B-136141, JUL. 31, 1958

B-136141: Jul 31, 1958

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TO DIMOND AND THORMAN: REFERENCE IS MADE TO YOUR LETTER DATED JULY 8. YOU STATE THAT BECAUSE THE CONTRACTOR WAS REQUIRED TO PROVIDE 450 SEATS HE COULD CONTEMPLATE 1. THAT THIS WAS AN INDICATION TO HIM THAT THE ESTIMATE OF 2. 000 EMPLOYEES WAS A REALISTIC FIGURE. 000 FIGURE WAS UNRELIABLE SINCE THE CONTRACTOR'S ALLEGED COMPUTATION ESTIMATED ONLY 1. 800 PEOPLE AND THAT WAS BASED ON UTILIZING THE REQUIRED ACCOMMODATIONS TO THEIR FULLEST EXTENT. HEMIGHT HAVE ANTICIPATED APPROXIMATELY 1. THERE WAS NO ASSURANCE THAT ANY NUMBER OF THEM WOULD MAKE FOOD PURCHASES. THE CONTRACT PROVIDED THAT ALL EMPLOYEES OF THE VETERANS ADMINISTRATION BROOKLYN REGIONAL OFFICE SHOULD HAVE THE RIGHT TO USE THE CAFETERIA FOR EATING PURPOSES DURING THE HOURS IT WAS OPEN FOR BUSINESS REGARDLESS OF WHETHER THEY MADE ANY PURCHASES.

B-136141, JUL. 31, 1958

TO DIMOND AND THORMAN:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 8, 1958, REQUESTING RECONSIDERATION OF OUR DECISION, B-136141, DATED JUNE 30, 1958, WHICH CONCLUDED THAT THE CLAIM OF IRVING FRIEDMAN FOR RELIEF, BECAUSE OF AN ALLEGED MISREPRESENTATION BY THE GOVERNMENT IN CERTAIN CAFETERIA CONCESSION CONTRACTS, DID NOT CONTAIN SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO JUSTIFY SUBMISSION OF IT TO THE CONGRESS PURSUANT TO THE ACT OF APRIL 10, 1928, 45 STAT. 413, 31 U.S.C. 236.

ONE OF THE SUBJECT CONTRACTS ANTICIPATED THAT THERE WOULD BE APPROXIMATELY 2,000 EMPLOYEES EMPLOYED BY THE VETERANS ADMINISTRATION BROOKLYN REGIONAL OFFICE AND REQUIRED THAT THE CONTRACTOR PROVIDE ADEQUATE ACCOMMODATIONS FOR 450 PERSONS. YOU STATE THAT BECAUSE THE CONTRACTOR WAS REQUIRED TO PROVIDE 450 SEATS HE COULD CONTEMPLATE 1,800 PEOPLE IN THE CAFETERIA, ON THE BASIS OF FOUR 30-MINUTE SITTINGS DURING THE LUNCH PERIOD, AND THAT THIS WAS AN INDICATION TO HIM THAT THE ESTIMATE OF 2,000 EMPLOYEES WAS A REALISTIC FIGURE.

BY YOUR STATEMENT YOU PROVE THAT THE 2,000 FIGURE WAS UNRELIABLE SINCE THE CONTRACTOR'S ALLEGED COMPUTATION ESTIMATED ONLY 1,800 PEOPLE AND THAT WAS BASED ON UTILIZING THE REQUIRED ACCOMMODATIONS TO THEIR FULLEST EXTENT. FURTHERMORE, ALTHOUGH, DURING ANY LUNCH PERIOD, HEMIGHT HAVE ANTICIPATED APPROXIMATELY 1,800 PATRONS, THERE WAS NO ASSURANCE THAT ANY NUMBER OF THEM WOULD MAKE FOOD PURCHASES. IN THIS REGARD, THE CONTRACT PROVIDED THAT ALL EMPLOYEES OF THE VETERANS ADMINISTRATION BROOKLYN REGIONAL OFFICE SHOULD HAVE THE RIGHT TO USE THE CAFETERIA FOR EATING PURPOSES DURING THE HOURS IT WAS OPEN FOR BUSINESS REGARDLESS OF WHETHER THEY MADE ANY PURCHASES. AND IN THIS LATTER RESPECT, THE CONTRACTOR HAS STATED THAT THE NUMBER OF EMPLOYEES WHO BROUGHT THEIR OWN FOOD AND MADE NO PURCHASES "FAR EXCEEDED" WHAT WAS ANTICIPATED BY HIM. WHILE IT MAY BE THAT THE CONTRACTS PROVIDED EATING ACCOMMODATIONS FOR A CERTAIN NUMBER OF EMPLOYEES IN THE BROOKLYN REGIONAL OFFICE THERE WAS NO GUARANTEE THAT THERE WOULD BE A MINIMUM NUMBER OF EMPLOYEES USING THE FACILITIES ON A PAYING BASIS. IF THE CONTRACTOR FELT THAT THE NUMBER OF EMPLOYEES ON A PAYING BASIS WAS NOT SUFFICIENT TO WARRANT CONTINUING THE WORK, HE WOULD HAVE HAD NO RECOURSE OTHER THAN EXERCISING HIS PRIVILEGE OF TERMINATING THE CONTRACT BY 90 DAYS WRITTEN NOTICE.

IT IS DESIRED TO POINT OUT AGAIN THAT THE 2,000 ESTIMATED QUANTITY WAS STATED TO BE ,ANTICIPATED.' THE WORD "ANTICIPATED" INDICATES THAT THE ESTIMATE WAS A MERE IMPRESSION, OPINION, PROPHECY, OR PREDICTION AND WAS SPECULATIVE. FURTHERMORE, IN THIS INSTANCE, THE STATEMENT OF THE ESTIMATED NUMBER OF EMPLOYEES OR THE REQUIREMENT FOR A DEFINITE NUMBER OF SEATS, ALL OR SOME OF WHICH COULD BE USED BY NON-PAYING PATRONS, CANNOT BE CONSIDERED AS A MATERIAL REPRESENTATION SINCE IT WAS NOT A RELIABLE INDICATION OF THE NUMBER THAT WOULD PURCHASE FOOD IN THE CAFETERIA. REGARDLESS OF HOW MANY EMPLOYEES WERE EMPLOYED OR HOW MANY SEATS WERE AVAILABLE, NECESSARILY THE NUMBER OF EMPLOYEES THAT MADE PURCHASES IN THE CAFETERIA DEPENDED UPON THEIR PERSONAL NEEDS AND DESIRES AND THE CONTRACTOR'S REPUTATION FOR QUALITY, SERVICE AND REASONABLE PRICES.

WITH FURTHER REGARD TO THE CONTRACTOR'S ADMISSION THAT HE CONTEMPLATED 1,800 EMPLOYEES WHEN THE CONTRACT ESTIMATED 2,000, FOR FIFTEEN MONTHS, THE CONTRACTOR PERFORMED THE CONTRACT AND ACCEPTED ITS BENEFITS WITH KNOWLEDGE OF THE ALLEGED MISREPRESENTATION. UNDER SUCH CIRCUMSTANCES, PARTICULARLY CONSIDERING THE RIGHT TO TERMINATE AT ANY TIME BY 90 DAYS WRITTEN NOTICE, EXECUTION OF A NEW CONTRACT AT A REDUCED RENTAL, AND CONTINUED OPERATION UNDER IT FOR FOUR YEARS, THE CONTRACTOR MUST BE HELD TO HAVE WAIVED ITS RIGHT TO CLAIM DAMAGES FOR THE ALLEGED MISREPRESENTATION.

THE CONTRACTOR'S DETERMINATION TO SPECULATE ON FUTURE CHANCES OF PROFIT AFTER HE HAD KNOWLEDGE THAT THE OPERATION MIGHT BE A LOSS WAS HIS SOLE CHOICE. THE CONTRACT OFFERED HIM THE OPPORTUNITY TO TERMINATE THE CONTRACT AT ANY TIME BY 90 DAYS WRITTEN NOTICE, BUT HE CHOSE TO CONTINUE ONE CONTRACT FOR FIFTEEN MONTHS AND ANOTHER FOR FOUR YEARS.

YOU STATE THAT IT WAS IMPOSSIBLE FOR THE CONTRACTOR TO ASCERTAIN THE NUMBER OF PERSONS TO BE EMPLOYED SINCE IT WAS PECULIARLY WITHIN THE KNOWLEDGE OF THE VETERANS ADMINISTRATION AND YOU QUOTE FROM FEHLHABER CORP. V. UNITED STATES, 151 F.SUPP. 817, 825, AS FOLLOWS:

"PLAINTIFF HAD A RIGHT TO RELY ON THE GOVERNMENT'S SPECIFICATIONS AND DRAWINGS AND THE GOVERNMENT IS BOUND BY ANY ASSERTIONS MADE THEREIN NOTWITHSTANDING THE FACT THAT IT WAS STATED THAT THE DATA WAS FOR INFORMATION ONLY.'

THE RULE STATED THERE MUST BE CONSIDERED IN THE CONTEXT IN WHICH IT WAS STATED AND IN THE LIGHT OF THE SURROUNDING FACTS IN WHICH IT WAS EXPRESSED. IN THE CITED CASE, IT WAS "A VIRTUAL IMPOSSIBILITY" FOR THE CONSTRUCTION CONTRACTOR TO VERIFY THE SUBTERRANEAN CONDITIONS ON THE JOB SITE AND TO SUBMIT ITS BID WITHIN THE SHORT TIME ALLOTTED BETWEEN ISSUANCE OF THE INVITATION AND OPENING OF THE BIDS. THE INVITATION ASSERTED EXISTING FACTS AND THE INFORMATION FOR BIDDERS HAD A DIRECT BEARING ON THE JOB. IN THE INSTANT MATTER, THERE WAS AMPLE TIME FOR THE CONCESSIONAIRE TO ASCERTAIN THE ACTUAL NUMBER OF EMPLOYEES EMPLOYED AND TO SUBMIT ITS BID; IN ANY EVENT, THE NUMBER OF EMPLOYEES ESTIMATED IN THE INVITATION WAS A MERE PREDICTION; AND THE EFFECT OF THE KNOWLEDGE OF THE NUMBER OF EMPLOYEES IS MERELY SPECULATIVE. THEREFORE, THE CITED CASE NEITHER IS PARALLEL NOR CONTROLLING.

ACCORDINGLY, SINCE NOTHING HAS BEEN FURNISHED WHICH WOULD WARRANT ANY CHANGE IN THE CONCLUSION HERETOFORE REACHED IN THE MATTER, YOUR REQUEST THAT THE CLAIM BE SUBMITTED TO THE CONGRESS PURSUANT TO THE ACT OF APRIL 10, 1928, MUST BE DENIED.