B-173644, AUG 5, 1971

B-173644: Aug 5, 1971

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(SMITH) IS NOT REQUIRED TO PAY FOR CERTAIN RIGHT-OF-WAY TIMBER IN ADDITION TO PAYMENTS ALREADY DUE FOR PAYMENT UNITS INVOLVED IN A TIMBER SALE IN THE CONECUH NATIONAL FOREST. WHEN A GOVERNMENT CONTRACT IS AMBIGUOUS. THE AMBIGUITY WILL BE RESOLVED AGAINST THE DRAFTER OF THE DOCUMENT IN FAVOR OF THE OTHER PARTY IF THAT PARTY'S INTERPRETATION CAN REASONABLY BE SUSTAINED BY THE CONTRACT. THE RECORD HERE INDICATES THAT SMITH'S INTERPRETATION WAS REASONABLE. WAS SUPPORTED BY THE FACTS. SECRETARY: REFERENCE IS MADE TO A LETTER DATED JULY 16. IT WAS CONTEMPLATED BY THE FOREST SERVICE THAT THE TIMBER SALE WOULD INVOLVE THE TIMBER WITHIN SEVEN PAYMENT UNITS. TIMBER WITHIN THESE UNITS WAS MARKED FOR CUTTING WITH ONE OF THREE DIFFERENT COLORS OF PAINT IN ORDER TO DISTINGUISH THE VARIOUS PAYMENT UNITS.

B-173644, AUG 5, 1971

BID PROTEST - AMBIGUOUS CLAUSE DECISION TO THE SECRETARY OF AGRICULTURE THAT BILL SMITH WOOD PRODUCTS, INC. (SMITH) IS NOT REQUIRED TO PAY FOR CERTAIN RIGHT-OF-WAY TIMBER IN ADDITION TO PAYMENTS ALREADY DUE FOR PAYMENT UNITS INVOLVED IN A TIMBER SALE IN THE CONECUH NATIONAL FOREST. SMITH CONTENDS THAT THEY INTERPRETED THE CONTRACT TO INCLUDE THE RIGHT-OF-WAY TIMBER IN THE SALE UNITS. WHEN A GOVERNMENT CONTRACT IS AMBIGUOUS, THE AMBIGUITY WILL BE RESOLVED AGAINST THE DRAFTER OF THE DOCUMENT IN FAVOR OF THE OTHER PARTY IF THAT PARTY'S INTERPRETATION CAN REASONABLY BE SUSTAINED BY THE CONTRACT. THE RECORD HERE INDICATES THAT SMITH'S INTERPRETATION WAS REASONABLE, AND WAS SUPPORTED BY THE FACTS.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED JULY 16, 1971, FROM THE DEPUTY ASSISTANT SECRETARY REQUESTING OUR DECISION AS TO WHETHER BILL SMITH WOOD PRODUCTS, INC. (SMITH), SHOULD BE REQUIRED TO PAY FOR CERTAIN RIGHT-OF-WAY TIMBER IN ADDITION TO PAYMENTS ALREADY DUE FOR PAYMENT UNITS INVOLVED IN A TIMBER SALE IN THE CONECUH NATIONAL FOREST.

IT WAS CONTEMPLATED BY THE FOREST SERVICE THAT THE TIMBER SALE WOULD INVOLVE THE TIMBER WITHIN SEVEN PAYMENT UNITS. TIMBER WITHIN THESE UNITS WAS MARKED FOR CUTTING WITH ONE OF THREE DIFFERENT COLORS OF PAINT IN ORDER TO DISTINGUISH THE VARIOUS PAYMENT UNITS. TIMBER ALONG THE RIGHT-OF -WAY OF TWO ROADS WHICH WERE TO BE BUILT, IN PART, THROUGH SOME OF THE PAYMENT UNITS WAS NOT INTENDED TO BE INCLUDED IN THE SALE. THE INTENT, CONTRARY TO USUAL SALE PROCEDURES, WAS TO SELL THIS TIMBER AT LATER DATE TO THE TIMBER SALE PURCHASER, OR IF HE DECLINED TO BUY, TO SOME OTHER INTERESTED BUYER. CONSEQUENTLY, THIS TIMBER, VALUED AT APPROXIMATELY $5,000, WAS MARKED FOR CUTTING BUT IN A COLOR DIFFERENT THAN THOSE USED IN THE PAYMENT UNITS.

AT BID OPENING, SMITH WAS THE HIGHEST BIDDER FOR THE SALE TIMBER WITH AN OFFER OF $147,617.22, WHICH WAS APPROXIMATELY $18,500 MORE THAN THE NEXT HIGHEST BIDDER. NOTICE OF AWARD WAS SENT TO SMITH ON MAY 28, 1971, BUT LATER THAT SAME DAY IT BECAME APPARENT, DURING A CONVERSATION BETWEEN BILL SMITH AND FOREST SERVICE REPRESENTATIVES, THAT THE SMITH BID HAD BEEN BASED ON THE BELIEF THAT THE RIGHT-OF-WAY TIMBER WAS INCLUDED IN THE SALE. THE FOREST SERVICE DOES NOT DISPUTE THE CONTENTION THAT THE BID WAS, IN FACT, SUBMITTED ON SUCH A BASIS.

THE LIABILITY OF SMITH FOR ANY ADDITIONAL PAYMENT IS DEPENDENT UPON AN INTERPRETATION OF THE TIMBER SALE CONTRACT. PART BT2.0 OF THE CONTRACT STATES THAT TIMBER INCLUDED IN THE CONTRACT CONSISTS OF TREES DESIGNATED FOR CUTTING; THAT ALL TIMBER WITHIN THE CLEARING BOUNDARIES OF ROADS SHALL BE DESIGNATED FOR CUTTING; THAT SUCH TIMBER NEED NOT BE WITHIN THE SALE AREA BOUNDARIES; AND THAT, CONTRARY TO THE ACTUAL FACTS OF THIS CASE, SUCH TIMBER WAS TO BE DESIGNATED AFTER SALE ADVERTISEMENT. IN ADDITION, SPECIFICATION ITEM 50, PARAGRAPH 3.2 STATES:

"TIMBER - TIMBER ON THE RIGHT-OF-WAY HAS BEEN INCLUDED IN THE VOLUMES FOR THIS SALE.

"ALL MERCHANT SALE TIMBER HAS BEEN REMOVED FROM WITHIN THE CONSTRUCTION LIMITS OF THE RIGHT-OF-WAY."

THESE LAST TWO SENTENCES ARE OBVIOUSLY IRRECONCILABLE AND THE FOREST SERVICE TAKES THE POSITION THAT BOTH SHOULD HAVE BEEN STRICKEN FROM THE CONTRACT IN VIEW OF THEIR OBJECTIVE OF SELLING THE RIGHT-OF-WAY TREES AFTER THE PRESENT SALE WAS COMPLETED. SMITH, ON THE OTHER HAND, CONTENDS THAT ONLY THE FIRST SENTENCE WAS APPLICABLE TO THE SALE SINCE THE FACT THAT THE TREES STILL STOOD AND WERE DESIGNATED FOR CUTTING PRECLUDED GIVING ANY WEIGHT TO THE SECOND SENTENCE. THE REASONABLENESS OF SMITH'S POSITION IN THIS REGARD IS BOLSTERED BY THE RECORD BEFORE US WHICH REFLECTS STATEMENTS BY THREE OTHER BIDDERS THAT THEY ALSO THOUGHT THE RIGHT-OF-WAY TIMBER WAS INCLUDED IN THE SALE.

WHEN A GOVERNMENT CONTRACT IS AMBIGUOUS, THE AMBIGUITY WILL BE RESOLVED AGAINST THE DRAFTER OF THE DOCUMENT IN FAVOR OF THE OTHER PARTY IF THAT PARTY'S INTERPRETATION CAN REASONABLY BE SUSTAINED BY THE CONTRACT. SEE MAX DRILL, INC. V UNITED STATES, 427 F. 2D 1233, 1240 (CT. CL. 1970). BELIEVE THAT A REASONABLE INTERPRETATION OF THE CONTRACT SUPPORTS THE CONCLUSION THAT THE RIGHT-OF-WAY TIMBER WAS INCLUDED IN THE PRESENT TIMBER SALE. THE AMBIGUITIES OF THE CONTRACT THEN LOSE THEIR SIGNIFICANCE WHEN CONSIDERED IN THE CONTEXT OF FACTUAL REALITIES AND THE ACTIONS OF THE FOREST SERVICE. WHATEVER WAS THE ACTUAL INTENT OF THE GOVERNMENT WITH RESPECT TO THE DISPOSITION OF THE TIMBER IN QUESTION, THE CONTRACT DID NOT CLEARLY CONVEY THAT INTENT.

WE CONCLUDE THAT THE RIGHT-OF-WAY TIMBER WAS INCLUDED IN THE TIMBER SALE CONTRACT WITH SMITH AND ..END :