Baudier Marine Electronics, Sales & Service, Inc. v. United States

32 Cont. Cas. Fed. 72,872, 6 Cl. Ct. 246, 1984 U.S. Claims LEXIS 1314
CourtUnited States Court of Claims
DecidedSeptember 6, 1984
DocketNo. 63-84C
StatusPublished
Cited by28 cases

This text of 32 Cont. Cas. Fed. 72,872 (Baudier Marine Electronics, Sales & Service, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baudier Marine Electronics, Sales & Service, Inc. v. United States, 32 Cont. Cas. Fed. 72,872, 6 Cl. Ct. 246, 1984 U.S. Claims LEXIS 1314 (cc 1984).

Opinion

OPINION ON PLAINTIFFS’ AND DEFENDANT’S MOTIONS FOR SUMMARY JUDGMENT

PHILIP R. MILLER, Judge:

Statement

This is a suit by eight subcontractors of a defaulted prime contractor with the United States, who seek to have the United States held liable for their uncompensated goods and services because the United States failed to verify the financial responsibility of the surety company on the prime contractor’s payment bond prior to awarding the contract, prior to giving notice to proceed to the contractor and prior to the time when the plaintiffs furnished their goods and services without knowledge of the financial irresponsibility of the surety.

On September 30, 1982, the Army Corps of Engineers (Corps) awarded a contract for certain maintenance dredging in Jefferson Parrish, Louisiana, in the sum of $1,200,000 to the Miken Construction Company (Miken), the low bidder. Prior to the award, the Corps had conducted a prea-ward survey of Miken to determine if it was a responsible bidder, and had made a favorable determination of such responsibility. The Corps verified that Miken’s potential surety, listed as the New Hampshire Insurance Company, was a qualified surety. On September 30, 1982, the Corps by letter requested Miken for its performance and payment bonds, as required by the solicitation, and on or about October 5, 1982, Miken submitted to the Corps bonds signed by the New Hampshire Insurance Company as surety.

Thereafter the Corps submitted the bonds to the United States Army Legal Service Agency in Washington, D.C., for review of their legal sufficiency in accordance with applicable regulations. Without waiting for the results of such review, on October 25, 1982, the Corps issued a notice to proceed to Miken. However, on December 28,1982, the Army Legal Service Agency advised that the bonds were not approved for legal sufficiency because the New Hampshire Insurance Company, which had signed the surety bonds, was not [248]*248in fact the New Hampshire Insurance Company of Manchester, New Hampshire, which was included on the approved list of surety companies approved by the Treasury Department.

Upon receipt of this information, the Corps made several unsuccessful attempts to have Miken provide a new and proper surety bond. As a result, on March 18, 1983, it terminated Miken’s contract for default.

Meanwhile, between October 1982 and February 1983, the various plaintiffs furnished equipment, materials and services to Miken, for which they claim $528,268 as due and unpaid. During November and December 1982, the Corps made two progress payments to Miken in the total amount of $118,807, but it is not clear whether any portion of this was used to pay any of the subcontractors.

Plaintiffs’ claims against the United States are based on the theory that they entered into their subcontracts and extended credit to Miken in reliance upon statutory and contractual provisions that the Corps would require a proper and valid payment bond from Miken prior to authorizing its prosecution of the work; that plaintiffs are intended third-party beneficiaries of the contract between Miken and the United States; and that the Corps breached an implied warranty to plaintiffs that it would see to it that a valid payment bond would be furnished prior to the contract award in order to protect the subcontractors.

Discussion

Although the plaintiffs’ claims are deserving of sympathy, there is no basis upon which the United States may be held liable to reimburse them for their losses.

The jurisdictional basis for this suit must be found in the Tucker Act, 28 U.S.C. § 1491, which, insofar as pertinent, provides as follows:

The United States Claims Court shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliq-uidated damages in cases not sounding in tort.

Plaintiffs may not properly found jurisdiction over this action upon an act of Congress. The only kind of statute which would avail plaintiffs would be one providing for payment of compensation or money damages by the United States. For, as the court stated in United States v. Testan, 424 U.S. 392, 398, 401-02, 96 S.Ct. 948, 953, 954-55, 47 L.Ed.2d 114 (1976):

The Tucker Act * * * is * * * only a jurisdictional statute; it does not create any substantive right enforceable against the United States for money damages * * * the Act merely confers jurisdiction upon [the court] whenever the substantive right exists.
* * * * * *
Where the United States is the defendant and the plaintiff is not suing for money improperly exacted or retained, the basis of the federal claim — whether it be the Constitution, a statute, or a regulation— does not create a cause of action for money damages unless * * * that basis “in itself * * * can fairly be interpreted as mandating compensation by the federal government for the damage sustained.”

And see also United States v. Mitchell, 463 U.S. 206, 103 S.Ct. 2961, 2967-68, 77 L.Ed.2d 580 (1983) and Eastport S.S. Corp. v. United States, 178 Ct.Cl. 599, 607, 372 F.2d 1002, 1009 (1967).

Plaintiffs claim that the Miller Act, 40 U.S.C. § 270a, does create such a substantive right in favor of unpaid subcontractors. Insofar as pertinent that statute provides:

(a) Before any contract, exceeding $25,000 in amount for the construction, alteration, or repair of any public building or public work of the United States is awarded to any person, such person shall furnish to the United States * * * upon [249]*249the award of the contract to such person, who is hereinafter designated .as “contractor”:
* * * * * *
(2) A payment bond with a surety or sureties satisfactory to such officer for the protection of all persons supplying labor and material in the prosecution of the work provided for in said contract for the use of each such person.

However, the Miller Act does not serve plaintiffs’ purpose in this suit, for it does not provide that if the United States fails to enforce that provision, or is duped into approving an unqualified surety and allowing the contractor to go ahead with the performance of the contract, the United States will compensate or be liable to unpaid subcontractors. In United Electric Corp. v. United States, 227 Ct.Cl. 236, 240 n. 4, 647 F.2d 1082, 1084 n. 4 (1981), cert. denied, 454 U.S. 863, 102 S.Ct. 322, 70 L.Ed.2d 163 (1982), the court stated:

It is plain that the Miller Act itself does not mandate compensation by the United States to a subcontractor within the coverage of 28 U.S.C.

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Cite This Page — Counsel Stack

Bluebook (online)
32 Cont. Cas. Fed. 72,872, 6 Cl. Ct. 246, 1984 U.S. Claims LEXIS 1314, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baudier-marine-electronics-sales-service-inc-v-united-states-cc-1984.