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MOYLAN AND COMPANY: REFERENCE IS MADE TO YOUR LETTERS OF JUNE 17. MCDONOUGH WAS ADVISED THAT THE CLAIM WOULD BE ALLOWED ON A QUANTUM MERUIT BASIS. WHICHEVER IS GREATER. YOU HAVE REQUESTED RECONSIDERATION OF THAT DETERMINATION AND HAVE SUBMITTED SUPPLEMENTAL MATERIAL IN SUPPORT OF YOUR CONTENTION THAT. IF THE CLAIM IS TO BE ALLOWED ON A QUANTUM MERUIT BASIS. WHICH IS THE BASIS OF YOUR ORIGINAL CLAIM. YOUR BID IS SET OUT IN ONE OF YOUR LETTERS AS FOLLOWS: "A. IS COMPUTED BY YOU TO BE $7. THERE IS NOT PERCEIVED ANY SOUND BASIS FOR ALLOWANCE OF ANY GREATER COMPENSATION FOR THE SERVICES IN QUESTION THAN THAT PAID TO YOU UNDER THE EXPIRED CONTRACT FOR SIMILAR SERVICES. ALTHOUGH IT IS TRUE THAT WHEN IT WAS DECIDED IN 1951 NOT TO ENTER INTO A NEW CONTRACT IT WAS UNDERSTOOD BY YOU.

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B-121660, JUL. 20, 1955

TO JOHN J. MOYLAN AND COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 17, 1955, AND ENCLOSURES, REQUESTING RECONSIDERATION OF YOUR CLAIM IN THE AMOUNT OF $8,305.24 FOR FREIGHT FORWARDING SERVICES ALLEGEDLY RENDERED TO THE GENERAL SERVICES ADMINISTRATION DURING THE PERIOD FROM JULY 1951 TO AUGUST 1953, AFTER THE EXPIRATION OF CONTRACT NO. EC-TS-791, DATED JUNE 20, 1950, COVERING SIMILAR SERVICES THERETOFORE RENDERED. THERE HAS BEEN RECEIVED ALSO A LETTER DATED JUNE 27, 1955, FROM HONORABLE GORDON L. MCDONOUGH RELATIVE TO THE MATTER.

BY LETTER DATED MARCH 31, 1955, MR. MCDONOUGH WAS ADVISED THAT THE CLAIM WOULD BE ALLOWED ON A QUANTUM MERUIT BASIS, USING THE SAME RATES AS THOSE SPECIFIED IN THE EXPIRED CONTRACT, NAMELY, $7.50 MINIMUM CHARGE PER SHIPMENT OR $00.06 1/2 PER REVENUE TON, WHICHEVER IS GREATER. YOU HAVE REQUESTED RECONSIDERATION OF THAT DETERMINATION AND HAVE SUBMITTED SUPPLEMENTAL MATERIAL IN SUPPORT OF YOUR CONTENTION THAT, IF THE CLAIM IS TO BE ALLOWED ON A QUANTUM MERUIT BASIS, THE AMOUNT ALLOWED SHOULD BE 1 1/2 PERCENT OF THE OCEAN FREIGHT CHARGES, WHICH IS THE BASIS OF YOUR ORIGINAL CLAIM; OR, IN THE ALTERNATIVE, THAT THE AMOUNT ALLOWED BE BASED ON A BID SUBMITTED BY YOU IN RESPONSE TO AN INVITATION FOR BIDS DATED FEBRUARY 11, 1952, ALTHOUGH NO CONTRACT RESULTED. YOUR BID IS SET OUT IN ONE OF YOUR LETTERS AS FOLLOWS:

"A. BID PRICE PER REVENUE TON ON GENERAL CARGO--- $0.175 PER REVENUE TON.

"B. BID PRICE, MINIMUM CHARGE PER SHIPMENT--- $15 PER SHIPMENT.

"C. BID PRICE, BULK CARGO, 1000 SHORT TONS OR MORE--- 1 1/2 PERCENT OF OCEAN FREIGHT CHARGE.'

THE AMOUNT DUE ON YOUR CLAIM, IF ALLOWED ON THE BASIS OF YOUR BID, IS COMPUTED BY YOU TO BE $7,027.32.

UPON CAREFUL RECONSIDERATION OF THE ENTIRE MATTER, THERE IS NOT PERCEIVED ANY SOUND BASIS FOR ALLOWANCE OF ANY GREATER COMPENSATION FOR THE SERVICES IN QUESTION THAN THAT PAID TO YOU UNDER THE EXPIRED CONTRACT FOR SIMILAR SERVICES. ALTHOUGH IT IS TRUE THAT WHEN IT WAS DECIDED IN 1951 NOT TO ENTER INTO A NEW CONTRACT IT WAS UNDERSTOOD BY YOU, AS WELL AS BY THE GENERAL SERVICES ADMINISTRATION, THAT YOU WOULD BE COMPENSATED FOR FURTHER SERVICES THROUGH THE PAYMENT OF BROKERAGE TO YOU BY THE SHIP LINES, THAT FACT CANNOT FURNISH A PROPER BASIS FOR CONSIDERING THE GOVERNMENT OBLIGATED TO PAY YOU THE SAME AMOUNT, SINCE CLEARLY IT WAS NOT AT THE TIME WITHIN THE CONTEMPLATION OF EITHER PARTY THAT THE GOVERNMENT WOULD PAY ANYTHING. NOR DO WE BELIEVE THAT THE AMOUNT YOU WOULD HAVE RECEIVED AS BROKERAGE, HAD THE NECESSARY CONDITIONS BEEN MET, IS THE PROPER MEASURE OF THE VALUE OF THE SERVICES RENDERED BY YOU TO THE GOVERNMENT. BROKERAGE WAS PAID BY THE SHIP LINES INVOLVED, IN ACCORDANCE WITH THE TARIFFS OF THE PACIFIC WESTBOUND CONFERENCE, ONLY TO A FREIGHT FORWARDER DESIGNATED BY THE SHIPPER AND AUTHORIZED TO BOOK THE CARGO--- IN OTHER WORDS, TO SELECT THE SHIP LINE. IT THUS APPEARS THAT THE FUNDAMENTAL BASIS FOR THE PAYMENT OF BROKERAGE IS THE POWER OF THE FORWARDER TO PLACE THE BUSINESS; AND THE REASON YOU DID NOT RECEIVE BROKERAGE ON THE GSA SHIPMENTS DURING THE PERIOD IN QUESTION WAS THAT YOU WERE NOT GIVEN THAT POWER, WHICH THE GSA CHOSE TO RESERVE TO ITSELF. HAD THAT AGENCY BEEN OBLIGATED TO CONFER SUCH POWER UPON YOU, THE AMOUNT OF BROKERAGE MIGHT BE A PROPER MEASURE OF YOUR DAMAGES FOR BREACH OF ITS OBLIGATION, BUT NO SUCH OBLIGATION EXISTED, AND THE GOVERNMENT'S LIABILITY TO YOU MUST BE LIMITED BY THE VALUE TO THE GOVERNMENT OF THE BENEFITS RECEIVED BY IT FROM YOUR SERVICES. FOR THIS WE FIND NO BETTER MEASURE THAN THE RATES FIXED BY YOUR ACTUAL CONTRACT FOR THE YEAR IMMEDIATELY PRECEDING THE PERIOD INVOLVED IN YOUR CLAIM. THE PRICES OFFERED BY YOU IN 1952, NOT HAVING BEEN ACCEPTED BY THE GOVERNMENT, CANNOT PROPERLY BE CONSIDERED AS FIXING THE VALUE TO THE GOVERNMENT, PARTICULARLY IN VIEW OF THE FACT THAT IN THE NEXT YEAR THE GOVERNMENT OBTAINED A CONTRACT FOR THE SAME SERVICES FROM ANOTHER FORWARDER AT RATES EVEN LOWER THAN THOSE UNDER YOUR PRIOR CONTRACT.

THEREFORE, THE CONCLUSION STATED IN OUR LETTER OF MARCH 31, 1955,TO MR. MCDONOUGH, IS AFFIRMED AND INSTRUCTIONS ARE BEING ISSUED TO MAKE SETTLEMENT ACCORDINGLY.

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