B-143839, SEP. 30, 1960

B-143839, SEP. 30, 1960

TO MR. J. H. DONALD:

REFERENCE IS MADE TO LETTER OF MAY 6, 1960, FROM YOUR ATTORNEY, MR. EUGENE F. ROGERS, PRESENTING A CLAIM FOR REFUND OF AN ALLEGED OVERPAYMENT FOR GARBAGE COLLECTED AT FORT JACKSON, SOUTH CAROLINA, UNDER CONTRACT NO. DA/S) 38-042-AIII-530, DATED MAY 1, 1957. THE LETTER ALSO REQUESTS A REDUCTION IN THE CONTRACT PRICE OF THE GARBAGE BEING COLLECTED.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO COLLECT GARBAGE SUITABLE FOR ANIMAL CONSUMPTION FOR THE PERIOD FROM MAY 1, 1957, TO APRIL 30, 1962, INCLUSIVE. YOU AGREED TO PAY $0.10625 PER MAN PER MONTH, BASED ON AN ESTIMATED 15,000 DAILY RATIONS. PARAGRAPH 17 OF SPECIAL CONDITIONS PROVIDES THAT THE GOVERNMENT WILL ENDEAVOR TO KEEP THE EDIBLE GARBAGE FREE FROM ALL WASTE MATERIALS WHICH MIGHT BE INJURIOUS TO ANIMALS, OR THAT HAVE NO VALUE SUCH AS BROKEN GLASS, TIN CANS, COFFEE GROUNDS, ETC., BUT NO RESPONSIBILITY WILL BE ATTACHED TO THE GOVERNMENT FOR FAILURE TO KEEP THE GARBAGE FREE FROM SUCH MATERIALS.

IT IS REPORTED THAT ON SEVERAL OCCASIONS, PRIOR TO NOVEMBER 30, 1959, YOU MADE VERBAL COMPLAINTS OF A SHORTAGE IN GARBAGE TO THE CONTRACTING OFFICER AND YOU REQUESTED RELIEF, BASED UPON THE REDUCTION IN THE PRICE OF HIGS, AND THE SHORTAGE IN THE AMOUNT OF GARBAGE. YOU WERE PROPERLY INFORMED BY THE CONTRACTING OFFICER THAT THE PRICE OF HOGS COULD NOT BE USED AS A BASIS FOR AN ADJUSTMENT IN PRICE AS THE CONTRACT MADE NO PROVISION THEREFORE IN THIS REGARD. HOWEVER, THE CONTRACTING OFFICER PROPOSED THAT THE GARBAGE BE WEIGHED FOR ONE MONTH. THE GARBAGE WAS WEIGHED DURING THE MONTH OF JANUARY 1960. THIS WEIGHING SHOWED THAT 291,442 POUNDS OF GARBAGE WERE GENERATED DURING THIS PERIOD AND THE RECORDS SHOW THAT 475,316 DAILY RATIONS WERE ISSUED DURING JANUARY 1960.

IT IS STATED ON YOUR BEHALF BY YOUR ATTORNEY THAT YOU HAD BASED YOUR BID UPON THE EXPERIENCE OF GARBAGE COLLECTORS AND THE PROVISIONS OF ARMY REGULATIONS 755-7, PARAGRAPH 84A, ISSUED NOVEMBER 9, 1954, TO THE EFFECT THAT TROOPS GENERATE ABOUT ONE POUND OF GARBAGE PER MAN PER DAY. ALSO, IT IS STATED THAT IN APRIL 1958, YOU WERE AWARE OF A SHORTAGE IN GARBAGE AND THAT THE SHORTAGE BECAME MORE PRONOUNCED DURING THE SUBSEQUENT MONTHS. UPON INVESTIGATION IT WAS FOUND THAT THE ARMY HAD INAUGURATED AN "AUSTERITY" PROGRAM WHICH ELIMINATED A LARGE AMOUNT OF GARBAGE AND ALSO, THERE WAS INCREASED BIVOUAC ACTIVITY IN THE TRAINING OF THE TROOPS WHICH RESULTED IN THE ISSUANCE OF RATIONS AS TO WHICH NO GARBAGE WAS GENERATED. IN THE LETTER OF MAY 6, 1960, YOUR ATTORNEY STRESSES THE FACT THAT THE GARBAGE CONTAINED A CONSIDERABLE AMOUNT OF CITRUS RINDS, COFFEE GROUNDS, GLASS AND OTHER MATTER UNFIT FOR ANIMAL CONSUMPTION. YOUR ACCOUNTANTS HAVE PREPARED AN ITEMIZED STATEMENT FROM YOUR RECORDS PURPORTING TO SHOW THAT DURING THE PERIOD FROM APRIL 1958, TO FEBRUARY 1960, THERE WAS A SHORTAGE IN GARBAGE, BASED ON THE RATIONS ISSUED DURING THIS PERIOD, WHICH ENTITLED YOU TO A REFUND OF $11,523.73. ALSO, YOUR ATTORNEY REQUESTED THAT THE CONTRACT BE AMENDED BY A DOWNWARD ADJUSTMENT IN THE PRICE OF RATIONS PER DAY PER MAN TO $0.054 PER MAN PER MONTH.

THE CONTRACTING OFFICER HAS FOUND THAT DURING THE PERIOD FROM MAY 1957, TO MARCH 1960, FIELD-TYPE RATIONS TOTALING 10,763 WERE BILLED TO YOU IN ERROR AT THE CONTRACT PRICE OF $1,143.57, SINCE NO GARBAGE WAS GENERATED FROM THESE RATIONS. ALSO, HE HAS MADE THE FOLLOWING RECOMMENDATION WITH REGARD TO YOUR CLAIM FOR REFUND AND YOUR REQUEST FOR REVISION OF THE CONTRACT PRICE:

"B. REFERENCE PARAGRAPH 84A, AR 755-7, EVIDENCE SUPPLIED BY MR. ROGERS (REFERENCE INCLOSURE 24), STATEMENT BY FOOD ADVISOR, FORT JACKSON, AND THE ACTUAL WEIGHTS OF GARBAGE FOR THE MONTH OF JANUARY 1960. THE CONSERVATION PROGRAM AT FORT JACKSON HAS RESULTED IN APPROXIMATELY 38.68 PERCENT LESS GARBAGE BEING GENERATED CURRENTLY THAN WHEN THE CONTRACT WAS EXECUTED IN MAY 1957. A REVISION DOWNWARD OF PRICES PER MAN, PER MONTH TO .06516 PER MAN WILL COMPARE WITH THE BID OF .10625 PER MAN AT ONE POUND, PER MAN, PER DAY. IT IS BELIEVED THAT THIS PRICE WILL PROTECT THE GOVERNMENT'S INTEREST AND BE A FAIR REVISION TO THE CONTRACTOR. THIS REVISION SHOULD BE RETROACTIVE TO 1 MARCH 1960.

"C. THE STATISTICAL DATA SUBMITTED BY MR. ROGERS (SEE EXHIBITS A AND C, OF INCLOSURE 24) OFFERED IN SUPPORT OF THE CLAIM FOR A REFUND OF $11,523.73, APPEARS TO BE REASONABLE WITH THE EXCEPTION OF THE MONTHS OF DECEMBER 1959, JANUARY AND FEBRUARY 1960. BASED UPON THE 38.68 PERCENT SHORTAGE, THE REFUND FOR DECEMBER 1959 SHOULD BE $443.90, JANUARY 1960, $630.17, FEBRUARY 1960, $679.55 AND THE TOTAL CLAIM FOR THESE MONTHS IS $2,055.71. THE TOTAL CLAIM OF $2,055.71 IS BELIEVED TO BE EXCESSIVE BY $302.09 AND SHOULD BE REDUCED TO $1.753.62, THEREBY REDUCING THE TOTAL CLAIM TO $11,221.64. BASED UPON THE INFORMATION AVAILABLE TO THE CONTRACTING OFFICER, IT IS BELIEVED THAT THE CLAIM TO BE JUST AND THAT A REFUND IN THE AMOUNT OF $11,221.64 SHOULD BE MADE. THE OVERCHARGE OF $1,143.57 (REFERENCE PARAGRAPH 4, ABOVE, AND INCLOSURE 25) IS INCLUDED IN THE GRAND TOTAL OF $11,221.64.'

WITH REGARD TO THE MATERIALS CONTAINED IN THE GARBAGE THAT MIGHT BE INJURIOUS TO ANIMALS, PARAGRAPH 17 OF SPECIAL CONDITIONS SPECIFICALLY RELIEVES THE GOVERNMENT OF ANY RESPONSIBILITY THEREFOR. AS TO THE SHORTAGE IN GARBAGE PER RATION, WHILE UNDER THE TERMS OF THE CONTRACT YOU ARE NOT ENTITLED TO ANY RELIEF IF THE RATIONS ISSUED DAILY VARIES FROM THE ESTIMATED NUMBER OF 15,000, IT IS CLEAR THAT WHERE, AS HERE, FIELD-TYPE RATIONS WERE ISSUED AS TO WHICH NO GARBAGE WHATEVER WAS GENERATED YOU ARE ENTITLED TO AN ADJUSTMENT THEREFOR. ALSO, SINCE THE GOVERNMENT HAS TAKEN AFFIRMATIVE ACTION IN THIS CASE BY THE ESTABLISHMENT OF ITS "AUSTERITY" PROGRAM WHICH RESULTED IN A LARGE SHORTAGE OF GARBAGE PER RATION AND THUS HAS MADE THE PERFORMANCE OF THE CONTRACT MORE BURDENSOME FOR YOU, REFUND ON THE BASIS RECOMMENDED BY THE CONTRACTING OFFICER WHICH TAKES INTO ACCOUNT THE ISSUANCE OF FIELD-TYPE RATIONS APPEARS PROPER. INSTRUCTIONS TO EFFECT SETTLEMENT ON THAT BASIS ARE BEING ISSUED TODAY TO THE CLAIMS DIVISION OF OUR OFFICE.

WITH REGARD TO YOUR REQUEST FOR A DOWNWARD REVISION OF THE CONTRACT PRICE BECAUSE OF THE CONTINUING SHORTAGE OF GARBAGE PER RATION, IT, OF COURSE, WOULD NOT BE FEASIBLE TO ASCERTAIN THE AMOUNT OF SHORTAGE OCCURRING EVERY MONTH. BASED ON THE ACTUAL WEIGHING OF GARBAGE COLLECTED DURING JANUARY 1960, THE SHORTAGE IN GARBAGE HAS BEEN DETERMINED TO BE APPROXIMATELY 38.68 PERCENT LESS THAN WHEN THE CONTRACT WAS EXECUTED IN MAY 1957. THE ADMINISTRATIVE OFFICE IS BEING ADVISED THAT IN LINE WITH THE CONTRACTING OFFICER'S RECOMMENDATION THE CONTRACT PRICE MAY BE REVISED DOWNWARD TO $0.06516 PER MAN PER MONTH.