A-10090, AUGUST 18, 1925, 5 COMP. GEN. 124

A-10090: Aug 18, 1925

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LIMITATION OF AUTHORITY A CONTRACTING OFFICER OF THE GOVERNMENT IS WITHOUT AUTHORITY TO OBLIGATE THE GOVERNMENT. WHERE A HIGHER BID HAS BEEN ACCEPTED WITHOUT SUCH LAWFUL REASON THEREFOR SETTLEMENT OF THE CLAIM WILL BE MADE ON THE BASIS OF THE LOWEST BID PRICE. THE DISTINCTION BETWEEN THE LIABILITY OF INDIVIDUALS AND THE GOVERNMENT WITH RESPECT TO THEIR AGENTS IS THAT THE FORMER ARE LIABLE TO THE EXTENT OF THE POWER THEY HAVE APPARENTLY GIVEN THEIR AGENTS. WHILE THE GOVERNMENT IS LIABLE ONLY TO THE EXTENT OF THE POWER IT HAS ACTUALLY GIVEN ITS AGENTS BY LAW. THE BID WAS ACCEPTED. CLAIMANT'S BID WAS NOT THE LOWEST OF THE BIDS SUBMITTED. SETTLEMENT WAS MADE ON THE BASIS OF THE LOWEST BID.

A-10090, AUGUST 18, 1925, 5 COMP. GEN. 124

ADVERTISING, ACCEPTANCE OF OTHER THAN THE LOWEST BID - OFFICERS AND EMPLOYEES, LIMITATION OF AUTHORITY A CONTRACTING OFFICER OF THE GOVERNMENT IS WITHOUT AUTHORITY TO OBLIGATE THE GOVERNMENT, IN THE ABSENCE OF ANY LAWFUL REASON, TO PAY OTHER THAN THE PRICE STIPULATED IN THE LOWEST BID, AND WHERE A HIGHER BID HAS BEEN ACCEPTED WITHOUT SUCH LAWFUL REASON THEREFOR SETTLEMENT OF THE CLAIM WILL BE MADE ON THE BASIS OF THE LOWEST BID PRICE. THE DISTINCTION BETWEEN THE LIABILITY OF INDIVIDUALS AND THE GOVERNMENT WITH RESPECT TO THEIR AGENTS IS THAT THE FORMER ARE LIABLE TO THE EXTENT OF THE POWER THEY HAVE APPARENTLY GIVEN THEIR AGENTS, WHILE THE GOVERNMENT IS LIABLE ONLY TO THE EXTENT OF THE POWER IT HAS ACTUALLY GIVEN ITS AGENTS BY LAW, AND THE UNAUTHORIZED ACTS OF SUCH AGENTS CAN NOT ESTOP THE GOVERNMENT FROM ASSERTING THEIR INVALIDITY.

DECISION BY COMPTROLLER GENERAL MCCARL, AUGUST 18, 1925:

THE J. B. OSGOOD COFFEE CO. REQUESTED, JUNE 6, 1925, REVIEW OF SETTLEMENT NO. 079943, DATED MAY 11, 1925, DISALLOWING $95 OF ITS CLAIM FOR $185 FOR COFFEE FURNISHED THE UNITED STATES VETERANS' HOSPITAL NO. 99, EXCELSIOR SPRINGS, MO., DURING THE MONTHS OF FEBRUARY AND MARCH, 1925.

IT APPEARS THAT THE OFFICER IN CHARGE OF THE UNITED STATES VETERANS' HOSPITAL NO. 99 ADVERTISED FOR BIDS ON A QUANTITY OF FOOD SUPPLIES. CLAIMANT SUBMITTED A BID AT 37 CENTS PER POUND ON 500 POUNDS OF COFFEE. THE BID WAS ACCEPTED. CLAIMANT'S BID WAS NOT THE LOWEST OF THE BIDS SUBMITTED, BEING 19 CENTS PER POUND MORE THAN THAT OF THE ITEN BISCUIT CO., THE LOWEST BIDDER. CLAIMANT MADE DELIVERY OF THE COFFEE AND SUBMITTED INVOICES TO THE VETERANS' BUREAU FOR PAYMENT. SETTLEMENT WAS MADE ON THE BASIS OF THE LOWEST BID, OR 18 CENTS PER POUND FOR THE 500 POUNDS DELIVERED. CLAIMANT REFUSED TO ACCEPT SETTLEMENT ON THIS BASIS AND RETURNED CHECK IN THE SUM OF $90 TO THIS OFFICE, AND CLAIMS PAYMENT AT THE RATE OF 37 CENTS PER POUND.

WITH REFERENCE TO THE ACCEPTANCE OF OTHER THAN THE LOWEST BID THE OFFICER IN CHARGE STATES:

THIS CONTRACT RECOMMENDED FOR ACCEPTANCE FOR THE ITEMS MARKED "A" ON THE ATTACHED SCHEDULE OF SUPPLIES. THE ITEM OF COFFEE IS RECOMMENDED FOR ACCEPTANCE AT THE PRICE OF 0.37 OFFERED BY THE J. B. OSGOOD COFFEE CO., RATHER THAN AT THE PRICE OF 0.18 OFFERED BY THE ITEN BISCUIT CO., FOR THE FOLLOWING REASONS: THE COFFEE OFFERED BY THE J. B. OSGOOD COFFEE CO. HAS BEEN USED FOR SOME TIME AT THIS STATION, AND HAS BEEN SATISFACTORY; THE ITEN BISCUIT CO. DID NOT SEND A SAMPLE OF THE COFFEE THEY INTENDED TO FURNISH, AND THEREFORE, DUE TO THE HIGH PRICE FOR COFFEE PREVAILING IN THIS LOCALITY, IT WAS CONCLUDED THAT A COFFEE AT THE LOW PRICE WOULD NOT BE SATISFACTORY.

THE CIRCUMSTANCES RELATED BY THE CONTRACTING OFFICER CONSTITUTE NO REASONABLE BASIS FOR HIS ASSUMPTION THAT THE COFFEE PROPOSED TO BE FURNISHED BY THE LOWEST BIDDER WOULD NOT COMPLY WITH THE SPECIFICATIONS OF THE ADVERTISEMENT, AND IT IS TO BE ASSUMED THAT ANY COFFEE COMPLYING WITH SUCH SPECIFICATIONS WOULD MEET THE NEEDS OF THE GOVERNMENT. THEREFORE IT MUST BE HELD THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO OBLIGATE THE GOVERNMENT TO PAY OTHER THAN THE PRICE STIPULATED IN THE LOWEST BID.

THERE IS A WELL-RECOGNIZED DISTINCTION BETWEEN INDIVIDUALS AND THE GOVERNMENT WITH RESPECT TO ITS AGENTS; THE FORMER ARE LIABLE TO THE EXTENT OF THE POWER THEY HAVE APPARENTLY GIVEN THEIR AGENTS, WHILE THE GOVERNMENT IS LIABLE ONLY TO THE EXTENT OF THE POWER IT HAS ACTUALLY GIVEN ITS AGENTS. IN OTHER WORDS, THE GOVERNMENT'S AGENTS OR OFFICERS HAVE ONLY LIMITED POWER AND CERTAIN PRESCRIBED DISCRETION, AND PERSONS DEALING WITH SUCH AGENTS OR OFFICERS MUST UNDER ALL CIRCUMSTANCES SEE FOR THEMSELVES THAT SUCH AUTHORITY IS NOT EXCEEDED. THE UNAUTHORIZED ACTS OF SUCH AGENTS CAN NOT ESTOP THE GOVERNMENT FROM ASSERTING THEIR INVALIDITY.

UPON REVIEW THE SETTLEMENT IS SUSTAINED.

CHECK NO. 137449, IN THE SUM OF $90, IS RETURNED HEREWITH IN FULL SETTLEMENT OF ALL CLAIMS ARISING BY REASON OF THE TRANSACTION.