THE APPLICABLE CLAUSE OF THE CONTRACT PROVIDES THAT NOTICE WILL BE GIVEN "PROMPTLY." WHAT CONSTITUTES "PROMPTLY" IS NOT SUSCEPTIBLE OF EXACT DEFINITION, HAVING BEEN GIVEN VARIOUS INTERPRETATIONS BY THE COURTS. THE RECORD BEFORE US SHOWS THAT NOTICE OF THE SHORTAGE WAS MAILED 14 DAYS AFTER RECEIPT OF THE SHIPMENT. WHETHER THIS CONSTITUTED "PROMPT NOTICE" IS, IN OUR OPINION, OPEN TO QUESTION. HOWEVER, WE ARE UNABLE TO CONCLUDE THAT THE FAILURE TO NOTIFY YOU EARLIER PROVIDES A BASIS FOR ALLOWING YOUR CLAIM. SINCE THERE WAS NO PROVISION IN THE CONTRACT, AS IN THE WWPA RULES, THAT THE DISPUTED MATERIAL BE KEPT INTACT FOR A SPECIFIED NUMBER OF DAYS FOR AN IMPARTIAL RETALLY, THERE IS NO ASSURANCE THAT THE LUMBER WOULD HAVE BEEN AVAILABLE FOR YOU TO DISPUTE THE SHORTAGE HAD YOU BEEN NOTIFIED IN LESS THAN 14 DAYS.