B-166536, JUL. 7, 1969

B-166536, JUL. 7, 1969

TO MR. JAMES E. WORK:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 21, 1969, PRESENTING, ON BEHALF OF TRANSCO CONTRACTING CO., A CLAIM IN THE AMOUNT OF $36,650.05, REPRESENTING DAMAGES WHICH ALLEGEDLY ACCRUED WHEN THE COMPANY WAS AWARDED A CONTRACT FOR REPAIR WORK ONLY UNDER INVITATION FOR BIDS F39601-67-B- 0712, ISSUED BY THE BASE PROCUREMENT OFFICE, ELLSWORTH AIR FORCE BASE, SOUTH DAKOTA, WHEREAS THE INVITATION PROVIDED FOR AN AGGREGATE AWARD OF BOTH REPAIR WORK AND PAINTING.

THE SUBJECT INVITATION, ISSUED DECEMBER 2, 1966, SOLICITED BIDS TO REPAIR STORM DAMAGE AND TO PAINT WHERRY HOUSING AT THE AIR FORCE BASE. THE REPAIR WORK, DESIGNATED PROJECT ELS 1331-6, WAS LISTED AS ITEM 1 IN THE SCHEDULE OF BID ITEMS, AND THE PAINT WORK, DESIGNATED PROJECT ELS 04-7, WAS LISTED AS ITEM 2. ITEM 1 WAS DIVIDED INTO A NUMBER OF SUBITEMS AS TO WHICH SEPARATE UNIT AND TOTAL PRICES WERE SOLICITED. ITEM 2 SOLICITED A LUMP-SUM PRICE FOR THE ENTIRE PAINT JOB. PARAGRAPH 2 ON PAGE 2 OF THE SCHEDULE PROVIDED FOR AN AWARD IN THE AGGREGATE OR ON AN INDIVIDUAL PROJECT BASIS, WHICHEVER WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.

MODIFICATION M02 TO THE INVITATION INSTRUCTED BIDDERS TO DELETE THE AWARD STATEMENT ON PAGE 2 OF THE SCHEDULE OF BID ITEMS IN ITS ENTIRETY AND TO ADD TO PAGE 2 AN AWARD STATEMENT PROVIDING FOR AN AWARD IN THE AGGREGATE. THE MODIFICATION PROVIDED FURTHER THAT ITEM 2 OF THE SCHEDULE OF BID ITEMS SHOULD BE DELETED IN ITS ENTIRETY AND A SEPARATE BID SCHEDULE FOR PROJECT ELS 4-7 SUBSTITUTED IN LIEU THEREOF.

THE SCHEDULE OF BID ITEMS FOR PROJECT ELS 4-7 DIVIDED THE WORK INTO 30 ITEMS AS TO WHICH UNIT AND TOTAL BID PRICES WERE SOLICITED. AT THE END OF THE COLUMN FOR THE 30 TOTAL BID PRICES, SPACE WAS PROVIDED FOR A "GRAND BID TOTAL.' IMMEDIATELY FOLLOWING IS A STATEMENT THAT AWARD WILL BE MADE IN THE AGGREGATE.

BIDS WERE OPENED ON JANUARY 16, 1967. FIFTEEN BIDDERS RESPONDED TO THE INVITATION. TEN BIDDERS, INCLUDING TRANSCO, BID ON BOTH PROJECTS. TWO BIDDERS BID ON THE REPAIR WORK ONLY. THREE BIDDERS BID ON THE PAINTING ONLY.

THE TRANSCO BID ON THE REPAIR WORK WHICH TOTALED $113,029.50 WAS THE LOWEST OFFER FOR THAT PROJECT. THE TRANSCO BID ON THE PAINTING WHICH TOTALED $135,715 WAS NOT THE LOWEST OFFER ON THAT PROJECT. THE LOWEST OFFER ON THAT PROJECT TOTALED $84,054 AND WAS SUBMITTED BY A COMPANY WHICH ALSO BID ON THE REPAIR WORK.

THE CONTRACTING OFFICER REQUESTED TRANSCO TO VERIFY ITS BID ON THE REPAIR WORK PROJECT. TRANSCO DID SO AND IT WAS AWARDED THE CONTRACT FOR THAT PROJECT ON FEBRUARY 8, 1967. THE PAINT CONTRACT WAS AWARDED TO THE BIDDER WHOSE BID FOR THAT WORK WAS THE LOWEST RECEIVED.

BY LETTER OF FEBRUARY 20, 1967, THE CONTRACTING OFFICER FURNISHED TRANSCO WITH A COPY OF THE CONTRACT AND REQUESTED THAT THE PAYMENT AND PERFORMANCE BONDS, ALSO TRANSMITTED BY THE LETTER, BE EXECUTED. BY LETTER OF FEBRUARY 25, 1967, TRANSCO RETURNED THE BONDS EXECUTED AND ALSO A CERTIFICATE OF INSURANCE.

AT A PREPERFORMANCE CONFERENCE HELD ON MARCH 24, 1967, THE CONTRACTOR ALLEGED FOR THE FIRST TIME THAT BOTH PROJECTS SHOULD HAVE BEEN AWARDED TO THE SAME CONTRACTOR. THE CONTRACTOR WAS REQUESTED TO SUBMIT THE COMPLAINT IN WRITING. BY LETTER OF APRIL 3, 1967, TRANSCO CONTENDED THAT THE INVITATION FOR BIDS PROVIDED FOR A SINGLE AWARD FOR BOTH PROJECTS AND REQUESTED THAT THE CONTRACT BE VOIDED IF BOTH PROJECTS COULD NOT BE AWARDED TO THE COMPANY. BY LETTER OF APRIL 19, 1967, THE CONTRACTING OFFICER DENIED THE REQUEST ON THE BASIS THAT THE INVITATION FOR BIDS, AS AMENDED, PROVIDED FOR SEPARATE AGGREGATE AWARDS FOR EACH PROJECT. THE LETTER FURNISHED A NOTICE TO PROCEED AND REQUESTED THE CONTRACTOR TO PROCEED IMMEDIATELY WITH CONTRACT PERFORMANCE. BY LETTER OF APRIL 25, 1967, THE CONTRACTOR WROTE TO THE CONTRACTING OFFICER AS FOLLOWS:

"THANK YOU FOR YOUR LETTER OF 19 APRIL, REJECTING OUR WITHDRAWAL REQUEST OF 3 APRIL.

"SINCE WE HAVE UP BONDS AND YOU HAVE ORDERED US TO PROCEED AND SEND BACK THE -NOTICE TO PROCEED,- IT IS ENCLOSED.

"HOWEVER WE DO NOT WHOLE-HEARTEDLY AGREE WITH THE CONCLUSIONS THAT YOU HAVE DRAWN CONCERNING THE INVITATION FOR BIDS AND AWARD OF CONTRACT.

"IN ANY EVENT WE WILL PROCEED WITH ALL DILIGENCE TO COMMENCE AND COMPLETE THIS CONTRACT IN GOOD ORDER.'

THE CONTRACTOR COMPLETED THE WORK AND ON JANUARY 2, 1968, WROTE A LETTER ADDRESSED "ATTENTION: HEAD OF THE AGENCY, CONTRACTING APRIL 25, 1967,"APPEAL" AND REQUESTING A DECISION ON ITS "DISPUTE.' BY LETTER OF JANUARY 30, 1968, THE CONTRACTING OFFICER ADVISED TRANSCO THAT THE APRIL 25, 1967, LETTER WAS CONSTRUED AS AN ACCEPTANCE, OFFICE," EXPRESSING SURPRISE THAT THERE HAD BEEN NO DECISION ON THE ALTHOUGH NOT A WHOLEHEARTED ACCEPTANCE, OF THE POSITION STATED IN THE APRIL 19 LETTER AND THAT HE WAS UNCERTAIN AS TO WHAT TRANSCO WAS THEN REQUESTING. TRANSCO APPEALED THE LETTER OF JANUARY 30, 1968, TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS WHICH DISMISSED THE APPEAL FOR LACK OF JURISDICTION.

ALTHOUGH THE CONTRACTOR'S APRIL 25 LETTER INDICATES THAT THE CONTRACTOR DID NOT AGREE WITH THE CONTRACTING OFFICER'S REASONS FOR DIVIDING THE PROCUREMENT BETWEEN TWO BIDDERS, IT FURTHER INDICATES THAT THE CONTRACTOR HAD DECIDED TO ACCEPT THE CONTRACT AND GO FORWARD WITH THE WORK IN ANY EVENT. THERE IS NOTHING IN THAT LETTER WHICH COULD BE SAID TO CONSTITUTE AN APPEAL FROM THE CONTRACTING OFFICER'S LETTER OF APRIL 25, 1967, OR INDICATING THAT THE WORK WAS BEING PERFORMED UNDER PROTEST. WHILE MORE THAN 8 MONTHS LATER, AFTER COMPLETION OF THE WORK, THE CONTRACTOR STATED THAT ITS LETTER OF APRIL 25 WAS INTENDED TO OPERATE AS AN "APPEAL," THE LETTER DOES NOT INDICATE SUCH A PURPOSE AND, ACCORDINGLY, THE LETTER OF JANUARY 2, 1968, REQUESTING A DECISION AFTER THE WORK WAS COMPLETED APPEARS TO HAVE BEEN AN AFTERTHOUGHT. HOWEVER, EVEN IF THE CONTRACTOR'S LETTER OF APRIL 25 WAS CONSIDERED A RESERVATION OF THE MATTER, THE RATIONALE IN BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V O.D. WILSON CO., INC., 133 F.2D 399, WOULD APPEAR TO BE CONTROLLING. IN THAT CASE, THE COURT HELD THAT A CONTRACTOR COULD NOT REPUDIATE A CONTRACT WITH A RESERVATION FOR A CLAIM AND THEN PERFORM THE CONTRACT TO COMPLETION AND SUE FOR THE AMOUNT IT HAD OMITTED FROM ITS BID. IN DENYING THE CLAIM FOR RELIEF, THE COURT RECOGNIZED THAT THE CONTRACTOR PERFORMED THE CONTRACT KNOWING ALL THE FACTS. THE COURT SAID,"IT IS ELEMENTARY THAT IN THE ABSENCE OF FRAUD, MISTAKE, DURESS, AND THE LIKE, ONE WHO MERELY PERFORMS HIS CONTRACT CAN RECOVER MERELY THE CONTRACT PRICE.' THE CONTRACTOR THERE CONTENDED THAT IT ACTED UNDER DURESS SINCE IT WAS THREATENED WITH FORFEITURE OF ITS BID BOND IF IT REFUSED TO PERFORM. HOWEVER, THE COURT HELD THAT THERE WAS NO DURESS SINCE THE CONTRACTOR COULD HAVE LITIGATED THE MATTER, BUT INSTEAD CHOSE TO PERFORM RATHER THAN HAVE ITS RIGHT TO RESCIND JUDICIALLY DETERMINED. THE COURT CONCLUDED THAT THE CONTRACTOR WAS BOUND BY THE CONTRACT AND COULD NOT RECOVER ON ITS SUIT FOR THE VALUE OF THE OMITTED ITEM. THE COURT HELD THAT THE CONTRACTOR "COULD NOT ON ANY THEORY CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE AHD BEEN NONE. IT COULD NOT ACQUIRE SUCH A RIGHT BY PURPORTING TO -RESERVE- IT.'

YOU CONTEND THAT THE AWARD WAS "FORCED" ON TRANSCO. HOWEVER, THE RECORD IS TO THE CONTRARY. IT DOES NOT APPEAR THAT TRANSCO CAN BE CONSIDERED TO HAVE ACTED OTHER THAN ON A VOLUNTARY BASIS IN DECIDING TO PERFORM THE CONTRACT. IF TRANSCO WAS SATISFIED THAT THE AWARD WAS IMPROPER, IT COULD HAVE PROMPTLY PROTESTED THE AWARD TO OUR OFFICE FOR IMMEDIATE RESOLUTION OR REFUSED TO HAVE PERFORMED AND THEREBY LEFT THE MATTER FOR ADMINISTRATIVE RESOLUTION AND POSSIBLE APPEAL TO THE COURTS.

IN THESE CIRCUMSTANCES, AND IN VIEW OF THE VOLUNTARY ACCEPTANCE OF THE CONTRACT AND COMPLETE PERFORMANCE THEREOF BY TRANSCO INFORMED AS IT WAS AS TO THE BASIS FOR THE AWARD, WE FIND NO LEGAL BASIS TO ALLOW ANY PAYMENT IN ADDITION TO THAT SPECIFIED IN THE CONTRACT.