B-153299, MAR. 3, 1964

B-153299, MAR. 3, 1964

TO TRIO CHEMICAL WORKS:

YOUR LETTER OF JANUARY 7, 1964, APPEARS IN THE NATURE OF A REQUEST FOR REVIEW OF OUR VIEWS REGARDING AN ASSESSMENT OF DAMAGES AGAINST YOUR FIRM AS A RESULT OF YOUR DEFAULT UNDER CONTRACT NO. 14-06-503 1367.

THE RECORD SHOWS THAT ON JANUARY 18, 1963, THE BUREAU OF RECLAMATION, UNITED STATES DEPARTMENT OF THE INTERIOR, SOLICITED BIDS UNDER INVITATION FOR BIDS NO. 503-582-63 FOR THE PURCHASE OF VARIOUS STRENGTH HERBICIDES, AND A WOOD-PRESERVATIVE AND SOIL POISONER, REFERRED TO AS ITEM NO. 4. TRIO CHEMICAL OFFERED TO FURNISH THE ABOVE ITEM NO. 4 AT A PRICE OF $1.10 PER GALLON OR $665.50 FOR THE APPROXIMATE TOTAL QUANTITY OF 605 GALLONS LESS DISCOUNT. SINCE THE NEXT LOW BID WAS APPROXIMATELY ONE-THIRD HIGHER (I.E., $1.49 PER GALLON VS. $1.10 PER GALLON) THE PROJECT MANAGER ATTEMPTED TO OBTAIN VERIFICATION BY LETTER DATED FEBRUARY 6, 1963. AS NO RESPONSE WAS FORTHCOMING A SECOND REQUEST WAS MADE ON FEBRUARY 15, 1963. HAVING FAILED TO RECEIVE ANY RESPONSE TO THIS SECOND REQUEST THE MATTER WAS FORWARDED TO THE REGIONAL DIRECTOR FOR INSTRUCTIONS.

ON MARCH 7, 1963, TRIO CHEMICAL WAS AWARDED CONTRACT NO. 14-06-503 1367 AS THE LOWEST RESPONSIVE BIDDER AND WAS ADVISED THAT DELIVERY WOULD BE DUE 30 DAYS FROM THE DATE OF AWARD. WE UNDERSTAND THAT THE DECISION TO AWARD THE CONTRACT IN QUESTION WAS BASED UPON PARAGRAPH 1 2.406-3 (D) (5) OF THE FEDERAL PROCUREMENT REGULATIONS WHICH DIRECTS THAT WHERE A BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS, OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR OTHER BONA FIDE BIDDERS. A FOLLOW-UP INQUIRY DATED APRIL 2, 1963, REQUESTED INFORMATION CONCERNING SHIPPING, ROUTING, ETC. ON APRIL 10, 1963, THE PROJECT MANAGER AGAIN WROTE TRIO AND ADVISED THAT SHIPMENT HAD NOT BEEN RECEIVED.

BY LETTER DATED APRIL 18, 1963, TRIO CLAIMED THAT A MISTAKE HAD OCCURRED IN THEIR BID IN THAT THE SPECIFICATIONS CALLED FOR A MATERIAL OTHER THAN THAT WHICH THEY COULD SUPPLY. SPECIFICALLY THEIR LETTER STATES:

"* * * WE FIND THAT THE MATERIALS ARE NOT THE SAME, AND WE ARE UNABLE TO SUPPLY THE MATERIAL YOU HAVE REQUESTED.

"WE ASK YOUR COOPERATION, IN THIS INSTANCE. WE ASK EITHER THAT YOU ACCEPT THE MATERIAL THAT CONFORMS TO MIL-S-13518B TYPE B, TO COVER THIS CONTRACT OR THAT YOU ACCEPT THE RETURN OF THIS CONTRACT TO YOU. * * *"

ON JULY 26, 1963, TRIO RECEIVED A LETTER OF EXPLANATION AS TO THE AGENCY'S POSITION ALONG WITH A BILL FOR COLLECTION IN THE AMOUNT OF $242.60 REPRESENTING THE DIFFERENCE BETWEEN THE ACTUAL PURCHASE PRICE OF THE MATERIALS AND THE PRICE ORIGINALLY BID BY TRIO. SEVERAL DAYS LATER, TRIO RETURNED THE BILL AND STATED THAT THEY WOULD NOT HONOR SUCH A CHARGE SINCE THEY HAD NOT BEEN GIVEN PRIOR NOTICE OF DEFAULT. THEREAFTER THE AGENCY AGAIN REQUESTED PAYMENT AND AGAIN TRIO RETURNED THE BILL RESTATING ITS ORIGINAL POSITION. ESSENTIALLY THE CONTRACTOR TAKES THE POSITION THAT SINCE THE AGENCY NEVER SPECIFICALLY NOTIFIED THEM OF DEFAULT UNTIL JULY, THEY WERE NEVER GIVEN AN OPPORTUNITY TO FULFILL THE CONTRACT. IN THEIR LETTER DATED JANUARY 7, 1964, TRIO FURTHER STATES:

"* * * THE STANDARD "DEFAULT" CLAUSE EXPRESSLY REQUIRES TERMINATION TO BE EFFECTED "BY WRITTEN NOTICE OF DEFAULT.' THE TERMINATION OF THIS CONTRACT IS IN EFFECT NOT VALID SINCE NO WRITTEN NOTICE OF DEFAULT WAS EVER SENT TO US.'

IN VIEW OF THIS CONTENTION, WE ARE CALLED UPON TO DECIDE WHETHER A WRITTEN NOTICE OF DEFAULT WAS ACTUALLY REQUIRED UNDER THE FACTS AS PRESENTED ABOVE. WE AGREE THAT ORDINARILY ARTICLE 11 (A) OF THE GENERAL PROVISIONS (STANDARD FORM 32) REQUIRES A WRITTEN NOTICE OF TERMINATION AND ADVICE THAT THE AGENCY WILL PROCURE THE SUPPLIES ELSEWHERE. WHERE A CONTRACTOR, HOWEVER, NOT ONLY BREACHES HIS CONTRACT BY FAILING TO MAKE DELIVERY WITHIN THE SPECIFIED TIME, BUT EXPRESSLY REPUDIATES THE CONTRACT AS HE DID BY HIS LETTER OF APRIL 18, 1963, WE DO NOT BELIEVE THAT ANY FURTHER ACTION ON THE PART OF THE AGENCY WAS NECESSARY. ARTICLE 11 (F) STATES:

"/F) THE RIGHTS AND REMEDIES OF THE GOVERNMENT PROVIDED IN THIS CLAUSE SHALL NOT BE EXCLUSIVE AND ARE IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES PROVIDED BY LAW OR UNDER THIS CONTRACT.'

IT IS AN ANCIENT MAXIM OF THE COMMON LAW THAT THE LAW FORCES NO ONE TO DO A VAIN AND FUTILE ACT (LEX NEMINEM COGIT AD VANA SEU INUTILA PERAGENDA). THIS MAXIM HAS BEEN TERMED ONE OF "COMMON SENSE" AND HAS BEEN CITED IN AN ALMOST INEXHAUSTIBLE NUMBER OF CASES INVOLVING NEARLY EVERY TYPE OF ACTION. SEE 36 C.J. 1048, NOTE 72. AS THE COURT SAID IN ROEHM V. HORST, 178 U.S. 1 AT PAGE 9:

"* * * IT SEEMS STRANGE THAT THE DEFENDANT, AFTER RENOUNCING THE CONTRACT, AND ABSOLUTELY DECLARING THAT HE WILL NEVER ACT UNDER IT, SHOULD BE PERMITTED TO OBJECT THAT FAITH IS GIVEN TO HIS ASSERTION, AND THAT AN OPPORTUNITY IS NOT LEFT TO HIM OF CHANGING HIS MIND. * * *"

THIS OFFICE PREVIOUSLY IN 39 COMP. GEN. 570 QUOTED WITH APPROVAL A PORTION OF THE CASE OF CONTI V. UNITED STATES, 158 F.2D. 581, AT PAGE 583, WHEREIN IT WAS HELD:

"TO REQUIRE THE PLAINTIFF TO GIVE A WRITTEN NOTICE UNDER THESE CIRCUMSTANCES WOULD BE TO REQUIRE IT TO DO SOMETHING WHOLLY UNNECESSARY AND THE PLAINTIFF IS RELIEVED FROM THAT OBLIGATION. WILLISTON, CONTRACTS, REVISED EDITION, SEC. 698 (A): RESTATEMENT, CONTRACTS, SEC. 306. * * *"

SECTION 321 OF THE RESTATEMENT OF CONTRACTS PROVIDES:

"STATEMENTS OF REPUDIATION IN A LETTER MAILED OR TELEGRAM SENT TO A PROMISEE OR OTHER PERSON HAVING A RIGHT UNDER A CONTRACT WHICH IF MADE ORALLY WOULD BE A BREACH OF CONTRACT CONSTITUTE A BREACH AS OF THE TIME WHEN AND THE PLACE WHERE THE LETTER OR TELEGRAM IS DESPATCHED.'

IN VIEW OF THE ABOVE, WE ARE CONSTRAINED TO CONCLUDE THAT DAMAGES WERE BOTH LEGALLY PROPER AND APPROPRIATE UNDER THE CIRCUMSTANCES.