B-126099, JUN. 4, 1956

B-126099, JUN. 4, 1956

TO GOLWYNNE CHEMICALS CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 5, 1956, REGARDING YOUR INDEBTEDNESS TO THE UNITED STATES AS STATED IN OUR CLAIMS DIVISION LETTER DATED FEBRUARY 17, 1956, IN THE AMOUNT OF $12,867.41, REPRESENTING OVERPAYMENTS RECEIVED BY YOU IN CONNECTION WITH CONTRACT NO. GS-OOS- 26247/SCM; DATED OCTOBER 20, 1950. THIS AMOUNT AS COMPUTED IN THE ADMINISTRATIVE STATEMENT SET FORTH IN THE PHOTOSTATIC COPIES SUPPLIED WITH THE LETTER OF FEBRUARY 17, 1956, HAS BEEN COLLECTED IN FULL FROM AMOUNTS OTHERWISE DUE YOU.

UNDER THE CONTRACT YOU AGREED TO DELIVER "FOB CARS, NORTH ATLANTIC PORTS" A SPECIFIED NUMBER OF SHORT DRY TONS OF MULLITE KYANITE AND CRUDE KYANITE AT THE STIPULATED UNIT PRICES FROM EAST AFRICA IN ACCORDANCE WITH THE DELIVERY SCHEDULE SET FORTH UNDER ARTICLE 2 OF SPECIAL TERMS, CONDITIONS AND SPECIFICATIONS. THESE UNIT PRICES INCLUDED THE COSTS OF RAILWAY FREIGHT FROM MINE-HEAD TO MOMBASA, KENYA, AND OCEAN FREIGHT COMPUTED AT PREVAILING RATES WITH ANY INCREASE OR DECREASE IN SUCH COSTS TO BE ADJUSTED FOR THE ACCOUNT OF THE GOVERNMENT. THE RECORD DISCLOSES THAT YOUR DEVIATIONS FROM THE DELIVERY SCHEDULE RESULTED IN CERTAIN PAYMENTS TO YOU WHICH INCLUDED INCREASED FREIGHT COSTS THAT WOULD NOT HAVE BEEN INCURRED IF TIMELY DELIVERIES HAD BEEN MADE. YOUR FAILURE TO COMPLY WITH THE SCHEDULE OF DELIVERIES RESULTED IN THE TERMINATION OF THE CONTRACT AND THE COLLECTION OF THE INCREASED FREIGHT COSTS WHICH HAD BEEN ERRONEOUSLY CHARGED TO THE ACCOUNT OF THE GOVERNMENT.

IN YOUR LETTER OF MARCH 5, 1956, YOU CONTEND THAT YOUR INABILITY TO MAKE TIMELY DELIVERY WAS ATTRIBUTABLE TO REASONS BEYOND YOUR CONTROL AND THAT YOU REPEATEDLY ADVISED THE GOVERNMENT REPRESENTATIVES REGARDING THE DIFFICULTIES ENCOUNTERED IN OBTAINING THE CONTRACT ITEMS AT THE SHIPPING POINT. ALSO, YOU CONTEND THAT THE GOVERNMENT RECOGNIZED YOUR POSITION AS EVIDENCED BY THE PREAMBLE OF CONTRACT AMENDMENT NO. 2, DATED JANUARY 18, 1951, IN WHICH IT WAS STATED THAT ,DELIVERY OF THE CRUDE KYANITE CANNOT BE COMPLETED ON THE AFORESAID DATE BECAUSE OF CIRCUMSTANCES BEYOND CONTRACTOR'S CONTROL.' YOU EXPRESS THE VIEW THAT IF THIS CONDITION EXISTED AT THE TIME OF THE AMENDMENT AND WARRANTED RELIEF ALL OTHER DELAYED DELIVERIES ARE LIKEWISE EXCUSABLE UNDER PARAGRAPH 12/B) OF THE CONTRACT SINCE THESE SAME EXCUSABLE CONDITIONS PREVAILED THROUGHOUT THE CONTRACT PERIOD. FURTHER, YOU STATE, THAT SINCE YOU WERE NOT AWARE THAT THE GOVERNMENT WOULD ASSESS ANY PENALTIES IN CONNECTION WITH THE DELAYED DELIVERIES YOU WERE DEPRIVED OF THE RIGHT OF TIMELY APPEAL OF THE DISPUTED MATTER UNDER THE "DISPUTES" CLAUSE OF THE CONTRACT.

THE ORIGINAL SCHEDULE REQUIRED THE DELIVERY OF 20,000 SHORT TONS OF MULLITE AND 8,000 SHORT TONS OF CRUDE KYANITE IN INSTALLMENT DELIVERIES AT STATED THREE-MONTH INTERVALS BEGINNING DECEMBER 31, 1950, AND ENDING JUNE 30, 1952. IT WILL BE OBSERVED THAT DELIVERY OF THE FIRST 2,840 SHORT TONS OF CRUDE KYANITE WAS REQUIRED BY JUNE 30, 1951. HOWEVER, BECAUSE OF THE DELIVERY DIFFICULTIES ENCOUNTERED AT THE OUTSET, THE PARTIES MUTUALLY AGREED UNDER CONTRACT AMENDMENT NO. 2, DATED JANUARY 18, 1951, TO MODIFY THE ORIGINAL DELIVERY SCHEDULE SO AS TO PERMIT THE INCLUSION OF THE FIRST 2,840 TONS WITH THE SUBSEQUENTLY SCHEDULED CONTRACT DELIVERIES. PARTICULARLY ATTENTION IS INVITED TO THE FACT THAT THE AMENDMENT ALSO INCLUDES THE PROVISION THAT "ALL OTHER TERMS AND CONDITIONS OF THE CONTRACT SHALL REMAIN UNCHANGED" AND THAT THE AMENDMENT COVERS ONLY THE DELAY IN DELIVERY OF 2,840 TONS OF CRUDE KYANITE AS TO WHICH IT WAS FOUND THAT THE FAILURE TO DELIVER BY JUNE 30, 1951 WOULD BE DUE TO "CIRCUMSTANCES BEYOND CONTRACTOR'S CONTROL.' THIS AMENDMENT, IN EFFECT, NEGATIVES YOUR CONTENTION THAT THE REASONS FOR FAILURE TO MAKE TIMELY DELIVERY OF THE FIRST 2,840 TONS SHOULD APPLY, IN AND OF ITSELF, THROUGH THE ENTIRE LIFE OF THE CONTRACT OR TO THE LATER SCHEDULED DELIVERIES. THE RECORD FAILS TO ESTABLISH THAT YOU SOUGHT ANY FURTHER CONSIDERATION IN THE MATTER WITHIN THE PURVIEW OF PARAGRAPH 15 OF THE GENERAL CONDITIONS OF THE CONTRACT.

ASIDE FROM THE FOREGOING, YOU ENCLOSED WITH YOUR LETTER DATED OCTOBER 25, 1951, A COPY OF LETTER DATED OCTOBER 12, 1951, FROM THE KENYA KYANITE, LTD., AND ADVISED THE ADMINISTRATIVE OFFICE OF YOUR INABILITY TO FURNISH A DEFINITE SCHEDULE COVERING THE DELIVERIES OF THE CRUDE KYANITE AND EXPRESSED DOUBT AS TO YOUR ABILITY TO FURNISH ANY HIGH-GRADE ITEM. YOU STATED, HOWEVER, THAT YOU WOULD BE ABLE TO DELIVER 12,000 TONS OF MULLITE BY JUNE 30, 1952, AND REQUESTED AN EXTENSION ON THE REMAINING DELIVERIES UNDER THAT SCHEDULE TO DECEMBER 31, 1952. YOUR REQUEST WAS DENIED BY THE CONTRACTING OFFICER IN HIS LETTER DATED OCTOBER 31, 1951. YOU DID NOT APPEAL FROM THIS FINDING. YOU WERE ADVISED IN THAT LETTER THAT THE TOTAL CONTRACT QUANTITY OF CRUDE KYANITE WAS REDUCED BY 2,020 TONS, THE AMOUNT OF THAT ITEM THEN IN DELAY, AND THAT A FURTHER REDUCTION OF 5,280 TONS OF EITHER ITEM WOULD BE AUTHORIZED, WITHOUT PENALTY TO YOU, UPON RECEIPT OF NOTICE OF YOUR ELECTION IN THE MATTER. AT THE SAME TIME, YOU WERE PLACED ON NOTICE THAT "IN THE EVENT OF YOUR FAILURE TO DELIVER WITHIN THE CONTRACT PERIOD, SUITABLE ACTION WILL BE TAKEN UNDER THE PROVISIONS OF THE CONTRACT TO PROTECT THE GOVERNMENT'S BEST INTEREST.' FOLLOWING YOUR ELECTION, CONTRACT AMENDMENT NO. 3, DATED DECEMBER 18, 1951, AUTHORIZED A REDUCTION OF THE ORIGINAL QUANTITY OF CRUDE KYANITE TO 700 SHORT TONS, THUS LEAVING A BALANCE OF 20,000 AND 700 SHORT TONS OF MULLITE AND CRUDE KYANITE, RESPECTIVELY, FOR FINAL DELIVERY UNDER THE CONTRACT. IT WILL BE SEEN FROM THE FOREGOING THAT EVERY CONSIDERATION WAS AFFORDED YOU IN THE MATTER OF THE DELAYED DELIVERIES AND THAT YOU WERE FULLY APPRISED OF YOUR RESPONSIBILITIES IN THE EVENT OF ANY ADDITIONAL DELAYS IN DELIVERY.

NOTWITHSTANDING THE FOREGOING, ON JULY 31, 1952, YOU AGAIN FORMALLY REQUESTED AN EXTENSION IN THE DELIVERY TIME. BY LETTER OF AUGUST 29, 1952, YOUR REQUEST WAS DENIED AND YOUR ATTENTION INVITED TO THE FACT THAT YOU WERE THEN IN DEFAULT OF THE CONTRACT WHICH EXPIRED JUNE 30, 1952. THEREFORE, YOU WERE NOTIFIED, PURSUANT TO THE PROVISIONS OF ARTICLE 12 OF THE GENERAL CONDITIONS, THAT YOUR RIGHT TO PROCEED WITH REMAINING DELIVERIES WAS TERMINATED. WHILE THERE WAS A FURTHER EXCHANGE OF CORRESPONDENCE BETWEEN THE CONTRACTING PARTIES AND YOU WERE AFFORDED SEVERAL INTERVIEWS BY THE ADMINISTRATIVE OFFICIALS, NO APPEAL WAS FILED BY YOU IN REFERENCE TO THE TERMINATION NOTICE. THE MATTER DISCUSSED APPEARS TO HAVE BEEN CONFINED SOLELY TO THE SPECIFIC AMOUNT OF THE OVERPAYMENTS REFLECTING THE INCREASED FREIGHT COSTS IN QUESTION. THE FINAL STATEMENT OF YOUR ACCOUNT PREPARED BY THE ADMINISTRATIVE OFFICIALS IS CONTAINED IN THE PHOTOSTATIC COPIES SUPPLIED WITH OUR LETTER OF FEBRUARY 17, 1956.

SINCE YOU FAILED TO TAKE AN APPEAL FROM THE CONTRACTING OFFICER'S DETERMINATION OF OCTOBER 31, 1951, AS SUPPLEMENTED BY HIS STATEMENT OF AUGUST 29, 1952, TO YOU, HIS DETERMINATION THAT YOU WERE NOT ENTITLED TO AN EXTENSION OF TIME MUST BE ACCEPTED AS FINAL AND CONCLUSIVE. ACCORDINGLY, THE ..END :