B-136080, MAY 19, 1958

B-136080: May 19, 1958

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TO NORMAN'S WHOLESALE GROCERY COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 21. APPEARS THAT THE OFFICER WAS NOT AWARE THAT THERE EXISTED AT THAT TIME A FEDERAL SUPPLY SCHEDULE CONTRACT WITH THE QUAKER OATS COMPANY UNDER WHICH THE GOVERNMENT COULD HAVE PURCHASED THE SAME QUANTITY OF CORN FLAKES FOR $45. THIS SUM WAS ALLOWED YOU BY THE SETTLEMENT OF MARCH 21. THE PROCUREMENT OF THE CORN FLAKES HERE WAS NOT DUE TO A PUBLIC EMERGENCY SINCE IT HAS BEEN REPORTED THAT THE PURCHASE WAS OCCASIONED BY AN ERROR ON THE PART OF THE PROCUREMENT OFFICER. IT WAS THE DUTY OF THE PROCUREMENT OFFICER. THE PURCHASE HERE AT A PRICE IN EXCESS OF THAT STIPULATED IN THE PROCUREMENT CONTRACT WAS BEYOND THE SCOPE OF THE PROCUREMENT OFFICER'S AUTHORITY.

B-136080, MAY 19, 1958

TO NORMAN'S WHOLESALE GROCERY COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 21, 1958, REQUESTING REVIEW OF THAT PART OF SETTLEMENT DATED MARCH 21, 1958, WHICH DISALLOWED $44 OF YOUR CLAIM IN THE AMOUNT OF $89 FOR CORN FLAKES FURNISHED THE VETERANS ADMINISTRATION HOSPITAL, SUNMOUNT, NEW YORK.

THE RECORD SHOWS THAT CHIEF, PROCUREMENT SECTION OF THE HOSPITAL ORDERED 25 CASES OF CORN FLAKES IN 100 ONE-OUNCE PACKAGES TO THE CASE FOR $89 FROM YOU ON OCTOBER 24, 1957, AND REQUESTED DELIVERY OCTOBER 30, 1957. APPEARS THAT THE OFFICER WAS NOT AWARE THAT THERE EXISTED AT THAT TIME A FEDERAL SUPPLY SCHEDULE CONTRACT WITH THE QUAKER OATS COMPANY UNDER WHICH THE GOVERNMENT COULD HAVE PURCHASED THE SAME QUANTITY OF CORN FLAKES FOR $45. THIS SUM WAS ALLOWED YOU BY THE SETTLEMENT OF MARCH 21, 1958.

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 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 CORN FLAKES HERE WAS NOT DUE TO A PUBLIC EMERGENCY SINCE IT HAS BEEN REPORTED THAT THE PURCHASE WAS OCCASIONED BY AN ERROR ON THE PART OF THE PROCUREMENT OFFICER. HOWEVER, SUCH ERROR DOES NOT ESTABLISH THE LEGALITY OF THE TRANSACTION. IT WAS THE DUTY OF THE PROCUREMENT OFFICER, ACTING FOR AND IN BEHALF OF THE UNITED STATES, TO PURCHASE THE CORN FLAKES 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 PROCUREMENT OFFICER'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 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.

ACCORDINGLY, SINCE THE PROCUREMENT OFFICER WAS NOT AUTHORIZED TO OBLIGATE THE GOVERNMENT TO PAY ANY AMOUNT IN EXCESS OF THE LISTED CONTRACT PRICE FOR THE CORN FLAKES, THE ACTION TAKEN IN THE SETTLEMENT OF MARCH 21, 1958, WAS CORRECT AND IS SUSTAINED.