B-126718, FEB. 3, 1956

B-126718, FEB. 3, 1956

TO THE HONORABLE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO A LETTER OF JANUARY 19, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY, REQUESTING DECISION AS TO WHETHER THE RENTAL PROVIDED IN LEASE NO. 12-10-330-36, DATED SEPTEMBER 13, 1955, WITH MRS. MARGERY B. (LOUIS P.) YOCHEM, TIFFIN, OHIO, MAY BE INCREASED BECAUSE OF A MISTAKE CONCERNING THE RENTAL TO BE PAID.

THE RECORD SHOWS THAT IN RESPONSE TO INVITATION FOR BIDS DATED SEPTEMBER 12, 1955, FOR OFFICE SPACE FOR USE BY THE SOIL CONSERVATION SERVICE AT TIFFIN, OHIO, MRS. YOCHEM OFFERED TO FURNISH FOR THE PERIOD OCTOBER 1, 1955 AND ENDING JUNE 30, 1956, APPROXIMATELY 540 SQUARE FEET OF FLOOR SPACE, AT A RENTAL PER MONTH OF $50, PLUS $16.50 PER MONTH FROM OCTOBER 1 TO JANUARY 30, 1956, TO COVER THE COST OF NEW LIGHT FIXTURES AND REDECORATING. QUOTATIONS WERE RECEIVED FROM TWO BIDDERS ON THREE LOCATIONS, BUT THE OTHER BIDS WERE NOT CONSIDERED BECAUSE NEITHER MET THE MINIMUM SPACE REQUIREMENTS. MRS. YOCHEM'S BID WAS ACCEPTED AND THE AWARD WAS MADE SEPTEMBER 13, 1955. HOWEVER, ONE MINOR CHANGE AS TO THE TERMINATION DATE OF THE INCREASED RENTAL PROVIDED IN THE LEASE WAS MADE SINCE THE ADMINISTRATIVE OFFICE CONSIDERED THAT A TYPOGRAPHICAL ERROR HAD BEEN MADE IN THE BID IN SHOWING THE DATE AS "JAN. 30, 1956," WHICH WAS ASSUMED TO HAVE BEEN INTENDED TO CALL FOR THE INCREASED RENTAL THROUGH JANUARY 31, 1956.

BY LETTER DATED DECEMBER 15, 1955, THE LESSOR ADVISED THE CONTRACTING OFFICER THAT ON RETURN OF THE SIGNED LEASE IT WAS FOUND THAT A TYPOGRAPHICAL ERROR HAD BEEN MADE IN THE BID AS TO THE DATE WHEN THE RENT WAS TO BE REDUCED FROM $66.50 TO $50 PER MONTH, IN THAT THE DATE APPEARING IN THE BID AS "JAN. 30, 1956," SHOULD HAVE BEEN JUNE 30, 1956. THE LESSOR STATED FURTHER THAT AT THE TIME THE REPRESENTATIVES OF THE SOIL CONSERVATION SERVICE MADE ARRANGEMENTS FOR RENTING THE INVOLVED SPACE THEY INFORMED THE LESSOR THAT THEY DID NOT WISH TO PAY $148.50, THE COST OF DECORATING AND INSTALLING OF NEW LIGHTS, IN ONE LUMP SUM, AND IT WAS AGREED TO ADD $16.50 PER MONTH TO THE RENT UNTIL THIS COST WAS REIMBURSED TO THE LESSOR.

THE CONTRACTING OFFICER REPORTS THAT THE ALLEGED ERROR WAS FIRST BROUGHT TO ATTENTION BY A LETTER DATED OCTOBER 19, 1955, FROM ONE OF THE GOVERNMENT REPRESENTATIVES WHO HAD MADE ARRANGEMENTS FOR THE LEASE. IT IS STATED IN THIS LETTER THAT IT WAS THE INTENT AND UNDERSTANDING OF EVERYONE CONCERNED THAT THE PERIOD OF THE INCREASED RENTAL WOULD BE FROM OCTOBER 1, 1955, TO JUNE 30, 1956. IT IS REPORTED FURTHER THAT THE STATE OFFICE WAS AWARE OF THE ARRANGEMENTS FOR THE PAYMENT OF REDECORATING COSTS AND LIGHT FIXTURES BUT DID NOT QUESTION THE BID SINCE IT WAS ASSUMED THAT FULL REIMBURSEMENT AS AGREED UPON LOCALLY WAS INCLUDED IN THE BID AS SUBMITTED.

IT IS STATED IN YOUR LETTER THAT THE ALLEGED ERRONEOUS DATE, CITED IN THE BID AND CARRIED INTO THE CONTRACT, IS THE RESULT OF A MISTAKE AND DOES NOT REPRESENT THE INTENT AND UNDERSTANDING BY WHICH REIMBURSEMENT WAS TO BE MADE. YOU FURTHER STATE THAT ALTHOUGH THE ERROR WAS DISCOVERED SUBSEQUENT TO THE AWARD, THE RELIEF REQUESTED WILL ALLOW THE LESSOR FAIR VALUE FOR THE SPACE FURNISHED. IN THIS CONNECTION THE STIPULATED INCREASE IN MONTHLY PAYMENT OF $16.50 THROUGH JANUARY 31, 1956, AS PROVIDED IN THE LEASE, WOULD NOT REIMBURSE THE LESSOR FOR THE $148.50 EXPENDED FOR DECORATING AND INSTALLING LIGHTS, WHEREAS THE $16.50 MULTIPLIED BY THE TERM OF NINE MONTHS THROUGH JUNE 30, 1956, AS INTENDED WOULD REIMBURSE THE LESSOR FOR SUCH COSTS. THEREFORE IT WOULD APPEAR THAT THE LEASE AS EXECUTED DOES NOT EMBODY THE AGREEMENT OF THE PARTIES AS ACTUALLY MADE; AND IT MAY ALSO BE SAID THAT WE FEEL THAT IN THE CIRCUMSTANCES THE KNOWLEDGE OF THE GOVERNMENT REPRESENTATIVES WHO NEGOTIATED WITH MRS. YOCHEM WAS IMPUTABLE TO THE CONTRACTING OFFICER, WHO THEREFORE SHOULD NOT HAVE ACCEPTED THE BID AS SUBMITTED WITHOUT VERIFICATION OF THE QUESTIONED DATE.

IT IS APPARENT FROM THE FACTS AS REPORTED THAT THE LEASE AS WRITTEN DID NOT REFLECT THE TRUE UNDERSTANDING OF THE PARTIES AS TO THE PERIOD DURING WHICH THE INCREASED RENTAL RATE WAS TO BE PAID AND THAT IT WAS THE INTENTION OF BOTH PARTIES TO THE LEASE THAT THE PERIOD FOR THE INCREASED RENTAL WAS TO BE THROUGH JUNE 30, 1956. IT IS WELL ESTABLISHED THAT WHERE A WRITING DOES NOT EMBODY THE AGREEMENT AS REACHED, THERE IS SUCH A MUTUAL MISTAKE AS WILL ENTITLE EITHER PARTY TO HAVE THE CONTRACT REFORMED TO CONFORM TO THE AGREEMENT ACTUALLY MADE. HYGIENIC FIBRE CO. V. UNITED STATES, 59 C.CLS. 598.

ACCORDINGLY, CORRECTION OF THE MISTAKE BY A SUPPLEMENTAL AGREEMENT IS AUTHORIZED AND REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT.