B-123421, APRIL 28, 1955, 34 COMP. GEN. 552

B-123421: Apr 28, 1955

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STAR ROUTE CONTRACTS - MILEAGE INCORRECTLY STATED - PRICE ADJUSTMENT A STAR ROUTE CONTRACTOR WHO CARRIED MAIL FOR THE FULL TERM OF A ONE YEAR CONTRACT WHICH CORRECTLY IDENTIFIED THE POINTS BETWEEN WHICH MAIL WAS TO BE CARRIED. WHEN BOTH THE CONTRACTOR AND THE GOVERNMENT WERE AWARE THAT THE ORIGINAL CONTRACT HAD INCORRECTLY STATED THE DISTANCE BETWEEN THE POINTS TO BE SERVED. 1955: REFERENCE IS MADE TO YOUR LETTER OF MARCH 25. IT APPEARS THAT THE CORRECT DISTANCE SHOULD HAVE BEEN SHOWN AS 37.30 MILES. THE FORM OF " ADVERTISEMENT FOR MAIL SERVICE" WHICH WAS USED CONTAINED A PROVISION THAT THE POST OFFICE DEPARTMENT WOULD NOT ASSUME ANY RESPONSIBILITY FOR ERRORS IN THE STATEMENT OF THE MILEAGE IF THE POINTS TO BE SUPPLIED WERE CORRECTLY STATED.

B-123421, APRIL 28, 1955, 34 COMP. GEN. 552

STAR ROUTE CONTRACTS - MILEAGE INCORRECTLY STATED - PRICE ADJUSTMENT A STAR ROUTE CONTRACTOR WHO CARRIED MAIL FOR THE FULL TERM OF A ONE YEAR CONTRACT WHICH CORRECTLY IDENTIFIED THE POINTS BETWEEN WHICH MAIL WAS TO BE CARRIED, BUT INCORRECTLY STATED THE DISTANCE INVOLVED, MAY NOT BE PAID AN INCREASE BASED ON THE ACTUAL DISTANCE. A RENEWAL CONTRACT AWARDED TO A STAR ROUTE CONTRACTOR AT HIS REQUEST, WHEN BOTH THE CONTRACTOR AND THE GOVERNMENT WERE AWARE THAT THE ORIGINAL CONTRACT HAD INCORRECTLY STATED THE DISTANCE BETWEEN THE POINTS TO BE SERVED, MAY NOT BE REFORMED TO PROVIDE A PRICE INCREASE BASED ON THE CORRECT DISTANCE.

COMPTROLLER GENERAL CAMPBELL TO THE POSTMASTER GENERAL, APRIL 28, 1955:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 25, 1955, REQUESTING A DECISION AS TO WHETHER YOUR DEPARTMENT MAY LEGALLY MAKE A PRO RATA ADJUSTMENT IN PAY TO COMPENSATE LARAMEE'S TRANSIT, INC., ON ACCOUNT OF A MILEAGE DIFFERENTIAL FOR THE PERIOD JULY 1, 1952, TO MARCH 28, 1954, INCLUSIVE.

THE ADVERTISEMENT IN THIS CASE STATED THE DISTANCE BETWEEN TWO OF THE POINTS TO BE SERVED, GLOUCESTER AND BOSTON, TO BE 33.30 MILES. IT APPEARS THAT THE CORRECT DISTANCE SHOULD HAVE BEEN SHOWN AS 37.30 MILES. THE FORM OF " ADVERTISEMENT FOR MAIL SERVICE" WHICH WAS USED CONTAINED A PROVISION THAT THE POST OFFICE DEPARTMENT WOULD NOT ASSUME ANY RESPONSIBILITY FOR ERRORS IN THE STATEMENT OF THE MILEAGE IF THE POINTS TO BE SUPPLIED WERE CORRECTLY STATED.

AN INVITATION TO BID WAS MAILED TO CERTAIN PROSPECTIVE BIDDERS. THIS INVITATION CONTAINED THE SAME INCORRECT STATEMENT OF MILEAGE BUT DID NOT INCLUDE THE DISCLAIMER OF RESPONSIBILITY FOR A MISTAKE IN MILEAGE. RESPONSE TO THE INVITATION, LARAMEE'S TRANSIT, INC., SUBMITTED A BID DATED APRIL 18, 1952, AS A RESULT OF WHICH, IT BEING THE LOW BIDDER, A CONTRACT WAS EXECUTED DATED MAY 6, 1952. THIS CONTRACT COVERED THE PERIOD JULY 1, 1952, THROUGH JUNE 30, 1953. THE CONTRACT WAS RENEWED FOR AN ADDITIONAL TERM OF FOUR YEARS BY LETTER OF RENEWAL DATED JUNE 26, 1953. IT WAS STATED IN THE RENEWAL LETTER THAT THE CONTRACT WAS BEING RENEWED "AT THE RATE PREVAILING ON JUNE 30, 1953.' EFFECTIVE MARCH 29, 1954, SUBSTANTIAL CHANGES WERE MADE IN THE ROUTE AND THE COMPENSATION UNDER THE CONTRACT ADJUSTED ACCORDING TO THE PROVISIONS OF THE ACT OF JUNE 19, 1948, 62 STAT. 477.

SHORTLY AFTER THE AWARD THE CONTRACTOR REQUESTED A PRO RATA ADJUSTMENT TO COMPENSATE IT FOR THE DIFFERENCE BETWEEN THE CORRECT DISTANCE OF 37.30 AND THE MILEAGE OF 33.30 SHOWN IN THE INVITATION. THE REQUEST WAS DENIED, CHIEFLY ON THE BASIS OF THE DISCLAIMER IN THE ADVERTISEMENT. THE CONTRACTOR CONTENDS THAT IT NEVER SAW THE ADVERTISEMENT AND THAT IT HAD RELIED COMPLETELY ON THE STATEMENT OF MILEAGE IN THE INVITATION.

THE CONTRACTOR'S BID WAS MADE ON FORM 5468," STAR ROUTE PROPOSAL, BOND, AND OATH," WHICH CONTAINED THE FOLLOWING PROVISION:

THIS PROPOSAL IS MADE * * * WITH FULL KNOWLEDGE OF THE DISTANCE OVER THE ROUTE, THE WEIGHT OF THE MAIL TO BE CARRIED, AND ALL OTHER PARTICULARS IN REFERENCE TO THE ROUTE AND SERVICE * * *.

THUS, EVEN THOUGH THE CONTRACTOR HAD NOT SEEN THE ADVERTISEMENT, IT WOULD BE RESPONSIBLE FOR ACQUAINTING ITSELF WITH THE DISTANCE OVER THE ROUTE. THERE IS NO QUESTION THAT THE POINTS TO BE SERVED WERE CORRECTLY STATED IN THE INVITATION AND THE ALLEGED ERROR WAS THE MISTAKE IN MILEAGE. REGARDING SUCH MISTAKES, THE CODE OF FEDERAL REGULATIONS, 39 C.F.R. 97.24, PROVIDES AS FOLLOWS:

NO EXTRA PAY BECAUSE OF MISTAKES. NO EXTRA PAY SHALL BE ALLOWED A CONTRACTOR FOR MAIL SERVICE ON ACCOUNT OF ALLEGED MISTAKES OR MISAPPREHENSION AS TO THE AMOUNT OF SERVICE REQUIRED, NOR SHALL ADDITIONAL PAY BE ALLOWED SHOULD IT BE SHOWN THAT THE ACTUAL DISTANCE IS GREATER THAN THAT STATED IN THE ADVERTISEMENT, IF THE POINTS TO BE SUPPLIED ARE CORRECTLY STATED.

SINCE THE QUOTED PROVISION OF THE POSTAL REGULATIONS IS PUBLISHED IN THE FEDERAL REGISTER (13 F.R. 9040), IT APPEARS THAT UNDER SECTION 7 OF THE FEDERAL REGISTER ACT, 49 STAT. 502, 44 U.S.C. 307, THE CONTRACTOR WAS ON NOTICE THAT NO EXTRA PAY COULD BE CLAIMED BECAUSE OF THIS MISTAKE. SEE COAT CORPORATION OF AMERICA V. UNITED STATES, 105 F.1SUPP. 832.

IN ADDITION, THE FORMAL CONTRACT DOCUMENT WAS EXECUTED ON FORM 5411," CONTRACT FOR MAIL RVICE," WHICH CONTAINS NO PROVISION FOR ADJUSTMENT FOR A MISTAKE IN MILEAGE SUCH AS HERE ALLEGED. IT IS WELL ESTABLISHED THAT A FORMAL CONTRACT DOCUMENT IS PRESUMED TO PROPERLY REFLECT THE INTENT OF THE PARTIES THERETO. THE COURT, IN THE CASE OF PENN BRIDGE CO. V. UNITED STATES, 59 C.1CLS. 892, 896, SAID---

CONTRACTUAL RIGHTS ONCE FIXED IN A PROPER CONTRACT EXECUTED BY AUTHORITY ARE INVIOLATE. THEY MUST BE FORFEITED BY ONE PARTY OR THE OTHER, CONSTRUCTION IS PERMISSIBLE IF THE TERMS ARE AMBIGUOUS, BUT IN THE ABSENCE OF AMBIGUITY OR FORFEITURE OF RIGHTS BY CONDUCT, SUCH CONTRACT CANNOT BUT BE ENFORCED AS WRITTEN.

ON THE BASIS OF THE FOREGOING, THE CONTRACTOR IS NOT ENTITLED TO AN ADJUSTMENT FOR THE PERIOD JULY 1, 1952, TO JUNE 30, 1953, INCLUSIVE.

THE RENEWAL LETTER OF JUNE 26, 1953, RENEWING THE CONTRACT BEGINNING JULY 1, 1953, WAS ACCEPTED BY THE CONTRACTOR WITH FULL KNOWLEDGE OF THE EXISTING ERROR IN MILEAGE. THE RENEWAL CONTRACT WAS EXECUTED AFTER RECEIPT FROM THE CONTRACTOR OF A FORM 5504," STAR ROUTE RENEWAL PROPOSAL" CONTAINING A PROVISION THAT THE PROPOSAL WAS MADE "AT THE RATE OF COMPENSATION PREVAILING ON JUNE 30, 1953" AND "WITH FULL KNOWLEDGE OF THE DISTANCE OVER THE ROUTE.' THIS RENEWAL CONTRACT WAS AWARDED TO THE CONTRACTOR, PURSUANT TO ITS REQUEST, AND AT THE TIME IT SIGNED THE RENEWAL CONTRACT IT WAS AWARE OF THE MISTAKE IN MILEAGE. THE GOVERNMENT WAS ALSO AWARE OF THE CONTRACTOR'S CLAIM THAT IT HAD MADE A MISTAKE IN ITS BID. THERE WAS NOT, THEN, AT THE TIME OF SIGNING THE RENEWAL CONTRACT, ANY LACK OF KNOWLEDGE, EITHER MUTUAL OR UNILATERAL, WHICH CAUSED THE PARTIES TO MAKE THE CONTRACT WHICH THEY DID MAKE, WHEN IN FACT THEY INTENDED TO MAKE A DIFFERENT CONTRACT. THEY MADE THE CONTRACT INTENDED BY BOTH PARTIES. CONSEQUENTLY, THERE IS NO PROPER BASIS FOR REFORMING THE CONTRACT FOR THE PERIOD FROM JULY 1, 1953, TO MARCH 28, 1954.