B-137482, AUG. 13, 1959

B-137482: Aug 13, 1959

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THE AWARD TO COASTAL WAS CANCELLED. A CONTRACT WAS AWARDED TO YOUR COMPANY COVERING THE REMAINING PERIOD FROM DECEMBER 19. YOUR CLAIM IS APPARENTLY BASED UPON A BELIEF THAT YOU WERE ENTITLED TO RECEIVE A CONTRACT AWARD ON OR BEFORE OCTOBER 1. THAT FAILURE TO RECEIVE SUCH AWARD WAS DUE TO THE ILLEGAL AND WRONGFUL FAILURE OF THE CONTRACTING OFFICER TO FOLLOW PROCEDURES PRESCRIBED BY DEPARTMENTAL REGULATIONS. IN THE EVENT THE CLAIM IS DISALLOWED. THE PAYMENT JURISDICTION OF THIS OFFICE ON CLAIMS AGAINST THE GOVERNMENT IS LIMITED TO THOSE CASES IN WHICH THE FACTS AND CIRCUMSTANCES CLEARLY INDICATE THE EXISTENCE OF AN ENFORCEABLE OBLIGATION AGAINST THE UNITED STATES. IS LEGALLY LIABLE FOR PAYMENT OF SUCH CLAIM.

B-137482, AUG. 13, 1959

TO LOS ANGELES AIR SERVICE:

YOUR LETTER DATED JULY 2, 1959, FORWARDED A CLAIM IN THE AMOUNT OF $50,999.16, REPRESENTING DAMAGES IN THE FORM OF LOST PROFITS ALLEGEDLY SUSTAINED BY REASON OF THE GOVERNMENT'S DELAY UNTIL DECEMBER 19, 1958, IN AWARDING YOUR COMPANY A CONTRACT FOR AIR PASSENGER TRANSPORTATION SERVICES UNDER IFB 11-626-59-3-CAB.

YOUR CLAIM ARISES AS A RESULT OF THE CIRCUMSTANCES UNDER WHICH THE DEPARTMENT OF THE AIR FORCE, AFTER REJECTING YOUR LOW BID ON ITEM 7 UNDER THE ABOVE INVITATION, AWARDED A CONTRACT TO COASTAL CARGO COMPANY, INC., FOR THE SERVICES COVERED BY THIS ITEM AND CONTINUED TO ACCEPT SUCH SERVICES FROM THAT COMPANY DURING THE PERIOD FROM OCTOBER 1 TO DECEMBER 18, 1958, AT WHICH TIME THE SMALL BUSINESS ADMINISTRATION CERTIFIED YOUR COMPANY AS COMPETENT TO PERFORM THE REQUIRED SERVICE, THE AWARD TO COASTAL WAS CANCELLED, AND A CONTRACT WAS AWARDED TO YOUR COMPANY COVERING THE REMAINING PERIOD FROM DECEMBER 19, 1958, THROUGH SEPTEMBER 30, 1959.

THE AMOUNT OF YOUR CLAIM REPRESENTS A COMPUTATION OF PROFITS ALLEGEDLY LOST BY YOUR COMPANY ON 1356 PASSENGERS DURING THE PERIOD OCTOBER 1 THROUGH DECEMBER 18, 1958. YOUR CLAIM IS APPARENTLY BASED UPON A BELIEF THAT YOU WERE ENTITLED TO RECEIVE A CONTRACT AWARD ON OR BEFORE OCTOBER 1, 1958; THAT FAILURE TO RECEIVE SUCH AWARD WAS DUE TO THE ILLEGAL AND WRONGFUL FAILURE OF THE CONTRACTING OFFICER TO FOLLOW PROCEDURES PRESCRIBED BY DEPARTMENTAL REGULATIONS; AND THAT FAILURE TO RECEIVE A TIMELY AWARD DID NOT RESULT FROM FAULT OR NEGLIGENCE OF YOUR COMPANY. YOUR LETTER OF JULY 2, 1959, THEREFORE REQUESTS OUR FAVORABLE DECISION OR, IN THE EVENT THE CLAIM IS DISALLOWED, YOU ASK THAT THE CLAIM BE REFERRED TO THE CONGRESS UNDER THE PROVISIONS OF THE ACT OF APRIL 10, 1928, 31 U.S.C. 236.

THE PAYMENT JURISDICTION OF THIS OFFICE ON CLAIMS AGAINST THE GOVERNMENT IS LIMITED TO THOSE CASES IN WHICH THE FACTS AND CIRCUMSTANCES CLEARLY INDICATE THE EXISTENCE OF AN ENFORCEABLE OBLIGATION AGAINST THE UNITED STATES.

YOUR CLAIM CONTAINS NO REFERENCE TO A LEGAL PRINCIPLE OR PRECEDENT WHICH WOULD INDICATE THAT THE GOVERNMENT, UNDER THE FACTS AND CIRCUMSTANCES IN THIS CASE, IS LEGALLY LIABLE FOR PAYMENT OF SUCH CLAIM, AND OUR RESEARCH OF LEGAL AUTHORITIES LEADS US TO THE CONCLUSION THAT NO SUCH LIABILITY DOES EXIST. IN THIS CONNECTION, SEE PERKINS V. LUKENS STEEL CO., 310 U.S. 113, HOLDING THAT THE ADVERTISING STATUTES ARE FOR THE BENEFIT AND PROTECTION OF THE GOVERNMENT AND CONFER NO ENFORCEABLE RIGHTS ON BIDDERS; ROBERT HAWTHORNE, INC. V. U.S. DEPARTMENT OF THE INTERIOR, 160 F.SUPP. 417, STATING A SIMILAR RULE WITH RESPECT TO AGENCY PROCUREMENT REGULATIONS; AND HEYER PRODUCTS COMPANY, INC. V. THE UNITED STATES, 140 F.SUPP. 409, HOLDING THAT AN AWARD TO A HIGHER BIDDER DOES NOT ENTITLE THE LOW BIDDER TO RECOVER THE PROFITS WHICH COULD REASONABLY HAVE BEEN ANTICIPATED IF THE CONTRACT HAD BEEN AWARDED TO THE LOW BIDDER.

WHILE THERE CAN BE NO DOUBT THAT THE PER PASSENGER BID PRICE SUBMITTED BY YOUR COMPANY ON ITEM 7 WAS BASED UPON TRANSPORTING A GREATER NUMBER OF PASSENGERS THAN CAN BE ANTICIPATED UNDER THE CONTRACT AWARDED TO YOU, OUR RECORDS INDICATE THAT DURING THE ENTIRE PERIOD OF PERFORMANCE BY COASTAL YOUR COMPANY INSISTED THAT THE AWARD TO COASTAL SHOULD BE CANCELLED AND A CONTRACT FOR THE REMAINING SERVICES SHOULD BE AWARDED TO YOU AT THE PER PASSENGER PRICE SET OUT IN YOUR BID. WHETHER SUCH PRICE WOULD HAVE BEEN GREATER IF IT HAD BEEN SUBMITTED ON THE REDUCED NUMBER OF PASSENGERS CONTEMPLATED BY THE CONTRACT EVENTUALLY AWARDED TO YOUR COMPANY WOULD APPEAR TO BE IMMATERIAL. UPON CANCELLATION OF THE AWARD TO COASTAL THERE WAS NO OBLIGATION ON THE PART OF THE CONTRACTING OFFICER TO AWARD A CONTRACT TO YOUR COMPANY AND, OTHER THAN THE FACT THAT YOUR INSISTENCE THAT THE AWARD TO COASTAL BE CANCELLED AND A CONTRACT FOR THE REMAINING SERVICES BE AWARDED TO YOUR COMPANY OPERATED AS A CONTINUING OFFER TO PERFORM THE REMAINING SERVICES AT THE PER PASSENGER PRICE STATED IN YOUR BID, THERE WOULD APPEAR TO HAVE BEEN NO LEGAL BASIS UPON WHICH AN AWARD COULD HAVE BEEN MADE TO YOUR COMPANY, OR UPON WHICH YOUR COMPANY COULD HAVE BEEN BOUND BY SUCH AWARD TO PERFORM THE REMAINING SERVICES.

AS INDICATED BY THE MEYER CASE CITED ABOVE, NO LIABILITY ON THE PART OF THE GOVERNMENT FOR LOSS OF ANTICIPATED PROFITS BY YOUR COMPANY WOULD HAVE ARISEN IF, UPON CANCELLATION OF THE AWARD TO COASTAL, THE DEPARTMENT OF THE AIR FORCE HAD DECIDED TO EITHER READVERTISE THE ITEM 7 REQUIREMENTS OR TO COMPLETELY ABANDON PROCUREMENT OF THE REMAINING SERVICES FROM COMMERCIAL CARRIERS. WE SEE NO SOUND BASIS FOR CONTENDING THAT SUCH LIABILITY WOULD ARISE SOLELY AS A RESULT OF CONTRACTING WITH YOUR COMPANY TO PERFORM THE REMAINING SERVICES. IT IS THEREFORE OUR OPINION THAT THE EXTENT OF THE GOVERNMENT'S LIABILITY TO YOUR COMPANY IS DEFINED BY, AND LIMITED TO, PAYMENT AT THE RATE STATED IN YOUR CONTRACT FOR SUCH SERVICES AS MAY ACTUALLY BE RENDERED THEREUNDER. ACCORDINGLY, PAYMENT OF YOUR CLAIM MUST BE DENIED.

CONCERNING YOUR REQUEST THAT THE CLAIM BE TRANSMITTED TO THE CONGRESS FOR CONSIDERATION UNDER 31 U.S.C. 236, IT SHOULD BE NOTED THAT THIS STATUTE PROVIDES FOR SUCH ACTION ONLY WHERE WE BELIEVE THE CLAIM CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF THE CONGRESS. WE DO NOT CONSIDER YOUR CLAIM TO CONTAIN SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS WOULD JUSTIFY THIS OFFICE IN RECOMMENDING PRIVATE RELIEF LEGISLATION. IN VIEW THEREOF, YOUR REQUEST THAT THE CLAIM BE TRANSMITTED TO THE CONGRESS UNDER THE PROVISIONS OF 31 U.S.C. 236 MUST ALSO BE DENIED.