B-164062, SEPT. 11, 1968

B-164062, SEPT. 11, 1968

TO CASEY, PALMER AND FELTZ:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 21, 1968, CONCERNING OUR DECISION OF MAY 15, 1968, B-164062, IN WHICH WE APPROVED THE FOREST SERVICE'S PROPOSED REFUND OF $3,922.39 TO YOUR CLIENT, IDAPINE TENANTS-IN- COMMON, FOR EXCESS SCALING CHARGES LEVIED UNDER NINE CONCURRENT CONTRACTS FOR THE PURCHASE OF TIMBER LOCATED IN NEZPERCE NATIONAL FOREST. IN OUR LETTER OF JUNE 3, 1968, WE ANSWERED TWO OF THE QUESTIONS RAISED IN YOUR LETTER. REMAINING FOR CONSIDERATION IS THE MATTER OF IDAPINE'S CLAIM IN THE AMOUNT OF $66,610.27 FOR THE STATED COST OF CONVERTING ITS HARPSTER MILLSITE FROM A TRUCK TO A GROUND OR ROLLWAY SCALING FACILITY. SINCE THE FACTS SURROUNDING THESE CONTRACTS WERE FULLY SET FORTH IN OUR DECISION OF MAY 15 THEY WILL BE REPEATED HEREIN ONLY TO THE EXTENT NECESSARY TO A RESOLUTION OF THE REMAINING ISSUE.

APPARENTLY IT IS YOUR CONTENTION THAT IDAPINE WAS COMPELLED TO INSTALL THE FACILITIES IN QUESTION TO COMPLY WITH THE FOREST SERVICE'S LETTERS OF JULY 16 AND SEPTEMBER 2" 1964, AND, THEREFORE, THE COSTS THEREOF SHOULD BE BORNE BY THE GOVERNMENT. THESE LETTERS ADVISED THAT AS OF OCTOBER 11, 1964, THE SCALING SERVICES CALLED FOR UNDER THE CONTRACTS WOULD BE PROVIDED IN ACCORDANCE WITH THE TERMS OF THE CONTRACTS ONLY IF THE SCALING STATION WAS AN AREA ON THE GROUND OR ROLLWAY, AND IF THE SCALING WAS TO BE DONE ON A TRUCK THERE WOULD BE A CHARGE FOR EXTRA COSTS INVOLVED. THE LETTER OF JULY 16, 1964, ALSO PROVIDED THAT THIS PROCEDURE WOULD NOT BE INITIATED IMMEDIATELY "TO GIVE YOU TIME TO PROVIDE ON-THE-GROUND AREA AND LOG HANDLING EQUIPMENT IF YOU SO DESIRE.' BY LETTER DATED OCTOBER 10, 1964, TO THE FOREST SUPERVISOR, IDAPINE PROTESTED THIS ATTEMPT TO "ALTER, CHANGE OR AMEND, BY UNILATERAL ACTION, THE TERMS AND PROVISIONS" OF THE CONTRACTS, AND POINTED OUT THAT UNDER THE CONTRACTS THE SCALING SERVICES WERE TO BE PROVIDED WITHOUT CHARGE WHERE THE SPECIFIED MINIMUM VOLUME OF FOOTAGE WAS PRESENTED FOR SCALING DURING THE DESIGNATED PERIOD OF TIME.

THE FOREST SUPERVISOR DENIED THE PROTEST AND EXCESS SCALING CHARGES WERE ASSESSED AND PAID UNDER PROTEST WHILE IDAPINE WAS PROCEEDING WITH ITS APPEAL THROUGH THE DEPARTMENT'S APPEAL PROCEDURES. IN THE MEANTIME, THE FACILITIES IN QUESTION WERE INSTALLED AT THE HARPSTER MILLSITE BUT NOT AT THE WHITEBIRD MILL WHERE IT IS REPORTED THAT THE TOPOGRAPHY PROHIBITED SUCH FACILITIES. SINCE GROUND OR ROLLWAY SCALING WAS DONE AT HARPSTER NO EXCESS CHARGES WERE LEVIED FOR SCALING THERE. HOWEVER, TRUCK SCALING CONTINUED AT WHITEBIRD AND EXCESS CHARGES WERE LEVIED AND PAID IN ACCORDANCE WITH THE PROCEDURE PRESCRIBED BY THE FOREST SERVICE'SLETTERS OF JULY 16 AND SEPTEMBER 28, 1964.

ON NOVEMBER 7, 1967, THE CHIEF, FOREST SERVICE, HELD THAT SINCE THE APPEAL INVOLVED A CLAIM FOR REFUND, IT SHOULD BE SUBMITTED TO OUR OFFICE FOR DECISION.

IN OUR DECISION OF MAY 15, 1968, WE STATED THAT:

"PERHAPS THE MOST IMPORTANT FACTOR PRESENT HERE IS THE FACT THAT FOR A PERIOD OF OVER THREE YEARS, THE FOREST SERVICE PROVIDED IDAPINE WITH TRUCK SCALING SERVICES WITHOUT REQUESTING ADDITIONAL SCALING CHARGES FOR THOSE SITES WHICH HANDLED THE MINIMUM VOLUME OF 720 THOUSAND FEET BOARD MEASURE DURING THE STIPULATED TIME PERIOD. THIS CONTINUED PATTERN OF OPERATION BY BOTH PARTIES REPRESENTS THEIR MUTUAL INTERPRETATION OF THE CONTRACT TERMS FOR A PERIOD IN EXCESS OF THREE YEARS. IT CAN THEREFORE BE CONCLUDED THAT DURING THIS PERIOD BOTH PARTIES TO THE CONTRACTS CONSIDERED TRUCK SCALING AS A SCALING POINT WHICH SATISFIED THE REQUIREMENTS OF SECTION 6A (2), DESPITE THE FACT THAT TRUCK SCALING REQUIRED THE USE OF MORE MAN-HOURS THAN GROUND OR ROLLWAY SCALING TO HANDLE A COMPARABLE VOLUME OF TIMBER.' WE, IN EFFECT, AGREED WITH THE ARGUMENT ADVANCED IN YOUR APPEAL THAT THE CHANGE IN THE BASIS FOR GOVERNMENT FURNISHED SCALING SERVICES RESULTING FROM THE LETTERS OF JULY 16 AND SEPTEMBER 28, 1964, WAS UNILATERAL ACTION BY THE FOREST SUPERVISOR INCONSISTENT WITH THE CONTRACTS AND, THEREFORE, THE EXCESS COSTS WERE IMPROPERLY ASSESSED AND SHOULD BE REFUNDED.

WE BELIEVE THE SAME RATIONALE IS APPLICABLE TO IDAPINE'S CLAIM FOR THE COST OF ROLLWAY FACILITIES AT ITS HARPSTER MILLSITE. SINCE TRUCK SCALING SATISFIED THE REQUIREMENTS OF SECTION 6A (2) OF THE CONTRACT, DESPITE THE FACT THAT IT REQUIRED MORE MAN-HOURS THAN GROUND OR ROLLWAY SCALING TO HANDLE A COMPARABLE VOLUME OF TIMBER, HARPSTER MILLSITE WAS A SCALING POINT FOR THE PURPOSE OF FURNISHING GOVERNMENT SCALERS WITHOUT COST AS PROVIDED IN SECTION 6E OF THE CONTRACT. THEREFORE, THE REQUIREMENT OF THE LETTERS IN QUESTION THAT IDAPINE FURNISH ROLLWAY SCALING OR PAY EXCESS COSTS WAS A UNILATERAL ATTEMPT TO CHANGE THE SCALING PROVISIONS OF THE CONTRACTS AND CANNOT BE VIEWED AS COMPELLING INSTALLATION OF SUCH FACILITIES AND IMPLYING A PROMISE THAT THE GOVERNMENT PAY FOR SUCH FACILITIES, ANY MORE THAN IT JUSTIFIED THE GOVERNMENT'S LEVY OF EXCESS CHARGES.

IF, ON THE OTHER HAND, THE DEMAND BY THE GOVERNMENT IS VIEWED AS JUSTIFYING AN EFFORT BY YOUR CLIENT TO COMPLY THEREWITH, WE BELIEVE THERE WAS AN OBLIGATION TO FOLLOW THE LESS COSTLY ALTERNATIVE PENDING THE OUTCOME OF IDAPINE'S APPEAL. WE ARE ADVISED THAT HAD IDAPINE CONTINUED TRUCK SCALING AT HARPSTER MILLSITE, THE EXCESS CHARGES WOULD HAVE BEEN VERY MODEST SINCE LESS THAN THREE MILLION BOARD FEET WERE DELIVERED THERE, WHEREAS NEARLY FOURTEEN MILLION BOARD FEET WERE DELIVERED TO THE WHITEBIRD MILL AND THE EXCESS CHARGES AMOUNTED TO ONLY $3,922.39. IN ADDITION, WE NOTE THAT EVIDENCE ADDUCED DURING THE HEARING ON IDAPINE'S APPEAL INDICATED THAT IDAPINE HAD CONTEMPLATED INSTALLATION OF ROLLWAY SCALING FACILITIES AT HARPSTER MILLSITE BEFORE THE ISSUE HERE UNDER CONSIDERATION AROSE. IN THIS CONNECTON, IT IS REPORTED THAT OVER THE YEARS THERE HAS BEEN A GRADUAL CONVERSION TO SUCH FACILITIES IN THE SAWMILL BUSINESS AND SUCH FACILITIES WERE ALREADY IN USE BY OTHER SAWMILL CONCERNS IN THE SAME GENERAL AREA. IN THESE CIRCUMSTANCES, WE BELIEVE ANY LIABILITY OF THE GOVERNMENT WOULD BE LIMITED TO THE AMOUNT OF ANY EXCESS CHARGES WHICH MIGHT HAVE BEEN ASSESSED.

ACCORDINGLY, THERE IS NO BASIS UPON WHICH OUR OFFICE MAY ALLOW THE CLAIM.