The opinion of the court was delivered by: LORD
The plaintiff has brought this action to recover for the value of a shipment of lumber delivered to the United States Army, pursuant to the terms of a written contract.
The case involves a contract in which the plaintiff agreed to sell to the Army a specified grade of lumber to be delivered at a certain date. The lumber did not pass an independent inspection required in the contract, and most of it was not delivered. Pursuant to the terms of the contract, the Contracting Officer for the Army terminated the contract, and bought the lumber elsewhere, paying $ 7,506.66 more for the replacement lumber than the amount of the contract with the plaintiff.
The contract authorized the Army to terminate the contract after default and to charge the defaulting party with any excess cost required to purchase replacement lumber.
Plaintiff appealed the decision of the Contracting Officer, awarding excess costs of lumber in the amount of $ 6,008.17, to the Army Contract Appeals Panel. This appeal was denied after a full hearing. The plaintiff then filed this action in the District Court.
The United States counterclaims for the amount it cost the Army to buy replacement lumber ($ 20,869.17), above the amount specified in the original contract ($ 13,362.51), less the amount owed to plaintiff for lumber supplied by it to the Army ($ 1,498.49 less 2% discount or $ 1,468.52). The difference is $ 6,038.14. The Army Contract Appeals Panel found excess costs of $ 6,008.17, disallowing the aforementioned 2% discount.
After trial, arguments, and review of the briefs, the Court makes the following
1. The facts as found in the opinion of the Armed Services Board of Contract Appeals, dated September 12, 1952, are herewith adopted.
2. There is substantial evidence in the record, developed before the Board of Contract Appeals, to sustain the Government's counterclaim in an amount of $ 6,008.17.
3. There is substantial evidence in the record, developed before the Board of Contract Appeals, to deny the plaintiff's claim.
4. In accepting the lowest bid for the replacement lumber, the Government was reasonable and acted in good faith.
5. The liquidated damages clause (par. 11(c)) in the basic contract provides:
'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 ...