B-150496, FEB. 4, 1963

B-150496, FEB. 4, 1963

TO MR. PAUL J. MCCORMACK:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 11, 1962, WHICH IN EFFECT, REQUESTS REVIEW OF THE DISALLOWANCE OF CLAIMS FOR $43.13, $50.12, AND $47.49 (TOTAL $140.74) ALLEGED TO BE DUE TRADERS TRANSPORT CO., INC., BEDFORD, MASSACHUSETTS, AS WAITING TIME (DEMURRAGE) IN CONNECTION WITH THE LOADING OF THREE SHIPMENTS AT THE GENERAL SERVICES ADMINISTRATION'S WAREHOUSES IN THE BOSTON, MASSACHUSETTS, AREA, IN MAY AND JUNE 1962.

THESE CLAIMS WERE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE BY THE GENERAL SERVICES ADMINISTRATION FOR SETTLEMENT. THE SHIPMENTS ON WHICH THESE CLAIMS AROSE APPARENTLY WERE TRANSPORTED PURSUANT TO TRADERS TRANSPORT CO., INC., CONTRACT NO. AF19/628/637, DATED JULY 3, 1961. THE CLAIMS WERE DISALLOWED BECAUSE THE CONTRACT, AMONG OTHER THINGS, PROVIDED THAT THE RATES NAMED IN THE SCHEDULE INCLUDED ALL TRANSPORTATION COSTS AND SPECIFIED THAT NO CLAIM WOULD BE ALLOWED FOR DEMURRAGE OR OTHER EXPENSES, EXCEPT AS PROVIDED THEREIN, AND THERE WAS NO OTHER PROVISION THEREIN FOR THE PAYMENT OF DETENTION OR DEMURRAGE CHARGES.

IN YOUR REQUEST FOR REVIEW OF THAT DISALLOWANCE YOU CONCEDE THAT THE STATEMENTS MADE IN THE SECOND PARAGRAPH OF THE DISALLOWANCE ARE CORRECT, SO FAR AS YOU ARE CONCERNED, AND NO ISSUE IS RAISED ON THOSE POINTS. HOWEVER, YOU REFER TO PARAGRAPH 2 OF THE GENERAL PROVISIONS ATTACHED TO THE CONTRACT, ENTITLED "CHANGES," AND ASSERT THAT UNDER THIS PROVISION THE CONTRACTING OFFICER MAY MAKE CHANGES IN THE PLACE AND METHOD OF SHIPMENT BUT IF SUCH CHANGES CAUSE AN INCREASE IN THE COST OF PERFORMANCE OR IN THE TIME REQUIRED FOR THE PERFORMANCE OF THE CONTRACT AN EQUITABLE ADJUSTMENT WILL BE MADE. YOU URGE THAT THIS PARAGRAPH COVERS THE DEMURRAGE (WAITING TIME) FOR THE SHIPMENTS UNDER CONSIDERATION.

PARAGRAPH 2, ENTITLED "CHANGES (DEC. 1960)," OF THE GENERAL PROVISIONS OF THIS CONTRACT PROVIDES, IN PERTINENT PART, THAT:

"THE CONTRACTING OFFICER MAY, AT ANY TIME, BY A WRITTEN ORDER * * * MAKE CHANGES IN OR ADDITIONS TO DRAWINGS AND SPECIFICATIONS, ISSUE ADDITIONAL INSTRUCTIONS, REQUIRE MODIFIED OR ADDITIONAL WORK OR SERVICES WITHIN THE GENERAL SCOPE OF THE CONTRACT, CHANGE THE PLACE OF DELIVERY OR METHOD OF SHIPMENT, OR THE AMOUNT OF GOVERNMENT FURNISHED PROPERTY * * *.'

PROVISION ALSO IS MADE THAT, IF SUCH WRITTEN ORDER (AMENDING THE CONTRACT) RESULTS IN AN INCREASE OR DECREASE IN THE COST OF OR TIME REQUIRED FOR PERFORMANCE OF THE CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE IN THE CONTRACT PRICE. IT PROVIDES ALSO THAT ANY CLAIM FOR ADJUSTMENT UNDER THIS CLAUSE MUST BE ASSERTED WITHIN SIXTY DAYS AFTER RECEIPT OF SUCH WRITTEN CHANGE ORDER, AND THAT THE CONTRACTING OFFICER MAY ACT UPON SUCH CLAIM AT ANY TIME PRIOR TO FINAL PAYMENT UNDER THE CONTRACT.

THE PROVISIONS OF PARAGRAPH 2 RELATE SOLELY TO CHANGES MADE IN THE CONTRACT BY THE CONTRACTING OFFICER PRIOR TO THE PERFORMANCE OF SUCH SERVICES, AND THE PARAGRAPH PROVIDES SPECIFICALLY THAT THE CHANGES MUST BE MADE "BY A WRITTEN ORDER.' THE PRESENT RECORD CONTAINS NO RECORD OF ANY ORDER, EITHER ORAL OR WRITTEN. ALSO, THE CHANGES ARE LIMITED TO CHANGES IN OR ADDITIONS TO DRAWINGS AND SPECIFICATIONS; ISSUING ADDITIONAL INSTRUCTIONS; REQUIRING MODIFIED OR ADDITIONAL WORK OR SERVICES WITHIN THE GENERAL SCOPE OF THE CONTRACT; A CHANGE IN THE PLACE OF DELIVERY OR METHOD OF SHIPMENT; OR A CHANGE IN THE AMOUNT OF GOVERNMENT-FURNISHED PROPERTY. THEREFORE, IT SEEMS OBVIOUS THAT--- ASIDE FROM THE ABSENCE OF ANY WRITTEN ORDER--- AN AGREEMENT BY THE CONTRACTING OFFICER TO PAY DETENTION (DEMURRAGE) CHARGES WOULD NOT BE A CHANGE, MODIFICATION, ADDITIONAL INSTRUCTION, OR A CHANGED AMOUNT OF THE KIND OR TYPE CONTEMPLATED BY THE CITED PARAGRAPH 2.

THE SERVICE CONTRACTED FOR WAS A TRANSPORTATION SERVICE AND THE CHARGE AGREED UPON WAS SHOWN TO "INCLUDE ALL TRANSPORTATION COSTS.' DEMURRAGE IS A CHARGE FOR THE DETENTION OF THE CARRIER'S VEHICLE (UNION BELT OF DETROIT POOLING OF REVENUES, 201 I.C.C. 577, 581; ST. LOUIS, SOUTHWESTERN RAILWAY COMPANY V. MAYS, 177 F.SUPP. 182, 183), AND IS PART AND PARCEL OF THE TRANSPORTATION CHARGES. DAVIS V. TIMMONSVILLE OIL COMPANY, 285 F. 470, 472; PROCTOR AND GAMBLE COMPANY V. UNITED STATES, 281 F. 1014, 1015; NORTON V. SHOTMEYER, 72 F.SUPP. 188, 191; INDIANA HARBOR BELT RAILROAD CO. V. JACOB STERN AND SONS, 37 F.SUPP. 690, 692. THUS, THE DEMURRAGE CHARGES CLAIMED ARE INCLUDED SPECIFICALLY IN THE CHARGE AGREED UPON IN THE CONTRACT AS INCLUDING "ALL TRANSPORTATION COSTS.' HOWEVER, APPARENTLY THROUGH AN EXCESS OF CAUTION OR FROM THE DESIRE TO AVOID ANY MISUNDERSTANDING, THE CONTRACTING PARTIES FOLLOWED THE PROVISION THAT THE CHARGE AGREED UPON SHOULD "INCLUDE ALL TRANSPORTATION COSTS" WITH THE PHRASE "AND NO CLAIM SHALL BE ALLOWED FOR DEMURRAGE OR OTHER EXPENSES EXCEPT AS PROVIDED HEREIN.' IT WILL BE NOTED THAT EXPENSES ARE PROVIDED THEREIN FOR EXTRA LABOR AND FOR HEAVY LIFT EQUIPMENT, BUT THERE IS NO PROVISION THEREIN FOR DEMURRAGE. THUS, THE CONCLUSION IS INESCAPABLE THAT THE DEMURRAGE CHARGES CLAIMED BY YOU ARE AN INTEGRAL PART OF AND COVERED BY THE AGREED TRANSPORTATION RATES SET OUT IN THE CONTRACT AND THAT NOTHING IN EXCESS OF THE CONTRACT TRANSPORTATION RATES IS PAYABLE FOR DEMURRAGE.

WE FIND NOTHING IN PARAGRAPH 2 OF THE GENERAL PROVISIONS OF THIS CONTRACT WHICH WOULD PERMIT THE CONTRACTING OFFICER--- EVEN IF HE SO DESIRED--- TO AMEND OR CHANGE, EITHER ORALLY OR IN WRITING, THE AGREED UPON TRANSPORTATION COST SO AS TO ELIMINATE ITS DEMURRAGE COVERAGE AND REQUIRE THE PAYMENT OF ADDITIONAL CHARGES FOR ANY ACCRUED DEMURRAGE. ACCORDINGLY, THE DISALLOWANCE OF THESE CLAIMS IS SUSTAINED.