B-9298, APRIL 5, 1940, 19 COMP. GEN. 843
Highlights
THE LIABILITY UNDER A GOVERNMENT CONTRACT FOR SERVICES WHICH ARE NOT PERSONAL IN THEIR NATURE IS NOT TERMINATED BY THE CONTRACTOR'S DEATH. 1940: I HAVE YOUR LETTER OF MARCH 23. AS FOLLOWS: THERE ARE ENCLOSED PAPERS FROM THE UNITED STATES COAST GUARD HEADQUARTERS' FILE RELATIVE TO A CONTRACT FOR THE ERECTION OF A STEEL LOOKOUT TOWER. IT WILL BE OBSERVED THAT MR. THERE WAS SENT TO HIM FOR EXECUTION U.S. THE STANDARD FORMS REFERRED TO WERE NOT EXECUTED BY HIM BEFORE HIS DEATH. NOR HAVE THEY BEEN EXECUTED BY THE ADMINISTRATRIX OF HIS ESTATE WHO. IT IS UNDERSTOOD. YOUR DECISION IS REQUESTED WHETHER THE ESTATE OF MR. WAS ACTUALLY SENT ON OR ABOUT FEBRUARY 17. REFERENCE ALSO IS MADE TO THE PROVISIONS OF THE ACT OF AUGUST 24.
B-9298, APRIL 5, 1940, 19 COMP. GEN. 843
CONTRACTS - PERFORMANCE LIABILITY - CONTRACTOR'S DEATH WHERE A BIDDER FOR A GOVERNMENT CONSTRUCTION CONTRACT HAD BEEN NOTIFIED OF THE ACCEPTANCE OF HIS BID PRIOR TO HIS DEATH, A BINDING CONTRACT RESULTED EVEN THOUGH HE DID NOT EXECUTE THE STANDARD FORM OF CONTRACT OR THE PAYMENT AND PERFORMANCE BONDS. THE LIABILITY UNDER A GOVERNMENT CONTRACT FOR SERVICES WHICH ARE NOT PERSONAL IN THEIR NATURE IS NOT TERMINATED BY THE CONTRACTOR'S DEATH.
ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, APRIL 5, 1940:
I HAVE YOUR LETTER OF MARCH 23, 1940, AS FOLLOWS:
THERE ARE ENCLOSED PAPERS FROM THE UNITED STATES COAST GUARD HEADQUARTERS' FILE RELATIVE TO A CONTRACT FOR THE ERECTION OF A STEEL LOOKOUT TOWER, WITH WATCH HOUSES, ETC., AT THE TILLAMOOK BAY COAST GUARD STATION, BARVIEW, OREGON.
IT WILL BE OBSERVED THAT MR. H. R. BRUMBACH SUBMITTED A BID ON U.S. STANDARD FORM NO. 21 ( REVISED APRIL 5, 1937), DATED JANUARY 6, 1940. LETTER DATED JANUARY 18, 1940, ADVISED HIM RELATIVE TO THE ACCEPTANCE OF HIS BID. WITH A LETTER DATED JANUARY 25, 1940, THERE WAS SENT TO HIM FOR EXECUTION U.S. STANDARD FORM OF CONTRACT NO. 23, TOGETHER WITH THE APPROPRIATE STANDARD FORMS FOR PAYMENT AND PERFORMANCE BONDS.
MR. BRUMBACH DIED ON JANUARY 31, 1940. THE STANDARD FORMS REFERRED TO WERE NOT EXECUTED BY HIM BEFORE HIS DEATH, NOR HAVE THEY BEEN EXECUTED BY THE ADMINISTRATRIX OF HIS ESTATE WHO, IT IS UNDERSTOOD, DOES NOT DESIRE TO PROCEED WITH THE WORK CONTEMPLATED BY THE CONTRACT.
YOUR DECISION IS REQUESTED WHETHER THE ESTATE OF MR. BRUMBACH SHOULD BE DECLARED IN DEFAULT, ATTENTION BEING INVITED PARTICULARLY TO THE LETTER ERRONEOUSLY DATED JANUARY 17, 1940 (WHICH, OF COURSE, WAS ACTUALLY SENT ON OR ABOUT FEBRUARY 17, 1940), ADDRESSED TO THE COMMANDANT, UNITED STATES COAST GUARD, BY THE COMMANDER, SEATTLE DISTRICT, UNITED STATES COAST GUARD. REFERENCE ALSO IS MADE TO THE PROVISIONS OF THE ACT OF AUGUST 24, 1935 ( U.S.C., SUPP. IV, TITLE 40, SEC. 270A), WHICH PROVIDE, IN EFFECT, THAT NO CONTRACT FOR CONSTRUCTION SHALL BE AWARDED UNTIL THE REQUIRED PERFORMANCE AND PAYMENT BONDS HAVE BEEN FURNISHED.
YOUR ADVICE ALSO WOULD BE APPRECIATED WHETHER THE UNITED STATES COAST GUARD MAY IN THIS CASE ACCEPT THE NEXT LOWEST BID, THAT SUBMITTED BY MR. A. C. BAUMBACK, SANDY, OREGON, PROVIDED, OF COURSE, HE CONSENTS TO SUCH ACCEPTANCE.
IT WILL BE NOTED THAT THE AMOUNT OF THE H. R. BRUMBACH BID IS $3,966.46 (WITHOUT THE SPECIFIED ALTERNATIVES), AND THE AMOUNT OF THE A. C. BAUMBACK BID IS $4,095.50 (WITHOUT THE SPECIFIED ALTERNATIVES/--- A DIFFERENCE OF $129.04. MR. BRUMBACH'S BID WAS ACCOMPANIED WITH A BID GUARANTEE IN THE FORM OF A CASHIER'S CHECK IN THE AMOUNT OF $200.00. THIS, OF COURSE, WILL BE HELD PENDING YOUR ADVICE WITH RESPECT TO THIS MATTER.
PLEASE RETURN THE ENCLOSED PAPERS WITH YOUR REPLY.
YOU HAVE REPORTED THAT THE CONTRACT AND BOND FORMS WERE TRANSMITTED JANUARY 25, 1940, TO H. R. BRUMBACH, THE SUCCESSFUL BIDDER, BUT THAT HE DIED ON JANUARY 31, PRIOR TO EXECUTION OF SAID FORMS. HOWEVER, THE ACCEPTANCE BY THE GOVERNMENT ON JANUARY 18, 1940, OF THE BID DATED JANUARY 6, CONSTITUTED A CONTRACT BINDING UPON THE BIDDER, IRRESPECTIVE OF THE FACT THAT CERTAIN FORMS FOR THE PROTECTION OF THE UNITED STATES WERE NEVER EXECUTED. SEE UNITED STATES V. NEW YORK AND PORTO RICO S.S. CO., 239 U.S. 88.
AS THE CONTRACT HERE INVOLVED IS FOR SERVICES WHICH ARE NOT PERSONAL IN THEIR NATURE, THE LIABILITY THEREUNDER IS NOT DISCHARGED OR TERMINATED BY THE DEATH OF MR. BRUMBACH. PAGE ON THE LAW OF CONTRACTS, SECTION 2685; WILLISTON ON CONTRACTS, SECTION 1945; AND AUTHORITIES CITED IN 17 C.J.S. 957-959.
HOWEVER, SINCE IT IS UNDERSTOOD THAT THE ADMINISTRATRIX OF THE DECEASED CONTRACTOR DOES NOT DESIRE TO PROCEED WITH THE WORK CONTEMPLATED BY THE CONTRACT, THERE APPEARS NO OBJECTION TO THE RELEASING OF THE PERSONAL REPRESENTATIVE OF SAID CONTRACTOR UPON COLLECTION OF THE DIFFERENCE (REPORTED TO BE $129.04) BETWEEN THE ACCEPTED BID PRICE AND THE NEXT LOWEST BID RECEIVED AND NOW AVAILABLE FOR ACCEPTANCE. THE CASHIER'S CHECK IN THE AMOUNT OF $200 SUBMITTED IN LIEU OF BID BOND, OR SUCH PORTION THEREOF AS MAY BE NECESSARY, SHOULD BE USED FOR THE PURPOSE OF SUCH COLLECTION.