B-132663, AUG. 19, 1957

B-132663: Aug 19, 1957

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TO SHELL OIL COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED JULY 29. WHICH WERE DELIVERED THE NEXT DAY. IT APPEARS THAT THE SUPERINTENDENT WAS NOT AWARE THAT YOUR CONTRACT TO FURNISH GASOLINE TO THE CEMETERY FOR THE PREVIOUS YEAR HAD EXPIRED ON JANUARY 31. WHICH WAS THE PRICE YOU UNSUCCESSFULLY BID FOR THE CURRENT YEAR. THE NEW ARMED SERVICES PETROLEUM PROCUREMENT CONTRACT WAS IN EFFECT ON FEBRUARY 15. THE GASOLINE COULD HAVE BEEN PURCHASED UNDER THE CURRENT PROCUREMENT CONTRACT FOR $178.88. THIS SUM WAS ALLOWED YOU BY THE SETTLEMENT OF APRIL 15. THE PROCUREMENT OF THE GASOLINE HERE WAS NOT DUE TO A PUBLIC EXIGENCY BUT TO AN ERROR ON THE PART OF THE CEMETERY SUPERINTENDENT. IT WAS THE DUTY OF THE SUPERINTENDENT.

B-132663, AUG. 19, 1957

TO SHELL OIL COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 29, 1957, AND PRIOR CORRESPONDENCE, REQUESTING REVIEW OF THAT PART OF SETTLEMENT DATED APRIL 15, 1957, WHICH DISALLOWED $14.13 OF YOUR CLAIM IN THE AMOUNT OF $193.01 FOR GASOLINE FURNISHED THE GOLDEN GATE NATIONAL CEMETERY, SAN BRUNO, CALIFORNIA.

THE RECORD SHOWS THAT THE SUPERINTENDENT OF THE CEMETERY ORDERED 841 GALLONS OF GASOLINE FROM YOU ON FEBRUARY 14, 1956, WHICH WERE DELIVERED THE NEXT DAY. IT APPEARS THAT THE SUPERINTENDENT WAS NOT AWARE THAT YOUR CONTRACT TO FURNISH GASOLINE TO THE CEMETERY FOR THE PREVIOUS YEAR HAD EXPIRED ON JANUARY 31, 1956. ON FEBRUARY 21, 1956, YOU NOTIFIED THE SUPERINTENDENT THAT SINCE YOU HAD NO CONTRACT COVERING THE PERIOD INVOLVED, YOUR INVOICE WOULD BE FOR $0.1695 PER GALLON, WHICH WAS THE PRICE YOU UNSUCCESSFULLY BID FOR THE CURRENT YEAR. HOWEVER, THE NEW ARMED SERVICES PETROLEUM PROCUREMENT CONTRACT WAS IN EFFECT ON FEBRUARY 15, 1956, WITH ANOTHER COMPANY AT A PRICE OF $0.1527 PER GALLON. THUS, THE GASOLINE COULD HAVE BEEN PURCHASED UNDER THE CURRENT PROCUREMENT CONTRACT FOR $178.88. THIS SUM WAS ALLOWED YOU BY THE SETTLEMENT OF APRIL 15, 1957.

IT LONG HAS BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT ARTICLES OR SUPPLIES CONTRACTED FOR UNDER PROCUREMENT CONTRACTS MUST BE PROCURED UNDER SUCH CONTRACTS EXCEPT IN CASE OF AN EXIGENCY OR EMERGENCY REQUIRING SUCH IMMEDIATE DELIVERY AS COULD NOT BE EFFECTED BY ORDERING FROM THE PROCUREMENT CONTRACTOR. SEE 16 COMP. GEN. 225, 227, AND THE CASES THERE CITED. THE PROCUREMENT OF THE GASOLINE HERE WAS NOT DUE TO A PUBLIC EXIGENCY BUT TO AN ERROR ON THE PART OF THE CEMETERY SUPERINTENDENT. HOWEVER, SUCH ERROR DOES NOT ESTABLISH THE LEGALITY OF THE TRANSACTION. IT WAS THE DUTY OF THE SUPERINTENDENT, ACTING FOR AND IN BEHALF OF THE UNITED STATES, TO PURCHASE THE GASOLINE UNDER THE CURRENT PROCUREMENT CONTRACT. HENCE, THE PURCHASE HERE AT A PRICE IN EXCESS OF THAT STIPULATED IN THE PROCUREMENT CONTRACT WAS BEYOND THE SCOPE OF THE SUPERINTENDENT'S AUTHORITY. WHERE AN AGENT OF THE GOVERNMENT ACTS IN EXCESS OF THE AUTHORITY VESTED IN HIM, HIS ACT FROM A LEGAL STANDPOINT, IS NO LONGER AN ACT OF THE GOVERNMENT. THE UNDERWRITER, 6 F.2D 937.

MOREOVER, THE COURTS HAVE HELD CONSISTENTLY THAT ONE ENTERING INTO A CONTRACT WITH AN OFFICER OR EMPLOYEE OF THE GOVERNMENT IS CHARGED WITH NOTICE OF THE LIMITATIONS PLACED UPON THE AUTHORITY OF THE OFFICER OR EMPLOYEE TO OBLIGATE THE UNITED STATES. SEE HUME V. UNITED STATES, 132 U.S. 406; JACOB REED'S SONS V. UNITED STATES, 273 ID. 200; AND DAVIS V. UNITED STATES, 59 C.CLS. 197. IT IS APPARENT THAT YOU WERE AWARE THAT YOUR BID OF $0.1695 PER GALLON FOR FURNISHING THE GASOLINE FOR THE CURRENT YEAR HAD NOT BEEN ACCEPTED AND THAT A CONTRACT FOR SUCH SERVICES HAD BEEN MADE WITH ANOTHER COMPANY AT A LESS PRICE.

ACCORDINGLY, SINCE THE SUPERINTENDENT WAS NOT AUTHORIZED TO OBLIGATE THE GOVERNMENT TO PAY ANY AMOUNT IN EXCESS OF THE EXISTING CONTRACT PRICE FOR THE GASOLINE, THE ACTION TAKEN IN THE SETTLEMENT OF APRIL 15, 1957, WAS CORRECT AND IS SUSTAINED.