B-129623, NOV. 15, 1956

B-129623, NOV. 15, 1956

TO THE HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 23, 1956, RELATIVE TO THE REQUEST OF EVERSMAN MANUFACTURING COMPANY FOR REFUND OF THE AMOUNT OF $163.53 WHICH WAS DEDUCTED, BY REASON OF EXCESS AIR FREIGHT CHARGES, IN MAKING PAYMENT TO THE CONTRACTOR FOR FOUR SETS OF HYDRAULIC CONTROL ADAPTER KITS FURNISHED UNDER CONTRACT NO. GS-OOS-1182 (ICA), DATED DECEMBER 14, 1955.

TRANSMITTED WITH YOUR LETTER IS A COPY OF DOCKET NO. 333 OF THE BOARD OF REVIEW, GSA, CONTAINING A STATEMENT OF THE FACTS AND ISSUES INVOLVED, AND THE RECOMMENDATION OF THE BOARD ON THE CONTRACTOR'S APPEAL UNDER THE DISPUTES CLAUSE OF THE CONTRACT FROM THE ASSESSMENT.

THE RECORD SHOWS THAT UNDER CONTRACT NO. GS-03P-2777 (T), REQ.NO. 462-150 -173-134, DATED APRIL 9, 1954, THE EVERSMAN MANUFACTURING COMPANY FURNISHED FOUR HYDRAULICALLY OPERATED LAND LEVELERS TO GSA FOR SHIPMENT TO PAKISTAN; THAT THE CATERPILLAR TRACTORS WHICH THEREAFTER WERE PURCHASED FROM ANOTHER SOURCE TO OPERATE THIS TYPE OF EQUIPMENT, AS WELL AS OTHER TYPES, COULD NOT BE USED FOR SUCH OPERATION BECAUSE THEIR HYDRAULIC CONTROL MECHANISM WAS DESIGNED TO OPERATE A FRONT MOUNTED LEVELER ONLY, WHEREAS THE EVERSMAN LEVELER WAS DESIGNED TO BE OPERATED AS TRAILED EQUIPMENT; AND THAT EVERSMAN, WHILE DISCLAIMING ANY LIABILITY IN THE MATTER (SINCE THE LEVELERS ADMITTEDLY WERE FURNISHED ACCORDING TO SPECIFICATIONS), AGREED, AT THE REQUEST OF GSA, TO SEEK A SOLUTION TO THE PROBLEM.

AFTER CONSIDERABLE CORRESPONDENCE WITH THE UNITED STATES OPERATIONS MISSION TO PAKISTAN AND CONSULTATION WITH THE CATERPILLAR TRACTOR COMPANY, EVERSMAN PROPOSED TO FURNISH TO YOUR AGENCY THE HYDRAULIC CONTROL ADAPTER KITS, REFERRED TO ABOVE, AS A CORRECTIVE DEVICE WHICH WOULD ENABLE THE TRACTORS TO OPERATE THE LEVELERS. THE CONTRACTOR QUOTED A TOTAL PRICE OF $1,040.60, F.O.B. DENVER, COLORADO, FOR THE ASSEMBLED UNITS TO BE FURNISHED, AND WAS AWARDED A CONTRACT ON THAT BASIS.

PAGE 3 OF THE INVITATION, BID, AND AWARD (SUPPLY CONTRACT), STANDARD FORM 33, REV. JUNE, 1955, WHICH WAS USED IN CONNECTION WITH THE INSTANT PROCUREMENT, CONTAINED THE INFORMATION THAT THE ADAPTER KITS WERE TO BE PACKED FOR AIR SHIPMENT AND, UNDER THE HEAD "WEIGHTS AND MEASUREMENTS," SPACES WERE PROVIDED FOR THE CONTRACTOR TO SET FORTH THE GROSS WEIGHT OF THE EQUIPMENT TO BE SHIPPED, AMONG OTHER THINGS. RELATIVE THERETO, ARTICLE 20 OF THE SPECIAL PROGRAM CONTRACT PROVISIONS, WHICH WERE MADE A PART OF THE CONTRACT, PROVIDED:

"20. WEIGHTS AND MEASUREMENTS. COST OF INLAND AND OCEAN FREIGHT WILL BE USED IN EVALUATING BIDS. WEIGHTS AND CUBIC MEASUREMENTS ARE, THEREFORE, ESSENTIAL. THE METRIC SYSTEM SHALL NOT BE USED. BIDDER SHALL STATE THE TOTAL GUARANTEED MAXIMUM GROSS WEIGHT AND CUBE FOR THE UNIT SPECIFIED, THE NUMBER OF PACKAGES IN A SHIPMENT OF A SINGLE UNIT WITH WEIGHT AND CUBE OF EACH PACKAGE, TOGETHER WITH SHIPPING POINT OR POINTS. DIMENSIONS SHALL BE THOSE UPON WHICH CHARGES WOULD BE BASED BY COMMON CARRIERS. WHERE DIFFERENT FREIGHT RATES ARE AVAILABLE, CONTENTS OF EACH PACKAGE SHALL BE SPECIFIED.

"FAILURE TO STATE WEIGHTS AND/OR CUBIC MEASUREMENTS SHALL BE CAUSE FOR REJECTING BID.

"THE GOVERNMENT SHALL DEDUCT FROM ANY PAYMENT DUE THE CONTRACTOR ANY EXCESS COST RESULTING FROM WEIGHT AND/OR CUBAGE EXCEEDING SUCH GUARANTEED MAXIMUM GROSS WEIGHT OR CUBE.'

IN FURNISHING THE REQUESTED INFORMATION, THE CONTRACTOR SET FORTH THE GROSS WEIGHT OF THE KITS TO BE 535 POUNDS. THE ACTUAL WEIGHT TURNED OUT TO BE 614 POUNDS, AND THE OFFICE OF THE COMPTROLLER, GSA, DEDUCTED THE AMOUNT OF $163.53 FROM THE CONTRACT PRICE OF THE EQUIPMENT, STATING IN THE ADMINISTRATIVE DIFFERENCE STATEMENT FURNISHED THE CONTRACTOR THAT THE SUM REPRESENTED THE EXCESS COST OF AIR FREIGHT PURSUANT TO ARTICLE 20 OF THE SPECIAL PROGRAM CONTRACT PROVISIONS.

IN THE LETTER OF MARCH 28, 1956, WHEREIN THE CONTRACTOR APPEALED TO YOU FROM THE ACTION TAKEN WITH RESPECT TO THE ADMINISTRATIVE DISALLOWANCE OF THE AFORESAID SUM, THE CONTRACTOR STATED THAT, IN ORDER TO GET THE MATERIAL TOGETHER FOR THEIR QUOTATION, IT HAD BEEN NECESSARY TO OBTAIN COMPONENTS FROM SEVERAL SUPPLIERS, AND THE CONTRACTOR, ON THE BASIS OF PAST EXPERIENCE, MADE AN APPROXIMATE GUESS AT WHAT THE EQUIPMENT WOULD WEIGH WHEN PACKED; THAT THIS WAS NECESSARY, SINCE OTHERWISE THEIR QUOTATION WOULD HAVE BEEN DELAYED FOR SEVERAL WEEKS TO ALLOW TIME FOR THE COMPONENTS OF THE EQUIPMENT TO COME FORWARD FROM THE INDIVIDUAL FACTORIES, BE PACKED UP, MEASURE UP, ETC., AT THE CONTRACTOR'S DENVER PLANT, AND SPEED IN GETTING THE SHIPMENT TO PAKISTAN WAS OF THE GREATEST IMPORTANCE TO THE GOVERNMENT; AND THAT THEY OBJECTED STRONGLY TO BEING PENALIZED AS A RESULT OF HAVING ACTED IN THE BEST INTERESTS OF THE GOVERNMENT, ESPECIALLY INASMUCH AS THEIR SERVICE WAS RENDERED ON A NO-PROFIT BASIS.

IN DOCKET NO. 333, THE BOARD OF REVIEW RECOMMENDED (1) THAT THE MATTER OF THE CONTRACTOR'S APPEAL BE REFERRED TO US FOR DETERMINATION OF THE LEGAL QUESTION OF WHETHER ARTICLE 20 OF THE SPECIAL PROGRAM CONTRACT PROVISIONS SHOULD BE INTERPRETED AS APPLYING TO SHIPMENTS MADE BY AIR, AND (2) IN THE EVENT THE ANSWER TO THAT QUESTION SHOULD BE IN THE AFFIRMATIVE, THE BOARD RECOMMENDED THAT WE AUTHORIZE ALLOWANCE OF THE CLAIM FOR REASONS SUMMARIZED IN THE DOCKET AS FOLLOWS:

"IN VIEW OF THE NON-COMPETITIVE NATURE OF THE APPELLANT'S BID, THE FACT THAT THE GOVERNMENT WOULD HAVE PAID THE TRANSPORTATION COSTS REGARDLESS OF THE SHIPPING WEIGHT, THE FACT THAT ,ESTIMATED" AND NOT "GUARANTEED" SHIPPING WEIGHT IS CUSTOMARY AND ACCEPTABLE IN SUCH TRANSACTIONS, THE FACT THAT IT WAS THE GOVERNMENT'S URGENT DESIRE TO ADJUST A SITUATION OF ITS OWN MAKING WHICH REQUIRED SHIPMENT BY AIR FREIGHT, THE FACT THAT THE 79 POUND EXCESS WEIGHT WOULD HAVE BEEN INCONSEQUENTIAL IF SHIPMENT HAD BEEN MOVED BY SURFACE TRANSPORTATION AND THE FACT THAT THE APPELLANT, AT NO PROFIT TO ITSELF, BUT ACTING SOLELY, IN A SENSE AS THE GOVERNMENT'S REPRESENTATIVE, WAS PERFORMING A SERVICE, THE BOARD OF REVIEW CONCLUDES THAT THE APPELLANT'S REQUEST FOR REIMBURSEMENT AS A MATTER OF EQUITY SHOULD BE GIVEN FAVORABLE CONSIDERATION.'

FOR THE ABOVE REASONS, ESPECIALLY THE FACT THAT THE CONTRACT WAS A NEGOTIATED AGREEMENT ADMITTEDLY PERFORMED ON A NO-PROFIT BASIS AND THE SHOWING THAT IT WOULD HAVE BEEN IMPOSSIBLE FOR THE CONTRACTOR TO HAVE GIVEN THE CORRECT WEIGHT WITHOUT UNDULY DELAYING SHIPMENT OF THE SUPPLIES TO THE DETRIMENT OF THE GOVERNMENT, REFUND TO THE CONTRACTOR OF THE AMOUNT INVOLVED APPEARS PROPER AND IS HEREBY AUTHORIZED.