B-134396, DECEMBER 6, 1957, 37 COMP. GEN. 400

B-134396: Dec 6, 1957

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CONTRACTS - AMOUNTS - ESTIMATED QUANTITIES IN CONTRACT FOR COMPLETE JOB INCREASED COSTS AN ESTIMATED QUANTITY WHICH IS SPECIFIED IN A CONTRACT FOR FURNISHING TOPOGRAPHIC MAPS OF ALL ACREAGE IN A DESIGNATED AREA AND ON WHICH THE CONTRACTOR RELIES IN FIXING THE PRICE PER ACRE IS MERELY AN OPINION AND DOES NOT CONSTITUTE A WARRANTY. THE CONTRACTOR IS NOT ENTITLED TO AN ADDITIONAL AMOUNT FOR INCREASED COSTS RESULTING FROM AN ACREAGE LESS THAN THE ESTIMATE. THE CONTRACT WAS ENTERED INTO PURSUANT TO INVITATION FOR BIDS NO. 701S- 418 ISSUED AUGUST 6. THE WORK TO BE PERFORMED UNDER THE FIRST ITEM IS DESCRIBED IN THE INVITATION AND IN THE CONTRACT AS FOLLOWS: FURNISHING AND DELIVERING ONE (1) COMPLETE SET OF TOPOGRAPHIC MAPS OF THE SPECIFIED AREA WITHIN THE RED WILLOW UNIT.

B-134396, DECEMBER 6, 1957, 37 COMP. GEN. 400

CONTRACTS - AMOUNTS - ESTIMATED QUANTITIES IN CONTRACT FOR COMPLETE JOB INCREASED COSTS AN ESTIMATED QUANTITY WHICH IS SPECIFIED IN A CONTRACT FOR FURNISHING TOPOGRAPHIC MAPS OF ALL ACREAGE IN A DESIGNATED AREA AND ON WHICH THE CONTRACTOR RELIES IN FIXING THE PRICE PER ACRE IS MERELY AN OPINION AND DOES NOT CONSTITUTE A WARRANTY; THEREFORE, IN THE ABSENCE OF EVIDENCE OF BAD FAITH OR FRAUD ON THE PART OF THE CONTRACTING OFFICERS IN DETERMINING THE ESTIMATED QUANTITY, THE CONTRACTOR IS NOT ENTITLED TO AN ADDITIONAL AMOUNT FOR INCREASED COSTS RESULTING FROM AN ACREAGE LESS THAN THE ESTIMATE.

TO THE SECRETARY OF THE INTERIOR, DECEMBER 6, 1957:

A LETTER OF NOVEMBER 14, 1957, WITH ENCLOSURES, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY REQUESTS OUR ADVICE AS TO THE PROPER DISPOSITION OF A CLAIM MADE BY THE RYALL ENGINEERING COMPANY FOR ADDITIONAL COMPENSATION UNDER BUREAU OF RECLAMATION CONTRACT NO. 14-06 701-2414, DATED SEPTEMBER 14, 1956.

THE CONTRACT WAS ENTERED INTO PURSUANT TO INVITATION FOR BIDS NO. 701S- 418 ISSUED AUGUST 6, 1956, WHICH CALLED FOR BIDS ON TWO ITEMS. THE CLAIM DEALS ONLY WITH THE FIRST OF THESE. THE WORK TO BE PERFORMED UNDER THE FIRST ITEM IS DESCRIBED IN THE INVITATION AND IN THE CONTRACT AS FOLLOWS:

FURNISHING AND DELIVERING ONE (1) COMPLETE SET OF TOPOGRAPHIC MAPS OF THE SPECIFIED AREA WITHIN THE RED WILLOW UNIT, IN ACCORDANCE WITH THE DRAWINGS AND PROVISIONS OF THIS INVITATION.

BIDS WERE TO BE EXPRESSED IN PRICE PER ACRE TO COVER AN ESTIMATED 13,000 ACRES. UNIT NO. 1 WAS FURTHER DESCRIBED UNDER THE FOLLOWING PARAGRAPHS OF THE SPECIAL REQUIREMENTS TO THE INVITATION AS FOLLOWS:

B-1. THE REQUIREMENT. UNDER ITEM 1, IT IS REQUIRED THAT THERE BE FURNISHED AND DELIVERED COMPLETE IN ACCORDANCE WITH THIS INVITATION AND THE INCLUDED DRAWINGS, INKED TOPOGRAPHIC MAPS AT A SCALE OF 1 INCH TO 1,000 FEET, AND REPRODUCIBLE COPIES THEREOF, AND ALL OTHER MATERIAL AND DATA AS SPECIFIED IN THIS INVITATION COVERING THE AREA WITHIN THE RED WILLOW UNIT AS DESIGNATED ON ATTACHED DRAWING NO. 328-701-5860. THE CONTOUR INTERVAL SHALL BE 5 FEET WHERE THE CROSS SLOPE DOES NOT EXCEED 20 PERCENT; WHERE THE CROSS SLOPE IS GREATER THAN 20 PERCENT, THE CONTOUR INTERVAL SHALL BE 25 FEET. THE BOUNDARY OF THE AREA TO BE MAPPED, AS OUTLINED ON DRAWING NO. 328-701-5860 IS APPROXIMATE AND IS SUBJECT TO FINAL DETERMINATION BY THE CONTRACTING OFFICER, WHO WILL EXTEND THE BOUNDARY OF THE AREA TO SUCH EXTENT AS HE DETERMINES NECESSARY TO SECURE TOPOGRAPHIC MAPS OF ALL LAND LYING BELOW ELEVATION 2650 EXCEPT ON THE ENTRENCHED STREAMBEDS OF RED WILLOW AND SPRING CREEKS WHERE THE MAPPING WILL BE REQUIRED ONLY UP TO ELEVATION 2630. EACH TOPOGRAPHIC SHEET SHALL COVER SIX SECTIONS OF THE SPECIFIED AREA WITHIN THE RED WILLOW UNIT (3 MILES EAST AND WEST AND 2 MILES NORTH AND SOUTH) AS DESCRIBED IN PARAGRAPH C-14.

B-11. SPECIAL INSTRUCTIONS TO BIDDERS. (A) THE ATTENTION OF ALL BIDDERS IS DIRECTED TO THE FACT THAT THE ACCURACY AND COMPLETENESS OF THE WORK CALLED FOR BY THIS INVITATION ARE ESSENTIAL TO THE PURPOSE FOR WHICH THE MAPS AND DATA ARE INTENDED. BIDDERS SHOULD NOT UNDERESTIMATE THE DIFFICULTIES OF MEETING THE REQUIREMENTS OF THIS INVITATION, AND MUST ASSURE THEMSELVES BY THOROUGH EXAMINATION OF AVAILABLE INFORMATION OR BY ACTUAL INVESTIGATION OF THE AREAS INVOLVED, THAT THEIR FACILITIES AND PROPOSED PROCESSES ARE ADEQUATE TO INSURE COMPLETE COMPLIANCE WITH ALL THE TERMS OF THIS INVITATION.

B-13. MEASUREMENT FOR PAYMENT. ITEM 1--- THE ACREAGE OF COMPLETED AND ACCEPTED TOPOGRAPHIC MAPS WILL BE MEASURED FOR PAYMENT BY THE CONTRACTING OFFICER TO THE NEAREST ACRE BY PLANIMETERING ON EACH SHEET THE AREAS COMPLETELY MAPPED AND MEETING THE DETAILED REQUIREMENTS OF THIS INVITATION.

AWARD OF ITEM NO. 1 WAS MADE TO RYALL BY THE REFERENCED CONTRACT AT A UNIT PRICE OF ?99 PER ACRE. A REPORT FROM THE PROCURING AGENCY DATED AUGUST 9, 1957, ENCLOSED WITH THE LETTER OF NOVEMBER 14 INDICATES THAT THE CONTRACTOR COMPLIED WITH THE PROVISIONS OF PARAGRAPH B-11 QUOTED ABOVE BY VISITING THE SITE AND CONDUCTING A COMPETENT INVESTIGATION. UPON COMPLETION OF THE WORK CALLED FOR UNDER ITEM NO. 1, IT WAS DETERMINED THAT THE AREA TO BE COVERED THEREUNDER CONSISTED NOT OF 13,000 ACRES AS ESTIMATED IN THE INVITATION BUT OF ONLY 7,374 ACRES. RYALL NOW CONTENDS THAT THE UNIT COSTS OF THE WORK WERE SUBSTANTIALLY INCREASED BY REASON OF THE ACREAGE DEFICIENCY AND CLAIMS AN ADDITIONAL AMOUNT FOR THE WORK WHICH TOGETHER WITH THE CONTRACT PRICE WOULD EQUAL THE CHARGE FOR 13,000 ACRES AT THE ORIGINAL UNIT PRICE.

IN SUMMATION OF THE FOREGOING, IT MAY BE STATED THAT UNDER UNIT NO. 1 OF THE CONTRACT THE CONTRACTOR WAS REQUIRED TO MAP ALL AREAS WITHIN THE PROPOSED RESERVOIR UP TO AN ELEVATION OF 2,650 AT A PRICE OF ?99 PER ACRE. THE GOVERNMENT ESTIMATED THAT THE MAP WOULD INCLUDE AN AREA OF 13,000 ACRES WHEREAS IN FACT ONLY 7,374 ACRES WERE COVERED. THERE IS NO INDICATION THAT EITHER PARTY WAS NEGLIGENT IN APPROXIMATING THE QUANTITY OR ACTED IN OTHER THAN GOOD FAITH IN CONNECTION THEREWITH.

IT IS A WELL-ESTABLISHED RULE THAT THE USE OF SUCH WORDS AS "ESTIMATED" FOLLOWING THE DESCRIPTION OF THE SUBJECT OF A CONTRACT INDICATE THAT A STATEMENT OF QUANTITY IS A MATTER OF DESCRIPTION AND NOT OF THE ESSENCE OF THE CONTRACT AND THE PARTIES BEAR THE RISK AS TO QUANTITY IF THERE IS NO INTERMIXTURE OF FRAUD. UNDER THESE CIRCUMSTANCES, THE ESTIMATION OF QUANTITY IS NOT REGARDED AS IN THE NATURE OF A WARRANTY BUT ONLY AS AN ESTIMATE OF OPINION OF THE PROBABLE AMOUNT IN REFERENCE TO WHICH GOOD FAITH IS ALL THAT IS REQUIRED OF THE PARTY MAKING SUCH ESTIMATE. BIGLIONE V. BRONGE, 219 P. 69. SEE, ALSO, GREEN V. K. S. WEBSTER AND SONS, 291 P.2D 864.

IN THE CASE OF ROBINSON V. NOBLE, 8 PET. 181, THE PLAINTIFF AGREED TO TRANSPORT FOR THE DEFENDANT A QUANTITY OF DESIGNATED PROVISIONS "SUPPOSED TO AMOUNT TO THREE THOUSAND SEVEN HUNDRED BARRELS" AT $1.50 PER BARREL. THE PROVISIONS IN QUESTION ACTUALLY AMOUNTED ONLY TO 3,105 BARRELS AND ONLY THAT AMOUNT WAS DELIVERED FOR TRANSPORTATION UNDER THE TERMS OF THE CONTRACT. THE REDUCTION IN QUANTITY MEANT THAT LESS THAN FULL LOADS WOULD BE TRANSPORTED TO THE OBVIOUS DISADVANTAGE OF THE PLAINTIFF. THE SUPREME COURT HELD THAT THE LOWER COURT SHOULD HAVE INSTRUCTED THE JURY THAT THE PLAINTIFF COULD RECOVER ONLY AT THE STIPULATED RATE FOR BARRELS OF PROVISIONS ACTUALLY TRANSPORTED SINCE THE DEFENDANT DID NOT BIND HIMSELF TO DELIVER ANY SPECIFIC QUANTITY FOR TRANSPORT.

IN A LATER CASE, BRAWLEY V. UNITED STATES, 96 U.S. 168, THE UNITED STATES AGREED TO PURCHASE 880 CORDS OF WOOD "MORE OR LESS, AS DETERMINED NECESSARY FOR REGULAR SUPPLY TO TROOPS AND CIVILIANS AT A GIVEN POST IN ACCORDANCE WITH ARMY REGULATIONS FOR A DESIGNATED PERIOD. ONLY 40 CORDS OF WOOD WERE ACTUALLY REQUIRED AND ONLY THAT AMOUNT WAS ACCEPTED AND PAID FOR ALTHOUGH THE CONTRACTOR HAD ALREADY CUT AND PARTIALLY TRANSPORTED THE FULL AMOUNT OF (880) CORDS. THE CONTRACTOR SUED TO RECOVER FOR THE REMAINING 840 CORDS AT THE CONTRACT PRICE. THE SUPREME COURT HELD THAT THE UNITED STATES WAS NOT LIABLE FOR ANY NUMBER OF CORDS BEYOND THE 40 ACTUALLY REQUIRED. THE COURT STATED THE RULE IN SUCH CASES, AT PAGE 171, AS FOLLOWS:

WHERE A CONTRACT IS MADE TO SELL OR FURNISH CERTAIN GOODS IDENTIFIED BY REFERENCE TO INDEPENDENT CIRCUMSTANCES, SUCH AS AN ENTIRE LOT DEPOSITED IN A CERTAIN WAREHOUSE WITH ALL THAT MAY BE MANUFACTURED BY THE VENDOR IN A CERTAIN ESTABLISHMENT, OR THAT MAY BE SHIPPED BY HIS AGENT OR CORRESPONDENT IN CERTAIN VESSELS, AND THE QUANTITY IS NAMED WITH THE QUALIFICATION OF "ABOUT," OR "MORE OR LESS," OR WORDS OF LIKE IMPORT, THE CONTRACT APPLIES TO THE SPECIFIC LOT; AND THE NAMING OF THE QUANTITY IS NOT REGARDED AS IN THE NATURE OF A WARRANTY, BUT ONLY AS AN ESTIMATE OF THE PROBABLE AMOUNT, IN REFERENCE TO WHICH GOOD FAITH IS ALL THAT IS REQUIRED OF THE PARTY MAKING IT. IN SUCH CASES, THE GOVERNING RULE IS SOMEWHAT ANALOGOUS TO THAT WHICH IS APPLIED IN THE DESCRIPTION OF LANDS WHERE NATURAL BOUNDARIES AND MONUMENTS CONTROL COURSES AND DISTANCES AND ESTIMATES OF QUANTITY.

IN THIS CASE, THE SUBJECT OF THE CONTRACT, SO FAR AS CONCERNED ITEM 1, IS ALL OF THE ACREAGE WITHIN THE DESIGNATED AREA BELOW THE DESIGNATED ALTITUDE. UNDER SUCH CIRCUMSTANCES AND IN ACCORDANCE WITH THE CASES CITED ABOVE, THE RECITAL IN THE CONTRACT OF AN ESTIMATED QUANTITY AMOUNTS MERELY TO AN OPINION AND DOES NOT CONSTITUTE A WARRANTY. SINCE THERE IS NO INDICATION OF BAD FAITH OR FRAUD ON THE PART OF THE GOVERNMENT OFFICIALS CONCERNED IN ARRIVING AT THE ESTIMATED QUANTITY, THERE IS NO BASIS FOR PAYMENT TO THE CONTRACTOR OF ANY AMOUNT IN EXCESS OF THAT PROVIDED UNDER THE TERMS OF THE CONTRACT, I.E., ?99 PER ACRE ACTUALLY WITHIN THE TERMS OF THE DESCRIPTION CONTAINED IN THE CONTRACT. THAT AMOUNT HAVING ALREADY BEEN PAID, NO FURTHER AMOUNT IS DUE.

HOWEVER, IT IS WORTHY OF NOTE THAT BOTH THE CONTRACTOR AND THE CONTRACTING AGENCY AGREE THAT THE AMOUNT BID IS NOT SIGNIFICANTLY AFFECTED BY THE AREA TO BE COVERED. IT THUS WOULD SEEM THAT BIDDERS WERE REQUIRED TO STATE THEIR PRICES IN A MANNER (COST PER ACRE) UNRELATED TO THE METHOD BY WHICH THEIR BIDS WERE DEVELOPED (COST PER JOB). SINCE IT WOULD APPEAR THAT COMPETITION CAN BEST BE ACHIEVED BY SOLICITING BIDS ON A BASIS WHICH WILL REFLECT THE SIGNIFICANT FACTORS CONSIDERED BY THE BIDDERS IN DEVELOPING THEIR BIDS, IT IS SUGGESTED THAT A DISPUTE SUCH AS HERE INVOLVED MAY BE AVOIDED SHOULD THE FOREGOING PRINCIPLE BE APPLIED IN FUTURE PROCUREMENTS.

THE ATTACHMENTS TO THE CONTRACTING OFFICER'S MEMORANDUM ENCLOSED WITH THE LETTER OF NOVEMBER 14 ARE RETURNED AS REQUESTED.

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