B-164062, SEP 16, 1969

B-164062, SEP 16, 1969

CONTRACTS - TIMBER SALES - PAYMENTS DECISION TO SECRETARY OF AGRICULTURE CONCERNING CLAIM OF IDAPINE- TENANTS -IN-COMMON FOR EXCESS CHARGES IF MILL FACILITY HAD NOT BEEN CONVERTED TO A ROLLWAY SCALING FACILITY. IN VIEW OF CONVERSION OF TIMBER MILL FACILITY FROM TRUCK RAMP TO ROLLWAY SCALING FACILITY AND RESULTING IN A SAVING TO THE GOVERNMENT. CLAIM BASED ON ESTIMATED OVERCHARGE THAT MIGHT HAVE BEEN ASSESSED AGAINST FIRM REGARDED AS ESTIMATED GOVERNMENT SAVINGS AND THEREFORE REIMBURSEMENT MAY BE MADE.

MR. SECRETARY:

THIS IS IN REFERENCE TO THE LETTER OF AUGUST 29, 1969, WITH ENCLOSURES, FROM THE ACTING DIRECTOR OF BUDGET AND FINANCE, FOREST SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE, REFERENCE: 6540, FURNISHING OUR OFFICE WITH A REPORT ON A CLAIM FOR $2,691.80 SUBMITTED BY COUNSEL FOR IDAPINE- TENANTS-IN-COMMON AS THE AMOUNT OF EXCESS CHARGES WHICH MIGHT HAVE BEEN ASSESSED AGAINST IDAPINE IF THEIR HARPSTER MILLSITE HAD NOT BEEN CONVERTED TO A ROLLWAY SCALING FACILITY, AND IF THE PRAIRIE AND INLAND MILLS DID NOT HAVE ROLLWAY SCALING. THE FACTUAL BACKGROUND FOR THIS CLAIM WAS SET FORTH IN OUR DECISION, B 164062, SEPTEMBER 11, 1968, IN WHICH WE CONSIDERED IDAPINE'S CLAIM FOR THE COSTS OF CONVERTING ITS HARPSTER MILLSITE FROM A TRUCK SCALING FACILITY TO A ROLLWAY SCALING FACILITY.

THE FOLLOWING MATTERS HAVE BEEN BROUGHT TO OUR ATTENTION IN THE AUGUST 29 REPORT SUBMITTED BY THE FOREST SERVICE:

"THE UNILATERAL CONTRACT CHANGE THAT CAUSED THE VARIOUS CLAIMS TO ARISE TOOK EFFECT OCTOBER 11, 1964, AND INVOLVED NINE CONTRACTS. LOGS FROM FOUR OF THESE CONTRACTS WERE SCHEDULED TO GO TO THE HARPSTER MILL. THE HARPSTER MILL WAS CONVERTED TO ROLLWAY SCALING IN DECEMBER 1964. THE FIRST LOGS FROM THE FOUR AFFECTED CONTRACTS WERE SCALED IN JANUARY 1965 AT THE HARPSTER MILL. LOGS FROM THREE OF THESE FOUR CONTRACTS WERE SCALED AT THE HARPSTER MILL SPORADICALLY FROM JANUARY 1965 THROUGH JULY 1965. THE MILL BURNED IN AUGUST 1965 AND WAS REOPENED IN DECEMBER 1965. LOGS FROM THESE FOUR CONTRACTS WERE NOT PRESENTED AGAIN FOR SCALING UNTIL FEBRUARY 1966. AFTER FEBRUARY, NO LOGS WERE PRESENTED FOR SCALING UNTIL AUGUST 1967.

"IN AUGUST 1967, THE HARPSTER MILL WAS SHUT DOWN AND IDAPINE MERGED OR BOUGHT OUT THE INLAND AND PRAIRIE MILL FACILITIES. ALL LOGS CUT UNDER THESE FOUR CONTRACTS WERE THEN DIVERTED FROM HARPSTER TO THESE TWO OTHER MILLS AT THE DISCRETION OF THE APPELLANT.

"IDAPINE'S PRESENT CLAIM IS BASED ON THE PREMISE THAT ALL OF THE LOG VOLUME SCHEDULED TO GO TO THE HARPSTER MILL SHOULD BE CONSIDERED IN DETERMINING THE (EXCESS) CHARGES THAT MIGHT HAVE BEEN ASSESSED THEM, REGARDLESS OF WHERE THE LOGS WERE ACTUALLY SCALED. OUR FIELD UNIT HAS ARRIVED AT AN ESTIMATED AMOUNT OF THE (EXCESS) CHARGES WHICH MIGHT HAVE BEEN ASSESSED IDAPINE FOR THE LOG VOLUME SCALED AT THE HARPSTER MILL AND FOR THE LOG VOLUME SCALED AT THE OTHER MILLS."

WITH RESPECT TO THE MONETARY AMOUNTS OF THE ESTIMATED EXCESS CHARGES AT THE HARPSTER, PRAIRIE, AND INLAND FACILITIES, THE FOREST SERVICE REPORT STATES AS FOLLOWS:

"HARPSTER MILL

"IT IS ESTIMATED THAT FOR THE LOG VOLUME TRUCKSCALED UNDER THE RULES IN EFFECT BEFORE OCTOBER 11, 1964, IDAPINE WOULD HAVE BEEN ASSESSED $385.32 IN CHARGES FOR DEFICIT SCALING AND OVERTIME. UNDER THE UNILATERAL CONTRACT CHANGE, IDAPINE WOULD HAVE BEEN ASSESSED $1,554.41 FOR DEFICIT SCALING AND OVERTIME. THE DIFFERENCE OF $1,169.09 IS THE ESTIMATED OVERCHARGE WHICH MIGHT HAVE BEEN ASSESSED IDAPINE FOR LOGS TRUCK-SCALED AT THE HARPSTER MILLSITE.

"PRAIRIE AND INLAND MILLSITES

"UPON MERGER OF THE PRAIRIE AND INLAND MILLS WITH IDAPINE IN AUGUST 1967, THE LOG VOLUME SCHEDULED TO GO TO HARPSTER WAS DIVERTED TO THESE MILLS. USING THE TRUCK-SCALING METHODS IN EXISTENCE, PRIOR TO THE OCTOBER 11, 1964, UNILATERAL CONTRACT CHANGE, IT IS ESTIMATED THAT IDAPINE WOULD HAVE BEEN ASSESSED $1,164.93 FOR OVERTIME AND DEFICIT SCALING. USING THE TRUCK -SCALING METHODS IN EFFECT AFTER OCTOBER 11, 1964, IT IS ESTIMATED THAT THE EXCESS CHARGES FOR OVERTIME AND DEFICIT SCALING WOULD HAVE BEEN $3,156.28. THE DIFFERENCE OF $1,991.35 IS THE ESTIMATED OVERCHARGE WHICH MIGHT HAVE BEEN ASSESSED IDAPINE FOR LOGS TRUCK-SCALED AT THESE TWO OTHER MILLS.

"THE PRESENT CLAIM FOR THE ESTIMATED (OVER) CHARGE THAT MIGHT HAVE BEEN ASSESSED IDAPINE IS:

IDAPINE'S F.S.

CLAIM CALCULATION DIFFERENCE

"AT THE HARPSTER MILL:

USING SCALING METHOD IN EFFECT AFTER OCTOBER 11, 1964 $1,529.65 $1,554.41

USING SCALING METHOD IN EFFECT PRIOR TO OCTOBER 11, 1964 $ 341.05 $ 385.32

$1,188.60 $1,169.09 $19.51

"AT THE INLAND AND PRAIRIE MILLS: USING SCALING METHOD IN EFFECT AFTER OCTOBER 11, 1964 $2,151.13 $3,156.28 USING SCALING METHOD IN EFFECT PRIOR TO OCTOBER 11, 1964 $ 647.93 $1,164.93

$1,503.20 $1,991.35 ($488.15)

"TOTAL AT ALL MILLS: USING SCALING METHOD IN EFFECT AFTER OCTOBER 11, 1964 $3,680.78 $4,710.69 USING SCALING METHOD IN EFFECT PRIOR TO OCTOBER 11, 1964 $ 988.98 $1,550.25

$2,691.80 $3,160.44 ($468.64)

"THE FOREST SERVICE'S ESTIMATED TRUCK-SCALING (OVER) CHARGES FOR ALL THE LOGS ORIGINALLY SCHEDULED TO GO TO THE HARPSTER MILLSITE IS $3,160.44. THE REASON FOR THE DIFFERENCE IS THAT IT APPEARS THAT IDAPINE DIDN'T INCREASE THE OVERTIME HOURS. THEY ALSO USED THE RATES FOR DEFICIT VOLUME THAT WERE SHOWN ON THEIR STATEMENTS FOR ROLLWAY SCALE (ONE SCALER) FOR TRUCK SCALING (TWO SCALERS), EVEN THOUGH THEY ARE NOT THE SAME.

"YOU WILL NOTICE IN THE ATTACHED MATERIAL THAT THE FOREST SERVICE AND IDAPINE AGREED THAT THE (OVER) CHARGES FOR DEFICIT SCALING AND OVERTIME AT THE HARPSTER MILL WOULD HAVE BEEN $1,354.25; HOWEVER, THIS WAS BEFORE MR. KNUTSON OF IDAPINE QUESTIONED SOME OF THE FOREST'S CALCULATIONS CONCERNING MINIMUM VOLUMES AND WAS PROVED CORRECT. OUR FIELD UNIT RECALCULATED THE ESTIMATED (OVER) CHARGE THAT MIGHT HAVE BEEN CHARGED AT THE HARPSTER MILL TO $1,169.09."

A FOREST SERVICE MEMORANDUM DATED JULY 25, 1969, ENCLOSED WITH THE FILE, INDICATES THAT THE HARPSTER MILLSITE CONVERSION RESULTED IN SAVINGS TO THE GOVERNMENT SINCE ONLY ONE SCALER WAS REQUIRED AT THE ROLLWAY STATION COMPARED TO TWO FOR THE TRUCK RAMP. THE FOREST SERVICE'S MEMORANDUM ALSO POINTS OUT THAT IF IDAPINE HAD INCREASED OPERATIONS TO THE EXTENT THAT OVERTIME MIGHT BE REQUIRED, THERE WOULD BE A SAVINGS TO IDAPINE IF A ROLLWAY SCALING FACILITY WERE BEING USED, SINCE THE OVERTIME WOULD BE ASSESSED FOR ONE SCALER RATHER THAN TWO.

THE RECORD INDICATES THAT THE HARPSTER MILLSITE WAS SHUT DOWN IN AUGUST 1967 AND IN THE SAME MONTH THE PRAIRIE AND INLAND MILLS WERE ACQUIRED BY IDAPINE. THERE IS AT LEAST SOME CONNECTION BETWEEN THE GOVERNMENT'S ACTION IN PROPOSING THE CHANGED SCALING PROCEDURE AND IDAPINE'S DECISION TO CONVERT THE HARPSTER MILLSITE TO A ROLLWAY SCALING FACILITY AND THE RECORD INDICATES THAT AS A RESULT OF THIS CHANGE THERE WERE SOME SAVINGS TO THE GOVERNMENT. THE FOREST SERVICE'S COMPUTATION OF THE ESTIMATED OVERCHARGE OF $1,169.09 WHICH MIGHT HAVE BEEN ASSESSED IDAPINE FOR LOGS TRUCK-SCALED AT THE HARPSTER MILLSITE SEEMS TO BE AN ACCEPTABLE METHOD OF ESTIMATING THE GOVERNMENT'S SAVINGS RESULTING FROM THE HARPSTER MILLSITE SEEMS TO BE AN ACCEPTABLE METHOD OF ESTIMATING THE GOVERNMENT'S SAVINGS RESULTING FROM THE HARPSTER MILLSITE CONVERSION. ACCORDINGLY, AS INDICATED IN OUR DECISION, B 164062, SEPTEMBER 11, 1968, WE ARE DISPOSED TO ALLOW THE EXCESS CHARGES WHICH MIGHT HAVE BEEN ASSESSED AT THIS FACILITY IN THE AMOUNT OF $1,169.09.

THE INLAND AND PRAIRIE MILLS ALREADY HAD ROLLWAY FACILITIES AT THE TIME THEY WERE ACQUIRED BY IDAPINE. IN THOSE TWO MILLS NO CHANGE IN THE SCALING FACILITIES WAS ORDERED OR INDUCED RESULTING IN SAVINGS TO THE GOVERNMENT AS WAS THE CASE WITH THE HARPSTER FACILITY. CONSEQUENTLY, THE RATIONALE PERMITTING COMPENSATION TO IDAPINE FOR THE SAVINGS RESULTING FROM THE CONVERSION OF THE HARPSTER FACILITY WOULD NOT APPLY WITH RESPECT TO THE OTHER TWO MILLS.

FOR THE FOREGOING REASONS WE FIND THAT IDAPINE MAY BE PAID $1,169.09 IN FULL AND FINAL SETTLEMENT OF ITS CLAIM.