for permission to "deviate" from specifications. Permission was granted by letter in all instances where requested, with the standard provision that all savings would revert to the Government. 4. However, since the savings effected by the packing changes were taken into consideration by the contractors in computing their bids, actually no savings were effected. Concurrence: CONTRACT ADMINISTRATION BRANCH, (Attention Captain Wool.) GENTLEMEN: We have been attempting to obtain a clear interpretation of what is meant by the term "scrap" as used in the second paragraph of page 16, Invitation to Bid TAP-30-352-53-560. To date we have failed to obtain a clear answer to the question, therefore, we are writing this letter with the hope that you can clarify this problem. The only definition of scrap that we have obtained is as follows: "Scrap means all waste from clippings up to 1 yard." Our interpretation of this definition is that it includes clippings and all other waste. If our interpretation is correct, it would appear that the specified charge of 18 cents per pound is in the nature of a penalty as to the best of our knowledge cotton clippings have never sold at such a high price. Actually, we do not believe that the price we could obtain for such waste would pay for transportation and handling. We have been informed that in order to obtain anywhere near 18 cents a pound for scrap that we would have to include some short yardage with our clippings. It is possible that some people would resort to such practices, but we never have and do not expect to do so now. We have always practiced the utmost economy in our cutting operations and we believe in utilizing every inch of cloth that can possibly be used. On this particular contract we believe that we can use any remnant of 6 inches or more in length and at the end of the contract any saving that we might have will be in full pieces. We are perfectly willing to pay 18 cents per pound for remnants (we do not expect to have any), but we are not willing to pay 18 cents per pound for clippings which are not worth 2 cents per pound. If your interpretation of the term "scrap" is that if it does not include clippings, we are satisfied with the contract as it stands. On the contrary, if you interpret the term to include clippings, we must request some modification of the contract. If you do not feel that you can exclude clippings from the term "scrap," we would be perfectly willing to dispose of scrap by selling it locally and reimburse the Government for the full amount received from such sales or, if you prefer, we could turn the scrap over to a governmental agency for their disposal of such scrap. Please understand that we are not interested in making a profit off the sale of Government materials and neither are we inclined to accept an undeserved penalty for saving of Government materials. If we cut in our normal manner, we will generate the normal percentage of clippings, but we will not have any other so-called scrap. Every usable inch of cloth will be used in the manufacture of hats for this contract. Clippings are now accumulating and will soon become a storage problem. Therefore, it is requested that you give us a prompt answer to this important problem. Please address your reply to Harry Lev, Spencer Manufacturing Co., Mayaguez, P. R. HARRY LEV. EXHIBIT No. 34 CLOTHING SUPPLY OFFICE UNITED STATES NAVAL SUPPLY ACTIVITIES, NEW YORK From: Clothing supply officer. Brooklyn, N. Y. To: Chief of Agency Staff, Armed Services Textile and Apparel Procurement Agency, New York, N. Y. Subject: Contract TAP 1822-01-1880-C-53, Harry Lev for hats, white, enlisted men's. Reference: (a) ASTAPA letter SDTAA-PCC-22, dated August 27, 1953, to CSO w/enclosure (contractor's letter, dated August 21, 1953, to ASTAPA). 1. Enclosure (1) of reference (a) requested a clear interpretation of what is meant by the term "scrap" as used in the second paragraph of page 16, Invitation to Bid. 2. The term "scrap" is defined as follows: (a) Remnants: All pieces of cloth, full width, less than 1 yard in length which cannot be recut into smaller component parts. (b) Cut parts: Cut component parts not assembled or only partially assembled. (c) Clippings: Residue from cutting operations not large enough to be recut into smaller component parts. 3. It is advised that all material 1 yard or more in length, full width and undamaged, is to be returned to the Naval Supply Facility, Brooklyn, N. Y., and that a report be submitted to the Clothing Supply Office (Code 1V-O) indicating the quantity of material being returned to the Government. 4. It is further advised that the contractor is required to report the quantities of waste material generated under the contract and to dispose of such scrap at the highest market price prevailing, after which the Government is to be reimbursed accordingly. This transaction is to be supervised by the cognizant Inspector. 5. A check in the amount of the sale of scrap made payable to the Treasurer of the United States is to be forwarded to the Naval Supply Facility, 29th Street and 3d Avenue, Brooklyn 32, N. Y. Re Contract No. DA-30-352-TAP-1822-OI-1880-C-53. ASTAPA, New York, N. Y. Attention: Contracting officer, Capt. Raymond Wool. DEAR SIR: Request is hereby made that all Government furnished materials be shipped to us, domestic pack. We agree to assume full responsibility and liability for all Government furnished property in transit to us from point of origin to point of destination. We further agree to do this at no additional cost to the Government. Thanking you, we are, Very truly yours, HARRY LEV. EXHIBIT No. 38 File No. SDTAA-PCC-22. Subject: Harry Lev-TAP-1822, OI-1880-C-53-Hats, white, enlisted men's, hats, white, midshipmen's. From: Contracting officer, Clothing Purchasing Branch. To: Chief, Legal Office, ASTAPA. Attention: Mr. Kaiser. Date: August 11, 1953. Comment No. 1-Hackner-417. 1. Enclosed is letter from the Clothing Supply Office, Brooklyn, N. Y., dated June 18, 1953, regarding packing of Government furnished material in domestic, rather than export pack, for shipment to the plant of subject contractor at Mayaguez, P. R. 2. In this connection, attention is invited to the contract provision, which states, "Where the contractor's plant is located outside the continental United States, thereby requiring shipment of the Government furnished property via water, the Government will pack the Government furnished property for overseas shipment in accordance with standard Navy practice for such shipments. The contractor shall bear the cost of such Navy overseas packing. The amount of such cost shall be promptly reported by the United States Naval Supply Facility, New York, to the cognizant United States Navy Regional Accounts Office, which shall thereupon deduct such amount from payments due the contractor hereunder." 3. In consideration of the above, contractor has taken out insurance to cover all shipments of Government furnished material from the point of origin to destination (Mayaguez, P. R.). 4. In view of the foregoing, legal opinion is requested as to whether contractor should be charged for the difference between overseas and domestic pack as outlined in enclosed letter. RAYMOND WOOL, 2 Incls #1-Ltr fr Cloth Sup Off dtd 6/18/53. #2-Cy ltr to Cloth Sup Off dtd 6/5/53 w/Attach (Cy ltr fr Harry Lev dtd 6/4/53). EXHIBIT No. 39 SDTAA-L-161. Subject: Harry Lev-TAP 1822, OI 1880-C-53-hats, white, enlisted men's, hats, white, midshipmen's. From: Chief, ASTAPA Legal Office. August 27, 1953. Comment No. 2-Kaiser—77. Since the I/B contains a clause to the effect that the Government will pack Government furnished property for overseas shipment with export pack and that the contractor will bear the cost of such pack, it is assumed that such cost is included in the contractor's bid price. In such case, the Government is entitled to the savings resultant from the Government's decision at the contractor's request to use domestic pack on the shipment of Government furnished property. Otherwise, the contractor would receive a windfall. G. M. CLARKE, Jr., Chief, ASTAPA Legal Office. EXHIBIT No. 40 [Copy] CLOTHING SUPPLY OFFICE, UNITED STATES NAVAL SUPPLY ACTIVITIES, NEW YORK, Brooklyn, N. Y., October 28, 1953. 1V-O:ss Memorandum. From: Technical officer. To: Clothing supply officer. Subject: Report of trip to Spencer Manufacturing Co., Mayaguez, P. R., October 18-25, 1953. 1. The following is a report on the trip made to the Spencer Manufacturing Co., Mayaguez, P. R., on October 18-25, 1953: (a) Arrived in Mayaguez, P. R., on October 19, 1953, and inspected the plant. The plant is a modern 1-story structure with new equipment and highly engi neered. (b) I inspected the hats at the plant and discovered that they were in the same condition as all those hats received by Mechanicsburg and Clearfield; that is, they were improperly sized and poorly blocked. I instructed the Army inspector to reject all the hats at the plant. (c) Worked with the contractor to determine the cause of the improper sizing and blocking problem and came to the conclusion that the patterns being utilized by the contractor were incorrect. Ran test samples, utilizing the old Government patterns and the hats came out perfectly. After some discussion the contractor, he agreed to change the patterns and immediately commence production on size 74 hats. (d) The contractor agreed to reinspect all hats previously accepted by the Army inspector. Inasmuch as the hats labeled size 74 were actually size 7, the contractor was given permission to trim the 4 off the size ticket so that it would correctly read "size 7." After the contractor reinspects and screens all the hats now in the system, the entire lot will be inspected again by the Government inspector for acceptance. (e) In discussing quantity with the contractor, it was determined that if the contractor reaches the production of approximately 170,000 hats per week by February 1, 1954, he can make his last shipment in accordance with the contract delivery schedule. The contractor stated that he expected to reach that production prior to February 1, and also expected to finish his contract without any delinquency whatsoever. (f) Starting with the week of November 3, 1953, and each week thereafter, the contractor will ship 60,000 or more size 74 hats. (g) Returned to New York on October 25, 1953. Conclusions: (a) The contractor be granted an extension until February 1, 1954, to reach the estimated production of approximately 170,000 hats per week. If the contractor does not reach this production, consideration should be given at that time to reduce the contract quantity. (b) A meeting be arranged between the contractor, the Navy Purchasing Office and Clothing Supply Office to initiate the reinspection and correction of all white hats previously accepted by the Army inspector. (c) A meeting be arranged with the Army Quartermaster Inspection Office to discuss the errors made by the Army Quartermaster inspector at this plant. L. L. KORNFELD. EXHIBIT No. 58 DEPARTMENT OF THE NAVY, Hon. JOHN L. MCCLELLAN, Chairman, Committee on Government Operations, United States Senate, Washington, D. C. MY DEAR SENATOR MCCLELLAN: As requested by a member of your staff, the following information concerning the status of the Navy's claim against Harry Lev, contract TAP-1822, is submitted. The various claims against the contractor have been broken down into areas as a matter of convenience in considering the case. 1 Includes lots 43 through 64 containing hats which had been previously rejected and "salted" back indiscriminately. The contract provides for submission of rejected material as follows: MIL-STD-105A, which is a part of the contract by reference states: "When the supplier elects to resubmit a rejected lot, the supplier shall first inspect the rejected lot, repair or remove all defectives, and then present the units as a resubmitted lot. The Government shall inspect a resubmitted lot with either normal or tightened inspection for all types or classes of defects or merely inspect for the particular types or classes of defects that caused the lot to be rejected." This means that the contractor should keep all of the rejected material together and present it properly identified as resubmitted material. I trust the above information will be satisfactory for your purpose. be of further assistance, I shall be glad to do so. Sincerely yours, R. J. ARNOLD, If I can Rear Admiral, Supply Corps, United States Navy, EXHIBIT No. 59 MID CITY UNIFORM CAP Co. Chicago, Ill NUREMBERG, GERMANY, August 25, 1952. DEAR BILL: As I think you know I got off to a very bad start here as the samples have not arrived here in Nuremberg as yet. They reached Frankfort last week and I called Pan American Airways and they are being forwarded here. The furnishing agency said nothing at all to me about payment before shipment for if they did I would have paid before I left. However without the samples and order blank I have been calling on different buyers and post-exchange officers getting acquainted, etc. I had carried the Air Force samples on the plane and I have them with me at least. I called on Harry's friend General Middleswort at Heidelberg last week and he was very, very nice to me. He was wearing one of Harry's hats and gave me a list of places to go and officers to see. I believe that he will be of much help to us over here as he really seemed sincere. I sent you a cable for the Army samples. I have an appointment with General Swartz for the coming week. If I do not receive the Army samples I will use the Air Force samples and tell him the others have been delayed. I also have an appointment on Wednesday night this week with a civilian buyer who is coming up to the house to look over the samples of the other items that I have. He is a very good friend of mine; comes from Chicago where he was in the drug business for 30 years. E. E. S. or the Even Exchange System has just placed the first order for civilian hats to Dobbs. This is all right with me as I knew they never carried hats in the post exchanges over here. Now that they have started I feel that I will be able to do some good on this item also. |