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092756 1 (1970-03-12)

handle is hein.gao/gaobacwqu0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNriNG OFFICE <000u o'WASHINGTON, D C. 20548 CIVIL DIVISION MAR 12 1970 Dear Mr. Frick The General Accounting Office has made a review of Commodity Credit Corporation (CCC) financial operations for fiscal year 1969 carried out by the Minneapolis Commodity Office, Agricultural Stabilization and Conservation Service, Department of Agriculture Our review showed that CCC had paid liquidated damages claimed by processors (contractors) on the basis of CCC delays in issuing Notices to Deliver (ND). The underlying cause of these delays was a longshoremen strike together with a rail embargo. Neither the contractors nor CCC had any control over the embargo or strike. We believe that, under the circumstances, CCC had no legal liability to pay liquidated damages because the damages sustained by the contractors were in fact caused by a rail embargo resulting from a longshoremen strike and not by CCC's failure to issue NDs in a timely manner Our comments on the matter follow. INFORMATION ON CCC DELAYS IN ISSUING NOTICES 10 DELIVER CCC entered into contracts with millers and others to purchase processed commodities for export programs. The contractual terms and conditions are illustrated by CCC announcements (Exhibit A), Uniform Contractual Provisions (Exhibit B), and invitations for offers (Exhibit C). Under the contractual terms and conditions, the processors were required to make delivery at export points (Exhibit A, p. 8,Sec. 9B and Exhibit C, p. 2) generally within a specified period of a few weeks (Exhibit C, p. 1, para. 1) The contracts provided that fail- ure of CCC to issue NDs in sufficient time to enable the contractor to meet the specified delivery schedule could result in payment of liquidated damages by CCC. This provision states that a contractor's claim for payment of damages must be supported by evidence satisfac- tory to CCC that the contractor was in fact delayed by the late issuance of a Notice to Deliver. (See Section 10, Exhibit A.)

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