SOUTHERN, WALDRIP AND HARVICK COMPANY v. THE UNITED STATES, 167 Ct. Cl. 488

Per Curiam: This case was referred pursuant to Rule 45(a) (since April 1, 1964, Rule 57(a)), to Trial Commissioner Franklin M. Stone to make findings of fact and recommendation for conclusion of law. The commissioner has done so in a report filed February 14,1964, wherein he recommends that judgment be entered for plaintiff in the sum of $28,500. On June 1, 1964, defendant filed its consent to the entry of judgment and on June 12, 1964, plaintiff filed a motion for adoption of the commissioner’s report as the judgment of the court.

Since the court agrees with the findings of fact and recommendation for conclusion of law as filed by the commissioner, and as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Judgment is therefore entered for plaintiff in the sum of $28,500.

OPINION OE COMMISSIONER This is an action to recover the difference in amount between the price set forth in a Government construction contract awarded plaintiff, and an increased price resulting from an additive amount contained in a telegraphic bid modification message which the defendant determined was dispatched by plaintiff too late to be considered.

On June 2,1960, plaintiff, Southern, Waldrip and Harvick Company, a Nevada Corporation, with offices located in Long Beach, California, in response to an invitation for bids for construction of SAC Missile Facilities at Beale Air Force Base, California, submitted a written bid in tibe amount of $700,000 to defendant, acting through the District Engineer, United States Army Engineer District, Sacramento, California.

The invitation for bids stated that sealed bids for furnishing all labor, equipment, and materials and performing all work for the project described therein would be received “until 2:00 P.M., DST, 2 June 1960, in Boom 305, Wright Building, 1209 Eighth Street, Sacramento, California, and then publicly opened.” Attached to the invitation was a document entitled “Instructions to Bidders,” paragraph 7 (

b) of which, in relevant part, reads: * * * bids or bid modifications which were deposited for transmission by telegraph in time for receipt, by normal transmission procedure, prior to the time fixed in the Invitation for Bids and subsequently delayed by the telegraph company through no fault or neglect on the part of the bidder, will be considered if received prior to the award of the contract. The burden of proof of such abnormal delay will be upon the bidder and the decision as to whether or not the delay was so caused will rest with the officer awarding the contract.

Sometime during the morning of June 2, 1960, an officer of plaintiff, in response to an inquiry made of the Long Beach, California, branch office of the Western Union Telegraph Company (hereinafter referred to as “Western Union”), as to the time that would be required for the handling of a telegram between Long Beach and Sacramento, California, was advised that a telegram designated “xv rapid” would have priority over other straight wires and that an allowance of thirty minutes would be ample time.

Belying upon this information, plaintiff accepted subcontractor bids and material prices up until 1:20 P.M. on that day with the intention of adjusting its $700,000 bid by an additive or deductive amount, depending on the final bids and prices it received from subcontractors. Thereafter, at 1:25 P.M., on the same day, plaintiff placed on a Deskfax machine located in its office the f ollowing telegraphic message: FAX XV RAPID SOUTHERN 6-2-60 1 :25 PM TIME STAMP REQUIRED DISTRICT ENGINEER, U.S. ARMS' ENGINEER DISTRICT, WRIGHT BUILDING, 1209 EIGHTH STREET, SACRAMENTO 14, CALIFORNIA.

REFERENCE: BED FOR ENG-04-167-60-38 SAC MISSILE FACILITIES, BEALE AIR FORCE BASE, PLEASE ADD $55,555.00 TO ITEM 3 AND TO TOTAL BID. (MUST BE DELIVERED PRIOR TO 2 PM) FRED G. KOENEKE VICE PRESIDENT SOUTHERN, WALDRIP AND HARVICK CO. 2650 CHERRY AVENUE LONG BEACH, CALIFORNIA This message was received in the Western Union office in Long Beach and, thereafter, at 1:31 P.M. on June 2, 1960, it was time-stamped and transmitted to Sacramento. The telegram was not released for delivery by messenger by the Western Union office in Sacramento, until 2:03 P.M. on June 2, 1960.

It arrived in the offices of the District Engineer in Sacramento, where the bids were opened, at 2:10 P.M. In the form delivered, the message did not bear the notation, “must be delivered prior to 2:00 P.M.,” that appeared on the message when it was transmitted by plaintiff to Western Union. On or about June 3, 1960, the District Engineer at Sacramento, California, who was the contracting officer, issued an abstract of bids showing plaintiff as the low bidder with a bid of $755,555. The use of this figure indicated that plaintiff’s telegraphic bid modification had been accepted.

Even with the $55,555 increase, plaintiff’s total bid was $6,000 lower than the Government’s “reasonable contract estimate” and $67,000 lower than the bid submitted by the second lowest bidder. By letter dated June 3, 1960, the second lowest bidder lodged a protest with the contracting officer, alleging that plaintiff’s bid was not responsive in that it did not contain a unit price for bid item number 11 of the bid

schedule and that the telegram modifying the bid was “not timely received nor timely posted.” The District Engineer advised plaintiff of the protest and made inquiries to determine the timeliness of the bid modification. In letters submitted to the District Engineer, plaintiff explained that the reason for the $55,555 upward revision of its bid was the discovery by it of a mistake in the amount it had bid on item 3 which was bid at $34,000 but should have been bid at $89,555. On June 16, 1960, plaintiff sent a telegram to the District Engineer, quoting a telegram it had received from R. íí.

Fer-ian, manager of Western Union’s branch office at Long Beach, California, the text of Mr. Ferlan’s telegram reading as follows: WHILE THE TELEGRAPH COMPANY DOES NOT UNDERTAKE TO GUARANTEE DELIVERY OP ANY MESSAGE WITHIN A SPECIFIED TIME LIMIT, A STUDY OP OUR RECORDS POR THE PERIOD JUNE ONE THRU JUNE TEN DISCLOSES THAT THE AVERAGE OVERALL HANDLING TIME POR A MESSAGE PROM LONG BEACH TO SACRAMENTO DURING THE HOURS NINE A.M. TO SIX P.M. WEEKDAYS WAS LESS THAN 29 MINUTES. BASED UPON THIS STUDY THE MESSAGE INVOLVED HERE WHICH WAS PILED AT 1 :31 P.M. JUNE 2, COULD HAVE BEEN DELIVERED BEFORE THE TWO P.M. DEADLINE.

Largely, on the basis of the information contained in Mr.

Ferlan’s telegram, the contracting officer, in .a document entitled “Findings of Fact and Kecommendation of Award,” which was submitted to the Chief of Engineers, Department of the Army, Washington, D.C., on June 22,1960, concluded that the plaintiff had presented “* * * clear and convincing evidence that the telegraphic modification was filed in sufficient time to have been received by 2:00 P.M. and should be accepted.” The contracting officer recommended, therefore, that the protest be disallowed and the award be made to plaintiff “* * * for $755,555, the amount of their [sic] modified bid.” On August 12, 1960, however, plaintiff was advised by the contracting officer that the Chief of Engineers had determined that the bid modification message was “dispatched too late to be considered,” but that on the basis of the mistake in bid, the amount of the contract would be raised from $700,000 to $726,904.

The latter figure was arrived at by deducting the sum of $28,500 (the amount of mistake waived by the terms of paragraph 16, page 1-4 Invitation for Bids) and $151 (for overbid on item 11) from $755,555. After vainly protesting and urging that the contract price should be $28,500 higher, plaintiff, under threat of being placed in default, entered into a contract with the Government for $726,904. Before signing the contract, however, plaintiff inserted a provision therein reserving to itself the right to seek recovery of an additional $28,500.

On August 19,1960, plaintiff noted an appeal to the Armed Services Board of Contract Appeals. On June 12, 1961, the Board dismissed the appeal for lack of jurisdiction, holding that this dispute was not appealable to it under the standard disputes clause because it had arisen before the contract was executed. On January 29, 1962, plaintiff filed the present suit praying judgment against the United States in the amount of $28,500.

The instructions to bidders and invitation for bids, in response to which plaintiff submitted its bid, contained provisions dealing with mistakes in bids and separate provisions dealing with bid modifications. Under these provisions, if a bidder has erroneously understated his bid, a specified percentage of his total bid is waived. If, however, a bidder submits, for whatever reason, a telegraphic modification of his bid and such modification is timely, the total modified bid is to be considered.

In the present case, plaintiff, discovering a mistake in the amount it had bid on one item, submitted a telegraphic modification increasing its bid by $55,555. If this modification was timely, no part of the total bid should have been treated as waived and plaintiff is entitled to succeed here. The question of the timeliness of plaintiff’s telegraphic bid modification is made difficult by the closeness of the time element here (ten minutes) and by uncertainty as to the proper criterion by which the timeliness of such a modification is to be determined. As to the latter, paragraph 7 (

b) of the instructions to bidders refers both to “abnormal delay” and to “normal transmission procedure” as the appropriate test.

Section 2-305 of the Armed Services Procurement Regulations provides that the rules stated in Sections 2-303.3 through 2-303.5 shall govern in determining whether late bid modifications should be considered effective.

Section 2-303.4 provides that a late modification should be accepted if it “* * * was filed in sufficient time to have been delivered on time by normal transmission procedure * * The regulations do not require the bidder to prove that the telegraph company delayed abnormally. Defendant, however, has correctly pointed to two opinions of the Comptroller General where the contractor was required to prove abnormal delay by the telegraph company. 39 Comp. Gen. 586, 40 Comp. Gen. 290. There would appear, therefore, to be conflicting rules.

As will be seen below, however, the disposition of the present case does not necessitate the resolution of this conflict. With respect to the factual question, plaintiff’s telegraphic modification arrived at 2:10 P.M., ten minutes after the time fixed in the invitation for bids. There is no evidence that Western Union had encountered unusual conditions, such as line failure or equipment problems, and it would be difficult to say that there was abnormal delay on the part of Western Union in the handling of plaintiff’s message.

Nonetheless, there was delay and, on the basis of the entire record, it has been found that: * f * plaintiff’s telegram was deposited for transmission in time for receipt, by normal transmission procedure prior to 2:00 P.M., the time fixed in the invitation for bids and was subsequently delayed by Western Union through no fault or neglect on the part of the plaintiff. (See finding No. 17 (i).) It is not believed, however, that the decision of this case should rest on a de novo factual determination as to the timeliness of the bid modification. This case should be decided on different and broader grounds.

The last sentence of paragraph 7 (

b) of the instructions to bidders provides that the determination as to the timeliness of a telegraphic bid modification “* * * will rest with the officer awarding the contract.” In Mitchell Canneries, Inc. v. United States, 111 Ct. Cl. 228, 247, 77 F.

Supp. 498, 502, this court reaffirmed the “established principle of law” that where a contracting officer is designated to make certain findings of fact, such findings * * * are binding upon both tlie Government and the contractor if there is no fraud, gross error, or arbitrariness by the contracting officer amounting to bad faith * * * where the contracting officer acted fairly and impartially in making his findings and there is substantial evidence to support such findings, they should not be reversed. Recently, the U.S.

Supreme Court stated: * * * this court has long ago upheld the validity of clauses in Government contracts delegating to a Government employee the authority to make determinations of disputed questions of fact, and required such determinations to be given conclusive effect in any subsequent suit in the absence of fraud or gross mistake implying fraud or bad faith. United States v. Carlo Bianchi, Inc., 373 U.S. 709, 713. In accordance with the direction contained in paragraph 7 (

b) of the instructions to bidders, the contracting officer here determined that plaintiff’s telegraphic modification was timely. This appears from the abstract of bids which took account of the $55,555 increase in plaintiff’s bid and, even more clearly, from the document entitled “Findings of Fact and Recommendation of Award” which Lt. Colonel Joseph H. Sherrard, who was the contracting officer, submitted to the Chief of Engineers.

In said document, the contracting officer stated explicitly: * * * it is believed that the low bidder has presented clear and convincing evidence that the telegraphic modification was filed in sufficient time to have been received by 2:00 P.M., and should be accepted. This statement by the contracting officer would seem to be conclusive. Defendant contends, however, that the above statement was not an ultimate finding by the contracting officer, but simply a recommendation to a higher authority, the Chief of Engineers.

There is no support for defendant’s position that the Chief of Engineers in Washington was supposed to decide the question of the timeliness of a local telegram and this contention does seem somewhat unreasonable. More importantly, however, defendant, in arguing as it does, is, in effect, urging that the communication to the Chief of Engineers be construed in derogation of the provisions contained in the instructions to bidders. As noted above, by paragraph 7 (

b) of these instructions, the contracting officer — not the Chief of Engineers — was charged with the duty of making the determination as to the timeliness of a bid modification. Fortunately, the

interpretation advanced by the defendant is not required. In the communication to the Chief of Engineers, the contracting officer found that the modification was timely and then, on the basis of such finding, recommended that the protest be disallowed and the award be made to plaintiff in the full amount of its modified bid. This is the obvious and most reasonable construction of this communication. The testimony of Mr.

Drake, legal counsel for the Corps of Engineers, is, however, even more definitive and, on the basis of his testimony it has been found that: * * * had it not been for the obvious mistake in plaintiff’s bid and the protest lodged by the second lowest bidder, the contracting officer would have gone ahead and awarded the contract to the plaintiff in accordance with his determination as to the timeliness of the bid modification. (See finding No. 11, infra.) It emerges, therefore, that defendant’s contention with respect to the above-quoted communication to the Chief of Engineers (i.e., that it was simply a recommendation by the contracting officer to a higher authority) is not well taken.

The contracting officer had the responsibility of making the determination as to the timeliness of a bid modification. Pie carried out that responsibility and made a determination favorable to the plaintiff. In all likelihood, but for the protest and mistake, this matter would never even have come to the attention of the Chief of Engineers. To repeat, under the provisions of paragraph 7 (

b) of the instructions to bidders, the determination as to the timeliness of a telegraphic bid modification is to rest with the “officer awarding the contract.” This provision is, in effect, an agreement between the Government and prospective contractors, and agreements such as this which designate a particular Government official to make a certain factual determination must be strictly observed. United States v. Carlo Bianchi, Inc., supra.

The fact that, in the instant case, there happened to have been a protest did not change the identity of the “officer awarding the contract” and did not transfer the authority to make the determination in question to the Chief of Engineers. When, the contracting officer determined that the bid modification was timely, the principal evidence before him was the telegram of Mr. Ferian, the manager of Western Union’s branch office at Long Beach, California, sufra. The fact that the study to which reference is made in said telegram was not made by Mr.

Ferian himself, and that some of the statements in said telegram were later qualified, is not important. The controlling fact is that the contracting officer had this telegram before him at the time he made his determination. He had a right to assume that the statements in the telegram were true and to rely upon them.

The telegram stated that “the average overall handling time for a message from Long Beach to Sacramento * * * was less than 29 minutes” and that plaintiff’s message “could have been delivered before the 2:00 P.M. deadline.” In light of these statements, it cannot be said that the determination made by the contracting officer lacked the support of substantial evidence.

While another contracting officer, on the basis of the same facts, might well have determined that plaintiff’s bid modification was untimely, this is a matter of judgment on a close question, and it cannot be said that the judgment of the contracting officer in this case was unsound. There was no suggestion of fraud, bad faith, or arbitrariness on the part of the contracting officer, and, considering all the evidence, bis decision was not unreasonable. The evidence was certainly sufficient to preclude a subsequent determination that his decision was grossly erroneous.

In view of the foregoing, I can only conclude that the Chief of Engineers acted without authority in making an independent determination as to the timeliness of plaintiff’s bid modification and in reversing the finding of the contracting officer. Plaintiff modified its bid in the prescribed manner and the appropriate officer determined that such modification was timely. In my opinion, the action of the Chief of Engineers in reversing that determination was unlawful, and plaintiff is entitled to recover. Accordingly, it is recommended that the court enter judgment for plaintiff in the amount of $28,500.

Findings op Fact 1. Southern, Waldrip and Harvick Company (hereinafter referred to as “Southern” or “plaintiff”) is a corporation organized under the laws of the State of Nevada, and located in the City of Long Beach, County of Los Angeles, State of California. 2. On May 6, 1960, the Office of the District Engineer, U.S.

Army Engineer District, on behalf of the Department of the Army, Corps of Engineers, located at Sacramento, California, issued Invitation For Bids for the furnishing of all labor, equipment and materials, and the performance of all work, for the construction of SAC Missile Facilities at Beale Air Force Base, California, Specification No. 2627, Serial No. ENG-04-167-60-38. Pursuant to this invitation, plaintiff, on June 2, 1960, submitted a written bid in the amount of $700,000 to the United States Government through said District Engineer.

Plaintiff’s bid expressly referred to such invitation for bids by said date and specification number. 3. (

a) The first paragraph of such invitation for bids contained the following provision: Sealed bids in single copy for furnishing all labor, equipment, and materials and performing all work for the project described herein will be received until 2:00 P.M., DST, 2 June 1960 in Boom 305, Wright Building, 1209 Eighth Street, Sacramento, California and then publicly opened. (

b) Such invitation for bids also contained the following provision: 16. Mistakes in Bids: The bidder hereby waives that portion of any alleged mistake or mistakes in his bid which falls within the following amounts: If bid is $250,000 or less — 5 % of the bid; If bid is more than $250,000 and less than $500,000— $12,500 plus 4% of the bid over $250,000; If bid is $500,000 or more, and less than $1,000,000— $22,500 pins 3% of the bid over $500,000; If bid is $1,000,000 or more — $37,500 pins 2% of bid over $1,000,000.

In cases where the allegation of mistake exceeds the above waived amounts and the request for correction is allowed, such amount will be excluded from the contract price; however, the amount waived as provided herein will not be deducted for the purpose of evaluating bids to determine the low bidder. (

c) Attached to each such invitation for bids was a document entitled “Instructions To Bidders” which contained the following pertinent provisions: sjí H* •{• H* 5. Preparation of Bids. * * * * # * * * (

d) Unless specifically called for, telegraphic bids will not be considered. Modification by telegraph of bids already submitted will be considered if received prior to the time fixed in the Invitation for Bids. Telegraphic modifications shall not reveal the amount of the original or revised bid. # sfc $ $ 7. Receipt and Opening of Bids. * * * (

b) Subject to the provisions of paragraph 5(

d) of these instructions, bids or bid modifications which were deposited for transmission by telegraph in time for receipt, by normal transmission procedure, prior to the time fixed in the Invitation for Bids and subsequently delayed by the telegraph company through no fault or neglect on the part of the bidder, will be considered if received prior to the award of the contract. The burden of proof of such abnormal delay will be upon the bidder and the decision as to whether or not the delay was so caused will rest with the officer awarding the contract. # * * *!= * 4. (

a) Sometime during the morning on June 2, 1960, Mr. Fred G. Koeneke, vice president and general manager of the plaintiff, called the Long Beach, California, branch office of the Western Union Telegraph Company (hereinafter referred to as “Western Union”), and requested information as to the time that would be required for the handling of a telegram between Long Beach and Sacramento, California. Mr. Koeneke was advised that a telegram designated “XV Rapid” would have priority over other straight wires, and that an allowance of 30 minutes would be ample time. (

b) Relying on the information received from Western Union, plaintiff accepted subcontractor bid figures and material prices up until 1:20 P.M. on June 2, 1960, with the intention of adjusting its bid, by an additive or deductive amount depending upon final bids and prices received. Thereafter, at 1:25 P.M. on the same date, plaintiff placed a telegraphic bid modification message on the Deskfax Machine located in plaintiff’s office, which machine was leased to plaintiff by Western Union and was connected with the Long Beach office of Western Union.

The message reads as follows: FAX XV RAPID SOUTHERN 6-2-60 1 ¡26 PM TIME STAMP REQUIRED DISTRICT ENGINEER, U.S. ARMY ENGINEER DISTRICT WRIGHT BUILDING, 1209 EIGHTH STREET, SACRAMENTO 14, CALIFORNIA. REFERENCE : BID FOR ENG — 04-167-60-38 SAC MISSILE FACILITIES, BEALE AIR FORCE BASE, PLEASE ADD $55,655.00 TO ITEM 3 AND TO TOTAL BID. (MUST BE DELIVERED PRIOR TO 2 PM) FRED G. KOENEKE VICE PRESIDENT SOUTHERN, WALDRIP AND HARVICK CO. 2650 CHERRY AVENUE LONG BEACH, CALIFORNIA (

c) In brief explanation, a person using a Deskfax Machine located in his office to send a message places the message around a drum and pushes a button. The drum then begins to revolve, and the message is photographed on electrically sensitized paper on another drum in a certain Western Union office. After the message is taken off of the drum, a Western Union employee checks it for accuracy and timestamps it. The date and hour that the message is timestamped is considered the filing time. Thereafter, the message is delivered to an operator who places it in filing time order with other message traffic for transmission and subsequently types-transmits the message. (

d) The parties stipulated that said telegram involved herein was transmitted from plaintiff’s office in Long Beach, California, at 1:25 P.M. on June 2,1960, and that such message was transmitted from the Western Union office in Long Beach at 1:31 P.M. on June 2, 1960, i.e., the hour and date the message was time-stamped for filing time. (

e) Said telegram was released for delivery by the Western Union office in Sacramento, California, at 2:03 P.M., on June 2, 1960. It was delivered by messenger and received at 2:10 P.M. in the offices of the District Engineer where the bids were opened.

The telegram in the form received reads: I960 JUN 2 PM2:03 0B247 SUBJECT TO CORRECTION 4TH CPN DEES O LBA382 XV RAPID PD-FAX LONG BEACH CALIE 2 13 IP PDT-DISTRICT ENGINEER US ARMY ENGINEER DISTRICT WRIGHT BLDG 1209 EIGHTH ST SACRAMENTO CALLF- REEERENCE BID EOR ENG-04-167-60-38 SAC MISSILE FACILITIES, BEALE AIR FORCE BASE, PLEASE ADD $55,555.00 TO ITEM 3 AND TO TOTAL BID. FRED G. KOENEKE VICE PRESIDENT SOUTHERN WALDRIP AND HARVICK CO. 2 650 CHERRY AVENUE LONG BEACH CALIF- (

f) The Western Union office in Sacramento, from which plaintiff’s telegraphic bid modification message was delivered, was located on the ground floor of a building at a distance of from 300 to 500 feet from the place on the third floor of the building where the bids were opened. 5. (

a) On or about June 3,1960, an abstract of bids showing plaintiff as the low bidder with a total bid of $755,555 was issued from the Office of the Corps of Engineers, Sacramento District, Sacramento, California. Undoubtedly, such an abstract was required by, and issued in compliance with, provisions of Armed Services Procurement Regulation,

Section 2.403 which reads as follows: Record of Bids. The invitation number, bid, bid opening, date, general description of the procurement item, names of bidder, prices bid, and any other information required for bid evaluation shall be entered in an abstract or record which, except in the case of a classified procurement, shall be available for public inspection. When the items are too numerous to warrant recording of all bids completely, an entry should be made of the opening date, invitation number, general description of material, the lot number and the price bid.

The record or abstract should be completed as soon as (practicable) after the bids have been opened and read, and, as soon as all bids have been opened and read, the bid opening officer shall so certify in the record or abstract. If the invitation for bids is cancelled before the time set for bid opening, this shall be recorded together with a statement of the number of bids invited and the number of bids received. (

b) The use of said bid figure of $755,555 in the abstract of bids shows that plaintiff’s telegraphic modification had been accepted. (

c) The abstract of bids discloses that even with the $55,555 increase, plaintiff’s bid was $6,000 lower than the Government’s “reasonable contract estimate,” and $67,000 lower than the bid of $822,993 submitted by the second lowest bidder. As to item number 3, “Guided Missile Test Shop, Systems Building,” plaintiff’s original bid of $34,000 was increased to $89.555, and the Government’s estimate with respect to such item was $110,800. 6. By letter dated June 3, 1960, the second lowest bidder, Samuel N.

Zarpas, Inc., and Fullerton Construction Company (joint venturers), lodged a protest to plaintiff’s bid with the District Engineer, U.S.

Army Engineer District, Sacramento, California, on the grounds that (1) such bid was not responsive to the invitation for bids in that it did not contain a unit price for Bid item No. 11 in the bid schedule, and (2) that plaintiff’s telegram modifying (increasing) its total bid figure was “not timely received nor timely posted.” Thereafter, on June 4 and June 6,1960, the second lowest bidder sent to the District Engineer two additional letters of protest containing further information concerning plaintiff’s telegraphic bid modification.

Such information is not accepted as credible evidence in light of all the testimonial and documentary evidence of record. (7. (

a) The District Engineer’s office, by telephone and letter dated June 3,1960, advised plaintiff of the protest that had been lodged, and made inquiries to determine the timeliness of the filing of plaintiff’s telegraphic bid modification. (

b) It is clear that a request was made of Western Union for a determination as to whether or not the telegraphic bid modification sent by plaintiff was filed in time to have been received in the office of the District Engineer at Sacramento, California, by 2:00 P.M. on June 2, 1960.

Although it is not entirely clear from the record as to exactly when such request was made, it appears reasonably certain that this action was taken immediately after the telegram in question was received and before the time the abstract of bids was issued, and prior to the date the second lowest bidder protested award to the plaintiff of the contract here involved. 8.

After plaintiff was advised that the second lowest bidder had protested the award to plaintiff and in reply to such protest, plaintiff, by letter dated June 4, 1960, forwarded to the said District Engineer copies of its work sheets used in arriving at a price for item number 11 of the bid schedule, and set forth reasons for believing that the telegraphic bid modification was timely and should be accepted. In three other letters, all dated June 18, 1960, plaintiff forwarded additional information, including copies of work sheets used in computing the price for items number 3 and 11 in the bid schedule.

One of the above-mentioned letters which relates to Bid item No. 3, reads in pertinent part: Attached hereto is our .'worksheet on Bid Item No. 3. * * * Upon checking and re-estimating this building as indicated by the worksheet attached prior to bid time, it was ascertained that we had incorrectly bid $34,000.00 for this item of work. We then, of course, dispatched our telegram of June 2, 1960 to correct the price of this bid item by $55,555.00, thereby indicating the true value for a building of 6,000 square feet to be $89,555.00.

May we call your attention to the worksheet which indicates that upon receiving subcontract bids, it was obvious that the original quoted price of $34,000.00 was certainly in error and that the correct price for this work is the now proper quoted price. ífc V Another one of the above-mentioned letters which relates to Bid item No. 11, reads in pertinent part: Attached hereto is our worksheet on Bid Item No. 11. * * * * * *, this bid item was calculated at the various unit prices as shown and then the total of all the various unit extensions was inserted in Bid Item No. 11.

However, if you will allow us, we will be more than happy to indicate to you that the unit price for Bid Item No. 11 will be $1.21, times the quantity as shown which would then make the quotation for this item $23,414.00 which is some $151.00 less than shown for this item on our bid form. * ❖ * * * 9. On June 16, 1960, plaintiff sent a telegram to the District Engineer at Sacramento, California, quoting a telegram dated June 15, 1960, sent to plaintiff by Mr. N. R. Ferian, manager of Western Union’s branch office at Long Beach, California. The text of the telegram sent by Mr.

Ferian, as quoted in plaintiff’s telegram, reads as follows: WHILE THE TELEGRAPH COMPANY DOES NOT UNDERTAKE TO GUARANTEE DELIVERY OP ANY MESSAGE WITHIN A SPECIFIED TIME LIMIT, A STUDY OP OUR RECORDS POR THE PERIOD JUNE ONE THRU JUNE TEN DISCLOSES THAT THE AVERAGE OVERALL HANDLING TIME POR A MESSAGE PROM LONG BEACH TO SACRAMENTO DURING THE HOURS NINE A.M. TO SIX P.M. WEEKDAYS WAS LESS THEN 2 9 MINUTES. BASED UPON THIS STUDY THE MESSAGE INVOLVED HERE WHICH WAS PILED AT 1 ¡31 P.M. JUNE 2, COULD HAVE BEEN DELIVERED BEFORE THE TWO P.M. DEADLINE. 10. (

a) On June 22, 1960, Lt. Col. Joseph H. Sherrard, Corps of Engineers, who, on that date, was both the Acting District Engineer at Sacramento, California, and the Contracting Officer, submitted to the Chief of Engineers a document entitled “Findings of Fact and Recommendation of Award.” In addition to reciting that on June 2, 1960, at 2:00 P.M., four bids were received and opened, and listing such bids showing that plaintiff was the low bidder, the above-mentioned document reads in pertinent part: * * * * ❖ 2.

At 2:10 P.M., a Telegraphic Modification was received from the Low Bidder raising their bid by $55,555.00. The Telegram was filed with Western Union in Long Beach at 1:31 P.M. An immediate request was made to Western Union for a determination as to whether or not the Telegram was filed in time to have been received in the Sacramento District Office by 2:00 P.M. 3. By letter dated 3 June, the Second Low Bidder, * * *, protested award to the Low Bidder, * * *. Two additional letters * * * were received reiterating the protest. The District Engineer personally was not able to resolve these letters of protest. 4.

The Low Bidder was contacted and advised of the protest. In reply, by letter dated 4 June, Southern, Waldrip and Plarvick Company forwarded copies of their work sheets used in arriving at a price for Item No. 11 and set forth their reasons for believing that the Telegraphic Modification was timely and should be accepted. In three letters, each dated 18 June, they forwarded additional evidence, including copies of work sheets used in computing the price for Item No. 3.

Also received was a Telegram dated 16 June quoting a message from the Long Beach Office of Western Union showing that the average time for handling messages from Long Beach to Sacramento during the period 1 June to 10 June, 9 A.M. to 6 P.M. Weekdays, was less than 29 minutes. 5. In accordance with Paragraph 2-303.4 ASPE and based on the statement from Western Union, it is believed that the Low Bidder has presented clear and convincing evidence that the Telegraphic Modification was filed in sufficient time to have been received by 2:00 P.M. and should be accepted. With regard to the unit price for Item.

No. 11, the information contained in the Bidder’s letters of 4 June and 18 June and the attached work sheets indicate that failure to insert the unit price was a clerical omission and that the unit price as stated in the letter of 18 June was the intended unit price. 6. Based on the above facts it is my recommendation that the protest of Samuel N. Zarpas, Inc. and Fullerton Construction Company be disallowed and award (subject to availability of funds) be made to Southern, Wal-drip and Harvick for $755,555.00, the amount of their modified bid. (

b) There is no evidence of record that at the time the contracting officer submitted his above-mentioned findings of fact and recommendation of award, he had any other documentary material or information before him than that mentioned in findings 1 to 9, inclusive, supra. It is apparent, therefore, that the contracting officer’s determination with respect to the timeliness of plaintiff’s telegraphic bid modification, was based largely on the information contained in the telegram sent to plaintiff by Western Union on June 15, I960.

The foregoing is significant and should be kept in mind in considering additional facts, which were established of record during the trial of this case, and are contained in findings set out hereinafter, but were not available to the contracting officer at the time he made his determination. 11. The District Engineer, as the Contracting Officer, had the authority to award the contract.

Had it not been for the obvious mistake in plaintiff’s bid and the protest lodged by the second lowest bidder, the contracting officer would have gone ahead and awarded the contract to the plaintiff in accordance with his determination as to the timeliness of plaintiff’s bid modification. 12. There is no direct evidence establishing the existence of a written document containing any findings and determination made by the Chief of Engineers. However, considering the record as a whole, it may be inferred with reasonable certainty that such a document was prepared and dated August 1,1960.

It appears that the Chief of Engineers considered all of the data with respect to plaintiff’s original bid and finally concluded, with respect to Item 3 of that bid, that it was so unrealistically low that the amount would have been questioned by the Government. Accordingly, the Chief of Engineers considered that plaintiff’s original bid was understated by error and granted an upward revision of $27,055 in the bid. This was the maximum amount permissible under paragraph 16 of the invitation for bids.

With a minor adjustment for Item 11 in plaintiff’s bid and the above-mentioned increase of $27,055, plaintiff’s bid was considered in the total amount of $726,904. 13. (

a) Apparently in response to a telegraphic inquiry made by plaintiff on August 8, 1960, the District Engineer, on August 9, 1960, sent plaintiff a “corrected copy” of the abstract of bids, certified as of August 9, 1960, by the contracting officer, showing that the award was being made to plaintiff in the reduced amount of $726,904. On the same day plaintiff was advised in a telegram by the District Engineer’s office at Sacramento, that it was awarded a contract in said amount, and confirmation of such award was contained in a letter to plaintiff bearing the same date. Plaintiff was also requested to execute the contract and bond which were enclosed with that letter. (

b) By letter dated August 11, 1960, plaintiff replied to the above-mentioned telegram and letter, and returned the contract unexecuted on the grounds that the amount stated therein was not the amount of plaintiff’s bid. Plaintiff set forth in its letter various arguments in support of its position that the original bid price, as modified upwards to $755,404 by its telegram of June 2,1960, should be the contract price, and indicated a willingness to execute the contract on condition it were amended to state said full amount. (

c) By letter dated August 12,1963, the District Engineer, in his capacity as the contracting officer, advised plaintiff that in accordance with a telegram sent to it on the same date, the contract, together with the Performance and Payment Bonds, was being returned for execution. Although said telegram is dated August 12, 1960, plaintiff did not receive it until August 15, 1960. It reads in pertinent part: * * * THE CHIEF OF ENGINEERS HAS DETERMINED THAT YOUR TELEGRAPHIC MODIFICATION WAS DISPATCHED TOO LATE TO BE CONSIDERED.

YOUR REQUEST FOR PERMISSION TO CORRECT YOUR BID DUE TO A MISTAKE IN THE AMOUNT OF $55,000 ON ITEM 3 HAS BEEN ALLOWED LESS THE AMOUNT WAIVED BY THE INVITATION FOR BIDS MAKING A NET CORRECTION OF MISTAKE OF $27,055. THIS COUPLED WITH YOUR CORRECTION OF UNIT PRICE FOR ITEM NO. 11 RESULTS IN AN ESTIMATED TOTAL CONTRACT PRICE OF $726,904.00. IT IS STRONGLY URGED THAT YOU EXECUTE THE CONTRACT AND BONDS WHICH ARE BEING DISPATCHED BY RETURN MAIL SINCE IT IS IMPERATIVE THAT THE WORK CONCERNED BE COMMENCED FORTHWITH. (

d) Until plaintiff received the above-mentioned telegram, it was unaware of the determination of the Chief of Engineers which had been made by him on August 1, 1960. (

e) By letter dated August 17,1960, the contracting officer confirmed the above telegram he sent to plaintiff on August 12,1960, and advised in pertinent part: 3: ‡ ‡ 3* Your bid was accepted and the contract was awarded to you by telegram dated 9 August 1960 and letter dated 9 August 1960 forwarding the contract and bonds for execution. It is my contention that a contract came into being at the time your offer was accepted by the Government.

Page B-l of the Invitation for Bids requires you to execute the contract and bonds and deliver them to the Contracting Officer within two calendar days after they are delivered to you. You are informed that unless the contract and bonds are executed by you and your surety and delivered to my office on or before the close of business, Monday, 22 August 1960, you will be placed in default under your contract and the work will be prosecuted by contract or otherwise and you and your surety will be responsible for any excess coste occasioned the Government. (

f) Thereafter, plaintiff signed and returned the above-mentioned contract under the terms of which plaintiff agreed to complete the work involved for the stated contract sum of $726,904; however, before doing so, plaintiff inserted the following typewritten notation on the face thereof : (The amount of this contract is in question by reason of a decision of the Chief of Engineers that telegraphic modification was received too late. Contractor contending that they have met the burden of proof as required by ASPE Sec. 2-303.4 and 2-305. That said decision is erroneous.

Contractor by executing this contract, waives none of their right to appeal said decision, it being expressly stipulated that if Contractor is successful on appeal or by court decision, that the amount of this Contract be amended to include the amount of the telegraphic modification not to exceed a total of $755,-555.00 less an agreed adjustment of $151.00). (

g) Although the above-quoted statement was unilaterally inserted on the contract by plaintiff, and there is no direct evidence that the contracting officer specifically concurred in such reservation, it appears that he did accept the contract in the form returned to him by plaintiff. At least there is no evidence that the contracting officer expressed objection to, or requested the removal of, such reservation before proceeding. 14. (

a) On August 19, 1960, plaintiff noted an appeal to the Armed Services Board of Contract Appeals (ASBCA) from the decision of the Chief of Engineers that the plaintiff’s telegraphic modification of its bid was dispatched too late to be considered.

On June 12,1961, the Board dismissed the appeal for lack of jurisdiction, holding that a decision by Government officials not to include in a contract the sum which the successful bidder attempted to add to its bid by a telegraphic amendment to the bid was not appealable to the ASBCA under the standard disputes clause because the dispute between the parties involving such amendment arose, and the parties took adverse positions with respect thereto, prior to the time the contract was executed. (

b) On January 29, 1962, plaintiff filed the present suit for damages in the sum of $28,500. 15. (

a) It was established through testimony presented by Mr. B. B. Ferian at the trial of this case that in response to a request made by plaintiff, the headquarters office of Western Union dictated, for the signature of Mr. Ferian, the message to be released to plaintiff which is contained in the telegram Mr. Ferian sent to plaintiff on June 15, I960. (

b) The headquarters office of Western Union also dictated the contents of a letter, dated July 19, 1960, winch was sent to plaintiff over the signature of Mr. Ferian in accordance with instructions given to him by the headquarters office. That letter contained the results of a study made by Western Union of 22 messages sent from Long Beach, California, to Sacramento, California, during the period June 1 through June 10,1960.

The study showed that the average elapsed time, from filing time to time of delivery, of those 22 messages was 25 minutes, and that the maximum elapsed time, from the filing time to the time of delivery, of any one of the messages was 56 minutes. In addition to the foregoing information, the above-mentioned letter contains the following statements: * * * * 1 would like to direct your attention to the fact that the messages which were studied comprise only those which were delivered to customers over their private tie line equipment and by telephone.

We have no records available to show the elapsed time service on messages delivered by messenger during that period, which w,as the mode of delivery utilized to deliver your message of June 2 to the Corps of Engineers at Sacramento. With respect to the “XV” designation which was shown on your message of June 2, this classification is not authorized for the type of message which you sent to the Corps of Engineers. However, the “EX” classification would have been appropriate. Your message was accorded the “EX” priority in transmission and delivery. (

c) Plaintiff and defendant erroneously assume that the above-mentioned telegram dated June 15, 1960 (quoted in finding 9, supra), and letter dated July 19, 1960 (quoted in finding 15 (b), supra), were based upon two different studies made of messages sent between Long Beach and Sacramento, California, during the period June 1 through June 10,1960. While the evidence on that question is not entirely clear, an analysis of the telegram and letter, and consideration of the entire record, leads to the more reasonable conclusion that both the telegram and letter were based on the same study.

In any event, the evidence is clear that the contents of both the telegram and the letter were dictated by someone in the headquarters office of Western Union, and that Mr. Ferian did not personally make any study of messages sent between Long Beach and Sacramento, California. It is necessary that the foregoing facts be kept in mind in considering the testimony given by Mr. Ferian at the trial relating to statements made in the telegram and letter. (

d) It will be noted from finding 10(c), supra, that the contracting officer submitted his findings of fact and recommendation of award on June 22, 1960, prior to the time Western Union sent the above-mentioned letter, dated July 19, 1960. Accordingly, insofar as the record shows, the only facts concerning any study made by Western Union which the contracting officer had before him at the time of his determination that plaintiff’s telegraphic bid modification was timely, were those set forth in the above-mentioned telegram, dated June 15,1960. 16.

Western Union has a policy of destroying all message records at the end of a period of six months following the date of a particular message. That policy is followed even in those instances where an investigation is made as to the time of transmission of a particular message. The tabulation of any investigation as to the average time of transmission also is destroyed within the same period of time.

Such policy was adhered to with respect to the telegraphic bid modification message involved in this case and to the study made by Western Union of messages transmitted between Long Beach and Sacramento, California. 17. (

a) In addition to the documentary material consisting of the telegram and letter discused in finding 15, supra, the only other evidence of record directly relating to the transmission time normally required for messages handled by Western Union between Long Beach and Sacramento, California, and to whether plaintiff’s telegraphic bid modification was dispatched in a timely manner, is the testimony of Mr. Ferian. Such testimony is inconsistent with certain statements contained in the above-mentioned documentary material. Although the testimony of Mr.

Ferian presents a conflict in some of the evidence and is not entirely clear in all respects, it is concluded, on the basis of the record as a whole, that the relevant facts are as stated in the following findings: (

b) Western Union makes a reasonable effort to deliver all messages as fast as possible, consistent with other traffic and the priority assigned to such traffic. The company does not guarantee that any message will be delivered by any particular time, or by the time that may be specified by a customer, but it attempts to deliver a particular message by the time, or as close as possible to the time, that may be requested or specified. (

c) The company has the policy objective of effecting delivery of all business messages within the maximum time of one hour. However, this is not the average or normal transmission time taken to deliver such messages. (

d) At all times material, employees of the Long Beach branch office and, presumably, all other branch offices, of Western Union were under standing instructions to get out all traffic, other than day letters, in 25 minutes or less, in order to meet Western Union’s objectives on file with the Federal Communications Commission. (

e) As a matter of normal routine, in answer to an inquiry as to how long it will take for the delivery of a message, a Western Union employee usually makes a statement to the effect that the transmission time will be “approximately 30 minutes, plus delivery time.” However, such a statement refers only to an ordinary message and not to one that is to be assigned a priority symbol. (

f) The term “overall handling time,” as used in the telegram sent by Mr. Ferian to plaintiff on June 15, I960, meant the entire time lapse from the time of filing of the message to the time of its delivery, including messages delivered by telephone, tie line, or messenger. (

g) Western Union gives messages bearing the “XV Bapid” symbol the highest priority which takes precedence over all other message traffic, including messages bearing the symbol “BX”, which receive the second highest priority. The XV Bapid symbol is supposed to be assigned only to Government messages. Western Union made a mistake in accepting plaintiff’s bid modification telegram with the XV symbol appearing thereon.

Although the telegraphic modification bears the XV Bapid symbol, it is concluded, considering all the evidence, particularly the time actually taken by Western Union in transmitting and delivering the telegram in question after it was filed, that the message was accorded the lower BX priority in transmission and delivery. It also appears reasonable to conclude that if the message actually bad been accorded XV Sapid priority, it would have been delivered sooner tban it was. (

b) There is no evidence bere that plaintiff’s telegram was delayed abnormally by unusual conditions such as line failure, equipment problems, etc. There was, nevertheless delay in the handling, transmission, and delivery of said telegram. (

i) It is concluded, on the basis of all the evidence, that plaintiff’s telegram was deposited for transmission in time for receipt, by normal transmission procedure, prior to 2:00 P.M., the time fixed in the invitation for bids, and was subsequently delayed by Western Union through no fault or neglect on the part of the plaintiff.

CONCLUSION OK LAW Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is entitled to recover, and it is therefore adjudged and ordered that the plaintiff recover of and from the United States the sum of twenty-eight thousand five-hundred dollars ($28,500). See finding 10(a), infra. See finding 9, supra, for text of this telegram.

During the trial of this case, the commissioner permitted plaintiff to amend its petition to delete from paragraph XIV the words “Subsection 3 and 4”, and to insert in place thereof the words “Title 2S”. See finding 9, supra. See finding 15(b), supra. See finding 9, supra. See finding 4 (e), supra, for text of this telegram.