B-142616, JUNE 13, 1960, 39 COMP. GEN. 829

B-142616: Jun 13, 1960

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MAKING REFERENCE TO A PREVIOUS ALLOCATION AND PURCHASE ORDER AND STATING THAT AN ADDITIONAL QUANTITY OF THE ORDERED SUPPLIES ARE REQUIRED. THE PERTINENT FACTS HAVE BEEN FURTHER DEVELOPED BY OUR OFFICE AND ARE AS FOLLOWS. AN ALLOCATION FOR THE ADDITIONAL 120 SETS WAS RECEIVED FROM NIB IN RESPONSE TO A TELEGRAPHED REQUEST ON MAY 5. AN AMENDMENT TO THE PURCHASE ORDER WAS ISSUED BY GSA ON MAY 5. ADVISED THAT AN ADDITIONAL 120 SETS WERE REQUIRED. THIS TELEGRAM ALSO STATED THAT NIB SHOULD "WIRE APPROVAL" IF THE TERMS WERE UNCHANGED AND INDICATE CHANGES IN TERMS IF ANY. WHILE GSA MAY HAVE INTENDED TO ISSUE A FOLLOW- UP ORDER UPON RECEIPT OF THE ALLOCATION ORDER FOR THE LAST 120 SET INCREMENT. NEITHER WAS A NOTICE OF ALLOCATION RECEIVED FROM NIB NOR WAS AN ORDER OR AMENDMENT TO THE PURCHASE ORDER ISSUED BY GSA FOR SUCH INCREMENT.

B-142616, JUNE 13, 1960, 39 COMP. GEN. 829

APPROPRIATIONS - OBLIGATION - REQUESTS FOR ADDITIONAL QUANTITIES A TELEGRAM FROM THE GENERAL SERVICES ADMINISTRATION TO THE NATIONAL INDUSTRIES FOR THE BLIND ( NIB) REQUESTING AN ADDITIONAL AMOUNT OF AN ITEM PREVIOUSLY ORDERED, WITHOUT THE SUBSEQUENT ALLOCATION BY NIB OF THE PRODUCTION TO ONE OR MORE DESIGNATED AGENCIES FOR THE BLIND, AND BEFORE THE ISSUANCE BY GSA OF A PURCHASE ORDER PURSUANT TO A NOTICE OF ALLOCATION RECEIVED FROM NIB, DOES NOT CONSTITUTE A VALID OBLIGATION UNDER SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, 31 U.S.C. 200 (A) (1), WHICH REQUIRES THE EXISTENCE OF A VALID AND BINDING CONTRACT BASED ON AN OFFER AND ACCEPTANCE IMPOSING A LIABILITY ON BOTH PARTIES.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, JUNE 13, 1960:

YOUR LETTER OF APRIL 13, 1960, WITH ENCLOSURES, REQUESTS OUR DECISION AS TO WHETHER A TELEGRAM TO THE NATIONAL INDUSTRIES FOR THE BLIND ( NIB), MAKING REFERENCE TO A PREVIOUS ALLOCATION AND PURCHASE ORDER AND STATING THAT AN ADDITIONAL QUANTITY OF THE ORDERED SUPPLIES ARE REQUIRED, CONSTITUTES A VALID OBLIGATION UNDER SECTION 1311 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1955, 31 U.S.C. 200. THE PERTINENT FACTS HAVE BEEN FURTHER DEVELOPED BY OUR OFFICE AND ARE AS FOLLOWS.

IN ACCORDANCE WITH ESTABLISHED PROCEDURES, THE AMARILLO AIR FORCE BASE SUBMITTED A REQUISITION DATED DECEMBER 19, 1958, TO THE NATIONAL BUYING DIVISION, GSA, COVERING, AMONG OTHER ITEMS, 604 INNERSPRING MATTRESSES AND BOX SPRINGS. GSA THEREUPON REQUESTED AN ALLOCATION FROM NIB ON MARCH 27, 1959, AND RECEIVED THE NOTICE OF ALLOCATION DATED MARCH 30, 1959. UPON RECEIPT OF THE ALLOCATION, GSA PROCESSED PURCHASE ORDER NO. FNW-20759- 1/CD3 DATED APRIL 8, 1959. THEREAFTER, ON MAY 1, 1959, THE AIR FORCE BASE TELEGRAPHED GSA REQUESTING THAT THEIR REQUISITION BE INCREASED BY 120 SETS OF MATTRESSES AND BOX SPRINGS. AN ALLOCATION FOR THE ADDITIONAL 120 SETS WAS RECEIVED FROM NIB IN RESPONSE TO A TELEGRAPHED REQUEST ON MAY 5, 1959, AND, ACCORDINGLY, AN AMENDMENT TO THE PURCHASE ORDER WAS ISSUED BY GSA ON MAY 5, 1959, TO COVER THE ADDITIONAL REQUIREMENTS. HOWEVER, BY TWX DATED MAY 4, 1959, THE AIR FORCE BASE REQUESTED ANOTHER 120 SETS, WHEREUPON GSA TELEGRAPHED NIB ON MAY 15, 1959, MAKING REFERENCE TO THE PREVIOUS ALLOCATION, AND ADVISED THAT AN ADDITIONAL 120 SETS WERE REQUIRED. THIS TELEGRAM ALSO STATED THAT NIB SHOULD "WIRE APPROVAL" IF THE TERMS WERE UNCHANGED AND INDICATE CHANGES IN TERMS IF ANY. APPARENTLY, NIB INTERPRETED THIS TELEGRAM AS A DUPLICATE OF GSA'S TELEGRAM OF MAY 5, 1959, AND DID NOT REPLY TO GSA. WHILE GSA MAY HAVE INTENDED TO ISSUE A FOLLOW- UP ORDER UPON RECEIPT OF THE ALLOCATION ORDER FOR THE LAST 120 SET INCREMENT, NEITHER WAS A NOTICE OF ALLOCATION RECEIVED FROM NIB NOR WAS AN ORDER OR AMENDMENT TO THE PURCHASE ORDER ISSUED BY GSA FOR SUCH INCREMENT. BECAUSE OF A CLERICAL OVERSIGHT, GSA FAILED TO FOLLOW UP THE LATEST REQUEST FROM THE AIR FORCE BASE UNTIL DECEMBER 11, 1959, OR SUBSEQUENT TO THE DELIVERY OF THE 724 UNITS IN JUNE 1959. ON THAT FORMER DATE, WE UNDERSTAND THAT GSA ADVISED NIB TO HOLD IN ABEYANCE ANY ACTION ON THE MAY 15, 1959, TELEGRAM. WHILE NIB REQUESTED AN AMENDMENT ON MARCH 21, 1960, TO COVER THE LAST INCREMENT OF 120 SETS, NO ACTION HAS AS YET BEEN TAKEN BY GSA TO PLACE AN ORDER FOR THOSE 120 SETS.

THE PROCEDURES UNDER WHICH BLIND-MADE PRODUCTS ARE TO BE PURCHASED, PURSUANT TO 41 U.S.C. 46-48, ARE SET OUT IN THE SCHEDULE FOR BLIND-MADE PRODUCTS AND READ IN PART AS FOLLOWS:

ALLOCATIONS DO NOT CONSTITUTE AN OBLIGATION TO SUPPLY NOR TO RECEIVE AND ACCEPT ANY ARTICLES. WORKSHIPS FOR THE BLIND ARE NOT AUTHORIZED TO PROCEED WITH PRODUCTION UNTIL AND UNLESS THEY ARE IN RECEIPT OF A PURCHASE ORDER OR PURCHASE CONTRACT.

AGENCIES FOR THE BLIND ARE NOT AUTHORIZED NOR OBLIGATED TO PROCEED WITH PRODUCTION UNTIL THEY ARE IN RECEIPT OF PURCHASE ORDERS OR CONTRACTS.

WE AGREE THAT NIB IS NOT A " GOVERNMENT AGENCY" WITHIN THE MEANING OF 31 U.S.C. 200 (A) (3); HENCE, THERE IS FOR CONSIDERATION WHETHER THE TELEGRAM OF MAY 15, 1959, CONSTITUTED A VALID OBLIGATION UNDER 31 U.S.C. 200 (A) (1) WHICH PROVIDES:

(A) AFTER AUGUST 26, 1954 NO AMOUNT SHALL BE RECORDED AS AN OBLIGATION OF THE GOVERNMENT OF THE UNITED STATES UNLESS IT IS SUPPORTED BY DOCUMENTARY EVIDENCE OF---

(1) A BINDING AGREEMENT IN WRITING BETWEEN THE PARTIES THERETO, INCLUDING GOVERNMENT AGENCIES, IN A MANNER AND FORM AND FOR A PURPOSE AUTHORIZED BY LAW, EXECUTED BEFORE THE EXPIRATION OF THE PERIOD OF AVAILABILITY FOR OBLIGATION OF THE APPROPRIATION OR FUND CONCERNED FOR SPECIFIC GOODS TO BE DELIVERED, REAL PROPERTY TO BE PURCHASED OR LEASED, OR WORK OR SERVICES TO BE PERFORMED; * *

IN VIEW OF THE FOREGOING PROCEDURES AND THOSE CONTAINED IN 41 CFR 301, IT IS OUR VIEW THAT THE MAY 15 TELEGRAM DID NOT CONSTITUTE DOCUMENTARY EVIDENCE OF A BINDING AGREEMENT WITHIN THE PURVIEW OF 31 U.S.C. 200 (A) (1). WE REGARD THE MAY 15 TELEGRAM AS NOTHING MORE THAN A REQUEST FOR AN ADDITIONAL ALLOCATION. SUCH A REQUEST COULD NOT, UNDER THE PUBLISHED PROCEDURES, RIPEN INTO A VALID AND SUBSISTING CONTRACT UNTIL THERE WAS AN ALLOCATION BY NIB OF THE PRODUCTION CALLED FOR BY THE REQUEST TO ONE OR MORE DESIGNATED AGENCIES FOR THE BLIND AND UNTIL A PURCHASE ORDER WAS ISSUED BY GSA PURSUANT TO A NOTICE OF ALLOCATION RECEIVED FROM NIB.

CONCERNING THE CONTENTION THAT THE TELEGRAMS AND RELATED DOCUMENTS SATISFY THE REQUIREMENT IN 31 U.S.C. 200 (A) (1) THAT AN OBLIGATION BE SUPPORTED BY A BINDING AGREEMENT "IN WRITING," WE DO NOT BELIEVE THAT THE AUTHORITY RELIED UPON (SECTION 568, WILLISTON ON CONTRACTS) IS A SUFFICIENT BASIS FOR REGARDING THE MAY 15 TELEGRAM AS A VALID OBLIGATION. ASIDE FROM THE FACT THAT THERE IS NO FEDERAL STATUTE OF FRAUDS OR THAT NO FORMALITY OF CONTRACT IS REQUIRED TO BIND A GOVERNMENT VENDEE CONTRACTUALLY (23 COMP. GEN. 596), THERE STILL REMAINS THE FACT THAT THE TELEGRAM DID NOT MEET THE PRIMARY PURPOSE OF 31 U.S.C. 200 (A) (1); THAT IS, TO REQUIRE THAT THERE BE AN OFFER AND AN ACCEPTANCE IMPOSING LIABILITY ON BOTH PARTIES.

ACCORDINGLY, AND SINCE THE RECORD DOES NOT SUPPORT THE EXISTENCE OF A VALID AND BINDING CONTRACT FOR THE LAST 120 INCREMENT OF MATTRESSES AND BOX SPRINGS, YOU ARE ADVISED THAT THE MAY 15, 1959, TELEGRAM MAY NOT BE REGARDED AS A VALID OBLIGATION UNDER 31 U.S.C. 200 (A) (1). SEE 34 COMP. GEN. 705.