B-58690, B-89349, AUG. 2, 1955

B-58690, B-89349, AUG. 2, 1955

TO REPUBLIC LUMBER COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 12, 1954, WITH ENCLOSURE, REQUESTING REVIEW OF SETTLEMENT DATED APRIL 12, 1949, WHEREIN THE AMOUNT OF $27,820.58, OTHERWISE DUE YOU FOR LUMBER FURNISHED UNDER TREASURY DEPARTMENT CONTRACTS NOS. DA-TPS-16891, DA TPS-29313 AND DA-TPS-30779, WAS WITHHELD AND APPLIED IN PARTIAL LIQUIDATION OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $39,293.03 ARISING OUT OF THE FOREGOING AND CERTAIN OTHER TREASURY DEPARTMENT CONTRACTS AND THE BALANCE OF $8,809.69 OF YOUR TOTAL CLAIM OF $36,630.27 WAS DISALLOWED FOR THE REASONS SET FORTH IN THE SETTLEMENT.

THE RECORDS SHOW THAT UNDER DATE OF FEBRUARY 25, 1946, THE PROCUREMENT DIVISION, TREASURY DEPARTMENT, TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE FOR DIRECT SETTLEMENT THREE VOUCHERS SUBMITTED BY YOU FOR $6,838.86, $6,260.49 AND $23,530.92, OR IN THE TOTAL AMOUNT OF $36,630.27, WHICH REPRESENTED THE AMOUNT REPORTED TO BE DUE FOR LUMBER FURNISHED UNDER TREASURY DEPARTMENT CONTRACTS NOS. DA-TPS-16891, DA-TPS 29313 AND DA-TPS- 30779. IN THE SETTLEMENT THE AMOUNT OF $8,809.69 WAS DISALLOWED OR SUSPENDED FOR THE REASONS SET FORTH IN DETAIL THEREIN, NAMELY, THAT CERTAIN AMOUNTS WERE INVOICED AT PRICES WHICH WERE IN EXCESS OF MAXIMUM OPA PRICES APPLICABLE FOR THE LUMBER FURNISHED; INVOICES WERE PAID LESS THE COST OF NATIONAL HARDWOOD LUMBER ASSOCIATION CERTIFICATE; SHORTAGES IN MEASUREMENT OR IN SHIPMENT OF LUMBER; AND STILL OTHER AMOUNTS SUSPENDED PENDING RECEIPT OF THE CERTIFICATES OF INSPECTION OF THE NATIONAL HARDWOOD LUMBER ASSOCIATION. THE BALANCE OF $27,820.58 OF THE TOTAL AMOUNT CLAIMED BY YOU WAS ALLOWED BY THE SETTLEMENT BUT APPLIED AGAINST THE INDEBTEDNESS OF $39,293.03, ABOVE REFERRED-TO, WHICH RESULTED FROM OVERPAYMENTS MADE TO YOU ON INVOICES SUBMITTED IN EXCESS OF MAXIMUM OPA PRICES AND TO SHORTAGES, OFF GRADE OR DOTY LUMBER FURNISHED UNDER THE FOREGOING THREE CONTRACTS AND THE FIVE OTHER TREASURY DEPARTMENT CONTRACTS CITED IN THE SETTLEMENT.

WHILE MANY CONTENTIONS ARE ADVANCED IN SUPPORT OF YOUR REQUEST FOR REVIEW IT APPEARS THAT THE REQUEST IS BASED PRIMARILY ON THE ALLEGATIONS SET FORTH IN THE SECOND PARAGRAPH OF YOUR LETTER WHICH STATES, IN PART, AS FOLLOWS:

"* * * THESE DEDUCTIONS WERE BASED ON AMENDMENTS TO THE CONTRACT, WHICH IN FACT WERE NOT AMENDMENTS AS THEY WERE NOT SIGNED OR AGREED TO. THESE AMENDMENTS WERE BASED ON OPA PRICES FOR DOMESTIC LUMBER IN THE NORTHEASTERN REGION WHEREAS MANY OF THE SHIPMENTS ORIGINATED IN THE APPALACHIAN REGION WHICH COMMANDED A HIGHER UNIT PRICE AND THE POINT OF ORIGIN ACCORDING TO OPA CONTROLLED THE PRICING OF THE LUMBER. FUTHERMORE THE AMENDMENTS WERE BASE PRICES ONLY AND NO ALLOWANCE WAS MADE FOR MARK- UPS WHICH OPA ALLOWS FOR THE SPECIAL WIDTHS AND LENGTHS AND FOR STRAIGHT CARS OF ONE GRADE, ETC. EACH OF THESE MARK UPS SHOULD HAVE BEEN ADDED TO THE UNIT PRICE FOR THE REGION FROM WHICH THE SHIPMENT ORIGINATED.'

ALSO, MR. A. J. ROST CONFERRED WITH A REPRESENTATIVE OF THIS OFFICE IN APRIL OF THIS YEAR AT WHICH TIME HE REITERATED THE BASIC ALLEGATIONS SET FORTH IN YOUR LETTER OF OCTOBER 12, 1954, AND STATED, IN EFFECT, THAT HE DID NOT FEEL THAT THE OPA REGULATIONS WERE FOR APPLICATION IN THE FIRST INSTANCE, BUT THAT IN THE EVENT THE REGULATIONS DID PROPERLY GOVERN THE PRICES UNDER THE SUBJECT CONTRACTS, THEY WERE INCORRECTLY APPLIED.

A FURTHER EXAMINATION OF THE MATTER REVEALS THAT AT THE TIME OF CONSIDERATION OF YOUR CLAIM FOR $36,630.27 A COMPLETE AND THOROUGH DETAILED AUDIT WAS MADE BY BOTH THE AUDIT DIVISION AND THE CLAIMS DIVISION OF THIS OFFICE. AT THAT TIME THERE WERE CONSIDERED, IN ADDITION TO CONTRACTS NOS. DA-TPS-16891, DA-TPS-29313 AND DA-TPS 30779, UNDER WHICH THE VOUCHERS WERE SUBMITTED, THE FIVE OTHER TREASURY DEPARTMENT CONTRACTS CITED IN THE SETTLEMENT. THE EXAMINATION REVEALS FURTHER THAT APPARENTLY FULL RECOGNITION WAS GIVEN TO ALL REGULATIONS, PRICE CONTROL ORDERS AND SUCH OTHER PERTINENT FACTORS NECESSARY IN DETERMINING THE PROPER DISPOSITION TO BE MADE OF THE AMOUNT CLAIMED INCLUDING, BUT NOT RESTRICTED TO, APPLICABLE MAXIMUM OPA PRICE REGULATIONS, CONTRACT AMENDMENTS, REGIONAL SHIPMENT ORIGINS, INSPECTION CERTIFICATE COSTS, SHORTAGES, OFF GRADE, AND DOTY LUMBER FURNISHED, ETC. IN VIEW OF THE FOREGOING, IT MUST BE CONCLUDED THAT THE AMOUNTS SET FORTH IN THE SETTLEMENT OF APRIL 12, 1949, WERE PROPERLY COMPUTED--- PARTICULARLY WITH RESPECT TO THE APPLICABLE MAXIMUM CEILING PRICES ESTABLISHED BY THE OFFICE OF PRICE ADMINISTRATION FOR THE LUMBER INVOLVED. SINCE THE PREVAILING MAXIMUM PRICES ESTABLISHED FOR THESE ITEMS HAD THE FULL FORCE AND EFFECT OF LAW, THERE EXISTS NO AUTHORITY, EITHER IN THIS OFFICE OR IN ANY OTHER ESTABLISHMENT OF THE GOVERNMENT, TO AUTHORIZE PAYMENT IN EXCESS THEREOF.

WHILE YOU HAVE RAISED MANY QUESTIONS WITH RESPECT TO THE BASIS UPON WHICH THE SETTLEMENT WAS MADE, PRIMARILY WITH REGARD TO THE ALLEGED INAPPLICABLE OPA MAXIMUM PRICES, YOU HAVE NOT FURNISHED ANY EVIDENCE TO PROVE WHEREIN THE COMPUTATIONS WERE WRONG OR WERE IMPROPERLY APPLIED. THE GENERAL AND INDEFINITE NATURE OF YOUR REQUEST FOR REVIEW MAY NOT BE ACCEPTED AS ANYTHING MORE THAN "DRAGNET" CLAIM, AND THE ACCOUNTING OFFICERS, PRESENT AND PAST, UNIFORMLY HAVE REFUSED TO AUTHORIZE FURTHER "AUDIT" ON THE BASIS OF SUCH GENERALITIES. 6 COMP. DEC. 692, DATED FEBRUARY 27, 1900.

WHILE THE PRESENT FACTS AND CIRCUMSTANCES DO NO WARRANT A FURTHER AUDIT OF THE MATTER, YOU ARE ADVISED THAT A CURSORY EXAMINATION OF THAT PART OF THE RECORD PERTAINING TO THE APPLICABLE MAXIMUM OPA PRICES REVEALS THAT MAXIMUM PRICES FOR CERTAIN TYPES OF LUMBER UNDER THE SUBJECT CONTRACTS WERE, AT LEAST IN MANY INSTANCES, HIGHER FOR LUMBER SHIPPED FROM THE NORTHEASTERN REGION THAN THOSE PRICES APPLICABLE FOR THE APPALACHIAN REGION--- A FACT WHICH IS IN DIRECT CONTRADICTION WITH WHAT APPEARS TO BE YOUR PRIME CONTENTION IN THE MATTER.

IT ALSO MIGHT BE FURTHER POINTED OUT THAT, WHILE YOU CONTEST THAT PART OF THE SETTLEMENT WHICH EITHER DISALLOWED OR SUSPENDED CERTAIN AMOUNTS REPRESENTING INSPECTION COSTS FOR THE LUMBER FURNISHED BECAUSE THE INVOICES WERE NOT SUPPORTED BY CERTIFICATES OF INSPECTION OF THE NATIONAL HARDWOOD LUMBER ASSOCIATION, YOU HAVE NOT FURNISHED ANY OF THE CERTIFICATES OR CERTIFIED COPIES THEREOF, EVEN THOUGH YOU ALLEGE THAT CERTIFICATES WERE FURNISHED IN SOME INSTANCES OR THAT THEY ARE AVAILABLE, BUT NO DEMAND THEREFORE HAS EVER BEEN MADE.

ACCORDINGLY, AND IN THE ABSENCE OF THE SUBMISSION BY YOU OF DEFINITE EVIDENCE WHICH MAY BE READILY IDENTIFIED BY REFERENCE TO INVOICE NUMBERS, OR OTHERWISE, AND WHICH WILL CLEARLY SHOW THE USE, IN THE AUDIT BY THIS OFFICE, OF INAPPLICABLE OPA CEILING PRICES, OR THAT THERE WERE NOT PROPERLY CONSIDERED CONTRACT AMENDMENTS, DEDUCTIONS FOR SHORTAGES, OFF GRADE AND DOTY LUMBER, ETC., THE SETTLEMENT OF APRIL 12, 1949, MUST BE SUSTAINED.