B-152242, DEC. 26, 1963

TO HUXLEY-WESTFRIED CORPORATION:

WE HAVE RECEIVED YOUR LETTER OF JULY 16, 1963, REQUESTING RECONSIDERATION OF A DECISION BY OUR CLAIMS DIVISION DATED JUNE 20, 1963, WHICH REJECTED YOUR CONTENTION THAT YOU ARE NOT LIABLE FOR EXCESS COSTS AS ASSERTED BY GENERAL SERVICES ADMINISTRATION (GSA) UNDER CONTRACT NO. GS-00S-26377 (SCM). THE DISPUTE IN QUESTION ARISES FROM AN INTERPRETATION OF A SENTENCE IN THE SUBJECT CONTRACT, UNDER WHICH YOU AGREED TO FURNISH GSA 50,000 LONG DRY TONS OF MANGANESE ORE NO LATER THAN DECEMBER 31, 1950, WHICH SENTENCE PROVIDES: "THE MANGANESE TO BE FURNISHED UNDER THIS CONTRACT SHALL HAVE BEEN MINED IN AND EXPORTED FROM INDIA.'

ON JANUARY 19, 1951, AFTER PARTIAL PERFORMANCE, YOU ADVISED THE CONTRACTING OFFICER THAT THE MINES OF YOUR PRINCIPAL SUPPLIER, R.B.S. SHREERAM DURGAPRASAD, WOULD NOT YIELD ORE OF THE SPECIFIED QUALITY, AND YOU ASKED TO BE EXCUSED FROM DELIVERING THE BALANCE OF THE QUANTITY CALLED FOR BY THE CONTRACT. YOU WROTE THAT "AT THE TIME WE MADE THE CONTRACT WITH YOU IT WAS MUTUALLY UNDERSTOOD THAT THE ORE WHICH WE WOULD DELIVER UNDER THE CONTRACT WOULD COME PRINCIPALLY FROM R.B.S. SHREERAM DURGAPRASAD'S MINES.' ON JANUARY 31, 1951, YOU ASKED THAT THE DELIVERY PERIOD UNDER THE CONTRACT BE EXTENDED FOR SIX MONTHS. IN RESPONSE THERETO, THE CONTRACTING OFFICER EXTENDED DELIVERY TIME TO JUNE 30, 1951. ON FEBRUARY 22, 1951, YOU DELIVERED 4,740.331 LONG DRY TONS, BRINGING THE TOTAL AMOUNT OF ORE DELIVERED TO 15,148.778 LONG DRY TONS.

IN A LETTER OF APRIL 12, 1951, YOU NOTIFIED THE CONTRACTING OFFICER THAT YOU COULD NOT FULFILL YOUR COMMITMENTS UNDER THE CONTRACT. YOU STATED THEREIN:

"AS YOU REMEMBER, WHEN WE NEGOTIATED AND CLOSED THIS CONTRACT, YOU INSISTED THAT WE GIVE YOU THE NAMES OF OUR PRINCIPAL SUPPLIERS AND ADVISED YOU THAT THEY ARE R.B.S. SHREERAM DURGAPRASAD AND R.S.S. GOPIKISAN AGRAWAL. AGRAWAL FULFILLED HIS COMMITMENT BUT DURGAPRASAD DID NOT. THEREFORE, WE REGRET INDEED THAT WE CANNOT ACCEPT THE EXTENSION OF THE CONTRACT WHICH YOU SUGGEST TO US, AND ASK YOU TO RELEASE US AND CANCEL THE REQUIREMENTS FOR THE DELIVERY OF THE ORE OF THE ABOVE MENTIONED CONTRACT.'

ON APRIL 19, 1951, THE CONTRACTING OFFICER RESPONDED TO THE ABOVE QUOTED STATEMENT AS FOLLOWS:

"IT IS TRUE THAT THE NAMES OF YOUR SUPPLIERS WERE REQUESTED PRIOR TO THE ACCEPTANCE OF YOUR OFFER WHICH RESULTED IN THE ABOVE NUMBERED CONTRACT, BUT AS EXPLAINED IN CONFERENCE IN THIS OFFICE APRIL 18, 1951, YOUR SUPPLIERS' NAMES WERE REQUESTED FOR INFORMATIONAL PURPOSES ONLY AND WAS NOT MADE A PART OF THE CONTRACT, THEREFORE THERE IS NO RESTRICTION AGAINST YOUR SECURING ORE FROM OTHER SOURCES AND DELIVERING IT UNDER THE CONTRACT. IN FACT, YOU MAY DELIVER ORE FROM ANY COUNTRY UNDER THE CONTRACT BUT IF IT SHOULD BE EXPORTED FROM A COUNTRY OTHER THAN INDIA, PLEASE ADVISE THIS OFFICE OF ITS SOURCE SINCE THE CONTRACT SPECIFIES THAT THE ORE SHALL ORIGINATE IN INDIA. A SIMPLE AMENDMENT CAN RECTIFY THIS.'

AFTER FURTHER CORRESPONDENCE, THE CONTRACTING OFFICER, IN A LETTER OF JANUARY 21, 1952, TERMINATED YOUR RIGHT TO PROCEED WITH DELIVERIES UNDER THE CONTRACT AND ADVISED YOU THAT THE GOVERNMENT WOULD PURCHASE SIMILAR MATERIAL ELSEWHERE, CHARGING ANY EXCESS COST TO YOUR ACCOUNT. IN DECEMBER OF 1954 YOU WERE CHARGED WITH EXCESS COSTS IN THE AMOUNT OF $183,368.27. IN A LETTER OF FEBRUARY 7, 1955, THIS AMOUNT WAS INCREASED TO $310,442.53. ON FEBRUARY 21, 1955, YOU DENIED LIABILITY FOR THE EXCESS COSTS ON THE BASIS THAT PERFORMANCE WAS EXCUSED BY VIRTUE OF PARAGRAPH 12 OF THE GENERAL CONDITIONS OF THE SUBJECT CONTRACT, WHICH PROVIDES:

"12. FORCE MAJEURE. (A) EXCEPT AS HEREINAFTER PROVIDED IN SUBPARAGRAPH (B) OF THIS ARTICLE, IN THE EVENT THE CONTRACTOR REFUSES OR FAILS TO MAKE DELIVERIES OF MATERIAL CONFORMING TO THE SPECIFICATIONS AS DEFINED IN THE CONTRACT WITHIN THE TIME SPECIFIED OR ANY EXTENSION THEREOF, OR TO PERFORM FAITHFULLY ANY CONDITIONS OF THE CONTRACT, THE CONTRACTING OFFICER, WITHOUT PREJUDICE TO OTHER RIGHTS RESULTING FROM BREACH OF THE CONTRACT CONDITIONS, MAY, BY WRITTEN NOTICE, TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED WITH ANY OR ALL REMAINING DELIVERIES UNDER THE CONTRACT.

(B) IN THE EVENT OF ANY STRIKE, LOCK-OUT, DIFFERENCE OF WORKMEN, ACCIDENTS, FIRE, EXPLOSION, FLOODS, MOBILIZATION, WAR (WHETHER DECLARED OR UNDECLARED) ACT OF ANY BELLIGERENT IN ANY SUCH WAR, RIOT, REBELLION OF ANY GOVERNMENT, WHETHER LEGAL OR OTHERWISE; THE ELEMENTS, POWER SHORTAGES, OR ANY OTHER CAUSE BEYOND THE REASONABLE CONTROL OF THE CONTRACTOR, WHETHER OR NOT OF THE NATURE OR CHARACTER HEREINBEFORE SPECIFICALLY ENUMERATED, PERFORMANCE UNDER THE CONTRACT SHALL BE SUSPENDED IN WHOLE OR IN PART UNTIL SUCH CAUSE CEASES TO EXIST AND THEREAFTER THE TIME FOR FULFILLMENT OF THE CONTRACT SHALL BE EXTENDED BY THE LENGTH OF TIME DURING WHICH SUCH CAUSE PREVENTED PERFORMANCE UNDER THE CONTRACT; PROVIDED, HOWEVER, THAT ANY SUSPENSION OF PERFORMANCE PURSUANT TO THIS CLAUSE SHALL NOT EXCEED NINETY (90) DAYS UNLESS OTHERWISE AGREED UPON, IN WRITING, BY THE GOVERNMENT. IN THE EVENT ANY FORCE MAJEURE CONDITION PROVIDED FOR IN THIS CLAUSE CONTINUES BEYOND SAID NINETY (90) DAYS SUSPENSION PERIOD, THE GOVERNMENT, AT ITS OPTION, MAY AGREE, IN WRITING, TO EXTEND SAID SUSPENSION PERIOD OR MAY CANCEL THE CONTRACT WITH NO COST TO EITHER PARTY WITH RESPECT TO THE UNDELIVERED PORTION THEREOF.

(C) UNLESS THE CONTRACTOR SHALL FURNISH THE GOVERNMENT WITH WRITTEN NOTICE OF THE NATURE AND EXTENT OF ANY FORCE MAJEURE CONDITION REFERRED TO IN PARAGRAPH (B) HEREOF WHICH IS CLAIMED TO EXIST, WITHIN A REASONABLE TIME AFTER THE HAPPENING THEREOF, THE TERMS, AND CONDITIONS OF SAID PARAGRAPH (B) SHALL NOT BECOME OPERATIVE WITH RESPECT THERETO.'

ON DECEMBER 21, 1955, THE CONTRACTING OFFICER REJECTED YOUR ARGUMENTS. ON JANUARY 24, 1956, YOU APPEALED IN WRITING THE DECISION OF THE CONTRACTING OFFICER TO THE ADMINISTRATOR OF GENERAL SERVICES. HEARINGS WERE HELD ON APRIL 23, 1956. ON AUGUST 29, 1962, THE BOARD OF CONTRACT APPEALS DENIED YOUR APPEAL ON THE GROUNDS THAT IT WAS NOT TAKEN WITHIN 30 DAYS AFTER THE CONTRACTING OFFICER'S DECISION OF JANUARY 21, 1952, AS ALLEGEDLY REQUIRED BY PARAGRAPH 15 OF THE GENERAL CONDITIONS OF THE SUBJECT CONTRACT, WHICH PROVIDES:

"15. DISPUTES. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS CONTRACT, ALL QUESTIONS OF FACT INVOLVED IN DISPUTES ARISING UNDER THE CONTRACT SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHOSE DECISION SHALL BE IN THE FORM OF WRITTEN FINDINGS OF FACT. WHENEVER A CONTRACTOR IS AGGRIEVED BY SUCH DECISION, HE MAY, AT HIS ELECTION:

(1) WITHIN THIRTY (30) DAYS FROM THE DATE OF MAILING OR OTHERWISE FURNISHING A COPY OF SUCH FINDINGS TO THE CONTRACTOR, APPEAL IN WRITING TO THE ADMINISTRATOR OF GENERAL SERVICES ADMINISTRATION, OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION SHALL BE FINAL AND CONCLUSIVE UPON THE PARTIES HERETO; OR (2) PURSUE ANY RIGHTS THAT HE MAY HAVE AGAINST THE UNITED STATES BY LAW. IN THE MEANTIME, THE CONTRACTOR SHALL DILIGENTLY PROCEED WITH THE PERFORMANCE OF THE CONTRACT.'

YOU REQUESTED RECONSIDERATION BY THE BOARD ON THE GROUNDS THAT SINCE THE CONTRACTING OFFICER DID NOT MAKE FINDINGS OF FACT AT THE TIME HE TERMINATED THE CONTRACT AS DESCRIBED IN THE ABOVE-QUOTED PARAGRAPH 15, THE 30-DAY PERIOD DURING WHICH AN APPEAL COULD BE TAKEN HAD NOT COMMENCED TO RUN. ON NOVEMBER 30, 1962, THE BOARD DENIED YOUR APPEAL FOR RECONSIDERATION.

CONSIDERABLE ARGUMENT HAS REVOLVED AROUND THE QUESTION OF WHETHER THE CONTRACTING OFFICER EVER MADE A FINDING OF FACT AS DESCRIBED BY THE DISPUTES CLAUSE TO SUPPORT HIS IMPLIED CONCLUSION THAT THE FORCE MAJEURE PROVISIONS WERE NOT FOR APPLICATION TO THE INSTANT TERMINATION. IN OUR VIEW, THE DISPUTES CLAUSE WAS NOT RELEVANT TO HIS DECISION. THE CONTRACTING OFFICER DETERMINED THAT SINCE THE CONTRACTUAL UNDERSTANDING BETWEEN YOU AND THE GOVERNMENT REQUIRED ONLY THAT THE ORE BE MINED AND EXPORTED FROM INDIA, AND SINCE IT WAS NOT THEN ALLEGED THAT THE MANGANESE COULD NOT BE OBTAINED FROM OTHER MINES IN INDIA, THERE WAS NO EXCUSE FOR THE FAILURE TO DELIVER THE SPECIFIED ORE EVEN ON THE ASSUMPTION THAT IT COULD NOT BE OBTAINED FROM THE APPROVED SUPPLIERS. UNDER THIS INTERPRETATION OF THE CONTRACT, THE FORCE MAJEURE PROVISIONS ARE INAPPLICABLE SINCE THE ALLEGED IMPOSSIBILITY OF OBTAINING ORE FROM DURGAPRASAD AND AGRAWAL IS NOT A RELEVANT FACTOR. CLEARLY, THE CONTRACTING OFFICER IS NOT REQUIRED TO MAKE FACTUAL FINDINGS ON A MATTER WHICH IS OF NO RELEVANCE TO HIS DETERMINATION.

IT SEEMS CLEAR TO US THAT IT CANNOT REASONABLY BE ARGUED THAT FINDINGS OF FACT WERE OR ARE REQUIRED, UNLESS IT IS FIRST ESTABLISHED THAT THE CONTRACTING OFFICER'S LEGAL CONCLUSION IS INCORRECT. IF WE PROPERLY UNDERSTAND YOUR CONTENTIONS, YOU DO NOT SERIOUSLY DISAGREE WITH THE FOREGOING STATEMENT, BUT ARGUE THAT SINCE AS A MATTER OF LAW A CORRECT INTERPRETATION OF THE CONTRACT LIMITS YOUR OBLIGATION TO OBTAIN THE ORE ONLY FROM PREVIOUSLY APPROVED SUPPLIERS, NEITHER DOES OUR OFFICE NOR DID THE BOARD OF CONTRACT APPEALS HAVE JURISDICTION TO DECIDE THE QUESTION OF WHETHER THERE EXISTED A FORCE MAJEURE CONDITION UNTIL THE CONTRACTING OFFICER MADE FINDINGS OF FACT REGARDING YOUR ABILITY TO SECURE ORE FROM THOSE TWO NAMED SUPPLIERS. CF. ALLIED CONTRACTORS, INC. V. UNITED STATES, 129 CT.CL. 400, 407 (1954), WHERE THE COURT HELD THAT PLAINTIFF'S FAILURE TO TAKE AN ADMINISTRATIVE APPEAL FROM A CONTRACTING OFFICER'S DECISION BASED ON LEGAL MERITS AND CONTAINING NO FINDING OF FACTS DID NOT BAR THE COURT'S CONSIDERATION OF THE CLAIM.

ACCORDINGLY, WHETHER OUR OFFICE HAS JURISDICTION OVER THE QUESTIONS CONCERNING THE ALLEGED FORCE MAJEURE CONDITIONS DOES NOT BECOME RELEVANT UNLESS WE SHOULD FIRST CONCLUDE THAT THE FORCE MAJEURE PROVISIONS WERE FOR APPLICATION. YOU ARGUE THAT THEY WERE BECAUSE IN ADDITION TO THE LANGUAGE OF THE CONTRACTUAL INSTRUMENT STATING THE MANGANESE WAS TO BE MINED IN AND EXPORTED FROM INDIA, THERE WAS, CONTRARY TO THE VIEWS OF THE CONTRACTING OFFICER, AN ORALLY EXPRESSED UNDERSTANDING THAT SUCH MANGANESE WAS TO BE DELIVERED FROM THE MINES OF AGRAWAL AND DURGAPRASAD, PRIMARILY THE LATTER.

BEFORE PROCEEDING TO DISCUSS THIS INITIAL ISSUE, WE MUST ACKNOWLEDGE THAT YOU DO ALLEGE IN YOUR BRIEF OF MAY 2, 1963, THAT BECAUSE OF THE KOREAN SITUATION, THE GOVERNMENT WAS BUYING EVERY DROP OF ORE AVAILABLE FOR ITS STOCKPILE, AND AS A CONSEQUENCE "THERE WAS NO ORE OBTAINABLE IN INDIA FOR DELIVERY WITHIN THE CONTRACT PERIOD (PROMPT DELIVERY) AT ANY PRICE.' NONETHELESS, EVEN ASSUMING ARGUENDO THAT IN FACT NO ORES OF THE SPECIFIED QUALITY WAS AVAILABLE ANYWHERE IN INDIA FOR "PROMPT DELIVERY," IT APPEARS FROM THE AFOREMENTIONED BRIEF AND MORE CLEARLY IN YOUR MEMORANDUM OF JULY 16, 1963, THAT THE "DELIVERY" PERIOD TO WHICH YOU REFER ENDED ON JUNE 30, 1951, THE DATE TO WHICH DELIVERY UNDER THE CONTRACT HAD BEEN EXTENDED. IS NOT ARGUED, PRESUMABLY IN VIEW OF YOUR LETTERS TO GSA IN MAY AND NOVEMBER OF 1951, INDICATING YOUR WILLINGNESS TO SUPPLY THE SPECIFIED MANGANESE AT A HIGHER PRICE, THAT DELIVERY COULD NOT HAVE BEEN MADE BEFORE THE CONTRACT WAS TERMINATED IN JANUARY OF 1952. YOUR ARGUMENT THAT THE CONTRACT SHOULD BE CONSIDERED TO HAVE TERMINATED ON JUNE 30, 1951, BY OPERATION OF THE FORCE MAJEURE PROVISIONS, EVEN IF ASSUMED TO BE LEGALLY CORRECT, DEPENDS ON THE ASSUMPTION THAT SUCH PROVISIONS AUTOMATICALLY BECAME OPERATIVE WHEN IN A LETTER OF JANUARY 19, 1951, YOU REQUESTED CANCELLATION ON THE GROUNDS THAT DURGAPRASAD ALLEGEDLY ADVISED YOU THAT IT COULD NO LONGER PRODUCE ORE OF THE SPECIFIED QUALITY. AS WE HAVE ALREADY POINTED OUT, THIS ASSUMPTION, AS WELL AS THE ARGUMENTS REGARDING THE NECESSITY OF FINDINGS OF FACT, DEPENDS IN TURN UPON THE ISSUE OF WHETHER THE CONTRACTING OFFICER WAS IN ERROR IN DECIDING THE FORCE MAJEURE PROVISION WAS NOT FOR APPLICATION BECAUSE YOU WERE REQUIRED UPON DEFAULT OF YOUR SUPPLIERS TO OBTAIN ORE FROM OTHER MINES IN INDIA.

YOU CITE SEVERAL CASES TO SUPPORT YOUR ARGUMENT THAT UPON DEFAULT OF DURGAPRASAD, YOU WERE NOT REQUIRED TO OBTAIN ORE FROM OTHER INDIAN MINES, BUT WE CANNOT ACCEPT ANY OF THEM AS CONTROLLING. IN MITCHELL CANNERIES, INC. V. UNITED STATES, 111 CT.CL. 228; 77 F.SUPP. 498 (1948), THE COURT DISMISSED THE GOVERNMENT'S DEFENSE THAT THE CONTRACTING OFFICER'S "FINDING OF FACT"--- THAT DELIVERY OF CANNED BLACKBERRIES WAS EXCUSED BY AN UNFORESEEABLE FLOOD--- AMOUNTED TO A LEGAL CONCLUSION THAT THE BLACKBERRIES WERE TO BE SUPPLIED ONLY FROM A CERTAIN AREA. SINCE THE CONTRACT ITSELF DID NOT DEFINE THE AREA FROM WHICH THE GOODS WERE TO BE SUPPLIED, THE COURT WAS OBLIGED TO DRAW SOME REASONABLE LIMIT TO THE AREA FROM WHICH THE CONTRACTOR COULD BE EXPECTED TO ACQUIRE RAW MATERIALS. THUS, THE CITED CASE IS CLEARLY DISTINGUISHED FROM THE INSTANT ONE, IN WHICH THE WRITTEN CONTRACT DOES ESTABLISH THE AREA OF SUPPLY, I.E., INDIA. THE CASE OF DILLON V. UNITED STATES, 156 F.SUPP. 719 (1957), IS BASED ON THE MITCHELL RATIONALE AND BEARS THE SAME DISSIMILARITY WITH THE INSTANT CASE. IN THE CASE OF STEWART-WARNER CORP. V. REMCO, INC., 205 F.2D 583 (7TH CIR. 1953), THE COURT, PRIMARILY CONCERNED WITH OTHER ISSUES, AFFIRMED A DIRECTED VERDICT OF THE LOWER COURT THAT DEFENDANT HAD NOT PROVED ITS COUNTERCLAIMS OF FRAUD AND DECEIT, WHICH WERE BASED UPON BREACH OF AN ALLEGED ORAL PROMISE TO DELIVER CERTAIN QUANTITIES OF GOODS. THE COURT SAID THAT EVEN IF SUCH A PROMISE OF DELIVERY WAS MADE, NONPERFORMANCE WAS EXCUSED BY "THE STRIKE CLAUSE," WHICH CLAUSE EXCUSED PROMPT DELIVERY IN THE EVENT OF "STRIKE, FAILURE OF SOURCE OF SUPPLY.' THE LANGUAGE OF THE INSTANT CONTRACT, AND THE JUDICIALLY IMPLIED MEANING OF THE CONTRACTS IN THE TWO PREVIOUSLY CITED CASES, REFER TO AN AREA OF SUPPLY, I.E., A GEOGRAPHIC LOCATION WITHIN WHICH SOURCES OF SUPPLY MAY BE FOUND. ON THE OTHER HAND, THE CONTRACTUAL LANGUAGE IN STEWART-WARNER SPECIFICALLY BASED EXCUSE OF PERFORMANCE NOT ON FAILURE OF AN AREA OF SUPPLY, BUT OF A "SOURCE OF SUPPLY," OR IN OTHER WORDS, ON FAILURE OF A PARTICULAR SUPPLIER/S) OR SUBCONTRACTOR/S). CF. SUNSERI V. GARCIA AND MAGGINI CO. (298 PA. 249), 148 A. 81 (1929), AND CASES CITED THEREIN, HOLDING THAT A DEALER'S CONTRACTS WITH PARTICULAR SOURCES OF SUPPLY WHOSE CROPS HAD FAILED WERE NOT RELEVANT TO ITS DEFENSE THAT PERFORMANCE WAS EXCUSED BY FAILURE OF CROPS IN THE AREA SPECIFIED BY THE CONTRACT. THE VERY ISSUE BEFORE US IS WHETHER THE CONTRACTUALLY DESIGNATED AREA OF SUPPLY HAS BEEN FURTHER RESTRICTED TO TWO PARTICULAR SOURCES. IF THE PARTIES TO THIS CONTRACT DID CONTEMPLATE THAT THE MATERIAL WHICH YOU FAILED TO DELIVER WAS TO BE SUPPLIED FROM PARTICULAR SOURCES, THAT UNDERSTANDING CERTAINLY COULD NOT BE INFERRED FROM THE WRITTEN CONTRACT, AS IT WAS IN THE STEWART-WARNER CASE.

MANY CASES HOLD THAT IT IS ESSENTIAL TO A DEFENSE OF IMPOSSIBILITY THAT AN EXCLUSIVE MEANS OF PERFORMANCE SHALL HAVE BEEN CONTRACTED FOR, NOT MERELY CONTEMPLATED, AS HEREIN CONSIDERED. SEE 6 WILLISTON ON CONTRACTS 1952 (REV.ED.) AND 6 CORBIN ON CONTRACTS 1339, 1340. UNLESS BOTH PARTIES TO THE CONTRACT AT LEAST CONTEMPLATED THAT SUPPLY WOULD BE FORTHCOMING SOLELY FROM CERTAIN THIRD PARTIES, IT IS WELL ESTABLISHED THAT ONE WHO MAKES A PROMISE WHICH CANNOT BE PERFORMED WITHOUT THE COOPERATION OF A THIRD PERSON IS NOT EXCUSED FROM LIABILITY BECAUSE THE THIRD PERSON CANNOT OR WILL NOT PERFORM ITS OBLIGATION. SEE JONES V. UNITED STATES, 96 U.S. 24 (1877).

THE GOVERNMENT DENIES THAT IT CONTEMPLATED THAT DURGAPRASAD AND AGRAWAL WOULD BE THE SOLE SOURCES OF SUPPLY. THE ONLY EVIDENCE PRESENTED TO REBUT THIS DENIAL IS THE FACT THAT THE GOVERNMENT INSISTED ON APPROVING INTENDED SUPPLIERS BEFORE AWARDING THE CONTRACT. TWO SUPPLIERS WERE APPROVED, TWO WERE NOT. THERE IS NO EVIDENCE THAT OF ALL SUPPLIERS IN INDIA, THE GOVERNMENT WOULD ACCEPT PERFORMANCE ONLY FROM THE TWO OF FOUR SUGGESTED COMPANIES IT HAD AN OPPORTUNITY TO APPROVE. AT MOST, THE GOVERNMENT'S INSISTENCE DURING NEGOTIATIONS FOR THE RIGHT TO APPROVE SUBCONTRACT SUPPLIERS ARGUABLY MIGHT BE TAKEN AS AN IMPLIED CONDITION TO THE RESULTING CONTRACT THAT ALL SUBCONTRACTORS SUBSEQUENTLY SUGGESTED BY YOU AS SUPPLIERS WOULD NOT BE USED WITHOUT PRIOR APPROVAL BY THE GOVERNMENT. EVEN UNDER THIS RATIONALE, YOUR CAUSE WOULD FAIL SINCE YOU DID NOT OFFER ALTERNATE SUPPLIERS, AND A FORTIORI, THE GOVERNMENT DID NOT DISAPPROVE ALTERNATE SUPPLIERS. IN LIGHT OF THE FOREGOING, WE DO NOT THINK THE GOVERNMENT'S ACTION OF APPROVING DURGAPRASAD AND AGRAWAL AND DISAPPROVING TWO OTHER SUPPLIERS MAY BE TAKEN REASONABLY AS AN IMPLICATION THAT THE GOVERNMENT CONTEMPLATED THAT SUPPLIES WOULD NOT BE ACCEPTED UNLESS FURNISHED SOLELY FROM THE MINES OF DURGAPRASAD AND AGRAWAL. FURTHERMORE, SINCE YOU ADMIT THAT AGRAWAL DID NOT DEFAULT BUT FULFILLED ITS COMMITMENT WITH YOU, IT SHOULD BE NOTED THAT EVEN ASSUMING THAT THE EVIDENCE WOULD SUPPORT THE IMPLICATION THAT THE GOVERNMENT CONTEMPLATED ONLY DURGAPRASAD AND AGRAWAL AS SUPPLIERS, YOU MIGHT STILL BE REQUIRED TO SHOW THAT THE GOVERNMENT ALSO CONTEMPLATED THE EXACT AMOUNT OF ORE EACH WAS TO SUPPLY.

THE FACT THAT YOU MAY HAVE THOUGHT YOU COULD FULLY MEET THE SUPPLY REQUIRED UNDER THE GOVERNMENT CONTRACT WITH ORE FROM DURGAPRASAD AND AGRAWAL IS NO DEFENSE TO YOUR OWN DEFAULT. SEE SUNSERI V. GARCIA AND MAGGINI CO., SUPRA. HOWEVER, THE RECORD CASTS SOME DOUBT AS TO WHETHER EVEN YOUR COMPANY, MUCH LESS THE GOVERNMENT, CONTEMPLATED DURGAPRASAD AND AGRAWAL AS SOLE SOURCES OF SUPPLY. IN A LETTER OF JANUARY 19, 1951, TO GSA, YOU STATE THAT AT THE TIME YOU SIGNED THE SUBJECT CONTRACT YOU HAD FIRM COMMITMENTS FROM DURGAPRASAD AND AGRAWAL FOR OVER 50,000 TONS OF THE SPECIFIED MANGANESE AND, IN ADDITION, HAD COVERED YOURSELF BY MAKING TWO ADDITIONAL CONTRACTS FOR 20,000 TONS OF ORE. YOU STATED THAT NOT ONLY YOUR "PRINCIPAL SOURCE OF SUPPLY" HAD DEFAULTED, BUT ALSO YOUR "OTHER SOURCES OF SUPPLY" HAD LIKEWISE DEFAULTED. FROM THIS INFORMATION, WE GATHER THAT YOU CONTEMPLATED THE POSSIBLE USE OF, AND BELIEVED YOU WERE FREE UNDER THE CONTRACT TO HAVE USED,"OTHER SOURCES OF SUPPLY" IN ADDITION TO DURGAPRASAD AND AGRAWAL.

FOR THE REASONS STATED ABOVE, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER WAS CORRECT IN DETERMINING, WITHOUT FINDINGS OF FACT, THAT THE FORCE MAJEURE PROVISIONS OF THE CONTRACT WERE NOT FOR APPLICATION TO THE INSTANT TERMINATION BECAUSE EVEN ON THE ASSUMPTION THAT YOU COULD NOT POSSIBLY OBTAIN ORE FROM DURGAPRASAD AND AGRAWAL, YOU WERE NONETHELESS OBLIGATED TO OBTAIN ORE FROM OTHER MINES IN INDIA. ACCORDINGLY, OUR CLAIMS DIVISION'S ACTION OF JUNE 20, 1963, IS SUSTAINED. IF PAYMENT OF THE INDEBTEDNESS IS NOT MADE WITHIN 30 DAYS FROM THE DATE OF THIS LETTER, YOUR NAME WILL BE PLACED ON THE LIST OF DEBTORS INDEBTED TO THE UNITED STATES, AND CONSIDERATION WILL BE GIVEN TO TRANSFERRING THE MATTER TO THE DEPARTMENT OF JUSTICE FOR WHATEVER FURTHER ACTION MAY BE REQUIRED.