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MILITARY SEA TRANSPORTATION SERVICE - CHARTERS - RISKS ASSUMED BY CONTRACTOR - FAILURE TO FURNISH FIRM COMMITMENT DOCUMENTS A CONTRACTOR WHO COULD HAVE FORESEEN THAT A DELAYED OR UNFAVORABLE ADMINISTRATIVE DETERMINATION OF VESSEL COSTS FOR MORTGAGE AND LOAN INSURANCE WOULD AFFECT THE FINANCING PLANS. 1957: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 18. YOU STATE THAT YOU WERE READY. IT IS YOUR CONTENTION THAT SUCH DELAYED ACTION MADE IT IMPOSSIBLE FOR YOU TO COMPLY WITH THE PROVISIONS OF THE BOND AND. THE MILITARY SEA TRANSPORTATION SERVICE WAS NEITHER LEGALLY NOR EQUITABLY JUSTIFIED IN FORFEITING YOUR BOND. WAS CONDITIONED UPON THE FURNISHING BY YOUR CORPORATION WITHIN THIRTY DAYS.

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B-127512, MARCH 7, 1957, 36 COMP. GEN. 636

MILITARY SEA TRANSPORTATION SERVICE - CHARTERS - RISKS ASSUMED BY CONTRACTOR - FAILURE TO FURNISH FIRM COMMITMENT DOCUMENTS A CONTRACTOR WHO COULD HAVE FORESEEN THAT A DELAYED OR UNFAVORABLE ADMINISTRATIVE DETERMINATION OF VESSEL COSTS FOR MORTGAGE AND LOAN INSURANCE WOULD AFFECT THE FINANCING PLANS, INCIDENT TO A CONDITIONAL AWARD OF LONG-TERM CHARTER OF TWO TANKERS, MAY NOT BE EXCUSED FOR FAILURE TO SUBMIT FIRM COMMITMENT DOCUMENTS REQUIRED BY THE CASH BOND, AND FAILURE TO FURNISH THE DOCUMENTS JUSTIFIES FORFEITURE OF THE BOND.

TO THE NEW ENGLAND TANKER AND SHIPPING CORPORATION, MARCH 7, 1957:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 18, 1956, CLAIMING THE AMOUNT OF $25,000, WHICH HAD BEEN DEPOSITED BY YOUR CORPORATION IN CONNECTION WITH THE CONDITIONAL AWARD TO YOU BY THE MILITARY SEA TRANSPORTATION SERVICE OF THE LONG TERM CHARTER OF TWO TANKERS PURSUANT TO PUBLIC LAW 575, 83D CONGRESS (34 U.S.C. 498 (O/-/Q) ).

IN YOUR LETTER YOU STATE THAT YOU AT ALL TIMES COMPLIED WITH THE SPIRIT AS WELL AS THE LETTER OF THE BOND AND WITH THE REQUIREMENTS LAID DOWN BY THE MILITARY SEA TRANSPORTATION SERVICE, AND THAT THE FAULT, IF ANY, IN THE MATTER LIES WITH THE GOVERNMENT AND NOT WITH YOUR CORPORATION. FURTHERMORE, YOU STATE THAT YOU WERE READY, WILLING AND ABLE TO COMPLETE THE AWARD SUBJECT ONLY TO A DETERMINATION BY THE MARITIME ADMINISTRATION OF WHAT CONSTITUTED THE "ACTUAL COST" OF THE VESSEL FOR PURPOSES OF CONSTRUCTION LOAN AND MORTGAGE INSURANCE. BUT IN VIEW OF THE UNTIMELINESS ON THE PART OF THE MARITIME ADMINISTRATION IN MAKING SUCH A DETERMINATION, IT IS YOUR CONTENTION THAT SUCH DELAYED ACTION MADE IT IMPOSSIBLE FOR YOU TO COMPLY WITH THE PROVISIONS OF THE BOND AND, HENCE, THE MILITARY SEA TRANSPORTATION SERVICE WAS NEITHER LEGALLY NOR EQUITABLY JUSTIFIED IN FORFEITING YOUR BOND.

A BRIEF REVIEW OF THE RECORD AS PRESENTED TO THIS OFFICE INDICATES THAT THE AWARD OF JANUARY 31, 1956, FOR THE CHARTER OF TWO TANKERS TO BE CONSTRUCTED BY THE INGALLS SHIPBUILDING CORPORATION, WAS CONDITIONED UPON THE FURNISHING BY YOUR CORPORATION WITHIN THIRTY DAYS, OR FROM SUCH OTHER TIME AS MIGHT BE DETERMINED BY THE COMMANDER, MILITARY SEA TRANSPORTATION SERVICE, TO BE IN THE BEST INTEREST OF THE GOVERNMENT, OF FIRM EVIDENCE OF YOUR ABILITY TO FINANCE, CONSTRUCT AND OPERATE THE VESSELS. SUCH A BOND WAS REQUIRED BY PARAGRAPH 4 OF THE INVITATION FOR OFFERS IN THOSE INSTANCES IN WHICH THE OFFERS WERE SUPPORTED BY COMMITMENTS IN PRINCIPLE RATHER THAN FIRM COMMITMENTS. THE PERTINENT PROVISIONS OF THE AFOREMENTIONED BOND, DATED JANUARY 3, 1956, READ AS FOLLOWS:

4--- WHEREAS, ALSO, THE CONTRACTOR HAS DELIVERED TO THE GOVERNMENT, OR WILL DELIVER TO THE GOVERNMENT WITHIN TWO (2) WORKING DAYS FROM THE DATE HEREOF THE SUM OF TWENTY-FIVE THOUSAND ($25,000.00) DOLLARS AS A CASH BOND TO ASSURE THE GOVERNMENT THAT ITS SAID REPRESENTATIONS ARE FIRM, OR, IF IN PRINCIPLE, THAT THEY CAN BE REDUCED TO FIRM COMMITMENTS WITHOUT UNDUE DELAY AND THAT IN THE EVENT IT SHOULD BE AWARDED A CONTRACT UNDER COMSTS LETTER SERIAL 2274M34 DATED 14 NOVEMBER 1955 THE CONTRACTOR CAN AND WILL PRODUCE DOCUMENTARY EVIDENCE OF SAID FIRMNESS WITHIN THIRTY (30) DAYS FROM THE GRANTING TO IT OF AN AWARD CONDITIONED UPON SUBMISSION OF SUCH PROOF, AND WILL THEREAFTER ACCEPT A FINAL AWARD IN ACCORDANCE WITH ITS SAID OFFER AND UNDERTAKE THE PERFORMANCE OF THE AWARD.

5--- NOW, THEREFORE, THE CONTRACTOR, ITS SUCCESSOR AND ASSIGNS ARE HELD AND FIRMLY BOUND UNTO THE GOVERNMENT IN THE PENAL SUM OF TWENTY FIVE THOUSAND ($25,000.00) DOLLARS.

6--- THE CONDITION OF THIS OBLIGATION IS SUCH, THAT SAID BOND SHALL BE FORFEITED TO THE GOVERNMENT IF THE CONTRACTOR SHALL FAIL TO FURNISH THE GOVERNMENT AS EVIDENCE OF ITS ABILITY TO PERFORM UNDER THE FINAL AWARD THE DOCUMENTS DESCRIBED IN (A), (B) AND (C) BELOW IN A FORM ACCEPTABLE TO THE GOVERNMENT, WITHIN THIRTY (3) DAYS FROM THE CONDITIONAL AWARD, OR FROM SUCH OTHER TIME AS SPECIFIED IN PARAGRAPH 7 BELOW:

(A) A STATEMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH OF THE INDIVIDUALS, CORPORATIONS OR FINANCIAL INSTITUTIONS NAMED IN PARAGRAPH 3 ABOVE, OR A SUBSTITUTE THEREFOR AGREEABLE TO THE GOVERNMENT, CONSTITUTING A FIRM COMMITMENT ON HIS OR ITS PART TO FURNISH FOR THE CONSTRUCTION OR OPERATION OF SAID TANKERS, EITHER AS A LOAN, CREDIT OR PURCHASE OF BONDS OR STOCK, THE AMOUNT OR AMOUNTS HERETOFORE SET OPPOSITE HIS OR ITS NAME;

(B) AN EXECUTED COPY OF A CONTRACT WITH EACH OF THE SHIPYARDS LISTED IN PARAGRAPH 3 ABOVE IN WHICH THE SHIPYARD AGREES TO CONSTRUCT AND DELIVER TO THE TRANSPORTATION SERVICE LETTER SERIAL 2274M34 DATED 14 NOVEMBER 1955 IN THE NUMBER SET OPPOSITE THE NAME OF THE SHIPYARD IN PARAGRAPH 3, SAID TANKERS TO BE DELIVERED TO THE CONTRACTOR WITHIN SUFFICIENT TIME TO PERMIT THEIR TENDER TO THE GOVERNMENT WITHIN TWO YEARS FROM THE DATE OF THE FINAL AWARD BY THE GOVERNMENT OF A CHARTER OR CHARTERS TO THE CONTRACTOR; THE SAID CONTRACT, OR A SUPPLEMENTARY AGREEMENT BETWEEN THE CONTRACTOR AND THE SHIPYARD, SHALL CLEARLY ESTABLISH THAT THE LATTER ACCEPTS THE FINANCING PROPOSED BY THE CONTRACTOR IN PAYMENT OF THE COST OF CONSTRUCTION OF THE TANKERS.

(C) A FIRM COMMITMENT IN WRITING BY THE MARITIME ADMINISTRATION TO GRANT TO THE CONTRACTOR MORTGAGE INSURANCE FOR 90 PERCENT OF 87 1/2 PERCENT OF THE CONSTRUCTION COSTS OF THE TANKERS COVERED BY THE CONDITIONAL AWARD, TOGETHER WITH APPROVAL IN WRITING BY THE MARITIME ADMINISTRATION OF THE CITIZENSHIP OF THE STOCKHOLDERS OF THE CONTRACTOR, THE CONTROL OF SUCH STOCK, AND THE OPERATING ORGANIZATION PROPOSED BY THE CONTRACTOR TO OPERATE THE TANKERS WHILE SAID TANKERS ARE TO BE UNDER TIME CHARTER TO THE GOVERNMENT.

ON FEBRUARY 27, 1956, YOU REQUESTED AN EXTENSION OF THIRTY DAYS FOR COMPLIANCE WITH THE CONDITIONAL AWARD, EXPLAINING THAT NEGOTIATIONS WERE PROCEEDING IN CONNECTION WITH THE FINALIZATION OF ARRANGEMENTS FOR CONSTRUCTING AND FINANCING THE VESSELS, AND ALSO ADVISING THAT YOU HOPED TO HAVE YOUR REVISED APPLICATION FOR MORTGAGE AND LOAN INSURANCE SUBMITTED TO THE MARITIME ADMINISTRATION BY MARCH 2, 1956. SUCH REQUEST WAS GRANTED BY LETTER DATED MARCH 2, 1956, AND YOUR AMENDED APPLICATION FOR MORTGAGE AND LOAN INSURANCE WAS SUBMITTED TO THE MARITIME ADMINISTRATION ON MARCH 21, 1956. ON MARCH 26, 1956, YOU REQUESTED A FURTHER EXTENSION TO AND INCLUDING MAY 15, 1956, AT WHICH TIME YOU ADVISED THAT YOUR AMENDED APPLICATION, SUBMITTED TO MARITIME ON MARCH 21, 1956, HAD BEEN COMPLETED AS TO THE CONSTRUCTION CONTRACT AND CONSTRUCTION LOAN FINANCING. YOU EXPLAINED FURTHER THAT AGREEMENT IN PRINCIPLE HAD BEEN REACHED REGARDING FIRST MORTGAGE FINANCING, BUT THAT IT COULD NOT BE FINALIZED UNTIL THE MARITIME ADMINISTRATION MADE A DECISION AS TO WHETHER FINANCING COSTS WERE SUBJECT TO INSURANCE. IT WAS CONCLUDED THAT DETERMINATION OF THIS QUESTION AND THE NECESSARY DOCUMENTATION FOR THE LOAN WOULD REQUIRE AT LEAST SIX WEEKS.

IN REPLY TO THIS REQUEST THE MILITARY SEA TRANSPORTATION SERVICE, BY MESSAGE DATED APRIL 2, 1956, EXTENDED THE PERIOD OF PERFORMANCE PENDING SUBMISSION OF A SIGNED STATEMENT WITH RESPECT TO ITS COMMITMENT OF EACH OF THE FIRMS INVOLVED IN THE FINANCING AND CONSTRUCTION OF THE VESSELS; AND THIS MESSAGE STATED THAT A DEFINITE EXTENSION OF TIME WOULD BE DETERMINED UPON RECEIPT OF SUCH STATEMENTS. VARIOUS DOCUMENTS WERE SUBMITTED IN REPLY TO THIS REQUEST, BUT THEY WERE NOT CONSIDERED BY THE MILITARY SEA TRANSPORTATION SERVICE AS BEING FIRM COMMITMENTS SINCE THEY WERE SUBJECT TO NUMEROUS CONDITIONS. FOR EXAMPLE, THE SUMMARY OF TERMS SUBMITTED BY THE FIRST NATIONAL CITY BANK OF NEW YORK WAS CONDITIONED, AMONG OTHER THINGS, UPON (1) SATISFACTORY DOCUMENTATION PROVING THAT MORTGAGE LOAN HAD BEEN COMPLETED; (2) A GUARANTEE FROM THE INGALLS SHIPBUILDING CORPORATION TO THE FIRST NATIONAL CITY BANK OF NEW YORK; (3) ASSIGNMENT TO THE FIRST NATIONAL CITY BANK OF THE INGALLS CONSTRUCTION CONTRACT AND THE MILITARY SEA TRANSPORTATION SERVICE CHARTER, AND (4) SATISFACTION OF THE FIRST NATIONAL CITY BANK AND ITS COUNSEL AS TO ALL AGREEMENTS AND DOCUMENTS.

IN VIEW OF THE ABOVE, THE MILITARY SEA TRANSPORTATION SERVICE, ON APRIL 9, 1956, REQUESTED ADDITIONAL INFORMATION AS TO THE STATUS OF THE CONTINGENCIES EXISTING IN THE SO-CALLED COMMITMENT DOCUMENTS, AND, PURSUANT THERETO, YOU SUBMITTED FURTHER DOCUMENTATION, INCLUDING A LETTER DATED APRIL 12, 1956, BUT THIS, LIKEWISE, WAS CONSIDERED FAR FROM BEING UNCONDITIONAL AS CONTEMPLATED BY SECTION 6 (A) OF THE BOND, AND ON APRIL 20, 1956, YOU WERE SO ADVISED. FURTHERMORE, YOU WERE INFORMED THAT THE DOCUMENTS FURNISHED THUS FAR DID NOT CONSTITUTE IRREVOCABLE COMMITMENTS FOR FINANCING, AND DID NOT ESTABLISH THAT THE ADDITIONAL TIME REQUIRED WAS ONLY FOR THE PURPOSE OF FINALIZING DOCUMENTS; AND IT WAS STATED THAT UNDER THESE CIRCUMSTANCES THE PERIOD OF PERFORMANCE COULD NOT BE EXTENDED WITHOUT FURTHER EVIDENCE AS TO THE FIRMNESS OF THE COMMITMENTS AND THE TIME REQUIRED TO FINALIZE THE DOCUMENTS--- AND IT ALSO WAS REQUESTED THAT SUCH ADDITIONAL EVIDENCE BE FURNISHED BY MAY 3, 1956. IN RESPONSE TO THIS REQUEST, YOU CONTENDED, IN EFFECT, THAT NO FIRM COMMITMENTS COULD BE MADE UNTIL THE MARITIME ADMINISTRATION HAD RENDERED ITS DECISION AS TO ACTUAL COST, THAT THE CONSTRUCTION CONTRACT AND LETTERS OF COMMITMENT FROM THE FINANCIAL INSTITUTIONS WERE SUFFICIENT EVIDENCE OF FIRM ARRANGEMENTS, AND THAT FINALIZATION OF THE TRANSACTIONS COULD ONLY BE ACCOMPLISHED SIMULTANEOUSLY AND AFTER CONSIDERABLE TIME AND EFFORT. NEVERTHELESS, PENDING THE DECISION OF ACTUAL COST YOU MADE NO FURTHER PROGRESS TOWARD SUBMITTING FIRM OR IRREVOCABLE COMMITMENTS.

NOTWITHSTANDING THE FOREGOING, YOU CONTEND THAT YOU COMPLIED WITH THE SPIRIT AS WELL AS THE LETTER OF THE BOND AND WITH THE REQUIREMENTS LAID DOWN BY THE MILITARY SEA TRANSPORTATION SERVICE; BUT THE FACT REMAINS THAT YOU DID NOT MEET THE TERMS OF THE BOND AND THE AWARD IN THE FOLLOWING PARTICULARS:

1. YOU HAD NO FIRM COMMITMENTS FROM THE FINANCIAL INSTITUTIONS AS REQUIRED BY PARAGRAPH 6 (A) OF THE BOND;

2. YOU DID NOT FURNISH EXECUTED CONTRACTS FROM THE SHIPYARD AS REQUIRED BY PARAGRAPH 6 (B) OF THE BOND, AND

3. YOU DID NOT FURNISH A FIRM COMMITMENT FROM THE MARITIME ADMINISTRATION OF THE MORTGAGE INSURANCE AS REQUIRED BY PARAGRAPH 6 (C) OF THE BOND.

WHILE THE DELAY BY THE MARITIME ADMINISTRATION IN DETERMINING WHETHER CERTAIN COSTS WERE INSURABLE MAY HAVE HAD AN ADVERSE EFFECT UPON YOUR NEGOTIATIONS AND PLANS, IT IS DOUBTFUL THAT SUCH DELAY WAS THE PRIMARY CAUSE OF YOUR FAILURE TO MEET YOUR OBLIGATIONS; AND IT SHOULD BE CONSIDERED THAT THE DELAY WAS FORESEEABLE AND ITS RISK ASSUMED BY YOUR CORPORATION. FURTHERMORE, UNDER THE CIRCUMSTANCES OF RECORD, IT APPEARS PROBABLE THAT AN EARLIER UNFAVORABLE DECISION LIKEWISE WOULD HAVE BEEN FATAL TO YOUR FINANCING PLANS. HENCE, WE ARE UNABLE TO CONCUR IN YOUR CONTENTION THAT AN EARLY FAVORABLE DECISION WAS REQUIRED, AND THAT YOU WERE EXCUSED BECAUSE SUCH A DECISION WAS NOT FORTHCOMING. MANIFESTLY, A DIFFERENT FINANCIAL ARRANGEMENT NOT REQUIRING MORTGAGE INSURANCE WOULD HAVE ELIMINATED THE DIFFICULTY, OR A FINANCIAL ARRANGEMENT NOT DEPENDENT UPON THE CONTROVERSIAL COSTS BEING INSURED WOULD HAVE PERMITTED PROMPT ACTION BY THE MARITIME ADMINISTRATION, PARTICULARLY SINCE IT APPEARS THAT THESE COSTS WERE RELATIVELY UNIMPORTANT IN THE OVERALL FINANCIAL PICTURE. IT ALSO APPEARS FROM THE RECORD THAT YOU WERE AWARE OF THE FACT THAT THE SPECIFIC QUESTION OF WHAT CONSTITUTES "ACTUAL COST" HAD BEEN RAISED IN 1955 AND HAD NOT YET BEEN DECIDED. IT OBVIOUSLY SHOULD HAVE BEEN EXPECTED THAT A DECISION ON THIS POINT MIGHT HAVE BEEN UNFAVORABLE OR, IF FAVORABLE, DELAYED. THEREFORE, IT CLEARLY WAS WITHIN YOUR POWER AND RESPONSIBILITY TO PLAN AGAINST AN UNFAVORABLE DECISION OR A DELAYED FAVORABLE OPINION. IN THIS CONNECTION, ATTENTION IS INVITED TO THE CASE OF DAY V. UNITED STATES, 245 U.S. 160, WHEREIN THE SUPREME COURT OF THE UNITED STATES, IN TREATING OF THIS PHRASE, STATED IN PERTINENT PART

AS FOLLOWS:

ONE WHO MAKES A CONTRACT NEVER CAN BE ABSOLUTELY CERTAIN THAT HE WILL BE ABLE TO PERFORM IT WHEN THE TIME COMES, AND THE VERY ESSENCE OF IT IS THAT HE TAKES THE RISK WITHIN THE LIMITS OF HIS UNDERTAKING. * * *

AND, FINALLY, IN A REPORT DATED NOVEMBER 14, 1956, THE ADMINISTRATIVE OFFICE STATED THE FOLLOWING:

NEW ENGLAND'S ARGUMENT RELATIVE TO THE DELAY SEEMS TO BE PREDICATED UPON THE IDEA THAT THE GRANTING OF ITS APPLICATION FOR MORTGAGE INSURANCE WAS A CONDITION OF PERFORMANCE ON THE PART OF THE GOVERNMENT. THIS IS ACTUALLY THE REVERSE OF THE TRUE SITUATION. OBTAINING MORTGAGE INSURANCE WAS AN IMPORTANT PART OF THE PERFORMANCE TO BE RENDERED BY NEW ENGLAND ITSELF, AND AS STATED IN THE CASH BOND A FAILURE TO OBTAIN SUCH INSURANCE AUTHORIZED THE GOVERNMENT TO FORFEIT THE BOND. THE SOLE PURPOSE OF REQUIRING THE BOND WAS TO PROTECT THE GOVERNMENT AGAINST A FAILURE TO CARRY OUT THE OBLIGATION TO COMPLETE THE FINANCING THAT HAD BEEN REPRESENTED AS ALREADY OBTAINED IN PRINCIPLE.

RETURNING TO YOUR NEGOTIATIONS WITH THE MARITIME ADMINISTRATION, YOU CONTEND IN YOUR LETTER OF FEBRUARY 6, 1957, THAT WHEN THE CASH BOND WAS FILED ON JANUARY 3, 1956, THERE WAS NO QUESTION THAT YOU COULD COMPLY WITH THE THREE CONDITIONS SET FORTH THEREIN; AND PARTICULARLY YOU HAD NO DOUBT THAT THE MARITIME ADMINISTRATION WOULD GRANT YOU THE MORTGAGE INSURANCE. HOWEVER, THE FACTS OF RECORD IN THIS OFFICE ARE NOT EASILY RECONCILABLE WITH SUCH CONTENTION.

THE RECORD INDICATES THAT ON DECEMBER 28, 1955, YOU SUBMITTED A LETTER "APPLICATION FOR FEDERAL SHIP MORTGAGE INSURANCE IN CONNECTION WITH THE VESSELS TO BE AWARDED UNDER THE MSTS TANKER OGRAM.' ON DECEMBER 30, 1955, YOU WERE ADVISED BY THE ADMINISTRATION THAT SUBJECT TO RECEIPT OF A FORMAL APPLICATION, YOUR LETTER APPLICATION WAS APPROVED IN PRINCIPLE SUBJECT TO FIVE (5) CONDITIONS. ON JANUARY 10, 1956, YOUR ATTORNEY WAS ADVISED THAT THE ADMINISTRATION WOULD NOT REVISE ITS NET WORTH REQUIREMENTS AS STATED IN ITS DECEMBER 21ST LETTER, AND ADDED THAT THE APPLICATION OF YOUR CORPORATION WOULD BE PROCESSED FURTHER UPON ACCEPTANCE OF THE CONDITIONS AS SET FORTH IN ITS LETTER. AGAIN, BY LETTER DATED FEBRUARY 8, 1956, YOU WERE ADVISED, AFTER REFERENCE TO PERSONAL CONFERENCES, THAT ANY DEPARTURE FROM THE AFOREMENTIONED CONDITIONS WOULD BE UNWARRANTED, AND YOU WERE URGED TO ADVISE PROMPTLY YOUR UNQUALIFIED ACCEPTANCE OF THE CONDITIONS. AND THEN BY TELEGRAM DATED FEBRUARY 15, 1956, YOU WERE INFORMED THAT IT WAS MANDATORY THAT ALL REQUIRED DOCUMENTS AND OTHER DATA BE SUBMITTED TO THE ADMINISTRATION NOT LATER THAN THE CLOSE OF BUSINESS FEBRUARY 20, 1956. ON THE SAME DATE AN AIRMAIL-SPECIAL DELIVERY LETTER WAS FORWARDED TO YOU REQUESTING YOUR UNQUALIFIED ACCEPTANCE OF THE ADMINISTRATION'S CONDITIONS AS SET FORTH IN ITS LETTER OF DECEMBER 21, 1955, AND POINTING OUT THAT " DELAY IN FURNISHING ANY OF THE AFOREMENTIONED DATA MAY RESULT IN YOUR APPLICATION NOT BEING PROCESSED WITHIN THE TIME ALLOTTED.' AND, FINALLY, ON MARCH 9, 1956, THE ADMINISTRATION FORWARDED TO YOU THE FOLLOWING TELEGRAM:

RE MSTS TANKER AWARDS AND OUR TELEGRAM OF FEBRUARY 15, 1956, IF EXTENDED DEADLINE OF APRIL 2 SET BY MSTS IS TO BE MET BY THIS AGENCY, IT IS MANDATORY THAT ALL REQUIRED DOCUMENTS AND OTHER DATA, COMPLETE, ACCURATE AND IN THE REQUIRED NUMBER OF COPIES, BE SUBMITTED TO MARITIME ADMINISTRATION ON OR BEFORE MARCH 21, 1956. FEE OF $13,075 AS REQUESTED MARITIME LETTER OF FEBRUARY 16 AND PROMISED IN YOUR LETTER OF FEBRUARY 21 NOT YET RECEIVED. REQUEST THIS MATTER BE GIVEN IMMEDIATE ATTENTION.

THERE IS NO EVIDENCE OF RECORD THAT YOU COMPLIED WITH SUCH REQUEST BY SUBMITTING THE REQUIRED DOCUMENTS.

IN THE LIGHT OF THE FOREGOING, THEREFORE, IT MUST BE CONCLUDED THAT THE CONDITIONS OF THE BOND WERE NOT COMPLIED WITH AS CONTENDED BY YOU.

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