B-132341, JUN. 28, 1957

B-132341: Jun 28, 1957

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GOVERNMENT PRINTING OFFICE: REFERENCE IS MADE TO YOUR LETTER OF JUNE 26. IT HAS BEEN DETERMINED THAT THE COMPANY WILL BE UNABLE TO PERFORM IN ACCORDANCE WITH ITS BID. WHICH WAS ACCEPTED. IT APPEARS THAT FIVE CONTRACTS WERE AWARDED PURSUANT TO THE SAME INVITATION FOR BIDS. IT WAS POINTED OUT THAT A PURPORTED CONTRACT UNDER WHICH THE PURCHASER WAS OBLIGATED TO ORDER ONLY SUCH GOODS AS HE MIGHT. DESIRE IS NOT BINDING. AN OBLIGATION ON THE PURCHASER TO ORDER ALL OF HIS NEEDS OR REQUIREMENTS IS SUFFICIENT CONSIDERATION TO SUPPORT THE UNDERTAKING OF THE SELLER TO FURNISH THEM. THE MULTIPLICITY OF AWARDS IS INCONSISTENT WITH THE EXISTENCE OF ANY OBLIGATION OF THE GOVERNMENT TO ANY INDIVIDUAL CONTRACTOR.

B-132341, JUN. 28, 1957

TO THE HONORABLE RAYMOND BLATTENBERGER, PUBLIC PRINTER, GOVERNMENT PRINTING OFFICE:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 26, 1957, REQUESTING ADVICE AS TO WHETHER A CONTRACT AWARDED TO THE TABULATING CARD COMPANY, INC., NEW YORK, NEW YORK, FOR PRODUCTION OF TABULATING CARDS FOR THE 6-MONTH PERIOD BEGINNING JULY 1, 1957, AND ENDING DECEMBER 31, 1957, MAY PROPERLY BE CANCELLED. IT HAS BEEN DETERMINED THAT THE COMPANY WILL BE UNABLE TO PERFORM IN ACCORDANCE WITH ITS BID, WHICH WAS ACCEPTED, HOWEVER, IN ANTICIPATION OF ENLARGEMENT OF ITS PLANTS WHICH IT HAS BEEN UNABLE TO ACCOMPLISH.

IT APPEARS THAT FIVE CONTRACTS WERE AWARDED PURSUANT TO THE SAME INVITATION FOR BIDS, WHICH STIPULATED THAT MULTIPLE AWARDS MIGHT BE MADE, BUT FAILED TO APPRISE BIDDERS AS TO THE OBLIGATIONS OF THE GOVERNMENT IN THE EVENT OF MULTIPLE AWARDS.

IN A DECISION TO ONE OF YOUR PREDECESSORS, B-101099, MARCH 7, 1951, IT WAS POINTED OUT THAT A PURPORTED CONTRACT UNDER WHICH THE PURCHASER WAS OBLIGATED TO ORDER ONLY SUCH GOODS AS HE MIGHT, AT HIS SOLE OPTION, DESIRE IS NOT BINDING. WILLARD SUTHERLAND AND CO. V. UNITED STATES, 262 U.S. 489. ON THE OTHER HAND, AN OBLIGATION ON THE PURCHASER TO ORDER ALL OF HIS NEEDS OR REQUIREMENTS IS SUFFICIENT CONSIDERATION TO SUPPORT THE UNDERTAKING OF THE SELLER TO FURNISH THEM.

IN THE ABSENCE OF TERMS DEFINING THE OBLIGATIONS OF THE GOVERNMENT TO EACH OF SEVERAL CONTRACTORS, THE MULTIPLICITY OF AWARDS IS INCONSISTENT WITH THE EXISTENCE OF ANY OBLIGATION OF THE GOVERNMENT TO ANY INDIVIDUAL CONTRACTOR, SINCE IT CANNOT BE OBLIGATED TO OBTAIN ALL ITS NEEDS FROM EACH OF SEVERAL SUPPLIERS, AND WE HAVE HELD THAT SUCH AWARDS ARE ACCORDINGLY UNENFORCEABLE. SEE THE ATTACHED COPY OF OUR DECISION OF FEBRUARY 7, 1956, B-121926, B-122682, TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION. THE "INSTRUCTIONS TO USING AGENCIES" CONTAINED IN YOUR FORM 1047 MAKE IT CLEAR THAT ORDERS ARE TO BE PLACED WITH THE CONTRACTOR FROM WHICH THE DESIRED SUPPLIES CAN BE OBTAINED AT THE LOWEST COST, TRANSPORTATION INCLUDED, BUT IT DOES NOT APPEAR THAT BIDDERS WERE ADVISED AS TO THOSE PROVISIONS. IF THE FORM OF INVITATION AND ACCEPTANCE USED IN THIS INSTANCE BE CONSIDERED AS OBLIGATING THE GOVERNMENT TO BUY ITS NEEDS, EVERY BIDDER RECEIVING AN AWARD WOULD APPEAR TO BE ENTITLED TO BELIEVE THAT HE HAD A CONTRACT TO FURNISH THE ENTIRE NEEDS. IF THE GOVERNMENT IS NOT OBLIGATED TO BUY ALL ITS NEEDS, OR ANY DEFINITELY DETERMINABLE PART THEREOF, FROM ANY SINGLE SUPPLIER, NO SUPPLIER IS OBLIGATED TO FURNISH ANY MORE THAN IT MAY CHOOSE.

FOR THESE REASONS, WE CAN HAVE NO OBJECTION TO CANCELLATION OF THE AWARD TO THE TABULATING CARD COMPANY, AND IN ORDER TO AVOID THE POSSIBILITY OF ANY DISPUTE AS TO THE RIGHTS OF ANY OTHER BIDDER WHOSE BID WAS ACCEPTED, WE SUGGEST THE DESIRABILITY OF RESCINDING ALL THE AWARDS, OR CLARIFYING THE CONTRACTS BY AMENDMENT IF PERFORMANCE IN ACCORDANCE WITH YOUR INTENTIONS IS ACCEPTABLE TO THEM.

THE DOCUMENTS AND CORRESPONDENCE FORWARDED WITH YOUR LETTER ARE RETURNED HEREWITH.