869. APPROVAL. 870. ARBITRATION. 871-873. ASSIGNMENT. 874-875. AWARD. 876-885. BIDS. 886-889. CANCELLATION. 890-891. CIVIL LAWS AFFECTING. 892. COMBINATION OF PROJECTS. 894. DEBARRED BIDDERS. 895. DELIVERY CHARGES. 896. DEMURRAGE. 897. DISCOUNT. 898-907. EIGHT-HOUR LAW. 908-913. EMPLOYEES OF CONTRACTOR. 914. EXECUTION. 915-927. EXPENSE; LOSS; DAMAGE. 928. FRAUD. 929. INSPECTORS. 930. INTEREST IN CONTRACTS. 931-934. LIABILITY FOR LOSS OR DAMAGE OF PROPERTY. 935-939. MODIFICATION OR SUPPLEMENTAL AGREEMENT. 940-941. PATENTS. 942-945. PAYMENTS. 946-950. PURCHASE PRICE OR QUANTUM MERUIT. 951. REFORMATION. 952. SPECIFIC PERFORMANCE. 953. TRADE CUSTOMS. 954. VARIABLE QUANTITY. APPROVAL 869. A certain bid for laundry work at an Army hospital was accepted, the Surgeon General directed the supply officer of the hospital to enter into a contract with the successful bidder, and a contract, subject to the approval of the Surgeon General, was drawn up and transmitted to the bidder, who signed and returned it. Subsequently, but before he had formally approved this contract, on the ground that the circular advertisement had not made plain the method of award that would be followed, the Surgeon General directed that all bids be rejected and another circular advertisement issued, and caused the supply officer to recall and cancel the contract referred to. Upon the protest of the bidder against such cancellation, it was Held, That as the contract provided for approval by the Surgeon General, it did not become a binding obligation until so approved (although duly signed by both the contracting officer and bidder); and the fact that the Surgeon General directed the making of the contract did not estop him from withholding his formal approval of same, rejecting all bids, and readvertising. 486.3, June 18, 1925. ARBITRATION 870. Clause 32 of the "time form" and clause 13 of the "bare boat" form of the United States Shipping Board requisition charters provide in effect for submission to arbitration of disputes on law or fact arising under the charter, with an appeal to the courts at the option of either party. These contract provisions are contrary to public policy and are void on the ground that they attempt to oust the jurisdiction of the court. (The "Excelsior," 123 U. S. 40; Munson v. Straits of Dover S. S. Co., 99 Fed. 787, affirmed 100 Fed. 1005.) No officer or department of the Government has the right to waive the illegality and give life to the clause by submitting the rights of the United States to arbitration in the manner therein provided. No contracting officer of the Government may bind its credit legally or morally except within the scope of the authority entrusted to him and no officer of the Government charged with making charter parties has authority to commit the Government to the performance of a promise that is contrary to sound public policy and therefore void in law. 545.02, May 5, 1919. It is provided in a contract between an individual and the War Department that claims, doubts, or disputes arising under the contract shall be referred for settlement to an adjustment board for decision. Such arbitration clauses of contracts are legally unenforceable for the reason that it is deemed contrary to public policy to permit parties by contract to undertake in advance that all disputes under the contract shall be determined by arbitration rather than by adjudication, thus ousting the courts of their jurisdiction over the subject matter of the contract. (Insurance Co. v. Morse, 20 Wall. 445; Mitchell v. Dougherty, 90 Fed. 639; The "Excelsior," 123 U. S. 40; Munson v. Straits of Dover S. S. Co., 99 Fed. 787, affirmed 100 Fed. 1005.) The War Department may decline the arbitration under the terms of the contract. 164, Apr. 14, 1920. ASSIGNMENT Secs. 871. IN GENERAL. 872. MERGER OR CHANGE OF NAME. 873. TO SURETY COMPANY. IN GENERAL 871. An assignment of a contract executed by a person, firm, or corporation with the United States, unless falling within the conditions mentioned in R. S. 3477 is null and void, the purview of the statute being the protection of the United States and not the parties to the assignment. (Goodman v. Niblack, 102 U. S. 556, 560.) 164, Aug. 21, 1919. Inquiry is made whether the Government will recognize an assignment by a Government contractor to a third person of a claim for and me all money due and owing, or to become due and owing to me from the War Department, under all contracts entered into between the said War Department during the year 1919. Being in violation of R. S. 3477, such assignment would be null and void. The mischiefs which this statute was designed to remedy are stated in Goodman v. Niblack, 102 U. S. 556, 560, to be: (1) That the rights of the Government might be embarrassed by having to deal with several persons and by the introduction of a stranger to the transaction, and (2) that the transfer might cause improper influences in prosecuting claims in which the rewards were contingent upon success. 164, Sept. 19, 1919. MERGER OR CHANGE OF NAME 872. A company having a contract with the United States to supply coal during the fiscal year ending June 30, 1913, became financially embarrassed and a new company was organized by the principal stockholders of the old company to continue the business of the old company, and the contract assigned to such new company. The surety company guaranteeing the old contract executed a supplemental instrument whereby it agreed that its bond should cover the faithful performance of the contract by the assignee. Held, That while the better form would have been a tripartite contract supported by a new bond whereby the assignee would contract directly with the United States for the completion of the contract and the assignor would agree directly with the United States that all payments should be made to the assignee, the facts here stated are not such as to bring the case within the prohibition of R. S. 3737, forbidding the transfer of contracts with the United States, and the Chief of the Quartermaster Corps may therefore approve the assignment. 76-520, Feb. 20, 1913. TO SURETY COMPANY 873. A contractor, having become financially involved and unable to complete his contract, assigned the same, after a portion of the work had been performed, to the surety company on his contract bond, and executed a power of attorney to said company authorizing it to collect from the Government all amounts due and to become due for work done under the contract. Held, That in view of the fact that the surety company had an equitable right to complete the work in default of the contractor and to have all moneys due applied to the discharge of the claims of labor and material men (Richards Brick Co. v. Rothwell, 18 App. Cases (D. C.), 516; Marble Co. v. Burgdorf, 13 idem, 506, 509) the assignment was not within the prohibition of R. S. 3477, forbidding the transfer of claims against the Government, or of R. S. 3737, prohibiting the assignment of Government contracts; and that, in view of the further fact that the assignee held a power of attorney from the contractor authorizing it to complete the work and to collect all moneys due, payment might be made to it, not only of all amounts due the contractor and unpaid, but also of amounts due for work performed by the surety company. (Dig. Comp. Dec. 336.) 76–500, Aug. 10, 1914. 72746-32- -27 AWARD Secs. 874. CANCELLATION. 875. VARIANCE FROM SPECIFICATIONS AND BID. CANCELLATION 874. Whether or not an award once having been made can thereafter be withdrawn after the successful bidder has been notified of its acceptance and directed to proceed with the work depends upon all the facts and circumstances of each particular case. Such questions are to be considered as whether the representatives of the Government who approved the award had authority to act finally in the matter, or whether the approval of higher authority was necessary, whether the purchase price had been paid, whether the successful bidders had actually taken possession of the material on which they had bid, whether a written agreement had been executed, whether the bid accepted was the most advantageous to the Government, and similar considerations. However, without regard to the Government's bare legal right to do so, a proper consideration of its own interests in dealing with bidders, and of that fairness and justice which should characterize its dealings with its citizens, should make the Government exceedingly reluctant to resort to such measures except in those cases where the justice of the situation clearly demands it. (U. S. v. Purcell Envelope Co. (1919), 249 U. S. 313, 318.) 163, Jan. 14, 1921. VARIANCE FROM SPECIFICATIONS AND BID 875. Where an advertisement was made for building material for 5 sets of field officers' quarters and 19 double sets of company officers' quarters, subject to an increase or decrease of 20 per cent, and after bids were received it was proposed to make contracts for material for 11 and 33 sets, respectively. Held, That such a contract would not be in accordance with the advertisement and would not be a compliance with the law requiring advertising for such supplies. Held, however, That if it be determined that there is such an exigency as will not permit of the delay incident to readvertising there would be no legal objection to the proposed contract. C. 29600, Apr. 11, 1912. Secs. BIDS 876-879. ACCEPTANCE OR REJECTION. 880. ALTERNATIVE. 881-882. MISTAKE. 883-885. SOLICITATION. ACCEPTANCE OR REJECTION Secs. 876. NOT RESPONSIVE TO ADVERTISEMENT. 877. OTHER THAN LOWEST. 878. RECEIVED AFTER OPENING HOUR. 879. WAIVER OF IRREGULARITIES. NOT RESPONSIVE TO ADVERTISEMENT 876. A company, in response to an advertisement for proposals for furnishing stationery, wrapping paper, etc., during the fiscal year 1915, submitted a proposal which, as to all but one item, was qualified by the condition that the bids should apply only to shipments made within sixty days from September 11, 1914, the reason given being that the European war had so unsettled the paper market that arrangements could not be made with paper mills for the delivery of paper for the entire year. Subsequently to the opening of the bids the company withdrew said condition. The prices bid by said company were lower than those of other competitors. Held, That the bid was not responsive to the advertisement, which called for the furnishing of such supplies as might be ordered from time to time during the fiscal year, and that the condition named in the bid could not be regarded as a slight failure to conform to the terms of the advertisement, which, under paragraph 546, A. R., 1913, need not necessarily lead to the rejection of a bid, and that the bid could not properly be accepted. Held further, That if the other bids were found to be unreasonable, taking into consideration the bid in question, such other bids might be rejected for that reason, and recourse had to an open-market purchase, the requirements of the law as to advertising having been satisfied. (Dig. Op. J. A. G. 1912, p. 311.) 76-260, Oct. 23, 1914. OTHER THAN LOWEST 877. Where two bids were received by the Signal Corps for deep-sea cable, but the superiority of the cable offered at the higher bid more than compensated the difference in price, it was held that the higher bid might be accepted as being the lowest and best bid for the Government, having regard to the quality of the cable to be secured. C. 29451, Feb. 17, 1912. A paint manufacturer entered protest against the system of purchasing supplies alleged to have been followed by the War Department in awarding contracts to the lowest bidder. R. S. 3709 provides that all purchases and contracts for supplies shall be made by advertising for proposals respecting the same. Competition is required by this statute and the lowest proposal, considering the interests of the Government, must be accepted if the supplies offered are what was required. Bids so accepted are not required to be the lowest made. This is the rule in making purchases for the Army. See pars. 515-551, A. R., 1913 (par. 9, AR 5-160). These rules may be held applicable to purchases made by a park commission created under act of February 21, 1899 (30 Stat. 841). 163, Jan. 7, 1920. RECEIVED AFTER OPENING HOUR 878. A contract was to be let for remodeling a building, and the time for opening proposals therefor was fixed at 11 a. m. The lowest bid was received 7 minutes after the time fixed for opening, but 13 minutes before the bids were actually opened. It was not claimed, nor did it appear, that the lowest bidder derived any advantage from the delay in submitting his bid. Held, That under these circumstances the lowest bid might be received and the contract awarded to the lowest bidder, the case being one where the strict requirements of the regulations might be waived. 76-251, June 12, 1913. |