B-88850, OCTOBER 26, 1949, 29 COMP. GEN. 198

B-88850: Oct 26, 1949

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PAYMENT OF AN AMOUNT IN EXCESS OF SUCH MAXIMUM IS NOT AUTHORIZED. EVEN THOUGH THE CONTRACT PRICE MAY HAVE BEEN BASED ON ESTIMATES OF THE LENGTH OF THE EXTENSION WHICH. 1949: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4. IT WAS AGREED THAT THE COMPANY WOULD FURNISH ELECTRIC POWER TO THE CIVIL AERONAUTICS ADMINISTRATION VERY HIGH FREQUENCY AIRWAYS RADIO STATION. AS A PART OF THE TRANSACTION IT WAS AGREED THAT. IN YOUR LETTER IT IS STATED THAT IT WAS FOUND UPON COMPLETION THAT THE ACTUAL LENGTH OF THE LINE CONSTRUCTED WAS 11. IT WAS STATED FURTHER THAT THE ADDITIONAL LENGTH WAS DUE TO CERTAIN MINOR CHANGES WHICH WERE REQUIRED TO BE MADE IN THE ROUTING OF THE LINE ON ACCOUNT OF THE TERRAIN INVOLVED AND TO A GREATER UP AND DOWN DISTANCE THAN WAS AT FIRST ESTIMATED.

B-88850, OCTOBER 26, 1949, 29 COMP. GEN. 198

CONTRACTS - INCREASED COSTS - EXTRA WORK WHERE THE UNAMBIGUOUS TERMS OF A CONTRACT FIX A MAXIMUM LIMITATION ON THE GOVERNMENT'S SHARE OF THE COST OF EXTENDING A POWER LINE TO A DESIGNATED POINT FOR THE CONVENIENCE OF THE GOVERNMENT, PAYMENT OF AN AMOUNT IN EXCESS OF SUCH MAXIMUM IS NOT AUTHORIZED, EVEN THOUGH THE CONTRACT PRICE MAY HAVE BEEN BASED ON ESTIMATES OF THE LENGTH OF THE EXTENSION WHICH, WHEN COMPLETED, PROVED LONGER BECAUSE OF TERRAIN PROBLEMS.

COMPTROLLER GENERAL WARREN TO H. NUNN, DEPARTMENT OF COMMERCE, OCTOBER 26, 1949:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4, 1949, TRANSMITTING A VOUCHER IN THE AMOUNT OF $223.50 STATED IN FAVOR OF THE SOUTHERN CALIFORNIA EDISON COMPANY UNDER CONTRACT NO. C6CA-2936, DATED APRIL 21, 1948, AND REQUESTING A DECISION AS TO WHETHER THE VOUCHER MAY BE CERTIFIED FOR PAYMENT.

UNDER THE TERMS OF THE AFORESAID CONTRACT, CONSISTING OF THE BID OF THE SOUTHERN CALIFORNIA EDISON COMPANY DATED FEBRUARY 18, 1948, AND THE GOVERNMENT'S ACCEPTANCE THEREOF DATED APRIL 21, 1948, IT WAS AGREED THAT THE COMPANY WOULD FURNISH ELECTRIC POWER TO THE CIVIL AERONAUTICS ADMINISTRATION VERY HIGH FREQUENCY AIRWAYS RADIO STATION, LIEBRE MOUNTAIN, CALIFORNIA, AT CERTAIN RATES, AND THAT THE COMPANY WOULD EXTEND ITS OVERHEAD LINES TO A TERMINAL POLE LOCATED APPROXIMATELY 750 FEET NORTHWEST OF THE TRANSMITTER BUILDING, FROM WHICH POLE THE GOVERNMENT WOULD MAINTAIN A SUITABLE UNDERGROUND CABLE TO THE TRANSMITTER BUILDING. AS A PART OF THE TRANSACTION IT WAS AGREED THAT, UPON COMPLETION OF THE WORK, THE GOVERNMENT WOULD MAKE PAYMENT TO THE COMPANY OF AN EXTENSION CHARGE NOT TO EXCEED $3,300.

IN YOUR LETTER IT IS STATED THAT IT WAS FOUND UPON COMPLETION THAT THE ACTUAL LENGTH OF THE LINE CONSTRUCTED WAS 11,745 FEET, RESULTING IN A CHARGE OF $3,523.50 TO THE CIVIL AERONAUTICS ADMINISTRATION. IT WAS STATED FURTHER THAT THE ADDITIONAL LENGTH WAS DUE TO CERTAIN MINOR CHANGES WHICH WERE REQUIRED TO BE MADE IN THE ROUTING OF THE LINE ON ACCOUNT OF THE TERRAIN INVOLVED AND TO A GREATER UP AND DOWN DISTANCE THAN WAS AT FIRST ESTIMATED. ALSO, IT WAS STATED THAT THE COST OF THE POLE LINE EXTENSION ORIGINALLY WAS BILLED IN THE AMOUNT OF $3,523.50, BUT THAT IN VIEW OF THE TERMS OF THE CONTRACT LIMITING THE CONSTRUCTION COST TO AN AMOUNT NOT TO EXCEED $3,300 THE BILL WAS PAID IN THAT AMOUNT. HENCE, THE VOUCHER FORWARDED WITH YOUR LETTER COVERS THE ADDITIONAL AMOUNT CLAIMED OF $223.50.

IT IS CLEAR FROM THE TERMS OF THE BID, AS ACCEPTED ON BEHALF OF THE UNITED STATES, THAT THE COMPANY BECAME OBLIGATED TO EXTEND ITS OVERHEAD LINES, ETC., BUT THAT THE GOVERNMENT LIMITED ITS OBLIGATION WITH RESPECT TO THE POLE LINE EXTENSION CHARGE TO AN AMOUNT NOT TO EXCEED $3,300. THE CONTRACT DOES NOT PROVIDE, EITHER EXPRESSLY OR BY NECESSARY IMPLICATION, THAT THE AMOUNT OF $3,300 WOULD BE INCREASED IN THE EVENT OF DIFFICULTIES IN CONSTRUCTION OR UPON A DETERMINATION AFTER CONSTRUCTION THAT THE LINE WAS LONGER THAN ANTICIPATED. SINCE IT IS WELL SETTLED THAT THE RIGHTS OF PARTIES TO A CONTRACT ARE LIMITED BY THE EXPRESS TERMS THEREOF WHEN CLEAR AND UNAMBIGUOUS, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID RESULTED IN A BINDING CONTRACT WHICH VESTED IN THE UNITED STATES THE RIGHT TO LIMIT ITS PAYMENT THEREUNDER TO $3,300. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168; AND SIMPSON V. UNITED STATES, 172 U.S. 372.

WITH RESPECT TO THE STATEMENT BY THE CONTRACTOR THAT THE AMOUNT OF $3,300 WAS A MERE ESTIMATE AND SUBJECT TO ADJUSTMENT, DEPENDING UPON LATER COSTS, THERE IS NOTHING IN THE CONTRACT INDICATING THAT SUCH WAS THE INTENTION OF THE PARTIES. ON THE CONTRARY, THE PLAIN TERMS OF THE CONTRACT SHOW THAT THE PARTIES INTENDED THAT THE GOVERNMENT'S SHARE OF THE EXTENSION CHARGE WAS NOT TO EXCEED $3,300.

ACCORDINGLY, THE VOUCHER IS RETURNED HEREWITH AND YOU ARE ADVISED THAT IT SHOULD NOT BE CERTIFIED FOR PAYMENT.