B-150630, B-150637, NOV. 5, 1963

B-150630, B-150637, NOV. 5, 1963

TO PARAMOUNT CANNING COMPANY:

REFERENCE IS MADE TO YOUR LETTERS DATED AUGUST 19 AND SEPTEMBER 25, 1963, REQUESTING RECONSIDERATION OF OUR DECISION OF AUGUST 9, 1963 (B 150630, B- 150637), IN WHICH WE DENIED, FOR THE REASONS STATED THEREIN, YOUR CLAIM FOR $10,990.79 REPRESENTING ADDITIONAL CHARGES FOR SUPPLYING ORANGE AND GRAPEFRUIT JUICE UNDER CONTRACT V7018P-4225B WITH THE VETERANS ADMINISTRATION (VA) BASED ON AN "ACT OF GOD" AS SET FORTH IN PARAGRAPH 11 OF STANDARD FORM 32, GENERAL PROVISIONS, WHICH WAS MADE A PART OF THE CONTRACT. THE FACTS AND CIRCUMSTANCES INVOLVED IN YOUR CLAIM WERE DETAILED RATHER FULLY IN OUR DECISION OF AUGUST 9 AND NEED NOT BE REPEATED HERE.

YOUR LETTER OF SEPTEMBER 25 CONTAINS THREE GENERAL CONTENTIONS IN SUPPORT OF YOUR REQUEST FOR RECONSIDERATION. FIRST YOU CONTEND THAT THE JUDICIAL AUTHORITIES CITED IN OUR DECISION OF AUGUST 9 DO NOT APPLY TO THE CIRCUMSTANCES OF YOUR CLAIM. YOU FEEL THAT THE RASPBERRY (BLACKBERRY) CASES ARE MORE DIRECTLY IN POINT THAN DILLON V. UNITED STATES, 156 F.SUPP. 719, WHICH WE CITED AS CONTROLLING THE DISPOSITION OF YOUR CLAIM. IN EFFECT, YOU CONTEND THAT THE BLACKBERRY CASES (MITCHELL CANNERIES, INC. V. UNITED STATES, 111 CT.CL. 228, AND HARGIS CANNERIES, INC. V. UNITED STATES, 60 F.SUPP. 729), INVOLVED SITUATIONS WHERE BLACKBERRIES WERE AVAILABLE TO THE CONTRACTORS BUT THEY (THE CONTRACTORS) WERE, NEVERTHELESS, EXCUSED FROM PERFORMANCE.

SECONDLY, YOU CONTEND THAT THE TERMINATION PROVISIONS OF THE DEFAULT CLAUSE BECAME EFFECTIVE BECAUSE OF THE SEVERE FREEZE AND THAT YOU DID NOT HAVE TO MAKE DELIVERY UNDER THE CONTRACT AND, IN SUCH EVENT, NO RECOVERY COULD HAVE BEEN MADE BECAUSE OF FAILURE TO DELIVER.

THIRDLY, YOU STATE THAT THE VA PURCHASING AGENT REQUESTED, AFTER THE FREEZE OCCURRED, THAT YOU MAKE DELIVERIES UNDER THE CONTRACT SINCE THE VA WAS BADLY IN NEED OF THE FRUIT JUICES AND DID NOT WANT TO TAKE TIME TO ISSUE ANOTHER INVITATION FOR BIDS. YOU STATE THAT THE PURCHASING AGENT ADVISED YOU THAT YOU WOULD HAVE TO SUBMIT A CLAIM FOR THE ADDITIONAL COST INVOLVED AND HE WOULD RECOMMEND THAT YOUR CLAIM BE ALLOWED. YOU CONTEND THAT THE PURCHASING AGENT'S ACTIONS ARE BINDING AND IN VIEW OF THE FACT THAT HE ASKED YOU TO MAKE DELIVERIES, KNOWINGLY AT THE HIGHER PRICE, YOU ARE ENTITLED TO RECOVERY OF ADDITIONAL COSTS.

WITH RESPECT TO YOUR FIRST CONTENTION IT SHOULD BE NOTED THAT, CONTRARY TO YOUR ALLEGATIONS, THE BLACKBERRIES INVOLVED IN THE MITCHELL AND HARGIS CASES WERE NOT READILY AVAILABLE. IN HARGIS, THE CONTRACTOR, PRIOR TO ITS DEFAULT, MADE EVERY EFFORT TO DELIVER AND PURCHASED BLACKBERRIES AS FAR AWAY AS 200 MILES. THE CONTRACTING OFFICER IN THAT CASE STATED IN HIS FINDINGS OF FACT (SEE PAGE 731):

" "* * * I WAS VERY FAVORABLY IMPRESSED WITH THE EFFORT THAT THEY (HARGIS CANNERIES, INC.) WERE MAKING DURING THE PACKING SEASONS AND BELIEVE THAT THEY SECURED ALL OF THE RAW STOCKS AVAILABLE, REGARDLESS OF PRICE, AND CONTINUED TO OPERATED AFTER MOST OTHERS HAD CLOSED DOWN.'"

IN THE MITCHELL CASE, THE COURT MADE THE FOLLOWING OBSERVATION WITH RESPECT TO THE AVAILABILITY OF BLACKBERRIES:

"* * * IT WOULD BE AN UNCONSCIONABLE RESULT TO HOLD THE CONTRACTOR LIABLE FOR DAMAGES FOR FAILURE TO COMPLETE THE CONTRACT WHEN THE RAW MATERIAL WAS ACTUALLY UNOBTAINABLE.' (SEE PAGE 251.)

IN ANY EVENT, HOWEVER, THE FACT REMAINS THAT YOU DID NOT DEFAULT AND THE JUICES WERE SUPPLIED FROM KISSIMMEE, FLORIDA, WHICH WAS THE LOCATION INDICATED IN YOUR BID AS THE INSPECTION POINT. IT CANNOT BE SAID, THEREFORE, THAT THE REQUIRED PRODUCT WAS UNAVAILABLE AS IT WAS IN BOTH HARGIS AND MITCHELL.

WITH REGARD TO YOUR SECOND CONTENTION, IT HAS BEEN HELD (AS WE NOTED IN OUR DECISION OF AUGUST 9) THAT THE DEFAULT CLAUSE APPLIES, BY ITS EXPRESS TERMS, ONLY TO DEFAULTS AND FAILURE TO PERFORM. THE PROVISIONS OF THE CLAUSE DO NOT PROVIDE A BASIS FOR RECOVERY OF ADDITIONAL COSTS RESULTING FROM LOSSES AND DIFFICULTIES IN PERFORMANCE IN CARRYING OUT A CONTRACT. DILLON V. UNITED STATES, SUPRA. THE TERMINATION PROVISIONS OF THE DEFAULT CLAUSE DID NOT, AS YOU CONTEND, BECOME EFFECTIVE UPON THE OCCURRENCE OF THE FREEZE SINCE THE TERMINATION AUTHORITY SET FORTH IN THE CLAUSE IS DISCRETIONARY WITH THE GOVERNMENT AND MAY BE EXERCISED IF, AMONG OTHER THINGS," THE CONTRACTOR FAILS TO MAKE DELIVERY OF THE SUPPLIES OR TO PERFORM THE SERVICES WITHIN THE TIME SPECIFIED HEREIN.' AS REPORTED BY THE CONTRACTING OFFICER, DEFAULT ACTION UNDER THE DEFAULT CLAUSE WAS NOT FELT TO BE APPLICABLE IN YOUR CASE SINCE YOU STATED THAT YOU WERE CAPABLE AND WILLING TO PERFORM, PROVIDED THAT YOU COULD FILE A CLAIM FOR ADDITIONAL COSTS RESULTING FROM THE FREEZE. WE AGREE WITH THE CONTRACTING OFFICER'S CONCLUSION IN THAT RESPECT.

FINALLY, IN REGARD TO YOUR THIRD CONTENTION, WE FAIL TO PERCEIVE THE BASIS FOR YOUR ASSERTION THAT THE PURCHASING AGENT'S REQUEST THAT YOU MAKE DELIVERIES UNDER THE CONTRACT WAS BINDING ON THE GOVERNMENT SO AS TO ENTITLE YOU TO RECOVERY OF THE ADDITIONAL CHARGES CLAIMED. THE RECORD DOES NOT INDICATE THAT THE PURCHASING AGENT REPRESENTED TO YOU THAT YOUR CLAIM WOULD BE PAID. ON THE CONTRARY, THE RECORD SHOWS, AS YOUR LETTER OF SEPTEMBER 25 CONFIRMS, THAT THE PURCHASING AGENT MERELY ADVISED YOU THAT YOU WOULD HAVE TO MAKE A CLAIM FOR THE ADDITIONAL COST INVOLVED AND HE WOULD RECOMMEND THAT YOUR CLAIM BE ALLOWED. INDEED, ANY AFFIRMATIVE REPRESENTATION OR ASSURANCE BY THE PURCHASING AGENT THAT YOUR CLAIM WOULD BE PAID WOULD BE A NULLITY AND NOT BINDING ON THE GOVERNMENT BECAUSE CONTRACTING OFFICERS ARE WITHOUT AUTHORITY TO MAKE SUCH REPRESENTATION OR TENDER SUCH ASSURANCES. IN THE INSTANT CASE THE CONTRACTING OFFICER DID, IN FACT, RECOMMEND TO OUR OFFICE THAT YOUR CLAIM BE PAID. HOWEVER, SUCH RECOMMENDATION IS MERELY ADVISORY AND DOES NOT BIND OUR OFFICE SINCE WE ARE WITHOUT AUTHORITY TO PAY CLAIMS WHICH DO NOT HAVE AN ADEQUATE BASIS IN LAW.

IN YOUR REQUEST FOR RECONSIDERATION, YOU FAILED TO SHOW WHY, OR HOW, THE DILLON CASE IS INAPPLICABLE TO THE FACTS AND CIRCUMSTANCES INVOLVED IN YOUR CLAIM. SINCE WE THINK THAT THE HOLDING IN DILLON IS CONTROLLING HERE, WE MUST CONCLUDE THAT THERE IS NO LEGAL BASIS FOR PAYMENT OF YOUR CLAIM AND OUR PRIOR DECISION IS SUSTAINED.