B-181235, SEP 16, 1974

B-181235: Sep 16, 1974

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BARNES' CONTRACT WAS FOR THE SUPPLY OF FROZEN VEGETABLES AND FRENCH FRIED POTATOES. THESE ITEMS WERE TO BE SHIPPED TO THE UNITED STATES SECURITY WAREHOUSE (USSW). THE RECORD INDICATES THAT THE VEGETABLES WERE LOADED ON ONE END OF THE CAR. IT IS NOT CLEAR FROM THE RECORD. WHETHER THE VEGETABLES WERE IN PLAIN VIEW OR WERE HIDDEN BY LOAD DIVIDERS. IT IS ALSO NOT CLEAR WHETHER THERE WAS A MANIFEST CLEARLY VISIBLE IN THE CAR INDICATING THAT THE VEGETABLES WERE CONSIGNED TO USSW. A NOTATION ON THE INVOICE INDICATES THAT A COPY THEREOF WAS SENT TO USSW. BEARING THE LEGEND: "ALL MERCHANDISE IN THIS CAR IS FOR COLUMBUS EXCEPT THE FROZEN COB CORN LOADED IN MOTOR END OF CAR.". USSW'S POSITION IS THAT WHEN CAR NO. 451925 WAS DELIVERED TO ITS SIDING.

B-181235, SEP 16, 1974

1. VA REFERRAL OF DOUBTFUL CLAIM FOR PAYMENT FOR SPOILED VEGETABLES RETURNED FOR RESOLUTION UNDER "DISPUTES" PROCEDURE. 2. FACTUAL DISPUTES, BEARING UPON GOVERNMENTAL LIABILITY FOR LOSS, PRECLUDES COMPTROLLER GENERAL'S AUTHORIZATION FOR PAYMENT.

BARNES COMPANY:

THE VETERANS ADMINISTRATION (VA) REFERRED FOR OUR CONSIDERATION A DOUBTFUL CLAIM OF $3,800, FILED ON BEHALF OF THE BARNES COMPANY (BARNES), FOR PAYMENT FOR FROZEN VEGETABLES UNDER CONTRACT V797P 4683B.

BARNES' CONTRACT WAS FOR THE SUPPLY OF FROZEN VEGETABLES AND FRENCH FRIED POTATOES, TO BE USED IN VA HOSPITALS. THESE ITEMS WERE TO BE SHIPPED TO THE UNITED STATES SECURITY WAREHOUSE (USSW), COLUMBUS, GEORGIA, A PRIVATE FIRM PROVIDING COLD STORAGE SERVICES TO THE VA UNDER CONTRACT. BARNES, THROUGH ITS SUBCONTRACTORS, PLACED THE VEGETABLES AND POTATOES ON A FREIGHT CAR, ALONG WITH AN UNRELATED SHIPMENT OF FROZEN CORN BOUND FOR CAMP LEJEUNE, NORTH CAROLINA. THE RECORD INDICATES THAT THE VEGETABLES WERE LOADED ON ONE END OF THE CAR, THE CORN ON THE OPPOSITE END, AND THE POTATOES IN THE CENTER. IT IS NOT CLEAR FROM THE RECORD, AND APPEARS TO BE DISPUTED AMONG THE PARTIES, WHETHER THE VEGETABLES WERE IN PLAIN VIEW OR WERE HIDDEN BY LOAD DIVIDERS. IT IS ALSO NOT CLEAR WHETHER THERE WAS A MANIFEST CLEARLY VISIBLE IN THE CAR INDICATING THAT THE VEGETABLES WERE CONSIGNED TO USSW.

PRIOR TO SHIPMENT, BARNES NOTIFIED THE VA BY TELEPHONE THAT ALL ITEMS CONSIGNED TO USSW WOULD BE SHIPPED ON JULY 2, 1971, VIA FPE CAR NO. 451925, ESTIMATED TIME OF ARRIVAL JULY 19, 1971. BARNES' INVOICE NO. 2359 -8 DATED JUNE 29, 1971, AND RECEIVED BY THE VA ON JULY 7, 1971, ALSO ADVISED THAT ITEMS FOR USSW WOULD BE IN CAR NO. 451925. A NOTATION ON THE INVOICE INDICATES THAT A COPY THEREOF WAS SENT TO USSW, BEARING THE LEGEND: "ALL MERCHANDISE IN THIS CAR IS FOR COLUMBUS EXCEPT THE FROZEN COB CORN LOADED IN MOTOR END OF CAR."

USSW DENIES THAT IT RECEIVED A COPY OF THE INVOICE, AND THE VA APPARENTLY CONCEDES THAT IT DID NOT PROVIDE USSW WITH ADVANCE INFORMATION CONCERNING THE SHIPMENT. USSW'S POSITION IS THAT WHEN CAR NO. 451925 WAS DELIVERED TO ITS SIDING, IT DID NOT KNOW WHICH OF THE CAR'S CONTENTS WERE CONSIGNED TO IT. USSW STATES THAT WHEN ITS EMPLOYEES OPENED THE CAR, THE ONLY VISIBLE MANIFEST SHOWED THAT THE FRENCH FRIED POTATOES WERE TO BE REMOVED FOR STORAGE, AND THAT THE REST OF THE SHIPMENT WAS HIDDEN BY THE LOAD DIVIDERS. THEREFORE, USSW REMOVED ONLY THE POTATOES, AND THE CAR PROCEEDED TO CAMP LEJEUNE, WHERE THE CORN WAS OFFLOADED. MARINE CORPS REPRESENTATIVES SEALED THE CAR DOORS AND RELEASED THE CAR, AS EMPTY, TO THE RAILROAD. THE RAILROAD DISCONNECTED THE REFRIGERATION AND THE CAR WAS RETURNED TO POCATELLO, IDAHO, WHERE THE SPOILED VEGETABLES WERE DISCOVERED. PAYMENT FOR THE VEGETABLES HAS NOT BEEN MADE TO THE BARNES COMPANY.

BARNES' CONTRACT CALLED FOR DELIVERY "FOB: DESTINATION", WHICH WAS DEFINED AS "ON BOARD THE CONVEYANCE OF CARRIER FREE OF EXPENSE TO THE GOVERNMENT AT A SPECIFIED POINT WHERE THE CONSIGNEE'S FACILITY IS LOCATED." VA FORM 10-1130 (JULY 1970 ED.), PARAGRAPH 16 (A). BARNES WAS RESPONSIBLE FOR THE SUPPLIES AFTER DELIVERY AND PRIOR TO ACCEPTANCE BY THE GOVERNMENT, UNLESS LOSS OF OR DAMAGE TO THE SUPPLIES "RESULTS FROM THE NEGLIGENCE OF OFFICERS, AGENTS, OR EMPLOYEES OF THE GOVERNMENT ACTING WITHIN THE SCOPE OF THEIR EMPLOYMENT." STANDARD FORM 32 (NOV. 1969 ED.), PARAGRAPH 6(II). NO ONE DISPUTES THAT THE SUPPLIES WERE ABOARD CAR NO. 451925, BUT AS SHOWN ABOVE, THE SUPPLIES WERE DAMAGED PRIOR TO ACCEPTANCE BY THE GOVERNMENT. GOVERNMENTAL LIABILITY IS THEREFORE PREDICATED UPON A SHOWING THAT THE LOSS RESULTED FROM THE NEGLIGENCE OF OFFICERS, AGENTS, OR EMPLOYEES OF THE GOVERNMENT ACTING WITHIN THE SCOPE OF THEIR EMPLOYMENT.

THE DETERMINATION OF GOVERNMENTAL NEGLIGENCE REQUIRES THE RESOLUTION OF LEGAL ISSUES, SUCH AS DEFINING THE EXTENT OF BARNES' CONTRACTUAL DUTY TO PROVIDE ADVANCE NOTICE OF SHIPMENT, AND THE EXTENT OF THE VA'S OBLIGATION TO NOTIFY USSW OF PENDING SHIPMENT ARRIVALS UNDER THE CONTRACT FOR COLD STORAGE SERVICES. APART FROM THESE QUESTIONS, HOWEVER, ARE SOME UNRESOLVED FACTUAL ISSUES WHICH BEAR UPON THE LEGAL LIABILITY OF THE GOVERNMENT. THESE ISSUES CONCERN USSW'S ALLEGED LACK OF RECEIPT OF THE COPY OF BARNES' INVOICE, AND WHETHER THE VEGETABLES WERE IN PLAIN VIEW OR HIDDEN BY LOAD DIVIDERS.

EVEN IF ONE ASSUMES FOR THE PURPOSE OF ARGUMENT THAT THE VA FAILED TO FULFILL AN OBLIGATION TO NOTIFY THE CONSIGNEE OF SHIPMENT DATA, OR ALTERNATIVELY, THAT USSW RECEIVED ADVANCE NOTICE OF SHIPMENT FROM BARNES, ANOTHER CIRCUMSTANCE MUST BE CONSIDERED IN DETERMINING LEGAL LIABILITY. SPIEGL FOODS, INC., SUBCONTRACTOR TO BARNES AND ACTUAL SHIPPER OF THE VEGETABLES, INDICATED ON THE BILL OF LADING THEREFOR THAT THE VEGETABLES WERE CONSIGNED TO "RECEIVING OFFICER, COLD STORAGE BLDG., CAMP LEJEUNE, NORTH CAROLINA." SPIEGL'S INVOICE TO BARNES ALSO STATED THAT THE VEGETABLES WERE SHIPPED TO CAMP LEJEUNE. HOWEVER, THE CAR LOADING MANIFEST FOR THE VEGETABLES INCLUDED THE NOTATION "V.A." IT IS NOT CLEAR FROM THE RECORD TO WHAT DEGREE THIS APPARENT ERROR BY BARNES' SUBCONTRACTOR MAY HAVE CONTRIBUTED TO THE FAILURE TO OFFLOAD THE VEGETABLES.

THE CONTRACT FROM WHICH THIS CLAIM AROSE CONTAINS THE STANDARD "DISPUTES" CLAUSE, AS WELL AS THE STANDARD "PAYMENTS" CLAUSE WHICH PROVIDES FOR PAYMENT "FOR SUPPLIES DELIVERED AND ACCEPTED." STANDARD FORM 32 (NOV. 1969 ED.), PARAGRAPHS 7 AND 12. PAYMENT HAS BEEN WITHHELD BECAUSE THE VEGETABLES HAVE NEVER BEEN ACCEPTED BY THE GOVERNMENT. THE RESOLUTION OF THE PROPRIETY OF THE WITHHOLDING, INVOLVING AS IT DOES QUESTIONS OF FACT, SHOULD BE THROUGH THE MECHANISM OF THE "DISPUTES" PROCEDURE. SEE FRUGAL CO., GSBCA NO. 2219, SEPTEMBER 13, 1967, 67-2 BCA PARAGRAPH 6581; FARBER & PICKETT CONTRACTORS, INC., IBCA NO. 591-9-66, MARCH 15, 1967, 67-1 BCA PARAGRAPH 6190; HOUSTON - FEARIESS CORP., ASBCA NO. 9160, MARCH 23, 1964, 64 BCA PARAGRAPH 4159.

IN VIEW OF THE FOREGOING AND SINCE THE UNRESOLVED FACTUAL ISSUES IN THIS CASE BEAR DIRECTLY UPON GOVERNMENTAL NEGLIGENCE AND PROXIMATE CAUSATION, WE ARE UNABLE TO AUTHORIZE PAYMENT ON THE PRESENT RECORD. LONGWILL V. UNITED STATES, 17 CT. CL. 288, 291 (1881); CHARLES V. UNITED STATES, 19 CT. CL. 316, 319 (1884). THE FILE IS RETURNED FOR RESOLUTION BY THE VETERANS ADMINISTRATION UNDER THE "DISPUTES" PROCEDURE.