De Matteo Const. Co. v. United States, 441-77.

Decision Date13 June 1979
Docket NumberNo. 441-77.,441-77.
Citation600 F.2d 1384
CourtU.S. Claims Court

William H. Clendenen, Jr., New Haven, Conn., attorney of record, for plaintiff.

Ray Goddard, Washington, D. C., with whom was Asst. Atty. Gen., Barbara Allen Babcock, Washington, D. C., for defendant.

Before NICHOLS, BENNETT and SMITH, Judges.



This case comes before the court on defendant's motion, filed May 10, 1979, requesting that the court adopt the recommended decision of Trial Judge Philip R. Miller, filed March 30, 1979, pursuant to Rule 166(c), on the parties' cross-motions for summary judgment, as the basis for its judgment in this case since neither party has filed a request for review thereof by the court and the time for so filing pursuant to the Rules of the court has expired. Upon consideration thereof, without oral argument, since the court agrees with the trial judge's recommended decision, as hereinafter set forth, it hereby grants defendant's motion and affirms and adopts the recommended decision as the basis for its judgment in this case. Therefore, it is concluded that plaintiff is not entitled to recover and, accordingly, plaintiff's motion for summary judgment is denied, defendant's cross-motion for summary judgment is granted, and the petition is dismissed.


MILLER, Trial Judge:

Plaintiff sues for an equitable adjustment of $153,281.71 in the price of its contract with the United States Postal Service for the construction of a post office building at Hartford, Connecticut. Plaintiff claims the equitable adjustment is warranted by the standard suspension of work clause of the contract.

The Postal Service contracting officer did not at any time expressly suspend the performance of plaintiff's work, but plaintiff claims that his failure to issue a notice to plaintiff to proceed with the construction for a period of 43 days while he considered the validity of a protest by another bidder against the award of the contract to plaintiff amounted to a constructive suspension of work.

The Postal Service Board of Contract Appeals (the board) having ruled against the claim (76-2 BCA ¶ 12,172), in its petition plaintiff seeks to have the court set aside the board's findings as unsupported by substantial evidence and its decision as arbitrary and capricious, under authority of the Wunderlich Act (41 U.S.C. § 321). However, examination of the briefs in support of plaintiff's motion for summary judgment and in opposition to defendant's cross-motion reflects that there is virtually no dispute as to the pertinent facts relating to plaintiff's right to recover1 and the only issue is whether or not the board's conclusion that plaintiff was not entitled to the relief sought is warranted by such facts.

The Invitation for Bids (IFB) was issued May 1, 1974, and the bid opening date was set forth therein as June 11, 1974. Each bidder agreed to the provision of the IFB that "upon written acceptance of this bid, mailed or otherwise furnished within 60 calendar days after the date of opening of bids," within 10 calendar days after receipt of the prescribed forms it would execute the construction contract and supply performance and payment bonds with good and sufficient surety. If awarded the contract, the bidder also agreed "to commence the work within 0 calendar days after the date of receipt of notice to proceed, and to complete the work within 620 calendar days after the date of receipt of notice to proceed."

On the June 11, 1974 bid opening date, a joint venture of Oneglia and Gervasini Building Construction, Inc., and Empire Building Contractors, Inc. (OGE), was revealed to have submitted a bid of $10,755,000 but with an added qualification that "if sales tax required add the sum of $300,000," while plaintiff bid an unqualified $11,043,000. Thereupon, the contracting officer requested an opinion from the Postal Service law department as to whether or not the OGE bid was responsive; while, in an attempt to have itself declared the low bidder, on June 18, 1974, plaintiff voluntarily advised the contracting officer that its bid already included $300,000 for Connecticut sales tax. As a result, on June 21, 1974, the contracting officer rejected the OGE bid as nonresponsive, and on June 27, 1974, wrote to plaintiff:

Your bid, dated June 11, 1974, has been selected as the lowest responsive bid for the construction of the United States Post Office Building and related site work at Hartford, Connecticut.
Enclosed are three copies of Contract No. 109450-74-R-0-011, concurrent Modification No. 1 and Payment and Performance Bond forms. Please execute the contract and concurrent Modification No. 1 and return all copies within 10 days, as well as the Payment and Performance Bonds. Upon approval of the bonds, the Contracting Officer will execute the contract and concurrent Modification No. 1 and return a signed copy of each to you. Receipt of signed copy of executed contract by you will constitute your notice to proceed with the work. Please note that column 9, P.S. Form 7390 (May 1974) of the contract provides that the period of performance shall start upon receipt of Notice to Proceed.

The concurrent modification reduced plaintiff's bid by the $300,000 referred to in its letter of June 18, 1974, subject to restoration to the extent plaintiff had to pay state sales taxes.2

By letter dated June 28, 1974, OGE protested the contracting officer's determination that, because it had been stated in the alternative depending upon the applicability of state sales taxes, its bid was nonresponsive.

On July 2, 1974, plaintiff executed and returned to the contracting officer the contract together with Modification No. 1 and the required bonds. However, since OGE's protest was under active consideration by the Postal Service, the contracting officer withheld execution of the contract and its return to plaintiff.

A principal ground for OGE's protest was the confusion in the office of the taxing authorities of the State of Connecticut as to whether or not the sales tax was applicable. Before the bid opening, the state had advised bidders that the tax was applicable, but it revised its opinion after the opening. At least five of the eight bidders on the contract also came to the erroneous conclusion that the tax was applicable.

Because of the closeness of the bids and the possibility of award to another bidder or complete resolicitation of bids, plaintiff decided to participate in the proceedings on OGE's bid protest. On July 9, 1974, plaintiff wrote to the law department of the Postal Service urging prompt denial of the protest. Plaintiff also submitted documents supportive of its claim that its own bid had included $300,000 for payment of Connecticut sales tax. In addition, plaintiff asked for and obtained a conference with Postal Service officials on July 18, 1974, to make known its views orally. Plaintiff was given additional time to make post-conference submissions, and on July 22, 1974, it submitted affidavits of six of its officials that they had included provision for payment of $300,000 of sales tax in plaintiff's unqualified bid.

On August 7, 1974, within 10 working days of the last receipt of evidence from the interested parties (including plaintiff), the Postal Service's general counsel wrote an opinion rejecting OGE's bid protest. Two days later, on Friday, August 9, 1974, the contracting officer executed the contract, and, shortly thereafter, mailed it to plaintiff, although plaintiff's officer testified that it was not received until Wednesday, August 14, 1974.

Because receipt of the executed contract constituted the notice to proceed, plaintiff claims that the defendant's delay in returning the executed contract in excess of the relatively short time it should have taken to approve the bonds amounted to a constructive suspension of work by defendant. Plaintiff asserts that in anticipation of the receipt of notice to proceed within no more than 10 days from July 2, 1974, the date when it transmitted the signed contract and bonds to the contracting officer, it mobilized its men and equipment in preparation for moving them onto the construction site, but instead they had to mark time for 43 days, from July 2 until August 14. It claims that not only did it incur the needless expense of maintaining such men and machinery in the initial 43 days, but it was compelled to pour its building foundations in less favorable weather than it had anticipated in computing its bid.3

The Suspension of Work clause in the contract reads in pertinent part as follows:

8. Suspension of Work:

* * * * * *
(b) If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted by an act of the Contracting Officer in the administration of this contract, or by his failure to act within the time specified in this contract (or if no time is specified, within a reasonable time), an adjustment shall be made for any increase in the cost of performance of this contract (excluding profit) necessarily caused by such unreasonable suspension, delay, or interruption and the contract modified in writing accordingly. However, no adjustment shall be made under this clause for any suspension, delay, or interruption to the extent (1) that performance would have been so suspended, delayed, or interrupted by any other cause, including the fault or negligence of the contractor or (2) for which an equitable adjustment is provided for or excluded under any other provision of this contract.

Defendant's primary position is that the contract was not awarded to plaintiff until at least August 9, 1974, when the contracting officer signed it and returned it to plaintiff; hence the suspension of work clause itself was inoperative until such date and could not provide...

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