B-1283, SEPTEMBER 15, 1939, 19 COMP. GEN. 358

B-1283, SEPTEMBER 15, 1939, 19 COMP. GEN. 358

CONTRACTS - INCREASED COSTS - REVIEW OF CONTRACTING OFFICER'S FINDINGS WHERE A WAR DEPARTMENT CONTRACT FOR THE FURNISHING OF PORTABLE BUILDINGS PROVIDED THAT "THE CONTRACTOR SHALL FURNISH ALL MATERIALS, LABOR, ETC., NECESSARY TO COMPLETE THE WORK FULLY ACCORDING TO THE TRUE INTENT AND MEANING OF THE DRAWINGS AND SPECIFICATIONS, OF WHICH INTENT AND MEANING THE CONTRACTING OFFICER SHALL BE THE INTERPRETER," AND MADE NO PROVISION FOR APPEAL FROM THE CONTRACTING OFFICER'S DECISION, AND THE SAID OFFICER IN THE FREE EXERCISE OF THE DISCRETION VESTED IN HIM DECIDED THE CONTRACT REQUIRED THE FURNISHING OF CERTAIN VESTIBULES AND SKIRTING, THE UNITED STATES ACQUIRED A VESTED RIGHT TO HAVE SAID ITEMS FURNISHED WITHOUT MODIFICATION OF THE CONTRACT PRICE, AND A CHANGE ORDER, ISSUED UNDER INSTRUCTIONS OF THE QUARTERMASTER GENERAL, PROPOSING PAYMENT TO THE CONTRACTOR OF AN AMOUNT IN ADDITION TO THE CONTRACT PRICE WAS WITHOUT CONSIDERATION AND PAYMENT THEREUNDER WAS UNAUTHORIZED, THE CONTRACTUAL PROVISIONS, PRESUMABLY MADE WITH THE QUARTERMASTER GENERAL'S APPROVAL, NOT BEING INCONSISTENT WITH THE GENERAL SUPERVISORY DUTIES IMPOSED UPON HIM BY LAW.

COMPTROLLER GENERAL BROWN TO THE SECRETARY OF WAR, SEPTEMBER 15, 1939:

THERE WAS RECEIVED YOUR LETTER OF JULY 5, 1939, AS FOLLOWS:

ATTENTION IS INVITED TO THE ENCLOSED COPY OF LETTER DATED MAY 23, 1939, FROM THE GENERAL ACCOUNTING OFFICE, AUDIT DIVISION, TO THE QUARTERMASTER GENERAL, IN WHICH IT IS STATED THAT CREDIT MAY NOT BE ALLOWED, ON THE PRESENT RECORD, FOR PAYMENTS MADE UNDER CHANGE ORDER "B" TO CONTRACT NO. W 58 QM CIV-59, WITH KING AND BOOZER, ANNISTON, ALABAMA. THE STATEMENT MADE THEREIN THAT THE QUARTERMASTER GENERAL WAS WITHOUT AUTHORITY TO MODIFY THE DECISION OF THE CONTRACTING OFFICER APPEARS TO BE SO INCONSISTENT WITH ESTABLISHED PRINCIPLES GOVERNING THE ACTIONS OF CONTRACTING OFFICERS AS TO WARRANT THE CAREFUL CONSIDERATION OF YOUR OFFICE.

THE ENCLOSURES, CONSISTING OF CERTAIN CORRESPONDENCE BETWEEN THE CONTRACTING OFFICER, THE QUARTERMASTER GENERAL, AND THE GENERAL ACCOUNTING OFFICE, AUDIT DIVISION, OBVIATE THE NECESSITY FOR HERE DETAILING THE DIFFERENCES OF OPINION WHICH EXISTED BETWEEN THE VARIOUS OFFICIALS CONCERNED. WHILE SEVERAL ISSUES HAVE BEEN RAISED, IT APPEARS THAT THE ONLY ONE WHICH IS MATERIAL IS THAT CONCERNING THE AUTHORITY OF THE QUARTERMASTER GENERAL TO OVERRULE THE CONTRACTING OFFICER'S INTERPRETATION OF THE DRAWINGS AND SPECIFICATIONS IN RESPECT OF THE FURNISHING OF SKIRTINGS AND VESTIBULES.

THE ACT OF JUNE 3, 1916 (39 STAT. 170), AS AMENDED BY THE ACT OF JUNE 4, 1920 (41 STAT. 766), CHARGES THE QUARTERMASTER GENERAL WITH THE PROCUREMENT OF CERTAIN CLASSES OF SUPPLIES, SUCH AS PREFABRICATED PORTABLE BUILDINGS. IN CARRYING OUT THIS STATUTORY DUTY, THE QUARTERMASTER GENERAL ACTS THROUGH CONTRACTING OFFICERS DULY APPOINTED BY HIM, AND PURCHASES OF QUARTERMASTER CORPS SUPPLIES MAY ONLY BE MADE BY OFFICERS SO APPOINTED. SEE PARAGRAPH 5A (4), ARMY REGULATIONS 5 100, AND PARAGRAPH 4A, CIRCULAR 1 -3, OQMG. MOREOVER, EACH CONTRACTING OFFICER SO APPOINTED PERFORMS THE DUTIES ASSIGNED TO HIM IN CONFORMITY WITH BOTH GENERAL AND SPECIAL INSTRUCTIONS ISSUED BY THE QUARTERMASTER GENERAL.

FROM THE ABOVE, IT SEEMS APPARENT THAT THE RELATIONSHIP BETWEEN THE QUARTERMASTER GENERAL AND EACH CONTRACTING OFFICER OF THE QUARTERMASTER CORPS IS THAT OF PRINCIPAL AND AGENT, AND THAT SUCH RELATIONSHIP NECESSARILY PRESUMES A DEGREE OF SUBORDINATION ON THE PART OF THE CONTRACTING OFFICER TO THE QUARTERMASTER GENERAL. ANY OTHER CONCLUSION APPEARS TO BE UNTENABLE, SINCE THE QUARTERMASTER GENERAL, WITH A STATUTORY DUTY TO PERFORM, MUST NECESSARILY BE IN A POSITION AT ALL TIMES TO GUIDE AND DIRECT HIS SUBORDINATES IN THE PERFORMANCE OF SAID DUTY.

IN THE SUBJECT CONTROVERSY, THE AUDIT DIVISION CONTENDS THAT THE QUARTERMASTER GENERAL WAS WITHOUT AUTHORITY TO RULE THAT CONTRACT NO. W 58 QM CIV-59 DID NOT REQUIRE THE FURNISHING OF SKIRTINGS AND VESTIBULES, SINCE PARAGRAPH GC 9 OF THE SPECIFICATIONS SPECIFIES THAT THE C.O. (CONTRACTING OFFICER) SHALL BE THE INTERPRETER OF THE TRUE INTENT AND MEANING OF THE DRAWINGS AND SPECIFICATIONS. IN REACHING SUCH A CONCLUSION, THE AUDIT DIVISION APPARENTLY FAILED TO CONSIDER THE PRINCIPAL AND AGENT RELATIONSHIP REFERRED TO ABOVE AND THE FACT THAT THE CONTRACTING OFFICER, IN INTERPRETING THE DRAWINGS AND SPECIFICATIONS, WAS ACTING AS THE REPRESENTATIVE OF THE QUARTERMASTER GENERAL AND SUBJECT TO THE INSTRUCTIONS OF THE LATTER OFFICIAL. THE AUDIT DIVISION HAS ALSO BASED ITS CONCLUSION ON THE PROPOSITION THAT THE QUESTION CONCERNING THE INTERPRETATION OF THE SPECIFICATIONS WAS DECIDED AS AN APPEAL UNDER ARTICLE 12 OF THE CONTRACT AND THAT THE QUARTERMASTER GENERAL WAS WITHOUT AUTHORITY TO DECIDE QUESTIONS OF FACT COMING UP UNDER SAID ARTICLE 12. NOTWITHSTANDING ALL PREVIOUS ASSUMPTIONS AND STATEMENTS TO THE CONTRARY, THE QUESTION WAS DECIDED BY THE QUARTERMASTER GENERAL NOT AS AN APPEAL BUT AS A MATTER OF ROUTINE INSTRUCTION TO A SUBORDINATE OFFICIAL. IN THIS CONNECTION IT SHOULD BE NOTED THAT THE SPECIFICATIONS WERE PREPARED IN THE OFFICE OF THE QUARTERMASTER GENERAL, AND THUS IT WAS INCUMBENT UPON THAT OFFICE TO CLARIFY ANY QUESTIONS OF INTERPRETATION WHICH MIGHT BE BROUGHT TO ITS ATTENTION.

SUMMARIZING THE FOREGOING, IT IS THE OPINION OF THE WAR DEPARTMENT THAT THE QUARTERMASTER GENERAL PROPERLY FOUND THAT THE CONTRACT DID NOT CONTEMPLATE THAT SKIRTINGS AND VESTIBULES WERE TO BE INCLUDED AS AN INTEGRAL PART OF THE BUILDINGS AND THAT THE CONTRACTOR WAS NOT REQUIRED TO FURNISH SUCH SKIRTINGS AND VESTIBULES WITHOUT ADDITIONAL COMPENSATION. SUCH A FINDING HAVING PROPERLY BEEN MADE, IT IS ALSO THE OPINION OF THE DEPARTMENT THAT THE CONTRACTING OFFICER WAS REQUIRED TO FOLLOW THE INSTRUCTIONS OF THE QUARTERMASTER GENERAL CONCERNING THE INTERPRETATION OF THE CONTRACT AND THE ISSUING OF CHANGE ORDER "B.'

IN VIEW OF THE ABOVE, IT IS REQUESTED THAT CREDIT BE ALLOWED FOR PAYMENTS MADE UNDER THE CHANGE ORDER.

UNDER THE TERMS OF THE CONTRACT, KING AND BOOZER AGREED TO FURNISH AND DELIVER F.O.B. CARS AT ANNISTON, ALA., 19 UNITS OF PORTABLE, DEMOUNTABLE BUILDINGS IN STRICT ACCORDANCE WITH THE SPECIFICATIONS, SCHEDULES, AND DRAWINGS WHICH WERE ATTACHED TO AND MADE A PART OF THE CONTRACT. MAJOR W. L. BARTLEY, PURCHASING AND CONTRACTING OFFICER, FORT SAM HOUSTON, TEX., WHO SIGNED THE CONTRACT ON BEHALF OF THE UNITED STATES, WAS SPECIFICALLY DESIGNATED BY NAME AS THE CONTRACTING OFFICER. SEE PARAGRAPH 2 OF THE " SCHEDULE OF SUPPLIES" ATTACHED TO AND MADE A PART OF THE CONTRACT.

BY LETTER OF JULY 12, 1938, ADDRESSED TO MAJOR BARTLEY, THE CONTRACTORS REQUESTED HIS DECISION AS TO WHETHER, UNDER THE TERMS OF THE CONTRACT, THEY WERE REQUIRED TO FURNISH VESTIBULES AND SKIRTING FOR CERTAIN BUILDINGS IN EACH OF THE UNITS. MAJOR BARTLEY INFORMED THE CONTRACTORS OF HIS DECISION BY LETTER OF JULY 14, 1938, IN WHICH HE DISCUSSED THE APPLICABLE PROVISIONS OF THE CONTRACT AND CONCLUDED AS FOLLOWS:

YOUR PARTICULAR ATTENTION IS INVITED TO PARAGRAPH GC 9 OF THE SPECIFICATION ECW NO. 1-8 C.A. WHICH READS AS FOLLOWS: " INTERPRETATION OF THE CONTRACT--- UNLESS OTHERWISE SPECIFICALLY SET FORTH, THE CONTRACTOR SHALL FURNISH ALL MATERIALS, LABOR, ETC., NECESSARY TO COMPLETE THE WORK FULLY ACCORDING TO THE TRUE INTENT AND MEANING OF THE DRAWINGS AND SPECIFICATIONS, OF WHICH INTENT AND MEANING THE C.O. SHALL BE THE INTERPRETER.' IT IS MY DECISION UNDER THE PROVISIONS OF THE ABOVE PARAGRAPH OF THE SPECIFICATIONS THAT THE TRUE INTENT AND MEANING OF THE PLANS AND SPECIFICATIONS ARE THAT THE VESTIBULES AND SKIRTING ARE INCLUDED IN THE CONTRACT.

UNDER DATE OF JULY 19, 1938, THE CONTRACTORS ADDRESSED TO THE CONTRACTING OFFICER A LETTER PROTESTING THE ABOVE-QUOTED DECISION AND REQUESTING THAT THE MATTER BE REFERRED TO THE QUARTERMASTER GENERAL. SAID LETTER WAS FORWARDED TO THE QUARTERMASTER GENERAL BY MAJOR BARTLEY'S FIRST INDORSEMENT THEREON OF AUGUST 6, 1938, WHICH IS IN PERTINENT PART AS FOLLOWS:

3. IN CONNECTION WITH ALL THE CORRESPONDENCE CONCERNED HEREWITH, AND WITH PARTICULAR REFERENCE TO THE PURCHASING AND CONTRACTING OFFICER'S DECISION IN THIS MATTER, AS PER ENCLOSURE NO. 3 HERETO, WHICH WAS MADE AFTER CAREFUL REVIEW OF THE PLANS, SPECIFICATIONS, BID FORMS, AND SCHEDULES THERETO, AND WHILE IT IS ADMITTED THAT THERE IS A POSSIBLE DOUBT IN THE MATTER, IT IS BELIEVED THAT A CAREFUL REVIEW AND STUDY OF THE PLANS AND SPECIFICATIONS, PARTICULARLY THE NOTE ON PAGE SIX (6) OF SPECIFICATIONS ECW NO. 1-8CA, UNDER GENERAL HEADING " SPECIFICATION OF FABRICATION," AND PARAGRAPH ONE (1) THEREOF," SCOPE OF WORK," AND DRAWING NO. ECW 125, AND PARTICULARLY THE BILL OF MATERIAL THEREON, WILL SHOW THIS RULING TO BE THE CORRECT ONE TO HAVE MADE. SPECIFIC ATTENTION IS INVITED TO THE NOTE AT THE BOTTOM OF THE BUILDING MATERIALS SCHEDULE ON ECW DRAWING NO. 125, WHICH STATES," NOTE--- ITEMS NUMBERS 73 AND 74 ABOVE, NOT INCLUDED IN CONTRACT FOR PURCHASE OF BUILDINGS.' IT IS CLEAR THAT ALL OTHER ITEMS IN THE BUILDING MATERIALS SCHEDULE ON DRAWING NO. ECW 125, ARE INCLUDED IN THE CONTRACT, ESPECIALLY SINCE ECW DRAWING NO. 125 WAS SPECIFIED AS A BASIS TO GOVERN AS TO TYPE, DETAILS OF CONSTRUCTION, AND BASIC REQUIREMENTS, OTHER THAN THE LENGTH AND NUMBER OF TRANSVERSE PARTITIONS FOR SUCH BUILDINGS TO BE PROCURED, OTHER THAN IN STRICT CONFORMANCE TO ECW PLAN NO. 101. THIS NOTE ON DRAWING NO. ECW 125 CANCELS THE EFFECT OF THE OTHER NOTE ON DRAWING NO. ECW 125, WHICH STATES THAT VESTIBULES AND SKIRTING WILL ONLY BE FURNISHED WHERE CLIMATIC CONDITIONS REQUIRE, ESPECIALLY IN VIEW OF THE FACT THAT NO MENTION WAS MADE OF OMITTING THE VESTIBULES AND SKIRTING.

4. THE CONTRACTING OFFICER'S DECISION IN THIS MATTER WAS MADE UNDER THE PROVISIONS OF PARAGRAPH GC9 OF THE ABOVE CITED SPECIFICATIONS. A GREAT MAJORITY OF THE NINETEEN (19) UNITS OF BUILDINGS PURCHASED UNDER THIS CONTRACT, ARE FOR USE IN COLORADO, WYOMING, AND FOR CAMPS LOCATED IN HIGH ALTITUDES IN NEW MEXICO AND ARIZONA, AND IT WAS THE ORIGINAL INTENT OF THIS OFFICE THAT VESTIBULES AND SKIRTING WOULD BE INCLUDED IN THE CONTRACT, AS THE USE THEREOF WAS DEEMED NECESSARY IN VIEW OF THE LOCATIONS OF THE CAMPS.

5. IN MAKING THIS DECISION, THE PURCHASING AND CONTRACTING OFFICER TOOK INTO CONSIDERATION THE PROVISIONS OF PARAGRAPH 6C (2) (E). ARMY REGULATIONS ARE AR-30-1435. IN ADDITION TO ALL OF THE ABOVE, YOUR ATTENTION IS INVITED TO THE STATEMENT ATTRIBUTED TO CONTRACTOR PART OF WHICH IS QUOTED IN ENCLOSURE NO. 3. MR. T. C. KING, REPRESENTING KING AND BOOZER, WAS AT THIS OFFICE THE DATE AWARD WAS MADE, JUNE 25, 1938. AFTER THE LETTER OF AWARD HAD BEEN HANDED TO HIM, HE THEN BROUGHT UP THE QUESTION OF THE VESTIBULES AND SKIRTING. IT IS NOTED THAT THE CONTRACTOR NEVER MADE ANY CLAIMS AS TO MISTAKE IN BID PRIOR TO AWARD. THE SITUATION AND INTERPRETATION OF THE PROVISION TO FURNISH VESTIBULES AND SKIRTING WAS CAREFULLY EXPLAINED TO MR. KING AT THE TIME WHEN HE RAISED THIS QUESTION, AFTER AWARD. IT WAS NOTICED ON THAT OCCASION THAT MR. KING REFERRED TO SOME PERSONAL PAPERS OF HIS OWN, AND THEN MADE THE REMARK TO THE EFFECT,"WELL, I HAVE ONLY BOUGHT ONE; I HAVE GOT THREE IN.' THIS STATEMENT WAS WITNESSED, IN ADDITION TO THE UNDERSIGNED, BY MR. VANDERHECK, SUPERVISOR OF CONSTRUCTION CCC; MRS. LOUISE PINTO, CLERK- STENOGRAPHER; MR. JACK S. RAYBURN, INSPECTOR; MR. F. A. HAECKER, INSPECTOR; AND MR. V. B. CHAPMAN, INSPECTOR, ALL FROM THIS OFFICE, THE LATTER THREE, NOW INSPECTING UNDER THE ABOVE MENTIONED CONTRACT AT ANNISTON, ALA.

6. THE CONTRACTOR IS FURNISHING VESTIBULES AND SKIRTING IN COMPLIANCE WITH INSTRUCTIONS CONTAINED IN ENCLOSURE NO. 3. THE CONTRACTOR'S BID PRICE AS SHOWN UNDER UNIT PRICE OF THE BID SHEET FOR THESE VESTIBULES AND SKIRTING, IS AS FOLLOWS: 1 VESTIBULE AND SKIRTING FOR ANNEX TO HEADQUARTERS -------------- $40.00 1 VESTIBULE AND SKIRTING FOR ANNEX TO STOREHOUSE ---------------- 41.00 2 VESTIBULES AND SKIRTING FOR SCHOOL BUILDING ------------------- 82.00

THE INCLUSION OF THESE ITEMS UNDER UNIT PRICES, FURTHER INDICATES THE INTENT OF THIS OFFICE THAT VESTIBULES AND SKIRTING WERE INCLUDED IN THE CONTRACT. FOR THE NINETEEN (19) UNITS PROCURED UNDER THE ABOVE MENTIONED CONTRACT, THIS WILL AMOUNT TO $3,097.00.

7. IT IS RECOMMENDED THAT IN VIEW OF THE ABOVE FACTS, THE CLAIM OF THE CONTRACTOR FOR ADDITIONAL COMPENSATION FOR FURNISHING VESTIBULES AND SKIRTING FOR NINETEEN (19) UNITS OF PORTABLE DEMOUNTABLE C.C.C. CAMP BUILDINGS, UNDER CONTRACT NO. W58 QM CIV-59, IN THE AMOUNT OF $3,097.00, BE DISALLOWED.

THE CONTRACTOR'S LETTER OF JULY 19, 1938, WAS RETURNED TO THE CONTRACTING OFFICER FROM THE OFFICE OF THE QUARTERMASTER GENERAL BY SECOND INDORSEMENT OF AUGUST 15, 1938. IN SAID INDORSEMENT, WHICH WAS SIGNED," FOR THE QUARTERMASTER GENERAL" BY A. B. WARFIELD, BRIGADIER GENERAL, QUARTERMASTER CORPS, ASSISTANT, THE CONTRACTING OFFICER WAS INSTRUCTED THAT "IF THE VESTIBULES ARE REQUIRED, A CHANGE ORDER SHOULD BE PLACED ON THE CONTRACT COVERING SUCH VESTIBULES AS ARE QUIRED.' IN ACCORDANCE WITH THIS INSTRUCTION, MAJOR BARTLEY ISSUED CHANGE ORDER "B," DATED AUGUST 23, 1938, PROVIDING FOR THE FURNISHING OF VESTIBULES AND SKIRTING AT AN INCREASE OF $3,097 IN THE CONTRACT PRICE, IN ACCORDANCE WITH UNIT PRICES IN THE CONTRACTOR'S BID. PAYMENT UNDER THE CHANGE ORDER WAS MADE TO THE CONTRACTORS SEPTEMBER 8, 1938, ON VOUCHER NO. 531, ACCOUNTS OF MAJ. L. P. WORRALL, F.D., IN THE NET AMOUNT OF $3,066.03.

THE CONTRACT MADE NO PROVISION FOR APPEAL FROM THE CONTRACTING OFFICER'S DECISION UNDER PARAGRAPH GC 9 OF THE SPECIFICATIONS. THE CONTRACTING OFFICER'S ABOVE-QUOTED INDORSEMENT OF AUGUST 6, 1938, CLEARLY SHOWS THAT AS ONE OF THE PARTIES TO THE CONTRACT, HE INTENDED THE SPECIFICATIONS SHOULD COVER THE FURNISHING OF VESTIBULES AND SKIRTING FOR THE BUILDINGS IN QUESTION. FURTHER, SAID INDORSEMENT INDICATES THE EXISTENCE OF EVIDENCE WHICH WOULD TEND TO ESTABLISH THAT THE CONTRACTORS, ALSO, UNDERSTOOD THEY WERE REQUIRED TO FURNISH SUCH VESTIBULES AND SKIRTING.

WHERE A CONTRACT PROVIDES THAT SPECIFIED MATTERS WILL BE REFERRED TO THE JUDGMENT OF A DESIGNATED OFFICIAL, THE PARTIES WHO HAVE AGREED TO BE BOUND BY THAT JUDGMENT ARE ENTITLED TO HAVE IT EXERCISED IN GOOD FAITH BY THE OFFICER NOMINATED, AND CANNOT BE BOUND BY THE SUBSTITUTED JUDGMENT OF ANOTHER AUTHORITY. UNITED STATES V. NORTH AMERICAN COMMERCIAL CO., 74 F. 145, CITING KIHLBERG V. UNITED STATES, 97 U.S. 398. AND SEE 18 COMP. GEN. 870, AND CASES CITED AT P. 872. INSTANCES OF APPLICATION OF THE RULE STATED ABOVE ARE TO BE FOUND IN CASES INVOLVING YOUR DEPARTMENT. FOR EXAMPLE, IN BURTON COAL CO. V. UNITED STATES. 60 CT.1CLS. 294, THE CONTRACT PROVIDED FOR TERMINATION THEREOF, IF, IN THE OPINION OF THE QUARTERMASTER GENERAL, THE PUBLIC INTEREST SHOULD SO REQUIRE. THE COURT HELD THAT AN ATTEMPTED CANCELLATION OF THE CONTRACT BY AN OFFICER OTHER THAN THE QUARTERMASTER GENERAL WAS INEFFECTIVE, STATING (P. 314):

* * * WE NEED NOT MULTIPLY CITATIONS TO THE EFFECT THAT WHERE ONE IS VESTED WITH DISCRETION TO DO OR NOT TO DO A CERTAIN THING, HE ALONE MUST ACT. * * *

THE PARTIES TO SUCH A STIPULATION AS HERE CONSIDERED NOT ONLY ARE ENTITLED TO THE JUDGMENT OF THE OFFICER NAMED IN THE CONTRACT, BUT, ALSO, THEY ARE ENTITLED TO HAVE THAT JUDGMENT EXERCISED HONESTLY AND INDEPENDENTLY. THE APPLICATION OF THE RULE IN THIS RESPECT IS APTLY ILLUSTRATED BY THE CASE OF STANDARD DREDGING CO. V. UNITED STATES, 71 CT.1CLS. 218, WHERE THE COURT OF CLAIMS SAID (PP. 247-248):

* * * THE PLAINTIFF WAS ENTITLED TO THE JUDGMENT OF THE DISTRICT ENGINEER AND CONTRACTING OFFICER AND SINCE THE WORK SPECIFIED IN THE CONTRACT WAS TAKEN OUT OF PLAINTIFF'S HANDS AND THE PLAINTIFF WAS EXCLUDED FROM THE AREA TO BE DREDGED SOLELY BY DIRECTION OF THE CHIEF OF ENGINEERS, AND SINCE THE CONTRACT WAS ANNULLED BY THE CHIEF OF ENGINEERS WITHOUT RECOMMENDATION OR DECISION AS TO ANY OF THE MATTERS SPECIFIED IN ARTICLE 4 BY THE DISTRICT ENGINEER AND CONTRACTING OFFICER, THE DEFENDANT BREACHED THE CONTRACT AND CANNOT HOLD THE PLAINTIFF LIABLE FOR ANY EXCESS COST TO IT IN THE PERFORMANCE OF THE WORK.

THE DEFENDANT ATTEMPTS TO JUSTIFY THE ACTION TAKEN ON THE GROUND THAT THE CONTRACTING OFFICER DID ACT IN THE MATTER, AND IT IS IMMATERIAL THAT HE ACTED SOLELY UNDER INSTRUCTIONS FROM THE CHIEF OF ENGINEERS OF THE WAR DEPARTMENT, AT WASHINGTON, D.C. THIS WAS NOT ENOUGH. * * *

* * * IT WAS FOR THE CONTRACTING OFFICER WHO WAS ON THE GROUND AND FAMILIAR WITH THE CONDITIONS TO DECIDE WHETHER THE PLAINTIFF SHOULD BE GIVEN ASSISTANCE IN BRINGING THE WORK TO A PROPER STATE OF ADVANCEMENT OR WHETHER THE CONTRACTOR HAD SO FAILED FAITHFULLY AND DILIGENTLY TO PROSECUTE THE WORK AS TO JUSTIFY ANNULMENT OF THE CONTRACT. HE MADE NO SUCH DECISION INDEPENDENTLY AS THE CONTRACT REQUIRED. THE CHIEF OF ENGINEERS HAD NO AUTHORITY TO TAKE ANY ACTION WHATSOEVER UNDER THE CONTRACT OTHER THAN TO SANCTION THE OPINION OF THE CONTRACTING OFFICER THAT THE CONTRACT SHOULD BE ANNULLED. HE HAD NO AUTHORITY ARBITRARILY TO INSTRUCT THE CONTRACTING OFFICER WHAT TO DO UNDER ARTICLES 3 AND 4, OR WHAT DECISION HE SHOULD COME TO THEREUNDER. THE CONTRACTING OFFICER NEVER DECIDED THAT THE CONTRACT SHOULD BE ANNULLED AND THE CHIEF OF ENGINEERS HAD NO AUTHORITY TO DIRECT HIM TO CANCEL IT.

IN THE RECENT CASE OF SCHNOLL, ASSIGNEE, ETC. V. UNITED STATES, 86 CT.1CLS. 632, THE QUARTERMASTER GENERAL HAD ALLOWED THE CONTRACTOR $71.28 IN CONNECTION WITH ONE OF THE ITEMS IN SUIT, BUT THE COURT AWARDED JUDGMENT TO THE PLAINTIFF ON THIS ITEM IN THE SUM OF $2,186.90. EXPLANATION OF ITS REFUSAL TO BE BOUND BY THE DETERMINATION OF THE QUARTERMASTER GENERAL, THE COURT SAID:

* * * THE CONSTRUCTING QUARTERMASTER DID NOT PASS UPON THIS CONTROVERSY; HE REFERRED IT TO THE QUARTERMASTER GENERAL AND IT WAS THE LATTER OFFICIAL WHO DETERMINED IT IN THE FIRST AND LAST INSTANCES. THE CONTRACTOR WAS ENTITLED TO A RULING FROM THE CONSTRUCTING QUARTERMASTER UNDER THE CONTRACT. * * *

CONSIDERATION OF THE ABOVE-CITED AUTHORITIES LEADS INESCAPABLY TO THE CONCLUSION THAT THE QUARTERMASTER GENERAL WAS WITHOUT AUTHORITY EITHER TO INSTRUCT THE CONTRACTING OFFICER AS TO HOW THE LATTER'S DECISION UNDER THE CONTRACT SHOULD BE RENDERED, OR TO MODIFY SUCH DECISION AFTER IT HAD BEEN RENDERED. THERE IS IN THIS NOTHING INCONSISTENT WITH THE DUTIES IMPOSED BY LAW UPON THE QUARTERMASTER GENERAL UNDER THE STATUTES AND REGULATIONS CITED IN YOUR LETTER, SINCE THE AUTHORITY VESTED IN THE CONTRACTING OFFICER WAS DERIVED DIRECTLY FROM SPECIFICATIONS WHICH WERE PREPARED IN THE OFFICE OF THE QUARTERMASTER GENERAL--- PRESUMABLY WITH HIS APPROVAL. IF, AS WOULD APPEAR FROM YOUR LETTER, IT IS ADMINISTRATIVELY CONSIDERED NECESSARY OR DESIRABLE THAT CONTRACTS OF THIS TYPE BE INTERPRETED BY THE QUARTERMASTER GENERAL RATHER THAN BY A SUBORDINATE OFFICER, THE CONTRACTS SHOULD BE PREPARED ON THAT BASIS.

WHEN THE CONTRACTING OFFICER, IN THE FREE AND INDEPENDENT EXERCISE OF THE DISCRETION PLACED IN HIM BY THE CONTRACTING PARTIES, DECIDED THAT THE CONTRACT REQUIRED THE FURNISHING OF THE VESTIBULES AND SKIRT/IN QUESTION, THE UNITED STATES ACQUIRED A VESTED RIGHT TO HAVE SUCH VESTIBULES AND SKIRTING FURNISHED WITHOUT MODIFICATION OF THE CONTRACT PRICE. NO OFFICER OF THE GOVERNMENT MAY MODIFY OR WAIVE SUCH A RIGHT WITHOUT A VALUABLE CONSIDERATION PASSING TO THE GOVERNMENT. SEE 18 COMP. GEN. 114, 116, AND CASES THERE CITED, PARTICULARLY AMERICAN SALES CORPORATION V. UNITED STATES, 27 F./2D) 389, AFFIRMED 32 F./2D) 141, CERTIORARI DENIED, 280 U.S. 574.

IT FOLLOWS THAT THE CHANGE ORDER OF AUGUST 23, 1938, PROPOSING PAYMENT TO THE CONTRACTORS OF $3,097 IN ADDITION TO THE CONTRACT PRICE FOR FURNISHING ARTICLES THEY WERE LEGALLY BOUND TO FURNISH AT THE ORIGINAL CONTRACT PRICE, WAS WITHOUT CONSIDERATION, AND THAT THIS OFFICE MAY NOT ALLOW CREDIT FOR THE PAYMENT MADE THEREUNDER. FINAL ACTION ON THE PAID VOUCHER WILL BE ACCORDINGLY.