B-127471, MAY 15, 1956

B-127471, MAY 15, 1956

TO WITTENMEIER MACHINERY COMPANY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 6, 1955, FROM IRWIN, DENEKE AND PENNER, REQUESTING, IN YOUR BEHALF, REVIEW OF THE DETERMINATION, AS SET FORTH IN LETTER OF OCTOBER 21, 1955, FROM THE CLAIMS DIVISION OF OUR OFFICE, OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $4,266.18, REPRESENTING AN OVERPAYMENT UNDER CONTRACT NO. N156S-27921, DATED JUNE 29, 1951.

BY INVITATION NO. 156/9500-31212/51, DATED MAY 24, 1951, BIDS WERE REQUESTED FOR ITEM 1, FOUR VALVE PRESSURE CONTROL ASSEMBLIES, NAF PART NO. 55-4920-1, AND ITEM 2, FOUR BODY ASSEMBLIES, NAF PART NO. 55-60007 1. YOUR BID ON ITEM NO. 1, NAF PART NO. 55-4920-1, WAS ACCEPTED FOR A TOTAL PRICE OF $48,284. ITEM 1 WAS DESCRIBED AS CONSISTING OF CERTAIN ITEMS OF COMPONENT PARTS LISTED IN THE INVITATION, ONE OF WHICH WAS PART NO. 55- 60007-1, THE SAME PART AS THAT COVERED BY ITEM 2. THE INVITATION STATED THAT IN ACCORDANCE WITH SECTION 30 OF THE GENERAL PROVISIONS, FOUR MOTOR UNIT ASSEMBLIES, NAF PART NO. 55-4782-1, WOULD BE FURNISHED TO THE CONTRACTOR BY THE NAVAL AIR MATERIAL CENTER APPROXIMATELY ON OCTOBER 18, 1951, FOR USE IN THE MANUFACTURE OF ITEM 1. ALSO, IT WAS STATED THAT THE CONTRACTOR MUST FURNISH ALL OTHER SUPPLIES AND SERVICES. DURING THE PERFORMANCE OF THE CONTRACT SEVERAL MINOR ENGINEERING CHANGES WERE MADE. SOME OF THE CHANGES CAUSED INCREASES IN THE CONTRACT PRICE AND SOME CAUSED DECREASES IN THE PRICE, RESULTING IN A CONTRACT PRICE OF $47,663.20 AT THE TIME OF CHANGE ORDER NO. 5. ON OCTOBER 8, 1953, THE CONTRACTING OFFICER ISSUED CHANGE ORDER NO. 7, STATING THAT SINCE CERTAIN UNDELIVERED COMPONENT PARTS WERE LONG OVERDUE, THE CONTRACT WAS TERMINATED FOR DEFAULT. FOUR BODY ASSEMBLIES, ITEM NO. 55-60007-1, WERE LISTED AS SOME OF THE UNDELIVERED COMPONENT PARTS. ON DECEMBER 10, 1953, THE CONTRACTING OFFICER ISSUED CHANGE ORDER NO. 8, STATING THAT DUE TO YOUR FAILURE TO FURNISH THE LISTED COMPONENT PARTS THE CONTRACT PRICE WAS CHANGED FROM $47,663.20 TO $36,407.20. THE AMOUNT DEDUCTED DUE TO YOUR FAILURE TO DELIVER PART NO. 55-60007-1 WAS BASED ON YOUR BID FOR SUCH PART UNDER ITEM 2 OF THE INVITATION. SINCE YOU HAD BEEN PAID $40,673.38 UNDER THE CONTRACT AT THE TIME OF CHANGE ORDER NO. 8, THERE RESULTED AN OVERPAYMENT OF $4,266.18.

IT IS CONTENDED THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE NO REDUCTION IN THE CONTRACT PRICE SHOULD HAVE BEEN MADE AS A RESULT OF YOUR FAILURE TO DELIVER COMPONENT PART NO. 55-60007-1 AND THAT THERE IS ACTUALLY DUE YOU $6,989.82. YOUR CONTENTION IS BASED ON THE FACT THAT AT THE TIME OF THE MAKING OF THE SUBJECT CONTRACT INTENDED THAT YOU WERE TO FURNISH SUCH PART UNDER ITEM 1. HOWEVER, YOU CONCEDE THAT THE CONTRACT AS WRITTEN SPECIFIES THAT YOU WERE TO FURNISH THE PART BUT CONTEND THAT SUCH SPECIFICATION WAS INSERTED INTO THE CONTRACT AS A MUTUAL MISTAKE BY THE PARTIES.

THE INVITATION FOR BID SPECIFICALLY STATED ON PAGE SIX THAT PART NO. 55- 60007-1 WAS A COMPONENT PART OF ITEM 1. WHILE ITEM 2 OF THE INVITATION REQUESTED BIDS FOR THE FURNISHING OF PART NO. 55-60007-1 AS A SEPARATE ITEM, THE PRACTICE OF REQUESTING SEPARATE BIDS ON COMPONENT ITEMS IS NOT UNCOMMON IN GOVERNMENT INVITATION FOR BIDS. UNDER DATE OF FEBRUARY 17, 1954, THE CONTRACTING OFFICER RENDERED A DECISION AS TO THE PROPRIETY OF CHANGE ORDER NO. 8, WHICH IS IN PART AS OLLOWS:

"3. EXCEPTION IS TAKEN TO THE STATEMENT THAT AN ERROR WAS MADE IN THE PREPARATION OF THE SUBJECT CONTRACT BY INCLUDING PART NO. 55-60007 1, SHOWN AS ITEM 2 ON THE ORIGINAL REQUEST FOR QUOTATION, AS A COMPONENT PART OF ITEM 1. ITEM 1 OF THE ORIGINAL REQUEST FOR QUOTATION COVERED THE REQUIREMENTS FOR 4 VALVE PRESSURE CONTROL ASSEMBLIES, TO BE IN ACCORDANCE WITH NAVAL AIRCRAFT FACTORY DRAWING NO. 55-4920, ALTERNATION 1, AND THE COMPONENT DRAWINGS LISTED ON PAGE NUMBERS 1 TO 8 OF THE SCHEDULE. IN THIS CONNECTION IT WILL BE NOTED THAT COMPONENT DRAWING NO. 55-60007 OF 7 MARCH 1951 IS LISTED AS THE FOURTH ITEM ON PAGE 6 OF THIS SCHEDULE. THIS REQUEST FOR QUOTATION ALSO INCLUDED THE REQUIREMENT FOR 4 SPARE BODY ASSEMBLIES, COMPONENT PART NO. 55-60007-1 AS SHOWN UNDER ITEM 2, TO BE IN ACCORDANCE WITH DRAWING NO. 55-60007, LISTED AS THE PRIME NAVAL AIRCRAFT FACTORY DRAWING AT THE BOTTOM OF PAGE 8 OF THE SCHEDULE. PRIOR TO THE ISSUANCE OF THE CONTRACT, IT WAS DECIDED THAT THE SPARE COMPONENT BODY ASSEMBLIES WOULD NOT BE PURCHASED AT THIS TIME. HOWEVER, THE REQUIREMENT FOR THE BOYD ASSEMBLY WHICH IS A COMPONENT OF THE VALVE PRESSURE CONTROL ASSEMBLY WAS NOT DELETED AT ANY TIME.

"5. AFTER CAREFUL CONSIDERATION OF THE FACTS PRESENTED HEREIN, THE FINDINGS OF THE CONTRACTING OFFICER ARE THAT, THIS IS NOT A SERIES OF "MUTUAL MISUNDERSTANDINGS" AS NOTED IN REFERENCE (B), AS THE REQUEST FOR QUOTATION LISTED PART NO. 55-60007 AS A COMPONENT PART OF THE VALVE ASSEMBLY UNDER ITEM 4 OF PAGE 6, AND THE CONTRACT LISTED PART NO. 55-60007 AS A COMPONENT OF NAVAL AIRCRAFT PART NO. 55-4920-1 AS ITEM 8 OF PAGE 7. THIS COMPONENT PART WAS NEVER DELETED FROM THE REQUIREMENTS. IT IS FURTHER NOTED THAT THE PROPOSED CONTRACT, BASED ON NEGOTIATIONS WITH YOUR COMPANY, WAS FORWARDED TO YOU FOR APPROVAL AND ACCEPTANCE. THIS CONTRACT WAS SIGNED AND RETURNED TO THE CONTRACTING OFFICER WITH NO EXCEPTIONS TAKEN.'

THE INVITATION ISSUED IN THE PRESENT CASE WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT PART NO. 55-60007-1 WAS TO BE FURNISHED AS A COMPONENT PART OF ITEM 1. IT IS CLEAR THAT IF YOUR BID WAS BASED ON ELIMINATING THAT PART, THE ERROR WAS DUE SOLELY TO YOUR NEGLIGENCE OR OVERSIGHT. THUS, CONTRARY TO YOUR CONTENTION, SUCH ERROR AS WAS MADE IN YOUR BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE YOU TO RELIEF. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259.

FURTHERMORE, IT HAS BEEN HELD THAT IN CONSTRUING A CONTRACT THE COURT WILL GIVE MEANING TO EVERY WORD THE PARTIES USED. MEIGHAN V. FINN, 146 F.2D. 594, AFFIRMED 325 U.S. 300. ALSO, SEE SHELL OIL CO., INC. V. MANLEY OIL CORPORATION ET AL., 024 F.2D. 714, REVERSING 37 F.SUPP. 289, CERTIORARI DENIED, 316 U.S. 690, 86 L.ED. 1761, WHEREIN IT WAS HELD THAT THE COURTS ARE NOT AUTHORIZED TO MAKE CONTRACTS FOR THE PARTIES BUT MUST CONSTRUE THEM AS WRITTEN, AND THAT WHERE PLAIN AND COMMON WORDS ARE USED IN THEIR ORDINARY MEANING, THEY MUST BE ACCEPTED IN THAT SENSE. YOU CONCEDE THAT THE CONTRACT AS WRITTEN SPECIFIES THAT YOU WERE TO FURNISH THE COMPONENT PART INVOLVED, AND HAVING SO CONTRACTED THERE IS NO LEGAL BASIS FOR THE GOVERNMENT TO PAY FOR THE PARTS WHICH WERE NOT FURNISHED. THUS, IT APPEARS THAT THE ACTION TAKEN IN CHANGE ORDER NO. 8, WHICH REDUCED THE CONTRACT PRICE FOR $47,663.20 TO $36,407.20, THEREBY RESULTING IN AN OVERPAYMENT TO YOU OF $4,266.18, WAS PROPER.

ACCORDINGLY, UNLESS PROMPT ARRANGEMENTS ARE MADE WITH OUR OFFICE FOR THE SATISFACTION OF THE FULL AMOUNT OF YOUR INDEBTEDNESS, THE MATTER NECESSARILY WILL BE REFERRED TO THE ATTORNEY GENERAL FOR FURTHER COLLECTION ACTION IN ACCORDANCE WITH THE USUAL PROCEDURE.