B-126073, DEC. 15, 1955

B-126073, DEC. 15, 1955

TO MISS JANET S. ELLIOT, DISBURSING OFFICER, DEPARTMENT OF THE ARMY:

BY SECOND ENDORSEMENT DATED OCTOBER 25, 1955, THE CHIEF OF ENGINEERS, DEPARTMENT OF THE ARMY, TRANSMITTED YOUR LETTER OF OCTOBER 25, 1955, REQUESTING A DECISION AS TO WHETHER YOU ARE AUTHORIZED TO PAY A VOUCHER IN FAVOR OF JOHN C. MITCHELL IN THE AMOUNT OF $400, REPRESENTING A REFUND OF A DEPOSIT MADE IN CONNECTION WITH MR. MITCHELL'S OFFER TO LEASE CERTAIN LANDS IN THE ABERDEEN PROVING GROUNDS MILITARY RESERVATION AREA.

BY INVITATION DATED APRIL 21, 1947, THE NORTH ATLANTIC DIVISION, CORPS OF ENGINEERS, REQUESTED BIDS FOR THE LEASING OF CERTAIN AGRICULTURAL LANDS LOCATED IN THE ABERDEEN PROVING GROUNDS MILITARY RESERVATION AREA. THE INVITATION TO BID CONTAINED NO STATEMENT AS TO THE TIME WITHIN WHICH THE GOVERNMENT WAS TO SEND A NOTICE OF AWARD. BIDS WERE TO BE OPENED ON APRIL 30, 1947, AND THE LEASES WERE TO RUN FROM MAY 7, 1947, TO MAY 6, 1952. RESPONSE TO THE INVITATION MR. MITCHELL SUBMITTED A BID IN THE AMOUNT OF $1,306 FOR TRACT NO. 2, ACCOMPANIED BY THE REQUIRED DEPOSIT OF $400, AND SPECIFICALLY STATED IN THE BID THAT AFTER RECEIVING WRITTEN NOTICE OF ACCEPTANCE HE WOULD ENTER INTO A WRITTEN LEASE WITHIN TEN DAYS AFTER DATE OF RECEIPT OF SAID NOTICE OF ACCEPTANCE.

IT IS REPORTED THAT THE INVITATION RESTRICTED ADVERTISEMENT TO A PERIOD OF TEN DAYS IN ORDER TO MAKE THE LAND AVAILABLE TO THE SUCCESSFUL BIDDERS IN TIME FOR SPRING PLANTING. NO NOTICE OF AWARD WAS EVER SENT TO MR. MITCHELL INFORMING HIM THAT HE WAS HIGH BIDDER ON TRACT NO. 2, BUT ON MAY 13, 1947, HE CALLED THE WASHINGTON DISTRICT AND WAS INFORMED OF SUCH FACT. MR. MITCHELL WAS ADVISED FURTHER THAT A RIGHT OF ENTRY TO TRACT NO. 2 WOULD BE GRANTED TO HIM PENDING THE FORMALIZATION OF THE LEASE DOCUMENT AND ON MAY 16, 1947, A RIGHT OF ENTRY WAS MAILED AND WAS SIGNED BY MR. MITCHELL AND RETURNED ON MAY 20, 1947. THE WRITTEN LEASE WAS RECEIVED BY THE LESSEE ON JUNE 12, 1947, AND WAS RETURNED UNSIGNED ON JUNE 17, 1947, AND SINCE THE GOVERNMENT COULD NOT LEASE TRACT NO. 2 AGAIN FOR ANOTHER YEAR, BECAUSE IT WAS TOO LATE FOR SPRING PLANTING, THE $400 DEPOSIT WAS RETAINED. BY LETTER DATED SEPTEMBER 23, 1947, MR. MITCHELL DEMANDED THE RETURN OF THE DEPOSIT, BASING HIS ENTITLEMENT TO THIS SUM ON THE FACT THAT HE WAS ASSURED AT THE TIME HE ACCEPTED THE RIGHT OF ENTRY THAT THE WRITTEN LEASE WOULD BE FORTHCOMING VERY SHORTLY THEREAFTER, AND CLAIMING THAT THE RIGHT OF ENTRY WAS OF NO USE TO HIM BECAUSE HE IN TURN WANTED TO ASSIGN THE LEASE, WHICH ALLEGEDLY NECESSITATED THE EXISTENCE OF A BONA FIDE LEASE.

THE PRIMARY QUESTION INVOLVED IN THIS CASE IS WHETHER THE GOVERNMENT MADE A VALID TENDER OF LEASE IN ACCORDANCE WITH THE TERMS OF THE INVITATION TO BID SO AS TO CREATE A VALID AND BINDING CONTRACT.

THE INVITATION TO BID PROVIDED THAT NOTICE OF AWARD WOULD BE MAILED TO SUCCESSFUL BIDDERS UPON APPROVAL OF THE DIVISION ENGINEER. AS INDICATED ABOVE NO NOTICE OF AWARD WAS EVER MAILED. IT WAS NOT UNTIL MAY 13, 1947, DURING A TELEPHONE CONVERSATION WITH THE WASHINGTON DISTRICT, THAT MR. MITCHELL WAS INFORMED THAT HE WAS HIGH BIDDER ON TRACT NO. 2, AND THAT A RIGHT OF ENTRY WOULD BE GRANTED TO HIM PENDING FORMALIZATION OF THE LEASE DOCUMENT. THE RIGHT OF ENTRY WAS OF A TEMPORARY NATURE AND PROVIDED THAT "THE USE AND OCCUPANCY OF THE PREMISES UPON WHICH THIS RIGHT OF ENTRY IS GRANTED SHALL BE CONTINGENT UPON ACCEPTANCE OF THE LESSEE OF ALL THE TERMS AND CONDITIONS TO BE IMPOSED UNDER A REVOCABLE LEASE.' THE BID AS SUBMITTED PROVIDED THAT THE BIDDER WOULD, AFTER RECEIVING WRITTEN NOTICE OF ACCEPTANCE, ENTER INTO A WRITTEN LEASE WITHIN TEN DAYS AFTER DATE OF SAID NOTICE OF ACCEPTANCE. THUS, IT WOULD APPEAR THAT THE ONLY WAY THE OFFER COULD HAVE BEEN ACCEPTED BY THE GOVERNMENT WOULD HAVE BEEN TO SEND THE BIDDER A WRITTEN NOTICE OF ACCEPTANCE OF THE BID, AND THIS WAS NOT DONE. MOREOVER, IT IS WELL SETTLED THAT WHERE THE OFFER DOES NOT SPECIFY THE TIME WITHIN WHICH IT MAY BE ACCEPTED, IT MUST BE ACCEPTED WITHIN A REASONABLE TIME AND THAT WHAT IS A REASONABLE TIME IS DETERMINED BY CONSIDERATION OF ALL THE CIRCUMSTANCES IN THE CASE. SEE 26 COMP. GEN. 365 AND COURT CASES CITED. INASMUCH AS THE LEASE WAS TO RUN FOR THE PERIOD BEGINNING MAY 7, 1947, AND SINCE IT IS REPORTED THAT THE REASON FOR RESTRICTING THE ADVERTISEMENT TO A PERIOD OF TEN DAYS WAS TO MAKE THE LAND AVAILABLE TO THE SUCCESSFUL BIDDERS IN TIME FOR SPRING PLANTING, IT WOULD APPEAR THAT TIME WAS OF THE ESSENCE AND THAT THE GOVERNMENT'S TENDER OF THE WRITTEN LEASE ON JUNE 12, 1947, CONSTITUTED UNREASONABLE DELAY UNDER THE CIRCUMSTANCES.

IN VIEW OF THE FOREGOING, THIS OFFICE WILL NOT OBJECT TO THE REFUND OF THE DEPOSIT OF $400 TO MR. MITCHELL.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER.

THE PAPERS, WITH THE EXCEPTION OF YOUR STATEMENT OF OCTOBER 25, 1955, ARE RETURNED.