Bromley Contracting Co., Inc. v. United States
| Decision Date | 21 March 1979 |
| Docket Number | No. 5-76.,5-76. |
| Citation | 596 F.2d 448 |
| Parties | BROMLEY CONTRACTING CO., INC. v. The UNITED STATES. |
| Court | U.S. Claims Court |
Martin J. Cohen, New York City, attorney of record for plaintiff.
Lynn J. Bush, Washington D.C., with whom was Asst. Atty. Gen. Barbara Allen Babcock, Washington D.C., for defendant.
Before COWEN, Senior Judge, and NICHOLS and BENNETT, Judges.
This case comes before the court on plaintiff's exception to the recommended decision of Trial Judge Joseph V. Colaianni, filed July 24, 1978, pursuant to Rule 134(h). The claim, as upheld by Trial Judge Colaianni, is for reformation of a contract for building reconstruction to correct a mistaken bid. Defendant before us has abandoned its opposition to the claim except as it asserts a right to interest on the sum awarded. After consideration of briefs and oral argument of counsel, this court agrees with the trial judge's recommended decision as set forth below, and affirms and adopts it as the basis for its judgment in this case. The court also adopts the trial judge's separate findings of fact as its own, which are set forth in his recommended decision and are not printed here as such facts necessary to the decision are contained in his opinion.
The only aspect of the trial judge's opinion to which plaintiff excepted was his omission of interest on the recommended judgment for plaintiff. Plaintiff seeks interest payments from the date of completion of the contract to the date of payment of the claim.
We agree with the trial judge's recommended decision, and do not allow recovery of interest. Plaintiff bases its interest claim on the contract clause incorporated under ASPR 7-104.82, 32 C.F.R. § 7-104.82, for payment of interest on contractors' claims. That provision reads in part:
(a) If an appeal is filed by the Contractor from a final decision of the Contracting Officer under the DISPUTES clause of this contract, denying a claim arising under the contract, simple interest on the amount of the claim finally determined owed by the Government shall be payable to the Contractor. Such interest shall be at the rate established by the Secretary of the Treasury pursuant to Public Law 92-41; 85 STAT. 97 for the Renegotiation Board, from the date the Contractor furnishes to the Contracting Officer his written appeal pursuant to the DISPUTES clause of this contract, to the date of (i) a final judgment by a court of competent jurisdiction, or (ii) mailing to the Contractor of a supplemental agreement for execution either confirming completed negotiations between the parties or carrying out a decision of a Board of Contract Appeals. Emphasis supplied.
However, that provision does not govern the instant case, as it applies to appeals from a decision of the contracting officer made under the disputes clause of the contract. ASPR 2-406, 32 C.F.R. § 2-406, authorized correction of mistaken bids by the contracting officer. When, as here, he refused to correct a mistaken bid, the case went from the contracting officer to the General Accounting Office for resolution, and Boards of Contract Appeals did not have disputes clause jurisdiction. Plaintiff did not appeal to such a board here. Thus, plaintiff did not utilize the disputes clause or any of its accompanying administrative procedures. Procedures that will apply under the Contract Disputes Act of 1978, Pub.L. No. 95-563, are not relevant in this case.
Plaintiff argues that ASPR 7-104.82, 32 C.F.R. § 7-104.82, was meant to authorize a general allowance of interest to contractors in disputes where they were ultimately determined to be entitled to damages, and cites a footnote in Framlau Corp. v. United States, 568 F.2d 687, 694, 215 Ct.Cl. 185, 198 n. 16 (1977) for that proposition. But the footnote in Framlau does not alter the requirement of the contract language that claims arise under the contract, and it cannot be interpreted to expand allowance of interest for claims arising outside, not under, the contract, and which are not settled via a disputes clause. As an allowance of interest would require an explicit waiver of sovereign immunity, such interest may be awarded only if a specific provision for payment exists in a statute or the contract. United States v. Mescalero Apache Tribe, 518 F.2d 1309, 1314-17, 207 Ct.Cl. 369, 378-89 (1975), cert. denied, 425 U.S. 911, 96 S.Ct. 1506, 47 L.Ed.2d 761 (1976). This rule has been codified in 28 U.S.C. § 2516(a) which provides that:
No express provision for the award of interest applied to cases of equitable reformation of contracts to correct mistaken bids. Existing interest provisions of contracts of statutes cannot be enlarged by implication or analogy without doing violence to the doctrine of strict construction of the consent to be sued. This case will not be a precedent for future cases governed by Pub.L.No. 95-563, the Contract Disputes Act of 1978.
Therefore, we cannot allow recovery of interest for plaintiff. Judgment is entered for the plaintiff in the amount of $76,505, the sum found to be the difference between the reformed price and contracted price. The opinion of Trial Judge Colaianni follows:
OPINION OF TRIAL JUDGE
In this action, plaintiff, Bromley Contracting Co., Inc. ("Bromley"), a construction firm with its principal place of business in Valley Stream, New York, seeks reformation of its contract with the Government due to an alleged bid mistake. For reasons hereinafter set forth, it is concluded that reformation is an appropriate remedy and that plaintiff is entitled to recover.
On May 29, 1973, the Department of the Army issued an invitation for bids ("IFB") for contract DAHCO2-73-B-1737 for repointing the exterior of Building 745a at the United States Military Academy at West Point, New York. The IFB was broken down into five separate items (Item Nos. 1, A, B, C, and 2) and Bromley and three other contractors submitted bids on that basis.
Bromley's total bid was the lowest of the four, although it was slightly higher than the Government estimate. Defendant's estimate, Bromley's bid, and the next lowest bidder's bid, were as follows:
Next Lowest
Item No. Government Bromley Bidder
1 — Base Bid: $103,250 $ 84,200 $125,750
Elevations A, B, C
A — Additive Bid: 15,000 18,750 26,000
Elevations E, F, G
B — Additive Bid: 43,320 64,500 86,000
Elevations D, K, L, M
C — Additive Bid: 5,000 14,650 15,000
Elevations N, O, P
2 — Elevations H, I, J 129,990 124,434 145,900
________ ________ ________
Total $296,560 $306,534 $398,650
The other bids totaled $1,034,370 and $1,183,000, respectively.
The estimates which formed the basis for plaintiff's bid were made by Melvin Bloom, its vice-president, manager, and general superintendent. Upon examination of the drawings and the specifications, he prepared a layout sheet which contained his estimates of the amount of labor and materials necessary to accomplish each aspect of the job, and the estimated applicable rates. The total of his estimates amounted to $300,530. To determine if any modifications to his estimates were required because of conditions at the job site, Melvin visited West Point for an inspection of the building covered by the IFB. After determining that his work estimates were accurate, he returned to his office and left his layout sheet, work papers, and a note for his brother Howard, plaintiff's president, who was responsible for the actual preparation of all of plaintiff's bids, to submit a total bid of under $300,000.
After establishing that the bid would have to be broken down into five separate unit prices, Howard discussed the matter with Melvin over the telephone. During that telephone conversation Melvin attempted to explain to Howard how the total figure should be broken down into five unit prices. The brothers agreed that the total of the five unit prices should not exceed $298,434. But Howard Bloom, in performing the breakdown, mistakenly picked up one of the errors which Melvin had previously corrected, and therefore submitted a bid whose five unit prices totaled $306,534. Nevertheless, because the bid itself did not require a figure for the sum of the five items bid upon, Melvin and Howard Bloom did not find out until later that their actual bid was $306,534 rather than $298,434.
In 1973, Frank O'Donnell was a contract assistant to the contracting officer at West Point. His duties included processing construction contracts from the formation of an IFB to the ultimate award of the contracts. He also routinely received all correspondence addressed to the contracting officer regarding proposed or ongoing construction contracts, and handled mistakes in bid matters for such contracts. Although there was no specific delegation of authority from the contracting officer to Mr. O'Donnell, the parties are agreed that O'Donnell's actions with regard to the review of bids, conferences with the Blooms, and recommendations to the contracting officer concerning the present contract were within his authority.
On Friday afternoon, June 15, 1973, the bids submitted in response to the IFB were opened. Mr. O'Donnell examined the bids for responsiveness and obvious mistakes. In this instance Mr. O'Donnell compared plaintiff's bid with the next lowest bidder's bid and the Government estimate, and concluded that there was no mistake on the face of plaintiff's bid...
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