A-9721, SEPTEMBER 14, 1925, 5 COMP. GEN. 187

A-9721, SEPTEMBER 14, 1925, 5 COMP. GEN. 187

SALES, SURPLUS WAR SUPPLIES - REFUNDS THE RETURN OF SURPLUS WAR SUPPLIES SOLD AT PUBLIC AUCTION, BECAUSE OF THEIR FAILURE TO CONFORM TO THE SPECIFICATIONS UNDER WHICH SOLD, AND THEIR ACCEPTANCE BY THE GOVERNMENT RENDERS THE GOVERNMENT LIABLE NOT ONLY FOR REFUND OF THE PURCHASE PRICE, BUT FOR THE ACTUAL NECESSARY EXPENSES IN CONNECTION WITH THE SALE OF THE PROPERTY SUCH AS CARTAGE, LABOR, FREIGHT, AND WAR TAX. IN THE ABSENCE OF EVIDENCE SHOWING THAT THE STORAGE OF SAID SUPPLIES WAS AUTHORIZED OR REQUESTED BY AN AGENT OF THE GOVERNMENT, AND THE HOLDING NOT HAVING BEEN OTHER THAN STORAGE IN A GENERAL SENSE, THE GOVERNMENT IS UNDER NO OBLIGATION TO MAKE PAYMENT THEREFOR.

COMPTROLLER GENERAL MCCARL TO CAPTAIN R. G. JENKS, UNITED STATES ARMY, SEPTEMBER 14, 1925:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 15, 1925, TRANSMITTING, WITH REQUEST FOR DECISION AS TO WHETHER PAYMENT THEREON IS AUTHORIZED, A VOUCHER IN FAVOR OF THE HAZELTON MILLS (INC.) IN THE SUM OF $4,561.45 TO COVER ITS CLAIM FOR REIMBURSEMENT OF MONEYS EXPENDED FOR STORAGE, CARTAGE, LABOR, FREIGHT, AND WAR TAX IN CONNECTION WITH ITS PURCHASE DECEMBER 8, 1919, OF CERTAIN ARMY SURPLUS PROPERTY ON SALES NO. 6850 (S.P.D. NO. 1978- C.E.) FOR THE SUM OF $202,147.94, AND THE RETURN TO GOVERNMENT CONTROL OF A PORTION THEREOF, FOR WHICH A REFUND OF $95,119.98 WAS MADE MARCH 9, 1922.

IT APPEARS THAT UNDER SAID SALE NO. 6850 DELIVERIES WERE MADE TO PURCHASER OF 130,090 YARDS OF DUCK, O.D., 56 1/4 INCHES, 20 OZ., 50 BY 29, AT ITS BID PRICE OF $0.698764 PER YARD ($96,492.32), AND OF 160,815 1/2 YARDS OF DUCK, O.D., 56 3/4 INCHES, 26 2/3 OZ., 48 BY 30, AT ITS BID PRICE OF $0.656999 PER YARD ($105,655.62), FOR WHICH THE TOTAL SUM OF $202,147.94 WAS PAID; AND SHIPMENT OF SAID GOODS WAS MADE FROM STORAGE POINT, JEFFERSONVILLE (INDIANA) DEPOT, TO NEW YORK, IN ACCORDANCE WITHPURCHASER'S SHIPPING INSTRUCTIONS. SUBSEQUENTLY 144,779 1/2 YARDS OF THE DUCK SO PURCHASED WERE RETURNED TO THE NEW YORK ARMY DEPOT AND THE $95,119.98 PURCHASE PRICE PAID THEREFOR WAS REFUNDED TO PURCHASER BECAUSE SUCH GOODS DID NOT CONFORM IN CHARACTER OR SPECIFICATION TO THE REQUIREMENTS OF THE SALE AGREEMENT. SEE 1 COMP. GEN. 466.

THE RULE FOLLOWED BY THE GOVERNMENT, WHERE PURCHASES BY IT ARE REJECTED, IS TO HOLD THE SAME SUBJECT TO SHIPPING INSTRUCTIONS AND THEN TO SHIP THEM AS DIRECTED AT THE CONTRACTOR'S EXPENSE. THAT RULE IS APPLICABLE HERE. IT IS NOT A QUESTION OF DAMAGES, BUT OF THE PURCHASER ACTING FOR THE BENEFIT OF THE SELLER IN SEEING TO THE RETURN OF THE GOODS, AND SUCH PROPER COSTS OF TRANSPORTATION, ETC., AS MAY BE PAID BY THE PURCHASER ARE IN THE NATURE OF ADVANCES ON ACCOUNT OF THE SELLER. THE PURCHASER, THEREFORE, IS ENTITLED TO REIMBURSEMENT OF SUCH ITEMS AS ARE NECESSARILY EXPENDED INCIDENT TO THE PURCHASE AND THE RETURN TO GOVERNMENT CONTROL OF THE 144,779 1/2 YARDS OF DUCK.

IN 2 COMP. GEN. 484, QUOTING FROM THE SYLLABUS, IT WAS SAID:

THE RETURN OF SURPLUS WAR SUPPLIES BECAUSE OF THEIR FAILURE TO MEET THE SPECIFICATIONS UNDER WHICH SOLD RENDERS THE GOVERNMENT LIABLE FOR THE EXPENSES INCURRED BY THE PURCHASER FOR FREIGHT, STORAGE, AND HANDLING, WHICH EXPENSES MAY BE REIMBURSED FROM THE PROCEEDS OF THE GENERAL SALE OF LIKE SUPPLIES WHEN HELD IN SPECIAL-DEPOSIT ACCOUNT.

IN THE INSTANT CASE THE PURCHASER IS ENTITLED TO BE REIMBURSED FOR THE ACTUAL AND NECESSARY EXPENDITURES MADE FOR FREIGHT (INCLUDING WAR TAX), CARTAGE, LABOR, AND STORAGE IF NECESSARILY INCURRED (BUT NOT STORAGE IN A GENERAL SENSE) INCIDENT TO THE PURCHASE AND RETURN TO GOVERNMENT CONTROL OF THE 144,779 1/2 YARDS OF DUCK HEREINABOVE MENTIONED. HOWEVER, AS THE STORAGE OF SAID PROPERTY WAS NOT DONE BY THE AUTHORITY, REQUEST, OR DIRECTION OF AN AGENT OF THE UNITED STATES, AND SUCH STORAGE DOES NOT APPEAR TO HAVE BEEN OTHER THAN STORAGE IN A GENERAL SENSE, THE GOVERNMENT IS UNDER NO OBLIGATION TO MAKE PAYMENT THEREFOR.

IT APPEARS FROM THE EVIDENCE THAT THE ACTUAL NECESSARY EXPENSES FOR WHICH THE UNITED STATES IS LIABLE TO CLAIMANT IN CONNECTION WITH ITS RETURN OF SAID PROPERTY ARE FREIGHT AND WAR TAX, $1,908.05; CARTAGE, $271.80; AND LABOR, $135.90; AGGREGATING $2,315.75.

PAYMENT OF THE VOUCHER SUBMITTED IS THEREFORE AUTHORIZED IN THE SUM OF $2,315.75, IF OTHERWISE CORRECT, AND PROCEEDS OF LIKE SUPPLIES ARE AVAILABLE. 2 COMP. GEN. 484.