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ARE IN IRRECONCILABLE CONFLICT WITH THE ADMINISTRATIVE REPORT STATING THAT THE REVIEW AUTHORITY HAD NOT BEEN DELEGATED TO THE SALES OFFICER AND THAT APPROVAL AS REQUIRED BY THE REGULATION WAS NEVER GIVEN TO THE SALE. THAT CERTAIN SALES OF SURPLUS PROPERTY BE REVIEWED AND APPROVED CONTEMPLATES THAT THE REVIEWING AUTHORITY WILL BE SOMEONE OTHER THAN THE CONTRACTING OFFICER WHOSE ACTION IS BEING APPROVED. ALTHOUGH A CONTRACTING OFFICER MIGHT HAVE AUTHORITY TO REVIEW AND APPROVE AWARDS ON SPOT BID SALES. THERE IS NO BINDING CONTRACT FOR THE SALE OF THE PROPERTY. AN AGREEMENT WHICH WAS MADE BETWEEN THE DEPUTY COMMANDER AT AN ARMY PROPERTY DISPOSAL INSTALLATION AND THE CONTRACTING OFFICER THAT THE HIGH BIDDER AT A SPOT BID SALE SHOULD RECEIVE THE PROPERTY.

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B-147367, AUGUST 31, 1962, 42 COMP. GEN. 124

CONTRACTS - OFFER AND ACCEPTANCE - PRELIMINARY, ETC., APPROVAL. CONTRACTING OFFICERS - REVIEW OF ACTIONS. CONTRACTS - OFFER AND ACCEPTANCE - PRELIMINARY, ETC., APPROVAL. CONTRACTING OFFICERS - AUTHORITY - APPARENT - ESTOPPEL. SALES - TITLE PASSAGE - DELIVERY OF ONE OF MANY ITEMS. REGULATIONS - INCONSISTENCIES. GENERAL ACCOUNTING OFFICE - JURISDICTION - CLAIMS - LEGAL WHERE THE ALLEGATIONS BY A HIGH BIDDER THAT THE SALES OFFICER AT A SPOT BID SALE OF SURPLUS PROPERTY HAVING AN ACQUISITION COST IN EXCESS OF TWO MILLION DOLLARS HAD BEEN DELEGATED THE REVIEW AND APPROVAL AUTHORITY REQUIRED BY GENERAL SERVICES ADMINISTRATION REGULATIONS FOR SALES OF SURPLUS PROPERTY HAVING AN ACQUISITION COST OF OVER $10,000 (44 CFR 55.50)., AND THAT A VALID AND BINDING CONTRACT CAME INTO EXISTENCE WHEN AT THE SPOT BID SALE THE HIGH BID EXCEEDED THE UPSET PRICE, ARE IN IRRECONCILABLE CONFLICT WITH THE ADMINISTRATIVE REPORT STATING THAT THE REVIEW AUTHORITY HAD NOT BEEN DELEGATED TO THE SALES OFFICER AND THAT APPROVAL AS REQUIRED BY THE REGULATION WAS NEVER GIVEN TO THE SALE, THE ADMINISTRATIVE REPORT, IN THE ABSENCE OF EVIDENCE TO OVERCOME THE PRESUMPTION OF CORRECTNESS, MUST BE ACCEPTED AS ACCURATELY REFLECTING THE DISPUTED FACTS. A REQUIREMENT IN A REGULATION, 44 CFR 55.50, THAT CERTAIN SALES OF SURPLUS PROPERTY BE REVIEWED AND APPROVED CONTEMPLATES THAT THE REVIEWING AUTHORITY WILL BE SOMEONE OTHER THAN THE CONTRACTING OFFICER WHOSE ACTION IS BEING APPROVED, AND, THEREFORE, ALTHOUGH A CONTRACTING OFFICER MIGHT HAVE AUTHORITY TO REVIEW AND APPROVE AWARDS ON SPOT BID SALES, TO HOLD THAT HE HAS AUTHORITY TO APPROVE A SPOT BID SALE FOR WHICH HE ESTABLISHED THE UPSET PRICE PRIOR TO SALE WOULD RENDER THE REGULATION MEANINGLESS; ACCORDINGLY, IN THE ABSENCE OF APPROVAL OF THE SALE BY AN INDEPENDENT REVIEWING AUTHORITY, THERE IS NO BINDING CONTRACT FOR THE SALE OF THE PROPERTY. AN AGREEMENT WHICH WAS MADE BETWEEN THE DEPUTY COMMANDER AT AN ARMY PROPERTY DISPOSAL INSTALLATION AND THE CONTRACTING OFFICER THAT THE HIGH BIDDER AT A SPOT BID SALE SHOULD RECEIVE THE PROPERTY, WHICH AGREEMENT WAS NOT COMMUNICATED TO THE BIDDER, WAS MERELY TENTATIVE AND THE FACT THAT THERE WAS NO COMMUNICATION WITH THE SUCCESSFUL BIDDER IS FATAL TO ANY CONCLUSION THAT THE REVIEW AND APPROVAL OF THE SALE REQUIRED BY THE ADMINISTRATIVE REGULATIONS 44 CFR 55.50 WERE ACHIEVED SO AS TO ESTABLISH A BINDING CONTRACT BETWEEN THE UNITED STATES AND THE BIDDER FOR THE SALE OF THE PROPERTY. THE ABSENCE FROM A REGULATION REQUIRING REVIEW AND APPROVAL OF EACH PROPOSED AWARD UNDER A COMPETITIVE BID SALE OF SURPLUS GOVERNMENT PROPERTY WHEN THE ACQUISITION COST IS $10,000 OR MORE OF A DESIGNATION OF THE SPECIFIC OFFICE OR POSITION WHICH WOULD REVIEW AND APPROVE THE AWARD DOES NOT BRING A SPOT BID SALE OF SURPLUS PROPERTY HAVING AN ACQUISITION COST OF MORE THAN $10,000 IN WHICH THE REQUIRED REVIEW AND APPROVAL WERE NOT GIVEN TO THE SUCCESSFUL BIDDER AFTER THE CONTRACTING OFFICER HAD INDICATED AWARD WOULD BE MADE TO HIM WITHIN THE RULE THAT AGENT'S APPARENT AUTHORITY IS BINDING ON THE GOVERNMENT SO THAT THE GOVERNMENT IS ESTOPPED FROM DENYING THE EXISTENCE OF A CONTRACT OF SALE IN VIEW OF THE WELL- ESTABLISHED PRINCIPLE THAT WHEN A CONTRACT TO BE EXECUTED BETWEEN TWO PARTIES IS SUBJECT TO APPROVAL BY ANOTHER AND THAT APPROVAL IS NOT GIVEN, NO BINDING CONTRACT EXISTS ON WHICH THE UNITED STATES MAY BE REQUIRED TO RESPOND IN DAMAGES AS FOR A BREACH. NOTWITHSTANDING THE CONTENTION OF A HIGH BIDDER AT A SPOT BID SALE FOR AN ITEM OF SURPLUS PROPERTY CONSISTING OF 74,297 UNITS THAT THE ISSUANCE OF AN INVOICE AND DELIVERY OF ONE SAMPLE UNIT REQUESTED BY THE BIDDER EVIDENCES TRANSFER OF TITLE TO ALL 74,297 UNITS TO THE BIDDER UNDER 40 U.S.C. 484 (D), WHICH PROVIDES FOR ACCEPTANCE OF A BILL OF SALE, OR OTHER INSTRUMENT EXECUTED BY AN EXECUTIVE AGENCY AS EVIDENCE OF TRANSFER OF TITLE OR INTEREST TO SURPLUS GOVERNMENT PROPERTY, A MORE REASONABLE INTERPRETATION OF THE STATUTE IS THAT THE BILL OF SALE, OR OTHER INSTRUMENT IS CONCLUSIVE EVIDENCE OF COMPLIANCE WITH THE LAW ONLY WITH REGARD TO THOSE ITEMS SPECIFICALLY MENTIONED IN THE INSTRUMENT, AND, THEREFORE, IN THE ABSENCE OF APPROVAL BY A REVIEWING AUTHORITY OF THE SALE OF THE ENTIRE LOT AS REQUIRED BY THE ADMINISTRATIVE REGULATION, 44 CFR 55.50, THE BIDDER IS NOT ENTITLED TO DELIVERY OF THE REMAINING UNITS. AN ADMINISTRATIVE REGULATION WHICH PROVIDES FOR IMMEDIATE AWARD AT SPOT BID SALES OF SURPLUS GOVERNMENT PROPERTY, 44 CFR 55.45, AND A REGULATION WHICH REQUIRES APPROVAL BY A REVIEWING AUTHORITY OF SALES OF SURPLUS PROPERTY HAVING AN ACQUISITION COST OF $10,000 OR MORE ARE NOT AMBIGUOUS OR IN CONFLICT AS TO SALES OF PROPERTY COSTING LESS THAN $10,000 BECAUSE REVIEW AND APPROVAL ARE NOT REQUIRED, NOR ARE THEY IN CONFLICT AS TO PROPERTY COSTING $10,000 OR MORE SINCE THE IMMEDIATE AWARD AND REVIEW AND APPROVAL PROVISIONS CAN BE MET EITHER BY A REVIEWING AUTHORITY OTHER THAN THE CONTRACTING OFFICER ESTABLISHING UPSET PRICES PRIOR TO THE SALE, OR BY ASSIGNING AN INDIVIDUAL OTHER THAN THE CONTRACTING OFFICER WITH AUTHORITY TO REVIEW AND APPROVE AWARDS AT THE SALE. A HIGH BIDDER AT A SPOT BID SALE OF SURPLUS PROPERTY WHO SOLD THE PROPERTY TO A THIRD PARTY BEFORE HE LEARNED THAT THE REQUIRED APPROVAL OF THE SALE BY A REVIEWING AUTHORITY HAD BEEN DENIED MAY NOT HAVE THE SALE CONSIDERED VALID ON THE BASIS OF EQUITABLE CONSIDERATIONS SINCE UNDER THE LAW, THE COMPTROLLER GENERAL NOT ONLY HAS A RIGHT BUT A DUTY TO REJECT CLAIMS TO WHICH THERE ARE SUBSTANTIAL DEFENSES IN LAW.

TO STRASSER, SPIEGELBERG, KAMPELMAN AND MCLAUGHLIN, AUGUST 31, 1962:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 20, 1962, AND SUBSEQUENT CORRESPONDENCE, REQUESTING ON BEHALF OF YOUR CLIENT, UNIVERSAL AUTO PARTS EXPORTERS (UNIVERSAL), RECONSIDERATION OF OUR DECISION B-147367, JANUARY 31, 1962, IN WHICH WE AGREED WITH THE DETERMINATION OF THE COMMANDING OFFICER OF THE COLUMBUS GENERAL DEPOT DENYING THE EXISTENCE OF A CONTRACT FOR THE SALE OF ITEM NO. 303 UNDER INVITATION FOR BIDS NO. 33-167-S-61- 89.

THE FACTS AND CIRCUMSTANCES IN THIS CASE ARE SET FORTH RATHER FULLY IN OUR DECISION OF JANUARY 31, 1962, AND NEED NOT BE REPEATED HERE. HOWEVER, ANY NEW FACTUAL MATERIAL SUBMITTED IN SUPPORT OF YOUR REQUEST FOR RECONSIDERATION SHALL BE NOTED HEREAFTER.

IN SUBSTANCE, WE HELD IN OUR PRIOR DECISION THAT UNDER THE PROVISIONS OF A GENERAL SERVICES ADMINISTRATION (GSA) REGULATION PUBLISHED AT 15 FED.REG. 6494, 44 CFR 55.50, APPROVAL BY A REVIEWING AUTHORITY OF EACH HOLDING AGENCY IS REQUIRED FOR EACH PROPOSED AWARD UNDER A COMPETITIVE BID SALE WHEN THE ACQUISITION COST (ACTUAL OR ESTIMATED) OF THE PROPERTY IS $10,000 OR MORE, AND THAT, SINCE THE REQUIRED APPROVAL OF THE REVIEWING AUTHORITY WAS NOT RECEIVED, THE CONTRACTING OFFICER WAS NOT LEGALLY AUTHORIZED TO MAKE AN AWARD OF ITEM NO. 303. WE FURTHER HELD THAT THE DECISION BY THE QUARTERMASTER GENERAL TO RECOMMEND THAT THE INSTALLATION COMMANDER REJECT UNIVERSAL'S BID WAS NOT, ON THE BASIS OF THE FACTS BEFORE US, ARBITRARY OR AN ABUSE OF ADMINISTRATIVE DISCRETION.

YOUR LETTER OF FEBRUARY 20 STATES THAT ALTHOUGH YOU DISAGREE WITH OUR HOLDINGS IN THE ORIGINAL DECISION, YOU WILL ACCEPT FOR THE PURPOSE OF RECONSIDERATION THE FOLLOWING AS PREMISES: (A) THAT THE ADMINISTRATIVE DETERMINATION BY THE DEPARTMENT OF THE ARMY THAT UNIVERSAL'S BID WAS TOO LOW WAS NOT ARBITRARY OR CAPRICIOUS, AND (B) THAT GSA REGULATIONS (SPECIFICALLY 44 CFR 55.50) PERTAINING TO SPOT BID SALES WERE APPLICABLE IN THE INSTANT CASE. YOU SUBMIT, HOWEVER, THAT NEITHER HOLDING PRECLUDES A DETERMINATION THAT A VALID AND BINDING CONTRACT WAS ENTERED INTO BY THE COLUMBUS GENERAL DEPOT WITH UNIVERSAL ON JULY 5, 1961.

IN YOUR REQUEST FOR RECONSIDERATION, YOUR LETTER OF FEBRUARY 20 SETS FORTH FIVE GROUNDS, IN THE ALTERNATIVE, THE ACCEPTANCE OF ANY ONE OF WHICH, YOU CONTEND, MUST RESULT IN A REVERSAL OF OUR PRIOR DECISION. THESE GROUNDS MAY BE STATED AT THE OUTSET AS FOLLOWS:

1. THE PROVISIONS OF 44 CFR 55.50 REQUIRING REVIEW AND APPROVAL WERE COMPLIED WITH.

2. THE GOVERNMENT IS ESTOPPED FROM DENYING COMPLIANCE WITH 44 CFR 55.50.

3. THE REQUIREMENTS OF 44 CFR 55.50 ARE SUPERSEDED BY THE PROVISIONS OF 40 U.S.C. 484 (D).

4. AN AMBIGUITY IN GSA REGULATIONS NULLIFIES ANY POSSIBLE EFFECT OF LACK OF REVIEW AND APPROVAL; AND

5. THE EQUITIES OF UNIVERSAL'S CASE DEMAND THAT THE AWARD TO IT BE ACKNOWLEDGED AS A BINDING AND VALID CONTRACT.

WITH RESPECT TO THE FIRST GROUND STATED ABOVE, YOU NOTE THAT GSA REGULATION 44 CFR 55.13 DEFINES "REVIEWING AUTHORITY" AS "LOCAL, REGIONAL OR DEPARTMENTAL BOARD OF REVIEW OF A HOLDING AGENCY. IT MAY CONSIST OF ONE OR MORE PERSONS.' YOU STATE THAT THE REGULATION ALLOWS FOR CONSIDERABLE FLEXIBILITY IN ESTABLISHING A REVIEW AND APPROVAL AUTHORITY AND THAT IT IS SILENT ON HOW A REVIEW IS TO BE CONDUCTED, WHO IS TO REVIEW A PROPOSED AWARD, OR WHEN REVIEW IS TO TAKE PLACE. IT IS CONTENDED THAT THE REVIEWING AUTHORITY MAY BE DELEGATED BY THE HOLDING AGENCY; IT MAY BE EXERCISED IMMEDIATELY UPON EXAMINATION OF THE BIDS; IT MAY BE EXERCISED INFORMALLY; AND ITS EXERCISE NEED NOT BE COMMUNICATED TO SUCCESSFUL BIDDERS.

IN SUPPORT OF YOUR POSITION THAT REVIEW AND APPROVAL IN THE INSTANT CASE HAD BEEN ACCOMPLISHED, THE PRESENTATION ON THIS POINT APPEARING IN YOUR LETTER OF MARCH 16 MAY BE SUMMARIZED AS FOLLOWS: MR. BEELMAN HAD REVIEW AND APPROVAL AUTHORITY OF DISPOSAL AWARDS AT COLUMBUS GENERAL DEPOT ON JULY 5, 1961, WHICH HE RECEIVED IN ONE OF TWO WAYS: (1) A SPECIFIC (EITHER WRITTEN OR ORAL) DELEGATION OF SUCH AUTHORITY BY THE PREDECESSOR OF GENERAL SHALLER, COMMANDER OF THE COLUMBUS GENERAL DEPOT ON JULY 5, 1961, WHICH WAS NOT REVOKED OR TERMINATED BY GENERAL SHALLER PRIOR TO JULY 5, 1961; AND/OR (2) A SPECIFIC (EITHER WRITTEN OR ORAL) DELEGATION TO MR. BEELMAN (AS THE CONSOLIDATED SURPLUS SALES OFFICER) OF THE REVIEW AND APPROVAL AUTHORITY BY GENERAL SHALLER AFTER HE BECAME THE INSTALLATION COMMANDER. MR. BEELMAN ACTUALLY EXERCISED THIS AUTHORITY IN "KNOCKING DOWN" THE AWARD TO YOUR CLIENT ON ITEM NO. 303 AFTER HE MENTALLY NOTED THAT UNIVERSAL'S BID ON THAT ITEM EXCEEDED THE PRICE SET BEFORE BID OPENING AS A MINIMUM ACCEPTABLE PRICE.

IT IS YOUR CONTENTION THAT THE ARMY CANNOT NOW BE HEARD TO SAY THAT (1) COLUMBUS GENERAL DEPOT HAD NO KNOWLEDGE OF, OR COMPLETELY IGNORED, ALL ARMY AND GSA REQUIREMENTS FOR REVIEW AND APPROVAL ON SALES IMMEDIATELY PRIOR TO THE JULY 5, 1961, SPOT BID SALE, OR (2) THAT THE COLUMBUS GENERAL DEPOT, WITH KNOWLEDGE OF THE ARMY AND GSA REQUIREMENTS FOR REVIEW AND APPROVAL, DID NOT DELEGATE THE AUTHORITY BELOW THE OFFICE OF THE INSTALLATION COMMANDER, AND THAT SUCH INSTALLATION COMMANDER DID IN FACT EXERCISE SUCH REVIEW AND APPROVAL ON SURPLUS PROPERTY SALES IMMEDIATELY PRIOR TO JULY 5, 1961. WITH REGARD TO THE FIRST POINT, YOU NOTE THAT THE ARMY, AS WELL AS ALL BIDDERS, WAS PUT ON NOTICE OF THE EXISTENCE OF THE GSA REVIEW AND APPROVAL REQUIREMENT WHEN IT WAS PUBLISHED IN THE FEDERAL REGISTER. ASSUMING THEN THAT THE COLUMBUS GENERAL DEPOT HAD KNOWLEDGE OF THE GSA REVIEW AND APPROVAL REQUIREMENTS, ANY FAILURE TO SO EXERCISE SUCH REVIEW AND APPROVAL WOULD HAVE BEEN TO FLAUNT AND IGNORE AN IMPORTANT REGULATION. SINCE IT IS EQUALLY INCONCEIVABLE THAT GENERAL SHALLER WOULD HAVE FLAUNTED AND IGNORED SUCH REGULATION, IT MUST BE ASSUMED THAT COLUMBUS GENERAL DEPOT WAS REVIEWING AND APPROVING ALL AWARDS OVER $100,000 IMMEDIATELY PRIOR TO JULY 5, 1961. THE QUESTION, THE, AS YOU STATE IT, IS WHETHER GENERAL SHALLER EXERCISED SUCH REVIEW AND APPROVAL AUTHORITY. YOU CONTEND THAT THE ANSWER TO THIS QUESTION IS IN THE NEGATIVE AND THE REASON FOR THIS IS THAT THE REVIEW AND APPROVAL FUNCTION HAD BEEN DELEGATED TO MR. BEELMAN, THE CONSOLIDATED SURPLUS SALES OFFICER, AND HE HAD EXERCISED IT ON THIS AWARD IN THE SAME MANNER AS MOST ARMY AND AIR FORCE DISPOSAL CONTRACTING OFFICERS-- THAT IS, MAKING AWARD ON THE SPOT IF THE HIGH BID EXCEEDED THE MINIMUM PRICE SET BEFORE BID OPENING.

IN SUPPORT OF THESE CONTENTIONS, YOU NOTE THAT THE AIR FORCE HAS FOLLOWED THIS VERY PROCEDURE IN SPOT BID SALES CONDUCTED AT AIR FORCE ADMINISTERED CONSOLIDATED SURPLUS SALES OFFICES AND THAT THE AIR FORCE CONSIDERS THE REQUIRED GSA REVIEW AND APPROVAL REGULATION AUTOMATICALLY COMPLIED WITH WHEN A BID EXCEEDS THE UPSET PRICE. THE UPSET PRICE IS DETERMINED BEFORE THE OPENING OF BIDS, AND THE CONTRACTING OFFICER THUS MAKES AN IMMEDIATE DETERMINATION THAT THE HIGH BID EXCEEDS SUCH UPSET PRICE. IT IS FURTHER STATED THE ARMY ITSELF CONDUCTS ITS SPOT BID SALES IN THIS MANNER AND YOU CITE AS EXAMPLES TWO RECENT SALES--- ONE ON FEBRUARY 13, 1962, AT SHARPE GENERAL DEPOT (SALE NO. 6251), AND ONE ON FEBRUARY 14, 1962, AT THE PUEBLO ORDNANCE DEPOT (SALE NO. 6239). YOUR LETTER OF MARCH 7, 1962, CITES SEVEN ADDITIONAL EXAMPLES OF SUCH SALES OCCURRING IN 1961.

IT IS FURTHER ALLEGED, IN THE ALTERNATIVE, THAT EVEN IF MR. BELLMAN HAD NOT BEEN DELEGATED THE NECESSARY REVIEW AND APPROVAL AUTHORITY, AN ACTUAL REVIEW AND APPROVAL OF THE AWARD WAS MADE BY THE DEPUTY INSTALLATION COMMANDER. YOU STATE THE GOVERNMENT HAS ACKNOWLEDGED THAT ON JULY 12, 1961, THE DEPUTY COMMANDER AGREED THAT AN AWARD SHOULD BE MADE TO UNIVERSAL ON THE INSTANT SALE. ALL THAT REMAINED TO BE DONE WAS THE MECHANICAL TASK OF PREPARING THE FORMAL PAPERS AND YOU SAY THAT THESE "MECHANICS" DO NOT SERVE TO DENY THE FACT OF APPROVAL. IT IS THIS FACT WHICH IS REQUIRED BY 44 CFR 55.50 AND NOTHING MORE. THERE NEED BE NO COMMUNICATION TO A SUCCESSFUL BIDDER OF THE FACTS OR RESULTS OF REVIEW. ACCORDINGLY, YOU CONCLUDE, THE REQUIREMENTS OF 44 CFR 55.50 WERE FULLY SATISFIED.

WITH RESPECT TO THE SECOND GROUND URGED FOR REVERSAL (ESTOPPEL), YOU SAY THAT IT WAS ENTIRELY REASONABLE FOR UNIVERSAL TO HAVE ASSUMED THAT ANY REQUIRED REVIEW AND APPROVAL HAD EITHER BEEN GIVEN BY MR. BEELMAN OR HAD BEEN GRANTED BY SOMEONE ELSE AND THE KNOWLEDGE COMMUNICATED TO MR. BEELMAN. SINCE THE GSA REGULATIONS DID NOT DESIGNATE THE SPECIFIC OFFICE OR POSITION WHICH WOULD REVIEW AND APPROVE THE AWARD, IT IS CLEAR THAT UNIVERSAL WAS IN NO POSITION TO KNOW WHO WOULD MAKE THE REVIEW, MUCH LESS WHEN SUCH REVIEW WOULD TAKE PLACE. THEREFORE, YOU CONTEND, UNIVERSAL COULD AND DID JUSTIFIABLY RELY ON MR. BEELMAN'S ASSURANCE THAT THE AWARD WAS FINAL AND SO RELYING, IT CONTRACTED WITH ANOTHER PARTY TO SELL THE GOODS IN QUESTION. YOU CONCLUDE THAT THIS CASE FALLS WITHIN THE "UNCOMMON" AREA WHERE AN AGENT'S APPEARANCE OR REPRESENTATION OF AUTHORITY (I.E., APPARENT AUTHORITY) IS BINDING ON THE GOVERNMENT. IN SUPPORT OF THIS POSITION YOU CITE GEORGE H. WHIKE CONSTRUCTION CO. V. UNITED STATES, 135 CT.CL. 129; EAGER V. UNITED STATES, 33 CT.CL. 336; AND THOMPSON V. UNITED STATES, 9 CT.CL. 187.

IN SUPPORT OF YOUR THIRD GROUND FOR REVERSAL, YOU POINT OUR THAT SUBSEQUENT TO THE BID OPENING, AND THE STATEMENT OF AWARD TO UNIVERSAL, UNIVERSAL REQUESTED THAT ONE UNIT OF THE GOODS IT HAD PURCHASED BE ISSUED TO IT. THE CONTRACTING OFFICER ACCEDED TO THIS REQUEST, AND A UNIT AND AN INVOICE THEREFOR WERE ISSUED TO UNIVERSAL. SECTION 484 (D), TITLE 40, U.S.C. PROVIDES THAT:

A DEED, BILL OF SALE, LEASE, OR OTHER INSTRUMENT EXECUTED BY OR ON BEHALF OF ANY EXECUTIVE AGENCY PURPORTING TO TRANSFER TITLE OR ANY OTHER INTEREST IN SURPLUS PROPERTY UNDER THIS SUBCHAPTER SHALL BE CONCLUSIVE EVIDENCE OF COMPLIANCE WITH THE PROVISIONS OF THIS SUBCHAPTER INSOFAR AS CONCERNS TITLE OR OTHER INTEREST OF ANY BONA FIDE GRANTEE OR TRANSFEREE FOR VALUE AND WITHOUT NOTICE OF LACK OF SUCH COMPLIANCE.

YOU CONTEND THAT THE ISSUANCE OF ONE UNIT TO UNIVERSAL WAS, IN FACT, A PARTIAL SHIPMENT UNDER THE AWARD AND CITE THE CASE OF ESCOTE MANUFACTURING COMPANY V. UNITED STATES, 144 CT.CL. 452, 169 F.SUPP. 483, IN SUPPORT THEREOF. ALSO CITED AS PERTINENT TO THE INTERPRETATION OF 40 U.S.C. 484 (D) ARE THE CASES OF UNITED STATES V. JONES, 146 F.2D 278, AND TURNEY V. UNITED STATES, 126 CT.CL. 202, 115 F.SUPP. 457. YOU CONCLUDE THAT A READING OF 40 U.S.C. 484 (D) REQUIRES THAT THE GOVERNMENT ACKNOWLEDGE A BINDING AWARD WITH UNIVERSAL AND SINCE THIS STATUTE IS DETERMINATIVE OF THE CASE, ANY FAILURE TO COMPLY WITH AN ADMINISTRATIVE REGULATION DOES NOT INVALIDATE A BINDING CONTRACT.

WITH REGARD TO THE FOURTH GROUND FOR REVERSAL YOU NOTE THAT 44 CFR 55.45 STATES, AMONG OTHER THINGS, THAT "AWARDS (AT SPOT BID SALES) SHALL BE MADE OR BIDS REJECTED IMMEDIATELY FOLLOWING THE OFFERING OF THE ITEM OR LOT.' YOU CONTEND THAT THIS SECTION NOT ONLY MARKS THE DISTINCTION BETWEEN AWARDS AND PROPOSED AWARDS, IT ALSO DIRECTS A CONTRACTING OFFICER IMMEDIATELY TO RESPOND CONCLUSIVELY TO A BID. IT WAS THUS PROPER FOR UNIVERSAL TO HAVE RELIED UPON 44 CFR 55.45, AND HAVE ANTICIPATED AN IMMEDIATE AWARD. YOU ARGUE THAT IF THIS RELIANCE WERE NOT FULLY JUSTIFIED, THEN IT MAY BE SAID THAT THE APPLICABLE REGULATIONS, READ TOGETHER, ARE AMBIGUOUS AND CONFUSION AND ALTHOUGH A CONTRACTOR MAY BE CHARGED WITH KNOWLEDGE OF REGULATIONS PERTINENT TO HIS DEALINGS WITH THE GOVERNMENT, HE MAY NOT BE MADE TO SUFFER THE CONSEQUENCE OF GROSS AMBIGUITIES IN SUCH REGULATIONS.

AND FINALLY WITH REGARD TO THE FIFTH GROUND FOR REVERSAL (THE EQUITIES OF UNIVERSAL'S CASE), YOU POINT OUT UNIVERSAL WAS ASSURED SEVERAL TIMES THE SALE WAS FINAL AND THE PROPERTY BELONGED TO IT AND THAT UNIVERSAL, CONFIDENT IT OWNED THE PROPERTY, CONTRACTED WITH A THIRD PARTY AND SOLD THE GOODS. THEREAFTER, UNIVERSAL'S COMPETITORS UNJUSTIFIABLY PRESSURED A REVERSAL OF THE AWARD AND DUE TO THEIR EFFORTS, THE DEPOT SENT THE CASE TO WASHINGTON FOR REVIEW; THAT UPON APPEAL, AND PURSUANT TO OUR PRIOR DECISION, THE PARTIES LEARNED THAT THE ARMY REJECTED THE AWARD TO UNIVERSAL PURSUANT TO A VOID REGULATION; AND THAT THE THIRD PARTY WITH WHOM UNIVERSAL DEALT IS NOW PREPARING A LAWSUIT AGAINST IT FOR BREACH OF CONTRACT.

YOU SUBMIT THAT THESE FACTS SHOW UNIVERSAL HAS BEEN CAUGHT IN A WEB OF UNFAIR COMPETITIVE PRESSURE, CONFLICTING AND/OR INVALID REGULATIONS, MISLEADING INVITATIONS FOR BIDS, AND EXPRESS BUT INCORRECT AVOWALS OF THE EXISTENCE OF A CONTRACT BY AN EXPERIENCED GOVERNMENT OFFICER. AND FINALLY YOU CITE 40 COMP. GEN. 160 FOR THE PROPOSITION THAT THIS OFFICE HAS THE POWER TO GRANT EQUITY IN APPROPRIATE CASES.

UPON RECEIPT OF YOUR LETTERS DATED FEBRUARY 20 AND MARCH 7, 1962, REQUESTING RECONSIDERATION OF OUR DECISION OF JANUARY 31, 1962, WE REQUESTED BY LETTER OF MARCH 20, 1962, A SUPPLEMENTAL ADMINISTRATIVE REPORT IN THE MATTER, COMMENTING ON EACH OF THE ALLEGATIONS AND CONTENTIONS MADE BY YOU, WITH PARTICULAR EMPHASIS TO BE PLACED ON YOUR ALLEGATIONS THAT MR. WILLIAM BEELMAN HAD THE NECESSARY REVIEW AUTHORITY AND THAT SO-CALLED UPSET PRICES HAVE BEEN ESTABLISHED ON SEVERAL OCCASIONS BY THE CONSOLIDATED SURPLUS SALES OFFICE OF THE COLUMBUS GENERAL DEPOT TO PERMIT ,INSTANTANEOUS REVIEW AND APPROVAL BEFORE ANNOUNCING THE AWARD" AT A SPOT BID SALE. BY LETTER DATED MAY 15, 1962, THE DEFENSE SUPPLY AGENCY SUBMITTED A REPORT ON THE MATTER WITH TWO ENCLOSURES, A SUPPLEMENTAL REPORT OF THE CONTRACTING OFFICER, MR. BEELMAN, AND A REPORT OF THE DEFENSE LOGISTICS SERVICE CENTER (DLSC). IN HIS REPORT THE CONTRACTING OFFICER STATES THAT INASMUCH AS THE SALE OF THE PROPERTY INVOLVED WAS BY AN ARMY ACTIVITY, WHICH ACTIVITY WAS GOVERNED BY ARMY REGULATION, HE RELIED NOT ON THE GSA REGULATIONS BUT UPON PERTINENT ARMY REGULATIONS WHICH WE HELD INVALID IN OUR DECISION OF JANUARY 31, 1962. HIS REPORT GOES ON TO RELATE THE FOLLOWING CIRCUMSTANCES.

7. PRIOR TO 5 JULY 1961, THE UNDERSIGNED ASSUMED THAT IF THE PRICES BID EQUALLED OR EXCEEDED THE AMOUNT DETERMINED PRIOR TO THE SALE AS THE MINIMUM ACCEPTABLE AMOUNT, THE ONLY FACTORS WHICH WOULD BE CONSIDERED IN APPROVING THE AWARD WOULD BE THE FORMAL REQUIREMENTS SUCH AS RESPONSIVENESS OF BID, ELIGIBILITY OF BIDDER, AND SIMILAR MATTERS, AND THAT DISAPPROVAL ON THE BASIS OF ADEQUACY OF PRICE WOULD BE MOST UNUSUAL.

8. PRIOR TO 5 JULY 1961, THE UNDERSIGNED BELIEVED THAT THE REQUIREMENT FOR FORMAL APPROVAL OF AWARDS DID NOT APPLY TO SPOT BID SALES, SINCE, UNDER THE EXISTING REGULATIONS, HE BELIEVED THAT THE ANNOUNCEMENT OF THE HIGH BID AND NAME OF THE HIGH BIDDER CONSTITUTED AN AWARD AND RESULTED IN A VALID, BINDING CONTRACT. THIS APPEARED TO CONFLICT WITH THE REQUIREMENT FOR WRITTEN REVIEW AND APPROVAL. THE UNDERSIGNED BELIEVED THAT, IN THE CASE OF A SPOT BID SALE, ANY "REVIEW AND PPROVAL" MUST BE ACCOMPLISHED BEFORE THE ANNOUNCEMENT OF THE HIGH BID. ANY SUGGESTION, IN PARAGRAPHS 5, 7, AND 13 OF THE ORIGINAL REPORT, THAT REVIEW OF SPOT BID SALES BY THE DEPOT COMMANDER OR HIS DEPUTY, WAS STANDARD PROCEDURE, IS UNINTENTIONALLY MISLEADING. UNTIL AFTER 5 JULY 1961 THE UNDERSIGNED HAD NO WRITTEN INSTRUCTIONS REGARDING APPROVAL OR REVIEW OF AWARDS FOR THE SALE OF SURPLUS PROPERTY BUT FOLLOWED THE PRACTICE OF REQUESTING REVIEW AND APPROVAL BY THE DEPOT COMMANDER ONLY ON SEALED BID SALES WHERE THE CONTRACT INVOLVED PROPERTY VALUED AT MORE THAN $100,000.00 ON USABLE MATERIAL OR OVER $500,000.00 FOR SCRAP.

9. HENCE IN PREPARING FOR SPOT BID SALES THE UNDERSIGNED AS CHIEF OF THE CONSOLIDATE SURPLUS SALES OFFICE, ESTABLISHED A MINIMUM ACCEPTABLE PRICE FOR EACH ITEM, AND HIS ASSISTANTS CONDUCTING THE SALES WERE INSTRUCTED TO ANNOUNCE LESSER BIDS AS SUCCESSFUL ONLY IF THE AMOUNT BY WHICH SUCH BIDS DID NOT MEET THE ESTABLISHED PRICE WERE VERY MINIMAL, OR AFTER CONSULTATION WITH THE UNDERSIGNED OR THE CONTRACTING OFFICER FOR REVISION OF THE MINIMUM ACCEPTANCE PRICE.

10.IN THE CASE AT HAND, THE UNDERSIGNED PRIOR TO 5 JULY 1961 ESTABLISHED THE MINIMUM ACCEPTABLE PRICE FOR THE ITEM IN DISPUTE AT $6.50 PER TON, OR 17.3 CENTS EACH (SEE PARA 3 ORIGINAL REPORT) AND SINCE UNIVERSAL'S BID EXCEEDED THAT PRICE BY APPROXIMATELY ONE-HALF CENT EACH, HE HAD NO HESITANCY IN CONSIDERING IT AN ACCEPTABLE AMOUNT. HOWEVER, AS REPORTED IN PARAS 5, 6, AND 7 OF THE ORIGINAL REPORT, THE SEVERAL COMMUNICATIONS RECEIVED WITHIN A FEW HOURS AFTER THE SALE CREATED A DOUBT IN HIS MIND AS TO THE ACCURACY OF HIS PREVIOUS ESTIMATES. HE THEREFORE DELAYED ISSUING A CONFIRMATION OF THE AWARD PENDING RECEIPT OF AN ANALYSIS OF THE MATERIAL. DURING THIS TIME, UPON DISCUSSION OF THE MATTER WITH THE DEPOT COMMANDER AND THE DEPOT LEGAL OFFICE, HE LEARNED THAT HIS PREVIOUS UNDERSTANDING OF THE APPLICABILITY OF PARA 31, AR 755-8 TO SPOT BID SALES WAS IN ERROR, AND THAT THE SALE REQUIRED APPROVAL OF THE DEPOT COMMANDER, OR HIS FORMALLY DESIGNATED REPRESENTATIVE. HE WAS ADVISED THAT REGARDLESS OF HIS FORMER OPINION AS TO HIS AUTHORITY TO AWARD A CONTRACT FOR PROPERTY WITH ACQUISITION COST OF MORE THAN $100,000.00, HE SHOULD IN ALL SUCH CASES IN WHICH FINAL ACTION HAD NOT BEEN TAKEN, OBTAIN THE DEPOT COMMANDER'S APPROVAL BEFORE MAKING AN AWARD. HE WAS ADVISED THAT EVEN THOUGH HE ACTED IN GOODFAITH THE ORAL AWARD ALLEGEDLY MADE BY HIM WAS NOT VALID, UNLESS AND UNTIL APPROVED BY THE DEPOT COMMANDER OR HIS DELEGATED REPRESENTATIVE.

11. UPON RECEIPT OF THE CHEMICAL ANALYSIS REQUESTED BY HIM AND MENTIONED IN PARA 7 OF THE ORIGINAL REPORT, THE UNDERSIGNED CONCLUDED THAT HIS JUDGMENT AS TO ACCEPTABLE PRICE HAD BEEN CORRECT, AND HE THEN DISCUSSED THE MATTER INFORMALLY WITH THE DEPUTY DEPOT COMMANDER WHO DIRECTED THAT A REQUEST FOR APPROVAL BE SUBMITTED IN WRITING, AS REQUIRED BY PARA 31E OF AR 755-8.

12. WHILE SUCH REQUEST WAS BEING PREPARED THE TELEPHONIC OFFER OF COUSINS IRON AND METAL COMPANY OF TOLEDO, OHIO, TO PURCHASE THE ITEM AT .30 CENTS PER UNIT WAS RECEIVED BY THE DEPUTY DEPOT COMMANDER. BECAUSE OF THIS INQUIRY THE DEPUTY DEPOT COMMANDER WITHHELD APPROVAL OF THE AWARD, SOLELY ON THE BASIS OF ADEQUACY OF PRICE, UNLESS AND UNTIL CONCURRENCE AS TO THE REASONABLENESS OF PRICE WAS RECEIVED FROM THE QUARTERMASTER GENERAL, DEPARTMENT OF THE ARMY (SEE PARA 9 OF THE ORIGINAL REPORT). THE MATTER HAVING THUS BEEN TAKEN OUT OF THE HANDS OF THE CONTRACTING OFFICER FOR DECISION BY HIGHER AUTHORITY, HE ADVISED UNIVERSAL THAT THERE WOULD BE A DELAY PENDING A DECISION.

13. THE CONTRACTING OFFICER AGREES THAT, AS STATED BY UNIVERSAL, IMMEDIATELY AFTER THE ANNOUNCEMENT OF UNIVERSAL AS THE HIGH BIDDER, UNIVERSAL REQUESTED THAT ONE UNIT OF THE PROPERTY IN QUESTION BE DELIVERED TO HIM PRESUMABLY FOR ANALYSIS BY A PROSPECTIVE BUYER. THIS SINGLE UNIT WAS DELIVERED TO UNIVERSAL BY USE OF A REQUISITION AND INVOICE (SHIPPING DOCUMENT, DD FORM 1149, DATED 7-5-61, A COPY OF WHICH WAS ATTACHED TO UNIVERSAL'S ORIGINAL PROTEST.

THE REPORT OF DLSC STATES THAT SUBSEQUENT TO THE RECEIPT OF OUR DECISION OF JANUARY 31, 1962, INSTRUCTIONS WERE ISSUED TO ALL DEFENSE SURPLUS SALES OFFICES REQUIRING THAT ALL PROPOSED AWARDS ON ITEMS HAVING AN ACQUISITION COST OF $10,000 OR MORE BE APPROVED BY THE CHIEF OF THE DEFENSE SURPLUS SALES OFFICE (DSSO) UNLESS THE CHIEF OF THE DSSO SHOULD ALSO BE ACTING AS CONTRACTING OFFICER. IN THE LATER CASE, PROPOSED AWARDS ARE TO BE REVIEWED BY HIGHER AUTHORITY.

WITH RESPECT TO YOUR CONTENTIONS THAT IT HAS BEEN STANDARD ARMY PRACTICE AT ARMY-ADMINISTERED CONSOLIDATED SURPLUS SALES OFFICES TO MAKE IMMEDIATE AWARD AT SPOT BID SALES WHEN THE HIGH BID EXCEEDED THE UPSET PRICE AND THAT THIS WAS INTENDED TO CONSTITUTE ANY REQUIRED REVIEW AND APPROVAL, THE DLSC REPORT STATES THAT IN THE CASE OF MOST ARMY-OPERATED CONSOLIDATED SURPLUS SALES OFFICES, AWARDS AT SPOT BID SALES OF ITEMS HAVING AN ACQUISITION COST OF $100,000 OR MORE HAVE BEEN REVIEWED AND APPROVED IN ACCORDANCE WITH PARAGRAPH 31 OF ARMY REGULATIONS 755-8 EITHER BY SEPARATELY REVIEWING EACH PROPOSED AWARD OR BY THE APPROVAL, IN ADVANCE, OF THE UPSET PRICES BY THE INSTALLATION COMMANDER OR HIS AUTHORIZED DESIGNEE. THE REPORT FURTHER STATES THAT WHILE IT IS TRUE THAT IN SOME CASES THE NECESSARY REVIEW AND APPROVAL WAS PERFORMED BY THE CHIEF OF THE CONSOLIDATED SURPLUS SALES OFFICE (CSSO), IT IS NOT BELIEVED THAT THERE CAN BE OBJECTION TO THIS PROCEDURE AS LONG AS THE CHIEF OF THE CSSO HAD BEEN DELEGATED THE AUTHORITY TO REVIEW AND APPROVE AND THE CHIEF DOES NOT ACT PERSONALLY AS CONTRACTING OFFICER AT THE SALE. THE REPORT CONCLUDES AS FOLLOWS:

5. IN HIS LETTER OF 20 FEBRUARY 1962, MR. KAMPELMAN REFERS TO SALES AT PUEBLO ORDNANCE DEPOT (SALE NO. 62-39) AND SHARPE GENERAL DEPOT (SALE NO. 62-51) IN SUPPORT OF HIS ALLEGATION THAT THE ARMY HAS MADE IMMEDIATE AWARDS AT SPOT BID SALES WITH THE ACTING CONTRACTING OFFICER EXERCISING REVIEW AUTHORITY WHERE THE ACQUISITION COST EXCEEDED $100,000. IN THE CASE OF SHARPE GENERAL DEPOT SALE NO. 62-51, NO INDIVIDUAL LINE ITEM INVOLVED AN ACQUISITION COST OF $100,000 OR MORE AND, UNDER THE ARMY REGULATIONS IN EFFECT WHEN THE SALE WAS CONDUCTED, REVIEW AND APPROVAL WAS REQUIRED ONLY WHEN ACQUISITION COST AMOUNTED TO $100,000 OR MORE. PUEBLO SALE NO. 62-39 WAS AN AUCTION SALE, NOT A SPOT BID SALE AND, IN THE CASE OF THE ITEMS INVOLVING ACQUISITION COST OF $100,000 OR MORE, AN INDIVIDUAL OTHER THAN THE CONTRACTING OFFICER WAS ASSIGNED BY THE INSTALLATION COMMANDING OFFICER TO REVIEW AND APPROVE AWARDS ON THE SPOT.

6. PRIOR TO RECEIPT OF THE COMPTROLLER GENERAL'S DECISION OF 31 JANUARY 1962 AND THE ISSUANCE OF THE INSTRUCTIONS REFERRED TO ABOVE, THERE WAS ADMITTEDLY A CERTAIN AMOUNT OF MISAPPREHENSION RESPECTING THE REQUIREMENTS FOR REVIEW AND APPROVAL AT SPOT BID SALES. IT IS POSSIBLE THAT OTHER SALES OFFICERS MAY HAVE OPERATED UNDER THE SAME UNDERSTANDING AS THE SALES OFFICER AT COLUMBUS GENERAL DEPOT. IN ANY EVENT, AT THE TIME OF THE SALE IN QUESTION, THE REVIEWING AUTHORITY HAD NOT BEEN DELEGATED TO MR. BEELMAN AND APPROVAL, AS REQUIRED BY 15 F.R. 6494, 44 CFR 55.50, HAS NEVER BEEN GIVEN TO AN AWARD TO UNIVERSAL AUTO PARTS EXPORTERS.

7. THE PROTESTANT IN THIS CASE APPEARS TO BE CONTENDING THAT MR. BEELMAN WAS, CONSISTENTLY WITH 15 FR. 6494, 44 CFR 55.50, ACTING SIMULTANEOUSLY AS CONTRACTING OFFICER AND AS REVIEWING AUTHORITY. IT IS SUBMITTED THAT THE REQUIREMENT FOR REVIEW AND APPROVAL NECESSARILY CONTEMPLATES THAT THE REVIEWING AUTHORITY WILL BE SOMEONE OTHER THAN THE CONTRACTING OFFICER WHOSE ACTION IS BEING REVIEWED AND THE CONSTRUCTION SOUGHT BY THE PROTESTANT WOULD MAKE THE PROVISIONS OF 15 F.R. 6494, CFR 55.50 ESSENTIALLY MEANINGLESS AND ILLUSORY. IT FURTHER SEEMS IMPLICIT IN THE PROTESTANT'S POSITION THAT THE COMMANDING GENERAL, COLUMBUS GENERAL DEPOT HAD, OVER AN EXTENDED PERIOD OF TIME, ACQUIESCED IN MR. BEELMAN'S PRACTICE OF ACTING AT THE SAME TIME AS CONTRACTING OFFICER AND AS REVIEWING AUTHORITY. ALTHOUGH THERE APPEARS TO BE NO QUESTION BUT THAT THE COMMANDING GENERAL, COLUMBUS GENERAL DEPOT HAD THE AUTHORITY TO REVIEW AND APPROVE PROPOSED AWARDS WITHIN THE LIMITATIONS OF 15 F.R. 6494, 44 CFR 55.50, IT IS CLEAR THAT THE COMMANDING GENERAL DID NOT HAVE AUTHORITY TO DISPENSE WITH THE REQUIREMENT FOR REVIEW AND APPROVAL. WHERE, BY LAW OR REGULATION, APPROVAL OF A GOVERNMENT CONTRACT BY HIGHER AUTHORITY IS REQUIRED, ANY PURPORTED CONTRACT ENTERED INTO WITHOUT THE REQUISITE APPROVAL IN THE MANNER PRESCRIBED BY THE LAW OR REGULATION IS A NULLITY, AND THE COURTS HAVE REFUSED TO APPLY THE DOCTRINE OF ESTOPPEL AGAINST THE GOVERNMENT IN SUCH CASES. SEE REESE V. GOVERNMENT OF THE VIRGIN ISLANDS, 277 F.2D 329 (1960); FARM SECURITY ADMINISTRATION V. HERREN, 165 F.2D 554 (1948).

WE ALSO HAVE THE STATEMENT IN THE LETTER DATED MAY 15, 1962, FROM THE DEFENSE SUPPLY AGENCY THAT:

ALTHOUGH UPSET PRICES WERE ESTABLISHED IN THIS CASE IN ADVANCE OF THE SALE, THEY WERE ESTABLISHED BY THE CONTRACTING OFFICER, AND WERE NOT APPROVED BY THE COMMANDING OFFICER, OR ANY REVIEWING AUTHORITY DESIGNATED BY HIM, AND DID NOT CONSTITUTE PRE-APPROVAL BY A REVIEWING AUTHORITY.

OBVIOUSLY ON THE BASIS OF THE FACTS AS REPORTED BY THE ADMINISTRATIVE OFFICERS ABOVE, THERE IS AN IRRECONCILABLE CONFLICT BETWEEN YOUR CONTENTIONS AND ALLEGATIONS AS TO THE EXTENT OF MR. BEELMAN'S REVIEW AND APPROVAL AUTHORITY PRIOR TO JULY 5, 1961, AND THE ADMINISTRATIVELY REPORTED FACTS ON THAT ISSUE. THE DLSC REPORT STATES UNEQUIVOCALLY THAT AT THE TIME OF THE SALE IN QUESTION, THE REVIEWING AUTHORITY HAD NOT BEEN DELEGATED TO MR. BEELMAN AND APPROVAL AS REQUIRED BY THE TERMS OF 44 CFR 55.50 HAS NEVER BEEN GIVEN TO AN AWARD TO UNIVERSAL. WE HAVE CONSISTENTLY HELD THAT WHERE THERE ARE DISPUTED QUESTIONS OF FACT,IN THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS OF THE ADMINISTRATIVE REPORT, THIS OFFICE WILL ACCEPT THE ADMINISTRATIVE REPORT AS ACCURATELY REFLECTING THE DISPUTED FACTS. COMP. GEN. 568; 41 ID. 47; ID. 266. SEE, ALSO, ON THIS POINT LONGWILL V. UNITED STATES. 17 CT.CL. 288, AND CHARLES V. UNITED STATES, 19 CT.CL. 316. INASMUCH AS YOUR CONTENTIONS WITH RESPECT TO MR. BEELMAN'S AUTHORITY TO REVIEW AND APPROVE ARE UNSUPPORTED BY ANY EVIDENCE, WE FEEL THAT THE PRESUMPTION IN FAVOR OF THE ADMINISTRATIVE REPORT HAS NOT BEEN OVERCOME.

IN ANY EVENT, HOWEVER, EVEN IF IT IS ASSUMED, FOR THE SAKE OF ARGUMENT, THAT MR. BEELMAN POSSESSED THE REQUISITE AUTHORITY TO REVIEW AND APPROVE AWARDS ON SPOT BID SALES, WE ARE IN AGREEMENT WITH THE DEPARTMENT OF THE ARMY POSITION THAT THE REQUIREMENT FOR REVIEW AND APPROVAL NECESSARILY CONTEMPLATES THAT THE REVIEWING AUTHORITY WILL BE SOMEONE OTHER THAN THE CONTRACTING OFFICER WHOSE ACTION IS BEING REVIEWED AND THAT YOUR VIEW ON THIS MATTER WOULD MAKE THE PROVISIONS OF 44 CFR 55.50 ESSENTIALLY MEANINGLESS AND ILLUSORY. WE ARE NOT UNMINDFUL OF THE FACT, AS YOU POINT OUT, THAT THE SUBJECT INVITATION FOR BIDS LISTED MR. JOSIAH G. TURNER AS CONTRACTING OFFICER. ALTHOUGH THE EXACT NATURE OF MR. BEELMAN'S DUTIES AS CHIEF OF THE CONSOLIDATED SURPLUS SALES OFFICE HAS NOT BEEN DEFINED WITH PRECISION, IT IS AN UNDISPUTED FACT THAT, AT LEAST ON THE LAST FEW ITEMS OF THE SALE (INCLUDING ITEM 303), MR. BEELMAN ASSUMED THE DUTIES AND WAS, IN FACT, THE CONTRACTING OFFICER. AND, ALTHOUGH YOU ALLEGE OTHERWISE, THERE IS NOTHING IN THE RECORD BEFORE US WHICH WOULD JUSTIFY A CONCLUSION THAT MR. BEELMAN DID NOT IN FACT SET THE UPSET PRICE PRIOR TO THE SALE.

YOU ALSO CONTEND, IN THE ALTERNATIVE, THAT THE GOVERNMENT HAS ACKNOWLEDGED THAT ON JULY 12, 1961, THE DEPUTY COMMANDER AGREED AN AWARD SHOULD BE MADE TO UNIVERSAL; THAT ALL THAT REMAINED TO BE DONE WAS THE MECHANICAL TASK OF PREPARING THE FORMAL PAPERS; AND THAT THERE NEED BE NO COMMUNICATION TO A SUCCESSFUL BIDDER OF THE FACTS OR RESULTS OF REVIEW. AS OUR DECISION OF JANUARY 31 EXPRESSLY STATES, THE AGREEMENT OF THE CONTRACTING OFFICER AND THE DEPUTY COMMANDER ON JULY 12, 1961, THAT AN AWARD SHOULD BE MADE TO UNIVERSAL WAS MERELY ,TENTATIVE.' MOREOVER, IT IS UNDISPUTED THAT SUCH AGREEMENT WAS NOT COMMUNICATED TO UNIVERSAL. WE FEEL THAT THE FAILURE TO SO COMMUNICATE THIS AGREEMENT IS FATAL TO ANY CONCLUSION THAT THE REQUIRED REVIEW AND APPROVAL WAS ACHIEVED. SEE SELL V. GENERAL ELECTRIC SUPPLY CORPORATION, 278 N.W. 442 (WISCONSIN). THERE, THE DEFENDANT'S AGENT TOOK AN ORDER FROM THE PLAINTIFFS FOR THE PURCHASE OF FIVE REFRIGERATORS. THE PURCHASE WAS MADE SUBJECT TO APPROVAL BY THE DEFENDANT'S HOME OFFICE. IN FACT, THE AGENT HAD NO ACTUAL AUTHORITY TO TAKE SUCH ORDER. THE ORDER WAS TAKEN ON MARCH 18, 1937. PLAINTIFFS AT THAT TIME GAVEDEFENDANT'S AGENT A CHECK FOR A DOWNPAYMENT OF 10 PERCENT, TOGETHER WITH A NOTE EXECUTED IN BLANK FOR THE BALANCE. SUBSEQUENT TO MARCH 18 THERE WAS NO COMMUNICATION BETWEEN PLAINTIFFS AND DEFENDANT UNTIL APRIL 5TH ON WHICH DATE PLAINTIFFS SENT DEFENDANT A TELEGRAM REQUESTING AN ANSWER REGARDING THE REFRIGERATORS. TO THIS WIRE DEFENDANT WIRED PLAINTIFFS AS FOLLOWS: "EXTREMELY SORRY WE ARE UNABLE TO SHIP REFRIGERATORS AS REQUESTED STOP THEREFORE CHECK FOR TEN PERCENT OF INITIAL ORDER IS BEING RETURNED.' THE NEXT DAY DEFENDANT WROTE PLAINTIFFS A LETTER CONTAINING, AMONG OTHER THINGS, THE FOLLOWING STATEMENT:

SUPPLEMENTING OUR TELEGRAM OF APRIL 5TH IN REFERENCE TO YOUR ORDER FOR HOTPOINT REFRIGERATORS, WE ARE EXTREMELY SORRY THAT WE ARE UNABLE TO SHIP THIS MERCHANDISE TO YOU AS ORIGINALLY INTENDED.

IN HOLDING THAT NO CONTRACT HAD EVER BEEN CONSUMMATED, THE SUPREME COURT OF WISCONSIN SAID:

"GENERALLY SPEAKING AN OFFEREE HAS A RIGHT TO MAKE NO REPLY TO OFFERS, AND HIS SILENCE AND INACTION BE CONSTRUED AS AN ASSENT TO THE OFFER" * *

(10) IN THE INSTANT CASE, THERE WERE NO FORMER RELATIONS BETWEEN THE PARTIES. THE ONLY MANIFESTATIONS TO THE OFFEROR BY THE DEFENDANT ARE THE TELEGRAM AND CONFIRMING LETTER, ABOVE QUOTED, EACH REJECTING THE OFFER. THE FACT THAT THE LETTER INDICATES THAT THE OFFEREE HAD ORIGINALLY INTENDED TO ACCEPT IS OF NO CONSEQUENCE BECAUSE AN UNMANIFESTED INTENT TO ACCEPT IS OF NO LEGAL CONSEQUENCE BECAUSE AN UNMANIFESTED INTENT TO ACCEPT IS OF NO LEGAL CONSEQUENCE. * * *

SEE, ALSO, METZLER V. HARRY KAUFMAN COMPANY, 32 APP. D.C. 434, WHICH INVOLVES SIMILAR FACTS REGARDING UNMANIFESTED APPROVAL AND WHICH REACHES THE SAME RESULT AS THE SELL CASE.

WE MUST CONCLUDE ON THE BASIS OF THE ABOVE ANALYSIS THAT THE REVIEW AND APPROVAL PROVISIONS OF 44 CFR 55.50 WERE NOT FULFILLED IN THE INSTANT SALE.

IN OUR DECISION OF JANUARY 31, THE GENERAL RULE REGARDING THE SCOPE OF A GOVERNMENT AGENT'S AUTHORITY AND THE DUTY IMPOSED UPON THOSE DEALING WITH SUCH AGENT TO ACCURATELY ASCERTAIN THE AGENT'S AUTHORITY WAS STATED. WAS NOTED THAT UNTIL THE REQUIRED REVIEW AND APPROVAL HAD BEEN ACCOMPLISHED, THE CONTRACTING OFFICER'S ACTION IN ANNOUNCING AN AWARD TO UNIVERSAL WAS AS INEFFECTUAL TO FIX ANY LIABILITY UPON THE GOVERNMENT AS IF HE HAD BEEN ENTIRELY DISCONNECTED WITH THE GOVERNMENT SERVICE. YOU FEEL, HOWEVER, THAT THIS CASE FALLS WITHIN THE "UNCOMMON" AREA WHERE AN AGENT'S APPEARANCE OR REPRESENTATION OF AUTHORITY, I.E., APPARENT AUTHORITY, IS BINDING ON THE GOVERNMENT, CITING FOR THIS PROPOSITION GEORGE H. WHIKE CONSTRUCTION CO. V. UNITED STATES, 135 CT.CL. 126; ARTHUR KNIGHT, ADMINISTRATOR V. UNITED STATES, 35 CT.CL. 129; EAGER V. UNITED STATES, 33 CT.CL. 336; AND THOMPSON V. UNITED STATES, 9 CT.CL. 187. ALTHOUGH EACH OF THESE CASES HOLDS THAT THE DOCTRINE OF ESTOPPEL MAY BE APPLIED AGAINST THE GOVERNMENT UNDER CERTAIN CIRCUMSTANCES WE DO NOT THINK THEY ARE DETERMINATIVE OF THE ISSUE BEFORE US.

IN THE WHIKE CASE, THE PLAINTIFF SIGNED A CONTRACT AFTER HE HAD BEEN REASSURED BY THE LEGAL ADVISORS OF THE CONTRACTING OFFICER THAT PLAINTIFF WOULD BE PROTECTED AGAINST THE OPERATION OF AN EXECUTIVE ORDER EVEN THOUGH A PROVISO IN THE CONTRACT MADE THE CONTRACT SUBJECT TO THE TERMS OF THE EXECUTIVE ORDER. THE COURT STATED THAT THE ASSURANCES WERE GIVEN BY THE REPRESENTATIVES OF AN AGENCY THAT HAD POWER TO AMEND CONTRACTS UNILATERALLY WITHOUT REGARD TO CONSIDERATION UNDER THE FIRST WAR POWERS ACT, 55 STAT. 838, 839, 50 U.S.C. 601, AND THE ASSURANCES WERE NOT CONTRARY TO ANY PROVISIONS OF THE CONTRACT. FURTHERMORE, A CAREFUL READING OF THE FACTS IN THE CASE INDICATES THAT THE ASSURANCES WERE GIVEN TO THE CONTRACTOR UNDER SUCH CIRCUMSTANCES THAT THE COURT BELIEVED THE CONTRACTING OFFICER HAD OR SHOULD HAVE HAD KNOWLEDGE OF THEM, AND THEREFORE ACQUIESCED IN THEM.

THE KNIGHT CASE INVOLVED A SITUATION WHERE THE PLAINTIFF REFUSED TO RESIGN FROM A POSITION AT THE REQUEST OF HIS SUPERIOR, BUT CONTINUED TO PERFORM THE SERVICES FOR WHICH HE WAS EMPLOYED. THE SUPERIOR WHO HAD THE AUTHORITY TO EMPLOY AND TO CONTINUE THE EMPLOYMENT OF THE PLAINTIFF HAD COMPLETE KNOWLEDGE OF THE PLAINTIFF'S CONTINUED EMPLOYMENT. THE SUPERIOR TOOK NO ACTION TO TERMINATE THE EMPLOYMENT BUT ACQUIESCED IN ITS CONTINUANCE. THE COURT APPLIED THE ESTOPPEL DOCTRINE AGAINST THE GOVERNMENT AND HELD THAT THE PLAINTIFF WAS ENTITLED TO RECOVER FOR THE SERVICES RENDERED.

IN THE EAGER CASE THE PLAINTIFF FILED THREE AMENDMENTS TO A COMPLAINT, WHICH AMENDMENTS STATED NEW CAUSES OF ACTION AND WERE NOT TRIABLE WITH THE ORIGINAL CAUSE OF ACTION. SINCE THE AMENDMENTS WERE FILED WITHOUT THE CONSENT OF THE GOVERNMENT, THE GOVERNMENT FILED A MOTION TO DISMISS. THE FIRST AMENDMENT WAS FILED MARCH 24, 1894; THE SECOND, AUGUST 13, 1896; THE THIRD, OCTOBER 23, 897; AND THE GOVERNMENT'S MOTION TO DISMISS WAS NOT FILED UNTIL MARCH 8, 1898. HAD THE COURT GRANTED THE MOTION TO DISMISS, THE STATUTE OF LIMITATIONS WOULD HAVE CUT OFF PART OF THE DIFFERENT DEMANDS. THE COURT STATED THAT CONSENT (TO AMEND) MAY BE GIVEN BY ACQUIESCENCE WITHOUT BEING REDUCED TO A FORMAL AGREEMENT. IT THEREFORE ORDERED SEVERANCE OF THE VARIOUS CAUSES WITH THE AMENDED PETITIONS TO BE TREATED AS ORIGINAL PETITIONS.

IN THE THOMPSON CASE AN ASSISTANT QUARTERMASTER DURING AN EMERGENCY ARISING IN THE LATTER PART OF THE CIVIL WAR, ENTERED INTO AN INFORMAL CONTRACT WITHOUT THE ADVERTISING TO PURCHASE 1,000 MULES. THIS WAS DONE WITH THE APPROVAL OF HIS SUPERIOR, THE CHIEF QUARTERMASTER. IT ALSO APPEARED THAT GENERAL THOMAS, THE COMMANDING GENERAL OF THE FIELD ARMY, HAD THE REQUISITE AUTHORITY TO DECLARE AN EMERGENCY AND TO DISPENSE WITH CERTAIN FORMALITIES IN PROCURING SUPPLIES. THE COURT NOTED THAT THE OFFICIAL RELATIONS BETWEEN GENERAL THOMAS AND HIS CHIEF QUARTERMASTER WERE OF THE "MOST INTIMATE AND INFORMAL CHARACTER" AND THAT ALL THE MEASURES TAKEN BY THE CHIEF QUARTERMASTER IN PROCURING SUPPLIES AND MEANS OF TRANSPORTATION WERE GENERALLY KNOWN TO GENERAL THOMAS AND RECEIVED HIS IMPLIED APPROVAL AND ASSENT. THE CHIEF QUARTERMASTER WAS INFORMED BY GENERAL THOMAS OF A SERIES OF MILITARY EMERGENCIES RUNNING THROUGH THE MONTHS OF DECEMBER 1964 AND JANUARY THROUGH MARCH 1865, REQUIRING THE UTMOST SPEED BY THE QUARTERMASTER DEPARTMENT, BUT NO FORMAL ORDER WAS EVER ISSUED BY GENERAL THOMAS DECLARING AN EMERGENCY OR DIRECTING THE PURCHASE IN OPEN MARKET OF THE NECESSARY SUPPLIES OR MEANS OF TRANSPORTATION THEN REQUIRED BY THE ARMY UNDER HIS COMMAND. AFTER THE CONTRACT HAD BEEN PARTIALLY PERFORMED THE CONTRACTOR WAS NOTIFIED BY THE CHIEF QUARTERMASTER OF THE ARMY THAT THE BALANCE WAS TERMINATED. ON THESE FACTS THE COURT HELD THAT THE CONTRACT WAS VALID AND THE CONTACTOR WAS ALLOWED AN ADJUSTMENT.

WITH REFERENCE TO THESE FOUR CASES THE CONTRACTING OFFICER CONTENDS THEY DIFFER FROM THE INSTANT CASE IN THAT IN THE MATTER AT HAND THERE IS NO SHOWING THAT THE OFFICIAL WHO HAD ACTUAL AUTHORITY TO APPROVE THE CONTRACT OF SALE HAD ANY KNOWLEDGE OF THE PROPOSED CONTRACT AT THE TIME UNIVERSAL BELIEVES THE AWARD BECAME FINAL. ON THE CONTRARY, ONCE THE OFFICIAL WITH ACTUAL AUTHORITY TO APPROVE WAS APPRISED OF THE FACTS IN THE CASE, HE DID NOT ACQUIESCE, BUT REFUSED TO APPROVE THE CONTRACT AND CAUSED UNIVERSAL TO BE NOTIFIED OF THIS FACT.

IN REBUTTAL TO THIS ANALYSIS OF THE CASES YOU CONTEND THAT THE CRITERIA SET FORTH IN THE CITED CASES IS NOT THAT THE PERSON WITH AUTHORITY SPECIFICALLY KNEW OF THE CONTRACT AT THE MOMENT OF AWARD, BUT IT IS ENOUGH THAT HE KNEW AND ACQUIESCED IN THE SUBORDINATE EXERCISING HIS REVIEW AND APPROVAL FUNCTION ON ANY PAST, PRESENT AND FUTURE OCCASION WHEN SUCH REVIEW AND APPROVAL WAS REQUIRED. YOU CONCLUDE THAT THE LATTER IS THE SITUATION IN THE PRESENT CASE.

EVEN IF WE ASSUME, ARGUENDO, THAT YOUR CONTENTIONS WITH RESPECT TO THE COMMANDING OFFICER'S KNOWLEDGE AND ACQUIESCENCE ARE TRUE, WE DO NOT THINK THAT THE PRINCIPLE OF ESTOPPEL IS APPLICABLE IN THE INSTANT CASE FOR THE FOLLOWING REASONS. TO BEGIN WITH, OF THE FOUR CASES CITED BY YOU, WE ARE OF THE OPINION THAT ONLY THE WHIKE CASE POSSIBLY SUPPORTS YOUR POSITION. IN KNIGHT AND IN EAGER SPECIFIC KNOWLEDGE AND ACQUIESCENCE BY THE PERSON, OR PERSONS, WHO HAD ACTUAL AUTHORITY TO DO THE PARTICULAR ACT INVOLVED WERE CLEARLY PRESENT. IN THOMPSON THE CHIEF QUARTERMASTER WAS IN CONSTANT COMMUNICATION WITH THE COMMANDING GENERAL AND KEPT HIM INFORMED OF THE MEASURES TAKEN TO PROCURE SUPPLIES EVEN THOUGH NO FORMAL ORDER WAS EVER ISSUED BY THE COMMANDING GENERAL DECLARING AN EMERGENCY AND DIRECTING THE PURCHASE OF MULES. ALSO PRESENT IN THE THOMPSON CASE WAS THE FACT, WHICH HAD CONSIDERABLE INFLUENCE ON THE COURT, THAT SECRECY WITH RESPECT TO THE DECLARATION OF AN EMERGENCY WAS DESIRABLE. AS THE COURT PUT IT:

* * * NOTHING COULD BE MORE FATAL TO THE MILITARY INTERESTS OF THE GOVERNMENT THAN THAT CONTRACTORS, OR THE PUBLIC, OR EVEN THE SUBORDINATE OFFICERS OF THE QUARTERMASTER DEPARTMENT SHOULD BE INFORMED "OF THE PARTICULAR FACTS AND CIRCUMSTANCES" WHICH CONSTITUTE THE EMERGENCY, OR OF "THE MOVEMENTS AND OPERATIONS OF AN ARMY" WHICH RENDER THE SUPPLIES NECESSARY, OR OF THE PROBABLE "CONTINUANCE OF SUCH EMERGENCY," OR, INDEED, OF THE FACT THAT AN EMERGENCY EXISTS. SUCH A COMMUNICATION MIGHT WELL BE MADE BY A MILITARY COMMANDER TO HIS CONFIDENTIAL ASSISTANT, THE CHIEF QUARTERMASTER, AND MIGHT ULTIMATELY BE USED AS A VOUCHER IN THE SETTLEMENT OF THE CHIEF QUARTERMASTER'S ACCOUNTS; BUT THAT IT SHOULD BE POSTED ABOUT THE ARMY AND SHOWN TO EVERY MAN WHO CONTEMPLATES FURNISHING THE NEEDED SUPPLIES, MOST CERTAINLY COULD NEVER HAVE ENTERED INTO THE INTENT OF THE FRAMERS OF THE STATUTE. * * *

AS TO THE WHIKE CASE, IT SHOULD BE EMPHASIZED THAT THE ASSURANCES GIVEN TO THE CONTRACTOR WERE NOT CONTRARY TO LAW OR TO ANY PROVISION IN THE CONTRACT. IN FACT THE CONTRACTING OFFICER IN THAT CASE HAD GIVEN THE VERY SAME ASSURANCES, IN THE FORM OF A LETTER, TO ANOTHER CONTRACTOR ON THE PREVIOUS DAY. WITH RESPECT TO THE PRESENT CASE BEFORE US, WE CAN FIND NO AUTHORITY FOR THE PROPOSITION THAT A FORMAL LEGAL REQUIREMENT IMPOSED BY LAW OR REGULATION CAN BE ABROGATED BY THE PERSON IN WHOM IS PLACED THE DUTY OF SEEING TO IT THAT THE REQUIREMENT IS SATISFIED. THE FACT THAT MR. BEELMAN HAD ERRONEOUSLY EXERCISED REVIEW AND APPROVAL FUNCTIONS WITHOUT EXPRESS AUTHORITY TO DO SO PRIOR TO JULY 5, 1961, DOES NOT ALTER THE MATTER. AND, AS NOTED EARLIER, EVEN IF IT IS ASSUMED, AS YOU CONTEND, THAT MR. BEELMAN HAD ACTUAL AUTHORITY TO REVIEW AND APPROVE, THE EXERCISE OF SUCH POWER WHILE ACTING IN THE DUAL CAPACITY OF REVIEWING AUTHORITY AND CONTRACTING OFFICER WOULD NOT, IN OUR OPINION, SATISFY THE REQUIREMENTS OF 44 CFR 55.50 SINCE THAT REGULATION NECESSARILY CONTEMPLATES THAT THE REVIEWING AUTHORITY WILL BE SOMEONE OTHER THAN THE CONTRACTING OFFICER WHOSE ACTION IS BEING REVIEWED.

FURTHERMORE, IT MUST BE NOTED THAT THE WHIKE CASE IS CONTRARY TO THE GREAT WEIGHT OF AUTHORITY IN THIS AREA. A CASE WHICH FAIRLY REPRESENTS, WE THINK THE WEIGHT OF AUTHORITY IN THIS FIELD IS SHIP CONSTRUCTION CO., INC. V. UNITED STATES, 91 CT.CL. 419, CERTIORARI DENIED 312 U.S. 699. THERE, THE PLAINTIFF SUED FOR BREACH OF AN ALLEGED CONTRACT UNDER WHICH IT CLAIMED TO HAVE PURCHASED A NUMBER OF WOODEN SHIPS. A MEMBER OF THE UNITED STATES SHIPPING BOARD (WHICH HAD AUTHORITY TO AWARD THE CONTRACT) SENT THE PLAINTIFF A DOCUMENT INFORMING THE PLAINTIFF THAT HIS BID HAD BEEN ACCEPTED BY THE BOARD. THE WHOLE BOARD, HOWEVER, HAD NOT APPROVED THE AWARD. IN HOLDING THAT NO CONTRACT WAS CONSUMMATED THE COURT STATED, IN PERTINENT PART:

* * * THE FACT THAT, AS IN THE CASE AT BAR, A REPRESENTATIVE OF THE GOVERNMENT OR THE GOVERNMENTAL AGENCY MISTAKENLY AND WITHOUT AUTHORITY INCORRECTLY ADVISES THE OTHER PARTY, OR THE BIDDER, THAT ITS PROPOSITION OR BID HAS BEEN ACCEPTED BY THE GOVERNMENT, OR SUCH GOVERNMENTAL CONTRACTING AGENCY, DOES NOT BIND THE GOVERNMENT, AND SUCH ACTION GIVES THE OTHER PARTY NO RIGHTS IN THE PREMISES TO ANY GREATER DEGREE THAN EXIST UPON THE BASIS OF THE ACTION WHICH WAS ACTUALLY TAKEN BY THE AGENCY OR BOARD POSSESSING THE AUTHORITY TO FIX THE TERMS AND CONDITIONS UPON WHICH THE GOVERNMENT SHALL BE BOUND. CASES TO THIS EFFECT ARE UNIFORM AND THE PROPOSITION MENTIONED IS SO WELL ESTABLISHED AS NOT TO REQUIRE CITATION OF AUTHORITY. IT IS ALSO AN ESTABLISHED PROPOSITION THAT ESTOPPEL CANNOT BE SET UP AGAINST THE GOVERNMENT ON THE BASIS OF AN UNAUTHORIZED REPRESENTATION OR ACT OF AN OFFICER OR EMPLOYEE WHO IS WITHOUT AUTHORITY IN HIS INDIVIDUAL CAPACITY TO BIND THE GOVERNMENT. * * * * * * *

* * * WHERE ONE AUTHORIZED TO DO SO RECEIVES AND ACCEPTS A BID AND AWARDS A CONTRACT BUT WHOSE ACTION WITH REFERENCE TO THE CONTRACT TO BE EXECUTED BETWEEN THE PARTIES IS SUBJECT TO APPROVAL BY ANOTHER AND THAT APPROVAL IS NOT SUBSEQUENTLY GIVEN, NO BINDING CONTRACT EXISTS ON WHICH THE UNITED STATES MAY BE REQUIRED TO RESPOND IN DAMAGES AS FOR A BREACH. MONROE V. UNITED STATES, 184 U.S. 524; CATHELL ET AL. V. UNITED STATES, 46 C.CLS. 368; HORTON V. UNITED STATES, 57 C.CLS. 395; JACOB REED'S SONS INC. V. UNITED STATES, 60 C.CLS. 97; BURNEY AXE, TRADING AS B. AXE AND CO. V. UNITED STATES, 60 C.CLS. 493; AMERICAN ELECTRIC CO. V. UNITED STATES, 60 C.CLS. 993.

IN ADDITION TO THE AUTHORITIES CITED BY THE COURT ABOVE AND TO THOSE CITED IN OUR DECISION OF JANUARY 31, SEE GRAMMER V. VIRGIN ISLANDS CORPORATION, 235 F.2D 27, AND REESE V. GOVERNMENT OF THE VIRGIN ISLANDS, 277 F.2D 329. ISSUANCE OF ONE UNIT OF THE TANK TRACK SHOE ASSEMBLIES, AND AN INVOICE THEREFOR, TO UNIVERSAL SATISFIES THE PROVISIONS OF 40 U.S.C. 484 (D) QUOTED IN FULL, SUPRA, SO AS TO RESULT IN VESTING CONCLUSIVE TITLE TO ALL UNITS IN UNIVERSAL. THE RECORD SHOWS THAT A TOTAL OF 74,297 TANK TRACKS ARE INVOLVED IN THE ALLEGED SALE. IN A SWORN AFFIDAVIT DATED SEPTEMBER 11, 1961, BY MR. ISAAC MORADI, OWNER OF UNIVERSAL, THE FOLLOWING CIRCUMSTANCES RELATING TO THE ISSUANCE OF ONE UNIT OF TANK TRACKS ARE RECOUNTED:

* * * WHEN MR. BEELMAN REACHED THE BIDS SUBMITTED FOR ITEM 303, HE ANNOUNCED: "1626 TO REX STRONG FOR $0.50 EACH; THE BALANCE AWARDED TO UNIVERSAL AUTO PARTS FOR $0.0773 EACH.'

IMMEDIATELY AFTER THIS ANNOUNCEMENT WAS MADE, I WAS APPROACHED BY MR. LOU MOED, OF MOTT HAVEN TRUCK PARTS, WHO EXPRESSED AN INTEREST IN PURCHASING FROM UNIVERSAL AUTO PARTS MATERIAL JUST AWARDED UNIVERSAL AT THE SPOT BID SALE. IN THE COMPANY OF MR. LOU MOED, AND MR. JACK GAISER, OF COLUMBUS, OHIO, I SOUGHT VERIFICATION OF THE AWARD TO UNIVERSAL, AND ASKED MR. BEELMAN WHETHER THE SALE WAS FINAL. MR. BEELMAN REPLIED: "YES. YOU BOUGHT IT AND YOU OWN IT; GET YOUR MONEY UP AND GET THE STUFF OUT OF HERE.' A SHORT WHILE LATER, MR BEELMAN AGAIN INFORMED ME THAT THE SALE WAS FINAL.

I THEN REQUESTED OF MR. BEELMAN THAT UNIVERSAL BE ISSUED A SAMPLE OF THE GOODS PURCHASED. MR. BEELMAN AUTHORIZED THE ISSUANCE, AND DIRECTED AN ASSISTANT IMMEDIATELY TO GIVE DEPONENT A SAMPLE AND ISSUE AN INVOICE FOR IT. THIS THE ASSISTANT DID.

ON THE BASIS OF THE ANNOUNCEMENT, THE AWARD, MR. BEELMAN'S ASSURANCES AND THE ISSUANCE OF A SAMPLE, I CONCLUDED A SALE OF THE MATERIAL WITH MOTT HAVEN TRUCK PARTS, INC.

YOU FURTHER CONTEND THAT 40 U.S.C. 484 (D) DOES NOT REQUIRE THAT A DOCUMENT OF NECESSITY PURPORT TO TRANSFER TITLE TO ALL ITEMS WITHIN A GIVEN LOT. WE CANNOT AGREE WITH THIS CONTENTION. ALTHOUGH THE LITERAL LANGUAGE OF THE STATUTE DOES NOT PRECLUDE THE VIEW URGED BY YOU, WE THINK THAT THE MORE REASONABLE INTERPRETATION OF THE STATUTE IS THAT THE DEED, BILL OF SALE, LEASE OR OTHER INSTRUMENT IS CONCLUSIVE EVIDENCE OF COMPLIANCE WITH THE PROVISIONS OF LAW ONLY WITH REGARD TO THOSE ITEMS SPECIFICALLY RECITED OR MENTIONED IN SUCH INSTRUMENT. THUS, IT CANNOT BE QUESTIONED THAT THE INVOICE COVERING THE ONE UNIT ISSUED TO UNIVERSAL EFFECTIVELY TRANSFERRED TITLE TO THAT UNIT, BUT SINCE THE INVOICE DID NOT PURPORT TO TRANSFER TITLE TO THE REMAINING 74,296 UNITS IT CANNOT BE CONCLUDED THAT TITLE TO THOSE UNITS ALSO PASSED OVER. TO HOLD OTHERWISE WOULD REQUIRE STRETCHING THE LANGUAGE ACTUALLY EMPLOYED BEYOND WHAT THAT LANGUAGE REASONABLY CONNOTES. IF THE CONGRESS HAD INTENDED THE STATUTE TO HAVE THE UNUSUAL OR NOVEL MEANING WHICH YOU URGE, THE CONGRESS WOULD HAVE SPECIFICALLY PROVIDED FOR SUCH RESULT.

WE HAVE EXAMINED THE AUTHORITIES CITED IN YOUR LETTER OF FEBRUARY 20, 1962, AND FIND THEM NOT IN POINT ON THIS ISSUE. IN UNITED STATES V. JONES, 176 F.2D 278, AND IN TURNEY V. UNITED STATES, 115 F.SUPP. 457, THE INSTRUMENTS OF TITLE DID NOT PURPORT TO TRANSFER A PORTION OUT OF A GROUP OF ITEMS OF SURPLUS PROPERTY. ON THE CONTRARY THE TITLE INSTRUMENTS PURPORTED TO TRANSFER ALL THE ITEMS IN THE GROUP AND THE CONTROVERSY IN BOTH CASES RESULTED WHEN THE GOVERNMENT ATTEMPTED TO WITHDRAW A PORTION OF THE ITEMS AFTER FORMAL AWARD HAD BEEN MADE.

IN JONES THE REASON FOR THE ATTEMPTED WITHDRAWAL WAS THAT THE VALUE OF THE PORTION WITHDRAWN WAS GREATER THAN REALIZED AND IN TURNEY THE WITHDRAWAL WAS ATTEMPTED BECAUSE THE LOT SOLD INCLUDED CERTAIN RADAR EQUIPMENT THE PRESENCE OF WHICH IN THE LOT WAS NOT KNOWN UNTIL AFTER THE SALE, WHICH RADAR EQUIPMENT THE GOVERNMENT DID NOT WISH TO SELL, FOR SECURITY REASONS. AS TO ESCOTE MANUFACTURING COMPANY V. UNITED STATES, 169 F.SUPP. 483, THE PURCHASER AT A SURPLUS SALE ATTEMPTED TO SHOW THAT THE CONTRACT OF PURCHASE WAS NOT BINDING. THE COURT HELD THAT A VALID CONTRACT EXISTED BECAUSE A PROPER AWARD OF CONTRACT HAD BEEN MADE EVEN THOUGH THE WRITTEN SIGNATURE OF THE CONTRACTING OFFICER DID NOT APPEAR ON THE GOVERNMENT'S FORMS SENT TO THE PURCHASER. THE OPINION OF THE COURT NOTED THAT A DELIVERY OF A SMALL NUMBER OF UNITS WAS MADE TO THE PURCHASER AND COMMENTED UPON THIS FACT AS BEING ADDITIONAL EVIDENCE OF THE PURCHASER'S RECOGNITION OF THE AWARD. HOWEVER, NOWHERE IN THE OPINION ARE THE PROVISIONS OF 40 U.S.C. 484 (D) MENTIONED AND IT IS CLEAR THAT THE COURT'S HOLDING DOES NOT REST UPON THOSE PROVISIONS.

TURNING NOW TO THE FOURTH GROUND URGED FOR REVERSAL, YOU CONTEND THAT THERE IS AMBIGUITY IN THE APPLICABLE GSA REGULATIONS WHICH NULLIFIES ANY POSSIBLE EFFECT OF THE LACK OF REVIEW AND APPROVAL. SPECIFICALLY YOU POINT TO POSSIBLE CONFLICT BETWEEN THE "IMMEDIATE AWARD" PROVISIONS OF 44 CFR 55.45 AND THE REVIEW AND APPROVAL REQUIREMENTS OF 44 CFR 55.50.

THE PROVISIONS OF 44 CFR 55.45 READ, IN PERTINENT PART, AS FOLLOWS:

IN SPOT BID SALES, BIDDERS SHALL BE FURNISHED WITH BID FORMS IN ADVANCE OF THE BIDDING, A BID FORM TO BE USED FOR EACH LOT OR UNIT TO BE SEPARATELY SOLD. REQUESTS FOR BIDS ON ITEMS OFFERED FOR SALE SHALL BE MADE BY THE OFFICIAL IN CHARGE. IN REQUESTING BIDS, THE OFFICIAL IN CHARGE SHALL ANNOUNCE THE ITEM, ITS IDENTIFICATION NUMBER, AND A BRIEF DESCRIPTION OF THE ITEM OR LOT. THE RIGHT TO REJECT ALL SUCH BIDS SHALL BE RESERVED IN THE TERMS OF THE SALE; AND LOTS FOR WHICH ALL BIDS HAVE BEEN REJECTED MAY BE RE-OFFERED AT THE SAME SALE IN ORDER TO SECURE AN ACCEPTABLE BID PRICE. AWARDS SHALL BE MADE OR BIDS REJECTED IMMEDIATELY FOLLOWING THE OFFERING OF THE ITEM OR LOT. THE BIDS AT SPOT BID SALES SHALL NOT BE DISCLOSED EXCEPT AT THE ANNOUNCEMENT OF AWARD FOR ANY ITEM OR LOT. WHERE MAILED WRITTEN BIDS AT SPOT BID SALES ARE PERMITTED, THEY SHALL BE SEALED AND NOT DISCLOSED EXCEPT AT THE ANNOUNCEMENT OF AWARD.

SINCE THE REVIEW AND APPROVAL PROVISIONS OF 44 CFR 55.50 ARE APPLICABLE ONLY TO THOSE SALES INVOLVING PROPERTY THE ACQUISITION COST OF WHICH IS $10,000 OR MORE IT IS CLEAR THAT THE REGULATIONS ARE NOT IN CONFLICT ON SALES INVOLVING PROPERTY COSTING LESS THAN $10,000. IN SUCH CASES AWARD MUST, IN CONFORMITY TO 44 CFR 55.45, BE MADE IMMEDIATELY. AS TO AWARDS ON PROPERTY COSTING MORE THAN $10,000 THE DUAL REQUIREMENTS OF IMMEDIATE AWARD AND REVIEW AND APPROVAL CAN BE MET EITHER BY A REVIEWING AUTHORITY OTHER THAN THE CONTRACTING OFFICER ESTABLISHING UPSET PRICES IN ADVANCE OF THE SALE, OR BY ASSIGNING AN INDIVIDUAL OTHER THAN THE CONTRACTING OFFICER WITH AUTHORITY TO REVIEW AND APPROVE AWARDS AT THE SALE. WE MUST CONCLUDE THAT THERE IS NO AMBIGUITY OR CONFLICT BETWEEN THE REGULATIONS SINCE AWARD ON PROPERTY COSTING MORE THAN $10,000 CAN BE MADE IMMEDIATELY UNDER THE ABOVE MENTIONED PROCEDURE.

WITH REFERENCE TO THE FIFTH GROUND URGED FOR REVERSAL, THE ACCOUNTING OFFICERS OF THE GOVERNMENT HAVE RECOGNIZED FROM AN EARLY TIME (9 COMP.DEC. 663 (1903); 7 COMP. GEN. 167 (1927) ( THAT THEY ARE WITHOUT AUTHORITY TO SETTLE QUESTIONS BEFORE THEM ON AN EQUITABLE--- AS DISTINGUISHED FROM A LEGAL--- BASIS. THIS OFFICE HAS RECOGNIZED THIS LIMITATION ON ITS JURISDICTION CONSISTENTLY OVER THE YEARS EXCEPT IN ONE SITUATION, IF THAT SITUATION CAN PROPERLY BE CALLED AN EXCEPTION. THAT IS THE SITUATION SET FORTH IN 40 COMP. GEN. 160 WHERE WE ALLOWED THE PROCUREMENT AGENCY TO ACCEPT DELIVERY OF EQUIPMENT ALREADY MANUFACTURED UNDER A CONTRACT WHICH, BECAUSE OF AN IMPROPER AWARD, WAS REQUIRED TO BE CANCELED. HOWEVER, EVEN IN THAT SITUATION, IT MUST BE RECOGNIZED AS THE DECISION IN 40 COMP. GEN. 160 EXPRESSLY STATED, THAT IN ACCEPTING SUCH EQUIPMENT NOT ONLY IS THE CONTRACTOR'S INTEREST TO BE CONSIDERED IN AUTHORIZING ACCEPTANCE BUT THE GOVERNMENT'S INTEREST AS WELL. FOR EXAMPLE, IN B-144621, SEPTEMBER 27, 1961, THIS OFFICE, AFTER AUTHORIZING THE PROCUREMENT AGENCY TO ACCEPT DELIVERY OF 10 UNITS UNDER A CANCELED CONTRACT, LATER REFUSED TO ALLOW DELIVERY OF ADDITIONAL UNITS BY THE CONTRACTOR IN ORDER TO RELIEVE IT OF ITS LOSSES.

WHILE WE DO NOT MAKE LIGHT OF UNIVERSAL'S UNFORTUNATE POSITION IN THIS CASE, WE FEEL THAT THE LAW AND FACTS INVOLVED ARE SUCH THAT WE ARE NOT JUSTIFIED IN ALLOWING EQUITABLE CONSIDERATIONS TO GOVERN THE DISPOSITION OF OUR DECISION. WE BELIEVE THAT THERE ARE SUBSTANTIAL LEGAL PRECEDENTS TO SUPPORT OUR DECISION AND THE PROTEST OF UNIVERSAL MUST BE DENIED. INDEED, IN SUCH CASES IT IS NOT ONLY THE RIGHT BUT THE DUTY OF THIS OFFICE TO DENY SUCH PROTESTS. AS STATED BY THE COURT OF CLAIMS IN LONGWILL V. UNITED STATES, 17 CT.CL. 288 AT 291:

THE ACCOUNTING OFFICERS OF THE TREASURY ARE IN DUTY BOUND TO SCRUTINIZE CLAIMS AND ACCOUNTS WITH GREAT CARE, AS IS THEIR CUSTOM; AND IT IS THE UNDOUBTED RIGHT AND DUTY OF THE COMPTROLLERS * * * WHO ALONE OF THE ACCOUNTING OFFICERS HAVE AUTHORITY TO DECIDE THEREON, TO REJECT, IN WHOLE OR IN PART, AS THEIR JUDGMENT DICTATES, ALL THOSE CLAIMS WHICH THEY HAVE REASONABLE CAUSE TO SUSPECT TO BE TAINTED WITH FRAUD, OR TO WHICH THEY BELIEVE THERE MAY BE SUBSTANTIAL DEFENSES IN LAW, OR AS TO THE VALIDITY OF WHICH THEY ARE IN DOUBT.

TO THE SAME EFFECT SEE CHARLES V. UNITED STATES, 19 CT.CL. 316.

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