B-141780, SEP. 14, 1961

B-141780, SEP. 14, 1961

WETSEL-OVIATT LUMBER COMPANY, INC.:

BY LETTER DATED JUNE 13, 1961, YOU REQUESTED RECONSIDERATION OF OUR DECISION OF FEBRUARY 1, 1961, WHEREIN WE DENIED YOUR CLAIM FOR ADDITIONAL COMPENSATION BELIEVED TO BE DUE UNDER TIMBER SALES CONTRACT NO. 12-11-005- 17307 WITH THE FOREST SERVICE, DEPARTMENT OF AGRICULTURE.

THE FACTS INVOLVED IN YOUR CLAIM WERE SET FORTH IN OUR FEBRUARY 1, 1961, DECISION AND WILL NOT BE RESTATED HERE.

YOU CONTEND THAT RULE III ESTABLISHED BY THE SUPREME COURT IN BRAWLEY V. UNITED STATES, 96 U.S. 168, IS NOT APPLICABLE TO YOUR CLAIM, BUT THAT RULE II THEREOF PROPERLY SUPPORTS ITS ALLOWANCE. THE RULES OF LAW LAID DOWN BY THE COURT IN THE BRAWLEY CASE ARE AS FOLLOWS:

(RULE I.) "WHERE A CONTRACT IS MADE TO SELL OR FURNISH CERTAIN GOODS IDENTIFIED BY REFERENCE TO INDEPENDENT CIRCUMSTANCES, SUCH AS AN ENTIRE LOT DEPOSITED IN A CERTAIN WAREHOUSE, OR ALL THAT MAY BE MANUFACTURED BY THE VENDOR IN A CERTAIN ESTABLISHMENT, OR THAT MAY BE SHIPPED BY HIS AGENT OR CORRESPONDENT IN CERTAIN VESSELS, AND THE QUANTITY IS NAMED WITH THE QUALIFICATION OF "ABOUT," OR "MORE OR LESS," OR WORDS OF LIKE IMPORT, THE CONTRACT APPLIES TO THE SPECIFIC LOT; AND THE NAMING OF THE QUANTITY IS NOT REGARDED AS IN THE NATURE OF A WARRANTY, BUT ONLY AS AN ESTIMATE OF THE PROBABLE AMOUNT, IN REFERENCE TO WHICH GOOD FAITH IS ALL THAT IS REQUIRED OF THE PARTY MAKING IT. * * *

(RULE II.) "BUT WHEN NO SUCH INDEPENDENT CIRCUMSTANCES ARE REFERRED TO AND THE ENGAGEMENT IS TO FURNISH GOODS OF A CERTAIN QUALITY OR CHARACTER TO A CERTAIN AMOUNT, THE QUANTITY SPECIFIED IS MATERIAL, AND GOVERNS THE CONTRACT. THE ADDITION OF THE QUALIFYING WORDS,"ABOUT," "MORE OR SS," AND THE LIKE, IN SUCH CASES, IS ONLY FOR THE PURPOSE OF PROVIDING AGAINST ACCIDENTAL VARIATIONS ARISING FROM SLIGHT AND UNIMPORTANT EXCESSES OR DEFICIENCIES IN NUMBER, MEASURE OR WEIGHT.

(RULE III.) "IF, HOWEVER, THE QUALIFYING WORDS ARE SUPPLEMENTED BY OTHER STIPULATIONS OR CONDITIONS WHICH GIVE THEM A BROADER SCOPE OR MORE EXTENSIVE SIGNIFICANCY, THEN THE CONTRACT IS TO BE GOVERNED BY SUCH ADDED STIPULATIONS OR CONDITIONS. AS, IF IT BE AGREED TO FURNISH SO MANY BUSHELS OF WHEAT, MORE OR LESS, ACCORDING TO WHAT THE PARTY RECEIVING IT SHALL REQUIRE FOR THE USE OF HIS MILL, THEN THE CONTRACT IS NOT GOVERNED BY THE QUANTITY NAMED, NOR BY THAT QUANTITY WITH SLIGHT AND UNIMPORTANT VARIATIONS, BUT BY WHAT THE RECEIVING PARTY SHALL REQUIRE FOR THE USE OF HIS MILL; AND THE VARIATION FROM THE QUANTITY NAMED WILL DEPEND UPON HIS DISCRETION AND REQUIREMENTS, SO LONG AS HE ACTS IN GOOD FAITH. * * *"

YOU CONTEND THAT THE QUANTITY NAMED IN THE CONTRACT, THAT IS,"12,800 M FEET B.M., MORE OR LESS * * *," DID NOT DEPEND UPON THE DISCRETION OF THE GOVERNMENT OFFICER NAMED IN SECTION 4 OF THE CONTRACT; INSTEAD, THE DOMINANT MEASURE OF QUANTITY WAS THE AMOUNT ESTIMATED AS A RESULT OF THE GOVERNMENT APPRAISAL PROCESS REQUIRED BY LAW. YOU SUMMARIZE SUCH POSITION AS FOLLOWS:

"THEREFORE, IN VIEW OF ALL THE FACTS THE "OBVIOUSLY DOMINANT MEASURE" OF THE QUANTITY OF TIMBER OFFERED FOR SALE AND SPECIFIED IN THE CONTRACT WAS NOT SECTION 4 OF THE CONTRACT, BUT THE APPRAISAL PROCESS REQUIRED BY LAW AND ADMINISTRATIVE REGULATION. YOUR DECISION OF FEBRUARY 1, 1961, ERRONEOUSLY APPLIES THE TERM "MORE OR LESS" TO THE MARKING OF TREES AND NOT TO THE APPRAISAL PROCESS WHICH IS REQUIRED BY LAW AND WHICH ESTABLISHES ESTIMATED VOLUME FOR ALL TIMBER SALES OF THIS TYPE. THE NET EFFECT OF YOUR DECISION IS TO RELIEVE THE FOREST SERVICE OF PERFORMING ITS STATUTORY FUNCTION OF MAKING AN APPRAISAL.

"MOREOVER, THE CONTRACT IS ENTIRELY CONSISTENT WITH THIS VIEWPOINT. SECTION ONE OF THE CONTRACT IMMEDIATELY BEFORE THE LIST OF SPECIES AND QUANTITIES IS THIS STATEMENT: "THE ESTIMATED AMOUNT (ESTIMATED IN THE APPRAISAL PROCESS) TO BE CUT UNDER THE METHODS OF MARKING DESCRIBED IN SECTION 4 IS ...' THEN THE PARAGRAPH CONTAINING SECTION 4 STATES:

" "MARKING ... 4. LIVE TIMBER SHALL BE MARKED OR DESIGNATED FOR CUTTING AS FOLLOWS: ALL TREES WHICH, IN THE JUDGMENT OF THE FOREST OFFICER, ARE POOR RISKS SHALL BE MARKED OR DESIGNATED FOR CUTTING.'

CLEARLY, SECTION 4 IS A DESCRIPTION OF THE "METHODS OF MARKING.' FURTHERMORE, SECTION 4 IS LOGICAL AND NECESSARY BECAUSE ONLY A PART OF ALL THE TREES ON A TRACT OF LAND APPROXIMATELY 800 ACRES IN SIZE WERE TO BE CUT. SINCE THE FOREST SERVICE ESTABLISHED THE APPRAISAL VALUE (AFTER A TIMBER CRUISE), ONLY A FOREST SERVICE OFFICER COULD MARK THE TREES WHICH HAD BEEN INCLUDED IN THE APPRAISAL PROCESS.

"TO REVIEW THE THREE RULES OF THE BRAWLEY CASE WE FIND THAT RULE I IS NOT APPLICABLE (ONLY PART OF A WHOLE LOT IS OFFERED AND THE PART FOR SALE WAS NOT MARKED--- EXCEPT FOR 80 ACRES--- UNTIL AFTER THE CONTRACT WAS SIGNED) NOR IS IT NOW RELIED UPON IN YOUR DECISION. RULE III IS THE RULE PERTAINING TO REQUIREMENTS CONTRACTS, AND THE INSTANT CASE IS NOT AN EXAMPLE OF A REQUIREMENTS CONTRACT. BESIDES, RULE III DOES NOT APPLY FOR THE REASONS ENUMERATED ABOVE. IN REGARD TO RULE II YOU STATED IN THE DECISION OF FEBRUARY 1, 1961, THAT:

" "WE DO NOT AGREE THAT THE NAMING OF THE QUANTITY OF THE TIMBER TO BE CUT UNDER THIS CONTRACT WAS IN THE NATURE OF A WARRANTY OR AS PERMITTING ONLY SLIGHT AND UNIMPORTANT VARIANCES IN QUANTITY. * * * THE CASES CITED IN SUPPORT OF THE PROPOSITION THAT RULE II OF THE BRAWLEY CASE APPLIED CLEARLY ARE NOT APPLICABLE HERE SINCE THOSE CASES INVOLVED ESTIMATED QUANTITIES WHERE THE ONLY DOMINANT MEASURE OF AMOUNTS WAS THE ESTIMATE ITSELF. SUCH IS NOT THE CASE HERE WHERE THE QUANTITY WAS TO BE MEASURED UNDER THE CONTRACT BY THE TREES MARKED IN THE DISCRETION OF THE FOREST OFFICER.'

IT IS ABUNDANTLY CLEAR FROM THE ANALYSIS OF THE FACTS ABOVE THAT THE QUANTITY WAS TO BE MARKED--- NOT MEASURED--- IN THE DISCRETION OF THE FOREST OFFICER. IT HAD BEEN MEASURED BY THE GOVERNMENT AFTER A LENGTHY AND COSTLY APPRAISAL PROCESS AND THE EXACT TREES WHICH HAD FORMED THE BASIS OF THE GOVERNMENT'S ESTIMATE AND STIPULATED IN THE CONTRACT COULD NOT BE MEASURED BY THE CONTRACTOR. THEREFORE, THE ONLY DOMINANT MEASURE WAS THE GOVERNMENT'S APPRAISAL ESTIMATE. CONSEQUENTLY THE INSTANT CASE DOES FALL WITHIN THE SCOPE OF CASES CITED BY THE CLAIMANT AND IS CONTROLLED BY RULE II OF THE BRAWLEY CASE.

"ONE OF THOSE CASES CITED BY ME IS A DECISION BY THE COMPTROLLER OF THE TREASURY AND RECORDED AT 15 COMP. DEC. 130. IN THAT CASE THE CONTRACTOR WAS TO "REPLACE ALL DEFECTIVE OR CORRODED BOLTS * * * THAT MAY BE FOUND NECESSARY, ESTIMATED TO BE 5,000," FOR A STIPULATED LUMP SUM PRICE. DECIDING THE CASE PURSUANT TO RULE II OF THE BRAWLEY CASE,THE COMPTROLLER MADE TWO SIGNIFICANT POINTS:

"1. THE ESTIMATE "AFFORDED CONTRACTORS A BASIS ON WHICH TO BID," AND

"2. "IF IT WAS INTENDED THE CONTRACTOR SHOULD REPLACE AN UNLIMITED NUMBER OF BOLTS, THE ESTIMATE OF THE QUANTITY WAS UNNECESSARY AND WITHOUT MEANING.'

"AS MENTIONED ABOVE THE GOVERNMENT WAS REQUIRED BY LAW TO MAKE AN APPRAISAL. DURING THIS APPRAISAL PROCESS MANY THOUSANDS OF DOLLARS WERE DEDUCTED FROM THE GROSS APPRAISAL FIGURE BECAUSE OF THE GOVERNMENT'S ESTIMATE OF THE COSTS OF IMPROVEMENTS (ROADS, DEVELOPMENT, ETC.) TO GOVERNMENT PROPERTY. THESE IMPROVEMENT COSTS ARE RELATIVELY FIXED; I.E., THE ROAD COSTS TO THE CONTRACTOR REMAINED AT X DOLLARS REGARDLESS OF HOW MUCH TIMBER THE GOVERNMENT SOLD HIM. THIS FIXED COST WAS PART OF THE CONTRACTOR'S CONSIDERATION AND NO DIFFERENT IN NATURE FROM THE STIPULATED LUMP SUM OF THE BOLT CASE CITED ABOVE. IT IS OBVIOUS, THEN, THAT THE CONTRACTOR AND ALL OTHER BIDDERS, HAD TO COMPUTE ITS BID ON THE BASIS OF RECOVERING THIS FIXED COST. HOW COULD RECOVERY OF THESE FIXED COSTS BE COMPUTED BY A BIDDER IF NO QUANTITY WERE OFFERED FOR SALE? IT WOULD APPEAR EVEN MORE ESSENTIAL HERE TO HOLD THAT THE ESTIMATE IN THE INVITATION, WHICH WAS SUBSEQUENTLY INCORPORATED IN THE CONTRACT, "AFFORDED CONTRACTORS A BASIS ON WHICH TO BID" THAN IN THE CITED DECISION, 15 COMP. DEC. 130. THE SECOND POINT OF THE COMPTROLLER'S DECISION FOLLOWS THE FIRST. IF IT WAS INTENDED THAT THE CONTRACTOR SHOULD BE ALLOWED TO PURCHASE ONLY A SMALL NUMBER OF TREES, THE ESTIMATE OF QUANTITY DURING THE APPRAISAL PROCESS WAS UNNECESSARY AND THE GOVERNMENT SHOULD HAVE ENTERED INTO A CONTRACT FOR ROAD BUILDING ONLY.

"SINCE RULE II OF THE BRAWLEY CASE IS DEFINITELY APPLICABLE, THERE REMAINS ONLY THE QUESTION OF WHAT IS MEANT BY "ACCIDENTAL VARIATIONS ARISING FROM SLIGHT AND UNIMPORTANT EXCESSES OR DEFICIENCIES IN NUMBER, MEASURE OR WEIGHT" AS STATED IN RULE II. IN MOORE V. UNITED STATES, 196 U.S. 157, THE CONTRACTOR AGREED TO DELIVER "ABOUT" FIVE THOUSAND TONS OF COAL. AFTER THE GOVERNMENT REFUSED TO ACCEPT DELIVERY ON THE LAST 366 TONS (LESS THAN 7 1/2 PERCENT) THE CONTRACTOR SUED. HE RECOVERED. YOUR OFFICE HELD, CITING BOTH RULE II OF BRAWLEY AND THE MOORE CASE, THAT A 10 PERCENT VARIATION IN DELIVERY OF LUMBER WAS TOO MUCH. 15 COMP. GEN. 386. IN THE INSTANT CASE THERE IS A VARIATION OF ALMOST 50 PERCENT.'

PURSUANT TO 16 U.S.C. 476, THE SECRETARY OF AGRICULTURE PROMULGATED REGULATIONS RESPECTING THE SALE OF TIMBER IN NATIONAL FORESTS. TITLE 36, CODE OF FEDERAL REGULATIONS, SECTION 221.15, COVERING THE ADMINISTRATION OF TIMBER SALES PROVIDES IN PART:

"/A) NO LIVE TIMBER SHALL BE CUT UNDER ANY TIMBER SALE CONTRACT OR PERMIT UNTIL MARKED OR OTHERWISE DESIGNATED FOR CUTTING BY A FOREST OFFICER.

"/B) THE VOLUME OF NATIONAL FOREST TIMBER IN A SALE MAY BE DETERMINED BY SCALING, MEASURING, OR COUNTING THE LOGS OR OTHER PRODUCTS, OR BY MEASURING THE TREES BEFORE CUTTING. IF THE CONTRACT OR PERMIT PROVIDES FOR THE DETERMINATION OF VOLUME BY TREE MEASUREMENT AND THE TIMBER HAS BEEN PAID FOR, THE MARKING OR OTHERWISE DESIGNATING OF THE TREE AUTHORIZES CUTTING AND REMOVAL. OTHERWISE NO TIMBER CUT UNDER ANY CONTRACT SHALL BE REMOVED FROM THE PLACE DESIGNATED UNTIL IT HAS BEEN SCALED, MEASURED, OR COUNTED BY A FOREST OFFICER, UNLESS SUCH REMOVAL IS SPECIFICALLY AUTHORIZED IN THE CONTRACT.'

TITLE 2400--- TIMBER MANAGEMENT, OF THE FOREST SERVICE HANDBOOK, PROVIDES:

"2430.5--- FORMS OF COMMERCIAL SALES

"1. SALE BY AREA. THE USUAL SALE INCLUDES ALL THE TIMBER MARKED OR DESIGNATED FOR CUTTING ON A SPECIFIED AREA. THE VOLUME TO BE CUT IS ESTIMATED BUT NOT GUARANTEED. IF THE VOLUME OF TIMBER MARKED OR DESIGNATED FOR CUTTING ON THE AREA COVERED BY THE SALE EXCEEDS THE ESTIMATE, AS A WHOLE OR BY SPECIES, THE PURCHASER HAS THE RIGHT AND OBLIGATION TO CUT AND REMOVE IT, PAYING THE BID PRICE. IF THERE IS LESS TIMBER THAN ESTIMATED, THERE IS NO OBLIGATION FOR THE FOREST SERVICE TO MAKE UP THE DEFICIENCY FROM OTHER AREAS. THE SYSTEM OF MARKING WILL NOT BE CHANGED TO INCREASE THE CUT TO THE ESTIMATE.'

"2422.1--- APPRAISALS NOT GUARANTEED.

"STUMPAGE APPRAISALS ARE NOT GUARANTEED REGARDING EITHER THE ABILITY OF A PURCHASER TO OBTAIN A PROFIT IF HE BUYS AT THE APPRAISED VALUE OR THE ACCURACY OF THE ESTIMATED COSTS OR RETURNS. PROSPECTIVE BIDDERS SHOULD BE INFORMED THAT THE FOREST SERVICE TRIES TO APPRAISE OFFERED TIMBER AT PRICES WHICH REPRESENT FAIR VALUES, BUT EACH BIDDER MUST DETERMINE FOR HIMSELF WHETHER HE WISHES TO BID AT OR ABOVE THE APPRAISED PRICE OR PRICES.'

THUS, WHILE TIMBER MAY BE SOLD UNDER 16 U.S.C. 476 AND THE IMPLEMENTING REGULATIONS FOR NOT LESS THAN THE APPRAISED VALUE, SALES MAY BE MADE AT MORE THAN THE APPRAISED VALUE AND IN QUANTITIES AS MAY BE PRESCRIBED BY THE FOREST OFFICER.

WE CANNOT AGREE THAT THE DOMINANT MEASURE OF THE QUANTITY OF TIMBER OFFERED FOR SALE WAS THE ESTIMATED AMOUNT MENTIONED IN ARTICLE 1 OF THE CONTRACT. IF SUCH WERE THE FACT, THE FOREST OFFICER WOULD HAVE HAD NO OPTION BUT TO MARK AND DESIGNATE AT LEAST A TOTAL OF 12,800 THOUSAND (SIC) BOARD FEET OF LIVE AND RECENTLY-KILLED TIMBER. BUT SECTION 4 OF THE CONTRACT DID NOT PERMIT MARKING AND DESIGNATING OF ALL TIMBER TO THE ESTIMATED VOLUME; INSTEAD, SECTION 4 CLEARLY PROVIDED A MEANS WHEREBY ONLY SELECTED TIMBER, IN THE DISCRETION OF THE FOREST OFFICER, WAS TO BE CUT AGAINST THE ESTIMATE. THE ESTIMATE, IN OUR OPINION, PROVIDED A YARDSTICK AGAINST WHICH SECTION 4 WAS INTENDED TO OPERATE AND DID NOT PROVIDE THE CONTRACT MEASUREMENT OF TIMBER VOLUME. SINCE THE APPRAISED VOLUME WAS SUBJECT TO, AND DEPENDENT UPON, THE DISCRETION OF THE FOREST OFFICER TO MARK AND DESIGNATE, THE TRUE AND ACTUAL MEASUREMENT OF VOLUME WAS THAT RESULTING FROM THE OPERATION OF SECTION 4.

WHETHER A CONTRACT WAS OR WAS NOT A REQUIREMENTS CONTRACT IS NOT DETERMINATIVE OF THE LEGALITY OF YOUR CLAIM. WHERE THE WORDS "MORE OR LESS" ARE SUPPLEMENTED BY OTHER STIPULATIONS OR CONDITIONS WHICH GIVE THEM A BROADER SCOPE OR A MORE EXTENSIVE SIGNIFICANCE, THEN THE CONTRACT, AS HERE, IS TO BE GOVERNED BY SUCH ADDED STIPULATIONS OR CONDITIONS AS WERE CONTAINED IN SECTION 4. 77 C.J.S., SALES, SECTION 169; 58 A.L.R.2D 411- 413; 37 COMP. GEN. 400. IN THE CASE OF STENNICK V. J. K. LUMBER CO., 161 P. 97, THE PLAINTIFF SOUGHT TO RESCIND A CONTRACT FOR THE PURCHASE OF TIMBER ON THE GROUND OF FRAUDULENT REPRESENTATIONS SINCE ONE AREA KNOWN AS THE "KRIBS" TRACT HAD BEEN ESTIMATED AS CONTAINING APPROXIMATELY 441,609,000 BOARD FEET, WHEREAS THE PURCHASER ASSERTED IT ACTUALLY CONTAINED 100,000,000 FEWER FEET. THE COURT HELD FOR THE SELLER. IN ITS OPINION, THE OREGON SUPREME COURT QUOTED AS FOLLOWS FROM THE LOWER COURT'S OPINION AT PAGE 104: "* * * IN CRUISING TIMBER THE HUMAN EQUATION IS ALWAYS PRESENT, AND THE ACCURACY OF THE CRUISE DEPENDS UPON THE SKILL, THE JUDGMENT, AND THE CONSCIENTIOUS SERVICE OF THE CRUISER. THE EXTENT TO WHICH THE ESTIMATES OF CRUISERS MAY VARY IS FORCIBLY ILLUSTRATED BY THE EVIDENCE IN THIS SUIT. UNDER FAVORABLE AND SIMILAR CONDITIONS TWO CRUISERS OF APPARENTLY EQUAL ABILITY WILL OFTEN VARY GREATLY IN THEIR ESTIMATES.

"WHEN THE PARTIES CONTRACTED CONCERNING THIS TIMBER, THEIR KNOWLEDGE OF THE INACCURACY OF TIMBER CRUISING AND THE PRACTICAL IMPOSSIBILITY OF ACCURATE KNOWLEDGE OF THE QUANTITY OF STANDING TIMBER WERE PRESENT, EXISTING FACTS, WHICH CANNOT BE EXCLUDED FROM THEIR NEGOTIATIONS. THEY BOTH KNEW THAT THEIR ESTIMATES MIGHT VARY; THAT THE TIMBER COULD NOT BE EXPECTED TO CUT OUT IN EXACT ACCORDANCE WITH THE ESTIMATES; THAT IT MIGHT OVERRUN OR MIGHT SHRINK IN THE CUT OR SCALE. * * * A REASONABLE MARGIN OF VARIANCE MUST HAVE BEEN WITHIN THE CONTEMPLATION OF THE PARTIES.'

THE COURT OF CLAIMS IN THE CASE OF BROCK ET AL. V. UNITED STATES, 84 CT.CL. 453, CONSIDERED A TIMBER SALES CONTRACT SIMILAR TO THE ONE HERE INVOLVED WHEREIN THE PLAINTIFF AGREED TO PURCHASE FROM THE FOREST SERVICE AT SPECIFIED RATES, AND CUT AND REMOVE, CERTAIN KINDS AND QUANTITIES OF TIMBER FROM ABOUT 188 ACRES TO BE DEFINITELY DESIGNATED BY A FOREST OFFICER PRIOR TO CUTTING. THE CONTRACT PROVIDED THAT THE AMOUNTS OF TIMBER TO BE CUT UNDER THE METHOD OF MARKING DESCRIBED IN SECTION 4 WAS 493 THOUSAND BOARD FEET OF SUGAR MAPLE; 176 THOUSAND BOARD FEET OF BEECH; 96 THOUSAND BOARD FEET OF BIRCH; 47 THOUSAND BOARD FEET OF BASSWOOD; AND 13 THOUSAND BOARD FEET OF OTHER HARDWOODS,"MORE OR LESS.' THE PLAINTIFF SUED FOR THE LOSS SUSTAINED IN OVERCUTTING BIRCH TIMBER WHICH WOULD HAVE BEEN MINIMIZED HAD THEY CUT TIMBER UP TO THE ESTIMATES OF THE OTHER SPECIES OF TIMBER. THE COURT HELD:

"* * * THE STATEMENT IN THE CONTRACT OF THE ESTIMATED QUANTITIES OF THE VARIOUS TYPES OF TIMBER ON THE AREA TO BE CUT, FOLLOWED BY THE WORDS "MORE OR LESS," DID NOT CONSTITUTE A WARRANTY AND WAS NOT A REPRESENTATION BINDING ON THE DEFENDANT SUCH AS THE POSITIVE STATEMENT IN THE SPECIFICATIONS OF A CONTRACT AS TO THE CHARACTER OF THE WORK TO BE PERFORMED. IT WAS MERELY AN ESTIMATE OF THE PROBABLE AMOUNTS OF THE VARIOUS KINDS OF TIMBER BOUGHT AND SOLD UNDER THE CONTRACT, IN REFERENCE TO WHICH GOOD FAITH IS ALL THAT WAS REQUIRED ON THE PART OF THE FENDANT.'

THE COURT OF CLAIMS IN THIS CASE RELIED ON THE BRAWLEY DECISION. SEE, ALSO, RUSSELL AND PUGH LUMBER COMPANY V. UNITED STATES, CT.CL. NO. 322- 59,DECIDED JUNE 7, 1961.

THE DECISION AT 15 COMP. DEC. 130, CITED BY YOU, HAS NO APPLICATION HERE. IN THAT CASE THE CONTRACTOR WAS OBLIGATED TO REPLACE ALL DEFECTIVE BOLTS WHICH THE GOVERNMENT ESTIMATED TO BE 5,000. THE ESTIMATED QUANTITY SPECIFIED WAS HELD TO BE A QUALIFICATION OF THE UNDERTAKING TO REPLACE ALL DEFECTIVE BOLTS AND WAS CONSIDERED AS EQUIVALENT TO USING THE QUALIFYING WORDS ABOUT" OR "MORE OR LESS" WHICH PERMITTED SLIGHT VARIATIONS. IN THE INSTANT CASE, THE CONTRACT COVERED THE SALE OF ALL TIMBER SELECTED BY THE FOREST OFFICER AND, THEREFORE, WAS A CONTRACT MADE FOR THE SALE OF GOODS IDENTIFIED BY INDEPENDENT CIRCUMSTANCES. THE QUANTITY NAMED WAS ONLY AN ESTIMATE OF THE PROBABLE AMOUNT, IN REFERENCE TO WHICH GOOD FAITH WAS ALL THAT WAS REQUIRED OF THE GOVERNMENT.

LIKEWISE, THE DECISION AT 15 COMP. GEN. 386 IS DISTINGUISHABLE SINCE NO INDEPENDENT CIRCUMSTANCES WERE REFERRED TO IN THE CONTRACT WHICH WOULD HAVE GIVEN THE TERM "MORE OR LESS" A BROADER SCOPE AS WAS THE CASE HERE. THERE RULE II OF THE BRAWLEY CASE WAS CLEARLY APPLICABLE. IN MOORE V. UNITED STATES, 196 U.S. 157, THE SUPREME COURT CONSIDERED A CLASSIC EXAMPLE OF RULE II OF THE BRAWLEY CASE AND APPLIED IT ACCORDINGLY. THERE WERE NO INDEPENDENT OR QUALIFYING CIRCUMSTANCES PRESENT IN THAT CASE SO AS TO GIVE A MORE EXTENSIVE SIGNIFICANCE TO THE TERM "MORE OR LESS.'

YOU ALSO REFER TO OUR DECISION B-136117 DATED JUNE 6, 1958, AND STATE THAT WE RULED IN FAVOR OF THE CLAIMANT. ON THE CONTRARY, WE ADVISED THE SECRETARY OF THE INTERIOR THAT NO LEGAL OBLIGATION EXISTED ON THE PART OF THE GOVERNMENT TO REIMBURSE THE CONTRACTOR FOR LOSSES SUSTAINED IN PERFORMING HIS CONTRACT.

CONCERNING THE SPECIFIC QUESTIONS RAISED IN YOUR LETTER, THEY ARE ANSWERED BELOW:

"1. IF THE QUANTITY COMPUTED BY THE GOVERNMENT DURING THE APPRAISAL PROCESS WAS NOT MATERIAL, UPON WHAT BASIS WERE THE BIDDERS MAKING THEIR BIDS?

AS IN THE CASE OF ALL SALES OF GOVERNMENT PROPERTY, IT IS INCUMBENT FOR ALL BIDDERS TO VISUALLY INSPECT NOT ONLY THE QUALITY BUT THE QUANTITY OF THE PROPERTY OFFERED FOR SALE SO THAT ALL ELEMENTS OF RISK ARE TAKEN INTO CONSIDERATION IN PREPARING THEIR BIDS. HERE A MONTH ELAPSED BETWEEN THE ANNOUNCEMENT OF THE SALE AND THE DATE BIDS WERE TO BE RECEIVED. ALSO, BIDDERS WERE ADVISED IN THE SALE ANNOUNCEMENT THAT THE SALE AREA WOULD BE MARKED ON A POOR RISK BASIS AND THAT THE VOLUMES WERE BASED ON A 6 PERCENT SAMPLE CRUISE. IN OUR OPINION, BIDDERS, HAVING NOTICE OF THE FOREGOING, WERE REQUIRED TO EXERCISE GOOD BUSINESS JUDGMENT AND BID ON THE BASIS OF THEIR OWN INSPECTION AND VERIFICATION OF THE VOLUMES EXPECTED TO BE CUT. THE DOCTRINE OF "CAVEAT EMPTOR" WAS ENVISAGED BY THE SALE ANNOUNCEMENT AND SHOULD HAVE GOVERNED YOU AS A BIDDER ACCORDINGLY.

"2. IF A 50 PERCENT DEFICIENCY IS ONLY SLIGHT AND UNIMPORTANT, WHAT IS A GROSS AND IMPORTANT DEFICIENCY WHEN EXPRESSED IN TERMS OF PERCENTAGES?

OF COURSE, THIS PERCENTAGE FIGURE ONLY IS SIGNIFICANT WHEN CONSIDERED IN THE LIGHT OF UNRECOVERED DEVELOPMENT COSTS. UNDER THE CONTRACT, THE GOVERNMENT RECEIVED PAYMENT ONLY FOR THE ACTUAL VOLUME CUT BY YOU. CANNOT, UNDER THE APPLICABLE LAW, SAY WHEN THERE IS A GROSS DEFICIENCY PERCENTAGE-WISE. IN THIS PARTICULAR CASE, IT WAS IMMATERIAL IN VIEW OF THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE CONTRACT. ANY EVENT, THE TERMS OF THE CONTRACT PROVIDED FOR NO PRICE ADJUSTMENT ON ACCOUNT OF VOLUME DEFICIENCIES. IF SUCH ADJUSTMENT IS REQUIRED BY PURCHASERS, IT SHOULD BE MADE PART OF THE CONTRACT.

"3. IF IT WERE INTENDED THAT THE QUANTITY SHOULD BE DETERMINED BY A FOREST SERVICE OFFICER AFTER THE CONTRACT CAME INTO EXISTENCE, DID THE GOVERNMENT ACTUALLY MAKE AN APPRAISAL AS REQUIRED BY LAW AND ADMINISTRATIVE REGULATION?

THE CONTRACT FILE BEFORE US SHOWS THAT AN APPRAISAL WAS MADE FOR THIS SALE AND THAT THE SALE ANNOUNCEMENT WAS SUPPORTED BY AN APPRAISAL REPORT DATED JULY 14, 1955, WHICH WAS DEEMED TO BE SATISFACTORY FOR PURPOSES OF PUBLIC SALE BY THE REGIONAL FORESTER.

WE, THEREFORE, ARE REQUIRED TO SUSTAIN OUR PRIOR SETTLEMENT DENYING YOUR CLAIM AND OUR DECISION OF FEBRUARY 1, 1961, AFFIRMING THAT SETTLEMENT.