B-129527, NOV. 16, 1956

B-129527: Nov 16, 1956

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TO THE POSTMASTER GENERAL: FURTHER REFERENCE IS MADE TO A LETTER OF OCTOBER 15. THE FACTS AS REPORTED IN THE LETTER ARE TO THE EFFECT THAT ON MARCH 21. GREENFIELD WAS AWARDED A CONTRACT FOR THE OPERATION OF A CONTRACT POST OFFICE STATION INCIDENT TO THE PROPOSED DISCONTINUANCE OF THE PINEDALE POST OFFICE. IT IS STATED THAT THE ORDER RESCINDING THE SCHEDULED DISCONTINUANCE OF THE PINEDALE POST OFFICE WAS PUBLISHED IN THE POSTAL BULLETIN OF MARCH 31. THAT THE ABOVE CONTRACT WAS CANCELLED PRIOR TO THE EFFECTIVE DATE OF THE CONTRACT TERM. GREENFIELD IS CLAIMING $150.72 FOR ALTERING HIS STORE TO COMPLY WITH REQUIREMENTS OF HIS CONTRACT. THERE IS NO PROVISION IN THE CONTRACT FOR REIMBURSING THE CONTRACTOR FOR ANY CHANGES.

B-129527, NOV. 16, 1956

TO THE POSTMASTER GENERAL:

FURTHER REFERENCE IS MADE TO A LETTER OF OCTOBER 15, 1956, FROM THE DEPUTY POSTMASTER GENERAL REQUESTING A DECISION AS TO THE PROPRIETY OF THE PROPOSED PAYMENT IN THE AMOUNT OF $150.72 TO MR. HALEY E. GREENFIELD OF PINEDALE, CALIFORNIA, FOR EXPENDITURES MADE BY HIM IN ALTERING HIS STORE TO ACCOMMODATE A CONTRACT POST OFFICE STATION.

THE FACTS AS REPORTED IN THE LETTER ARE TO THE EFFECT THAT ON MARCH 21, 1955, MR. GREENFIELD WAS AWARDED A CONTRACT FOR THE OPERATION OF A CONTRACT POST OFFICE STATION INCIDENT TO THE PROPOSED DISCONTINUANCE OF THE PINEDALE POST OFFICE. IT IS STATED THAT THE ORDER RESCINDING THE SCHEDULED DISCONTINUANCE OF THE PINEDALE POST OFFICE WAS PUBLISHED IN THE POSTAL BULLETIN OF MARCH 31, 1955, AND THAT THE ABOVE CONTRACT WAS CANCELLED PRIOR TO THE EFFECTIVE DATE OF THE CONTRACT TERM. AS A RESULT OF CANCELLATION OF THE CONTRACT MR. GREENFIELD IS CLAIMING $150.72 FOR ALTERING HIS STORE TO COMPLY WITH REQUIREMENTS OF HIS CONTRACT.

THE COPY OF THE FORM OF AGREEMENT FORWARDED WITH THE DEPUTY POSTMASTER GENERAL'S LETTER PROVIDES FOR ANNUAL PAYMENTS TO THE CONTRACTOR IN EQUAL QUARTERLY OR MONTHLY INSTALLMENTS. ALSO, THE AGREEMENT PROVIDES FOR TERMINATION BY THE POSTMASTER ON ONE DAY'S NOTICE IN WRITING WHENEVER IN HIS JUDGMENT THE INTERESTS OF THE POSTAL SERVICE REQUIRE SUCH ACTION. THERE IS NO PROVISION IN THE CONTRACT FOR REIMBURSING THE CONTRACTOR FOR ANY CHANGES, ALTERATIONS, OR EQUIPMENT NECESSARY TO PROVIDE SUITABLE SPACE FOR CONDUCTING THE BUSINESS OF THE CONTRACT STATION, REIMBURSEMENT THEREFOR, IF ANY, BEING LIMITED TO THE PAYMENTS STIPULATED IN THE CONTRACT.

IN A SOMEWHAT SIMILAR CASE INVOLVING THE GOVERNMENT'S BREACH OF A CONTRACT TO LEASE BEFORE OCCUPANCY OF THE PREMISES THE COURT OF CLAIMS HELD THAT THE MEASURE OF RECOVERY MUST BE LIMITED TO THE PAYMENTS STIPULATED UNDER THE CONTRACT. UNITED THEATRES CO. V. UNITED STATES, 67 C.CLS. 432. SEE ALSO H.S. AND D. INV. CO. V. MCCOOL, 9 P.2D 809. APPLYING THAT RULE TO THE PRESENT CASE THE CONTRACTOR--- IN VIEW OF ONE DAY CANCELLATION OPTION IN FAVOR OF THE GOVERNMENT--- WOULD BE ENTITLED TO COMPENSATION FOR ONE DAY.

IN THE PRESENT INSTANCE, HOWEVER, IT IS REPORTED INFORMALLY THAT THE RESCINDING ORDER REFERRED TO ABOVE ACTUALLY WAS ISSUED ON MARCH 29, 1955, AND THAT THE DEPARTMENT HAD BEEN CONSIDERING RESCINDING THE CONTRACT SINCE MARCH 26, 1955. ALSO, IT IS REPORTED THAT THE CONTRACTOR WAS NOT NOTIFIED OF THE CANCELLATION OF THE CONTRACT UNTIL MARCH 29, 1955, WHEN HE WAS NOTIFIED OF SUCH ACTION BY TELEPHONE. IN ADDITION, IT IS UNDERSTOOD THAT HE HAS NEVER BEEN GIVEN A NOTICE OF CANCELLATION IN WRITING AS REQUIRED BY THE CONTRACT. IN VIEW OF THIS DEFICIENCY IN THE NOTICE GIVEN THERE IS A POSSIBILITY THAT HE MIGHT BE ENTITLED TO COMPENSATION IN AN AMOUNT IN EXCESS OF THAT NOW CLAIMED. FURTHERMORE, IT SEEMS PROBABLE THAT HAD HE BEEN MORE TIMELY NOTIFIED OF THE GOVERNMENT'S INTENTION TO CANCEL THE CONTRACT, THE CONTRACTOR MIGHT HAVE BEEN ABLE TO AVOID AT LEAST PART OF THE EXPENSES FOR WHICH HE IS CLAIMING REIMBURSEMENT.

IN THE CIRCUMSTANCES RELATED ABOVE, IT IS OUR VIEW THAT PAYMENT OF THE AMOUNT CLAIMED IN FULL AND FINAL SETTLEMENT OF ALL LIABILITY UNDER THE CONTRACT WOULD BE JUSTIFIED.