B-107274, FEBRUARY 12, 1952, 31 COMP. GEN. 378

B-107274: Feb 12, 1952

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CONTRACTS - AWARDS - NEGOTIATION AFTER ADVERTISING FOR BIDS WHERE INVITATION FOR BIDS PROVIDES THAT AFTER PROPOSALS ARE RECEIVED NEGOTIATIONS WILL BE CONDUCTED WITH THE THREE LOWEST BIDDERS TO DETERMINE THE FINAL CONDITIONS. A NOTICE TO PROCEED ISSUED TO LOWEST BIDDER BEFORE ANY NEGOTIATIONS WERE HELD WITH AUTHORIZED REPRESENTATIVES OF THE BIDDER CONSTITUTED NO MORE THAN A FIRM OFFER ON THE PART OF THE GOVERNMENT TO AWARD THE CONTRACT TO THAT BIDDER AT THE PRICE STATED IN THE PROPOSAL. 1952: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 11. WERE ADVISED IN PART AS FOLLOWS: THE PROPOSALS WILL BE OPENED IN THIS ROOM AT 1500 HOURS ON THE 2ND OF OCTOBER. NEGOTIATIONS WILL BE CONDUCTED WITH THOSE SUBMITTING THE THREE LOWEST PROPOSALS TO DETERMINE THE FINAL CONDITIONS AND PRICE.

B-107274, FEBRUARY 12, 1952, 31 COMP. GEN. 378

CONTRACTS - AWARDS - NEGOTIATION AFTER ADVERTISING FOR BIDS WHERE INVITATION FOR BIDS PROVIDES THAT AFTER PROPOSALS ARE RECEIVED NEGOTIATIONS WILL BE CONDUCTED WITH THE THREE LOWEST BIDDERS TO DETERMINE THE FINAL CONDITIONS, PRICE, ETC., A NOTICE TO PROCEED ISSUED TO LOWEST BIDDER BEFORE ANY NEGOTIATIONS WERE HELD WITH AUTHORIZED REPRESENTATIVES OF THE BIDDER CONSTITUTED NO MORE THAN A FIRM OFFER ON THE PART OF THE GOVERNMENT TO AWARD THE CONTRACT TO THAT BIDDER AT THE PRICE STATED IN THE PROPOSAL, AND THEREFORE, SAID OFFER MUST BE ACCEPTED WITHOUT QUALIFICATION BY THE BIDDER IN ORDER FOR A CONTRACT TO BE CONSUMMATED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE ARMY, FEBRUARY 12, 1952:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 11, 1952, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER AN ENFORCEABLE CONTRACT EXISTS BETWEEN THE GOVERNMENT AND JONN MCSHAIN, INC., FOR CERTAIN CONSTRUCTION WORK AT CAMP RITCHIE, MARYLAND, COVERED BY INVITATION NO. ENG-10-080-52-13-/15), DATED SEPTEMBER 14, 1951.

THE RECORD SHOWS THAT, AT A CONFERENCE HELD IN THE OFFICE OF THE DISTRICT ENGINEER, WASHINGTON, D.C., ON SEPTEMBER 6, 1951, FOR THE PURPOSE OF ACQUAINTING PROSPECTIVE BIDDERS WITH THE GENERAL NATURE OF THE WORK TO BE PERFORMED, THE CONTRACTORS PRESENT, INCLUDING REPRESENTATIVES OF JOHN MCSHAIN, INC., WERE ADVISED IN PART AS FOLLOWS:

THE PROPOSALS WILL BE OPENED IN THIS ROOM AT 1500 HOURS ON THE 2ND OF OCTOBER, 1951. NEGOTIATIONS WILL BE CONDUCTED WITH THOSE SUBMITTING THE THREE LOWEST PROPOSALS TO DETERMINE THE FINAL CONDITIONS AND PRICE.

THE REFERRED-TO INVITATION WAS ISSUED UNDER DATE OF SEPTEMBER 14, 1951, AND STATED THAT PROPOSALS, WHICH WOULD BE THE BASIS OF NEGOTIATING A CONSTRUCTION CONTRACT, WOULD BE RECEIVED UNTIL OCTOBER 2, 1951. OF THE PROPOSALS RECEIVED, THAT OF JOHN MCSHAIN, INC., WAS LOW AT $6,574,825, THE OTHER PROPOSALS RANGING FROM $7,944,010 TO $11,509,980. THE PROPOSAL DID NOT CONTAIN ANY QUALIFICATION AND STATED THAT THE CONTRACTOR WOULD EXECUTE A CONTRACT WITHIN 30 DAYS AFTER DATE OF OPENING AND WOULD COMMENCE WORK WITHIN 10 DAYS AFTER RECEIPT OF NOTICE TO PROCEED. IT IS STATED IN FIRST INDORSEMENT OF DECEMBER 3, 1951, FROM THE DIVISION ENGINEER TO THE CHIEF OF ENGINEERS, THAT THE DIVISION ENGINEER, IMMEDIATELY AFTER THE RESULTS OF THE BIDDING WERE REPORTED TO HIM, INSTRUCTED THE DISTRICT ENGINEER TO DETERMINE WHETHER AN ERROR HAD BEEN MADE BY JOHN MCSHAIN, INC., IN VIEW OF THE RELATIVELY LOW BID SUBMITTED, BUT THAT, WHEN THE DISTRICT ENGINEER REPLIED THAT THE CONTRACTOR WAS PRESSING FOR AN AWARD OF THE CONTRACT, AUTHORITY TO MAKE SUCH AWARD WAS GRANTED.

IN YOUR LETTER OF JANUARY 25, 1952, WITH REFERENCE TO THE MATTER, YOU STATE THAT, AFTER THE PROPOSALS WERE OPENED, THE SECOND AND THIRD LOWEST BIDDERS INDICATED THAT, IN VIEW OF THE LOW PROPOSAL SUBMITTED BY MCSHAIN, THEY WERE NOT INTERESTED IN FURTHER NEGOTIATIONS AS THEY COULD NOT APPROACH THE PRICE; THAT THE CORPS OF ENGINEERS WAS COGNIZANT THAT MCSHAIN WAS "ABLE TO PARE CERTAIN ADMINISTRATIVE EXPENSES BECAUSE OF THE FACT THAT A PREVIOUS CONTRACT ( NO. DA-49-080-ENG-833) WAS STILL IN FORCE; " AND THAT ON OCTOBER 12, 1951, REPRESENTATIVES OF THE CONTRACTOR ATTENDED A CONFERENCE--- WHICH IS SHOWN TO HAVE BEEN HELD IN THE OFFICE OF THE DISTRICT ENGINEER, WASHINGTON, D.C.--- "FOR THE PURPOSE OF DISCUSSING THE PROPOSAL AND SETTLING ANY CONTRACT QUESTIONS.'

THE RECORD SHOWS THAT THREE REPRESENTATIVES OF JOHN MCSHAIN, INC., NONE OF WHOM WERE OFFICERS OF THE CORPORATION, ATTENDED THE CONFERENCE OF OCTOBER 12, AND THAT THESE REPRESENTATIVES ASKED VARIOUS QUESTIONS RELATING TO THE PERFORMANCE OF THE WORK AND GAVE NO INDICATION THAT JOHN MCSHAIN, INC., WOULD NOT BE WILLING TO TAKE THE CONTRACT AT THE AMOUNT STATED IN ITS PROPOSAL. MR. PAUL HAUCK, THE CONTRACTOR'S GENERAL MANAGER, WHO WAS PRESENT, DID EXPRESS SOME CONCERN BECAUSE THE AMOUNT QUOTED DID NOT INCLUDE ANYTHING TO COVER CONTINGENCIES, OVERTIME, LIQUIDATED DAMAGES, OR PRICE AND WAGE INCREASES. ON THE SAME DAY, BUT SUBSEQUENT TO THE CONFERENCE, A FORMAL NOTICE WAS ISSUED IN THE AMOUNT OF $6,574,825, WAS THEREBY ACCEPTED, THAT A FORMAL CONTRACT WAS BEING PREPARED, AND THAT THE CONTRACTOR WAS TO PROCEED WITH THE WORK. THE CONTRACTOR WAS REQUESTED IN THE NOTICE TO ACKNOWLEDGE RECEIPT THEREOF IN THE SPACE PROVIDED FOR THE CONTRACTOR'S SIGNATURE AND TO RETURN THE ORIGINAL AND ONE COPY TO THE OFFICE OF THE DISTRICT ENGINEER AT ONCE, RETAINING A COPY.

THE RECORD CONTAINS A MEMORANDUM MADE BY THE DISTRICT ENGINEER OF A CONFERENCE HELD IN HIS OFFICE WITH JOHN MCSHAIN AND PAUL HAUCK ON OCTOBER 24, 1951, WHICH STATES THAT MR. MCSHAIN STATED AT SUCH TIME THAT HE WAS WILLING TO GO AHEAD WITH THE JOB, BUT THAT TWO OF THE TRADES, PLUMBERS AND STEAMFITTERS, HAD REFUSED TO MAN THE JOB AT THE WAGE RATES SET FORTH BY THE DEPARTMENT OF LABOR, AND THE BALTIMORE UNIONS WERE REQUESTING THAT THE RITCHIE PROJECT BE PLACED WITHIN THEIR DISTRICT AND WERE REQUESTING AN INCREASE IN WAGE RATES, AND THAT HE THOUGHT IT WAS THE RESPONSIBILITY OF THE DISTRICT ENGINEER TO HAVE THE DEPARTMENT OF LABOR ISSUE NEW WAGE RATES IN LINE WITH THE BALTIMORE RATES, OR PLACE THE RITCHIE PROJECT UNDER JURISDICTION OF HAGERSTOWN UNIONS, WHICH WOULD MEAN LOWER RATES. THE MEMORANDUM STATES THAT COLONEL MCCUTCHEN STATED THAT THE CONTRACTOR WOULD HAVE TO HAVE THE INTERNATIONAL UNION STATE ITS REFUSAL, IN WRITING, TO MAN THE JOB AT THE RATES PUBLISHED BY THE DEPARTMENT OF LABOR, IN WHICH CASE THE MATTER WOULD BE SUBMITTED TO THE CHIEF OF ENGINEERS AND BE FORWARDED TO THE DEPARTMENT OF LABOR. IN AN AFFIDAVIT FILED WITH THIS OFFICE BY JOHN MCSHAIN ON JANUARY 28, 1952, IT IS STATED THAT THE AFFIANT INFORMED THE DISTRICT ENGINEER AT THIS MEETING THAT A SERIOUS MISTAKE HAD BEEN MADE IN THE COMPUTATION OF THE BID, BUT THAT, BY REASON OF THE FACT THAT THE CONTRACTOR HAD CONTRACT NO. DA-49-080-ENG-833 TO PERFORM, THE CONTRACTOR COULD PROBABLY "GET Y" WITH THE CONTRACT INVOLVED. HOWEVER, AFFIANT FURTHER STATES THAT HE ADVISED THE DISTRICT ENGINEER THAT CERTAIN ITEMS WOULD HAVE TO BE ADJUSTED AND CLEARED UP BEFORE ANY CONTRACT COULD BE SIGNED, OR AGREEMENT REACHED, PARTICULARLY THE WAGE SCALE SITUATION. OCTOBER 26, 1951, JOHN MCSHAIN, AS PRESIDENT OF JOHN MCSHAIN, INC., ADVISED THE DISTRICT ENGINEER THAT THE CONTRACTOR HAD PURPOSELY DELAYED RETURNING THE NOTICE TO PROCEED IN VIEW OF THE SERIOUS PROBLEM OF THE WAGE SCALE WHICH, IT WAS BELIEVED, SHOULD BE SETTLED BEFORE ANY ATTEMPT WAS MADE TO PROCEED WITH THE WORK. ALSO, ON NOVEMBER 7, 1951, THE CONTRACTOR, HAVING RECEIVED NOTICE ON NOVEMBER 5 OF THE TERMINATION FOR THE CONVENIENCE OF THE GOVERNMENT OF WHAT APPEARS TO HAVE BEEN THE MAJOR PORTION OF CONTRACT NO. DA-49-080-ENG 833, WROTE THE DISTRICT ENGINEER THAT THE CANCELLATION OF SAID CONTRACT HAD SERIOUSLY AFFECTED ITS POSITION ON THE CONTRACT HERE INVOLVED AND REQUESTED A CONFERENCE ON NOVEMBER 14. AT THE CONFERENCE, ACCORDING TO THE MEMORANDUM IN THE RECORD, JOHN MCSHAIN STATED THAT HE HAD "BID" FOR THE WORK HERE INVOLVED SOLELY BECAUSE OF HAVING BEEN PREPARED TO ABSORB THE LOSS DUE TO HIS MISTAKE BY REASON OF HAVING THE FIRST CONTRACT, AND THAT HE DID NOT FEEL THAT HE COULD POSSIBLY UNDERTAKE THE WORK UNDER THE CIRCUMSTANCES. ACCORDINGLY, HE ASKED TO BE EXCUSED, STATING THAT THE CONTRACTING OFFICER SHOULD HAVE RECOGNIZED THAT THE BID WAS EXTREMELY LOW IN COMPARISON WITH THE OTHERS AND NOTIFIED HIM OF A POSSIBLE MISTAKE AT THE TIME.

THE CONTRACTOR CONTENDS BEFORE THIS OFFICE THAT THE MISTAKES IN THE CALCULATION OF ITS BID WHICH WERE SET FORTH IN ITS LETTER OF DECEMBER 31, 1951, TO YOU, WERE MADE BECAUSE OF THE NECESSARY HASTE IN PREPARING ITS BID. IN THIS CONNECTION, THE CONTRACTOR CALLS ATTENTION TO THE FACT THAT THE SPECIFICATIONS FOR THE WORK INVOLVED CONTAIN APPROXIMATELY 575 PAGES AND, IN ADDITION, FOUR ADDENDA, OF WHICH TWO ARE DATED SEPTEMBER 20, 1951, AND THE OTHERS SEPTEMBER 25 AND SEPTEMBER 26, 1951, AND THAT EXTENSIVE DRAWINGS FORMED A PART OF THE REQUIREMENTS FOR A BID. IN THE AFFIDAVIT REFERRED TO ABOVE, JOHN MCSHAIN STATES THAT, ON OCTOBER 2, 1951, IN REVIEWING THE ESTIMATES WHICH THE CONTRACTOR HAD RECEIVED FOR THE SUBCONTRACTS AND THE INFORMATION COVERING THE WORK TO BE DONE BY THE CONTRACTOR, SOME DOUBT AROSE IN HIS MIND AS TO THE ADVISABILITY OF ATTEMPTING TO SUBMIT A BID COVERING THE WORK. HOWEVER, HE STATES THAT, IN VIEW OF THE STATEMENT WHICH HAD BEEN MADE TO PROSPECTIVE BIDDERS AT THE CONFERENCE OF SEPTEMBER 6, 1951, TO THE EFFECT THAT NEGOTIATIONS WOULD BE CONDUCTED WITH THOSE SUBMITTING THE THREE LOWEST PROPOSALS TO DETERMINE THE FINAL CONDITIONS AND PRICE, HE DECIDED TO SUBMIT A FIGURE BASED UPON THE ESTIMATES THAT WERE AVAILABLE IN THE BELIEF THAT ANY DISCREPANCIES ARISING COULD BE TAKEN CARE OF BEFORE THE CONTRACT WAS FINALLY NEGOTIATED. THE CONTRACTOR CONTENDS THAT THE NOTICE OF AWARD WAS ISSUED BEFORE ANY NEGOTIATIONS WERE HELD WITH REPRESENTATIVES OF THE CONTRACTOR WHO WOULD BE AUTHORIZED TO CONSUMMATE A CONTRACT, AND THAT, SINCE THE AWARD OF THE CONTRACT NEVER WAS FINALLY ACCEPTED, NO CONTRACT CAN BE SAID TO HAVE BEEN CONSUMMATED.

THE CONTRACTOR'S BID WAS CONSIDERABLY LOWER THAN THE OTHER BIDS AND YOU HAVE STATED, AS INDICATED ABOVE, THAT THE CORPS OF ENGINEERS WAS AWARE THAT THE CONTRACTOR WOULD BE ABLE TO PAR CERTAIN ADMINISTRATIVE EXPENSES BY REASON OF HAVING ANOTHER CONTRACT TO PERFORM AT THE SITE OF THE WORK. ALSO, THE CONTRACTING OFFICER WAS ADVISED FROM THE STATEMENT MADE BY MR. HAUCK AT THE MEETING OF OCTOBER 12, REFERRED TO ABOVE, THAT THE CONTRACTOR'S BID INCLUDED NOTHING FOR CONTINGENCIES. UNDER THESE CIRCUMSTANCES, THE DEPARTMENT OF THE ARMY WOULD HAVE BEEN UNDER A DUTY TO ADVISE THE CONTRACTOR THAT THE TERMINATION OF CONTRACT NO. DA-39-080 ENG- 833 WAS BEING CONSIDERED BEFORE ACCEPTING ITS BID IN THE EVENT IT HAD ANY INFORMATION TO THAT EFFECT. WHILE YOU STATE IN YOUR LETTER OF JANUARY 25, 1952, THAT THE CONTRACTING OFFICER HAD NO KNOWLEDGE THAT SAID CONTRACT WOULD BE TERMINATED, IT IS NOT SHOWN THAT OTHER OFFICIALS OF THE DEPARTMENT OF THE ARMY WERE UNAWARE OF SUCH FACT.

HOWEVER, ASIDE FROM THE ABOVE QUESTION, THERE IS THE MORE FUNDAMENTAL ONE OF WHETHER A CONTRACT WAS EVER CONSUMMATED. THE FACT THAT PROSPECTIVE BIDDERS WERE ADVISED AT THE PREBID CONFERENCE THAT NEGOTIATIONS WOULD BE CONDUCTED WITH THOSE SUBMITTING THE THREE LOWEST PROPOSALS TO DETERMINE THE FINAL CONDITIONS AND PRICE AND THAT THE INVITATION STATED THAT PROPOSALS WOULD BE RECEIVED FOR THE PURPOSE OF "NEGOTIATING" A CONSTRUCTION CONTRACT WOULD BE CALCULATED TO LEAD BIDDERS TO BELIEVE THAT THE CONTRACT WAS TO BE NEGOTIATED INFORMALLY, RATHER THAN ON A FORMAL BID AND ACCEPTANCE BASIS. IT IS NOT DENIED IN YOUR LETTER OF JANUARY 25 THAT NEGOTIATION WITH THE BIDDERS FOLLOWING RECEIPT OF THE PROPOSALS WAS CONTEMPLATED AT THE TIME THE INVITATION WAS ISSUED, BUT YOU STATE THAT THE MEETING OF OCTOBER 12 WAS CONSIDERED TO COVER ALL THE POINTS SUBJECT TO NEGOTIATION, SINCE THE PRICE QUOTED APPARENTLY WAS ACCEPTABLE TO THE CONTRACTOR AT THAT TIME.

ADMITTEDLY, THE REPRESENTATIVES OF THE CONTRACTOR WHO WERE PRESENT AT THE MEETING OF OCTOBER 12 SHOULD HAVE STATED AT THAT TIME THAT THE AMOUNT BID WAS NOT CONSIDERED BY THE CONTRACTOR TO BE FIRM. HOWEVER, IF AS APPEARS TO BE THE CASE IT IS ADMITTED THAT THE CONTRACTOR WAS ENTITLED TO NEGOTIATE THE CONTRACT INFORMALLY AND THAT THE PROPOSAL SUBMITTED WAS NOT, THEREFORE, UNDERSTOOD TO BE A FIRM PROPOSAL, THEN IT NECESSARILY FOLLOWS THAT ANY NEGOTIATION HAD WOULD NOT BE BINDING ON THE CONTRACTOR UNLESS TRANSACTED WITH REPRESENTATIVES OF THE CONTRACTOR WHO WERE DULY AUTHORIZED TO ENTER INTO A FINAL AND BINDING AGREEMENT. IN THIS CONNECTION, THERE HAS BEEN SUBMITTED HERE A " CERTIFICATE OF CERTIFICATION OF SECRETARY OF JOHN MCSHAIN, INC., OF DELAWARE," WHEREIN IT IS STATED THAT THE PRESIDENT AND, IN HIS ABSENCE OR DISABILITY, THE VICE-PRESIDENT, ARE AUTHORIZED BY SECTIONS 31 AND 33 OF THE BY-LAWS OF THE CORPORATION TO EXECUTE BONDS AND OTHER CONTRACTS REQUIRING THE SEAL, UNDER THE SEAL OF THE CORPORATION, AND THAT THE ONLY OTHER PERSONS AUTHORIZED TO PERFORM SUCH FUNCTIONS FOR THE CORPORATION ARE VINCENT P. MCDEVITT, THE CORPORATION'S COUNSEL, AND EDWARD S. BARNHART, SECRETARY OF THE CORPORATION, WHO, JOINTLY AND SEVERALLY, WERE APPOINTED ATTORNEYS-IN-FACT FOR THE CORPORATION AT A SPECIAL MEETING OF THE BOARD OF DIRECTORS HELD ON JULY 5, 1949, AND THAT THEIR AUTHORITY TO PERFORM SUCH FUNCTIONS IS OPERATIVE ONLY WHEN THE PRESIDENT AND VICE PRESIDENT OF THE CORPORATION ARE ABSENT FROM THE COUNTRY. RELATIVE TO THE AUTHORITY OF MESSRS. HAUCK, TIPPETT AND RUSSEL, THE REPRESENTATIVES OF THE CONTRACTOR WHO WERE PRESENT AT THE MEETING OF OCTOBER 12, 1951, IT IS STATED IN THE MCSHAIN AFFIDAVIT AS FOLLOWS:

ALL BIDS SUBMITTED BY THE CORPORATION MUST BE APPROVED BY ME BEFORE SUBMISSION AND MESSRS. HAUCK, TIPPETT AND RUSSELL HAVE NEVER BEEN AUTHORIZED TO SUBMIT, NOR HAVE THEY EVER SUBMITTED, A BID ON BEHALF OF THE CORPORATION WITHOUT SECURING SUCH APPROVAL.

MESSRS. HAUCK, TIPPETT AND RUSSELL HAVE NEVER BEEN AUTHORIZED TO NEGOTIATE OR ACCEPT, NOR HAVE THEY EVER NEGOTIATED OR ACCEPTED, A CONTRACT ON BEHALF OF THE CORPORATION. ON OCCASION THEY HAVE COMMUNICATED TO CONTRACTING OFFICERS THE FACT THAT I HAVE APPROVED PARTICULAR CONTRACTS, HAVING OBTAINED MY APPROVAL BEFORE THE MEETING OR DURING THE COURSE OF THE MEETING BY TELEPHONE.

OF COURSE, THE REPRESENTATIVES REFERRED TO, WHO WERE NOT OFFICERS OF THE CORPORATION, WOULD HAVE NO IMPLIED AUTHORITY TO BIND THE CORPORATION IN A MATTER OF THIS KIND FOR THE REASON THAT NEGOTIATION OF THE CONTRACT NECESSARILY INCLUDED THE EXECUTION OF THE CONTRACT AND THE PAYMENT AND PERFORMANCE BONDS, WHICH WERE REQUIRED TO BE SIGNED BY AN OFFICER OF THE CORPORATION. HENCE, IT WOULD SEEM THAT THE PROCEEDINGS WHICH TOOK PLACE AT THE MEETING OF OCTOBER 12 DID NOT AMOUNT TO A NEGOTIATION OF A FINAL CONTRACT, OR HAVE THE EFFECT OF CONVERTING THE CONTRACTOR'S PROPOSAL TO A FIRM BID THE PURPORTED ACCEPTANCE OF WHICH CREATED A CONTRACT. ON THE CONTRARY, THERE IS SUBSTANTIAL BASIS FOR THE VIEW THAT THE NOTICE OF AWARD AND NOTICE TO PROCEED WHICH WAS ISSUED TO THE CONTRACTOR ON OCTOBER 12, 1951, CONSTITUTED NO MORE THAN A FIRM OFFER ON THE PART OF THE GOVERNMENT TO AWARD THE CONTRACT TO THE CONTRACTOR AT THE PRICE STATED IN ITS PROPOSAL AND, AS SUCH, WOULD HAVE HAD TO HAVE BEEN ACCEPTED WITHOUT QUALIFICATION BY THE CONTRACTOR IN ORDER FOR A CONTRACT TO BE CONSUMMATED. AS INDICATED ABOVE, THE CONTRACTOR NEVER RETURNED THE REFERRED-TO NOTICE WITH ITS SIGNATURE, AS CONTEMPLATED, AND THERE IS CONSIDERABLE DOUBT THAT A COURT WOULD HOLD THAT THE STATEMENT REPORTED BY THE DISTRICT ENGINEER TO HAVE BEEN MADE BY JOHN MCSHAIN AT THE MEETING OF OCTOBER 24, 1951, TO THE EFFECT THAT HE WAS WILLING TO GO AHEAD WITH THE WORK, CONSTITUTED AN ACCEPTANCE OF THE OFFER OF AWARD, PARTICULARLY IN VIEW OF THE FACT THAT MCSHAIN REPORTEDLY FOLLOWED SUCH STATEMENT IMMEDIATELY WITH THE STATEMENT THAT HE THOUGH IT WAS THE RESPONSIBILITY OF THE DISTRICT ENGINEER TO TAKE ACTION TO THE END THAT CERTAIN WAGE-RATE PROBLEMS COULD BE RESOLVED, AND OF THE CONTENTION MADE IN MCSHAIN'S AFFIDAVIT, REFERRED TO ABOVE, AS TO THE CONDITIONAL NATURE OF THE OFFER. MOREOVER, THE CONTRACTOR'S LETTER OF OCTOBER 26, 1951, THE CONTENTS OF WHICH ARE SET OUT ABOVE, IS CAPABLE OF BEING INTERPRETED AS A CONDITIONAL ACCEPTANCE ONLY. THE NEGOTIATIONS WERE IN THIS STATUS WHEN, ON NOVEMBER 14, 1951, THE CONTRACTOR ADVISED THE DISTRICT ENGINEER THAT IT WOULD BE UNABLE TO UNDERTAKE THE WORK IN VIEW OF THE TERMINATION OF CONTRACT NO. DA -49-080 ENG-833. HENCE, UNDER THE FACTS DEVELOPED FROM THE EVIDENCE PRESENTED HERE, AND CONSIDERING THE AMBIGUITIES, UNCERTAINTIES, AND CONFUSION WHICH ATTENDED THE ENTIRE TRANSACTION, THERE APPEARS NO CLEARLY SOUND BASIS FOR CONCLUDING THAT A CONTRACT WAS EVER CONSUMMATED, OR THAT JOHN MCSHAIN, INC., HAS INCURRED ANY LIABILITY UNDER ITS BID.

THE COPY OF CONTRACT NO. DA-49-080-ENG-856, THE SPECIFICATIONS THERETO AND ABSTRACT OF BIDS, AS WELL AS COPY OF CONTRACT NO. DA-49-080 ENG-833, ARE RETURNED HEREWITH. THE OTHER PAPERS TRANSMITTED WITH YOUR LETTER ARE BEING RETAINED IN THIS OFFICE.