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TO RHODES AND SIMMS: REFERENCE IS MADE TO LETTER DATED JANUARY 22. LICENSE NOY/R/-98388 WAS AWARDED TO EXCAVATION FOR $61. THE LICENSE WAS FOR THE TERM JUNE 23. THIS REQUEST FOR EXTENSION WILL CONSTITUTE A RENEWAL FOR THE ONE (1) YEAR PERIOD ONLY UPON ACCEPTANCE BY THE LICENSOR WITHIN 30 DAYS OF LICENSEE'S SUBMISSION. ALL CONDITIONS AND TERMS OF THE INITIAL LICENSE WILL APPLY TO THE RENEWAL. EXCAVATION WAS GRANTED A RENEWAL OF THE LICENSE FOR 3 MONTHS OR THROUGH SEPTEMBER 22. 000 CUBIC YARDS OF FILL WAS PLACED UNDER THE LICENSE. 000 IS BASED UPON THE INCREASED COST OF HAULING ELSEWHERE APPROXIMATELY 125. IT IS CONTENDED THAT IN BIDDING ON THE PROJECT THE RENEWAL PROVISIONS WERE INTERPRETED TO MEAN THAT A REQUEST FOR RENEWAL OF 1 YEAR WOULD BE GRANTED UNLESS SOME UNFORESEEN CIRCUMSTANCES SHOULD ARISE.

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B-161638, APR. 17, 1969

TO RHODES AND SIMMS:

REFERENCE IS MADE TO LETTER DATED JANUARY 22, 1969, FROM EXCAVATION CONSTRUCTION, INC. (EXCAVATION), CLAIMING $75,000 UNDER CONTRACT NO. NOY/R/-98388, AND TO YOUR LETTER OF MARCH 12, 1969, RELATIVE THERETO.

THE RECORD SHOWS THAT THE NAVAL FACILITIES ENGINEERING COMMAND ADVERTISED FOR BIDS FOR LICENSING GOVERNMENT PROPERTY AS BOLLING FIELD FOR USE AS A DUMPING GROUND. LICENSE NOY/R/-98388 WAS AWARDED TO EXCAVATION FOR $61,345, THE HIGHEST BID. THE LICENSE WAS FOR THE TERM JUNE 23, 1967, TO JUNE 22, 1968, AND PERMITTED PLACEMENT OF A MINIMUM OF 250,000 CUBIC YARDS AND A MAXIMUM OF 870,750 CUBIC YARDS OF SUITABLE FILL MATERIAL. AS TO RENEWAL, THE LICENSE PROVIDED:

"4. RENEWAL

"LICENSEE MAY REQUEST EXTENSION OF THE TERMS OF THIS LICENSE FOR AN ADDITIONAL PERIOD OF ONE (1) YEAR BY DELIVERY TO THE LICENSOR WRITTEN NOTICE OF ITS INTENTION TO EXTEND, NO LATER THAN 60 DAYS PRIOR TO THE EXPIRATION OF THE CURRENT LICENSE. THIS REQUEST FOR EXTENSION WILL CONSTITUTE A RENEWAL FOR THE ONE (1) YEAR PERIOD ONLY UPON ACCEPTANCE BY THE LICENSOR WITHIN 30 DAYS OF LICENSEE'S SUBMISSION. ALL CONDITIONS AND TERMS OF THE INITIAL LICENSE WILL APPLY TO THE RENEWAL. A MAXIMUM TOTAL OF APPROXIMATELY 870,750 CUBIC YARDS OF COMPACTED AND IN PLACE MATERIAL CAN BE STOCKPILED UNDER THE CURRENT LICENSE AND ANY RENEWAL.'

IN LETTER DATED APRIL 16, 1968, EXCAVATION REQUESTED AN EXTENSION OF THE LICENSE FOR 1 YEAR IN ORDER TO BE ASSURED OF ITS ABILITY TO PLACE A SUBSTANTIAL PART OF THE MAXIMUM FILL PERMITTED. BY LETTER OF MAY 6, 1968, EXCAVATION WAS GRANTED A RENEWAL OF THE LICENSE FOR 3 MONTHS OR THROUGH SEPTEMBER 22, 1968. IT APPEARS THAT APPROXIMATELY 600,000 CUBIC YARDS OF FILL WAS PLACED UNDER THE LICENSE, AS AMENDED.

THE CLAIM OF $75,000 IS BASED UPON THE INCREASED COST OF HAULING ELSEWHERE APPROXIMATELY 125,000 CUBIC YARDS OF FILL MATERIAL. IT IS CONTENDED THAT IN BIDDING ON THE PROJECT THE RENEWAL PROVISIONS WERE INTERPRETED TO MEAN THAT A REQUEST FOR RENEWAL OF 1 YEAR WOULD BE GRANTED UNLESS SOME UNFORESEEN CIRCUMSTANCES SHOULD ARISE, AND THAT A REQUEST FOR RENEWAL WOULD RECEIVE REASONABLE AND FAIR CONSIDERATION. YOU CONTEND THIS HAS NOT BEEN DONE AND THAT THE IMPROPER EXERCISE OF THE CONTRACT RIGHT TO DENY RENEWAL FOR 1 YEAR CONSTITUTES A BREACH OF THE CONTRACT. YOU ALSO STATE THAT THE ONLY REASON SUGGESTED FOR NOT GRANTING THE REQUESTED EXTENSION OF TIME IS THAT THE REMAINING FILL REQUIRED MAY BE READVERTISED AND A HIGHER PRICE MAY BE OBTAINED FOR THE RIGHT TO DEPOSIT IT. YOU CONTEND THAT THE GOVERNMENT'S OPPORTUNITY TO OBTAIN ADDITIONAL PAYMENT FOR DUMPING RIGHTS SHOULD NOT BE CONSIDERED IN DETERMINING WHETHER EXCAVATION IS ENTITLED TO A RENEWAL OF THE LICENSE FOR 9 ADDITIONAL MONTHS.

WE DO NOT AGREE WITH YOUR CONTENTION THAT THE GOVERNMENT DID NOT HAVE THE UNQUALIFIED RIGHT TO DENY RENEWAL OF THE LICENSE. FURTHER, WE DO NOT AGREE WITH YOUR CONTENTION THAT THE GOVERNMENT HAS NO RIGHT TO CONSIDER ITS MONETARY INTERESTS IN DETERMINING WHETHER AN EXTENSION OF THE LICENSE SHOULD BE GRANTED. WHEN A CONTRACT WITH THE UNITED STATES HAS BEEN REDUCED TO WRITING, AS IN THIS CASE, ITS MEANING MUST, IF POSSIBLE, BE ASCERTAINED BY THE LANGUAGE OF THE CONTRACT ITSELF. THE RENEWAL PROVISION OF THE CONTRACT HERE INVOLVED WAS INCLUDED BY THE GOVERNMENT TO PROTECT ITS INTERESTS. IT IS OUR VIEW THAT THE PROVISION DOES NOT ENTITLE THE LICENSEE TO A RENEWAL OF THE LICENSE AT ITS OPTION ON GIVING THE SPECIFIED NOTICE OF ITS INTENT TO EXTEND. TO CONCLUDE THAT THE RENEWAL PROVISION ENTITLED THE LICENSEE TO A RENEWAL WOULD, IN EFFECT, BE MAKING A NEW CONTRACT FOR THE PARTIES AND WOULD PRACTICALLY AMOUNT TO A HOLDING THAT, WHEN A LICENSOR INSERTS IN THE LICENSE A PROVISION SOLELY FOR ITS BENEFIT, A RECIPROCAL PROVISION FOR THE BENEFIT OF THE LICENSEE MAY BE IMPLIED, ALTHOUGH NOT EXPRESSED. IN VIEW OF THE GOVERNMENT'S EXPRESS RIGHT TO REFUSE THE REQUESTED EXTENSION OF THE LICENSE, WE MUST CONCLUDE THAT NO LEGAL BASIS EXISTS FOR QUESTIONING THE GOVERNMENT'S ACTION IN REFUSING TO EXTEND THE LICENSE FOR AN ADDITIONAL 9 MONTHS.

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