Eastern Service Management Co. v. United States

243 F. Supp. 302, 1965 U.S. Dist. LEXIS 7497
CourtDistrict Court, E.D. South Carolina
DecidedJuly 8, 1965
DocketCiv. A. No. AC-1577
StatusPublished
Cited by6 cases

This text of 243 F. Supp. 302 (Eastern Service Management Co. v. United States) is published on Counsel Stack Legal Research, covering District Court, E.D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eastern Service Management Co. v. United States, 243 F. Supp. 302, 1965 U.S. Dist. LEXIS 7497 (southcarolinaed 1965).

Opinion

HEMPHILL, District Judge.

Before the Court are motions for Summary Judgment by both parties and a motion by the United States to dismiss for lack of jurisdiction. The parties have agreed that, for purposes of these motions, the Court may consider the testimony and record made in a prior hearing in this controversy before the Board of Contract Appeals of the General Services Administration of the United States. The relevant facts reflected there and in the affidavit attached to the plaintiff’s motion are undisputed.

On April 19, 1963 the government issued its Invitation, Bid and Award, inviting bids for cleaning the Atlanta Regional Service Center at Chamblee, Georgia for a one-year period beginning October 15, 1963. The Invitation required the contractor to perform all cleaning services and described the building as follows:

“Total space to be serviced consists of approximately 111,174 sq. ft. of occupied space, 18,126 sq; ft. of unoccupied space, 42,700 sq. ft. of warehouse space, and 6,000 sq. ft. of [304]*304cafeteria dining space. The building is occupied by the Internal Revenue Service.”

On August 29, 1963, an addendum to the Invitation was issued, changing this description to read:

“Total space to be serviced consists of approximately 129,300 sq. ft. of office space, 42,700 sq. ft. of warehouse space and 6,000 sq. ft. of cafeteria dining space. This building is occupied by the Internal Revenue Service.”

The Invitation and Addendum were in the form customarily used by the government and contained the usual information.

Upon receipt of the Invitation, plaintiff’s officers visited the premises to determine the general nature and layout of the building. Plaintiff’s officers then computed and submitted its bid. In arriving at the bid estimate, one of the material factors considered was the number of square feet in the building. As was customary in the trade, plaintiff’s officers relied upon the size specification set forth in the government’s Invitation.

Plaintiff was awarded the contract, has satisfactorily performed the work contemplated, and was paid the contract price. However, shortly after undertaking the job plaintiff found that the work required considerably more servicing than had been estimated. It was then discovered that the building contained at least 9,000 square feet more than the specifications in the Invitation. It appears that in listing the area to be serviced, the government had omitted all lobbies, corridors and rest rooms. The error was confirmed by the government, but the Contracting Officer declined to make any adjustment. The Board of Contract Appeals refused to overrule the Contracting Officer and this action was brought under the Tucker Act, 28 U.S.C. 1346(a) (2).

The uncontested affidavit of plaintiff’s president indicates that it incurred additional costs and loss of profit totalling $8,164.62 for the contract period in servicing the extra space. In addition its expenses in processing its claim were $529.31.

The government’s principal contention in support of its motions is that plaintiff’s claim is based upon a contract implied in law, over which this Court, as the plaintiff admits, would have no jurisdiction under the Tucker Act. It appears, however, that plaintiff is grounding its action on a breach of the express contract between the parties, jurisdiction over which is specifically provided in the Tucker Act.1

The plaintiff’s argument is twofold — (1) the specifications as to the size of the building were express representations or warranties, binding upon the government, which were broken, entitling it to damages, and (2) the discovery of the actual size of the building constituted a “change” within the language of the contract which the government was bound to consider as the subject of an adjustment. The Court agrees with plaintiff.

Beginning with United States v. Utah, Nevada and California Stage Co., 199 U.S. 414, 26 S.Ct. 69, 50 L.Ed. 251, there is a long line of decisions from the federal judiciary to the effect that when the government, in its Invitation to Bid, undertakes to prescribe or define certain existing conditions material to the performance of the contract it is bound to these specifications and liable for any increased cost arising from their substantial variation. See for example, Hol[305]*305lerbach v. United States, 238 U.S. 165, 172, 34 S.Ct. 553, 58 L.Ed. 898; Freund v. United States, 260 U.S. 60, 43 S.Ct. 70, 67 L.Ed. 131; United States v. L. P. & J. A. Smith, 256 U.S. 11, 41 S.Ct. 413, 65 L.Ed. 808; Railroad Waterproofing Corp. v. United States, 137 F.Supp. 713, 715, 133 Ct.Cl. 911 (1956); Kayfield Construction Corp. v. United States, 278 F.2d 217, 219 (2d Cir. 1960); United States v. Johnson, 153 F.2d 846, 848, 849 (9th Cir. 1946). Such is this case.

The government voluntarily undertook to state in its Invitation the size and character of the area to be serviced, facts which normally would be presumed to be within its specific knowledge. In fact, it was careful to amend the Invitation to reflect a change. This was consistent with its past practice. Equally consistent with the custom of the commercial cleaning industry was the plaintiff’s reliance upon the accuracy of this specification, admittedly very material to its bid. Under such circumstances the government is bound to those specifications and plaintiff is entitled to recover the cost of the added work if the specifications are materially varied.

' The government seeks to avoid the thrust of this position by contending that the bidders were instructed to make their own inspection of the building, thus relieving it of responsibility for any errors in the size specifications.2

This precise argument was rejected by the Supreme Court in Hollerbach v. United States, supra, in these words:

A government contract should be interpreted as are contracts between individuals, with a view to ascertaining the intention of the parties and to give it effect accordingly, if that can be done consistently with the terms of the instrument. In paragraph 33 the specifications spoke with certainty as to a part of the conditions to be encountered by the claimants. True, the claimants might have penetrated the 7 feet of soft slushy sediment by means which would have discovered the log crib work filled with stones which was concealed below, but the specifications assured them of the character of the material, — a matter concerning which the government might be presumed to speak with knowledge and authority. We think this positive statement of the specifications must be taken as true and binding upon the government, and that upon it, rather than upon the claimants, must fall the loss resulting from such mistaken representations.

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243 F. Supp. 302, 1965 U.S. Dist. LEXIS 7497, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastern-service-management-co-v-united-states-southcarolinaed-1965.