B-40524, MARCH 24, 1944, 23 COMP. GEN. 717

B-40524: Mar 24, 1944

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DID NOT PROVIDE EITHER EXPRESSLY OR BY IMPLICATION THAT AWARD WAS MADE ON SUCH BASIS. THE MEASURE OF DAMAGES INCIDENT TO THE CONTRACTOR'S FAILURE TO MAKE DELIVERY WITHIN THE SPECIFIED TIME IS NOT THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE LOW BID. THE CONTRACTOR IS ENTITLED TO PAYMENT OF THE CONTRACT PRICE UNLESS OTHER ACTUAL DAMAGES WERE SUSTAINED BY THE GOVERNMENT AS A RESULT OF THE DELAY. WHERE A CONTRACT WAS AWARDED TO OTHER THAN THE LOW BIDDER. ON THE BASIS OF DELIVERY WITHIN THE TIME SPECIFIED IN THE INVITATION FOR BIDS BUT DID NOT PROVIDE EITHER EXPRESSLY OR BY IMPLICATION THAT AWARD WAS MADE ON SUCH BASIS. IF IT IS ADMINISTRATIVELY DETERMINED THAT NO ACTUAL DAMAGES WERE SUSTAINED BY GOVERNMENT AS A RESULT OF THE CONTRACTOR'S FAILURE TO MAKE DELIVERY WITHIN THE TIME SPECIFIED IN THE CONTRACT AND A CERTIFICATION TO THAT EFFECT IS MADE ON OR ATTACHED TO THE VOUCHER.

B-40524, MARCH 24, 1944, 23 COMP. GEN. 717

CONTRACTS - DAMAGES - ACTUAL - AWARDED TO OTHER THAN LOW BIDDER ON BASIS OF EARLIER DELIVERY WHERE A CONTRACT, AWARDED TO OTHER THAN THE LOW BIDDER ON THE BASIS OF DELIVERY WITHIN THE TIME SPECIFIED IN THE INVITATION FOR BIDS, DID NOT PROVIDE EITHER EXPRESSLY OR BY IMPLICATION THAT AWARD WAS MADE ON SUCH BASIS, OR THAT IN THE EVENT OF DELAY IN DELIVERY AN ADJUSTMENT WOULD BE MADE ON THE BASIS OF THE LOW BID, THE MEASURE OF DAMAGES INCIDENT TO THE CONTRACTOR'S FAILURE TO MAKE DELIVERY WITHIN THE SPECIFIED TIME IS NOT THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE LOW BID, AND, THEREFORE, THE CONTRACTOR IS ENTITLED TO PAYMENT OF THE CONTRACT PRICE UNLESS OTHER ACTUAL DAMAGES WERE SUSTAINED BY THE GOVERNMENT AS A RESULT OF THE DELAY. WHERE A CONTRACT WAS AWARDED TO OTHER THAN THE LOW BIDDER, ON THE BASIS OF DELIVERY WITHIN THE TIME SPECIFIED IN THE INVITATION FOR BIDS BUT DID NOT PROVIDE EITHER EXPRESSLY OR BY IMPLICATION THAT AWARD WAS MADE ON SUCH BASIS, OR THAT IN EVENT OF DELAY IN DELIVERY AN ADJUSTMENT WOULD BE MADE ON THE BASIS OF THE LOW BID, IF IT IS ADMINISTRATIVELY DETERMINED THAT NO ACTUAL DAMAGES WERE SUSTAINED BY GOVERNMENT AS A RESULT OF THE CONTRACTOR'S FAILURE TO MAKE DELIVERY WITHIN THE TIME SPECIFIED IN THE CONTRACT AND A CERTIFICATION TO THAT EFFECT IS MADE ON OR ATTACHED TO THE VOUCHER, PAYMENT MAY BE MADE AT THE CONTRACT PRICE.

COMPTROLLER GENERAL WARREN TO FRANK T. GARTSIDE, NATIONAL PARK SERVICE, DEPARTMENT OF THE INTERIOR, MARCH 24, 1944:

I HAVE YOUR LETTER OF FEBRUARY 29, 1944, REQUESTING DECISION AS TO THE CORRECT AMOUNT WHICH MAY BE CERTIFIED FOR PAYMENT TO THE GREENBRIER FARMS, INC., NORFOLK, VIRGINIA, ON THE VOUCHER ACCOMPANYING YOUR SUBMISSION, STATED IN FAVOR OF SAID CORPORATION IN THE SUM OF $362, COVERING PAYMENT FOR A QUANTITY OF PLANT MATERIAL FURNISHED UNDER CONTRACT NO. I-28-P-862 AND PURCHASE ORDER NO. 22377-I, BOTH DATED DECEMBER 18, 1943.

THE FACTS AND CIRCUMSTANCES RELATIVE TO THE MATTER ARE STATED IN YOUR LETTER TO BE AS FOLLOWS:

A DECISION IS REQUESTED AS TO WHETHER IN MAKING PAYMENT DUE TO THE CONTRACTOR'S FAILURE TO MAKE DELIVERY OF THE PLANT MATERIAL UNDER ITEM 17 WITHIN 15 CALENDAR DAYS, THE TIME SPECIFIED IN THE CONTRACT, THERE SHOULD BE DEDUCTED $61.40 FROM THE CONTRACT PRICE OF $200.00 FOR ITEM 17, BECAUSE OF THE FACT THAT THERE WAS RECEIVED A LOWER BID OF $140.00 LESS ONE PERCENT DISCOUNT, OFFERING DELIVERY WITHIN 30 CALENDAR DAYS. ITEM NOS. 18, 30 AND 43 ON THE ENCLOSED VOUCHER WERE AWARDED ON THE BASIS OF THE LOW BID RECEIVED AND PAYMENT OF THOSE ITEMS IS NOT IN QUESTION.

FOR ITEM 17, THE LOW BID SUBMITTED BY THE NURSERY OUTLET COMPANY IN THE AMOUNT OF $140.00 LESS ONE PERCENT DISCOUNT FOR PAYMENT IN 20 CALENDAR DAYS, OFFERED DELIVERY WITHIN 30 CALENDAR DAYS AND WAS THEREFORE REJECTED BY THE CONTRACTING OFFICER FOR FAILURE TO MEET THE CONDITIONS OF INVITATION NO. 8977, AS PER COPY ENCLOSED, WHICH STIPULATED ON PAGE 15, PARAGRAPH 15, THAT " DELIVERY OF ALL PLANT MATERIAL SHALL BE MADE WITHIN 15 CALENDAR DAYS AFTER THE CONTRACTOR'S RECEIPT OF A NOTICE TO PROCEED WITH THE DELIVERY.'

THE SECOND LOW BID RECEIVED FOR ITEM NO. 17 WAS SUBMITTED BY THE JACKSON AND PERKINS COMPANY IN THE AMOUNT OF $180.00 NET, OFFERING DELIVERY WITHIN 10 CALENDAR DAYS AFTER THE RECEIPT OF A NOTICE TO PROCEED WITH THE DELIVERY. THAT BID WAS NOT FOR CONSIDERATION AS IN A TELEPHONE CONVERSATION ON DECEMBER 14, THEIR REPRESENTATIVE ADVISED THEY COULD NOT EXTEND THEIR OPTION WHICH HAD EXPIRED FOR THE ACCEPTANCE OF ITEM 17.

THERE IS ENCLOSED A COPY OF THE CONTRACT MADE WITH THE GREENBRIER FARMS, INC., ITEM 17 WAS AWARDED ON THE BASIS OF THE LOWEST ACCEPTABLE BID MEETING THE ADVERTISED SPECIFICATIONS AND CONDITIONS. ORDER NO. 22377-I ISSUED DECEMBER 18, 1943, CONTAINED A NOTICE TO THE CONTRACTOR READING: " YOU ARE HEREBY NOTIFIED OF AWARD OF CONTRACT FOR ITEMS AS LISTED HEREIN AND THIS ORDER IS YOUR NOTICE TO PROCEED WITH THE DELIVERY OF THE PLANT MATERIAL IN ACCORDANCE WITH THE SPECIFICATIONS AND CONDITIONS OF YOUR CONTRACT.' THE " ACKNOWLEDGMENT OF RECEIPT OF ORDER BY CONTRACTOR" FORM MAILED WITH THE ORDER WAS RETURNED BY THE CONTRACTOR UNDATED, BUT IT WAS RECEIVED BY THE PURCHASING OFFICE ON DECEMBER 23. AS DELIVERY WAS NOT MADE UNTIL JANUARY 31, 1944, THE TIME OF DELIVERY WAS IN EXCESS OF 30 DAYS, THE TIME OF DELIVERY SPECIFIED BY THE LOW BIDDER, THE NURSERY OUTLET COMPANY, FOR THAT TIME.

THE INVITATION DID NOT CONTAIN ANY PROVISION FOR LIQUIDATED DAMAGES WHICH WAS PURPOSELY OMITTED FROM THE ADVERTISEMENT BECAUSE OF THE SUGGESTION OF THE ADVISORY COMMISSION TO THE COUNCIL OF NATIONAL DEFENSE, REFERRED TO IN A LETTER ADDRESSED BY THE PRESIDENT TO THE HEADS OF ALL DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS ON OCTOBER 25, 1940.

SINCE THE INVITATION SPECIFIED THAT DELIVERY WAS REQUIRED WITHIN 15 CALENDAR DAYS AFTER THE RECEIPT OF A NOTICE TO PROCEED WITH THE DELIVERY, THE CONTRACTING OFFICER COULD NOT AWARD A CONTRACT TO A BIDDER OFFERING DELIVERY IN EXCESS OF 15 CALENDAR DAYS AS SUCH A BID WOULD FAIL TO MEET THE ADVERTISED CONDITIONS. OBVIOUSLY, IT WOULD HAVE BEEN UNFAIR TO BIDDERS OFFERING DELIVERY WITHIN 15 CALENDAR DAYS TO HAVE GIVEN ANY CONSIDERATION TO BIDS OFFERING DELIVERY WITHIN A GREATER LENGTH OF TIME.

THE GREENBRIER FARMS, INC., WAS NOT ADVISED THAT AWARD OF ITEM 17 HAD BEEN MADE TO THAT COMPANY BASED ON THEIR OFFER TO DELIVER WITHIN THE SPECIFIED TIME OF 15 CALENDAR DAYS. NEITHER WERE THEY ADVISED THAT BECAUSE A LOWER BID HAD BEEN RECEIVED OFFERING DELIVERY IN 30 CALENDAR DAYS, THERE WOULD BE A DEDUCTION MADE ON THEIR VOUCHER IF THEY DID NOT MAKE DELIVERY WITHIN 30 DAYS AFTER THE DATE OF THE RECEIPT OF THE NOTICE TO PROCEED WITH THE DELIVERY. THE RECORDS OF THE DEPARTMENT DO NOT SHOW THAT THE GREENBRIER FARMS, INC., HAD ANY KNOWLEDGE OF A LOWER BID HAVING BEEN OFFERED. THEREFORE, THERE COULD BE NO MEETING OF MINDS IN THE CONTRACT WITH RESPECT TO DAMAGE TO THE GOVERNMENT FOR THEIR FAILURE TO MAKE DELIVERY WITHIN THE SPECIFIED TIME, AS NEITHER THE ADVERTISEMENT OR THE CONTRACT STATES THAT SUCH DAMAGES WOULD BE CHARGED.

THE CONTRACTOR IN THIS CASE WAS ON NOTICE IN THE ADVERTISEMENT AND IN THE CONTRACT THAT IN ACCORDANCE WITH PARAGRAPHS 3 AND 4 ON THE REVERSE SIDE OF U.S. STANDARD FORM 33, ( REVISED), FAILURE TO MAKE DELIVERY WITHIN THE TIME SPECIFIED IN THE CONTRACT WOULD AUTHORIZE THE CONTRACTING OFFICER TO PROCEED WITH THE PURCHASE OF PLANT MATERIAL IN THE OPEN MARKET AND CHARGE ANY EXCESS COST TO HIM. IN THIS CASE THE CONTRACTING OFFICER DID NOT EXERCISE THAT AUTHORITY AS THE CONTRACTOR WAS ENDEAVORING TO MAKE DELIVERY AS EVIDENCED BY SEVERAL TELEPHONE CALLS TO THE NATIONAL CAPITAL PARKS, BUT WAS UNABLE TO MAKE DELIVERY BECAUSE OF THE UNUSUALLY SEVERE WEATHER CONDITIONS AND FOR THE FURTHER REASON THAT THE PLANT MATERIAL COULD NOT HAVE BEEN USED HAD IT BEEN RECEIVED WITHIN THE CONTRACT DELIVERY TIME. THE PLANT MATERIAL UNDER ITEM 17, WHEN RECEIVED ON JANUARY 31, WAS HEELED- IN BY THE NATIONAL CAPITAL PARKS, AND NONE OF THE MATERIAL WAS USED UNTIL FEBRUARY 8.

THUS, IT APPEARS THAT THE CONTRACT DID NOT PROVIDE EITHER EXPRESSLY OR BY IMPLICATION--- INSOFAR AS ITEM 17 WAS CONCERNED--- THAT AWARD WAS MADE AT A HIGHER PRICE THAN THAT QUOTED BY THE LOW BIDDER BECAUSE OF THE DELIVERY TIME PROMISED BY THE INSTANT CONTRACTOR AND THAT, IN THE EVENT OF DELAY, AN ADJUSTMENT WOULD BE MADE ON THE BASIS OF THE LOW BID. ACCORDINGLY, THE MEASURE OF DAMAGES BECAUSE OF THE CONTRACTOR'S FAILURE TO MAKE DELIVERY OF ITEM 17 WITHIN THE 15-DAY PERIOD SPECIFIED IN THE CONTRACT, IS NOT THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE LOW BID. KOLKER V. UNITED STATES, 40 F.1SUPP. 972. HENCE, THE CONTRACTOR IS ENTITLED TO PAYMENT OF THE CONSIDERATION STIPULATED IN ITS CONTRACT UNLESS OTHER ACTUAL DAMAGES WERE SUSTAINED BY THE UNITED STATES AS A RESULT OF THE DELAY IN DELIVERY FOR WHICH THE GOVERNMENT IS ENTITLED TO BE COMPENSATED. IF ANY SUCH ACTUAL DAMAGES CAN BE SHOWN TO HAVE BEEN SUSTAINED AS A RESULT OF THE DELAY, THE AMOUNT THEREOF SHOULD BE COLLECTED BY RECOUPMENT OR SET-OFF FROM THE CONTRACT PRICE.

THEREFORE, YOU ARE ADVISED THAT IF IT BE ADMINISTRATIVELY DETERMINED THAT NO ACTUAL DAMAGES WERE SUSTAINED BY THE UNITED STATES AS A RESULT OF THE CONTRACTOR'S DELAY AND A CERTIFICATION TO THAT EFFECT IS MADE ON OR ATTACHED TO THE PAYMENT VOUCHER, CERTIFICATION THEREOF FOR PAYMENT IN THE AMOUNT OF $362 IS AUTHORIZED, IF OTHERWISE CORRECT.