Kelly v. United States

91 F. Supp. 305, 116 Ct. Cl. 811
CourtUnited States Court of Claims
DecidedJune 5, 1950
Docket48853
StatusPublished
Cited by10 cases

This text of 91 F. Supp. 305 (Kelly 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
Kelly v. United States, 91 F. Supp. 305, 116 Ct. Cl. 811 (cc 1950).

Opinions

WHITAKER, Judge.

The plaintiff submitted a sealed competitive bid to supply milk and other dairy requirements to the Government’s Veterans’ Administration Hospital at Lexington, Kentucky, for the period May 15, 1946, through June 30, 1947. The bids were to be opened on April 30, 1946. In the standard government form on which the bids were submitted was paragraph 6,1 providing for an increase or decrease in the bid price if taxes or charges were increased or decreased by Congress after the bid was submitted.

When the bids were read on April 30, one of the plaintiff’s competitor’s bids was read first. That bidder had stamped on his bid the following statement: “The above prices will be adjusted upward or downward in the same amount of any adjustment in the ceiling prices on the same date.” The reading of that bid brought up a discussion as to whether paragraph 6 of the standard form would appíy to an adjustment of prices by the Office of Price Administration. The Chairman of the Board of Awards said that it was his opinion that it would. The plain[307]*307tiff’s bid, containing no qualifying statement, was read next, and then the bid of the third bidder was read which had a qualifying statement similar to the one contained in the bid first read.

The plaintiff was awarded the contract, the Government’s Certificate of Award being executed on May 13. The plaintiff was not the low bidder, but was the lowest bidder whose facilities weré regarded as satisfactory by the Board of Awards.

On June 7, 1946, O.P.A. ceiling prices were increased on some of the commodities covered by the contract. The plaintiff notified the hospital that prices would be increased accordingly. He was requested to itemize the increases and include them in his monthly bills. He did so, and his bills were paid as submitted until June 1, 1947. But from the plaintiff’s bill for June, 1947, all these increases included in former bills were deducted, amounting to $3,292.75. The plaintiff submitted a claim for this amount, which was denied by the Comptroller General of the United States.

The plaintiff contends that paragraph 6 of the contract gave it the right to add the O.P.A. increases in ceiling prices to the amount of its bid. We do not think it did.

In this paragraph the parties undertook to take care of an increase or decrease in taxes. The first sentence reads: “Prices bid herein include any Federal tax heretofore imposed by the Congress which is applicable to the material on this bid.” It then proceeds: “If any sales tax, processing tax, adjustment charge, or other taxes or charges are imposed or changed by the Congress after the date set for the opening of this bid, and made applicable directly upon the production, manufacture, or sale of the supplies covered by this bid, and are paid by the contractor on the articles or supplies herein contracted for, then the prices named in this bid will be increased or decreased accordingly, and any amount due the contractor as a result of such change will be charged to the Government and entered on vouchers (pr invoices) as separate items.”

The Government’s contracting officer drew this bid form. By it he directed the bidder to include in his price any Federal tax previously imposed by the Congress on the material included in the bid, but he said to him that if Congress thereafter should change the tax applicable to the material in the bid, the amount bid would be changed accordingly.

There would be no doubt at all in the mind of any one that the whole paragraph related to taxes except for the fact that the expression “adjustment charge” was used. But even though this expression might be somewhat ambiguous to a layman, we think a lawyer would naturally construe it in connection with its context, and its context clearly was taxes.

By the use of this expression we think the Government intended an adjustment charge affecting a tax; for instance, an adjustment in the valuation of property upon which a tax is levied. This would be such an adjustment charge as was in the minds of the parties who drew paragraph 6. The contracting officer in asking for bids according to the requirements of paragraph 6 had in mind an adjustment charge which affected tax liability.

However, it may be admitted that a layman reading this language might not understand that the expression, “adjustment charge,” was confined to an adjustment relating to taxes, and the bidders asked the question whether or not an adjustment in ceiling prices by the O.P.A. came within the terms of this paragraph. The Chairman of the Board of Awards said that in his opinion it did come within its provisions.

Had this expression of opinion been made by one who was authorized to enter into a contract on behalf of the Government, we would be inclined to say that the plaintiff was entitled to rely upon it and, hence, that the Government would be bound by it. However, the plaintiff has not shown, that the Chairman of the Board of Awards was authorized to express an opinion as to the meaning of this provision.

We have found as a fact in finding 2 that “there is no evidence that the Chairman [of the Board of Awards] had any authority, or represented that he had any, to alter the language of paragraph 6.” In finding [308]*3083 we said that the contracting officer “made-no statements, had no conversations and gave no assurances to the plaintiff or his agents, relative to the contract, before it was entered into.” The contracting officer is the person clothed with authority by the' Government to enter into a -contract on its behalf. He drew the form of bid which plaintiff was required to execute. This bid contained paragraph 6. He did not express any opinion as to the meaning of paragraph 6, and it is not shown that he delegated any authority to' do so to the Chairman of the Board of Awards. So far as the record-shows,- this board, had authority merely to receive bids and to award the contract, and it was authorized to award the contract only to such person as had bid according to the requirements laid down by the contracting officer.

Before a plaintiff is entitled-to rely upon any statement made by a Government agent he must show that this agent had the authority to make the statement.

As long ago as Hawkins v. United States, 96 U.S. 689, 691, 24 L.Ed. 607, the Supreme Court said that persons dealing with the Government must take notice of the extent of the authority it had given its agents, and that the Government is not bound by their declarations unless it appears that they had the authority to make thetn. In that case the court said:

“Individuals as well as courts must take notice of the extent of the authority conferred by law upon a person acting in an official capacity; and the rule applies, in such a case, that ignorance of the law furnishes no excuse for any mistake or wrongs ful act. State ex rel. etc. v. Hayes, [Hays], 52 Mo. 578; Delafield v. The State of Illinois, 26 Wend, (N.Y.) 91 [192]; The People v. The Phoenix Bank, 24 id. [Wend.] 430 [431, 35 Am.Dec. 634]; The Mayor and City Council of Baltimore v. Reynolds, 20 Md. 1 [83 Am.Dec. 535]; Whiteside v. United States, 93 U.S. 247 [23 L.Ed. 882].

“Different rules prevail in respect to the acts and declarations of public agents from those which ordinarily govern in the case of mere private agents.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

College of the Virgin Islands v. Vitex Corp.
283 F. Supp. 379 (Virgin Islands, 1966)
United States v. Oakland Truck Sales, Inc.
207 F. Supp. 175 (W.D. Pennsylvania, 1962)
National Electronic Laboratories, Inc. v. United States
180 F. Supp. 337 (Court of Claims, 1960)
Slobojan v. United States
136 Ct. Cl. 620 (Court of Claims, 1956)
Hargrave v. United States
130 F. Supp. 598 (Court of Claims, 1955)
Barling v. United States
111 F. Supp. 878 (Court of Claims, 1953)
Chalker & Lund Co. v. United States
107 F. Supp. 734 (Court of Claims, 1952)
Kelly v. United States
91 F. Supp. 305 (Court of Claims, 1950)

Cite This Page — Counsel Stack

Bluebook (online)
91 F. Supp. 305, 116 Ct. Cl. 811, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kelly-v-united-states-cc-1950.