B-69959, OCTOBER 21, 1947, 27 COMP. GEN. 225

B-69959: Oct 21, 1947

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CONTRACTS - PERFORMANCE - DELAY IN ORDERING AS EXCUSING THE CONTRACTOR IS NOT NOW REQUIRED TO FILL AN ORDER. PRESENTLY IS ENFORCEABLE AGAINST THE CONTRACTOR. WITH RESPECT TO DELIVERY OF THE MATERIALS THE CONTRACT PROVIDED THAT SHIPMENT WOULD BE MADE IN CARLOAD LOTS AS REQUIRED AND ORDERED BY THE GOVERNMENT AND THAT IT WAS ESTIMATED THAT SHIPMENT OF THE MATERIALS WOULD BEGIN ABOUT JULY 15. IT IS REPORTED THAT ON JUNE 16. WHICH WERE NOT EXISTENT AT THE TIME OF ITS BID. NOW ARE REQUIRED TO BE REFLECTED IN THE PRICE OF THE CEMENT. PROPERLY MAY NOT BE SAID TO HAVE BEEN WITHIN THE TIME STIPULATED IN THE CONTRACT. - THAT IS. IT IS WELL SETTLED THAT WHERE THE DUTY OF THE SELLER TO DELIVER IS MADE DEPENDENT UPON AN ORDER OR DEMAND BY THE BUYER.

B-69959, OCTOBER 21, 1947, 27 COMP. GEN. 225

CONTRACTS - PERFORMANCE - DELAY IN ORDERING AS EXCUSING THE CONTRACTOR IS NOT NOW REQUIRED TO FILL AN ORDER, PLACED IN JUNE, 1947, UNDER A CONTRACT FOR A SPECIFIED QUANTITY OF CEMENT ENTERED INTO IN JUNE, 1945, REQUIRING DELIVERY WHEN ORDERED BY THE GOVERNMENT, TO COMMENCE "ABOUT JULY 1, 1945," AND TO CONTINUE OVER A PERIOD OF "ABOUT ELEVEN THS.'

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, OCTOBER 21, 1947:

THERE HAS BEEN CONSIDERED YOUR LETTER OF SEPTEMBER 26, 1947, REQUESTING A DECISION AS TO WHETHER UNDER THE CIRCUMSTANCES THEREIN REPORTED, CONTRACT I2R-15384, ENTERED INTO WITH THE COLORADO PORTLAND CEMENT COMPANY FOR THE FURNISHING OF CERTAIN QUANTITIES OF CEMENT, PRESENTLY IS ENFORCEABLE AGAINST THE CONTRACTOR.

UNDER THE TERMS OF CONTRACT 12R-15384, DATED JUNE 30, 1945, THE COLORADO PORTLAND CEMENT COMPANY AGREED TO FURNISH TO THE BUREAU OF RECLAMATION 2,000 BARRELS OF MODIFIED PORTLAND CEMENT IN PAPER SACKS AT A PRICE OF $2.30 PER BARREL, F.O.B. SHIPPING POINT, PORTLAND, COLORADO, WITH SHIPMENTS TO BE MADE ON GOVERNMENT BILLS OF LADING TO MANCOS, COLORADO, FOR USE ON THE MANCOS PROJECT. WITH RESPECT TO DELIVERY OF THE MATERIALS THE CONTRACT PROVIDED THAT SHIPMENT WOULD BE MADE IN CARLOAD LOTS AS REQUIRED AND ORDERED BY THE GOVERNMENT AND THAT IT WAS ESTIMATED THAT SHIPMENT OF THE MATERIALS WOULD BEGIN ABOUT JULY 15, 1945, AND WOULD EXTEND OVER A PERIOD OF "ABOUT ELEVEN MONTHS.'

IT APPEARS FROM THE RECORD THAT THE CONTRACTOR HAS FURNISHED 1,000 BARRELS OF CEMENT UNDER THE CONTRACT, 500 BARRELS BEING DELIVERED ON AUGUST 3, 1945, AND 500 BARRELS ON SEPTEMBER 15, 1945. IT IS REPORTED THAT ON JUNE 16, 1947, THE PROJECT OFFICE AT MANCOS, COLORADO, REQUESTED SHIPMENT OF ANOTHER MINIMUM CARLOAD OF CEMENT UNDER THE CONTRACT--- PRESUMABLY 500 BARRELS--- BUT THAT THE CONTRACTOR DECLINED TO MAKE FURTHER DELIVERIES THEREUNDER IN VIEW OF THE LONG DELAY ON THE PART OF THE GOVERNMENT IN ISSUING ORDERS THEREFOR. IN THIS CONNECTION, THE CONTRACTOR TAKES THE POSITION THAT THE INCREASED MATERIAL AND LABOR COSTS APPLICABLE TO THE MATERIAL, WHICH WERE NOT EXISTENT AT THE TIME OF ITS BID, NOW ARE REQUIRED TO BE REFLECTED IN THE PRICE OF THE CEMENT.

THE WORD "ABOUT," WHEN USED HAS BEEN DEFINED AS DENOTING "APPROXIMATION TO EXACTNESS.' SEE BURLINGTON GROCERY COMPANY V. HEAPHY'S ESTATE, 98 VT. 122, 126 A. 525. IT SEEMS CLEAR, THEREFORE, THAT THE PLACEMENT OF THE ORDER HERE IN QUESTION ON JUNE 16, 1947, PROPERLY MAY NOT BE SAID TO HAVE BEEN WITHIN THE TIME STIPULATED IN THE CONTRACT--- THAT IS, WITHIN "ABOUT ELEVEN MONTHS" AFTER JULY 15, 1945-- AND IT IS WELL SETTLED THAT WHERE THE DUTY OF THE SELLER TO DELIVER IS MADE DEPENDENT UPON AN ORDER OR DEMAND BY THE BUYER, FAILURE OR DELAY ON THE PART OF THE BUYER IN GIVING THE ORDER OR MAKING THE DEMAND WITHIN THE TIME SPECIFIED EXCUSES THE SELLER'S FAILURE TO MAKE DELIVERY. SEE 46 AM. JUR. 379 AND 55 C.J. 473, AND THE NUMEROUS CASES THERE CITED. ALSO, SEE 119 A.L.R. 1498, CITING, AMONG OTHERS, THE CASE OF ST. LOUIS EXPANDED METAL FIREPROOFING COMPANY V. HALLIWELL CEMENT COMPANY, 123 MO. APP. 715, 101 S.W. 128, WHERE, UNDER A CONTRACT FOR THE SALE OF CEMENT WHICH THE COURT CONSTRUED AS PROVIDING FOR DELIVERY DURING THE FALL OF THE YEAR INVOLVED IN SUCH QUANTITIES AND AT SUCH TIMES AS REQUIRED BY THE BUYER, IT WAS HELD THAT THE BUYER HAD THE DUTY TO NOTIFY THE SELLER WHEN DELIVERY OF THE CEMENT WAS REQUIRED AND ITS FAILURE TO DO SO UNTIL THE NEXT SPRING RELIEVED THE SELLER OF ANY LIABILITY FOR FAILURE TO DELIVER, THE COURT EXPRESSLY OVERRULING THE BUYER'S CONTENTION THAT IT WAS THE DUTY OF THE SELLER TO DELIVER THE CEMENT WITHIN THE TIME FIXED BY THE CONTRACT WITHOUT DEMAND ON THE BUYER'S PART.

FURTHERMORE, ASSUMING THAT THE INSTANT CONTRACT SHOULD BE CONSTRUED AS STIPULATING AN INDEFINITE DELIVERY PERIOD, IT HAS BEEN HELD THAT, UNDER SUCH CONTRACTS, EXCUSABLE DELAYS IN DELIVERY BEYOND A REASONABLE TIME CONSTITUTE SUCH A FRUSTRATION OF THE CONTRACT PERFORMANCE AS TO COMPLETELY TERMINATE THE OBLIGATIONS OF THE PARTIES UNDER THE CONTRACT. SEE 22 COMP. GEN. 1087, AND THE AUTHORITIES CITED THEREIN.

IN THE PRESENT CASE, THE CONTRACT WAS EXECUTED ON JUNE 30, 1945, AND PROVIDED, IN EFFECT, THAT DELIVERY OF THE MATERIALS WOULD BE MADE AS REQUIRED AND ORDERED BY THE GOVERNMENT OVER A PERIOD OF APPROXIMATELY 11 MONTHS, COMMENCING JULY 15, 1945. IT WOULD SEEM TO FOLLOW THAT AN ORDER PLACED THEREUNDER ON JUNE 16, 1947, APPROXIMATELY TWO YEARS SUBSEQUENT TO THE DATE OF THE CONTRACT, AND MORE THAN A YEAR AFTER COMPLETE DELIVERY OF THE MATERIALS WAS CONTEMPLATED, DURING WHICH PERIOD THERE WAS A CONSTANT RISE IN MARKET PRICES AND IN THE COST OF LABOR AND MATERIALS, PROPERLY MAY NOT BE SAID TO CONSTITUTE AN ORDER PLACED WITHIN A REASONABLE TIME.

UNDER SUCH CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THERE IS NO ENFORCEABLE CONTRACT NOW EXTANT BETWEEN THE PARTIES.