B-78596 L/M, MAY 29, 1950

B-78596 L/M, MAY 29, 1950

PRECIS-UNAVAILABLE

BRISTER & KOESTER LUMBER CORPORATION:

ATTENTION: G. M. WALKO, ASSISTANT TREASURER

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 11 AND MARCH 10, 1950, AND TO MEMORANDUM BRIEF RECEIVED MARCH 20, 1950, FROM YOUR ATTORNEY MR. D. E. BLAKELY, REQUESTING RECONSIDERATION OF OFFICE DECISION DATED DECEMBER 10, 1948, B-78596 WHICH SUSTAINED SETTLEMENT OF JUNE 16, 1948, DISALLOWING YOUR CLAIM IN THE AMOUNT OF $1,132.37, REPRESENTING DISCOUNTS DEDUCTED BY A. K. ADAMS & COMPANY AND W. C. SHEPHERD - PRIME CONTRACTORS UNDER ARMY COST-PLUS-A-FIXED-FEE CONTRACT NO. W6367-QM-2, DATED SEPTEMBER 9, 1940 - IN MAKING PAYMENT FOR LUMBER FURNISHED BY YOUR CORPORATION PURSUANT TO PURCHASE ORDER NO. 4, ISSUED TO YOUR FIRM SEPTEMBER 27, 1940, BY SAID CONTRACTORS.

THE TERMS OF THE PURCHASE ORDER, THE FACTS AND CIRCUMSTANCES INVOLVED, AND THE BASIS ON WHICH IT WAS FOUND THAT THE AMOUNT CLAIMED PROPERLY COULD NOT BE ALLOWED WERE SET FORTH FULLY IN THE ABOVE MENTIONED DECISION.

IN YOUR LETTERS, THE CONTENTIONS PREVIOUSLY SUBMITTED AND CONSIDERED ARE REITERATED, PRIMARILY, THAT THE GOVERNMENT IS OBLIGATED TO PAY THE AMOUNT CLAIMED UNDER THE TERMS OF AN INFORMAL LUMBER AGREEMENT CONSISTING OF AN ALLEGED BID BY YOUR FIRM AND ACCEPTANCE THEREOF BY THE OFFICE OF THE QUARTERMASTER GENERAL. NO ADDITIONAL EVIDENCE IN SUPPORT OF YOUR CONTENTIONS HAS BEEN FURNISHED. FOLLOWING THE DECISION OF DECEMBER 10, 1948, IT WAS STATED IN YOUR LETTER OF APRIL 2, 1949, THAT YOU WERE UNABLE TO LOCATE PAPERS COVERING SUCH AGREEMENT IN YOUR OWN RECORDS, AND IT WAS REQUESTED THAT FURTHER ACTION ON THE CLAIM BE HELD IN ABEYANCE PENDING A CONTEMPLATED SEARCH OF THE ARMY RECORDS IN ST. LOUIS. IN A FURTHER LETTER BY YOUR ATTORNEY DATED JANUARY 24, 1950, IT WAS REQUESTED "THAT A CAREFUL AND EXHAUSTIVE SEARCH BE MADE FOR THESE DOCUMENTS," AND THIS REQUEST WAS REPEATED IN YOUR LETTERS OF FEBRUARY 11 AND MARCH 10, 1950.

YOU ARE ADVISED THAT A DILIGENT AND COMPLETE EXAMINATION OF ALL THE AVAILABLE FILES PERTINENT TO THIS TRANSACTION RETAINED BY THE ARMY AND BY THIS OFFICE HAS BEEN MADE BY REPRESENTATIVES OF THIS OFFICE. THIS EXAMINATION HAS FAILED TO DISCLOSE THE EXISTENCE OF THE ALLEGED BID AND ACCEPTANCE. IT MAY WELL BE THAT THE PURCHASE WAS MADE AS THE RESULT OF ORAL NEGOTIATIONS, AS WAS DONE IN MANY SUCH TRANSACTIONS. THIS IS SUPPORTED BY THE COPY OF THE TELEGRAM DATED SEPTEMBER 25, 1940, REFERRED TO IN YOUR LETTER OF MARCH 10, 1950, AND BY "PURCHASE ORDER ACCEPTANCE" DATED MAY 22, 1941, ATTACHED TO THE PURCHASE ORDER, IN WHICH YOUR FIRM ACKNOWLEDGED RECEIPT AND ACCEPTANCE OF THE ORDER "IN ACCORDANCE WITH THE CONDITIONS AND TERMS AS STATED THEREIN."

THE FACT THAT A LUMBER AGREEMENT MAY HAVE BEEN ENTERED INTO WITH YOUR CORPORATION BY THE OFFICE OF THE QUARTERMASTER GENERAL WOULD NOT, OF ITSELF, WARRANT PAYMENT OF THIS CLAIM. WHEN MAKING SUCH LUMBER AGREEMENTS WHICH WERE OF A VERY INFORMAL CHARACTER, THE PARTIES UNDERSTOOD THAT DELIVERIES OF THE LUMBER WERE TO BE MADE AND PAYMENTS THEREFOR WERE TO BE ACCOMPLISHED PURSUANT TO PURCHASE ORDERS TO BE ISSUED BY CONTRACTORS, AND APPROVED BY DESIGNATED REPRESENTATIVES OF THE GOVERNMENT, IN ACCORDANCE WITH APPLICABLE REGULATIONS PROMULGATED UNDER THE STATUTES AUTHORIZING THE EXPENDITURES. IT IS A WELL ESTABLISHED PRINCIPLE THAT THE LAWS AND REGULATIONS MADE IN CONFORMITY WITH OR NOT IN CONTRAVENTION OF LAW, WHICH SUBSIST AT THE TIME AND PLACE OF THE MAKING OF A CONTRACT, ENTER INTO AND FORM A PART OF IT AS FULLY AS IF THEY HAD BEEN EXPRESSLY REFERRED TO OR INCORPORATED INTO ITS TERMS. THIS EMBRACES LAWS AND REGULATIONS WHICH AFFECT ITS VALIDITY, CONSTRUCTION, DISCHARGE, AND ENFORCEMENT. (MISSING MATERIAL) OF MONROE, NORTH CAROLINA V. FEDERAL (MISSING MATERIAL) 202 U.S. CLS, 660; (MISSING MATERIAL), 292 (MISSING MATERIAL), 571, 577; UNITED STATES V. WILLIAMS, 302 U.S. (MISSING MATERIAL), 50; REESE V. BETHLEHAM STEEL COMPANY, 74 F. SUPP. 412, 418; AND FEDERAL CROP INSURANCE CORPORATION V. MERRILL, 332 U.S. 380. THUS, THE CONTRACTOR WAS REQUIRED BY APPLICABLE REGULATIONS TO USE THE PURCHASE ORDER FORM PRESCRIBED - FORM AB 101 - IN PROCURING THE LUMBER NEEDED, AND IT WAS PROVIDED IN ARTICLE II, PARAGRAPH 8 OF THE PRIME CONTRACT THAT THE CONTRACTOR "SHALL, TO THE EXTENT OF HIS ABILITY, TAKE ALL CASH AND TRADE DISCOUNTS ***" AND THAT IN "DETERMINING THE ACTUAL NET COST OF ARTICLES AND MATERIALS OF EVERY KIND REQUIRED FOR THE PURPOSE OF THIS CONTRACT, THERE SHALL BE DEDUCTED FROM THE GROSS COST THEREOF ALL CASH AND TRADE DISCOUNTS *** WHICH HAVE ACCRUED TO THE BENEFIT OF THE CONTRACTOR OR WOULD HAVE SO ACCRUED EXCEPT FOR THE FAULT OR NEGLECT OF THE CONTRACTOR." MANIFESTLY, THE TERMS OF THE PURCHASE ORDER AND THE PROVISIONS OF THE CONTRACT REFERRED TO, WHICH WERE DRAWN IN THE LIGHT OF THE ESTABLISHED PRACTICE OF THE CONTRACTING AGENCY, WERE CONTROLLING ON THE CONTRACTOR IN THIS TRANSACTION, AND IT IS CLEARLY ESTABLISHED BY THE EVIDENCE OF RECORD THAT THE DELIVERIES WERE MADE AND PAYMENTS THEREFOR WERE RECEIVED BY YOUR FIRM FROM A. K. ADAMS & COMPANY AND W. C. SHEPHERD AS PROVIDED IN SAID PURCHASE ORDER, OF. THOS. SOMERVILLE COMPANY V. UNITED STATES, (MISSING MATERIAL) .CLS. 329, 335.

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

"EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, ALL DISPUTES CONCERNING QUESTIONS OF FACT ARISING UNDER THIS CONTRACT SHALL BE DECIDED BY THE CONTRACTING OFFICER, SUBJECT TO WRITTEN APPEAL BY THE CONTRACTOR WITHIN 30 DAYS TO THE CHIEF OF BRANCH CONCERNED OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION SHALL BE FINAL AND CONCLUSIVE UPON THE PARTIES HERETO, WHEN THE AMOUNT INVOLVED IS $15,000 OR LESS. WHEN THE AMOUNT INVOLVED IS MORE THAN $15,000, THE DECISION OF THE CHIEF OF BRANCH SHALL BE SUBJECT TO WRITTEN APPEAL WITHIN 30 DAYS BY THE CONTRACTOR TO THE SECRETARY OF WAR OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION SHALL BE FINAL AND CONCLUSIVE UPON THE PARTIES HERETO. IN THE MEANTIME THE CONTRACTOR SHALL DILIGENTLY PROCEED WITH THE WORK DIRECTED."

THE RECORD SHOWS THAT YOUR CLAIM WHICH IS LESS THAN $15,000, WAS CONSIDERED BY THE CONTRACTING OFFICER ON AT LEAST TWO OCCASIONS, THAT IS, BY THE CONSTRUCTING QUARTERMASTER AND BY HIS SUCCESSOR, THE DISTRICT ENGINEER, AS WELL AS BY THE APPEAL BOARD, OFFICE OF CONTRACT SETTLEMENT. IN EACH OF THESE OCCASIONS, THERE WAS A DENIAL OF YOUR REQUEST FOR PAYMENT. WHEN ALL THE RECORDS WERE AT HAND AND THE FACTS WERE FRESH IN THE MINDS OF ALL PERSONS FAMILIAR WITH THE LUMBER TRANSACTION, IT WAS DETERMINED THAT ALL PROPERLY PREPARED INVOICES WERE PAID WITHIN TEN DAYS AFTER RECEIPT; THAT THE DISCOUNTS HAD BEEN PROPERLY TAKEN; AND THAT THERE WAS NO BASIS FOR ALLOWING YOUR CLAIM. SUCH DETERMINATION OF THE FACTS IN DISPUTE MUST BE ACCEPTED AS FINAL AND CONCLUSIVE. OF. UNITED STATES V. MOORMAN, DECIDED JANUARY 9, 1950, WHERE THE SUPREME COURT OF THE UNITED STATES HELD THAT IN RECONSIDERING QUESTIONS DECIDED BY THE DESIGNATED AGENT OF THE PARTIES, THE COURT OF CLAIMS WAS IN ERROR.

IN VIEW OF THE FOREGOING, IT IS APPARENT THAT THERE IS NOTHING IN YOUR LETTERS WHICH WOULD AFFORD ANY PROPER BASIS FOR A MODIFICATION OF THE CONCLUSION HERETOFORE REACHED IN THE MATTER.

ACCORDINGLY, THE DECISION OF DECEMBER 10, 1948, IS AFFIRMED.