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TO NORTHEAST SERVICE CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF APRIL 14. UNDER YOUR ARRANGEMENT WITH THE BASE YOU WERE TO FURNISH AN INITIAL SUPPLY OF MATERIAL WHICH. THE SHORTAGE OF TOWELS WAS COMPUTED BY ADDING 3. IT APPEARS THAT THIS AMOUNT WAS APPROVED FOR PAYMENT IN ORDER (27-604) 59-5352. THE EVIDENCE SUBMITTED BY YOU APPEARS TO HAVE BEEN ACCEPTED BY THE CONTRACTING AGENCY AS ESTABLISHING THAT ALL TOWELS AND COVERS REMAINING ON HAND ON DECEMBER 31. WERE NOT PICKED UP BY YOU. WE DID NOT BELIEVE THAT YOUR DELAY IN PICKING UP THE INVENTORY UPON EXPIRATION OF THE LAST ORDER SHOULD DEFEAT YOUR RIGHT TO EITHER HAVE THE INVENTORY RETURNED OR TO BE COMPENSATED FOR ITS VALUE IN ACCORDANCE WITH THE TERMS OF THE APPLICABLE PURCHASE ORDERS.

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B-155525, MAY 15, 1967

TO NORTHEAST SERVICE CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 14, 1967, REQUESTING AN INCREASE IN THE AMOUNT ($115.06) ALLOWED BY THIS OFFICE ON DECEMBER 6, 1966, FOLLOWING RECONSIDERATION OF OUR SETTLEMENT OF OCTOBER 19, 1964, WHICH HAD DISALLOWED YOUR ENTIRE CLAIM FOR $433.38.

IT APPEARS FROM THE RECORD THAT FOR SOME PERIOD OF TIME ENDING ON DECEMBER 31, 1959, YOU HAD FURNISHED TOWELS AND COVERS TO PEASE AIR FORCE BASE ON A QUARTERLY CONTRACT OR ORDER BASIS, AND THAT YOUR CLAIM INVOLVES TOWELS AND COVERS DELIVERED DURING THE LAST THREE QUARTERS OF 1959. UNDER YOUR ARRANGEMENT WITH THE BASE YOU WERE TO FURNISH AN INITIAL SUPPLY OF MATERIAL WHICH, AS IT BECAME SOILED, WOULD BE REPLACED BY CLEAN MATERIAL TO WHICH THE RENTAL RATE APPLIED. YOU STATED THAT WHEN THE ORDER COVERING THE FOURTH QUARTER EXPIRED ON DECEMBER 31, 1959, YOU DID NOT PICK UP THE INVENTORY, SINCE YOU ASSUMED THAT THE SERVICE WOULD BE CONTINUED IN THE FOLLOWING QUARTER. YOU FURTHER STATED THAT BEGINNING IN MARCH OF 1960 YOU MADE SEVERAL ATTEMPTS TO RECOVER YOUR INVENTORY AT THE BASE, BUT FOUND NONE AVAILABLE THEREAFTER, ON JUNE 30, 1959, YOU ISSUED INVOICES TO THE BASE FOR REPLACEMENT OF 17 FENDER COVERS AND 4,536 TOWELS FOR A TOTAL OF $388.38. THE SHORTAGE OF TOWELS WAS COMPUTED BY ADDING 3,140 TOWELS, THE NUMBER IN THE GOVERNMENT'S POSSESSION AS OF APRIL 1, 1959, TO THE 26,087 YOU DELIVERED DURING THE PERIOD APRIL 1 THROUGH DECEMBER 31, 1959, AND SUBTRACTING THE 24,691 RETURNED DURING THE SAME PERIOD. IN ADDITION, YOU CLAIM THAT INVOICE NO. 20965 FOR $45.00, ISSUED APRIL 30, 1959, FOR REPLACEMENT OF 30 FENDER COVERS HAS NOT BEEN PAID.

WITH REGARD TO THAT PORTION OF YOUR CLAIM FOR $45.00 COVERED BY INVOICE NO. 20695, IT APPEARS THAT THIS AMOUNT WAS APPROVED FOR PAYMENT IN ORDER (27-604) 59-5352, BUT HAD NOT BEEN PAID. WE THEREFORE INCLUDED THIS ITEM AS A PART OF THE $115.06 WE ALLOWED ON DECEMBER 6, 1966. CONCERNING THE REMAINDER OF YOUR CLAIM, THE EVIDENCE SUBMITTED BY YOU APPEARS TO HAVE BEEN ACCEPTED BY THE CONTRACTING AGENCY AS ESTABLISHING THAT ALL TOWELS AND COVERS REMAINING ON HAND ON DECEMBER 31, 1959, WERE NOT PICKED UP BY YOU. IN VIEW THEREOF, WE DID NOT BELIEVE THAT YOUR DELAY IN PICKING UP THE INVENTORY UPON EXPIRATION OF THE LAST ORDER SHOULD DEFEAT YOUR RIGHT TO EITHER HAVE THE INVENTORY RETURNED OR TO BE COMPENSATED FOR ITS VALUE IN ACCORDANCE WITH THE TERMS OF THE APPLICABLE PURCHASE ORDERS. HOWEVER, WE NOTED THAT THERE PLACEMENT OBLIGATION OF THE GOVERNMENT UNDER THE TERMS OF SUCH ORDERS IS LIMITED TO 3 PERCENT OF THE TOTAL QUANTITY DELIVERED FOR THE LAST TWO QUARTERS AND SINCE IT DOES NOT APPEAR THAT IT CAN BE DETERMINED WHAT QUANTITIES WERE DELIVERED AND LOST IN A GIVEN QUARTER (ALL RECORDS KEPT BY THE AGENCY, RELATING TO THIS MATTER, HAVING BEEN DESTROYED), IT WAS OUR OPINION THAT THE 3 PERCENT LIMITATION SHOULD BE APPLIED TO THE TOTAL QUANTITY DELIVERED DURING THE THREE QUARTERS INVOLVED. ACCORDINGLY, YOU WERE ALLOWED THE REPLACEMENT VALUE OF 782 TOWELS (3 PERCENT OF THE 26,087 TOWELS YOU DELIVERED FROM APRIL 1 THROUGH DECEMBER 31, 1959) AND 5 FENDER COVERS (180 COVERS LESS 30 COVERS INCLUDED ON INVOICE NO. 20965, EQUALS 150, AND 3 PERCENT OF 150 EQUALS 4.5, WHICH ROUNDS OFF TO 5) AT ?08 AND $1.50 EACH, RESPECTIVELY, FOR A TOTAL OF $70.06.

A CAREFUL REVIEW OF THE RECORD IN THIS MATTER LEADS US TO THE CONCLUSION THAT IT CONTAINS NOTHING WHICH WOULD ENTITLE YOU TO ANY AMOUNT IN ADDITION TO THE $115.06 ALLOWED ON DECEMBER 6, 1966. ACCORDINGLY, OUR SETTLEMENT OF THAT DATE IS SUSTAINED.

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