B-117825, FEB 1, 1954

B-117825, FEB 1, 1954

PRECIS-UNAVAILABLE

THE SECRETARY OF THE ARMY:

BY CERTIFICATES OF SETTLEMENT NOS. 2139152, 2165558 AND 2188806, DATED MAY 18, AUGUST 3 AND OCTOBER 28, 1953, ISSUED BY THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE THE SUMS OF $462.80, $121.03 AND $334.01 WERE CERTIFIED FOR PAYMENT TO THE DRIVER LUMBER COMPANY, P. O. BOX 311, SELMA, ALABAMA, A. G. MOORE & COMPANY, INC., P. O. BOX 659, NORFOLK 1, VIRGINIA, AND LEWIS LUMBER COMPANY, INC., 909 TITLE BUILDING, BIRMINGHAM 3, ALABAMA, ON ACCOUNT OF QUANTITIES OF LUMBER DELIVERED IN EXCESS OF THE MAXIMUM ALLOWABLE QUANTITIES PROVIDED FOR DELIVERY UNDER CONTRACTS NOS. DA -09-026-ENG-35384, DA-09-026-ENG-40654 AND DA-09-026-ENG-38763, DATED MAY 1, 1952, NOVEMBER 14, 1952, AND JUNE 27, 1952, RESPECTIVELY.

THE THREE CONTRACTS WERE AWARDED BY THE PROCUREMENT BRANCH, CORPS OF ENGINEERS, SOUTH ATLANTIC DIVISION, ATLANTA, GEORGIA, AND PROVIDED FOR DELIVERY OF 300,000 BOARD MEASURE FEET OF LUMBER BY THE DRIVER LUMBER COMPANY, 40,000 BOARD MEASURE FEET OF LUMBER BY A. G. MOORE & COMPANY, INC., AND 100,000 BOARD MEASURE FEET OF LUMBER BY LEWIS LUMBER COMPANY, INC. THE STATED CONTRACT QUANTITIES WERE SUBJECT TO A VARIATION OF 10 PERCENT AND DELIVERIES IN EACH CASE WERE IN EXCESS OF THE MAXIMUM ALLOWABLE QUANTITY OF 110 PERCENT. THE DRIVER LUMBER COMPANY REQUESTED THAT AN EXCESS QUANTITY OF 16,075 BOARD MEASURE FEET OF LUMBER EITHER BE RETURNED OR ACCEPTED BY THE GOVERNMENT AT A 20 PERCENT REDUCTION IN PRICE. THE OTHER CONTRACTORS, IN CONNECTION WITH EXCESS QUANTITY DELIVERIES OF 1,330 AND 3,902 BOARD MEASURE FEET OF LUMBER, CONTENDED IN EFFECT THAT, REGARDLESS OF ANY RESPONSIBILITY ON THEIR PART TO PREVENT OVERSHIPMENTS, THE GOVERNMENT SHOULD HAVE AFFORDED THEM AN OPPORTUNITY TO REMOVE THE EXCESS QUANTITIES DELIVERED, UNLESS IT WAS PROPOSED TO MAKE PAYMENT THEREFOR AT THE CONTRACT PRICES.

THE CLAIMS WERE REJECTED BY THE CONTRACTING OFFICER OR HIS SUCCESSOR. SUBSEQUENTLY, THE CLAIMS WERE CONSIDERED BY THE OFFICE OF THE CHIEF OF ENGINEERS AND IN EACH CASE IT WAS RECOMMENDED THAT PAYMENT BE MADE SINCE THE EXCESS LUMBER WAS NOT REJECTED BUT WAS ACCEPTED AND EITHER NEEDED OR USED BY THE GOVERNMENT. BY INDORSEMENTS OF JANUARY 27, JUNE 4 AND JUNE 22, 1953, FROM THE OFFICE OF THE CHIEF OF FINANCE, THE CLAIMS WERE FORWARDED TO THIS OFFICE FOR SETTLEMENT.

ON OCTOBER 21, 1953, THERE WAS FORWARDED TO THE CLAIMS DIVISION OF THIS OFFICE A LETTER DATED SEPTEMBER 18, 1953, FROM THE OFFICE OF THE DIVISION ENGINEER, SOUTH ATLANTIC DIVISION, TO THE CHIEF OF ENGINEERS. APPARENTLY, THAT OFFICE HAD NOT BEEN ADVISED OF THE SETTLEMENTS WHICH HAD ISSUED IN TWO OF THE CASES ON MAY 18 AND AUGUST 3, 1953, AND IT WAS SUGGESTED THAT THIS OFFICE BE REQUESTED TO FURNISH AS EXPEDITIOUSLY AS POSSIBLE A DECISION ON ONE OF THE THREE CLAIMS FOR THE FUTURE GUIDANCE OF ALL CONCERNED. IT WAS REPORTED THAT THE CONTRACTING OFFICER PERIODICALLY RECEIVES CLAIMS RESULTING FROM THE APPLICATION OF ARTICLE 6 OF THE SPECIAL CONDITIONS MADE A PART OF VARIOUS CONTRACTS FOR THE PURCHASE OF LUMBER AND THAT THREE OF SUCH CLAIMS CURRENTLY WERE ON HAND. THE MATTER RECENTLY HAS BEEN BROUGHT TO MY ATTENTION FOR INSTRUCTIONS AS TO WHETHER THE ACTION TAKEN UNDER CERTIFICATES NOS. 2139152, 2165558 AND 2188806 WAS PROPER AND, IF NOT, WHETHER STEPS SHOULD BE TAKEN TO RECOVER THE AMOUNTS PAID THEREUNDER.

ARTICLE 6 OF THE SPECIAL CONDITIONS, MADE A PART OF EACH OF THE THREE CONTRACTS HERE INVOLVED, PROVIDES AS FOLLOWS:

"6. VARIATION IN QUANTITY: A. A 10% VARIATION 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 OR LESS THAN THE QUANTITY 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 110% OF CONTRACT QUANTITY ALLOWED (PER ITEM) UNDER A. ABOVE WILL BE ACCEPTED, AND ANY INSPECTION AND ACCEPTANCE BY THE GOVERNMENT SHALL NOT BE APPLICABLE TO THAT PORTION OF THE CONTRACT QUANTITY (BY ITEM) WHICH IS IN EXCESS OF 110%. SUCH PORTION OF ANY SHIPMENT WHICH EXCEEDS THE 110% ALLOWABLE UNDER A. ABOVE 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 OTHERWISE. THIS POSITION AND PROVISION ARE NECESSARY BECAUSE OF THE IMPRACTICABILITY OF ATTEMPTING TO COORDINATE SEVERAL SHIPMENTS FROM DIFFERENT MILLS UNDER THE SAME CONTRACT. ALSO, WHEN A SHIPMENT IS RECEIVED BY THE CONSIGNEE THE ACCEPTABLE PORTION IS GENERALLY PLACED IN COMMON STOCKS AND THE INDIVIDUAL IDENTITY IS LOST; THUS, ON MULTIPLE SHIPMENTS, IT IS IMPOSSIBLE TO DETERMINE THE AMOUNT OF EXCESS MATERIAL UNTIL AFTER FINAL SHIPMENT HAS BEEN RECEIVED, AND IT IS IMPRACTICAL AND UNDESIRABLE TO HOLD SHIPMENTS INTACT PENDING DETERMINATION AS TO WHETHER OR NOT THERE HAS BEEN AN OVERSHIPMENT AND IN WHAT ITEMS."

THE RECORD FAILS TO INDICATE THAT ANY EXCEPTIONAL CIRCUMSTANCES WERE PRESENT IN MAKING THE DELIVERIES UNDER THE THREE CONTRACTS. IN ANY EVENT, IT WOULD APPEAR THAT STRICT COMPLIANCE WITH THE REQUIREMENT THAT PERMISSION BE GRANTED IN WRITING BY THE CONTRACTING OFFICER PRIOR TO SHIPMENT WAS NECESSARY IN ORDER FOR THE CONTRACTORS TO OBTAIN PAYMENT FOR ANY EXCESS DELIVERIES. SEE UNITED STATES V. BLAIR, 321 U. S. 730; PLUMLEY V. UNITED STATES, 226 U. S. 545; YUHASZ V. UNITED STATES, 109 F. 2D 467; AND LOUISE HARDWICK, ADMINISTRATRIX V. UNITED STATES, 95 C. CLS. 336.

ORDINARILY, UNDER A CONTRACT OF SALE, THE BUYER IS REQUIRED TO PAY FOR SUPPLIES DELIVERED IN EXCESS OF THE QUANTITY WHICH HE AGREED TO PURCHASE FROM THE SELLER, IF HE ACCEPTS SUCH EXCESS DELIVERY. THIS GENERAL RULE HAS BEEN APPLIED BY THIS OFFICE IN THE SETTLEMENT OF CLAIMS AGAINST THE UNITED STATES, PARTICULARLY IN CASES WHERE SUPPLIES HAVE BEEN PURCHASED ON A UNIT PRICE BASIS AND NO VIOLATIONS OF THE ADVERTISING STATUTES APPEAR TO BE INVOLVED. HOWEVER, THE RULE OBVIOUSLY IS NOT FOR APPLICATION WHERE, AS HERE, THE CONTRACTING PARTIES SPECIFICALLY HAVE AGREED WITH RESPECT TO THEIR RIGHTS AND OBLIGATIONS IN THE EVENT THAT OVERSHIPMENTS SHOULD BE MADE WITHOUT THE PRIOR WRITTEN PERMISSION OF A DESIGNATED GOVERNMENT OFFICIAL.

A CONTRACT OF SALE, LIKE ANY OTHER CONTRACT, IS TO BE CONSTRUED AS A WHOLE AND EFFECT GIVEN WHERE POSSIBLE TO ALL THE PROVISIONS THEREOF. AM. JUR. 310. IN PROVIDING THAT "NO CLAIMS FOR PAYMENT WILL BE MADE BY THE CONTRACTOR ON ACCOUNT OF SUCH EXCESS SHIPMENT," AND IN STATING REASONS FOR SUCH PROVISION WHICH APPEAR CONCLUSIVELY TO SHOW AN INTENTION NOT TO SEGREGATE AND RETURN LUMBER DELIVERED IN EXCESS OF THE MAXIMUM ALLOWABLE QUANTITIES, IT MUST BE PRESUMED THAT THE CONTRACTING PARTIES CONTEMPLATED THAT THE TOTAL PRICES PAYABLE FOR 110 PERCENT OF THE CONTRACT QUANTITIES WOULD REPRESENT FULL COMPENSATION FOR DELIVERIES OF ANY LARGER QUANTITIES OF LUMBER.

UNDER THE CIRCUMSTANCES, SUPERSEDING SETTLEMENTS WILL ISSUE EFFECTING CANCELLATION OF THE SETTLEMENTS DATED MAY 18, AUGUST 3 AND OCTOBER 28, 1953, AND CERTIFYING THE CONTRACTORS TO BE INDEBTED TO THE UNITED STATES FOR THE PAYMENTS ERRONEOUSLY MADE. ALSO, IT IS REQUESTED THAT THE RESPECTIVE AMOUNTS OF $462.80, $121.03 AND $334.01 BE DEDUCTED FROM PAYMENT UNDER ANY CURRENT CONTRACTS WHICH HAVE BEEN ENTERED INTO BY YOUR DEPARTMENT WITH THE DRIVER LUMBER COMPANY, A. G. MOORE & COMPANY, INC., AND LEWIS LUMBER COMPANY, INC., AND THAT A REPORT BE FURNISHED TO THE CLAIMS DIVISION OF THIS OFFICE WHEN, AND IF, SUCH COLLECTION HAS BEEN EFFECTED.