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B-143438, JUN. 22, 1961

B-143438 Jun 22, 1961
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TO DIMOND AND THORMAN: REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 5. ONLY THE TRASH PORTION OF THE CONTRACT IS UNDER CONSIDERATION. THE REFERENCED CONTRACT WAS THE SUBJECT OF DECISIONS B-143438. YOUR REQUEST FOR REFORMATION WAS BASED UPON THE FACT THAT SHORTLY AFTER PERFORMANCE OF THE CONTRACT BEGAN THERE WAS NOTED A WIDE DISCREPANCY IN THE NUMBER OF CUBIC YARDS OF TRASH ACTUALLY REMOVED WHEN COMPARED WITH THE ESTIMATES SET FORTH IN THE INVITATION FOR BIDS. WE HELD THAT THE CONTRACT IN PROVIDING FOR THE FURNISHING OF "ALL REQUIRED" TRASH AND DEBRIS REMOVAL AND DISPOSAL SERVICES AND DESCRIBING THE QUANTITY OF TRASH TO BE REMOVED IN ESTIMATED FIGURES WAS NOT INTENDED TO LIMIT THE SERVICES TO BE PROVIDED TO THE AMOUNT ESTIMATED.

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B-143438, JUN. 22, 1961

TO DIMOND AND THORMAN:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 5, 1960, REQUESTING ON BEHALF OF YOUR CLIENT, CAPITOL TRASH REMOVING COMPANY, INC., AN EQUITABLE ADJUSTMENT OF THE CONTRACT PRICE RETROACTIVE TO MARCH 15, 1960, ON CONTRACT NO. GS-03B-7665, DATED FEBRUARY 2, 1960, WHICH PROVIDED FOR THE REMOVAL AND DISPOSAL OF TRASH AND DEBRIS FROM CERTAIN DESIGNATED BUILDINGS. ONLY THE TRASH PORTION OF THE CONTRACT IS UNDER CONSIDERATION.

THE REFERENCED CONTRACT WAS THE SUBJECT OF DECISIONS B-143438, SEPTEMBER 9, 1960, TO THE GENERAL SERVICES ADMINISTRATION AND B 143438, OCTOBER 24, 1960, TO YOU, BOTH OF WHICH INVOLVED THE QUESTION OF THE PROPRIETY OF REFORMING THE CONTRACT SO AS TO GRANT AN INCREASE IN THE CONTRACT PRICE. YOUR REQUEST FOR REFORMATION WAS BASED UPON THE FACT THAT SHORTLY AFTER PERFORMANCE OF THE CONTRACT BEGAN THERE WAS NOTED A WIDE DISCREPANCY IN THE NUMBER OF CUBIC YARDS OF TRASH ACTUALLY REMOVED WHEN COMPARED WITH THE ESTIMATES SET FORTH IN THE INVITATION FOR BIDS. IN OUR DECISION OF SEPTEMBER 9, 1960, WE HELD THAT THE CONTRACT IN PROVIDING FOR THE FURNISHING OF "ALL REQUIRED" TRASH AND DEBRIS REMOVAL AND DISPOSAL SERVICES AND DESCRIBING THE QUANTITY OF TRASH TO BE REMOVED IN ESTIMATED FIGURES WAS NOT INTENDED TO LIMIT THE SERVICES TO BE PROVIDED TO THE AMOUNT ESTIMATED. THE DECISION CONCLUDED, FOR THE REASONS STATED THEREIN, THAT ANY MISTAKE THAT EXISTED DID NOT CONSIST IN DRAWING THE CONTRACT AND, THEREFORE, REFORMATION WAS NOT LEGALLY PERMISSIBLE. YOU REQUESTED RECONSIDERATION OF THIS DECISION ON THE ALTERNATIVE BASIS OF MISREPRESENTATION IN MAKING THE ESTIMATES ON THE PART OF THE GOVERNMENT AND RELIANCE THEREON BY YOUR CLIENT. IN AFFIRMING OUR PREVIOUS DECISION, WE HELD THAT THE QUANTITIES OF TRASH TO BE REMOVED WERE CLEARLY STATED TO BE ESTIMATES AND WERE NOT INTENDED TO REFLECT EXACT QUANTITIES AND COULD NOT PROPERLY BE RELIED UPON. IT WAS STATED THAT IN ANY EVENT THE SAME PRINCIPLES APPLICABLE TO REFORMATION FOR MUTUAL MISTAKE WERE APPLICABLE TO REFORMATION FOR MISREPRESENTATION AND SINCE THE MISREPRESENTATION, IF ANY EXISTED, DID NOT CONSIST IN THE REDUCTION OF THE AGREEMENT TO WRITING REFORMATION WAS NOT POSSIBLE.

THE CONTRACT PROVIDED FOR THE REMOVAL OF TRASH AT FIXED PRICE PER MONTH AND DESCRIBED THE EXTENT OF THE SERVICES THE CONTRACTOR WAS TO PERFORM AS FOLLOWS:

"FURNISH ALL REQUIRED TRASH AND DEBRIS REMOVAL AND DISPOSAL SERVICES AS ITEMIZED AND DESCRIBED IN THE ATTACHED SPECIFICATIONS AND GENERAL CONDITIONS * * * FOR A PERIOD OF ONE YEAR BEGINNING ON THE DATE SPECIFIED IN THE NOTICE OF AWARD AT THE SITES INDICATED IN EXHIBITS "A" AND "B" (SITES TO BE SERVICED AND SCHEDULE OF REMOVALS) OF THIS SCHEDULE * * *.'

EXHIBIT "A" SETS FORTH A LIST OF 43 SITES AND INDICATES THE NUMBER OF WEEKLY PICKUPS OF TRASH AT EACH SITE, PICKUP DAYS AND HOURS AND THE ESTIMATED CUBIC YARDS PER MONTH TO BE PICKED UP FROM EACH SITE. ITEM 22 OF EXHIBIT "A" LISTS A SITE ADDRESS AS "320-21ST ST. N.W.; " GIVES THE PICKUP POINT FOR SUCH SITE AS "TRASH ROOM BASEMENT GI CANS AND TRASH BOXES; " AND LISTS AN ESTIMATE OF 40 CUBIC YARDS PER MONTH TO BE REMOVED FROM THE SITE.

A PROVISION ON PAGE 3 OF THE CONTRACT PROVIDES, IN PERTINENT PART AS FOLLOWS:

"SERVICE REQUIREMENT CHANGES: LOCATIONS COVERED IN "EXHIBITS A AND B" MAY BE DROPPED OR ADDITIONAL LOCATIONS IN THE SAME GSA ORGANIZATIONAL AREA (WEST AREA) MAY BE ADDED TO BEST SERVE INTEREST OF THE GOVERNMENT.'

IN A REPORT DATED MAY 8, 1961, THE GENERAL SERVICES ADMINISTRATION STATES IN A LETTER DATED NOVEMBER 22, 1960, TO THE CONTRACTOR THE GENERAL SERVICES ADMINISTRATION ATTEMPTED TO SET UP A NEW PICKUP POINT TO PROVIDE FOR THE INCREASE IN QUANTITY OF TRASH TO BE REMOVED AT THE STATE DEPARTMENT BUILDING. THE LETTER OF NOVEMBER 22, 1960, ADDED A NEW ITEM (NO. 44) TO THE CONTRACT WITH AN ADDRESS LISTED AS "STATE BUILDING 320 21ST ST., N.W.' AND DESCRIBED THE NEW PICKUP POINT AS "SOUTH LOADING PLATFORM OF EXTENSION, NORTH LOADING PLATFORM OF EXTENSION.' THIS LETTER ALSO INCREASED THE ESTIMATED CUBIC YARDS PER MONTH OF TRASH TO BE REMOVED TO 1,300, WITH A RESULTING INCREASE IN THE MONTHLY CHARGE FROM $2,904.60 TO $5,959.60 EFFECTIVE NOVEMBER 9, 1960, AT THE RATE OF $2.35 PER CUBIC YARD.

THE ADMINISTRATIVE REPORT STATES, HOWEVER, THAT DURING A SUBSEQUENT REVIEW OF THE CONTRACT IT WAS DISCOVERED THAT THE NEW PICKUP POINT HAD NOT BEEN UTILIZED BY EITHER GOVERNMENT OR THE CONTRACTOR AND THAT IN ORDER TO CORRECT THIS SITUATION AND ADJUST THE ESTIMATED AMOUNT OF TRASH TO BE REMOVED WHICH WAS IN ERROR IN THE NOVEMBER LETTER, THE GENERAL SERVICES ADMINISTRATION BY LETTER DATED JANUARY 16, 1961, RESCINDED THE LETTER OF NOVEMBER 22, 1960. THE LETTER OF JANUARY 16, 1961, PROVIDED FOR AN ADDITIONAL PICKUP POINT WITH THE SAME ADDRESS (STATE BUILDING, 320 21ST ST., N.W.) AS THAT STATED IN THE NOVEMBER 22 LETTER, WITH A PICKUP POINT PRESCRIBED AS "SOUTH LOADING PLATFORM OF EXTENSION.' THE LETTER FURTHER STATED THE ESTIMATED CUBIC YARDS OF TRASH PER MONTH AS 433 WITH A RESULTING INCREASE IN THE MONTHLY CHARGE FROM $2,904.60 TO $3,922.15 EFFECTIVE JANUARY 16, 1961, AT THE RATE OF $2.35 PER CUBIC YARD. IT IS FURTHER REPORTED THAT THE CONTRACTOR HAS BEEN PAID SINCE JANUARY 16, 1961, ON THE BASIS OF 433 CUBIC YARDS PER MONTH WHICH, SINCE THE CONTRACT EXPIRED ON MARCH 15, 1961, AMOUNTS TO A TOTAL ADDITIONAL PAYMENT OVER AND ABOVE THAT STIPULATED IN THE CONTRACT OF $2,035.10.

YOUR PRESENT REQUEST FOR AN EQUITABLE ADJUSTMENT IS BASED UPON YOUR CONTENTION THAT THE INCREASE IN THE NUMBER OF CUBIC YARDS TO 1,300 PRESCRIBED IN THE LETTER OF NOVEMBER 22, 1960, HAD TAKEN PLACE PRIOR TO MARCH 15, 1960, THE INCEPTION DATE OF THE CONTRACT. APPARENTLY IN SUPPORT OF THIS CONTENTION, YOU INDICATE THAT ITEM 22, SCHEDULE "A" OF THE CONTRACT LISTS THE SAME ADDRESS (320-21ST ST., N.W.) AS THAT LISTED BY BOTH THE NOVEMBER 1960, AND JANUARY 1961, LETTERS FROM THE GENERAL SERVICES ADMINISTRATION TO THE CONTRACTOR. FURTHERMORE, YOU POINT OUT THAT PAGE 1 OF THE CONTRACT REQUIRED THE CONTRACTOR'S SERVICES "AT THE SITES INDICATED IN EXHIBITS "A" AND "B" (SITES TO BE SERVICES * * *)," AND THAT THIS REFERENCE IS TO SITES AND NOT PICKUP POINTS. YOU ALSO QUOTE, WITHOUT COMMENT, A PORTION OF THE PROVISION ON PAGE 3 OF THE CONTRACT WITH REGARD TO SERVICE REQUIREMENT CHANGES WHICH STATES THAT "LOCATIONS COVERED IN "EXHIBITS A AND B" MAY BE DROPPED OR ADDITIONAL LOCATIONS IN THE SAME GSA ORGANIZATIONAL AREA (WEST AREA) MAY BE ADDED," ETC.IN CONCLUSION YOU STATE THAT THE RECORDS OF THE GENERAL SERVICES ADMINISTRATION WOULD NO DOUBT BEAR OUT THE CONTRACTOR'S CONTENTION THAT THE INCREASE IN THE NUMBER OF CUBIC YARDS HAD TAKEN PLACE PRIOR TO MARCH 15, 1960, AND THAT IT WOULD, THEREFORE, BE APPROPRIATE THAT THE CHANGE SHOULD BE MADE RETROACTIVE TO MARCH 15, 1960.

WHILE WE ARE NOT UNSYMPATHETIC TO YOUR POSITION IN THIS MATTER, THE GENERAL ACCOUNTING OFFICE IS WITHOUT AUTHORITY TO SETTLE CLAIMS OF THIS KIND SOLELY ON MORAL OR EQUITABLE GROUNDS. THEREFORE, WE MUST, IN ARRIVING AT A CONCLUSION IN THIS CASE, BE GOVERNED BY APPLICABLE LEGAL PRINCIPLES. ON THAT BASIS, IT MUST BE NOTED THAT THE CLAIM YOU NOW MAKE FOR AN EQUITABLE ADJUSTMENT IS ESSENTIALLY THE SAME CLAIM FOR REFORMATION OF THE CONTRACT WHICH WAS PREVIOUSLY CONSIDERED AND DENIED IN OUR DECISIONS OF SEPTEMBER 9 AND OCTOBER 24, 1960. FURTHERMORE, EXCEPT FOR THE TWO LETTERS OF NOVEMBER 22, 1960, AND JANUARY 16, 1961, FROM THE GENERAL SERVICES ADMINISTRATION TO THE CONTRACTOR, WHICH WILL BE DISCUSSED BELOW, NO NEW EVIDENCE OR LEGAL AUTHORITY IN SUPPORT OF YOUR CLAIM HAS BEEN PRESENTED WHICH WAS NOT PREVIOUSLY CONSIDERED IN OUR PRIOR DECISIONS. ON THE BASIS OF THE RECORD BEFORE US THERE IS NO AUTHORITY IN LAW FOR GRANTING AN EQUITABLE ADJUSTMENT IN THE CONTRACT PRICE. ADDITION WE DO NOT FEEL THAT THE TWO LETTERS WHICH PURPORTED TO CHANGE THE TERMS OF THE CONTRACT WERE LEGALLY EFFECTIVE IN ATTAINING THE RESULT OR, FOR THAT MATTER, IN AIDING YOUR CLAIM FOR A RETROACTIVE ADJUSTMENT.

AS YOUR LETTER OF DECEMBER 5, 1960, POINTS OUT, THE CONTRACT REQUIRED THE CONTRACTOR'S SERVICES "AT THE SITES INDICATED IN EXHIBITS "A" OR "B" (SITES TO BE SERVICED * * *).' LIKEWISE, THE SERVICE REQUIREMENT CHANGES PROVISION ON PAGE 3 OF THE CONTRACT SPEAKS IN TERMS OF LOCATIONS COVERED IN EXHIBITS "A" OR "B" TO BE DROPPED OR ADDED AND NOT IN TERMS OF ADDING OR DROPPING PICKUP POINTS AT A PREVIOUSLY DESIGNATED SITE OR LOCATION. THE ONLY REASONABLE INTERPRETATION OF THIS CONTRACTUAL LANGUAGE REQUIRES THE CONCLUSION THAT THE GENERAL SERVICES ADMINISTRATION WAS GRANTED AUTHORITY THEREUNDER TO INCREASE THE COMPENSATION TO THE CONTRACTOR SOLELY FOR INCREASED SERVICES BY THE CONTRACTOR RESULTING FROM THE ADDITION OF PICKUP POINTS AT NEW SITES OR LOCATIONS AND NOT FOR THE ADDITION OF NEW PICKUP POINTS AT ALREADY EXISTING SITES OR LOCATIONS. ITEM 22 OF THE CONTRACT LISTED THE STATE DEPARTMENT BUILDING AT 320 21ST STREET, N.W., AS A REQUIRED SITE OF SERVICE AT THE TIME THE CONTRACT WAS MADE. THE LETTERS OF NOVEMBER 22, 1960, AND JANUARY 16, 1961, WHICH ON THEIR FACE WERE APPLICABLE TO THE STATE BUILDING, 320 21ST STREET, N.W., COULD NOT, THEREFORE, HAVE THE EFFECT OF MODIFYING THE CONTRACT SO AS TO CREATE A NEW PICKUP SITE FOR WHICH AN INCREASE IN THE CONTRACT PRICE WOULD BE AUTHORIZED.

IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING NO AGENT OR OFFICER OF THE UNITED STATES HAS AUTHORITY TO GIVE AWAY OR SURRENDER A RIGHT VESTED IN OR ACQUIRED BY THE GOVERNMENT UNDER A CONTRACT, 22 COMP. GEN. 260, 20 ID. 703 AND AUTHORITIES THEREIN CITED, UNLESS, OF COURSE, THE GOVERNMENT IS ADEQUATELY COMPENSATED FOR THE SURRENDERED RIGHT BY A NEW CONSIDERATION OR THE EXECUTION OF A NEW SUPPLANTING AGREEMENT MORE ADVANTAGEOUS TO THE GOVERNMENT. NOR DOES AN OFFICIAL'S AUTHORITY TO MAKE THE ORIGINAL CONTRACT IMPLY AUTHORITY TO RELINQUISH RIGHTS THEREBY ACQUIRED AGAINST THE INTEREST OF THE GOVERNMENT. AMERICAN SALES CORP. V. UNITED STATES, 32 F.2D, 141 (AFFIRMING JUDGMENT IN 27 F.2D 389, CERTIORARI DENIED 280 U.S. 574). UNDER THE EXPRESS TERMS OF THE CONTRACT, THE EXTENT OF THE CONTRACTOR'S DUTY WAS TO FURNISH "ALL REQUIRED TRASH AND DEBRIS REMOVAL AND DISPOSAL SERVICES * * * AT THE SITES INDICATED IN EXHIBIT "A" AND "B" * * *.' SINCE THE CONTRACTOR WAS ALREADY OBLIGATED TO FURNISH TRASH REMOVAL SERVICES FOR THE STATE BUILDING AT 320 21ST STREET, N.W., THE ATTEMPTED MODIFICATION OF THE CONTRACT SO AS TO INCREASE THE MONTHLY CHARGE PAYABLE TO THE CONTRACTOR WAS NOT SUPPORTED BY CONSIDERATION. SEE 17 C.J.S. CONTRACTS SECTION 112 AND AUTHORITIES CITED THEREIN, WHERE THE APPLICABLE LAW IS STATED AS FOLLOWS:

"THE PROMISE OF A PERSON TO CARRY OUT A SUBSISTING CONTRACT WITH THE PROMISE OR THE PERFORMANCE OF SUCH CONTRACTUAL DUTY IS CLEARLY NO CONSIDERATION, AS HE IS DOING NO MORE THAN HE WAS ALREADY OBLIGED TO DO, AND HENCE HAS SUSTAINED NO DETRIMENT, NOR HAS THE OTHER PARTY TO THE CONTRACT OBTAINED ANY BENEFIT. THUS, A PROMISE TO PAY ADDITIONAL COMPENSATION FOR THE PERFORMANCE BY THE PROMISEE OF A CONTRACT WHICH PROMISEE IS ALREADY UNDER OBLIGATION TO THE PROMISOR TO PERFORM IS WITHOUT CONSIDERATION * * *.'

IN ACCORDANCE WITH THE ABOVE ANALYSIS OF THE LEGAL ISSUES INVOLVED IN THIS CASE, IT MUST BE CONCLUDED THAT THE GENERAL SERVICES ADMINISTRATION WAS WITHOUT AUTHORITY TO AMEND THE CONTRACT IN THE MANNER RELATED SO AS TO INCREASE THE MONTHLY CHARGES DUE THE CONTRACTOR AFTER JANUARY 16, 1961, FROM $2,904.60 TO $3,922.15. INASMUCH AS THE CONTRACTOR HAS BEEN PAID AT THE HIGHER RATE FOR A PERIOD OF TWO MONTHS, IT APPEARS THAT AN UNAUTHORIZED OVERPAYMENT IN THE AMOUNT OF $2,035.10 HAS BEEN MADE.

ACCORDINGLY, THE SUM OF $2,035.10 REPRESENTING AN OVERPAYMENT FOR THE PERIOD JANUARY 16, TO MARCH 15, 1961, WAS IMPROPERLY PAID TO YOUR CLIENT. THE CAPITOL TRASH REMOVING COMPANY, INC., SHOULD REMIT SUCH SUM TO THIS OFFICE BY CHECK OR MONEY ORDER MADE PAYABLE TO THE U.S. GENERAL ACCOUNTING OFFICE IN ORDER THAT MORE FORMAL COLLECTION ACTION WILL NOT BE REQUIRED.

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