B-165642, FEB. 19, 1969

B-165642, FEB. 19, 1969

TO COOPER AND SMITH, CONTRACTORS:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 8, 1968, REQUESTING MONETARY RELIEF FOR A PORTION OF THE AMOUNT EXPENDED IN OBTAINING EQUIPMENT TO PERFORM THE SERVICES CALLED FOR UNDER CONTRACT NO. DABC13-68- C-0348 ENTERED INTO ON JUNE 20, 1968, WITH THE DEPARTMENT OF THE ARMY.

INVITATION FOR BIDS NO. DABC13-68-B-0131 WAS ISSUED ON APRIL 29, 1968, REQUESTING BIDS FOR FURNISHING THE ESTIMATED REQUIREMENTS OF THE GOVERNMENT FOR GROUNDS MAINTENANCE FOR THE PERIOD FROM DATE OF RECEIPT OF AWARD OF CONTRACT THROUGH MARCH 1969 AT VARIOUS LOCATIONS. IN THE ADDITIONAL SPECIAL PROVISIONS ON PAGE 16 OF THE INVITATION IT WAS PROVIDED AS FOLLOWS: "BASIS OF AWARD:

"AWARD WILL BE MADE FOR THE TOTAL OF ITEMS 1 THRU 18 OR ANY ITEM OR COMBINATION OF ITEMS THEREOF WHICHEVER IS CONSIDERED TO BE IN THE BEST INTEREST OF THE GOVERNMENT. NO SEPARATE AWARD WILL BE MADE ON SUB ITEMS.

"WHEN BIDDING ON ANY PARTICULAR ITEM OR COMBINATION THEREOF, THE PROSPECTIVE OFFEROR, MUST BID ON ALL SUB-ITEMS LISTED. FOR EXAMPLE, ITEM 1 INCLUDES 2 SUB-ITEMS. IN ORDER TO BE RESPONSIVE OFFEROR MUST BID ON SUB -ITEM A, GRASS MOWING AND SUB-ITEM B, APPLICATION OF FERTILIZER. BIDS RECEIVED WHICH DO NOT INCLUDE A BID ON EACH SUB-ITEM UNDER EACH ITEM WILL BE DETERMINED NON-RESPONSIVE AND REJECTED.' PARAGRAPH SP-11 STATED, IN PERTINENT PART, AS FOLLOWS: "SP-11 REQUIREMENTS (AUG 1965) (ASPR 7- 1102.2)

"/A) THIS IS A REQUIREMENTS CONTRACT FOR THE SUPPLIES OR SERVICES SPECIFIED IN THE SCHEDULE, AND FOR THE PERIOD SET FORTH THEREIN. DELIVERY OF SUPPLIES OR PERFORMANCE OF SERVICES SHALL BE MADE ONLY AS AUTHORIZED BY ORDERS ISSUED IN ACCORDANCE WITH THE CLAUSE ENTITLED ORDERING.- THE QUANTITIES OF SUPPLIES OR SERVICES SPECIFIED HEREIN ARE ESTIMATES ONLY, AND ARE NOT PURCHASED HEREBY. EXCEPT AS MAY BE OTHERWISE PROVIDED HEREIN, IN THE EVENT OF THE GOVERNMENT'S REQUIREMENTS FOR SUPPLIES OR SERVICES SET FORTH IN THE SCHEDULE DO NOT RESULT IN ORDERS IN THE AMOUNTS OR QUANTITIES DESCRIBED AS -ESTIMATED- OR -MAXIMUM- IN THE SCHEDULE, SUCH EVENT SHALL NOT CONSTITUTE THE BASIS FOR AN EQUITABLE PRICE ADJUSTMENT UNDER THIS CONTRACT.' PARAGRAPH SP-12 STATED AS FOLLOWS: "SP-12 ORDERING (AUG 1965) (ASPR 7 1101)

"/A) SUPPLIES OR SERVICES TO BE FURNISHED UNDER THIS CONTRACT SHALL BE ORDERED BY THE ISSUANCE OF DELIVERY ORDERS BY THE PURCHASING AND CONTRACTING OFFICE.

"/B) ALL DELIVERY ORDERS ISSUED HEREUNDER ARE SUBJECT TO THE TERMS AND CONDITIONS OF THIS CONTRACT. THIS CONTRACT SHALL CONTROL IN THE EVENT OF CONFLICT WITH ANY DELIVERY ORDER.'

THE RECORD SHOWS THAT THE CITED CONTRACT COVERED THE FURNISHING OF ITEMS NOS. 8 THROUGH 12 IN THE ESTIMATED AMOUNT OF $11,088. DELIVERY ORDERS NOS. DABC13-68-D-3443 AND DABC13-69-D-5050 WERE ISSUED TO YOU ON JUNE 24 AND AUGUST 13, 1968, RESPECTIVELY. EACH ORDER CONTAINED THE FOLLOWING: "VARIATION CLAUSE:

"THE PERMISSIBLE VARIATION UNDER THE CLAUSE OF THE GENERAL PROVISIONS ENTITLED -VARIATION IN QUANTITY- SHALL BE LIMITED TO:

INCREASE (10 PERCENT OR NONE)

DECREASE (10 PERCENT OR NONE)"

IN YOUR LETTER OF NOVEMBER 8, 1968, YOU ALLEGE THAT YOU RELIED ON THE GOVERNMENT ESTIMATE AS TO THE SERVICES WHICH WOULD BE ORDERED AND, THEREFORE, YOU EXPENDED $10,000 FOR EQUIPMENT TO PERFORM THE SERVICES. YOU CONTEND THAT THE SERVICES ORDERED BY THE GOVERNMENT WERE APPROXIMATELY 50 PERCENT LESS THAN THAT ESTIMATED. YOU ALSO CONTEND THAT THE DELIVERY ORDERS LIMITED VARIATION IN THE QUANTITY TO 10 PERCENT PLUS OR MINUS. ACCORDINGLY, YOU STATE THAT IN GOOD FAITH THE GOVERNMENT SHOULD BEAR A PORTION OF THE STARTUP COSTS INCURRED BY YOU. YOU ASK THAT OUR OFFICE GRANT RELIEF TO YOU EITHER BY WAY OF A RETROACTIVE PARTIAL TERMINATION, EQUITABLE ADJUSTMENT UNDER PUBLIC LAW 85-804 OR ANY OTHER RELIEF WHICH WE MAY DEEM APPROPRIATE.

A "REQUIREMENTS" CONTRACT, SUCH AS HERE INVOLVED, IS VALID UNDER THE THEORY THAT WHERE ONE PARTY AGREES TO LET ANOTHER PARTY FILL ITS ACTUAL REQUIREMENTS DURING A CERTAIN PERIOD AND THE SECOND PARTY AGREES TO FILL SUCH REQUIREMENTS, THESE PROMISES CONSTITUTE A VALID CONSIDERATION TO SUPPORT THE CONTRACT. SEE 1A CORBIN ON CONTRACTS 156; 1 WILLISTON ON CONTRACTS 104A; AND 2 WILLISTON ON SALES 464. THE LANGUAGE OF THE CONTRACT CLEARLY INDICATES THAT THE NUMBER OF ACRES SPECIFIED IS AN ESTIMATE ONLY AND IS NOT TO BE CONSIDERED AS A GUARANTY OF THE EXACT NUMBER OF ACRES WHICH THE GOVERNMENT WILL REQUIRE TO BE MOWED DURING THE CONTRACT PERIOD. THE GOVERNMENT IS ONLY OBLIGATED TO ORDER ITS ACTUAL REQUIREMENTS. THUS, UNDER THE SPECIFIC TERMS OF THE CONTRACT, THE GOVERNMENT, DEPENDING UPON ITS OWN NEEDS, HAS A RIGHT TO REQUIRE LESS THAN THE ESTIMATED NUMBER OF ACRES TO BE MOWED AND THE CONTRACTOR ASSUMES THE RISK THAT THE GOVERNMENT'S REQUIREMENTS WILL APPROACH THE ESTIMATE. HAVE HELD THAT THE FACT THAT A REQUIREMENTS CONTRACT HAS BECOME UNPROFITABLE DUE TO A REDUCTION IN QUANTITIES NEEDED DOES NOT JUSTIFY A PRICE ADJUSTMENT IN THE ABSENCE OF EVIDENCE THAT THE ESTIMATES WERE BASED ON OTHER THAN THE BEST INFORMATION AVAILABLE. 37 COMP. GEN. 688. WE FIND NOTHING IN THE RECORD TO SHOW THAT THE GOVERNMENT'S ESTIMATE WAS MADE IN OTHER THAN GOOD FAITH.

WHILE THE DELIVERY ORDERS SPECIFIED A 10-PERCENT VARIATION, PARAGRAPH SP- 12 QUOTED ABOVE SPECIFICALLY PROVIDED THAT IN CASE OF ANY CONFLICT BETWEEN THE CONTRACT AND THE DELIVERY ORDER THE CONTRACT TERMS WOULD GOVERN. ACCORDINGLY, WE SEE NO LEGAL BASIS TO ALLOW YOUR CLAIM.

WITH RESPECT TO YOUR REQUEST FOR RELIEF UNDER PUBLIC LAW 85-804, YOU MAY BE ADVISED THAT OUR OFFICE DOES NOT EXERCISE ANY JURISDICTION UNDER THAT LAW. SUCH JURISDICTION IS VESTED IN THE MILITARY DEPARTMENT CONCERNED. SEE ASPR 17-200, ET SEQ. ..END :