B-134599, FEB. 25, 1958

B-134599, FEB. 25, 1958

TO MR. WILLIAM J. DUARTE:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 4, 1958, RELATIVE TO A DECISION DATED DECEMBER 17, 1957, TO THE SECRETARY OF COMMERCE, GIVING OUR INTERPRETATION OF CONTRACT NO. C6CA-380A, DATED JUNE 19, 1957, AWARDED TO DUARTE'S U-DRIVE AND TOURS BY THE CIVIL AERONAUTICS ADMINISTRATION, COVERING THE RENTAL OF PASSENGER VEHICLES TO GOVERNMENT PERSONNEL IN THE VICINITY OF LIHUE, KAUAI, FROM JULY 1 THROUGH DECEMBER 31, 1957.

AS STATED IN YOUR LETTER, THE RENTAL TERMS ARE SET OUT IN THE CONTRACT AS FOLLOWS:

CHART

"ITEM NO. SUPPLIES OR SERVICES AMOUNT

1 A. RATE PER MILE ?09

B. MINIMUM CHARGE PER DAY

(24 HRS. FROM TIME VEHICLE

SIGNED FOR BY GOVERNMENT

EMPLOYEE) 5.00"

YOU CONTEND THAT THE QUOTED TERMS ENTITLE YOU TO BE PAID A MINIMUM CHARGE OF $5 PER DAY PLUS $0.09 PER MILE FOR MILES TRAVELED.

IN THE DECISION OF DECEMBER 17, 1957, IT WAS STATED IN PART:

"ACCORDING TO THE GOVERNMENT'S INTERPRETATION OF THE SPECIFIED RENTAL TERMS, THE CONTRACTOR IS TO BE PAID ?09 FOR EACH MILE THE VEHICLE IS DRIVEN WITHIN A SINGLE 24-HOUR PERIOD, AND IN THE EVENT THE NUMBER OF MILES TRAVELED, WHEN MULTIPLIED BY THE SPECIFIED MILEAGE RATE, AMOUNTS TO LESS THAN $5.00, THEN THE CONTRACTOR IS TO RECEIVE THE MINIMUM 24-HOUR RENTAL CHARGE OF $5.00, IN LIEU OF THE FLAT MILEAGE RATE.

"HAD THE CONTRACTOR INTENDED TO CHARGE A FLAT RENTAL OF $5 PER DAY, PLUS AN ACTUAL MILEAGE CHARGE OF ?09 PER MILE TRAVELED, SUCH INTENTION WAS NOT DISCLOSED IN HIS PROPOSAL UPON WHICH THE INSTANT CONTRACT PRESUMABLY WAS BASED. IN FACT, THE RENTAL TERMS OF THIS CONTRACT ARE CLEAR AND UNAMBIGUOUS, AND NOT SUBJECT TO AN INTERPRETATION DIFFERENT FROM THAT PLACED THEREON BY THE PROCUREMENT AGENCY, AS DISCLOSED IN ITS COMMUNICATION OF AUGUST 13, 1957, TO THE CONTRACTOR.

"THE WORD "MINIMUM," INSOFAR AS IT RELATES TO CHARGES OR PAYMENTS DUE UNDER A CONTRACT, OR OTHER AGREEMENT, HAS BEEN DEFINED JUDICIALLY TO MEAN THE SMALLEST POSSIBLE AMOUNT THAT CAN BE ASSIGNED IN A GIVEN CASE OR SITUATION. SEE MENNEN COMPANY V. KRAUSS COMPANY, 37 F.SUPP. 161, 163. BY THE EXPLICIT TERMS OF THE PRESENT CONTRACT, THE MINIMUM RENTAL PAYABLE FOR THE USE OF A VEHICLE OVER A 24-HOUR PERIOD IF $5.00, AND THIS AMOUNT IS PAYABLE TO THE CONTRACTOR ONLY WHEN THE MILEAGE ACCRUED DURING THAT PERIOD, WHEN MULTIPLIED BY THE SPECIFIED ?09 PER MILE RATE, DOES NOT EQUAL THE SPECIFIED MINIMUM CHARGE.'

IT IS REPORTED BY THE DEPARTMENT OF COMMERCE THAT OTHER CONTRACTORS HAVE NOT QUESTIONED THE GOVERNMENT'S INTERPRETATION OF SIMILAR LANGUAGE IN THEIR CONTRACTS. IT SEEMS OBVIOUS THAT THE WORD "MINIMUM" WOULD BE ENTIRELY UNNECESSARY IF THE MEANING OF THE CONTRACT WERE AS YOU CONTEND. ITS ONLY PURPOSE IS TO INDICATE THAT A MINIMUM OF $5 PER DAY IS TO BE PAID EVEN THOUGH THE RESULT OBTAINED BY MULTIPLYING THE MILEAGE ACCRUED DURING A 24-HOUR PERIOD BY THE RATE OF $0.09 PER MILE IS LESS THAN $5.

IT IS BELIEVED THAT A CORRECT INTERPRETATION OF THE CONTRACT TERMS REQUIRES THIS CONCLUSION.