B-128373, AUG. 9, 1956

B-128373: Aug 9, 1956

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TO THE WESTERN SALVAGE COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JUNE 5. THE MAXIMUM QUANTITY TO BE GENERATED WAS ESTIMATED TO BE 2. ACCOMPANIED BY A BID DEPOSIT OF $100 WAS ACCEPTED AND AWARD WAS MADE TO YOU JUNE 25. THE ADMINISTRATIVE AGENCY HAS REPORTED THAT ALL BURNING WAS TERMINATED AT THE FACILITY DURING THE MONTH OF AUGUST 1954. SINCE YOU RECEIVED ONLY DELIVERIES DURING A TWO MONTHS' PERIOD YOU ARE ENTITLED TO A REFUND OF $100. THE FACT THAT THE BURNING OPERATIONS WERE DISCONTINUED PRIOR TO THE EXPIRATION OF THE PERIOD SET FORTH IN THE CONTRACT BECAUSE OF THE COMPLAINT AFFORDS NO LEGAL BASIS FOR ADJUSTING THE CONTRACT PRICE. ALL THE DROSS PRODUCED AT THE FACILITY DURING THE CONTRACT PERIOD WAS MADE AVAILABLE TO YOU.

B-128373, AUG. 9, 1956

TO THE WESTERN SALVAGE COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 5, 1956, REQUESTING RECONSIDERATION OF SETTLEMENT DATED MAY 29, 1956, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF THE SUM OF $100, REPRESENTING A SUBSTANTIAL PART OF THE AMOUNT PAID BY YOU FOR CERTAIN MATERIAL PURCHASED FROM THE DEPARTMENT OF THE NAVY UNDER CONTRACT NO. N244S-46721, DATED JUNE 25, 1954.

THE RECORD SHOWS THAT IN RESPONSE TO INVITATION NO. B-234-54, DATED MAY 17, 1954, ISSUED BY THE UNITED STATES NAVAL SUPPLY DEPOT, SAN DIEGO, CALIFORNIA, YOU SUBMITTED A BID ON ITEM 1, BEING ONE LOT OF DROSS, CONSISTING OF THE BURNED RESIDUE ACCUMULATED FROM THE INCINERATORS AND BURNING PENS OF THE UNITED STATES NAVAL REPAIR FACILITY DURING THE PERIOD JULY 1 THROUGH SEPTEMBER 30, 1954, INCLUSIVE, FOR $126.75. THE MAXIMUM QUANTITY TO BE GENERATED WAS ESTIMATED TO BE 2,500 GROSS ONES; HOWEVER, THE GOVERNMENT GUARANTEED ONLY A MINIMUM DELIVERY OF 250 GROSS TONS. THE BID, ACCOMPANIED BY A BID DEPOSIT OF $100 WAS ACCEPTED AND AWARD WAS MADE TO YOU JUNE 25, 1954.

THE ADMINISTRATIVE AGENCY HAS REPORTED THAT ALL BURNING WAS TERMINATED AT THE FACILITY DURING THE MONTH OF AUGUST 1954, BECAUSE OF A COMPLAINT RECEIVED FROM THE CITY MANAGER OF NATIONAL CITY, CALIFORNIA. YOU CONTEND THAT YOU PURCHASED THE DROSS ON A THREE MONTHS' SUPPLY BASIS, BUT SINCE YOU RECEIVED ONLY DELIVERIES DURING A TWO MONTHS' PERIOD YOU ARE ENTITLED TO A REFUND OF $100.

THE RECORD SHOWS THAT YOU REMOVED A TOTAL OF 200 LOADS, OR APPROXIMATELY 400 GROSS TONS DURING THE PERIOD JULY 1 THROUGH SEPTEMBER 1, 1954, INCLUSIVE, OR 150 TONS IN EXCESS OF THE MINIMUM QUANTITY GUARANTEED BY THE CONTRACT TERMS. THE FACT THAT THE BURNING OPERATIONS WERE DISCONTINUED PRIOR TO THE EXPIRATION OF THE PERIOD SET FORTH IN THE CONTRACT BECAUSE OF THE COMPLAINT AFFORDS NO LEGAL BASIS FOR ADJUSTING THE CONTRACT PRICE. ANY ADDITIONAL QUANTITIES OF MATERIAL HAD BEEN GENERATED DURING SEPTEMBER 1954, AND DELIVERY THEREOF TO YOU HAD BEEN REFUSED, A DIFFERENT CONCLUSION MIGHT BE REQUIRED. BUT ALL THE DROSS PRODUCED AT THE FACILITY DURING THE CONTRACT PERIOD WAS MADE AVAILABLE TO YOU, AND SINCE THAT QUANTITY EXCEEDED THE MINIMUM QUANTITY GUARANTEED, AND SINCE THE PRODUCT WAS SOLD ON A LOT BASIS, THERE IS NO AUTHORITY TO REFUND ANY PART OF THE PURCHASE PRICE.

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