B-189266, MAR 29, 1978

B-189266, MAR 29, 1978

CLAIM BY OFFEROR FOR EXPENSES INCURRED IN PREPARATION FOR PERFORMANCE OF CONTRACT WHICH WERE ALLEGEDLY INDUCED BY GOVERNMENT PERSONNEL MAY NOT BE PAID UNDER EITHER QUANTUM MERUIT/QUANTUM VALEBANT OR ESTOPPEL THEORIES WHERE CONTRACT WAS NOT AWARDED, GOVERNMENT RECEIVED NO BENEFIT, AND PERSONNEL WITH CONTRACTING AUTHORITY DID NOT ACT IN MANNER THAT WOULD REASONABLY INDUCE EXPENDITURES BY OFFEROR.

MURRAY MINTZ FILMS - REQUEST FOR RECONSIDERATION:

MURRAY MINTZ FILMS (MINTZ) HAS REQUESTED RECONSIDERATION OF OUR DECISION IN B-189266, SEPTEMBER 7, 1977, 77-2 CPD 179, DENYING ITS CLAIM FOR EXPENSES INCURRED IN PREPARATION FOR FILMING AN ENVIRONMENTAL FILM, UNDER REQUEST FOR PROPOSALS (RFP) NO. RFP-BOR 1-77, ISSUED BY THE DEPARTMENT OF THE INTERIOR, BUREAU OF OUTDOOR RECREATION (BOR).

MINTZ INCURRED THE EXPENSES WITH THE KNOWLEDGE AND CONCURRENCE OF BOR'S REGIONAL STAFF, UPON ASSURANCES BY IT THAT HE WOULD BE AWARDED A CONTRACT FOR THE FILM. DUE TO PROBLEMS IN THE EVALUATION OF PROPOSALS, BOR FIRST DECIDED THAT NO AWARD COULD BE MADE UNDER THE SOLICITATION, AND THEN LATER CANCELED THE SOLICITATION, STATING THAT THE GOVERNMENT NO LONGER REQUIRED THE FILM.

OUR DECISION HELD THAT MINTZ COULD NOT BE PAID ON A QUANTUM MERUIT/QUANTUM VALEBANT BASIS BECAUSE THE GOVERNMENT HAD NOT RECEIVED A TANGIBLE BENEFIT. WE ALSO STATED THAT THE BOR REGIONAL STAFF HAD NO AUTHORITY TO BIND THE GOVERNMENT CONTRACTUALLY, AND THAT THE RFP NOTIFIED OFFERORS OF THIS WITH THE STATEMENT "*** THE CONTRACTING OFFICER IS THE ONLY PERSON WHO CAN LEGALLY COMMIT THE GOVERNMENT TO THE EXPENDITURE OF PUBLIC FUNDS." IN ADDITION, WE NOTE THAT ARTICLE I, SECTION 1.3, OF THE RFP PROVIDED THAT PERFORMANCE WAS TO BEGIN "*** IMMEDIATELY, UPON APPROVAL OF THE CONTRACT."

IN THE REQUEST FOR RECONSIDERATION MINTZ MAKES TWO ARGUMENTS. FIRST, MINTZ ARGUES THAT THE GOVERNMENT DID RECEIVE A BENEFIT, ALTHOUGH THE NATURE OF THE BENEFIT IS NOT SPECIFIED. SECOND, MINTZ CLAIMS THAT CERTAIN ACTIONS BY BOR OFFICIALS WITH CONTRACTING AUTHORITY IN WASHINGTON LED HIM TO BELIEVE THAT HE HAD BEEN AWARDED A CONTRACT. ACCORDING TO MINTZ, HE WAS PRESENT IN THE BOR REGIONAL OFFICE ON NOVEMBER 15, 1976, WHEN THE TECHNICAL ADVISER WAS SPEAKING TO THE CONTRACTING OFFICER IN WASHINGTON. MINTZ STATES THAT HE "*** WAS ASSURED VIA THAT TELEPHONE CALL THAT THE CONTRACT WOULD BE IN MY HAND BEFORE THAT WEEK WAS OUT." ALSO, MINTZ STATES THAT ANY DOUBTS THAT HE HAD WERE SETTLED WHEN HE SAW A COPY OF A LETTER FROM THE BOR CONTRACTING OFFICE NOTIFYING AN UNSUCCESSFUL OFFEROR THAT "*** A CONTRACT TO PRODUCE A MOTION PICTURE FILM *** HAS BEEN AWARDED TO MURRAY MINTZ FILMS ***."

REGARDING THE QUESTION OF WHETHER THE GOVERNMENT RECEIVED A BENEFIT, MINTZ HAS NOT PROVIDED ANY NEW ARGUMENTS OR EVIDENCE, BUT MERELY ASSERTS THAT THE GOVERNMENT BENEFITED FROM HIS EFFORTS. SINCE THESE EFFORTS CONSISTED OF SCOUTING LOCATIONS AND MAKING LOGISTICAL ARRANGEMENTS FOR A FILM THAT WAS NEVER MADE, WE DO NOT SEE WHAT BENEFIT THE GOVERNMENT RECEIVED. THEREFORE, PAYMENT OF THE CLAIM ON QUANTUM MERUIT/QUANTUM VALEBANT BASIS IS NOT APPROPRIATE.

THE COURTS AND OUR OFFICE HAVE ALSO ALLOWED PAYMENT OF CERTAIN EXPENSES WHERE THE GOVERNMENT IS ESTOPPED TO DENY THE EXISTENCE OF A CONTRACT. THE COURT OF CLAIMS IN EMECO INDUSTRIES, INC. V. UNITED STATES, 202 CT.CL. 1006 (1973), REASSERTED THE FOUR ELEMENTS OF ESTOPPEL PROPOUNDED IN UNITED STATES V. GEORGIA - PACIFIC COMPANY 421 F.2D 92 (9TH CIR. 1970), REQUIRING THAT:

1) THE PARTY TO BE ESTOPPED MUST KNOW THE FACTS;

2) THE PARTY MUST INTEND THAT ITS CONDUCT SHALL BE ACTED ON OR MUST ACT SO THAT THE PARTY ASSERTING THE ESTOPPEL HAS A RIGHT TO BELIEVE THAT THE CONDUCT IS SO INTENDED;

3) THE PARTY ASSERTING THE ESTOPPEL MUST BE IGNORANT OF THE TRUE FACTS, AND

4) THAT PARTY MUST RELY ON THE OTHER'S CONDUCT TO ITS INJURY.

ADDITIONALLY, IN ORDER TO ESTOP THE GOVERNMENT FROM DENYING THE EXISTENCE OF A CONTRACT, THE OFFICIAL WHOSE ACTS ARE BEING RELIED UPON MUST BE ONE WITH AUTHORITY TO BIND THE GOVERNMENT CONTRACTUALLY AND AN OFFEROR IS NOT JUSTIFIED IN ACTING UPON THE STRENGTH OF AN OFFICIAL'S APPARENT AUTHORITY. FLIPPO CONSTRUCTION CO., INC., B-182730, MARCH 7, 1975, 75-1 CPD 139.

IN THIS CASE, THE ACTIONS OF THE BOR REGIONAL OFFICE MAY NOT BE CONSIDERED IN APPLYING THE DOCTRINE OF ESTOPPEL, AS NO ONE IN THAT OFFICE HAD CONTRACTING AUTHORITY. ONLY THE ACTIONS OF THE CONTRACTING OFFICE IN WASHINGTON MAY BE CONSIDERED.

CONCERNING THE TELEPHONE CONVERSATION OF NOVEMBER 15, 1976, IT IS NOT CLEAR FROM MINTZ'S STATEMENT WHETHER HE ACTUALLY SPOKE TO A CONTRACTING OFFICIAL IN WASHINGTON, OR WHETHER THE ASSURANCES CONCERNING THE CONTRACT WERE MADE BY THE TECHNICAL REPRESENTATIVE AS HIS INTERPRETATION OF THE CONVERSATION. THE BOR CONTRACTING OFFICE RECOLLECTION OF THE CONVERSATION IS THAT THE TECHNICAL REPRESENTATIVE WAS SPECIFICALLY ADVISED THAT NO CONTRACT HAD YET BEEN AWARDED AND THAT MINTZ SHOULD NOT EXPEND FUNDS UNTIL A CONTRACT HAD BEEN AWARDED. IN ANY EVENT, A STATEMENT TO THE EFFECT THAT A CONTRACT WOULD BE SENT WITHIN THE WEEK, PROBABLY REFERRED TO THE SENDING OF UNSIGNED COPIES OF THE CONTRACT TO MINTZ TO SIGN AND RETURN. THIS SEEMS LIKELY BECAUSE WHILE AN OFFEROR COULD BE SELECTED FOR AWARD, AS MINTZ WAS, NO AWARD COULD BE MADE UNDER THE TERMS OF THE RFP UNTIL THE PROPOSED AWARDEE RECEIVED THE COPIES OF THE CONTRACT AND SIGNED THEM, AND THEN THE CONTRACT WAS APPROVED BY THE CONTRACTING OFFICE AND SIGNED BY THE CONTRACTING OFFICER.

BOR HAS INFORMED US THAT THE LETTER TO THE UNSUCCESSFUL OFFEROR REFERRED TO BY MINTZ SHOULD HAVE STATED THAT MINTZ WAS THE PROPOSED AWARDEE, BUT WAS ERRONEOUSLY WORDED. THIS LETTER WAS DATED NOVEMBER 19, 1977. LETTER DATED NOVEMBER 17, 1977, WAS SENT TO MINTZ FROM THE WASHINGTON CONTRACTING OFFICE, WITH COPIES OF THE UNSIGNED CONTRACT ENCLOSED. THIS LETTER STATED:

"ENCLOSED ARE FOUR COPIES OF THE PROPOSED CONTRACT, NUMBER 7-14-07-1 TO PRODUCE A MOTION PICTURE FILM (RFP - BOR 1-77). PLEASE RETURN THREE SIGNED COPIES OF THE CONTRACT TO THIS OFFICE."

MINTZ STATES THAT HE SAW THE LETTER TO THE UNSUCCESSFUL OFFEROR BEFORE HE RECEIVED THE COPIES OF THE CONTRACT.

IT IS OUR OPINION THAT THE ABOVE ACTS BY THE BOR CONTRACTING OFFICE DO NOT MEET THE SECOND REQUIREMENT OF ESTOPPEL - THAT THE PARTY TO BE ESTOPPED INTEND THAT ITS CONDUCT BE ACTED ON, OR THAT IT ACT IN SUCH A MANNER THAT THE OTHER PARTY MAY REASONABLY BELIEVE THAT THE CONDUCT IS SO INTENDED. IT IS CLEAR FROM THE RECORD THAT THE BOR CONTRACTING OFFICE DID NOT INTEND THAT MINTZ BEGIN PREPARATIONS FOR THE CONTRACT. THE BOR REGIONAL STAFF WAS EXPLICITLY WARNED THAT NO MONEY SHOULD BE SPENT UNTIL A CONTRACT WAS APPROVED. ALSO, THE LETTER TO MINTZ REFERRED TO A PROPOSED CONTRACT. WE DO NOT BELIEVE, IN LIGHT OF THE WARNING IN THE RFP CONCERNING AUTHORITY TO COMMIT FUNDS AND THE LACK OF ANY OFFICIAL COMMUNICATION FROM THE CONTRACTING OFFICE INDICATING THAT HE HAD BEEN AWARDED A CONTRACT, THAT IT WAS REASONABLE FOR MINTZ TO RELY ON THE WORDING OF A LETTER TO AN UNSUCCESSFUL OFFEROR TO INCUR EXPENSES.

ACCORDINGLY, OUR PRIOR DECISION DENYING THE CLAIM IS AFFIRMED.