B-169878, JUL. 27, 1970

B-169878, JUL. 27, 1970

CONTRACTS -- PAYMENTS -- MISTAKES DECISION TO CERTIFYING OFFICER, NATIONAL AERONAUTICS AND SPACE ADMIN., AUTHORIZING CERTIFICATION OF VOUCHER IN FAVOR OF OCEAN CITY MACHINE WORKS, INC., FOR TRAVEL TIME AND EXPENSES FOR EMERGENCY REPAIR SERVICES PERFORMED ON ELEVATORS AT WALLOPS ISLAND STATION. CONTRACTOR WHO CLAIMS REIMBURSEMENT FOR TRAVEL TIME AND TRAVEL EXPENSES INCIDENT TO EMERGENCY REPAIR SERVICES PERFORMED UNDER A CONTRACT WHICH SPECIFIED HOURLY RATES FOR EMERGENCY SERVICES IS NOT BOUND BY SUCH RATES IN VIEW OF LOCATION OF CONTRACTOR FROM PLACE OF PERFORMANCE, CONTRACTING OFFICER SHOULD HAVE SUSPECTED THAT RATES WERE ERRONEOUS AND REQUESTED VERIFICATION. THEREFORE, PAYMENT OF REASONABLE AMOUNTS FOR TRAVEL IS APPROVED.

TO MR. SHUMAKER:

REFERENCE IS MADE TO YOUR LETTER OF MAY 12, 1970, WITH ENCLOSURES, FORWARDED TO OUR OFFICE BY THE DIRECTOR OF FINANCIAL MANAGEMENT, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION. YOU REQUESTED A DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT A VOUCHER IN THE AMOUNT OF $351, STATED IN FAVOR OF OCEAN CITY MACHINE WORKS, INCORPORATED, OCEAN CITY, MARYLAND, AND COVERING ITEMS OF TRAVEL TIME AND TRAVEL EXPENSE WHICH WERE INCLUDED ON BILLINGS FOR EMERGENCY SERVICES PERFORMED UNDER CONTRACT NO. NAS6-1778, DATED DECEMBER 30, 1969.

THE CONTRACT WAS AWARDED TO OCEAN CITY MACHINE WORKS, INCORPORATED, PURSUANT TO ADVERTISED SOLICITATION NO. P-2027, ISSUED OCTOBER 14, 1969, BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, WALLOPS STATION, WALLOPS ISLAND, VIRGINIA, FOR SERVICES, MATERIALS AND EQUIPMENT NECESSARY FOR INSPECTING, ADJUSTING, REPAIRING AND MAINTAINING ELEVATORS AT THE WALLOPS STATION DURING A PERIOD OF ONE YEAR FROM THE EFFECTIVE DATE OF A NOTICE TO PROCEED WHICH WAS ANTICIPATED TO BE JANUARY 1, 1970.

THE CONTRACT IS ESSENTIALLY ONE FOR THE FURNISHING OF SERVICES, RATHER THAN FOR DELIVERY OF SUPPLIES, BUT THE ADVERTISED SOLICITATION STATES: "DELIVERY: F.O.B. WALLOPS ISLAND, VIRGINIA." UNDER ARTICLE X OF THE SCHEDULE OF THE SOLICITATION, PROSPECTIVE BIDDERS WERE REQUESTED TO QUOTE A PRICE PER MONTH FOR REGULAR SERVICES TO BE PERFORMED IN ACCORDANCE WITH AN ATTACHED STATEMENT OF WORK NO. P-2027 DATED AUGUST 18, 1969 (BID ITEM NO. 1), AND TO QUOTE PRICES PER MAN HOUR FOR THE PERFORMANCE OF EMERGENCY SERVICES IN ACCORDANCE WITH PARAGRAPH 4.0 OF THE ATTACHED STATEMENT OF WORK (BID ITEM NO. 2). THE CITED PARAGRAPH 4.0 PROVIDES IN PART THAT "SUCH SERVICES SHALL COMMENCE WITHIN ONE (1) HOUR AFTER NOTIFICATION." BID ITEM NO. 1, THE CONTRACTOR QUOTED $250 AS ITS PRICE PER MONTH FOR REGULAR SERVICES. ON BID ITEM NO. 2, THE CONTRACTOR QUOTED $7.50, $15 AND $11.25, RESPECTIVELY, AS ITS PRICES PER MAN HOUR FOR EMERGENCY SERVICES REQUIRED FROM MONDAY THROUGH FRIDAY, ON HOLIDAYS AND SUNDAYS, AND ON SATURDAYS.

ARTICLE VIII, SUBPARAGRAPH B, OF THE SOLICITATION AND CONTRACT SCHEDULE PROVIDES AS FOLLOWS:

"THE CONTRACTOR SHALL FURNISH ALL NECESSARY SALARIES, WAGES, AND FRINGE BENEFITS OF ITS PERSONNEL, ALL COSTS OF SUBSISTENCE AND LODGING, COSTS OF INSURANCE, AND ANY AND ALL OTHER COSTS IN CONNECTION WITH THE SERVICES TO BE RENDERED HEREUNDER."

THE CONTRACTOR SUBMITTED FIVE INVOICES FOR EMERGENCY SERVICES PERFORMED DURING THE MONTHS OF JANUARY, FEBRUARY AND MARCH 1970. THE BILLINGS INCLUDED CHARGES FOR LABOR HOURS "ON JOB TIME," FOR "TRAVEL TIME" LABOR HOURS AND FOR TRAVEL EXPENSES. THE TRAVEL TIME AND TRAVEL EXPENSE CHARGES, WHICH HAVE NOT BEEN PAID, AGGREGATE THE SUM OF $351.

NEITHER THE ADVERTISED SOLICITATION NOR THE STATEMENT OF WORK ATTACHMENT THERETO MAKES ANY REFERENCE TO TRAVEL TIME OR TO TRAVEL EXPENSES AS RELATED TO THE PERFORMANCE OF REQUIRED EMERGENCY SERVICES. IT IS THE POSITION OF THE CONTRACTOR, BASED UPON THE PRACTICE IN THE ELEVATOR SERVICE INDUSTRY, THE REQUIREMENTS OF LABOR LAWS AND OF LABOR UNION CONTRACTS, AS WELL AS THE CONTRACTOR'S PREVIOUS EXPERIENCE WITH OTHER FEDERAL CONTRACTING AGENCIES, THAT IT IS ENTITLED TO BE PAID FOR TRAVEL EXPENSES AND FOR ALL LABOR TIME, INCLUDING TIME IN TRANSIT FROM POINT OF EMPLOYMENT TO THE JOB AND BACK AGAIN, IN CONNECTION WITH THE PERFORMANCE OF EMERGENCY SERVICES.

THE CONTRACTING OFFICER IS, HOWEVER, OF THE OPINION THAT THE SPECIFIED HOURLY RATES FOR EMERGENCY SERVICES COVER ANY AND ALL EXPENSES CONNECTED THEREWITH, INCLUDING ANY AMOUNTS EARNED BY AN EMPLOYEE WHILE TRAVELING FROM HIS EMPLOYER'S PLACE OF BUSINESS AND IN RETURNING TO HIS EMPLOYER'S PLACE OF BUSINESS AFTER COMPLETION OF THE EMERGENCY SERVICE AT THE WALLOPS STATION. HIS CONTENTION THAT THE CONTRACTOR IS ENTITLED TO BE PAID ONLY FOR "ON JOB TIME" AT THE APPLICABLE RATE PER MAN HOUR IS BASED UPON THE F.O.B. WALLOPS ISLAND DELIVERY PROVISION AND THE PROVISION OF ARTICLE VIII, SUBPARAGRAPH B, OF THE SOLICITATION AND CONTRACT SCHEDULE WHICH ARE QUOTED ABOVE. IN A MEMORANDUM OF APRIL 10, 1970, THE CONTRACTING OFFICER STATES THAT THE REQUIREMENT FOR COMMENCEMENT OF EMERGENCY SERVICE WITHIN ONE HOUR AFTER NOTIFICATION WAS PLACED IN THE STATEMENT OF WORK TO INDICATE THAT ANY FIRM BIDDING SHOULD BE SO LOCATED TO WALLOPS STATION THAT WITHIN ONE HOUR IT COULD BE RENDERING SERVICES. THE CONTRACTING OFFICER ALSO REFERS TO A PREAWARD MEETING AND STATES THAT, ALTHOUGH THE MATTER IN QUESTION WAS NOT BROUGHT OUT AT THE MEETING, THE CONTRACTOR'S REPRESENTATIVE INDICATED THAT HE WAS AWARE OF THE CONTRACT REQUIREMENTS.

THE RECORD OTHERWISE SHOWS THAT BY LETTER DATED NOVEMBER 19, 1969, THE CONTRACTOR WAS REQUESTED TO VERIFY ITS BID AND TO ATTEND A PREAWARD MEETING TO BE HELD AT THE WALLOPS STATION ON DECEMBER 3, 1969. THE LETTER DID NOT STATE ANY REASON FOR REQUESTING A BID VERIFICATION. THE OFFICIAL RECORD OF THE MEETING WHICH WAS HELD ON DECEMBER 3, 1969, SHOWS THAT THE PRIMARY CONCERN OF THE GOVERNMENT WAS THE QUESTION WHETHER THE CONTRACTOR HAD THE ABILITY TO FURNISH QUALIFIED PERSONNEL TO PERFORM REQUIRED SERVICES, AND THE OFFICIAL RECORD OF THE MEETING DOES NOT REFLECT IN ANY MANNER THAT THE CONTRACTING OFFICER OR ANY OTHER GOVERNMENT REPRESENTATIVE AT THE MEETING SUSPECTED OR SURMISED THAT THE CONTRACTOR HAD MADE A MISTAKE IN BID. BY LETTER DATED DECEMBER 4, 1969, THE CONTRACTOR VERIFIED ITS BID PRICES AND STATED THAT THE PRICES COMPLETELY COVER ALL SERVICES REQUIRED UNDER THE ADVERTISED SOLICITATION.

IN VIEW OF THE CONTRACTING OFFICER'S INTERPRETATION OF THE REQUIREMENTS OF THE SOLICITATION, THE CONTRACTOR SHOULD HAVE BEEN ADVISED SPECIFICALLY THAT AN ERROR IN BID WAS SUSPECTED IN REGARD TO THE QUOTED HOURLY RATES FOR THE PERFORMANCE OF EMERGENCY SERVICES (BID ITEM NO. 2), BECAUSE THE CONTRACTOR'S PLACE OF BUSINESS IS A CONSIDERABLE DISTANCE FROM THE WALLOPS ISLAND STATION AND IT APPEARED: (1) THAT IN ALL PROBABILITY THE CONTRACTOR COULD NOT BE PERFORMING AN EMERGENCY SERVICE WITHIN ONE HOUR AFTER RECEIPT OF NOTIFICATION THAT THE SERVICE WAS REQUIRED; AND (2) THAT THE QUOTED RATES FOR EMERGENCY SERVICES WHICH MIGHT INVOLVE IN SOME CASES A RELATIVELY SMALL AMOUNT OF ACTUAL REPAIR TIME SEEMED TO BE INSUFFICIENT TO COVER ALL LABOR COSTS AND TRAVEL EXPENSES. IN SUCH CIRCUMSTANCES, EVEN IF THE CONTRACTING OFFICER'S INTERPRETATION OF THE REQUIREMENTS OF THE CONTRACT CONCERNING EMERGENCY SERVICES IS CORRECT, THE FACT THAT AN ADEQUATE REQUEST FOR VERIFICATION OF THE CONTRACTOR'S BID WAS NOT MADE WOULD APPEAR TO JUSTIFY A CONCLUSION THAT THE CONTRACTOR IS NOT BOUND BY AN INTERPRETATION OF THE CONTRACT UNDER WHICH PAYMENT FOR AN EMERGENCY SERVICE WOULD BE REQUIRED ONLY FOR THE TIME SPENT AT THE WALLOPS ISLAND STATION BY THE EMPLOYEE WHO PERFORMS THE EMERGENCY SERVICE. IN THAT CONNECTION, SEE 44 COMP. GEN. 383, 386 (1965), TO THE ADMINISTRATOR, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, IN WHICH WE STATED:

"GENERALLY, AWARD OF A CONTRACT FOLLOWING VERIFICATION OF A BID UPON REQUEST OF THE CONTRACTING OFFICER RESULTS IN A BINDING CONTRACT. COMP. GEN. 942, 947; 27 ID. 17. HOWEVER, WHERE, AS HERE, THE BIDDER HAS NOT BEEN PLACED ON NOTICE OF THE NATURE AND EXTENT OF THE MISTAKE WHICH IS SUSPECTED, OUR OFFICE HAS RECOGNIZED AND FOLLOWED THE RULING IN UNITED STATES V METRO NOVELTY MANUFACTURING CO., 125 F. SUPP. 713, THAT REAFFIRMATION OF A BID, WHERE THE PLAINTIFF WAS NOT PLACED ON NOTICE OF THE MISTAKE WHICH THE GOVERNMENT SURMISED, DID NOT BAR THE DEFENSE OF RESCISSION."

WE DOUBT THE RELEVANCY OF THE F.O.B. DELIVERY STATEMENT IN THE ADVERTISED SOLICITATION AND ARTICLE VIII, SUBPARAGRAPH B, OF THE CONTRACT SCHEDULE TO THE QUESTION WHETHER, UNDER THE TERMS OF THE CONTRACT, THE CONTRACTOR IS ENTITLED TO PAYMENT FOR TRAVEL TIME AND EXPENSES IN CONNECTION WITH THE PERFORMANCE OF EMERGENCY SERVICES. IN OUR OPINION, THE CONTRACT RATES PER MAN HOUR OF SERVICE REASONABLY COULD BE REGARDED AS BEING APPLICABLE TO TRAVEL TIME SPENT BY AN EMPLOYEE OF THE CONTRACTOR WHO PERFORMS AN EMERGENCY SERVICE AND IT IS ALSO OUR OPINION THAT, ALTHOUGH THE CONTRACT DOES NOT PROVIDE A SIMILAR BASIS FOR THE TREATMENT OF CLAIMED TRAVEL EXPENSES INVOLVED IN THE PERFORMANCE OF AN EMERGENCY SERVICE, THE CONTRACT MAY PROPERLY BE INTERPRETED AS CONTEMPLATING THAT ANY INCIDENTAL TRAVEL EXPENSE INCURRED IN PERFORMING AN EMERGENCY SERVICE WOULD CONSTITUTE A SEPARATELY ALLOWABLE COST, PARTICULARLY IN VIEW OF THE FACT THAT THE CONTRACTOR'S PLACE OF BUSINESS IS A CONSIDERABLE DISTANCE FROM THE WALLOPS ISLAND STATION. TO CONCLUDE IN THE PARTICULAR CIRCUMSTANCES THAT THE CONTRACTOR SHOULD NOT BE PAID A REASONABLE AMOUNT FOR TRAVEL EXPENSES, BASED UPON A LITERAL INTERPRETATION OF ARTICLE VIII, SUBPARAGRAPH B, OF THE CONTRACT SCHEDULE AND THE F.O.B. DELIVERY STATEMENT IN THE SOLICITATION AND CONTRACT WOULD, IN OUR OPINION, BE CONTRARY TO THE ESTABLISHED RULE THAT A CONTRACT IS NOT TO BE PRESUMED TO HAVE IMPOSED AN ABSURD OR IMPOSSIBLE CONDITION ON ONE OF THE PARTIES, BUT WILL BE INTERPRETED AS THE PARTIES MUST BE SUPPOSED TO HAVE UNDERSTOOD ITS TERMS AT THE TIME THEY CONSUMMATED THEIR BARGAIN. SEE A. E. WEST PETROLEUM CO. V ATCHISON, T. & S. F. RY. CO., 108 F. SUPP. 644, 648 (1952).

FOR THE FOREGOING REASONS, IT IS OUR OPINION THAT THE CONTRACTOR IS ENTITLED TO PAYMENT FOR THE TRAVEL TIME OF ITS EMPLOYEES AT THE HOURLY RATES AS SPECIFIED IN BID AND CONTRACT ITEM NO. 2, AND TO THE PAYMENT OF REASONABLE AMOUNTS FOR TRAVEL EXPENSES INCURRED IN CONNECTION WITH THE PERFORMANCE OF EMERGENCY SERVICES. ACCORDINGLY, THE VOUCHER FOR $351 AND ITS ACCOMPANYING PAPERS ARE RETURNED HEREWITH, AND YOU ARE ADVISED THAT CERTIFICATION OF THE VOUCHER FOR PAYMENT IS AUTHORIZED, IF OTHERWISE CORRECT.