B-174643, DEC 28, 1971

B-174643, DEC 28, 1971

CONTRACTS - STORAGE - DISPUTE AS TO SPACE DECISION SUSTAINING PREVIOUS SETTLEMENT WITH NORTHLAND INDUSTRIES, INC. IN CONNECTION WITH A CONTRACT FOR THE UNLOADING AND STORAGE OF RADAR EQUIPMENT ON GOVERNMENT BILLS OF LADING ISSUED BY THE TRANSPORTATION BRANCH, WRIGHT-PATTERSON AFB. THE CONTROVERSY AS TO THE AMOUNT OF SETTLEMENT AROSE CONCERNING THE COMPUTATION OF SQUARE FEET OF STORAGE SPACE. SINCE THE PROTESTANT HAS NOT SUPPLIED SUFFICIENT EVIDENCE TO SUPPORT ITS CLAIM AND THE ESTIMATE BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT WAS REASONABLE, THE PREVIOUS SETTLEMENT IS SUSTAINED.

TO NORTHLAND INDUSTRIES, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 18, 1971, REQUESTING REVIEW OF OUR SETTLEMENT DATED SEPTEMBER 16, 1971, WHEREIN $1,939 WAS ALLOWED AND $10,956 WAS DISALLOWED WITH RESPECT TO YOUR CLAIM FOR $12,895 WHICH AROSE IN CONNECTION WITH THE UNLOADING AND STORAGE OF CERTAIN GOVERNMENT-OWNED RADAR EQUIPMENT ERRONEOUSLY SHIPPED DURING THE MONTH OF MARCH 1970 FROM THE BELLEFONTAINE AIR FORCE STATION, OHIO, TO YOUR COMPANY, ON GOVERNMENT BILLS OF LADING ISSUED BY THE TRANSPORTATION BRANCH, WRIGHT-PATTERSON AIR FORCE BASE, OHIO.

BY PURCHASE ORDER OF FEBRUARY 25, 1971, YOU WERE AUTHORIZED TO LOAD THE RADAR EQUIPMENT ON TRUCKS FOR OUTSHIPMENT AND IT APPEARS THAT YOU HAVE BEEN PAID FOR THE LOADING SERVICE. HOWEVER, YOU SUBMITTED A SEPARATE INVOICE IN THE AMOUNT OF $12,895, COVERING UNLOADING CHARGES OF $595, A CHARGE OF $10,800 FOR STORAGE OF THE EQUIPMENT FROM MARCH 5, 1970, TO MARCH 5, 1971, AND AN ITEM OF $1,500 WHICH APPEARS TO HAVE BEEN BASED UPON A CONTENTION THAT EXTRA COSTS AND EXPENSES WERE INCURRED AS THE RESULT OF THE DELAY OF THE GOVERNMENT IN AUTHORIZING THE LOADING OF THE EQUIPMENT ON TRUCKS FOR OUTSHIPMENT.

THE DEPARTMENT OF THE AIR FORCE RECOMMENDED PAYMENT OF THE AMOUNT OF $1,939 ON YOUR CLAIM AND, AS ABOVE INDICATED, THAT AMOUNT WAS ALLOWED IN THE SETTLEMENT OF SEPTEMBER 16, 1971. THE UNLOADING CHARGES OF $595 AND $1,344 OF THE AMOUNT CHARGED FOR STORAGE WERE ALLOWED. THE ITEM OF $1,500 WAS DISALLOWED PRIMARILY FOR THE REASON THAT IT WAS NOT SUPPORTED BY EVIDENCE TO SHOW THAT EXTRA COSTS AND EXPENSES WERE INCURRED BY YOUR COMPANY AS THE RESULT OF THE GOVERNMENT'S DELAY IN AUTHORIZING THE REMOVAL OF THE EQUIPMENT FROM STORAGE.

IN REQUESTING REVIEW OF THE SETTLEMENT, YOU REFER IN PARTICULAR TO YOUR STORAGE CLAIM IN THE AMOUNT OF $10,800. THE CLAIM WAS BASED UPON THE USE OF AN ESTIMATED 6,000 SQUARE FEET OF SPACE AND THE APPLICATION OF A STORAGE RATE OF $0.15 PER SQUARE FOOT PER MONTH. THE AMOUNT OF $1,344 ALLOWED FOR STORAGE WAS BASED UPON THE USE OF AN ESTIMATED 1,120 SQUARE FEET OF SPACE AND THE APPLICATION OF A STORAGE RATE OF $0.10 PER SQUARE FOOT PER MONTH. THE RATE OF $0.10 WAS APPLIED ON THE BASIS OF A REPORT THAT YOU WERE BEING REIMBURSED FOR STORAGE OF MATERIAL IN THE SAME WAREHOUSE UNDER ANOTHER CONTRACT AT THE RATE OF $0.10 PER SQUARE FOOT PER MONTH.

YOU STATE THAT YOU KNOW HOW THE GOVERNMENT COMPUTED THE SQUARE FEET OF STORAGE AND WAREHOUSE AREA BUT THAT YOU KNEW THAT THIS METHOD COULD NOT POSSIBLY APPLY TO THIS SITUATION AS IT TOOK APPROXIMATELY 6,000 SQUARE FEET TO SPREAD THE SHIPMENT OUT AS WAS REQUESTED.

WITH RESPECT TO THE DIFFERENCE BETWEEN THE ESTIMATES FOR THE STORAGE AREA INVOLVED, IT WAS REPORTED BY THE CONTRACT ADMINISTRATION DIVISION, DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT, MILWAUKEE, THAT, WHEN THE STORED MATERIAL WAS REMOVED FROM YOUR PREMISES AND TRANSPORTED TO THE DISPOSAL SITE, 1,120 SQUARE FEET OF TRUCK FLOOR AREA WERE REQUIRED IN LIEU OF 6,000 SQUARE FEET SHOWN ON YOUR INVOICE. SUBSEQUENTLY, THE DIVISION REPORTED THAT, IN A DISCUSSION WITH PERSONNEL INVOLVED WITH THE REMOVAL OF THE MATERIAL FROM YOUR PREMISES, IT WAS LEARNED THAT THE MATERIAL WAS NOT STORED IN ONE SPECIFIC LOCATION SO THAT IT WAS IMPOSSIBLE TO MEASURE WITH ANY DEGREE OF ACCURACY THE AMOUNT OF FLOOR SPACE ACTUALLY UTILIZED.

THE DIVISION DETERMINED THAT THE TRUCK FLOOR AREA REQUIRED TO TRANSPORT THE MATERIAL FROM THE SITE, WHICH COULD BE ESTABLISHED BY VERIFIABLE EVIDENCE, REPRESENTED THE MOST REASONABLE APPROACH TO CALCULATING THE SQUARE FOOT AREA THE MATERIAL WOULD HAVE OCCUPIED IF IT HAD BEEN LOCATED TOGETHER IN YOUR PLANT. IT WAS FURTHER DETERMINED THAT THE METHOD OF STACKING THE MATERIAL ON THE TRUCK DID NOT DEVIATE SIGNIFICANTLY FROM THE ARRANGEMENT UTILIZED BY YOUR COMPANY SO THAT THERE COULD BE NO QUESTION CONCERNING A CHANGE IN CONDITIONS WHICH WOULD TEND TO SHOW THAT THE ESTIMATE OF 1,120 SQUARE FEET WAS UNREALISTIC.

IT APPEARS FROM THE FOREGOING THAT IT WAS IMPOSSIBLE TO VERIFY YOUR ESTIMATE OF 6,000 SQUARE FEET OF SPACE AS HAVING BEEN USED IN STORING THE GOVERNMENT-OWNED RADAR EQUIPMENT, AND THAT THE ESTIMATE AS MADE BY THE CONTRACT ADMINISTRATION DIVISION, DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT, MILWAUKEE, WAS REASONABLE IN THE PARTICULAR CIRCUMSTANCES. ACCORDINGLY, AND SINCE NO EVIDENCE HAS BEEN SUBMITTED BY YOUR COMPANY TO SHOW THAT EXTRA COSTS AND EXPENSES WERE INCURRED ON ACCOUNT OF THE DELAY IN AUTHORIZING REMOVAL OF THE EQUIPMENT FROM STORAGE, THE SETTLEMENT OF SEPTEMBER 16, 1971, IS SUSTAINED.