B-155480, DEC. 2, 1964

B-155480, DEC. 2, 1964

TO ATLAS DYNAMICS CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 20, 1964, REQUESTING RECONSIDERATION OF OUR DECISION OF OCTOBER 16, 1964, DISALLOWING YOUR CLAIM FOR REFUND OF $901.97 PAID FOR CERTAIN SURPLUS PROPERTY.

PURSUANT TO INVITATION FOR BIDS NO. 04-513-S-61-52, HELICOPTER INDUSTRIES CORPORATION WAS AWARDED CONTRACT NO. 01-1169 ON MARCH 20,1961, IN THE ABOVE AMOUNT BY SHARPE CONSOLIDATED SURPLUS SALES OFFICE, LATHROP, CALIFORNIA. THE CONTRACT INCLUDED SOME EIGHT ITEMS OF USABLE MISCELLANEOUS HELICOPTER PARTS AND ASSEMBLIES. THE BID SUBMITTED BY HELICOPTER INDUSTRIES WAS ACCOMPANIED BY A BID DEPOSIT OF $287.96, LEAVING A BALANCE DUE OF $614.01. BY LETTER OF APRIL 6, 1961, TO THE SALES ACTIVITY YOU ADVISED OF THE PURCHASE OF THESE ITEMS FROM HELICOPTER INDUSTRIES AND ENCLOSED YOUR CHECK IN PAYMENT OF THE BALANCE DUE ON THE CONTRACT, AS WELL AS A COPY OF THE SALES INVOICE. YOU ALSO REQUESTED THAT THE SALES ACTIVITY HAVE "ANY LOCAL FIRM SHIP THIS MATERIAL TO US AS FOLLOWS:

SURFSIDE HELICOPTERS

C/O OLSON YACHT BASIN

ST. SIMONDS ISLAND

GEORGIA

NO. 930 VIA TRUCK, FREIGHT COLLECT.' ON APRIL 13, 1961, THE PROPERTY WAS SHIPPED VIA VALLEY EXPRESS COMPANY, WHICH WAS APPARENTLY ENGAGED FOR THE JOB BY THE PROPERTY DISPOSAL ACTIVITY, ON A BILL OF LADING PREPARED BY AN EMPLOYEE OF SAID ACTIVITY. THE BILL OF LADING NAMED THE CONSIGNEE AS INSTRUCTED BY YOU, AND LISTED HELICOPTER INDUSTRIES AS THE SHIPPER. THE PROPERTY WAS THEREIN DESCRIBED AS 17 BOXES OF MAIN TRANSMISSION ASSEMBLIES AND 4 BOXES OF MISCELLANEOUS AIRCRAFT PARTS. WHEN THE PROPERTY WAS DELIVERED TO SURFSIDE HELICOPTERS BY A CONNECTING CARRIER, BENTON RAPID EXPRESS, IT WAS REFUSED BECAUSE THE FREIGHT CHARGES DUE WERE CONSIDERED EXCESSIVE. THEREAFTER THE PROPERTY WAS APPARENTLY RETURNED TO THE CARRIER'S WAREHOUSE, AND IT FURTHER APPEARS THAT THE PROPERTY IS EITHER PRESENTLY IN THE POSSESSION OF BENTON, OR WAS SOLD BY IT TO LIQUIDATE STORAGE CHARGES.

SURFSIDE'S REFUSAL TO ACCEPT THE SHIPMENT PRECIPITATED A CONSIDERABLE AMOUNT OF CORRESPONDENCE BETWEEN YOUR FIRM, THE SALES ACTIVITY, VALLEY EXPRESS COMPANY, BENTON RAPID EXPRESS, SURFSIDE HELICOPTERS, AND THE INTERSTATE COMMERCE COMMISSION. THE CORRESPONDENCE FROM YOUR COMPANY HAS PRIMARILY BEEN DIRECTED TO HAVING THE BILL OF LADING CORRECTED TO SHOW YOU AS THE SHIPPER AND TO CHANGE THE DESCRIPTION OF THE PROPERTY, TO EITHER "INTERNAL COMBUSTION ENGINE PARTS WITHOUT RADIAL CYLINDERS" OR "SCRAP, METAL NOIBN.' YOUR EFFORTS IN THIS DIRECTION HAVE APPARENTLY BEEN FUTILE. YOU CONTEND THAT THE FAILURE OF THE GOVERNMENT AGENT TO CORRECTLY DESCRIBE THE PROPERTY IN PREPARING THE BILL OF LADING, OR TO LATER HAVE IT CORRECTED, RESULTED IN AN EXCESSIVE FREIGHT RATE BEING APPLIED, AND THAT HIS FAILURE TO LIST YOU AS THE SHIPPER, OR TO LATER HAVE THIS CORRECTED, PREVENTED YOU FROM PAYING THE FREIGHT CHARGES, OBTAINING THE PROPERTY, AND THEN SEEKING ADJUSTMENT OF SAID CHARGES.

THE SALE TO YOU OF THE SURPLUS PROPERTY HERE INVOLVED BY HELICOPTER INDUSTRIES WAS A TRANSFER OR ASSIGNMENT OF ITS CONTRACT WITH THE GOVERNMENT FOR THE PURCHASE OF SUCH PROPERTY FROM THE LATTER. THE ASSIGNMENT OF THIS CONTRACT BY HELICOPTER INDUSTRIES WAS IN CONTRAVENTION OF 41 U.S.C. 15, WHICH, IN PERTINENT PART, PROVIDES:

"NO CONTRACT OR ORDER, OR ANY INTEREST THEREIN SHALL BE TRANSFERRED BY THE PARTY TO WHOM SUCH CONTRACT OR ORDER IS GIVEN TO ANY OTHER PARTY, AND ANY SUCH TRANSFER SHALL CAUSE THE ANNULMENT OF THE CONTRACT OR ORDER TRANSFERRED, SO FAR AS THE UNITED STATES ARE CONCERNED.'

HOWEVER, IT HAS CONSISTENTLY BEEN HELD THAT THIS STATUTE IS FOR THE BENEFIT AND PROTECTION OF THE GOVERNMENT AND MAY THEREFORE BE WAIVED BY IT. BENJAMIN V. UNITED STATES, ET AL., 318 F.2D 728, AND CASES CITED. THEREFORE, UPON BEING ADVISED OF YOUR AGREEMENT WITH HELICOPTER INDUSTRIES BY YOUR LETTER OF APRIL 6, 1961, THE GOVERNMENT COULD EITHER ACCEPT OR REPUDIATE THE PURPORTED ASSIGNMENT OF THE CONTRACT. ASSUMING THAT ACCEPTANCE OF YOUR CHECK BY THE CONTRACTING OFFICER AS PAYMENT OF THE BALANCE DUE ON THE CONTRACT WITH HELICOPTER INDUSTRIES WAS TANTAMOUNT TO WAIVER OF THE BAR OF THE ABOVE STATUTE AND ACCEPTANCE OF THE ASSIGNMENT, WE HAVE FOR CONSIDERATION THE RIGHTS AND OBLIGATIONS OF BOTH YOU AND THE GOVERNMENT AS EMBODIED IN THE TERMS AND CONDITIONS OF THE INVITATION. THIS CONNECTION, THE FOLLOWING PROVISIONS, IN PERTINENT PART, ARE APPLICABLE TO THE INSTANT CASE:

"GENERAL SALE TERMS AND CONDITIONS

"5. TITLE. UNLESS OTHERWISE SPECIFIED IN THE INVITATION, TITLE TO THE ITEMS OF PROPERTY SOLD HEREUNDER SHALL VEST IN THE PURCHASER AS AND WHEN FULL AND FINAL PAYMENT IS MADE, EXCEPT THAT IF THE INVITATION PROVIDES THAT LOADING WILL BE PERFORMED BY THE GOVERNMENT, TITLE SHALL NOT VEST UNTIL SUCH PAYMENT AND LOADING ARE COMPLETED. * * *

"6. DELIVERY AND REMOVAL OF PROPERTY. UNLESS OTHERWISE SPECIFIED IN THE INVITATION, THE PURCHASER SHALL BE ENTITLED TO OBTAIN THE PROPERTY UPON VESTING OF TITLE OF THE PROPERTY IN HIM. DELIVERY SHALL BE MADE AT THE DESIGNATED LOCATION, AND THE PURCHASER SHALL REMOVE THE PROPERTY AT HIS EXPENSE * * *

"SPECIAL CONDITIONS

"ARTICLE C. REMOVAL. A. WHERE MATERIAL OFFERED FOR SALE HEREIN IS F.O.B. CONVEYANCE THE GOVERNMENT RESERVES THE RIGHT TO SCHEDULE THE RELEASE OF SAME. WHEN THE CARRIER IS OTHER THAN THAT OF THE PURCHASER, THE PURCHASER WILL DESIGNATE THE CARRIER AND FURNISH THE NECESSARY COMMERCIAL BILL OF LADING. THE GOVERNMENT WILL SCHEDULE AND ARRANGE FOR REMOVAL OF THE PROPERTY. NO GOVERNMENT OFFICER OR EMPLOYEE WILL ARRANGE FOR TRANSPORTATION IN ANY CASE WHERE HIS SO DOING CONSTITUTES AN ACT AS AN AGENT FOR THE PURCHASER.

"ARTICLE H. LOADING. ALL PROPERTY HEREIN IS SOLD F.O.B. PURCHASER'S CONVEYANCE AT PRESENT LOCATION (TAILGATE OR ON BOARD LOADING). THE GOVERNMENT WILL NOT BLOCK, LASH, BAND, ETC., CARGO ON THE CONVEYANCE FURNISHED BY PURCHASER, UNLESS OTHERWISE SPECIFIED.'

IT IS CLEAR FROM THE ABOVE QUOTED PROVISIONS THAT TITLE TO THE PROPERTY VESTED IN YOU AT THE TIME YOUR CHECK WAS RECEIVED AND ACCEPTED BY THE CONTRACTING OFFICER. IT THEN BECAME YOUR RIGHT AND OBLIGATION TO LOAD AND REMOVE THE PROPERTY. FURTHERMORE, THE RESPONSIBILITY FOR DESIGNATING THE CARRIER AND PREPARING THE NECESSARY BILL OF LADING WAS IMPOSED UPON YOU BY THE TERMS OF ARTICLE C, WHICH FURTHER PROVIDED THAT THE GOVERNMENT WOULD DO NO MORE THAN SCHEDULE AND ARRANGE FOR THE REMOVAL. ALTHOUGH A GOVERNMENT EMPLOYEE UNDERTOOK TO PREPARE THE BILL OF LADING AT YOUR REQUEST, IT IS MANIFEST FROM THESE PROVISIONS THAT HE WAS NOT ACTING WITHIN THE ACTUAL BOUNDS OF HIS AUTHORITY. ASIDE FROM THE FACT THAT THE CONTRACT SPECIFICALLY DELINEATED THE AUTHORITY AND RESPONSIBILITY FOR PREPARATION OF THE BILL OF LADING AND REMOVAL OF THE PROPERTY, IT IS WELL ESTABLISHED THAT THE GOVERNMENT MAY NOT BE BOUND BY THE APPARENT AUTHORITY OF ITS AGENTS AND, MORE BASICALLY, THAT THE BURDEN IS ON THOSE WHO DEAL WITH THE GOVERNMENT TO ACCURATELY DETERMINE THE SCOPE OF THE AGENT'S AUTHORITY. FEDERAL CROP INSURANCE CORPORATION V. MERRILL, 332 U.S. 380, 384; UNITED STATES V. ZENITH GODLEY COMPANY, 180 F.SUPP. 611. THEREFORE, EVEN ASSUMING THE ACTIONS OF THE GOVERNMENT'S AGENT WERE NOT IN ACCORD WITH YOUR INTENTION, SUCH ACTIONS ARE NOT THE ACTIONS OF, AND IN NO WAY BINDING ON, THE UNITED STATES UNDER THESE CIRCUMSTANCES. WE THEREFORE SEE NO VALID BASIS UPON WHICH IT MAY BE CONTENDED THAT THERE IS ANY LEGAL LIABILITY UPON THE PART OF THE GOVERNMENT TO PAY ALL OR ANY PORTION OF THE AMOUNT OF YOUR CLAIM, AND IN THE ABSENCE OF SUCH LIABILITY THIS OFFICE MAY NOT AUTHORIZE PAYMENT.

ACCORDINGLY, OUR DECISION OF OCTOBER 16, 1964, DISALLOWING YOUR CLAIM IS SUSTAINED.