Honest Invoicing

In 1943, Patrick Lumber was called upon to furnish three large derrick booms for the Case Construction Company in San Pedro, California. The booms were to be part of a naval ship repair facility being built at Terminal Island in San Pedro. The order called for two 85-foot long booms with 27-inch tops and 36-inch butts, plus one 130-foot boom with a 28-inch top and 45-inch butt. Patrick turned to Ernie Whipple to supply pilings that would meet those specifications.

When providing the quote, Whipple said he couldn’t give a firm price for the large boom because he “might have to fall five trees” before he got one that would be suitable. As it turned out, the second tree felled was suitable. Whipple shipped the three booms and invoiced Patrick for the additional unshipped (and unsuitable for the job) stick. Patrick invoiced the same to Case. When the shipment and the invoice were received the folks at Case called to complain about the “extra” that was invoiced. They said the contract with the government was a cost-plus contract, so Patrick should have charged four “extras”!