B-151981, DEC. 13, 1963

B-151981: Dec 13, 1963

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PLOTKIN AND KAHN: REFERENCE IS MADE TO YOUR LETTER DATED JULY 2. IS INDEBTED TO THE UNITED STATES GOVERNMENT IN THE AMOUNT OF $1. INVITED BIDS ON THE INSTALLATION AND OPERATION OF A FOOD VENDING MACHINE CONCESSION THE DURATION OF WHICH WAS TO BE FROM DATE OF BID ACCEPTANCE OF THE MOST ADVANTAGEOUS BID BY THE GOVERNMENT UNTIL MARCH 1. THE SPACE CURRENTLY DESIGNATED FOR THE OPERATION OF THE CONCESSION IS LOCATED IN (ROOM NUMBER AND BUILDING NUMBER OR OTHER IDENTIFICATION). " WHICH STATEMENT WAS FOLLOWED BY THE FOLLOWING TYPED LANGUAGE: "CLINICAL CENTER CAFETERIA. THE INVITATION ALSO STATED IN PRINT: "EACH BIDDER IS URGED TO INSPECT. THE PREMISES WHERE THE CONCESSION WILL BE OPERATED.'.

B-151981, DEC. 13, 1963

TO ARENT, FOX, KINTNER, PLOTKIN AND KAHN:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 2, 1963, MAKING APPEAL, PURSUANT TO 31 U.S.C. SEC. 71, FROM THE DECISION OF THE CHIEF ACCOUNTANT OF THE NATIONAL INSTITUTES OF HEALTH TO THE EFFECT THAT YOUR CLIENT, THE G. B. MACKE CORPORATION OF WASHINGTON, D.C., IS INDEBTED TO THE UNITED STATES GOVERNMENT IN THE AMOUNT OF $1,814.37 UNDER THE TERMS OF CONTRACT NO. SA-43-PH-4472.

ON FEBRUARY 20, 1961, THE NATIONAL INSTITUTES OF HEALTH, SUPPLY MANAGEMENT BRANCH, LOCATED IN BETHESDA, MARYLAND, INVITED BIDS ON THE INSTALLATION AND OPERATION OF A FOOD VENDING MACHINE CONCESSION THE DURATION OF WHICH WAS TO BE FROM DATE OF BID ACCEPTANCE OF THE MOST ADVANTAGEOUS BID BY THE GOVERNMENT UNTIL MARCH 1, 1963. THE INVITATION, UNDER TERMS AND CONDITIONS, RECITED IN PRINT AS FOLLOWS: "2. THE SPACE CURRENTLY DESIGNATED FOR THE OPERATION OF THE CONCESSION IS LOCATED IN (ROOM NUMBER AND BUILDING NUMBER OR OTHER IDENTIFICATION); " WHICH STATEMENT WAS FOLLOWED BY THE FOLLOWING TYPED LANGUAGE: "CLINICAL CENTER CAFETERIA, BUILDING 10.' THE INVITATION ALSO STATED IN PRINT: "EACH BIDDER IS URGED TO INSPECT, BEFORE SUBMITTING HIS BID, THE PREMISES WHERE THE CONCESSION WILL BE OPERATED.' THE SIXTEENTH PROVISION OF THE TERMS AND CONDITIONS READ AS FOLLOWS IN PRINT: "THE OFFICER IN CHARGE MAY AT ANY TIME DESIGNATE OTHER SPACE IN LIEU OF THE SPACE HEREINBEFORE DESIGNATED FOR THE OPERATION OF THIS LICENSE PRIVILEGE.' THE SIXTH PROVISION OF THE TERMS AND CONDITIONS STATED IN PRINT THAT: "THE LICENSEE IS TO FURNISH ALL OTHER EQUIPMENT AND SERVICES NECESSARY FOR THE OPERATION OF CONCESSION AS FOLLOWS: "/THEN IN TYPE)" SEE ATTACHED TERMS AND CONDITIONS.' PARAGRAPH ONE OF THE ATTACHED TYPEWRITTEN TERMS AND CONDITIONS CONTAINED THE FOLLOWING LANGUAGE: "THE NUMBER, TYPE, AND LOCATION OF SUCH MACHINES AS WELL AS THE SELECTION OF FOODS TO BE DISPENSED, MAY BE CHANGED UPON MUTUAL AGREEMENT OF THE PARTIES.'

AT THE TIME THE INVITATION WAS ISSUED NIH HAD DECIDED TO DISCONTINUE ONE OF THE MANUALLY OPERATED FOOD SERVICE LINES IN ITS CLINICAL CENTER CAFETERIA, BUILDING 10, BETHESDA, MARYLAND, AND TO REPLACE IT WITH A BANK OF VENDING MACHINES. THE MACKE VENDING COMPANY MADE A SURVEY OF THE ANTICIPATED PROFITABILITY OF THE PROPOSED CONTRACT ON THE BASIS OF THIS LOCATION, WHICH IT STATES WAS EASILY ACCESSIBLE TO VERY LARGE NUMBERS OF PEOPLE AND THROUGH WHICH THERE WAS A GREAT FLOW OF TRAFFIC.

MACKE'S BID WAS AN OFFER TO PAY THE GOVERNMENT 16.1 PERCENT OF ITS GROSS SALES WITH A MINIMUM GUARANTEED ANNUAL PAYMENT OF $13,000 SUBJECT TO THE VARIOUS TERMS AND CONDITIONS OF THE CONTRACT. ITS BID BEING THE MOST ADVANTAGEOUS TO THE GOVERNMENT, MACKE WAS AWARDED A TWO-YEAR CONTRACT ON MARCH 2, 1961.

AFTER INSTALLATION OF THE EQUIPMENT THE CONTRACTOR'S SALES PROVED TO BE AS GOOD AS ITS EXPECTATIONS. IN OCTOBER 1961, HOWEVER, THE GOVERNMENT ORDERED THE CONTRACTOR TO REMOVE ITS MACHINES FROM THE CAFETERIA AND TO RELOCATE THEM IN THE COFFEE SHOP, A LESS DESIRABLE LOCATION BUT ONE WHICH WAS NONETHELESS WITHIN THE SPACE ASSIGNED TO THE CLINICAL CENTER CAFETERIA.

WHETHER THE CONTRACTOR PROTESTED THIS RELOCATION IS A QUESTION OF FACT AS TO WHICH THE RECORD CONTAINS CONFLICTING EVIDENCE. THE CONTRACTOR CONTENDS IT VIGOROUSLY PROTESTED THE MOVE AND COMPLIED WITH THE DIRECTION AGAINST ITS WILL. BUT NO WRITTEN EVIDENCE TO DOCUMENT THIS PROTEST IS SUBMITTED. THE GOVERNMENT CONTENDS THAT THE COMPANY MADE NO PROTEST AGAINST THE RELOCATION FROM THE TIME OF THE MOVE TO THE CONCLUSION OF THE CONTRACT. IT IS THE LONG ESTABLISHED POLICY OF THE GENERAL ACCOUNTING OFFICE TO TAKE THE FACTS AS STATED BY AGENTS OF THE GOVERNMENT IN THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THIS PRESUMPTION OF CORRECTNESS. 37 COMP. GEN. 568.

ON MARCH 18, 1963, NIH SENT THE CONTRACTOR A BILL FOR COLLECTION IN THE AMOUNT OF $1,814.37, BEING THE DIFFERENCE BETWEEN THE AMOUNT PAID BY CONTRACTOR AS COMMISSIONS FOR ITS SECOND YEAR OF OPERATION AND THE GUARANTEED MINIMUM OF $13,000. CONTRACTOR SEEKS TO AVOID LIABILITY ON THE GROUNDS THAT THE GOVERNMENT BREACHED ITS CONTRACT BY COMPELLING THE RELOCATION OF ITS VENDING MACHINES TO A LESS DESIRABLE POSITION.

IN SUPPORT OF THIS CONTENTION THE ATTORNEY FOR THE COMPANY ARGUES THAT THE SIXTEENTH PROVISION OF THE TERMS AND CONDITIONS DIRECTLY CONTRADICTS AND CANNOT BE RECONCILED WITH THE FIRST PROVISION OF THE ATTACHED TERMS AND CONDITIONS. SINCE THE FORMER IS PRINTED AND THE LATTER IS TYPEWRITTEN, IT IS CONTENDED THAT THE TYPEWRITTEN LANGUAGE MUST PREVAIL AND THAT THEREFORE THE CONTRACTING PERSONNEL WERE WITHOUT AUTHORITY TO ORDER RELOCATION OF THE VENDING MACHINES WITHOUT FIRST OBTAINING THE CONSENT OF THE CONTRACTOR. BRODERICK WOOL PRODUCTS COMPANY V. UNITED STATES, 195 F.2D 433 (10TH CIR. 1952); H. AND B. AMERICAN MATCH COMPANY V. UNITED STATES, 11 F.SUPP. 48, CERT. DENIED, 297 U.S. 726; UNITED STATES V. FOUR PARCELS OF LAND, 20 F.SUPP. 306; UNITED STATES V. CERTAIN PARCELS OF LAND, ETC., 102 F.SUPP. 854; FIREMAN'S FUND INSURANCE COMPANY V. MCDANIEL, 187 F.SUPP. 614; TOW V. MINERS MEMORIAL HOSPITAL ASSOCIATION, INC., 199 F.SUPP. 926; FLAX V. PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA, 148 F.SUPP. 720; IN RE MALDONADO, 171 F.SUPP. 340.

THE VALIDITY OF THE LAST MENTIONED PRINCIPLE IS UNDENIABLE. NONETHELESS, BY THE VIEW WE TAKE OF THIS CASE, IT IS INAPPLICABLE HERE SINCE, AS THE REPORT FROM NIH STATES, THE COMPANY MADE NO PROTEST AGAINST THE ORDERED RELOCATION, AND HENCE, BY COMPLYING WITH THE NIH MANDATE WITHOUT REGISTERING A FORMAL WRITTEN PROTEST, IT IS DEEMED TO HAVE GIVEN THE REQUIRED CONSENT.

IT IS CONCLUDED THAT THE G. B. MACKE CORPORATION IS INDEBTED TO THE UNITED STATES GOVERNMENT IN THE AMOUNT OF $1,814.37.