A-80416, SEPTEMBER 15, 1936, 16 COMP. GEN. 248

A-80416: Sep 15, 1936

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CONTRACTS - AWARDS - CONTINGENT WHERE AN AWARD CONTINGENT ON THE ENACTMENT INTO LAW OF THE APPROPRIATION BILL CONCERNED IS UNQUALIFIEDLY CONFIRMED BY THE CONTRACTOR. THE CONTRACTOR IS NOT EXCUSED FROM PERFORMANCE BECAUSE OF THE FAILURE OF THE CONTRACTING OFFICER TO GIVE NOTICE OF THE ENACTMENT OF SAID APPROPRIATION BILL INTO LAW. AN ADVERTISEMENT WAS ISSUED COVERING. BIDS FOR WHICH WERE OPENED ON APRIL 16. AS THE AWARDS UNDER THIS ADVERTISEMENT WERE MADE PRIOR TO THE PASSAGE OF THE INTERIOR DEPARTMENT APPROPRIATION BILL. ALL AWARDS WERE MADE CONTINGENT UPON THAT BILL'S ENACTMENT INTO LAW. THE AWARD ON NO. 10 CANNED CORN WAS SPLIT BETWEEN TWO BIDDERS. THE AWARD WAS MADE ON MAY 20. A CONFIRMATION OF THE AWARD WAS REQUESTED.

A-80416, SEPTEMBER 15, 1936, 16 COMP. GEN. 248

CONTRACTS - AWARDS - CONTINGENT WHERE AN AWARD CONTINGENT ON THE ENACTMENT INTO LAW OF THE APPROPRIATION BILL CONCERNED IS UNQUALIFIEDLY CONFIRMED BY THE CONTRACTOR, ALTHOUGH NOT MADE WITHIN THE TIME SPECIFIED IN THE BID, THE CONTRACTOR IS NOT EXCUSED FROM PERFORMANCE BECAUSE OF THE FAILURE OF THE CONTRACTING OFFICER TO GIVE NOTICE OF THE ENACTMENT OF SAID APPROPRIATION BILL INTO LAW.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, SEPTEMBER 15, 1936:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF SEPTEMBER 8, 1936, AS FOLLOWS:

UNDER DATE OF MARCH 19, 1936, AN ADVERTISEMENT WAS ISSUED COVERING, AMONG OTHER ITEMS, NO. 10 CANNED CORN, ITEM 56-C-14340, FOR THE INDIAN SERVICE FOR THE FISCAL YEAR 1937, BIDS FOR WHICH WERE OPENED ON APRIL 16.

AS THE AWARDS UNDER THIS ADVERTISEMENT WERE MADE PRIOR TO THE PASSAGE OF THE INTERIOR DEPARTMENT APPROPRIATION BILL, ALL AWARDS WERE MADE CONTINGENT UPON THAT BILL'S ENACTMENT INTO LAW. THE AWARD ON NO. 10 CANNED CORN WAS SPLIT BETWEEN TWO BIDDERS. SUSSMAN, WORMSER AND COMPANY, OF SAN FRANCISCO, BEING ENTITLED TO 504 DOZEN CANS, PRICE AND FREIGHT CONSIDERED, RECEIVED AN AWARD FOR THAT QUANTITY. THE AWARD WAS MADE ON MAY 20, AND SINCE THE BIDDER'S OPTION OF 20 DAYS HAD EXPIRED, A CONFIRMATION OF THE AWARD WAS REQUESTED. THIS CONFIRMATION, UNQUALIFIED, WAS RECEIVED BY RADIO ON MAY 22.

THE INTERIOR DEPARTMENT APPROPRIATION BILL BECAME LAW ON JUNE 22. INFORMATION CONCERNING THE PASSAGE OF ALL APPROPRIATION BILLS IS WIDELY DISSEMINATED BY VARIOUS MEDIUMS THROUGHOUT THE UNITED STATES, FIRMS RECEIVING AWARDS UNDER THIS AND SIMILAR ADVERTISEMENTS WERE NOT NOTIFIED CONCERNING THE PASSAGE OF THE BILL UNLESS THEY HAD SPECIFICALLY REQUESTED SUCH NOTIFICATION. BECAUSE OF THE PRESSURE UNDER WHICH THIS DEPARTMENT'S PURCHASING OFFICE WAS WORKING AT THAT TIME OF THE YEAR AND THE FACT THAT THE BIDDER HAD STATED OCTOBER 1 AS THE DELIVERY DATE OF THE CORN, THERE WAS CONSIDERABLE DELAY IN PLACING THE PURCHASING ORDER ON THIS PARTICULAR AWARD. ON AUGUST 5 THE CONTRACTOR WROTE THE PURCHASING OFFICER THAT SINCE IT HAD NOT BEEN NOTIFIED CONCERNING THE PASSAGE OF THE APPROPRIATION BILL OR RECEIVED A PURCHASE ORDER, IT CONSIDERED ITS OBLIGATION UNDER THE AWARD AS CANCELED.

UPON RECEIPT OF THIS LETTER, THE PURCHASING OFFICER NOTIFIED THE CONTRACTOR BY RADIO THAT IT WAS IMPOSSIBLE TO CANCEL THE AWARD AND THAT THE NECESSARY PURCHASE ORDER WOULD BE MAILED IMMEDIATELY. ON RECEIPT OF THE PURCHASING OFFICER'S RADIOGRAM, THE CONTRACTOR WROTE THE DEPARTMENT UNDER DATE OF AUGUST 10 AGAIN STATING THAT IT CONSIDERED ITS OBLIGATION UNDER THE AWARD AS CANCELED. THE PRICE OF CORN HAS ADVANCED APPROXIMATELY 90 PERCENT SINCE MAY 22, THE DATE ON WHICH THE AWARD WAS CONFIRMED, AND IT IS OBVIOUS THAT CANCELLATION AND SUBSEQUENT READVERTISEMENT WOULD RESULT IN A MUCH HIGHER PRICE BEING PAID FOR THIS COMMODITY BY THE GOVERNMENT.

THE ORDER FOR THE CORN WAS PLACED ON AUGUST 10, AND RECEIPT OF THE ORDER WAS ACKNOWLEDGED BY THE CONTRACTOR ON AUGUST 11, THE ORIGINAL COPY OF THE ACKNOWLEDGEMENT BEING ENCLOSED WITH THE OTHER PAPERS. YOU ARE REQUESTED TO ADVISE WHETHER, UNDER THE CIRCUMSTANCES, SUSSMAN, WORMSER AND COMPANY IS OBLIGATED TO FURNISH THE CANNED CORN.

THE BID OF SUSSMAN, WORMSER AND COMPANY, OPENED APRIL 16, 1936, IN RESPONSE TO THE ADVERTISEMENT OF MARCH 19, 1936, CONTAINED A STATEMENT THAT THE COMPANY AGREED, IN EVENT THE BID BE ACCEPTED WITHIN 20 DAYS FROM THE DATE OF OPENING, TO FURNISH ANY OR ALL OF THE ITEMS UPON WHICH PRICES WERE QUOTED, AND THERE WAS A FURTHER STATEMENT ON THE FACE OF THE BID IN PEN AND INK THAT---

20-DAY OPTION GIVEN YOU. SHOULD THERE BE POSSIBILITY OF AWARD ON ANY ITEM PLEASE WIRE FOR EXTENSION OF OPTION ON ITEM CONCERNED.

BY TELEGRAM OF MAY 20, 1936, SUSSMAN, WORMSER AND CO. WERE ADVISED BY THE PURCHASING OFFICER, INTERIOR DEPARTMENT, AS FOLLOWS:

YOU AWARDED CONTINGENT UPON INTERIOR DEPARTMENT APPROPRIATION BILL BECOMING LAW CORN ITEM FIFTY SIX DASH C DASH FOURTEEN THREE FORTY FOR FIVE NAUGHT FOUR DOZEN THREE DOLLARS FIFTY CENTS PER DOZEN FOB HOOPESTON WIRE CONFIRMATION.

THE COMPANY REPLIED IN TELEGRAM OF MAY 22, 1936:

RETEL ACCEPT AWARD NUMBER TEN CORN FIVE NAUGHT FOUR DOZEN.

THE TERMS OF THE BID AND THE INTERCHANGE OF THE TELEGRAMS DATED (MAY 20 AND 22, 1936, IMPOSED ON SUSSMAN, WORMSER AND CO. A LEGAL CONTRACT OBLIGATION TO MAKE DELIVERY IN ACCORDANCE WITH THE ACCEPTED BID IN EVENT THE INTERIOR DEPARTMENT APPROPRIATION BILL SHOULD BECOME LAW. SEE UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP CO., 239 U.S. 88, AND PLUMLEY V. UNITED STATES, 226 U.S. 545.

AS YOU HAVE STATED, SUSSMAN, WORMSER AND CO. NOW CONTENDS THAT, SINCE IT WAS NOT GIVEN NOTICE PRIOR TO AUGUST 5, 1936, OF THE INTERIOR DEPARTMENT APPROPRIATION BILL BECOMING LAW, SAID COMPANY WAS RELEASED FROM THE OBLIGATIONS OF THE CONTRACT RESULTING FROM THE BID OF THE COMPANY AND THE ABOVE-REFERRED TO TELEGRAMS OF MAY 20 AND 22, 1936.

THERE IS NO LEGAL BASIS TO SUPPORT ANY SUCH VIEW OF THE MATTER. IN THE FIRST PLACE, THE UNITED STATES DID NOT AGREE IN THE ADVERTISED SPECIFICATIONS OR IN THE TELEGRAM OF MAY 20, 1936, TO NOTIFY SUSSMAN, WORMSER AND CO. WHEN THE INTERIOR DEPARTMENT APPROPRIATION BILL FOR THE FISCAL YEAR 1937 BECAME LAW, AND THE COMPANY DID NOT REQUEST SUCH NOTIFICATION IN ITS TELEGRAM OF MAY 22, 1936, NOTIFYING THE GOVERNMENT THAT THE COMPANY ACCEPTED THE AWARD OF THE CONTRACT FOR THE CORN EVEN THOUGH THE BID WAS NOT ACCEPTED WITHIN 20 DAYS FROM THE DATE IT WAS OPENED. IN OTHER WORDS, THERE WAS NO CONDITION IN THE CONTRACT THAT THE UNITED STATES SHOULD NOTIFY THE COMPANY WHEN THE INTERIOR DEPARTMENT APPROPRIATION BILL BECAME LAW, AND SUBJECT TO THE CONDITIONS THAT SUCH BILL BECOME LAW THE CONTRACTOR WAS BOUND CONDITIONALLY TO DELIVER THE CORN. THE CONDITION BECAME ABSOLUTE WHEN THE APPROPRIATION BILL IN QUESTION DID BECOME LAW.

MOREOVER, IT IS AN ELEMENTARY PRINCIPLE OF LAW THAT ALL PERSONS ARE CHARGEABLE WITH NOTICE OF THE TERMS OF STATUTES ENACTED BY THE CONGRESS AND WHICH BECOME LAW. SEE BRUSH V. WARE, 15 PET. 3; COOKE V. UNITED STATES, 91 U.S. 389; WHITESIDE V. UNITED STATES, 93 U.S. 247; KETCHUM V. ST. LOUIS, 101 U.S. 306; AND TEXAS V. WHITE, 7 WALLACE 700. THAT IS TO SAY, SUSSMAN, WORMSER AND CO. WAS CHARGEABLE WITH NOTICE THAT THE INTERIOR DEPARTMENT APPROPRIATION BILL FOR 1937 DID BECOME LAW--- BOTH AS TO THE EFFECTIVE DATE AND THE TERMS THEREOF. ENTIRELY ASIDE FROM THE LACK OF ANY CONTRACTUAL OBLIGATION ON THE PURCHASING OFFICER OF THE INTERIOR DEPARTMENT TO NOTIFY SUSSMAN, WORMSER AND CO. AS TO THE DATE WHEN THE INTERIOR DEPARTMENT APPROPRIATION BILL FOR 1937 BECAME LAW, THE COMPANY WAS CHARGEABLE WITH NOTICE THAT SUCH BILL DID BECOME LAW. THERE IS NO LEGAL BASIS TO SUPPORT ANY CONCLUSION THAT SUCH PRESUMED NOTICE WAS NOT, IN FACT, ACTUAL NOTICE.

ANSWERING YOUR QUESTION SPECIFICALLY, YOU ARE ADVISED THAT THE CONTRACTOR, SUSSMAN, WORMSER AND CO., IS LEGALLY OBLIGATED TO DELIVER THE CANNED CORN IN ACCORDANCE WITH THE TERMS OF THE CONTRACT OR TO PAY THE UNITED STATES ANY EXCESS COSTS RESULTING FROM THE DEFAULT OF SAID COMPANY IN PERFORMANCE OF THAT CONTRACT.