B-124041, FEB. 16, 1956

B-124041: Feb 16, 1956

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CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 28. WHICH WAS RENDERED TO THE TREASURY DEPARTMENT. WHEREIN IT WAS HELD THAT PAYMENT OF YOUR CLAIM FOR $800.01. WAS NOT AUTHORIZED. SO FAR AS CONCERNS YOUR ALLEGATION THAT THE TERMS OF THE AGREEMENT AS TO DELIVERY WERE AMBIGUOUS. YOUR ATTENTION IS INVITED TO THE STATEMENT ON PAGE 3 OF THE INVITATION TO THE EFFECT THAT SHIPMENTS OF 20 PERCENT OF THE SPECIFIED PLATES WOULD BE MADE TO EACH OFFICE WITHIN FIVE DAYS AFTER RECEIPT OF THE ORDER. THIS WAS REITERATED IN TELETYPE OF AUGUST 26. WHICH WAS ACCEPTED BY YOU AND BECAME AN AMENDMENT TO THE INVITATION. ALTHOUGH AMENDMENTS WERE MADE TO THE INVITATION TO BID. WERE BASED ON REPORTS RECEIVED FROM EACH REGIONAL DISBURSING OFFICE INVOLVED.

B-124041, FEB. 16, 1956

TO AMERICAN EXPANSION BOLT AND MFG. CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 28, 1955, ACKNOWLEDGED JANUARY 13, 1956, RELATIVE TO OUR DECISION DATED OCTOBER 24, 1955, B-124041, WHICH WAS RENDERED TO THE TREASURY DEPARTMENT,WHEREIN IT WAS HELD THAT PAYMENT OF YOUR CLAIM FOR $800.01, DEDUCTED BY REASON OF DELAYS IN DELIVERY, UNDER CONTRACT NO. T-3-FE 112, DATED AUGUST 30, 1954, WAS NOT AUTHORIZED.

YOU QUESTION THE CORRECTNESS OF THE DECISION PRINCIPALLY WITH REGARD TO THE PERCENTAGE OF INITIAL DELIVERIES REQUIRED BY THE CONTRACT, AND THE BASIS FOR THE CALCULATIONS USED IN ARRIVING AT THE EXCESS COSTS FOR PROCESSING THE PLATES. A REPORT HAS NOW BEEN RECEIVED FROM THE SECRETARY OF THE TREASURY WITH RESPECT TO YOUR CONTENTIONS.

SO FAR AS CONCERNS YOUR ALLEGATION THAT THE TERMS OF THE AGREEMENT AS TO DELIVERY WERE AMBIGUOUS, YOUR ATTENTION IS INVITED TO THE STATEMENT ON PAGE 3 OF THE INVITATION TO THE EFFECT THAT SHIPMENTS OF 20 PERCENT OF THE SPECIFIED PLATES WOULD BE MADE TO EACH OFFICE WITHIN FIVE DAYS AFTER RECEIPT OF THE ORDER. THIS WAS REITERATED IN TELETYPE OF AUGUST 26, 1954, WHICH WAS ACCEPTED BY YOU AND BECAME AN AMENDMENT TO THE INVITATION. ALTHOUGH AMENDMENTS WERE MADE TO THE INVITATION TO BID, CHANGING DESTINATIONS DID NOT ALTER THE SPECIFICATIONS WHICH REQUIRED 20 PERCENT OF THE SPECIFIED PLATES TO BE DELIVERED WITHIN FIVE CALENDAR DAYS AFTER RECEIPT OF THE ORDER.

THE CALCULATIONS SET FORTH BELOW, USED IN ARRIVING AT THE EXCESS COST FOR PROCESSING THE PLATES, WERE BASED ON REPORTS RECEIVED FROM EACH REGIONAL DISBURSING OFFICE INVOLVED.

TABLE OFFICE MAN NUMBER PUNCHED PERSONAL MATERIALS TOTAL

HOURS AND EMBOSSED SERVICES EXPENSE COST DENVER 260 39,000 $ 343.20 $184.61 $ 527.81 MINNEAPOLIS 49 4,500 83.66 18.68 102.34 NEW YORK 31 4,650 40.92 89.62 130.54 PHILADELPHIA 44 6,000 58.08 43.12 101.20 WASHINGTON 286 47,500 681.00 186.20 867.20

TOTALS 670 101,650 $1,206.86 $522.23 (1) $1,729.09

(1)

(1) INCLUDES COST OF BLANK PLATE STOCK AND COST OF TRANSPORTING BLANK PLATES BETWEEN REGIONAL OFFICES WHICH WAS NECESSARY IN SOME CASES.

YOUR CHARGE FOR FURNISHING THESE PLATES AND EMBOSSING AND PUNCHING SERVICES AT $9.14 PER 1,000 WOULD HAVE BEEN $929.08. THE DIFFERENCE BETWEEN $1,729.09 AND $929.08, OR $800.01, IS THE EXCESS COSTS INCURRED BY THE DIVISION OF DISBURSEMENT FOR EMBOSSING AND PUNCHING PLATES BECAUSE OF YOUR FAILURE TO MAKE DELIVERIES IN TIME FOR USE. IN THIS CONNECTION YOUR ALLEGATION THAT THESE COSTS ARE EXCESSIVE IN THAT THEY REPRESENT A CHARGE OF $0.08 FOR EACH PLATE PUNCHED AND EMBOSSED IS OBVIOUSLY IN ERROR; THE COST OF 101,650 PLATES AT $800.01 IS ONLY $0.008 PER ITEM. IT IS REPORTED THAT THIS COST IS VERY LOW INASMUCH AS THESE PLATES WERE MANUALLY EMBOSSED AND PUNCHED WHICH REQUIRED LISTING AND PROOFREADING, AND ALSO INCLUDED THE COST OF SHIPPING PLATES FROM ONE AREA TO ANOTHER TO MEET DEADLINES AS A RESULT OF THE DELAYED DELIVERIES.

YOU URGE THAT IN THE DECISION OF OCTOBER 24, 1955, WE SHOULD NOT HAVE REJECTED THE STATEMENT IN 29 COMP. GEN. 57, TO THE EFFECT THAT THE GOVERNMENT COULD NOT ACCEPT DELAYED DELIVERIES AND THEN CHARGE THE CONTRACTOR FOR THE EXCESS COSTS OF SIMILAR SUPPLIES BOUGHT ELSEWHERE EVEN THOUGH THE ADDITIONAL PURCHASES WERE NECESSITATED BY THE CONTRACTOR'S DELAY. HOWEVER, AS POINTED OUT IN THE DECISION OF OCTOBER 24, 1955, IT IS WELL SETTLED THAT ACCEPTANCE OF DELAYED PERFORMANCE UNDER A CONTRACT IS NOT INCONSISTENT WITH A RIGHT TO DEMAND DAMAGES FOR DELAY, AND HENCE IS NOT IN AND OF ITSELF A WAIVER. IN SUPPORT OF THIS PRINCIPLE OF LAW, THERE WERE CITED CERTAIN COURT DECISIONS AS WELL AS THE UNIFORM SALES ACT AND WILLISTON ON CONTRACTS. NO REASON APPEARS WHY SUCH PRINCIPLE SHOULD NOT BE APPLIED TO THE FACTS IN THIS CASE. IT IS DIFFICULT TO PERCEIVE HOW ANY EXPENSES OR DAMAGES RESULTING FROM BREACH OR DEFAULT COULD BE CONSIDERED AS BEING MORE DIRECTLY TRACEABLE TO SUCH BREACH THAN THE DAMAGES THAT WERE CLAIMED BY THE GOVERNMENT IN THIS CASE. ALL THAT IS BEING CHARGED IN THIS INSTANCE ARE THE COSTS ACTUALLY INCURRED BY THE GOVERNMENT, IN EXCESS OF THAT WHICH IT WOULD HAVE BEEN CHARGED FOR THE SAME NUMBER OF PLATES UNDER THE CONTRACT, BY REASON OF YOUR DELAYS IN DELIVERIES. IN THE CIRCUMSTANCES, IT SEEMS CLEAR THAT THE DAMAGES WITHHELD WERE SUCH AS COULD READILY HAVE BEEN FORESEEN AND ANTICIPATED AT THE TIME THE CONTRACT WAS EXECUTED, AND ALSO ARE SUCH AS MAY READILY BE TRACED TO YOUR BREACH OF THE PERFORMANCE CONDITIONS OF THE CONTRACT.

FOR THESE REASONS, WE ARE OF THE VIEW THAT THERE IS NO LEGAL BASIS FOR ANY DEPARTURE FROM THE CONCLUSION REACHED IN DECISION OF OCTOBER 24, 1955.