disclosed to the contracting officer she would have authorized the acceptance of the items, but because such facts were not disclosed to her she did not have an opportunity to decide whether to authorize the acceptance of the items. The Board concludes that the gross mistake amounting to fraud found in this paragraph was one of the gross mistakes that occasioned the acceptance of the items that did not comply with the contract requirements. Appellant made a gross mistake when, after the award of the two contracts here concerned and prior to the acceptance of the items tendered, it furnished Mr. Burk, the Government inspector, the 19 February 1969 drawings and in addition failed to advise him that the drawings which it furnished to him when he asked for drawings were drawings which it had not furnished to, and which contained changes which it had not disclosed to, either the contracting officer or to WRAMA. Under the circumstances of this case such action and nondisclosure resulted in a false representation of a material fact by appellant to Mr. Burk. Appellant did not know whether Mr. Burk knew of the unsolicited proposal to WRAMA and the 12 January 1968 letter to the contracting officer, and did not know whether Mr. Burk knew that under the prior contract polyvinal chloride end pieces and not polystyrene end pieces had been used. While the drawings furnished to Mr. Burk showed on their face that they were revisions they were dated prior the dates the contracts concerned were entered into and thus could have been the drawings that both parties intended be used in performing the contract. Therefore the fact that the drawings showed on their face that they were revisions did not show or indicate that the revised drawings were different from the drawings that had been submitted to WRAMA and to the contracting officer prior to the award of the contracts concerned. Upon the basis of the entire record in this case the Board finds that appellant knew the drawings it furnished to Mr. Burk would be used by Mr. Burk to inspect the items tendered and that they were furnished to Mr. Burk by appellant for that purpose. The false representation in the case of this gross mistake was made by the failure to disclose facts that should have been disclosed to Mr. Burk in the circumstances. The mistake was gross in that it was out of all measure, beyond allowance, and one not to be expected of a responsible supplier who had supplied to WRAMA and to the contracting officer a different drawing for the item it offered to furnish. The mistake is one which cannot be reconciled with good faith and one which a responsible contractor acting honestly would not reasonably be supposed to make. The gross mistake found in this paragraph is such a gross mistake as amounts to fraud even though there may have been no actual bad faith on the part of appellant and even though the misrepresentation may have been made by mistake and without an intent to deceive. The Board concludes that the gross mistake as amounts to fraud found in this paragraph was one of the gross mistakes, and was in fact the ultimate gross mistake, that occasioned the acceptance of the items that did not comply with contract requirements. Upon the basis of the above findings the Board decides that under the terms of the Inspection article in the contracts the acceptance of the dehydrator cartridges was not conclusive. While from the standpoint of hindsight the Government also made mistakes in this case, the Board finds that they were not gross mistakes. In retrospect the Government made a mistake when it failed to put a specific reference to the 14 August 1967 drawing into the contracts; it made a mistake when it failed to provide Mr. Burk with a copy of the 14 August 1967 drawing for his use for inspection purposes; it, by Mr. Burk, made a mistake when it obtained from appellant the drawings used for inspecttion purposes; and it, by Mr. Burk, made a mistake when it accepted the cartridges. Considering the surrounding circumstances these were not gross mistakes. Appellant had submitted the 14 August 1967 drawing staging it was the drawing for appellant's part number 3120 and nothing in this record shows or implies that the Government, including Mr. Burk, could or should have reasonably foreseen that appellant would make such a major change in its drawing as the change from polyvinal chloride end pieces to polystyrene end pieces without disclosing that fact to the Government. The Government's mistakes do not excuse, and did not reasonably occasion, appellant's mistakes in this case, and provide no basis for holding that the acceptance was conclusive. XXXV Latent Defects Having decided that the acceptance of the items concerned was not conclusive because of "such gross mistakes as amount to fraud" it is unnecessary to decide whether it also was not conclusive because of latent defects. XXXVI Amount Due the Government The Government's claim in this case is limited to the price paid, plus interest, for dehydrator cartridges which it can return to appellant and has offered to return at appellant's expense. The Board has found that under the terms of the contract the acceptance of such cartridges was not conclusive. The Board finds further that the Government revoked the acceptance of such cartridges within a reasonable time after it discovered, or should have discovered the basis for the revocation, and that it is entitled to the return of the amount paid for the 5,861 cartridges concerned plus interest thereon at 6% per annum in accordance with the Interest article in the contracts. The amount paid for the 5,861 cartridges was $11,033.76. The Government demanded repayment on 5,251 cartridges, for which it paid $9,976.93, on 27 April 1970. Through 28 August 1970 the interest due on this amount is $201.72 ($9,976.93 at 6% per annum is $598.62 per annum or $1.64 per day.) Interest is computed for 123 days for a total of $201.72. The Government demanded repayment on 516 cartridges, for which it had paid $893.97, on 23 June 1970. Through 28 August 1970. Through 28 August 1970 the interest due on this amount is $9.90 ($893.97 at 6% per annum is $53.64 per annum or $.15 per day.) Interest is computed for 66 days for a total of $9.90. The Government demanded repayment on 94 cartridges, for which it had paid $162.86, on 28 August 1970. Starting on 29 August 1970 the interest is due on this amount at 6% per annum. Through 28 August 1970 the total interest due is $211.62 (i.e., $201.72 + $9.90). On and after 29 August 1970 interest accrues on the $11,033.76 at the rate of $1.81 per day except to the extent that it is reduced by partial payments or full payment. ($11,033.76 at 6% per annum is $662.03 per annum or $1.81 per day.) XXVII Summary The appeal is denied. As of 29 August 1970 appellant is liable to the Government in the amount of $11,245.38 consisting of $11,033.76 principal and $211.62 interest. On and after 29 August 1970 interest on the $11,033.76 accrues at the rate of $1.81 per day except to the extent it is reduced by partial or full payment. Section 6. Risk of Loss KIRINN AND COMPANY, INC. ASBCA No. 14533 (1970) OPINION BY COLONEL THORNILEY Forty-three desks manufactured by appellant pursuant to this contract were totally destroyed in a fire at appellant's plant. The contracting officer denied appellant's request for payment of $8,772.00, the contract price of the desks. The sole question presented is which party shall bear the risk of loss. FINDINGS OF FACT This formally-advertised contract awarded 30 March 1966 required appellant to furnish not less than a designated minimum nor more than a maximum quantity of desks at a unit price of $204.00 when ordered by the Government. Delivery Order Number 2, issued 13 June 1966, called for 126 desks. As modified, this order required delivery starting on 15 July 1968 to be complete on 15 August 1968. General Provision 6.14 of the basic contract provides: "6.14 PLACE OF DELIVERY: ORIGIN (a) The articles to be furnished hereunder shall be "(b) The articles to be furnished hereunder shall be "(1) Tottenville, Staten Island 7, New York, N.Y. "(2) Ellis St. Tottenville, S.I., N.Y. S.I. Rapid Transit Balt. Ohio (Bidder insert exact location of private siding "'(3) 101 Ellis St. Tottenville, S.I., N.Y. (Bidder insert exact location from which truck "(4) Port of New York (Bidder insert port, or the specific area within "c) The method of shipment shall be specified by the Armed Services Procurement Regulation 7-103.6, Responsibility for Supplies (Jan. 1958) incorporated into the contract by reference provides: "Except as otherwise provided in this contract, (i) the Contractor shall be responsible for the supplies By written application dated 3 January 1969 the appellant requested issuance of a Government Bill of Lading (GBL) for forty-three of the desks called for by Delivery Order Number 2. Pursuant to this application a GBL was issued and received by the appellant on 10 January designating the Transportation Officer, Naval Supply Center, Norfolk, Virginia, as consignee and specifying Pilot Freight Carriers as the transportation company. On 5 February 1969 the Government Quality Assurance Representative inspected the desks in appellant's plant and accepted them as complying with contract specifications. Later that same day appellant notified the Pilot Freight Carriers' dispatcher by telephone that a shipment was ready and |