B-158135, MAR. 29, 1968

B-158135, MAR. 29, 1968

TO MR. WALTER J. SCHNEIDER:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 5, 1967, REQUESTING AN UPWARD ADJUSTMENT IN THE RENTAL RATE SPECIFIED IN YOUR LEASE WITH THE POST OFFICE DEPARTMENT COVERING THE FACILITIES OF THE HAMILTON STATION POST OFFICE AT BALTIMORE, MARYLAND.

IN OUR DECISION OF APRIL 27, 1966, B-158135, WE DENIED YOUR REQUEST FOR RELIEF ON THE BASIS THAT THE ACCEPTANCE OF YOUR BID WITHOUT ANY ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR RESULTED IN A VALID AND BINDING CONTRACT AND UNDER THE BIDDING DOCUMENTS YOU WERE REQUIRED TO EXAMINE THE SITE FOR ANY UNUSUAL SITE PROBLEMS.

IN YOUR LETTER OF OCTOBER 5, 1967, YOU ASK FOR EQUITABLE RELIEF ON THE BASIS THAT THE PRESENT RENTAL RATE WILL NOT PROVIDE YOU WITH A FAIR RETURN ON YOUR INVESTMENT. SPECIFICALLY, YOU STATE THAT ALL BIDDERS SUBMITTED BIDS BASED ON THE THEORY THAT THE FACILITY COULD HAVE BEEN BUILT ON FILL AND SLAB, THE LEAST EXPENSIVE METHOD OF CONSTRUCTION. IN RESPONSE TO THIS ALLEGATION THE ADMINISTRATIVE OFFICE STATES THAT IT HAS NO WAY OF KNOWING WHETHER THIS IS CORRECT. HOWEVER, THE GOVERNMENT MADE NO REPRESENTATION AS TO THE FEASIBILITY OF THIS CONSTRUCTION METHOD EITHER BEFORE OR AFTER AWARD OF THE CONTRACT. MOREOVER, THE CONSTRUCTION REQUIREMENTS PAMPHLET (POD PUB. 39A) WHICH WAS SUPPLIED TO ALL PROSPECTIVE BIDDERS AND INCORPORATED IN THE BID AND THE LEASE AGREEMENT CLEARLY LEAVES THE CHOICE BETWEEN THE TYPESOF CONSTRUCTION FOR DETERMINATION OF THE CONTRACTOR. SEE POD PAM. 39A AT PAGE 7 WHICH PROVIDES THAT "CONSTRUCTION - FLOOR CONSTRUCTION ABOVE EXISTING GRADE SHALL BE ON COMPACTED FILL OR MAY BE STRUCTURALLY FRAMED.'

YOU ALSO ALLEGE THAT YOUR FIRST SET OF DETAILED PLANS WHICH THE POST OFFICE DEPARTMENT APPROVED WAS BASED UPON SUCH FILL AND SLAB. HOWEVER, YOU SUBSEQUENTLY DETERMINED THAT ALL OF THE AUTHORITIES ON SOIL ENGINEERING AND RELIABLE BUILDERS IN THE BALTIMORE AREA HAVE REJECTED THE PROPOSITION THAT THE FACILITY COULD BE BUILT IN THIS WAY. WHEN YOU REALIZED THIS FACT YOU WENT TO PREFABRICATED STRESCON AND WHEN THIS WAS UNSATISFACTORY A THIRD SET OF PLANS WAS APPROVED BY THE POST OFFICE DEPARTMENT PROVIDING FOR THE USE OF THE POURED CONCRETE METHOD. THIS ALLEGATION HAS REFERENCE TO YOUR ACTIONS AFTER AWARD OF THE CONTRACT AND IS, OF COURSE, NOT PERTINENT TO THE QUESTION AS TO WHETHER AWARD OF THE CONTRACT WAS MADE IN GOOD FAITH AND WITHOUT NOTICE OF PROBABILITY OF ERROR. IN FACT, YOUR ALLEGATION INDICATES THAT YOU MIGHT HAVE BEEN NEGLIGENT IN FAILING TO SEEK ADVICE OF BUILDERS BEFORE SUBMITTING YOUR BID.

YOU FURTHER ALLEGE THAT A POST OFFICE OF THIS SIZE AND IN THIS LOCATION COULD NOT BE BUILT ON SLAB AND FILL AND THAT THIS COULD ONLY BE ASCERTAINED AFTER FINAL DETAILED PLANS WERE DRAWN. ALSO, YOU ALLEGE THAT IF THE GOVERNMENT PERSONNEL WAS NOT AWARE OF THIS FACT THEN YOU SHOULD NOT BE CHARGED WITH ANY GREATER KNOWLEDGE.

WE DO NOT AGREE WITH YOUR CONTENTIONS. IT IS TRUE THAT THE GOVERNMENT DID NOT KNOW WHETHER FILL AND SLAB WAS FEASIBLE; THEREFORE, THE BIDDING DOCUMENTS PLACED THE RESPONSIBILITY FOR MAKING THE DETERMINATION ON THE BIDDER. IF YOU WERE UNABLE TO MAKE SUCH A DETERMINATION BY EXAMINATION OF THE SITE YOU COULD HAVE INCREASED YOUR BID PRICE TO PROVIDE FOR SUCH CONTINGENCY OR YOU COULD HAVE REFRAINED FROM BIDDING. IN VIEW OF THE FOREGOING WE SEE NO LEGAL BASIS FOR INCREASING THE RENTAL RATE SPECIFIED IN THE CONTRACT.

WITH RESPECT TO YOUR REQUEST FOR RELIEF ON AN EQUITABLE BASIS IT MAY ONLY BE STATED THAT NOT EVEN EQUITY MAY BE INVOKED BECAUSE OF THE HARDSHIP OF A CASE OR THE FAILURE OF THE PARTY'S REMEDY AT LAW. NOR DOES EQUITY RELIEVE PARTIES FROM THEIR CONTRACTUAL OBLIGATIONS OR REFUSE TO ENFORCE THE TERMS OF THEIR CONTRACTS BECAUSE IT SUBSEQUENTLY MAY DEVELOP THAT THEY ARE HARSH, OPPRESSIVE, OR UNREASONABLE. THUS, MERE LOSS UNDER A CONTRACT DOES NOT AFFORD EVEN AN EQUITABLE BASIS FOR RELIEF. SEE 19 COMP. GEN. 560 AND COURT CASES CITED THEREIN. APART FROM THAT, THE AUTHORITY OF THIS OFFICE UNDER SECTION 236, REVISED STATUTES, AS AMENDED BY SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF 1921, 31 U.S.C. 71, DOES NOT EXTEND TO CLAIMS BASED SOLELY ON EQUITABLE OR MORAL OBLIGATIONS.

ACCORDINGLY, IT MUST BE CONCLUDED THAT THERE IS NO PROPER OR LEGAL BASIS FOR ADJUSTING THE RENTAL RATE AND, CONSEQUENTLY, THE DECISION OF APRIL 27, 1966, IS AFFIRMED.

REGARDING YOUR REQUEST THAT AN ADJUSTMENT IN RENT BE GRANTED IN EXCHANGE FOR PROVIDING THE POST OFFICE DEPARTMENT WITH 3,800 FEET OF BASEMENT SPACE AND A SUBSTANTIAL REDUCTION IN RENT ON ALL RENEWAL OPTIONS, IT IS SUGGESTED THAT YOU MAKE YOUR OFFER DIRECTLY TO THE WASHINGTON, D.C., REGIONAL OFFICE OF THE POST OFFICE DEPARTMENT FOR ITS CONSIDERATION.