Court Opinion

ID: 8591553
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:49:47.66387+00
Date Added: 2024-06-11T16:54:30.454058
License: Public Domain

Laramore, Judge,
dissenting:
I respectfully dissent.
As stated by plaintiff in its original brief, “the sole question presented by this case is whether or not the Government made a proper repurchase as to the 98,000 cots in default.”
Plaintiff then argues that the relet contract should have been awarded to a California factory as the lowest responsible bidder.
This court, in the majority opinion, rejected this contention, but says the Government saved freight costs and the savings should inure to the benefit of the plaintiff.
The stipulation entered into after argument shows that the difference in freight costs was a comparison between costs of cots manufactured in Granville, New York, shipped to Schenectady, New York, and New Cumberland, Pennsylvania, and cots manufactured in Columbus, Mississippi, and shipped to Schenectady and New Cumberland.
I believe it cannot be said with certainty that the Government saved in costs because the goods were shipped to a closer destination point (Schenectady, New York, and New Cumberland, Pennsylvania). To prove a savings on transportation costs, plaintiff must show that the Government’s freight costs on the full 250,000 cots were less than they would have been had there been no default. In other words, deliveries undoubtedly were shifted due to the default, and there is no showing what the Government would have done with the cots had they been manufactured and delivered under the original contract. It is entirely possible that by reason of shipping *88to New York and Pennsylvania, greater freight costs were incurred on the balance of the cots manufactured under the reinstated contract. At least the evidence does not disclose otherwise. Since the burden is on the plaintiff to prove a savings, I believe it must fail.
At the time the contracts were entered into there was no assurance that the cots would go to any particular place. Nor is there any assurance now that the Government would have shipped these cots from Columbus, Mississippi to New York and Pennsylvania, had plaintiff performed as required. Inasmuch as there were no preestablished destinations for these cots, it must be assumed they were shipped to places where storage space ivas available or where the cots were needed. It must also be assumed that the changes in destination were also caused by plaintiff’s default. Therefore, I can see no basis upon which plaintiff can claim a “saving” by the Government in transportation costs.
Item I of each invitation provided:
The contract shall be awarded to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government, price and other factors considered.
This created an obligation to select a responsible bidder whose bid was most advantageous to the Government. This was the Telescope Folding Furniture Company, Inc., as conceded by plaintiff.
The repurchase of the 98,000 cots was made under the default clause of plaintiff’s contract which provides that “In the event the Government terminates this contract * * *, the Government may procure, upon such termination and in such manner as the contracting officer may deem appropriate * * *, and the contractor shall be liable to the Government for any excess costs for such similar supplies or services: * *
“Excess costs” mentioned above means the excess costs occasioned by the Government in obtaining the defaulted cots by a contract, which like the original contract was most advantageous to the Government.
The above provision vested in the contracting officer a discretion. Transportation costs were the sole responsibility *89of the defendant and consideration by the Government of those costs in evaluating bids, and the use of tentative destinations for this purpose, in the absence of determined ultimate destinations, was not an abuse of that discretion. The provisions of the reletting invitation expressly fixed the bidder’s location as the point of origin for the repurchased supplies, and requires that bids be evaluated on the basis of transportation costs from such bidder’s origin point to the named tentative destination point. These provisions govern the assessment of excess costs in this case, and Columbus, Mississippi, as a location, did not and could not enter into the evaluation of the reletting bids.
To say that the Govermnent should have waited until the ultimate destinations for the cots and the actual transportation costs were known is without merit. The Government could procure the defaulted cots in such manner and upon such terms and conditions as it deemed appropriate and charge plaintiff the excess costs. At the time these contracts were entered into, there was no assurance that the cots would go to any particular place. The Government had no way of knowing where the need for a particular shipment might be, nor is there any way of knowing where the cots would have been shipped had plaintiff not defaulted. Therefore the ultimate destinations to which defendant shipped the cots have no bearing upon the amount of excess costs assessed, and this court cannot say that the Government saved costs for which the plaintiff is entitled to benefit.
This case falls squarely within the language of the United States Court of Appeals in the case of United States v. Warsaw Elevator Co., 213 F. 2d 517, 518-519, wherein the court said:
The situation here presented is unlike the usual case of proving damages for breach of contract by showing the cost of substituted performance, where the burden is naturally on the claimant to show that the work is the same. * * * here Warsaw has expressly consented to “such terms” and “such manner” of completion as the Contracting Officer may deem appropriate. In the ordinary course of reletting a contract it is hardly strange that such details as the F. O. B. shipping point and the schedule of deliveries will be altered. If there is in*90creased cost from such natural, if not unavoidable, variances, that is surely within the reasonable expectation of the contracting parties. Under such a contract, liability for the loss the promisor has caused should not be avoided except upon its showing of an abuse of the discretion it has granted and some new obligations in the relet contract going beyond the reasonable latitude accorded the promisee.
In the case at bar the reletting contract was substantially the same as the original contract. The f. o. b. origin basis was the same in the reletting as in the original contract. The increased cost was natural and unavoidable and there is no showing of an abuse of discretion.
Therefore, since this Court has found that the award of the repurchase contract was proper, I believe the Government could properly assess against plaintiff as “excess costs” the difference between the two contracts. Goldberg v. United States, 103 C. Cls. 237; Doehler Metal Furniture Co., Inc., v. United States, 149 F. 2d 130.