B-134885, FEB. 6, 1958

B-134885, FEB. 6, 1958

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

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 13, 1958, AND ENCLOSURES, REQUESTING ADVICE AS TO THE ACTION TO BE TAKEN IN CONNECTION WITH ADDITIONAL LOADING CHARGES INCURRED UNDER CONTRACT NO. GS-00S-14358-ICA, DATED MARCH 15, 1957, WITH THE INDEPENDENT COAL AND COKE COMPANY, SALT LAKE CITY, UTAH.

UNDER THE TERMS OF THE CONTRACT THE INDEPENDENT COAL AND COKE COMPANY AGREED TO DELIVER AT THE PORT OF STOCKTON, CALIFORNIA, LOADED AND TRIMMED 14 CARGOES OF BULK COAL F.O.B. A VESSEL, CHARTERED FROM THE AMERICAN PRESIDENT LINES UNDER CONTRACT NO. GS-OOT-1031 (TRO). PRIOR TO DOCKING AT THE ORE LOADING DOCK, THE VESSEL COLLIDED WITH THE PIER, CAUSING THE COAL TIPPLE TO COLLAPSE. THE CONTRACTOR ADVISED THE CONTRACTING OFFICER THAT LOADING ON THE VESSEL WOULD BE COMPLETED BY "CLAMSHELL" OPERATION AND THAT THE STEAMSHIP COMPANY HAD AGREED TO ASSUME ALL EXCESS COSTS OCCASIONED THEREBY. HOWEVER, IT APPEARS THAT THE STEAMSHIP COMPANY LATER DISCLAIMED ANY RESPONSIBILITY FOR DAMAGE TO THE COAL LOADING TIPPLE AND REFUSED TO ASSUME THE EXTRA CHARGES FOR CLAMSHELL LOADING. THE CONTRACTOR AGREED THAT IT WOULD FULFILL ITS CONTRACTUAL OBLIGATION TO THE GOVERNMENT AND WOULD AUTHORIZE THE PORT OF STOCKTON TO PROCEED WITH THE CLAMSHELL LOADING OPERATION, BUT FAILED TO AUTHORIZE THE PORT OF STOCKTON TO PROCEED THEREWITH.

YOU STATE THAT IN VIEW OF THE URGENCY OF MOVING THE COAL TO KOREA AS PROMPTLY AS POSSIBLE AND IN ORDER TO PREVENT INCURRENCE OF POSSIBLE DEMURRAGE CHARGES FOR THE VESSEL IN THE AMOUNT OF $2,000 A DAY, THE CONTRACTING OFFICER AUTHORIZED THE PORT OF STOCKTON TO PROCEED WITH THE CLAMSHELL LOADING OF THE VESSEL AND AGREED THAT THE GOVERNMENT WOULD ASSUME RESPONSIBILITY FOR ANY EXCESS COST OF LOADING BY THIS METHOD. THE PORT OF STOCKTON HAS SUBMITTED ITS INVOICE IN THE AMOUNT OF $6,730.04 FOR EXCESS COSTS FOR THE LOADING.

YOU RECOMMEND THAT THE PORT OF STOCKTON BE PAID THE SUM OF $6,730.04; THAT NO PAYMENT BE WITHHELD FROM THE AMERICAN PRESIDENT LINES; AND THAT $6,730.04 BE WITHHELD FROM AMOUNTS OTHERWISE DUE THE CONTRACTOR, THEREBY PROTECTING THE GOVERNMENT'S INTEREST UNTIL IT CAN BE DETERMINED BY LEGAL REMEDIES THE PARTY ULTIMATELY RESPONSIBLE.

THE OBLIGATION OF THE INDEPENDENT COAL AND COKE COMPANY WAS TO DELIVER THE COAL F.O.B. VESSEL, LOADED AND TRIMMED AT THE PORT OF EXPORT, AND NOTHING WAS SAID IN THE CONTRACT AS TO THE METHOD OF LOADING. ANY AGREEMENT THE CONTRACTOR MAY HAVE HAD WITH THE PORT OF STOCKTON FOR THE LOADING OF THE COAL HAS NO BEARING ON THE MATTER AS THE GOVERNMENT DOES NOT APPEAR TO HAVE BEEN A PARTY TO SUCH AGREEMENT. ALSO, THERE APPEARS TO HAVE BEEN NO RESPONSIBILITY ON THE PART OF THE TRANSPORTATION COMPANY, THE AMERICAN PRESIDENT LINES, FOR THE LOADING OF THE COAL. WHILE NO DETERMINATION HAS BEEN MADE AS TO THE PARTY RESPONSIBLE FOR THE COLLAPSE OF THE COAL TIPPLE, THAT QUESTION IS NOT FOR RESOLVING IN CONNECTION WITH THE DISPOSITION OF THE PRESENT MATTER.

ACCORDINGLY, ON THE BASIS OF THE FACTS NOW OF RECORD, WE AGREE THAT THE SUM OF $6,730.04 SHOULD BE PAID TO THE PORT OF STOCKTON AND THAT SUCH AMOUNT SHOULD BE WITHHELD FROM SUMS OTHERWISE DUE THE CONTRACTOR.