Court Opinion

ID: 8591554
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:49:47.666206+00
Date Added: 2024-06-11T16:54:30.457463
License: Public Domain

Whitaker, Judge,
dissenting:
I agree with Judge Laramore, that the defendant' purchased the cots f. o. b. factory, and that it was no concern of the maker or of the plaintiff what it did with them.
Transportation costs have nothing to do with the “excess costs” incurred by the defendant as the result of plaintiff’s default. The defendant never represented that it intended to ship the cots to any particular place. Transportation costs were considered only for the purpose of evaluating bids.
I agree with Judge Laramore that plaintiff is not entitled to the deduction allowed it by the majority.
FINDINGS OF FACT
The court, having considered the evidence, the briefs and argument of counsel, and the report of Commissioner Paul H. McMurray, and a stipulation of the parties, makes findings of fact as follows:
1. The plaintiff, National Wood Products, Inc., is the successor to Southern Supply Company, a partnership composed of Oscar F. W. Bloom, E. Russell Sanford, Carol Ann San*91ford, Ward W. McFarland, Travis J. Kester and Travis J. Hester, Jr.
2. On the 7th day of November 1951, defendant issued an Invitation for Bids No. QM-11-009-52-579 and Amendment No. 1 for a quantity of 250,000 canvas folding cots, which invitation was mailed to 468 firms. Thirty-seven firms bid on said invitation. Plaintiff’s predecessor Southern Supply Company was determined by the defendant to be the lowest responsible bidder with a bid of $8.62 per unit; and the Southern Supply Company was awarded a Supply Contract No. DA-11-009-QM-15582 on January 11,1952, for the full amount of 250,000' cots. With respect to default by the contractor, the contract provided in Section 11 of the General Provisions thereof:

DEFAULT

(a) The Government may, subject to the provisions of paragraph (b) below, by written Notice of Default to the Contractor terminate the whole or any part of this contract in any one of the following circumstances:
(i) if the Contractor fails to make delivery of the supplies or to perform the services within the time specified herein or any extension thereof; or
(ii) if the Contractor fails to perform any of the other provisions of this contract, or so fails to make progress as to endanger performance of this contract in accordance with its terms, and in either of these two circumstances does not cure such failure within a period of 10 days (or such longer period as the Contracting Officer may authorize in writing) after receipt of notice from the Contracting Officer specifying such failure.
* * * * *
(c) In the event the Government terminates this contract in whole or in part as provided in paragraph (a) of this clause, the Government may procure, upon such terms and in such manner as the Contracting Officer may deem appropriate, supplies or services similar to those so terminated, and the Contractor shall be liable to the Government for any excess costs for such similar supplies or services: Provided, That the Contractor shall continue the performance of this contract to the extent not terminated under the provisions of this clause.
This contract was fully transferred and assigned by Southern Supply Company to plaintiff by written agreement prop*92erly executed by a duly authorized agent of the defendant, and Southern Supply Company, on June 30, 1952.
3.Under the terms of the Invitation to Bid, the bids were to be submitted on an F. O. B. origin basis; in evaluating bids, transportation costs were to be considered from bidders’ shipping points to certain specified tentative destinations; for the purpose of evaluating bids, and for no other purpose, the final destinations for the supplies were to be considered to be the following:
Army Depot, Georgia_ 50,000 units
Columbus, Obio_ 90,000 units
BellblufE, Virginia_ 50, 000 units
South Schenectady, N. Y_ 60,000 units
Item 1 of the Terms and Conditions of the Invitation for Bids provided in pertinent part:
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.
4. Prior to the assignment of the contract to the plaintiff, the defendant, under date of May 23, 1952, terminated the contract for default on the part of the Southern Supply Company in failing to deliver 98,000 cots in accordance with the terms of the delivery schedule set out in the contract. The default was not excusable under the terms of the contract. The termination was accomplished in accordance with the terms of the contract. No appeal from the decision of the contracting officer was taken by the Southern Supply Company prior to assignment of the contract to the plaintiff.
5. Subsequent to the termination of the contract, the defendant rescinded its order of termination as to 152,000 cots, and reinstated said contract, which contract was then assigned to plaintiff, as stated in finding No. 2 with the approval of the defendant.
6. At the time said contract was reinstated it was understood that the defendant was to make a repurchase of the 98,000 cots in which the Southern Supply Company was in default, and that upon a proper and legal repurchase being made, the excess costs, if any, would be assessed against *93Southern Supply Company or its successor, the plaintiff herein.
7. On or about June 13,1952, defendant issued its Invitation for Bids on No. QM-11-[ XXX-XX-XXXX ] and amendment No. 1 for the quantity of 98,000 folding canvas cots, which invitation contained the same specifications and same pertinent terms and conditions as were found in the prior invitation of November 7, 1951, relating to the original contract, except that two of the original four tentative destinations points for shipment were eliminated. The Invitation to Bid was mailed to 255 firms and 15 firms bid on the invitation. Included among the 15 firms were 12 firms which had bid on the invitation of November 7,1951. The Telescope Folding Furniture Company, Inc., of Granville, New York, which was one of the firms that had bid on both invitations, was considered by the defendant to be the lowest responsible bidder on the invitation of June 13,1952, with a bid of $3.94 per unit. The Telescope Folding Furniture Company, Inc., was awarded Supply Contract No. DA-11-009-QM-20119 on July 31, 1952, for the full amount of 98,000 cots.
8. Under the terms of the Invitation for Bids, it was provided that bids would be submitted on an F. O. B. origin basis. In evaluating bids, the defendant’s transportation costs were to be considered from bidders shipping points to certain specified tentative destinations. For the purpose of evaluating bids, and for no other purpose, the final destinations for these supplies were to be considered to be the following:
Army Depot, Georgia-60,000 units
Columbus, Ohio_ 48, 000 upits
In evaluating the bids, defendant’s contracting officer used proper transportation charges in effect at the time involved.
9.The Telescope Folding Furniture Company, Inc., was not the lowest responsible bidder from the standpoint of bid price alone, but that firm was the lowest responsible bidder taking into account bid price at point of origin, and defendant’s transportation costs to the tentative destination points, in accordance with the terms of the Invitation to Bid. The lowest net bid received was that of Pan Pacific Manufacturing Company of Glendale, California, in the amount of $3.25 *94per unit. The net bid of said Pan Pacific Manufacturing Company, plus transportation costs from its shipping point at Burbank, California, and the net bid of Telescope Folding Furniture Company, Inc., plus transportation costs from its shipping point in Granville, N. Y. to said tentative destination were as follows:
PAN PACIFIC MANUFACTURING COMPANY
Net bid_$3.25 Net bid-$3.25
Freight to Georgia 1.14 Freight to Columbus, - Ohio_ 1.16
Total_$4.39 --
Total_$4.41
TELESCOPE FOLDING FURNITURE COMPANY
Net bid_$3.94 Net bid_$3.94
Freight to Georgia_ . 43 Freight to Columbus, - Ohio_ . 35
Total_$4.37 -
Total_$4.29
10. On September 3, 1952, defendant’s Chicago Quartermaster Depot received from the Department of the Army, Office of the Quartermaster General, Washington 25, D. C., shipping instructions applicable to supplies under both the unterminated portion of contract No. DA-11-009-QM-15582 with plaintiff, and replacement contract No. DA-11-009QM-20119 with Telescope Folding Furniture Company, Inc.; that thereafter shipping instructions and bills of lading were transmitted to both contractors, and as a result thereof, shipments were made by plaintiff as follows:
20, 000 to Sharpe General Depot, Lyoth, California.
20, 000 to Mira Loma Quartermaster Depot, Mira Loma, Calif.
10,082 to Memphis General Depot, Memphis, Tennessee.
9,996 to Charlotte Quartermaster Depot, Charlotte, N. O.
19, 968 to Atlanta General Depot, Army Depot, Georgia.
19,916 to Columbus General Depot, Columbus, Ohio.
16, 000 to Auburn General Depot, Auburn, Washington.
16, 000 to Richmond Quartermaster Depot, Bellbluff, Va.
10, 000 to Fort Worth Quartermaster Depot, Fort Worth, Texas.
9, 994 to Utah General Depot, Ogden, Utah.
151,956
and that as a result of such instructions shipments were made by Telescope Folding Furniture Company, Inc., as follows:
48,946 to Schenectady, New York
49, 000 to New Cumberland, Pennsylvania
97,946
*9511. Nothing in said contract between the plaintiff, as successor in interest to Southern Supply Company, and defendant, or in said contract between Telescope Folding Furniture Company, Inc., and defendant, obligated defendant to ship supplies covered thereby to the tentative destination points listed therein. At the time of the letting of the contract to Telescope Folding Furniture Company, Inc., on July 31, 1952, there were no shipping instructions covering the actual destinations of the supplies to be furnished under either contract; the shipments as actually made were ordered by defendant in good faith, in accordance with the needs of the Government, and for its convenience and advantage.
12. On the first day of August 1952, defendant charged against Southern Supply Company, and made demand for, excess costs incurred in replacement of the terminated supplies, pursuant to General Provision 11 (c) of the contract No. DA-11-009-QM-15582, the sum of $44,635.90, representing $33,133.80 in excess costs on bid price, plus $11,502.10 in éxcess transportation costs to defendant. On the 27th day of August 1952, pursuant to plaintiff’s request therefor, defendant forwarded to plaintiff a detailed computation covering said assessment. Thereafter, on the 11th day of December 1952, defendant revised said excess costs of replacement by eliminating the excess transportation costs included therein. Defendant then made an assessment charging the plaintiff with the difference between the net bid of Telescope Folding Furniture Company, Inc., and the net bid of Southern Supply Company, which difference amounted to $33,133.80. The defendant is making no claim for said excess transportation charges.
13. On or about the 19th day of August 1952, Southern Supply Company appealed the assessment of said excess costs to the Secretary of the Army, contending “that in awarding said contract for repurchase of said 98,000 cots to the Telescope Folding Furniture Company, Inc., Granville, New York, the Govermnent did not award said contract to the 'lowest responsible bidder.” Plaintiff’s appeal was denied.
14. Plaintiff, under the contract as reinstated, delivered to the defendant 151,956 cots, for which plaintiff was entitled *96to payment of $3.62 per unit, less a discount of one-half of one percent, and less any excess costs due the defendant on account of the repurchase of 98,000 cots.
15.Plaintiff has been paid the sum of $514,195.53, computed as follows:
161,956 cots delivered @ $3.62 each_$650,080.72
Less discount % of 1% per contract-$2,750.41
Withheld as excess costs on replacement- 33,133.80
- 35,884.21
Payment due plaintiff_$514,196.51
Payment made to plaintiff- 514,195. 53
Credit to plaintiff as accounting adjustment- $0.98
16.The cost to defendant of 97,946 cots on the repurchase contract, plus transportation costs paid by the Government on shipments thereof from the contractor’s shipping point at Granville, New York, was as follows:
97,946 cots at $3.94 each-$385,907.24
Freight costs to Schenectady, New York_ 6,484. 97
Freight costs to New Cumberland, Pennsylvania_ 12,124.27
$404, 516.48
The cost to defendant of 97,946 cots on which plaintiff defaulted, plus estimated transportation costs which would have been incurred by defendant, had the cots been manufactured by plaintiff and had they been shipped by the Government from plaintiff’s shipping point at Columbus, Mississippi, to the above mentioned destinations is computed as follows:
97,946 cots at $3.62 each_$354,564. 52
Less Va of 1% discount_ 1,772.82
Net cost of cots_$352,791. 70
Freight costs to Schenectady, New York_ 22,291. 83
Freight costs to New Cumberland, Pennsylvania_ 20, 554. 80
$395,638. 33
The excess of the former figure over the latter is $8,878.15. This was the actual excess cost to the defendant of securing the cots from the Telescope Folding Furniture Co. Inc. and having them transported to the desired destinations.
17.The proper account of the debts and credits of the parties is as follows:
*97151,956 cots delivered at $3.62 each_$550,080.72
Less Ys of 1% discount_$2,750.41
Excess costs on reletting_ 8,878.15
- 11,628. 56
Amount due plaintiff under contract_$538,452.16
Less payment made to plaintiff_ 514,195. 53
Amount due plaintiff_ $24,256. 63
Less amount due defendant on its counterclaim_ 1, 868.40
Net amount due plaintiff_ $22,388.23
The $33,133.80 which the defendant deducted from the amount otherwise due the plaintiff was $24,255.65 more than the defendant’s actual excess costs. The figure $24,256.63 includes the $0.98 due plaintiff as reflected by finding 15.
CONCLUSION OK LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is entitled to recover on its petition the sum of $24,256.63, and defendant is entitled to recover on its counterclaim the sum of $1,868.40. It is therefore adjudged and ordered that the plaintiff recover the sum of twenty-two thousand three hundred eighty-eight dollars and twenty-three cents ($22,388.23).