B-128229, JUL. 5, 1956

B-128229, JUL. 5, 1956

TO THE WILLIAMS AND MCKEITHAN LUMBER COMPANY OF VIRGINIA, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 23, 1956, REQUESTING FURTHER CONSIDERATION OF OUR SETTLEMENT DATED MAY 21, 1956, WHICH DISALLOWED YOUR CLAIM FOR THE SUM OF $387.88, ALLEGED TO BE DUE FOR THE OVERSHIPMENT OF 4,286 BOARD FEET OF YELLOW PINE LUMBER FURNISHED THE DEPARTMENT OF THE AIR FORCE AND SHIPPED TO OTIS AIR FORCE BASE, MASSACHUSETTS, UNDER CONTRACT NO. DA-09-026-ENG-47196, DATED JUNE 15, 1955.

YOU CONTEND THAT IF THERE HAD BEEN AN EXCEPTION MADE AS TO QUANTITY OR OTHERWISE YOU SHOULD HAVE BEEN ADVISED PROMPTLY, IN WHICH EVENT THE EXCESS QUANTITY, IF NOT ACCEPTABLE, WOULD HAVE BEEN TAKEN CARE OF BY YOU AT THE TIME OF ARRIVAL AT DESTINATION.

YOU AGREED TO DELIVERY ITEMS 5, 6, 7 AND 8 OF THE CONTRACT COVERING48,250 BOARD FEET OF YELLOW PINE LIMBER, IN STRICT ACCORDANCE WITH THE TERMS OF THE CONTRACT AT A UNIT PRICE OF $90.50 PER MBF, OR A TOTAL AMOUNT OF $4,366.63, TO BE SHIPPED TO OTIS AIR FORCE BASE, FALMOUTH, MASSACHUSETTS.

WITH REGARD TO THE CONTRACT PROVISIONS AS TO VARIATION IN QUANTITY IT IS NOTED THAT YOU ENCLOSED WITH YOUR LATEST LETTER OF MAY 23, 1956, A CLIPPING SHOWING ARTICLE 6 OF THE PRINTED CONTRACT SPECIAL PROVISIONS. THAT ARTICLE AS SHOWN ON THE CLIPPING PERMITS A 10 PERCENT VARIATION IN QUANTITY WHEN DUE TO CERTAIN CONDITIONS AND ALLOWS THE GOVERNMENT THE OPTION UNDER CERTAIN CONDITIONS, TO PAY FOR EXCESS QUANTITIES AT 80 PERCENT OF THE CONTRACT PRICES. HOWEVER, ARTICLE 6 AS SHOWN ON THE CLIPPING WAS DELETED BY MIMEOGRAPHED NOTICE TO BIDDERS DATED JUNE 7, 1955, APPARENTLY SENT TO YOU WITH THE INVITATION FOR BIDS, AND ARTICLE 6 AS SHOWN ON THE ISSUE OF CONTRACT SPECIAL PROVISIONS EFFECTIVE OCTOBER 20, 1954, AS SUBSTITUTED. THE LATTER ARTICLE 6 PROVIDES AS FOLLOWS:

"6. VARIATION IN QUANTITY: A. UNLESS OTHERWISE SPECIFIED IN THE SCHEDULE, A 10 PERCENT DOWNWARD VARIATION ONLY IN QUANTITY IS ALLOWABLE UNDER GENERAL PROVISION 4 AND APPLIES TO EACH ITEM OF THIS CONTRACT.

"B. UNDER EXCEPTIONAL CIRCUMSTANCES, THE CONTRACTING OFFICER MAY GRANT PERMISSION TO THE CONTRACTOR, PRIOR TO SHIPMENT, TO SHIP MORE THAN THE CONTRACT QUANTITY (PER ITEM) OR LESS THAN THE QUANTITY (PER ITEM) RESULTING FROM THE APPLICATION OF THE DOWNWARD VARIATION ALLOWABLE UNDER A. ABOVE; SUCH PERMISSION MUST BE GRANTED IN WRITING.

"C. UNLESS SUCH EXPRESS WRITTEN PERMISSION IS GRANTED, NO SHIPMENTS OVER AND ABOVE THE CONTRACT QUANTITY (PER ITEM) WILL BE ACCEPTED, AND ANY INSPECTION AND ACCEPTANCE BY THE GOVERNMENT SHALL NOT BE APPLICABLE TO ANY MATERIAL IN EXCESS OF SAID QUANTITY. SUCH PORTION OF ANY SHIPMENT WHICH EXCEEDS THE CONTRACT QUANTITY WILL BE AT THE CONTRACTOR'S EXCLUSIVE RISK AND RESPONSIBILITY, AND IT IS HEREBY AGREED THAT NO CLAIMS FOR PAYMENT WILL BE MADE BY THE CONTRACTOR ON ACCOUNT OF SUCH EXCESS SHIPMENT, WHETHER OR NOT INSPECTION AND ACCEPTANCE WERE PERFORMED BY THE GOVERNMENT AT ORIGIN, OR AT DESTINATION OR OTHERWISE. THIS POSITION AND PROVISION ARE NECESSARY BECAUSE: (1) FUNDS AVAILABLE TO REQUISITIONING AGENCIES AND INSTALLATIONS ARE LIMITED, AND THE OBLIGATION OF FUNDS TO COVER POSSIBLE OVERSHIPMENTS IS BOTH IMPRACTICAL AND DISRUPTIVE TO EXISTING FUNDS CONTROL AND RECORD PROCEDURES AT SAID AGENCIES AND INSTALLATIONS; (2) IT IS IMPRACTICABLE FOR THE GOVERNMENT TO ATTEMPT TO COORDINATE SEVERAL SHIPMENTS FROM DIFFERENT MILLS UNDER THE SAME ONTRACT; (3) WHEN A SHIPMENT IS RECEIVED BY THE CONSIGNEE, THE ACCEPTABLE PORTION GENERALLY IS PLACED IN COMMON STOCKS AND THE INDIVIDUAL IDENTITY IS LOST, WHICH MAKES IT IMPOSSIBLE TO RETURN TO THE SUPPLIER ANY MATERIAL WHICH SUBSEQUENT DEVELOPMENTS REVEAL TO BE IN EXCESS OF CONTRACT QUANTITY; (4) ON MULTIPLE SHIPMENTS, IT IS IMPOSSIBLE TO DETERMINE THE AMOUNT OF EXCESS MATERIAL UNTIL AFTER FINAL SHIPMENT HAS BEEN RECEIVED, AND IT IS IMPRACTICABLE AND UNDESIRABLE TO HOLD A SHIPMENT, OR SHIPMENTS, INTACT PENDING DETERMINATION AS TO WHETHER OR NOT THERE HAS BEEN AN OVERSHIPMENT AND IN WHAT ITEM/S).'

ARTICLES 3 AND 4 OF THE GENERAL PROVISIONS OF THE CONTRACT READ AS FOLLOWS:

"3. EXTRAS

EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, NO PAYMENTS FOR EXTRAS SHALL BE MADE UNLESS SUCH EXTRAS AND THE PRICE THEREFOR HAVE BEEN AUTHORIZED IN WRITING BY THE CONTRACTING OFFICER.

"4. VARIATION IN QUANTITY

NO VARIATION IN THE QUANTITY OF ANY ITEM CALLED FOR BY THIS CONTRACT WILL BE ACCEPTED UNLESS SUCH VARIATION HAS BEEN CAUSED BY CONDITIONS OF LOADING, SHIPPING OR PACKING, OR ALLOWANCES IN MANUFACTURING PROCESSES, AND THEN ONLY TO THE EXTENT, IF ANY, SPECIFIED ELSEWHERE IN THIS CONTRACT.'

THE RECORD SHOWS THAT ON JUNE 30, 1955, YOU SHIPPED FROM YOUR MILL AT RIDGEWAY, SOUTH CAROLINA, CARS WP-2722 AND WP-2498 CONTAINING 23,786 MBF AND 28,230 MBF OF LUMBER, RESPECTIVELY. THE GOVERNMENT ACCEPTED THE LUMBER AND FURNISHED A RECEIVING REPORT DATED AUGUST 5, 1955, COVERING THE ENTIRE QUANTITY CONTAINED IN BOTH CARS. YOU SUBMITTED CERTIFIED INVOICES FOR THE ENTIRE QUANTITY SHIPPED AND ACCEPTED. IN VIEW OF THE PROVISIONS OF ARTICLE 6 OF THE CONTRACT SPECIAL PROVISIONS, A DEDUCTION OF $387.88 BASED ON THE UNIT PRICE OF $90.50 PER MBF FOR THE OVERSHIPMENT OF 4,286 MBF WAS MADE IN EFFECTING PAYMENT ON AUGUST 24, 1955.

THE RECORD FURTHER SHOWS THAT IN REPLY TO YOUR LETTER OF AUGUST 26, 1955, REQUESTING PAYMENT FOR THE OVERSHIPMENT OR PERMISSION TO REPOSSESS THIS EXCESS LUMBER, THE CONTRACTING OFFICER BY LETTER DATED AUGUST 30, 1955, ADVISED YOU THAT PAYMENT COULD NOT BE AUTHORIZED SINCE THE CONTRACT DID NOT PERMIT OVERSHIPMENT AND THAT UPON RECEIPT OF INFORMATION FROM FALMOUTH, MASSACHUSETTS, YOU WOULD BE INFORMED WHETHER THE LUMBER COULD BE MADE AVAILABLE TO YOU FOR PICKUP. ON SEPTEMBER 14, 1955, YOU WERE NOTIFIED THAT THE LUMBER HAD BEEN COMMINGLED WITH OTHER SHIPMENTS AND THEREFORE COULD NOT BE IDENTIFIED.

THE RECORD FURTHER SHOWS THAT THE CONTRACTING OFFICER DID NOT AT ANY TIME AUTHORIZE SHIPMENT OF THE EXCESS QUANTITY DELIVERED UNDER THE CONTRACT AND THAT YOU ADMIT IN YOUR LETTER DATED OCTOBER 17, 1955, THAT YOUR MILL WAS INADVERTENTLY DIRECTED TO SHIP 8,000 MBF OF LUMBER INSTEAD OF 3,500 MBF UNDER ITEM 8 OF THE CONTRACT.

IT IS DIFFICULT TO PERCEIVE HOW THE CONTRACT COULD HAVE MORE CLEARLY DEFINED YOUR RESPONSIBILITY FOR OVERSHIPMENT WHEN IT PROVIDED IN ARTICLE 6 OF THE SPECIAL PROVISIONS THAT "SUCH PORTION OF ANY SHIPMENT WHICH EXCEEDS THE CONTRACT QUANTITY WILL BE AT CONTRACTOR'S EXCLUSIVE RISK AND RESPONSIBILITY, AND IT IS HEREBY AGREED THAT NO CLAIMS FOR PAYMENT WILL BE MADE BY THE CONTRACTOR ON ACCOUNT OF SUCH EXCESS SHIPMENT, WHETHER OR NOT INSPECTION AND ACCEPTANCE WERE PERFORMED BY THE GOVERNMENT AT ORIGIN, OR AT DESTINATION OR OTHERWISE.' THE EVIDENT PURPOSE OF THIS PROVISION WAS TO MAKE CERTAIN THAT THE GOVERNMENT ALONE SHOULD DETERMINE WHETHER THE SHIPMENT IN EXCESS OF THE CONTRACT QUANTITY WAS DESIRABLE AND THAT SHIPMENT IN EXCESS OF THE MAXIMUM ALLOWABLE QUANTITY, WITHOUT PRIOR WRITTEN AUTHORIZATION OF THE CONTRACTING OFFICER, SHOULD NOT BE CONSIDERED AS CREATING ANY OBLIGATION ON THE PART OF THE GOVERNMENT TO PAY FOR THE EXCESS QUANTITY DELIVERED.

THE COURTS CONSISTENTLY HAVE FOLLOWED THE RULE THAT SPECIFIED PROCEDURAL REQUIREMENTS APPEARING IN A GOVERNMENT CONTRACT MUST BE COMPLIED WITH IN ORDER TO OBTAIN PAYMENT FOR ALLEGED EXTRA WORK, SERVICES OR MATERIALS FURNISHED IN CONNECTION WITH THE PERFORMANCE OF THE CONTRACT. SEE UNITED STATES V. BLAIR, 321 U.S. 730; PLUMLEY V. UNITED STATES, 226 U.S. 545; YAHASZ V. UNITED STATES, 109 F.2D 467; AND LOUISE HARDWICK, ADMINISTRATRIX V. UNITED STATES, 95 C.CLS. 336.

EACH OF THE PROVISIONS OF THE SEVERAL PARAGRAPHS REFERRED TO ABOVE MUST, THEREFORE, BE CONSIDERED AS AN IMPORTANT FEATURE OF THE CONTRACT, AND AFTER HAVING AGREED THERETO, NO CONTRACTOR REASONABLY COULD CONTEND THAT SUCH PROVISIONS WERE MERE TECHNICALITIES WHICH SHOULD NOT BE STRICTLY ENFORCED.

IT MAY BE STATED THAT UNDER THE EXPRESS TERMS OF THE CONTRACT, THE PORTION OF THE SHIPMENT WHICH WAS IN EXCESS OF THE CONTRACT QUANTITY WAS AT YOUR EXCLUSIVE RISK AND RESPONSIBILITY, IN THE ABSENCE OF PRIOR PERMISSION FROM THE CONTRACTING OFFICER.