Little River Lumber Co. v. United States

36 Cont. Cas. Fed. 75,945, 21 Cl. Ct. 527, 1990 U.S. Claims LEXIS 368, 1990 WL 141014
CourtUnited States Court of Claims
DecidedSeptember 28, 1990
DocketNo. 385-81C
StatusPublished
Cited by5 cases

This text of 36 Cont. Cas. Fed. 75,945 (Little River Lumber Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Little River Lumber Co. v. United States, 36 Cont. Cas. Fed. 75,945, 21 Cl. Ct. 527, 1990 U.S. Claims LEXIS 368, 1990 WL 141014 (cc 1990).

Opinion

OPINION

ANDEWELT, Judge.

In this government contract action filed pursuant to the Contract Disputes Act (CDA), 41 U.S.C. § 601 et seq., plaintiff, Little River Lumber Company (Little River), seeks damages with respect to each of 18 separate timber sale contracts it entered with the United States Department of Agriculture’s Forest Service (the Forest Service). In counterclaims, defendant seeks damages with respect to plaintiff’s performance on 12 of those 18 contracts. This action is presently before the court on defendant’s motion to dismiss plaintiff’s claims and plaintiff’s motion to dismiss defendant’s counterclaims. Each motion alleges a lack of subject matter jurisdiction. As is appropriate when evaluating challenges of this court’s jurisdiction, the court has considered the information submitted by the parties outside of the pleadings. See, e.g., Fidelity & Deposit Co. v. United States, 2 Cl.Ct. 137, 145 (1983). For the reasons set forth herein, defendant’s motion to dismiss is denied and plaintiff’s motion to dismiss is granted in part and denied in part.

[529]*529I.

The 18 timber sales contracts in issue cover the harvesting of timber in specified areas of the Black Hills National Forest. The respective bid solicitation for each of the contracts listed, inter alia, (1) the quantity of timber on the land, (2) the contract ratio, i.e., the ratio of sawtimber (more valuable) to roundwood (less valuable) on the land, and (3) the appraised value for sawtimber per thousand board feet (MBF) and for roundwood per cord.1 Pursuant to each solicitation, the Forest Service offered roundwood at the appraisal rate. The competitive aspect of each sale was the bidding for the sawtimber, with bidders generally required to submit bids at or above the sawtimber appraisal rate. Each solicitation also described the Forest Service’s method for scaling (measuring) the amount and determining the type (saw-timber/roundwood) of timber that the contractor harvested and was obliged to purchase at the contract prices.

After plaintiff had entered all 18 contracts and after performance on most had commenced, plaintiff complained in an April 14, 1978, letter of “serious errors of substantial nature” made by the Forest Service in each solicitation and contract. The alleged errors included the process by which the Forest Service set the contract ratio and appraisal rates and the method the Forest Service used for measuring the amount of timber harvested by Little River. Plaintiff sought “contract reformation, and other equitable relief” and, alternatively, “rescission of the contracts in some instances.”

In its letter, plaintiff alleged that it had lost “well over $1,000,000” on all 18 contracts during a time when it believed it would have made “substantially in excess of $1,000,000.” However, plaintiff did not specify the precise amount of total damages nor break down the damages as to each contract. Plaintiff recommended, inter alia, the hiring of experts and the conducting of studies and requested that “all future contract offerings be held in abeyance pending further study and correction of the substantial ... errors.” Plaintiff requested that “[f]air and reasonable procedures for the continued administration of these contracts ... be established” and warned that “[i]f this request is not granted, serious consideration will ... be given to suspending all logging operations and closing [plaintiff’s] mill pending resolution of the various problems.”

In a May 30, 1978, response, the Black Hills National Forest Supervisor defended its procedures and refused to suspend the contracts. In an August 1, 1978, letter, relying on essentially the same errors set forth in its April 14 letter, plaintiff alleged that the Forest Service was in breach of each of the 18 timber sale contracts and that “[a]s a result of these breaches, Little River Lumber Company is legally excused from any duty to further perform the contracts until such time as the breaches have been cured.” Plaintiff did not request damages but noted that it was reserving “all rights and remedies that it may have” for breach of contract. Thereafter, plaintiff suspended performance on the contracts.

Plaintiff pursued an administrative review of the Supervisor’s May 30,1978, decision not to suspend the contracts, but that effort was unsuccessful. In a final agency determination of August 16, 1979, the Supervisor’s decision was affirmed. Prior to this final decision, in March 1979, the CDA became effective.

Tinder the CDA, contractors “may elect to proceed under [the CDA] with respect to any claim pending then before the contracting officer [on the effective date] or initiated thereafter.” Contract Disputes Act of 1978, Pub.L. No. 95-563, § 16, 92 Stat. 2383 (1978). See, e.g., Folk Constr. Co. v. United States, 226 Ct.Cl. 602, 603 (1981). Commencing December 28,1979, and thereafter, plaintiff submitted letters to the contracting officer that purported to constitute written claims on each of the 18 contracts. In each letter, plaintiff elected to have the [530]*530respective claim resolved pursuant to the CD A.

II.

To understand the substance of the allegations contained in these purported claim letters, it is necessary to understand the methodology the Forest Service employed when it established the contract ratio, set the appraisal rate for sawtimber, and determined the amount of money the contractor owed for harvested timber.

To establish the contract ratio, prior to issuing the solicitations the Forest Service cruised (i.e., estimated) the amount of timber on each contract site and then broke down its estimate as to the amount of sawtimber and the amount of roundwood. The Forest Service estimated the amount of sawtimber in MBF and the amount of roundwood in cubic feet. It then converted the roundwood cubic feet figure into cords by using a conversion factor of 77 cubic feet of solid wood per cord, and then converted the cords figure into MBF by using a conversion factor of two cords per MBF. Based on these estimates, the Forest Service established the percentage ratio of sawtimber to roundwood on the contract sites (e.g., 60-40 means 60% sawtimber and 40% roundwood).

To set the appraisal rate for sawtimber on the contract site, the Forest Service referred to a timber price index known as the Western Wood Product Association (WWPA) Ponderosa Pine Index. The Forest Service adjusted the Ponderosa Pine Index price to account for a series of variables, including logging costs and wood chips removed. The “base rate” for saw-timber, i.e., the minimum at which sawtimber could be sold regardless of the appraisal rate, was $3.00 per MBF. Where the appraisal rate exceeded the base rate, the bidders were obliged to bid at or above the appraisal rate. The bid price was adjusted throughout the contract term to account for changes in the market price of sawtimber as reflected by changes in the Ponderosa Pine Index.

To determine the amount of money the contractor owed for harvested timber, the Forest Service scaled the cut lumber on a sample basis. As when establishing the contract ratio, the Forest Service scaled sawtimber in MBF and roundwood in cubic feet. To convert the roundwood cubic feet figure into cords, it used a table rate known as the Black Hills Roundwood Volume Table.

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Bluebook (online)
36 Cont. Cas. Fed. 75,945, 21 Cl. Ct. 527, 1990 U.S. Claims LEXIS 368, 1990 WL 141014, Counsel Stack Legal Research, https://law.counselstack.com/opinion/little-river-lumber-co-v-united-states-cc-1990.